AIRPORTS AUTHORITY OF INDIA REGIONAL CONNECTIVITY SCHEME (RCS) / UDAN SCHEME VERSION 2.0 RESPONSES TO QUERIES

AIRPORTS AUTHORITY OF INDIA REGIONAL CONNECTIVITY SCHEME (RCS) / UDAN SCHEME VERSION 2.0 RESPONSES TO QUERIES 18 September 2017 Pursuant to the pre-bid meeting held on 5 th September 2017 and the stakeholder responses received, the Ministry has undertaken a detailed assessment of the queries submitted by various bidders. Based on the assessment, the responses to the queries are provided below. S.N. Query/ Recommendation Response 1. 05 Sep is the date for pre-bid meeting with the prospective bidders. Our questions are : i) Is it necessary for us to input the routes in e- portal before this meeting - for us to participate in the pre-bid meeting. ii) If we have input the routes, can we delete, amend and add the routes after the meeting 2. With regard to the initial proposals, could we have the following clarifications : i) For an RCS airport YYY, Airline A has given initial proposal with routing (say) BOM-YYY with VGF and Airline B also gives initial proposal for the same route (BOM-YYY) but without VGF. In this case : Will counter proposal be invited for both proposals i.e. with no VGF as well as with VGF If the counter proposal is invited only against the no VGF scenario, then can airline A give counter proposal for the route with no VGF. ii) Suppose Airline A has not submitted initial proposal for the route CCU-XXX (XXX being RCS airport). Can airline A give counter proposal for CCU-XXX even if no initial proposal was made by the Airline A for this route. It is not necessary for Applicants to input the routes in e-portal before the pre-bid meeting scheduled on 5 Sep 2017. As per the timelines shared in the public domain, the last date for the submission of request for stage length/ flight duration (input of routes) is 27 Sep 2017. The Applicants may request for this information for multiple RCS Routes, but only the RCS Routes (Individual Route Proposal / Network Proposal) for which the Technical Bid and Financial Bid are submitted shall be considered for further evaluation by the Implementing Agency. Please refer Section 8 and Section 9 under the NIP document for further details. i) In the case as illustrated above in point i), it is understood that one Initial Proposal asks for VGF and the other Initial Proposal for the same RCS Route (Individual Route Proposal) does not ask for any VGF. Kindly note that both the proposals are for the same RCS Route and hence, the Counter Proposals shall not be invited separately for the same Individual Route Proposal. The proposal with No VGF shall be preferred and details as per the Clause 3.8.3 of RCS Version 2.0, shall be published for inviting Counter Proposals with No under VGF requested column. Further, as per the Clause 3.9.2 of RCS Version 2.0, the Implementing Agency will provide a defined period (to be specified separately) to all other interested airline operators to submit Counter Proposals against an Initial Proposal. This would mean that the Applicant cannot submit a Counter Proposal against a proposal, for which it has submitted an Initial Proposal in first place. Therefore, in the event as illustrated in the query above, the airline A cannot submit the Counter Proposal for the RCS Route BOM- YYY. ii) With reference to Clause 3.9.2 of RCS Version 2.0, the Applicants/ airline operators can submit Counter Proposals for all proposals 1

3. Suppose multiple airlines bid for routes to/from an unserved RCS airport - with all routes being different from one another, but the total flights combined under all proposal amount to (say) 35 flights per week to/from that RCS airport, will all routes be allowed? 4. Is the following understanding correct for the number of flights that can be proposed by any single airline: - For Unserved airport: To/from NON-Priority RCS Airport: Maximum of 14 flights/week, with only 7 on any individual route To/from Priority RCS Airport: Maximum of 28 flights/week, with only 7 on any individual route - For Underserved airport : To/from NON-Priority RCS Airport: Maximum of (14 minus no. of flights, already operating) from that airport To/from Priority RCS Airport: Maximum of (28 minus no. of flights, already operating) from that airport 5. An airline bids a network proposal on A-B-C route where A-B is an RCS route with RCS flight capacity of 30 seats (15 VGF 15 non- VGF) and B-C is a non-rcs flight route. If the airline operates a 70 seater aircraft between A-B-C, how many seats can the airline sell as commercial seats between A-C? (Individual Route Proposals/ Network Proposals) for which they have not submitted Initial Proposals. Therefore, in the query above, Airline A shall be allowed to submit a Counter Proposal for the RCS Route CCU-XXX, provided there is an Initial Proposal by some other bidder for the RCS Route CCU-XXX. If multiple airlines bid for routes to/from an unserved RCS airport, all the RCS Routes bid under the Scheme, which satisfy the definition of RCS Route as mentioned in Clause 1.4.1.16 of RCS Version 2.0 at the time of bidding, will be considered eligible under the Scheme in that bidding round. Please note that as per the Clause 3.3.2 of RCS Version 2.0, a Selected Airline Operator will be required to meet the following Minimum Performance Specifications with respect to the number of RCS Flight operations per week. For Priority RCS Routes, the number of RCS Flights to be operated in a week with VGF shall be a minimum of three (3) and a maximum of fourteen (14) departures per week from the same RCS Airport such that the RCS Flights are operated on at least three (3) days of the week. For RCS Routes other than Priority RCS Routes, the number of RCS Flights to be operated in a week with VGF shall be a minimum of three (3) and a maximum of seven (7) departures per week from the same RCS Airport such that the RCS Flights are operated on at least three (3) days of the week. Therefore, irrespective of the existing number of departures per week from an Underserved Airport, a Selected Airline Operator can propose number of departures ranging between 3 to 14 per week for a Priority RCS Route and 3 to 7 departures per week for an RCS Route other than Priority RCS Route as per its market assessment/ commercial operations plan. Bidders may refer the corrigendum issued by MoCA/ AAI in this regard. 2

