Alliance Air on 24 September 2014 signed a Memorandum of Understanding (MoU) with the North East Council for flight operations in the North East.
The MoU was signed in the presence of the Union Civil Aviation Minister Ashok Gajapathi Raju Pusapati and Minister of State for Development of North East Regions VK Singh.
Highlights of the MoU
• Alliance Air will provide air services to Shillong, Tezpur, Lilabari, Silchar and Guwahati with ATR 42 type of aircraft till 31 March 2016.
• North East Council will assist Alliance Air in obtaining concessions on Aviation Turbine Fuel, landing and Route Navigation Facility Charges.
• The actual cost of operations shall be reviewed every three months based on the proposed cost.
Alliance Air has been operating flights to the North East since January 2003 under Viability Gap Funding (VGF). VGF is a cost minus revenue formula which is used to cover losses on the operations in the North East.
Alliance Air provided its services in the North East Council till 31 December 2012 when it was operating 65 flights per week to the North East. In January 2013, due to outstanding VGF the airline restructured its ATR operations in the North East.
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. Subsequently, the agreement was put on hold and ATR services were discontinued on some routes since then.
In the meantime, Alliance Air continued its operations between Kolkata-Silchar, Kolkata-Guwahati and Silchar-Imphal with ATR aircraft. It also restored five times weekly flights on the Kolkata-Shillong route in july 2013.
Who: Alliance Air
When: 24 September 2014