In order to enhance air connectivity within the state, the Kerala government may underwrite a portion of seats of domestic carriers as part of its new civil aviation policy.
Top sources said the government would buy a small portion of seats of the airlines that were willing to operate within the southern state. This would help senior government employees travel within the state, they added.
Kerala, which has three profitable international airports, is also planning to offer sales tax concessions on aviation turbine fuel. The tax is as high as 34 per cent.
Chief Minister VS Achuthanandan has called a meeting of all domestic airlines, including Air India, tomorrow. Senior executives of all major Indian carriers are expected to attend. Government sources confirmed the development but refused to divulge the possible concessions that may be offered.
While Air India chairman and managing director Vasudevan Thulasidas said senior executives of the airline would attend the meeting, Paramount Airways MD M Thiagarajan said he too would be there.
Industry analysts, however, said the project could be suitable only for airlines operating regional and smaller jets.
"It will be ideal for 70- to 100-seater planes. A partnership with the tourism board, apart from the government underwriting, will make the project feasible. But airlines cannot deploy Boeing B737s or Airbus A320s on domestic routes," said a source.