6. An airline is awarded an RCS route at an RCS flight capacity of 70 seats, with a frequency of 3 flights/week. In case the airline increases the frequency of flight operation between the same route from 3 frequency to 6 frequency per week, then can the airline divide the declared RCS capacity between 2 flights i.e. 35 seats in 1 flight and the remaining 35 in other flight on the same day? 7. If an airline is awarded 4 frequency/ week on an RCS route, then can these 4 frequencies per week be operated as 2 flights per day on 2 days of the week? 8. An airline is awarded with network proposal on A-B-C-D-E route. Is the airline allowed to operate A-B-C with one aircraft and C-D-E with another aircraft of same aircraft type? 9. An airline is awarded with network proposal of A-B-C-D-E route. Is the airline allowed to operate A-B-C with one flight number and C- D-E with another flight number? Please note that the RCS Flight Capacity as per the Clause 1.4.1.14 is defined as the maximum number of passenger seats per RCS Flight offered on an RCS Route, wherein an RCS Flight should satisfy Minimum Performance Specifications as per the Clause 3.3. Further, as per the Clause 3.16.2.1, the Selected Airline Operator (SAO) is allowed to increase the no. of flights on RCS Route to any number such that the number of RCS Flights can be a maximum of 14 departures/ week and 7 departures/ week for Priority RCS Routes and for RCS Routes other than Priority RCS Routes respectively. Therefore, in consideration to the above mentioned provisions, for the case as exemplified in the query, the SAO cannot split the capacity and shall need to ensure RCS Flight Capacity of 70 seats on each of the 6 flights. Bidder may note that as per the Section 3.3.2 of the scheme, the Selected Airline Operator must operate RCS Flights on at least three (3) days of the week. The airline operator may use separate aircraft for A-B-C and C-D-E, provided both are of same aircraft type (and same RCS Flight Capacity) and the same number of flights per week are operated on A-B-C and C-D-E as submitted at the time of bidding. Provided further, that while undertaking operations on the network, the sequence of RCS Routes as submitted as part of Network Proposal is maintained and are operated in a single day. By way of illustration, the operations on C-D-E cannot take place before A-B-C to ensure that the sequence of RCS Routes of network A-B-C-D-E is maintained. The bidder may refer Clauses 3.5.1 and 3.5.2 for more details. As per the Clause 3.5.3, the Selected Airline Operator needs to ensure that all the RCS Routes in a Network Proposal are connected using the same aircraft type through the same number of flights per week. Further, the sequence of routes while operations should be maintained as submitted as part of the Network Proposal. Therefore, as per the current illustration of a network proposal A-B-C-D-E, the airline may need to have one flight number for the complete Network Proposal. Additionally, bidder is requested to refer the corrigendum issued with respect to RCS Flight Capacity. 3

10. An airline bids a network proposal on A-B-C route where B-C is RCS route with an RCS capacity of 30 seats and A-B is a non-rcs route. If the airline operates a 70 Seater aircraft, how many seats can the airline sell as commercial seats (over and above the RCS capacity) on A-C route? Also, can the airline start selling A-C route even before B-C route is filled up? 11. Can an airline declare RCS flight capacity between A-B different from RCS flight capacity between B-A? For Example: For A-B route declared 25 seats as RCS flight capacity and for B-A route declared 35 seats as RCS flight capacity. 12. In the first round of UDAN Scheme,Destination like CSI Airport Mumbai an Non- RCS Route is available for bidding. But in the second round of UDAN Scheme how can I connect RCS route to Non-RCS route and other 13. If an airline is awarded a proposed network as A-B-C route where A-B and B-C are both an RCS route with declared RCS flight capacity of 70 seats respectively. Then, how many seats can the airline sell as commercial seats between A-C? 14. If an airline is awarded 6 frequency/ week on an RCS route A-B, then can these 6 frequencies per week be operated as 2 flights (frequency) per day on 3 days of the week? 15. It is observed that in NleP at Annexure III (Technical Bid information), it is mentioned that stage flight duration (in minutes) of flying path declared by AAI shall be calculated based on the shortest permissible route length between origin and destination helipads of an RCS route. However it is submitted that the helicopters have been permitted to fly on RCS routes in North East Region, hilly states of Himachal, Uttarakhand and J&K and helicopters will take circuitous routes to fly between any such RCS sectors in the hilly areas. Thus, stage flight duration (in minutes) of flying for helicopters cannot be calculated based on the shortest distance between any two points. Further, the flight duration time for each route need to also consider time required for start up /taxi/line up /Take off/approach/landings/switch off of helicopter depending on the helipad/heliport/airport. As the flight duration (in minutes) in the RCS Bidders may refer the corrigendum issued by MoCA/ AAI in this regard. Bidder may note that under the Scheme the airline operators are not allowed declare different RCS Flight Capacity on different RCS Routes of the same Individual Route Proposal/ Network Proposal. Bidder may note that airports such as CSI Airport Mumbai, etc. have been excluded from the second round of bidding under RCS. Bidders may refer the corrigendum issued by MoCA/ AAI in this regard. As per the Clause 3.3.2.1 of the Scheme, the Selected Airline Operator needs to ensure that the RCS Flights are operated on at least 3 days of the week. Therefore, it is permissible to operate 6 flights per week over 3 days of the week. The Ministry has considered the submission. Bidders may refer to the corrigendum as issued in this regard. 4

