The Union Civil Aviation Ministry has has proposed a seat-credit mechanism offering incentives to airlines for flying to remote areas of India. The government's move to extend air connectivity to small towns, Ajit Singh Union Minister for Civil Aviation has said. Under the mechanism, small air-taxi operators can fly to a particular small city destination and earn seat credit that can be sold to scheduled airlines.    

Bigger airlines will be able to use such credits to meet their requirement of having to connect remote areas without losing money on such operations. Apart from the development of low-frills airports, the government is in the process of the formulation of a policy for the promotion of regional and remote-area connectivity in India, incentivising Indian airlines to operate on these routes including a code-sharing and seat-credit mechanism, Singh said. The growth in the civil aviation sector needs to be equitable and inclusive, providing connectivity to Tier-II and III cities, and remote and difficult areas of the country, the Minister explained.    

The Ministry is also creating the Essential Air Services Fund (EASF) for providing a direct subsidy to encourage domestic airlines to fly to remote areas, he said. The Ministry has engaged Deloitte Touche Tohmatsu India as a consultant to identify the factors inhibiting airlines from flying to more locations.