Thursday, June 13, 2024
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Alliance Air may stop operating from Umroi

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From C K Nayak

NEW DELHI: Come New Year, Meghalaya’s only operational airport at Umroi, which is undergoing the much-needed modernization, might become non-functional, may be for a brief period, due to the North Eastern Council’s failure to pay dues to the state-owned carrier Alliance Air.

Alliance Air has made it clear that it will stop all its operations in the three airports it operates from – Umroi, Tezpur, Lilabari — since the NEC has not paid its dues amounting to over hundred crores, official sources said here on Thursday.

When contacted the NEC also confirmed the communiqué received from the Alliance Air but said that the airlines’ agreement to operate in these three airports had already expired on December 31, 2011.

“The airline (Alliance Air) was asked to stop its services but it still continued to operate even without subsidy,” the Secretary NEC told The Shillong Times over phone while admitting that there are dues to be paid towards the subsidy.

But at the same time NEC will issue an ‘Expression of Interest’ in a few days time for operation of aircraft in these three airports, he said adding other airlines might step in that case.

The official, however, admitted that operation might come to a halt in these three airports as completion of all formalities would take some time.

The Alliance Air sources on the other hand said that due to the failure of the NEC to pay over Rs 100 crore, due for two years, the Air India subsidiary Alliance is not renewing the lease of three turbo-prop ATR planes operating in these places. The NEC finances Alliance Air’s operations in the crucial region each year through viability gap funding (VGF) under a MoU between the two sides.

While Alliance Air submitted its VGF estimates in September last year for the grant of Rs 52 crore and Rs 55 crore for 2012 and 2013 respectively, the amount has not been paid to it so far, sources said. “The airline has been operating so far on the assumption that the funds would soon be available,” sources added.

The viability gap for this year is now estimated at Rs 60 crore, resulting in a severe cash crunch for Alliance Air which was in dire straits to maintain the operations to the NE region, the sources informed.

After the grounding of helicopter services run by Pawan Hans in some airports following some accidents, Alliance Air had extended its intra-northeast operations by connecting cities like Lilabari, Tezpur, Dimapur and Jorhat. It has been flying four turbo-prop ATR aircraft in the region.

These additional routes have led to higher VGF due to lower seat factors and yields and despite this, the airline was continuing these flights, the sources said. The lease of one ATR aircraft expired in September and the leases of another two are due to expire shortly, they said.

If the NEC does not provide the VGF due for 2012-13, Alliance Air would not be able to renew the leases and be forced to return the aircraft to the lessor, leading to the stoppage of flights in these crucial sectors, the sources added.

The NEC has been informed that these flights would be discontinued from January 1 in case the VGF funds are not provided urgently, the sources said.

Operations in the northeast are guided by the government’s Route Dispersal Guidelines which entail that all Indian carriers fly to the NE and other remote parts of the country.

A major chunk of these operations are carried out by Air India and its subsidiary Alliance Air.

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