scheme has the bearing on the viability of route, therefore it is requested that for helicopters, stage flight duration based on the circuitous route submitted by bidder may be accepted. In case, the bidder's circuitous route is not acceptable, please clarify what methodology will be adopted to finalize the stage flight duration for helicopters. 16. As per clause 3.15.4.1(a), to ensure integrity of the scheduled flights on routes proposed i.e. if it fails to operate 70 percent of the scheduled flights. In this case, if any airline out of its 30 scheduled frequency in a month cancels its 17 frequency on the day of operation in the same month, due to bad weather (which is more than 70percent failed ops) and the booked passengers were taken care by flying them to nearest airport of the destination airport and then taken by local road transportation to the final booked destination. Then can the airline claims its VGF amount for the passengers taken to destination airport? 17. As per clause 2.5.8 of the Regional Connectivity Scheme, in the event that the airline operator, for any of the reasons mentioned therein, offers the non RCS seats on an RCS flight at or below the airfare cap prescribed for such RCS route under the Scheme, the VGF payable to the airline operator for such RCS route shall be deemed to have been distributed across all seats sold at or below the airfare cap so prescribed. It is not clear from the language of the Scheme as to the purpose of this clause. We request further clarification as to the necessity of the inclusion of the same in the Scheme. 18. In response to an airline operator s query in respect of compensation to said operator to mitigate the adverse impact of volatility in prices of ATF, it was stated that the VGF shall be revisited and revised on a quarterly basis to address the same. To this effect, clause 2.5.10 of the Scheme provides for the indexation of VGF to the change in Consumer Price Index Industrial Workers as published by the Government of India, the change in ATF prices, and the change in the rate of the US Dollar to the Indian Rupee. However, with regard to airline operators who do not opt for VGF, the manner in which such operators will be compensated for adverse impacts of volatility in ATF prices is not stated. Bidder may note that to provide flexibility to SAO to ensure the integrity of scheduled operations, (as per the Clause 15.1 a) of the Selected Airline Operator Agreement) the SAO needs to operate at least seventy percent (70%) of the flights scheduled by the DGCA continuously for a period of 3 (three) months or for an aggregate period of 4 (four) months within a continuous period of 6 (six) months, failure of which shall be considered as the Event of Default. On account of bad weather conditions, if the Selected Airline Operator (SAO) re-routes the flight, and ensures the transfer of passengers from Origin (O) to Destination (D), AAI may consider such a flight for VGF, provided adequate documents/ evidences are submitted to prove the diversion of flight and transfer of passengers from O to D. Bidders may note that the VGF shall be disbursed only for the number of committed/ offered RCS Seats as per the Selected Airline Operator Agreement (SAOA). No VGF shall be disbursed for the Non-RCS Seats which are sold at or below Airfare Cap (Maximum Airfare, as applicable), Therefore, the VGF per RCS Flight shall be limited to the product of RCS Seats committed/ offered and VGF per RCS Seat as per the SAOA. Bidders to note that since the bidder has quoted a zero VGF, no quarterly indexation to VGF shall be undertaken for such proposals and the VGF amount shall remain zero. The indexation in such cases shall only happen to the Airfare Caps as per the formula specified in the Scheme document. 5

