SHILLONG, Dec 7 – The North Eastern Council (NEC) today said, no money is owed to Alliance Air for flight operations from Tezpur, Lilabari and Shillong, saying, the company operated flights after expiry of an agreement in December 2011.
“The NEC does not owe any money to Alliance Air; all dues have been cleared. The agreement between NEC and Alliance Air has expired in December 2011 and it was not renewed,” NEC Secretary, UK Sangma said here.
The NEC and Alliance Air entered into an agreement in 2011 to provide air connectivity for travelers of the North East. Under the agreement, the NEC provided viability gap funding (read subsidy) to Alliance Air for operating flights within the region.
In the initial years, the NEC paid Rs 35 crore for operation of air service to the region and the amount was raised to Rs 49 crore.
But, Sangma said despite the subsidy, the performance of the company was far from satisfactory and most of the Council members – Chief Ministers and Governors of the seven Northeastern States, including Sikkim – were not happy and felt that the agreement with the company should be terminated. Accordingly, the agreement was terminated in December 2011 after clearing of dues.
“The Council members had adopted a decision to terminate the Alliance Air service due to its poor service, but the company continued to operate flights from the region and hence its claim of dues (Rs 100 crore) is incorrect. The company was only hoping that the Council would renew the agreement and get subsidy,” Sangma said.
Some of the reasons for cancellation of the agreement is its erratic service with frequent cancellation of flights and its refusal to park its aircrafts at Guwahati, instead of Kolkata.
Sangma said that the NEC would float an ‘Expression of Interest’ tomorrow to invite private airlines companies to operate in the region. Some of the private airline companies have already shown interest to operate fights from the region.
“If private airlines can operate in the region without subsidy, why can’t Alliance Air also compete with these private airlines to run their services in the region,” Sangma reasoned.