Government has laid down dispersal guidelines with a view to achieve better connectivity to remote areas and different regions of the country. It’s up to the airlines to provide air services to specific places depending upon the traffic demand and commercial viability. As such the airlines are free to operate anywhere in the country subject to compliance of route dispersal guidelines issued by the Government.
The Government has taken several measures to help the industry so that benefits percolate down to common man. These steps are persuading State Governments to reduce VAT on ATF, allowing direct import of Aviation Turbine Fuel by Indian Carriers as actual users, permitting foreign airlines to participate up to 49 percent in the equity of scheduled air transport undertaking, allowing External Commercial Borrowings (ECB) for working capital requirement of airline industry for a period of one year subject to a total ceiling of US $1 billion and tax concession for parts of aircraft and testing equipment for third party maintenance, repair and overhaul of civil aircraft, informed by the ministry of tourism.