19. Per clause 2.6.3.2, the annual VGF payable to any airline operator shall not exceed 30% of the total inflow of funds into the Regional Connectivity Fund. This seems to suggest that in the event the airline operator s VGF eligibility is in excess of such annual VGF limits, such VGF payouts will be restricted to the limits specified herein. It is to be understood as to whether there is proposed to be implemented any mechanism to cover the airline operator s losses arising out of such restriction on VGF. 20. Further to above, in the event that the airline operator s VGF eligibility exceeds such VGF cap of 30% as specified under clause 2.6.3.2, and the payout of VGF is restricted to the latter, it is to be understood as to whether the operator will be allowed to adjust inventory deployed on its RCS routes in such manner as to ensure that no financial losses are incurred on account of the restriction of VGF payout. 21. As per clause 2.7.1, ASKMs on RCS seats will not be available for set off under the Route Dispersal Guidelines. How is the capacity deployed on RCS seats to be shown under RDG? 22. Under sections 2.3 and 2.5, on a quarterly basis, airfare caps and VGF funding respectively shall undergo revision as per the formulae specified under the Scheme. In the event that the airline operator opts for a maximum airfare / VGF funding that is lower than the current ceilings prescribed under the Scheme in its bid, in a subsequent quarter, does such airline operator revise its maximum airfare / VGF in proportion to the change in airfare caps / VGF caps, or shall the airline operator be afforded the option to adopt the revised airfare caps / VGF caps as its revised maximum airfare / VGF funding? 23. In the event that a seat sold under RCS is cancelled, is the airline operator required to resell the seat at the maximum airfare under the Scheme, or can the same be sold at prevalent regular fares? As per the Clause 2.6.3.2 of the Scheme, the total VGF approved for a particular airline shall be capped to an annual limit of 30% of the estimated inflows in the RCF subject to the region-wise allocation cap. The proposal(s) which breach such cap shall not be awarded to the Selected Airline Operator and hence, shall be dropped from the respective bidding round. Please refer to the above response. As per Section 2.7 in the Scheme, ASKMs generated on RCS Seats shall not be allowed for set-off/ trading under RDG guidelines. However, ASKMs generated on remaining passenger seating capacity of the aircraft, i.e., Non-RCS Seats and passenger seating capacity other than RCS Flight Capacity, if any, shall be allowed to set-off/ trade under RDG guidelines as per the existing DGCA rules. For the indexation of Airfare Cap and VGF Cap under the Scheme, the formulae as specified in Annexure 4 and Annexure 5 in the Scheme, shall be applied to the Maximum Airfare and VGF per RCS Seat quoted by the Selected Airline Operator on a quarterly basis. As per the Clause 3.20.5, the Selected Airline Operator (SAO) shall sell RCS Seats first before selling Non-RCS Seats on an RCS Flight. In an event of cancellation of RCS Seat(s), i.e., the seat(s) sold below the applicable Airfare Cap/ Maximum Airfare, the SAO shall be required to resell such cancelled RCS Seat(s) prior to the sale of further Non-RCS Seat(s) from the time RCS Seat(s) get available on account of cancellation. However, as per the Clause 3.20.5.1, if certain passengers cancel their RCS Seats before the flight departure such that it 6

does not provide sufficient time to a Selected Airline Operator to resell such RCS Seats, such seats shall be considered as sold. 24. Clause 3.13.7 refers to award of simultaneous proposals to more than one bidder leading to joint exclusivity over the route. Under this clause, is it possible that a route may be awarded to more than one airline operator? 25. In the event that the airline operator identifies a route between airports not mentioned under the Scheme, but which meets the criteria of unserved / underserved airports as defined under the Scheme, can the airline operator claim the benefits on operating such a route that are available under the Scheme? 26. We understand that the Delhi Indira Gandhi International Airport is contemplating replacing all turboprop aircraft operations with narrow-body aircraft. In this case will the slots that free up after such transition be reserved for connections with RCS Airports under the Scheme for operations using narrow-body aircraft? 27. While RCS Route connections (and slots) from Delhi and Mumbai to RCS Airports were provided during the 1st round, we understand that connections to RCS Airports from Delhi and Mumbai will no longer be made available or allocated for this 2nd round of bidding. This is discriminatory to the airlines participating in the 2nd round and also not commensurate to furthering the objective of the Scheme of enhancing regional connectivity, as there are several unserved/underserved airports in proximity to Delhi and/or Mumbai that remain unconnected. Minimally, carriers should have the opportunity to use their own existing slots for RCS routes if they wish to. If certain airlines already have the required infrastructure and capability as opposed to other bidders they should have the flexibility to deploy such capability in generating regional connectivity. We do not believe that allowing airlines to utilize their additional capability in any manner As per the Clause 3.13.7, the Selected Airline Operator(s) for Simultaneous Proposals will jointly have exclusivity of operations (for a period of 3 years) for the overlapping RCS Routes. Hence, such overlapping RCS Routes may be operated by more than one airline operator as selected under the Scheme. Bidders may note that the list of Underserved Airports and Unserved Airports (Annexure -1A and Annexure -1B) provided in the Scheme document is indicative in nature. In an event, the bidder identifies an airport which is Unserved/ Underserved but not available in the Annexure - 1A or Annexure -1B or in the RCS e-portal (while bidding), the bidders are requested to bring the same to the notice of Implementing Agency for validation and accordingly, enable the bidding for the same in the system. The airline operators/ bidders are expected to undertake their own due-diligence and manage the slots on their own via undertaking slot related discussions separately with the airport operator. No change has been contemplated by the Ministry / AAI in this regard. 7

