Guwahati, Thursday, September 25, 2014
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NEC-Alliance Air sign MoU for operating in NE
Raju Das
 SHILLONG, Sept 24 After trying unsuccessfully to rope in private players, the North Eastern Council (NEC) has turned back to Alliance Air and signed a Memorandum of Understanding (MoU) with the subsidiary of Air India for flight operations in the North East till 2016.

The MoU was signed in New Delhi between the NEC and Alliance Air, a wholly owned subsidiary of Air India, for flight operations in the North East under Viability Gap Funding (VGF) in the presence of the Union Minister for Civil Aviation Ashok Gajapathi Raju Pusapati and Minister of State for DoNER (Independent charge) Gen VK Singh (Retd) and other senior officials.

Under the MoU, Alliance Air will provide air services to Shillong, Tezpur, Lilabari, Silchar and Guwahati with ATR 42 type of aircraft till March 31, 2016, an official statement said here. The operation is under VGF arrangement, in which NEC would assist Alliance Air in obtaining concessions on ATF, landing, RNFC rates and other issues. The actual cost of operations shall be reviewed every three months based on the proposed cost and VGF amount will be fixed accordingly.

Alliance Air has been operating flights to the NE since January 2003, under VGF. Under the arrangement, cost minus revenue formula is applied to cover losses on the operations in the NE.

Alliance Air continued services in the NE upto December 31, 2012 when it was operating 65 flights per week to the NE. However, from January 2013, due to outstanding VGF, the airline restructured its ATR operations in the NE and consequently ATR services were discontinued on some routes.

The NEC and Alliance Air had some issues with the fund and initially NEC refused to pay the outstanding bill stating that Alliance Air was operating flights after expiry of the agreement in December 2012. The agreement was put on hold and flight operations were stalled on some of the economically-unviable routes and the NEC futilely searched for private operators by floating tenders.

In the meantime, Alliance Air continued operations between Kolkata-Silchar, Kolkata-Guwahati and Silchar-Imphal with ATR aircraft. In July 2013, it also restored five times weekly flights on the Kolkata-Shillong route.

Officials said, besides the ATR operations, Air India has also been operating flights in the NE with its Airbus family aircraft between Kolkata and Silchar, Dimapur, Dibrugarh, Aizawl, Imphal, Agartala and Guwahati, apart from Delhi- Guwahati routes.

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