Time to tweak Route Dispersal Guidelines and make them attractive

As airlines remain grounded due to COVID-19, the time could be used to re-look at some of the regulations in the country and tweak them to make them more attractive. The most discussed and debated regulation has been the Route Dispersal Guidelines (RDG). Some of my suggestions were incorporated in the National Civil aviation Policy (NCAP),2016 when the policy was revamped. Contribution to NCAP and suggestions on National transportation policy led to me being part of a select group of 30, to be invited for a special program on Doordarshan.

Read the proposal which was shared with government: Gradual removal of 5/20 and new RDG

Since the time Regional Connectivity Scheme (RCS) – UDAN (Ude Desh ka Aam Nagrik) was launched; I have been a firm believer that the two schemes should be merged. With both the schemes having the same objective of helping connect the underserved and unconnected airports/routes, the government mandates the airports to fly under RDG but incentivizes airlines to fly under RCS-UDAN.

(Read: Is it time to merge RDG and UDAN)

RDG Refresher

The revised Route Dispersal Guidelines came into effect from winter schedule of 2017. There are 20 city pairs which form part of Category – I routes. When an airline deploys any capacity between these city pairs, the airline has to operate 10% of that capacity on Category II and 1% on Category IIA routes, while 35% of capacity should be operated on Category III routes. The capacity is measured by ASKM (Available Seat KiloMeters).

Category II routes are between any city to cities in North East (including Bagdogra), the Union Territory of Jammu & Kashmir, Union Territory of Ladakh, Himachal Pradesh and Uttarakhand. Category II A routes are amongst those regions, while Category III routes are all other routes.

How do airlines fulfil the criteria?

Airlines have been operating to Srinagar, Leh, Jammu and at times between them to accumulate the Cat IIA ASKs, but the most popular route remains Delhi – Guwahati, for its length gives good load of ASKs to satisfy the Cat II requirements. This has put pressure on airlines and the route for profitability. Anecdotal evidence and data released by DGCA shows that the route could be profitable for most part of the year, but for every increase in flight on the metro city pair, there is an increase in flight schedule to Guwahati which could eat into margins or push the airline to drop prices to fill up seats.

Jet Airways tried to move away from the market by starting non-stop flights to other cities in North – East. I firmly believe that the airline had wrong aircraft for such a route and the airline was already on the brink to sustain losses for long on such new long thin routes in domestic sector. As it stands today, Guwahati – the hub for North East has been congested on the terminal front as well as the apron.

To satisfy the Cat IIA requirement, airlines operate as Delhi – Guwahati – XXX – Guwahati – Delhi. The navigational aids are not the best at airports in the North East and the weather plays spoil sport at times which makes late evening departure a challenge from a few airfields. This has led to further congestion at Guwahati and through flights mean – stress on the ground staff to conduct transit checks and other security requirements for a transit flight.

Time to incentivise the airlines?

As airlines will be back from grounding, the RDG is here to stay but the traffic is guesswork. For every 10 one way flights between Delhi and Mumbai, the airline needs one between Delhi and Guwahati and one between Guwahati and Imphal to satisfy the current requirements.

For years there has been demand for airlines to offer direct flights to other airports in the North East so that passengers do not have to go one stop via Guwahati or Kolkata. But over the years, direct flights started to Dibrugarh and Imphal from New Delhi.

Why not tweak the RDG to offer double ASKMs to airlines to fly to any point other than Guwahati and Bagdogra in the North east and beyond Jammu, Srinagar and Leh. There is no denying the fact that there is traffic to Jorhat, Dibrugarh, Agartala, Imphal, SIlchar but flights to these cities do not produce as much volume as those to Guwahati.

To offer double ASKs means that airline can add more flights on the metro routes without adding corresponding number of flights in the Cat II area. Metro routes have traditionally been high volume and profitable for most flights and part of the year. For the sake of calculation, doubling of ASKs would help an airline operate 15 one way flights between Delhi and Mumbai and offset the CAT II ASKs by operating just one Delhi – Imphal flight.

Tail Note

This proposal, if implemented, helps the airlines with incentive to operate beyond Guwahati and help the North East region get that elusive non-stop flight to New Delhi. The incentive is not a cash incentive – so there is no extra cost to the government. A win-win for all?

The airlines would still need Cat IIA requirement which can be reduced further from 1% to 0.5% to ensure that airlines are not penalized to operate a non-stop beyond Guwahati?

Would love to hear your thoughts on the proposal.

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