restricts level playing field, as all bidders will have some or the other advantage over the others in certain sectors. For example, bidders which own smaller aircraft or aircraft which are capable of flying to higher altitudes will have an advantage over bidders which own bigger aircraft when bidding on Routes which service smaller airports or destinations located at higher altitudes. 28. If slots for any airport which is a part of the network/individual proposal (either RCS or NON RCS part of the network) are not provided to an airline that is successful in a bid for an RCS Route/Network, we trust that the selected operator s performance guarantee/additional performance guarantee will not be encashed and the operator will not be liable in any manner for not operationalizing such route/network or the remainder of the routes on that network/individual proposal? Kindly confirm our understanding. 29. To facilitate quicker decision making on part of the bidders and an efficient bidding process the Ministry should provide a detailed list of all proposed RCS airports specifying the airports technical capabilities with the runway length / width, airport compatibility for different types of aircraft, fire-fighting capability, nearby airports. Also the Ministry must specify, if the airport requires an investment of INR 5 crores or more for developing them to service RCS operators and an estimated period of time that will be required for such development. 30. Currently there are several governmental and other entities which will be required to coordinate with each other in order to ensure that an RCS Route allocated to a selected bidder is operational as per the terms of the Scheme. Will AAI as the Implementing Agency undertake the responsibility of ensuring that each of such entities, such as the relevant State Government or the Central Government, the DGCA and AAI itself will fulfil all their obligations under the Scheme? Since the parties will only be entering into the Selected Airline Operator Agreement ( SAOA ) with the The airline operators/ bidders are expected to undertake proper due-diligence and manage the slots on their own via undertaking slot related discussions separately with the airport operator. However, in an event, the Selected Airline Operator (SAO) is not able to commence operations on RCS Route(s) as part of Individual Route Proposal/ Network Proposal due to unavailability of slots, the Performance Guarantee or Additional Performance Guarantee shall not be encashed, provided the SAO submits the supporting evidences to prove the same. Applicants are required to undertake their own due diligence and assess the suitability of airports for RCS Flight operations. Bidders may refer the Clause 3.4.3 in this regard. The airline operators/ bidders are expected to undertake proper due-diligence and address any coordination issues themselves. Further, AAI is not liable for any compensation to Selected Airline Operators under similar events as specified in the query. Consequently, no change has been contemplated by the Ministry / AAI in this regard. 8

Implementing Agency and not each of the other Governmental bodies, the Implementing Agency should take full responsibility to oversee that all other governmental instrumentalities fulfil their obligations and in case they fail to do so, AAI should be liable to provide adequate compensation and to require specific performance of obligations of such entities. 31. How much is the scope of negotiation on the draft SAOA, as several provisions in the current draft are one sided and very favorable towards the Authority? 32. We need clarification on the understanding conveyed to us during the orientation for the online portal that the remaining capacity over and above the RCS Flight Capacity cannot be sold on the sector for which we have bid. We don t understand the benefit to the bidder or the consumer of restricting capacity on RCS sectors. We suggest the following formulation: a) The concept of RCS Flight Capacity should be retained. b) There should not be any selling restrictions on any seats on the RCS flight - neither the RCS Seats nor the non-rcs or passenger seats. As demand for origin destination and connecting traffic will be dynamic, the airline should be allowed to cater to both segments simultaneously, and fill up the airplane on a first come first serve basis. c) To prevent any airline from bidding too less a number as RCS Seats, we suggest that the minimum number of seats to be offered as RCS Seats for Category 2 and Category 3 Aircraft should be either nine seats or 20% of the aircraft capacity, whichever is higher. d) The existing cap of maximum 40 RCS Seats on a RCS flight should continue. 33. Currently the process requires us to enter all planned networks and routes prior to 26th Sep 17, and once entered, these are frozen. We should be allowed to build networks after the AAI has validated sectors and their stage lengths, as the distance given by AAI will impact the applicable VGF and airfare cap, and in turn our operating economics and bid thereon. Hence the operator should be given a flexibility to provide and construct the network details along with the technical bid process. Bidder is requested to raise queries/ submit its views on specific provisions of SAOA for MoCA/ AAI's consideration. The Ministry has considered the submission. Bidders may refer to the corrigendum as issued with reference to the Regional Connectivity Scheme Version 2.0 The Ministry has considered the submission. Bidders may refer to the corrigendum as issued with reference to the Regional Connectivity Scheme Version 2.0 9

