New Delhi/Kanpur, Dec 4 (IANS): After serving the Indian armed forces in various capacities, the German-origin, India-made twin-turboprop Dornier Do-228 aircraft is soon expected to don the colours of flag carrier Air India to boost regional connectivity.

The aircraft, best known for its specialist roles of surveillance, transport, search and rescue, has been found fit by the national passenger carrier to provide ferrying services under the country's ambitious regional connectivity scheme (RCS) christened as UDAN (Ude Desh ka Aam Naagrik). 

According to two senior officials with the state-run Hindustan Aeronautics Ltd (HAL), Air India has shown interest in at least two civilian versions of the 19-seater aircraft.

"Air India has shown interest in the Dornier aircraft. This has sprung from the fact that the aircraft has a very low operational and maintenance cost," a senior HAL official told IANS on condition of anonymity.

"Even in terms of the overall off-the-shelf price and lifecycle costs, the aircraft is far too competitive to its closest rivals, not to mention the proven track record of the aircraft with the Indian armed forces," the official told IANS on the phone from Kanpur, where the aircraft is manufactured under licence.

The official elaborated that though due diligence has been conducted by Air India, the two parties are yet to enter into a formal agreement for purchasing the two aircraft.

"We are currently manufacturing two Dornier aircraft for civilian roles which will be ready by the mid of next year," the official said.

The twin-turboprop, high-wing aircraft has been used for different purposes, such as VIP transport, surveillance, air observation, air ambulance services, cargo and logistics support, and maritime surveillance.

Last year, the aircraft had received regulatory approval from the Directorate General of Civil Aviation (DGCA) for a civilian role in accordance with the Civil Aviation Requirement (CAR 21G).

The aircraft originally manufactured by RUAG -- a Swiss technology major -- is being license manufactured by HAL since the 1980s at its Kanpur facility.

Air India, which will participate in the upcoming reverse-bidding round for allocation of RCS routes on December 5, is said to have selected the aircraft for its low-operational cost.

This may be the second innings of the aircraft in civilian role after it had served the few civil aviation players more than two decades ago.

"Operating a small aircraft with lesser number of seats jacks up the total operational cost manifolds. So an aircraft with an overall low operational and maintenance cost is best chosen for these types of operations," an Air India official said.

The UDAN scheme envisages enhancing air passenger traffic in the country by stimulating demand on regional routes.

The operations under the scheme are intended to provide air connectivity to unserved and remote routes, with airfare being capped at Rs 2,500 for an hour's journey of around 500 km.

The allocation of routes under the scheme will be based on a reverse bidding mechanism, with selected airlines getting a VGF (viability gap funding), apart from various other financial concessions for a period of three years.

While the central government is expected to provide concessions in the form of reduced excise duty and service tax, the state governments will have to lower the VAT (value added tax) on air turbine fuel (ATF) to one per cent or less.

Besides, the state governments would not charge on security and fire services, and electricity, water and other utilities would be provided at concessional rates.

On their part, airport operators will not impose landing and parking charges and terminal navigation landing fees. They would also offer discounts on route navigation facility charges.

As per another HAL official, "Last year, the HAL board sanctioned the production of two civil Dornier aircraft. HAL intends to operate these from its own airport at Nashik."

Last month, the Union cabinet had approved the purchase of 12 Dornier aircraft for the Indian Navy for Rs 2,500 crore.

Currently, HAL is manufacturing 16 Dornier aircraft for various customers, including the IAF. In 2015, the HAL had bagged an order for 14 Do-228 aircraft for the IAF.