Alliance Air and NEC sign an MoU in New Delhi on Wednesday while Union civil aviation minister Ashok Gajapathi Raju Pusapati and DoNER minister Gen. (retd) V.K. Singh look on

Shillong, Sept. 24: Alliance Air and the North Eastern Council (NEC) today renewed their partnership to improve air connectivity in the region where air services would be provided to Shillong, Tezpur, Lilabari, Silchar and Guwahati.

The renewal of ties was made by signing a memorandum of understanding, under viability gap funding (VGF), in New Delhi in the presence of Union civil aviation minister Ashok Gajapathi Raju Pusapati and DoNER minister Gen. (retd) V.K. Singh and other senior officials.

According to the terms of the MoS, Alliance Air, a subsidiary of Air India, will provide air services to Shillong, Tezpur, Lilabari, Silchar and Guwahati with ATR 42-type aircraft until March 31, 2016.

“The operation is under VGF arrangement. The NEC will assist Alliance Air in obtaining concessions on ATF, landing, route navigation facility charges (RNFC) rates, among others. The actual cost of operations shall be reviewed every three months based on the proposed cost and VGF amount will be fixed accordingly,” an official communiqué stated.

Alliance Air has been operating flights to the Northeast since January 2003 under VGF i.e. cost-minus-revenue formula to cover losses on the operations in the Northeast. The airline continued its services in the Northeast up to December 31, 2012, when it was operating 65 flights per week to the region. However, from January 2013, because of outstanding VGF, the airline restructured its ATR operations in the Northeast and consequently services were discontinued on some routes. But the operations between Calcutta-Silchar, Calcutta-Guwahati and Silchar-Imphal continued. In July 2013, Alliance Air also restored flights on the Calcutta-Shillong route.

It may be reminded that the NEC had provided VGF to Alliance Air since the Tenth Five Year Plan period, initially from January 1, 2003, to December 31, 2007, at an estimated cost of Rs 175 crore, and further extended it until December 31, 2011. However, Alliance Air continued its services to the region even after the expiry of the MoU beyond December 31, 2012, at its own cost without a valid memorandum of understanding.

Besides the ATR operations, Air India has also been operating flights in the Northeast with its airbus family aircraft between Calcutta and Silchar, Dimapur, Dibrugarh, Aizawl, Imphal, Agartala and Guwahati, apart from Delhi-Guwahati route.