34. The documentation requirement for bidding Air Operator Certificate ( AOC ) Holders is unnecessarily elaborate; for example, memorandum and article of association, etc. are already provided to DGCA at the time of applying for the AOC. Given the timelines within which the bidding is required to be completed, the documentation requirement could be simplified and documents which have already been provided or are provided to the Ministry from time to time as a regulatory requirement should be excluded. 35. Currently the Scheme contemplates that a separate bank guarantee or additional bank guarantee (if required) is to be provided for each RCS Route allotted to a bidder. We request the Ministry to consider accepting a consolidated bank guarantee, for all our RCS routes allotted to an individual selected operator for operational convenience. Such bank guarantee shall guarantee the entire outstanding liability for all routes (and any routes for which additional guarantee is required) and as and when appropriated (if required), can be replenished with additional amounts as may be required. 36. As per point 3.3.3 one departure is considered as A to B to A. Clarification is required for the following case: Airport A is Non RCS, Airport B is RCS Priority airport,airport C is priority RCS airport. How many departure will be considered per airport if the following route is followed. A to B, B to C, C to B, B to A flown twice a day. 37. Is CocoIsland airport (VYCI) is an RCS airport in the priority area? 38. Clarification regarding the applicable bank guarantee for a company having NOC for Schedule Commuter operator and in the process of obtaining SCO permit from DGCA. It is requested that bank guarantee for this case to be considered as 5 lakh rupees. 39. We are the NSOP holder and presenty our recertification is going on as per the new rules of DGCA, our NSOP is expired due to that. In case the certification is not completed and the NSOP is not renewed before the due date. Then can we submit the proposal security of Rs. 5,00,000/- or Rs. 20,00,000/- will be applicable to us as per the requirement for NOC holders of scheduled commuter operations. No change has been contemplated by the Ministry/ AAI in this regard. Bidder may note that the Performance Guarantee (as applicable) and Additional Performance Guarantee, if any are required to be furnished for each proposal, irrespective of it being an Individual Route Proposal or a Network Proposal. Further, no change has been contemplated by the Ministry/ AAI in this regard. Bidder may note that in the case as exemplified in the query, the number of departures shall be as follows: A to B: 1 departure from Airport 'A' B to C: 1 departure from Airport 'B' C to B: 1 departure from Airport 'C' B to A: 1 departure from Airport 'B' Total Departures (Flown twice a day): From A: 2 From B: 4 From C: 2 The set of islands as highlighted do not fall under Indian territory and hence shall not be considered as RCS airport in priority area. No change has been contemplated by the Ministry/ AAI in this regard. Bidder may note that the Applicants which do not have a valid AOP but which have applied for an initial No Objection Certificate (NOC) to MoCA, for obtaining Air Operator Certificate (AOC) for Scheduled Commuter Air Transport Services or Scheduled Operator Permit (SOP) before the last date of Submission of Initial Proposals of the respective bidding cycle have to furnish a Proposal Security for an amount of Rs. Twenty 10

Lakhs. Bidder may refer Clause 14.1 of the NIP document. 40. As per RCS 2.0, ( 3.3.2.1)min of 3 and max of 14 flights per week is mandated for priority areas. Helicopters will invariably operate in the priority areas without any facilities for instrument landing, All the helipads are VFR which makes weather a very important part of flight operations. Its possible that weather may not allow any flights to operate in a week. These causes of non-operation of flights are beyond the control of the operator. How does the policy address this issue? 41. As per minimum performance specifications given in RCS 2.0 a helicopter operator must provide a defined number of seats for RCS. However, unlike fixed wing, the number of passengers carried in a helicopter may not be constant and may vary each day depending upon temperature, altitude and weather. How does the RCS address this issue? 42. Two bidders have bid a route with zero VGF and zero max airfare. What is the selection criteria in such case? 43. In the counter-bid process, a bidder wins a route quoting zero VGF and lower max airfare than the other. Will the winner get route rights in such case? 44. One bidder has bid Pt A- Pt B as individual route, another has bid same Pt A Pt B but as part of network route. Are these two routes treated distinct for the purpose of counter bid? In other words can the network bidder counter bid against the individual route bidder or viceversa? As per the Clause 15.1 a) of the Selected Airline Operator Agreement, failure by the Selected Airline Operator (SAO) to operate at least seventy percent (70%) of the flights scheduled by the DGCA continuously for a period of 3 (three) months or for an aggregate period of 4 (four) months within a continuous period of 6 (six) months shall only be considered as the Event of Default. Such a provision is likely to accommodate non-operation of flights on account of unsuitable weather conditions. Bidder may note that as per the Clause 3.16.3.1 of RCS Version 2.0, in such an event, the RCS Flight Capacity for the purposes of calculation of RCS Seats, disbursement of VGF and compliance with the terms and conditions of the Selected Airline Operator Agreement, shall be considered as the actual deployed capacity on such RCS Flight based on DGCA orders/guidelines. With reference to the Clause 3.11.1 of RCS Version 2.0, in an event, two Applicants quote zero VGF for the same RCS Route, the Applicant quoting the maximum number of RCS Seats shall be preferred. However, if both the Applicants offer same number of RCS Seats, the Applicant quoting the lowest Maximum Airfare for RCS Seats shall be identified as Selected Airline Operator. In the event that both Applicants quote same Maximum Airfare, the bidder may note that the Implementing Agency shall specify a separate procedure for breaking the tie at that stage. The Applicant once identified as the Selected Airline Operator for an RCS Route shall be granted exclusivity for operations on that route for a period of 3 years. An Individual Route Proposal with say RCS Route A-B and a Network Proposal (satisfying the provisions as mentioned in Section 3.5 of RCS Version 2.0) with one of RCS Routes as A- B shall be considered distinct and if eligible, counter proposals shall be invited for both the proposals. Further, with reference to Clause 3.9.2 of RCS Version 2.0, the Applicants can submit Counter Proposals for all proposals (Individual Route Proposals/ Network Proposals) for which they have not submitted Initial Proposals. Hence, in 11

