The pity is that this initiative is seen as fulfilling a social objective. Air India, a full-service airline unlike some private carriers with hidden costs for baggage, seat allocation and food, should be encouraged to go further and explore all commercial options for expanding the air travel pie.Less than one per cent (60 million) of inter-city travellers choose to fly.The writer is adviser, Observer Research Foundation. More important, the fact that its bottomline is attracting leadership-level eyeballs is welcome for a state-owned company that got budgetary support of Rs 19,900 crores in the 2012-16 period. Pulling away rail travellers willing to pay AC fares to fly is a good one. The good news is that such mindsets are changing. Faster and better passenger trains are an option too. Seen through the binary vision of poor versus non-poor, air travel is a luxury used mostly by the rich. If it induces rail travellers to fly instead, it will be a win-win. Imposing penal taxes on air travel is a natural corollary.The Centre has launched a parallel scheme to improve air connectivity by creating a special fund to finance the gap in financial viability for linking Tier-2 and Tier-3 cities by air. But he admits that beyond 1,500 km, air travel would still be cheaper.Air India recently made the headlines by offering last-minute unsold seats at the price of AC rail tickets. But this disruptive innovation in transportation is yet to be piloted and tested. High-speed trains of the type envisaged between Mumbai and Ahmedabad and later between New Delhi and Varanasi can be viable only on high-density routes.This new initiative could bomb. The need for better regional connectivity is obvious in a country of India’s size, that is also saddled with our dodgy surface transport infrastructure.Disruptive price innovation in passenger travel as a whole is a welcome move to squeeze out hidden value.In lightly-policed countries like ours, the security and safety of ultra high-speed inter-city passenger trains is a matter of some concern. There are around 50 of these. But now several states most affected by poor connectivity wisely responded to the Centre’s efforts to de-demonise air travel. Musk estimates the capital cost at $6 billion, just a fraction of the $68 billion planned to be spent on the high-speed rail link between Los Angeles and San Francisco. Around 50 per cent of air traffic today and the crane cooling unit bulk of profits are from flights linking the seven large metros. This is an effective way to kill the long-term sustainability of air operations on these routes. But for significant numbers easy connectivity is also an issue. What is more significant is that it signals the Maharaja’s changed can-do business-oriented approach. It is suitable for connecting urban growth hubs at distances beyond 500 km under the "enclaved pattern" of development. But if it makes regular air travellers who are time flexible wait till the last minute to book tickets, it could squeeze revenues further. State governments earlier saw air travel as a cash cow and levied VAT at penal rates of upto 30 per cent. So deep is the association of private enterprise and markets with the rich that even this government, with its massive mandate, has to battle populist urges to stay on course with its reform agenda. It makes a lot of business sense for the national carrier: every marginal rupee it earns adds to its bottomline. Globally, every job created directly in civil aviation leads to an additional six jobs indirectly. The fuel cost is 50 per cent of an airline’s total costs. Only a link with growth will induce serious air operators to see the proposed subsidy as an initial sweetener rather than a perpetual crutch. Our fastest passenger trains run at an average speed of only 80 km/hour. Travelling from Kanyakumari, on the Indian Ocean, to Jammu, just below the Himalayas, or from Dwarka, on the Arabian Sea,K to Dibrugarh in Assam takes at least three days by train and even longer by road. But it will take at least two decades to build upgraded rail tracks and the appropriate rolling stock. The intrepid Elon Musk of the SpaceX rocket venture; Tesla Wall and automated electric car, has envisaged of travel by Hyperloop — an elevated tube mounted on pylons with passenger pods pushed through at hyper-speeds. Civil aviation is the neglected child of the ersatz socialism we have long practised. Air travel is more difficult to disrupt and offers higher security levels as it is off the ground. As the e-commerce market has found, funding losses to push out the competition quickly reaches the endpoint.Regional connectivity shouldn’t be branded as a populist goody. Even CPI(M)-ruled Tripura was persuaded to reduce VAT to 18 per cent. For most, the higher cost is the barrier. Air connectivity drives and contributes to growth and decent jobs. But this is a calculated risk that must be tested. The Union government has worked quietly but effectively since 2014 to convince state governments not to levy penal taxes on air turbine fuel, which cripple expansion of this sector.Till just two years back, the thought of air travel competing with trains was a fantasy. This should be distinguished from the price war unleashed by private low-cost airlines a decade ago, and again in 2014, to gain marketshare in aviation. Orissa, Madhya Pradesh, Chhattisgarh, Jharkhand and West Bengal slashed VAT to nominal levels in late 2014