45. As per Annexure-5 of the Scheme Version.02 August 2017 : For the purpose of above estimation, ATF prices (for Domestic operations) prevailing across four stations (Delhi, Mumbai, Kolkata and Chennai) of oil marketing companies IOCL, BPCL and HPCL - as published on their respective websites2 will be considered. For calculation purposes, for a particular date, the average price of ATF across all the four stations (Delhi, Mumbai, Kolkata and Chennai) will be considered In case the ATF price for a particular date is not available on the website of oil marketing Companies, the ATF price for the previous available date shall be considered. Rate of ATF in INR per kl (IOCL, BPCL and HPCL - as published on their respective websites) on 11.09.2017 are as below: As per IOCL website : Delhi- 50,020.00; Kolkata-54,416.00; Mumbai-49,383.00; Chennai-52,740.00 with effect from 1 st September-2017 As per BPCL website: MUMBAI- 47,458.87 : DELHI- 48,110.01: CHENNAI-50,784.1 6: KOLKATA 52,535.02, with effect from 01 Aug 2017 As per HPCL website: Chennai-40883.7 7: Kolkata-43532.81: Mumbai-39506.11: New Delhi (Palam) 40221.64: NewDelhi (T3 Terminal)-40015.60; As on 2017-09-11. Prices are exclusive of Sales Tax and Local levies. How the average price of ATF should be worked out on the particular date i.e.11.09.2017? 46. Bidder Alpha has Pt A Pt B as part of his network and is sequenced at number 5 out of 8 in the network leg. Bidder Bravo has same route Pt A Pt B as part of his network but in this case is sequenced at number 2 out of 7 routes. Both bidders recognize that route A-B is lucrative so Bidder Bravo in counter-bidding bids aggressively and wins. Part 1 of 2 (submitting in two parts due to portal restriction) Part 2 of 2 - This would lead to complete disruption of Bidder Alpha network since he would not be able to ply on A-B because of route right that is gained by Bidder Bravo. How is the network operation of Bidder the case exemplified in the query, the Applicant who submitted the Network Proposal can counter bid against the Individual Route Proposal and the Applicant who submitted the Individual Route Proposal can counter bid against the Network Proposal. Bidder may note that the Implementing Agency shall consider the average price of ATF on a particular date based on the average of ATF price on that day across four stations - Delhi, Mumbai, Kolkata and Chennai from any one website of the oil marketing companies IOCL, BPCL and HPCL and other relevant taxes. The bidder may note that as per the Clause 3.8.2.1 c) of Scheme Version 2.0, Network Proposals, which have one or more but not all common RCS Route(s) shall be considered nonidentical and all such networks shall be bid out as separate proposals. Further, as per the Clause 3.9.5.1, any Counter Proposal (Network Proposal) shall not be allowed to add/ delete/ propose any new RCS Route(s) other than the RCS Route(s) proposed as part of the Initial Proposal and released by the Implementing Agency. Therefore, in the case as exemplified in the query, during the counter bid stage, Bidder Alpha and Bidder Bravo (if bid) shall be required 12

Alpha protected in such a case? Can being outbid on one route lead to complete disruption of an entire network for Bidder Alpha? 47. We have successfully filed our initial bid of one network proposal, now we want to go for another proposal of a network, please; advice 1. do we need to upload again the same documents, uploaded for earlier initial bid...2. Do we have to make another power attorney for another network proposal/ or counter proposal. 48. We have added a Network but want to delete the same immediately. Request you to please guide us how can this be done. 49. Please refer section 3.6.7.1, where no VGF sought for particular flight (Fixed wing aircraft). As example if taken 301 km stage length flight where Airfare Cap is Rs1920 and VGF cap is Rs. 3980. in this case if no VGF sought then how much one operator can quote maximum airfare for bidding Rs or Rs5900?? 50. Clause 2.1.2.3 (d) can it be considered that Security and fire services equipment (X-ray machine, EDT etc.) will be provided along with BCAS staff for security for both passenger and Cargo. 51. Clause 2.1.2.5 (a) includes any other charge subsuming a charge for such aspects in future on RCS flights. Based on this can be assume that in all airports connected by RCS flight, the operator will get office space, ticket counter, security for both passenger and cargo without any additional cost. to bid against the complete Initial Proposal (not against their own Initial Proposal) and not just the common RCS Route (A-B). Further, as per the Clause 3.13.7, award of Simultaneous Proposals (Non-identical proposals one or more but not all common RCS Route(s)) is permitted to more than one bidder, which will allow different airline operators to operate on the common RCS Route(s), thus, resulting in loss of exclusivity of operations on such routes for an individual operator. Therefore, with reference to the query, both the Applicants Alpha and Bravo may operate on the common RCS Route A-B, subject to the provisions of Section 3.13 of Scheme Version 2.0. The bidder may also refer the detailed illustration as provided in the Clause 3.13.6. Bidder may note that the documents are to uploaded only once, and there is no need upload the same documents again. There is no provision to delete the network once created, in case the bidder wants to modify the network they can add a new network and ignore the old one. There is no compulsion, if a bidder has added a network they may or may not submit the bid for the network. The bidder may note that irrespective of the VGF quoted for an RCS Route, the Maximum Airfare cannot be more than the Airfare Cap as applicable for that RCS Route (based on its stage length). Therefore, the bidder may quote any value equal to or less than the applicable Airfare Cap depending upon its market assessment/ commercial plan. The bidder may note that as per the applicable standards and guidelines, security and fire services (free of cost) shall be provided at respective RCS Airports through appropriately trained personnel and equipment. The bidder may note that the Clause 2.1.2.5 a), refers to the charges associated with Landing and Parking of aircraft (for RCS Flights). Any other charges are not subsumed in this. 13

52. This is question in relation to clause 3.6.7 which is not clear. Let us assume a company does not want a VGF for a particular RCS route in category I of 300 km (Airfare cap: Rs. 1830 and VGF cap: Rs. 3,730 Total: Rs. 5,560). The Company does not want to take the VGF. If that is the case the company has to provide an all-inclusive maximum airfare for an RCS Seat for the purpose of bidding. It is not clear what the cap is in that case to qualify under the scheme. The wording in the scheme is 53. Need a clarity on proposal security. Do we need furnish separate security for each route or network? For example if am biding for 3 different routes. 54. Kindly advise is there any restriction on type of aircraft being twin engine or we can submit bid with single aircraft The bidder may note that irrespective of the VGF quoted for an RCS Route, the Maximum Airfare cannot be more than the Airfare Cap as applicable for that RCS Route (based on its stage length). Therefore, the bidder may quote any value equal to or less than the applicable Airfare Cap depending upon its market assessment/ commercial plan. Bidder may note that the proposal security (as applicable with reference to Clause 14.1 of the NIP document) is required to be furnished for each proposal, irrespective of it being an Individual Route Proposal or a Network Proposal. By way of an illustration, if an Applicant is bidding for a Network Proposal with 3 RCS Routes, it shall be required to furnish only one proposal security for the applicable amount, i.e., INR 5 Lakh for 3.2.1.3 a), 3.2.1.3b) Applicants and INR 20 Lakh for 3.2.1.3 c), 3.2.1.3d) Applicants of RCS Version 2.0 However, in the event, an Applicant submits 3 proposals for each of the distinct RCS Routes (3 in number), it shall be required to furnish three proposal securities for the applicable amount as stated above. Bidder is requested to refer the CAR guidelines as issued by DGCA pertaining to scheduled operations in the country. 55. Need Clarifty in Reference to serial number 14.5 of NIP, 1) which are the airports falling under this Regional Connectivity Scheme which needs investment of 5 Cr. 56. Can we start flight two times a day morning and evening session because you mention seven flights in a week what about the remaining seven please specify in detail? Applicants on the basis of their own due diligence and assessment of the suitability of airports for RCS Flight operations, are required to bid under the Scheme. Subsequently, AAI shall undertake the detailed assessment of investment requirement for the rehabilitation / upgradation of airport (nonoperational RCS Airport) infrastructure and accordingly, the Applicants shall be apprised of the list of airports requiring investment of INR 5 Crore or more and obligation of Additional Performance Guarantee. Bidder may note that as per the Section 3.3.2 of the scheme, the Selected Airline Operator must operate RCS Flights (departure) on at least three (3) days of the week from the RCS Airport. Therefore, it is permissible to operate 6 flights (departure) per week over 3 days of the week and the seventh flight can be operated on any day of the week as per the schedule filed by the 14

57. Suppose we select 24 routes in one network proposal. A-B-C-D-E-F-...X. It won t be possible to connect such a route with 1 Aircraft so can we split the route in 2 aircraft and change the sequence ie. Route 1: A-C-F-X-A AND Route 2: B-D-E-J...-B as per our flight schedule/convenience 58. I have noc for AOP but my AOP permit not yet to be issued can I apply for initial proposal? 59. We intend to participate with a 9 seater Single Engine Cessna Grand Caravan 208B Aircraft. Can we submit our Bid Yes or No.. airline operator according to its commercial operations plan. The bidder may note that the Network Proposal is required to be formed such that it can be operated in a single day. Further, the airline operator may use separate aircraft for different RCS Routes of the same Network Proposal, provided both are of same aircraft type (and same RCS Flight Capacity) and the same number of flights per week are operated on all RCS Routes of the same Network Proposal as submitted at the time of bidding. Provided further, that while undertaking operations on the network, the sequence of RCS Routes as submitted as part of Network Proposal is maintained and are operated in a single day. By way of illustration, the operations on D-E-F cannot take place before A-B-C to ensure that the sequence of RCS Routes of network A-B-C-D-E-F.X is maintained. The bidder may refer Clauses 3.5.1 and 3.5.2 of RCS Version 2.0 for more details. As per the Clause 3.2.1.3 d) of RCS Version 2.0, entities which do not have a valid AOP at the time of bidding under the Scheme, but which have applied for an initial No Objection Certificate (NOC) from MoCA, as per applicable regulations, for obtaining Air Operator Certificate (AOC) for Scheduled Operator Permit (SOP) or Scheduled Commuter Air Transport Services before the last date of Submission of Initial Proposals of the respective bidding cycle are eligible to bid under the Scheme. Bidder is requested to refer the CAR guidelines as issued by DGCA pertaining to scheduled operations in the country. 60. Are bidders supposed to submit the integrity pact on a stamp paper? 61. Do we have to fill in the blanks given in the integrity pact and SAOA Agreement or just take a print on blank paper and initial the pages There is no need of Stamp Paper for the submission of Integrity Pact. The Applicant is required to fill the requisite information in the template as provided for the Integrity Pact in the NIP document. Whereas, the SAOA is required to be initialed only on each page. 15