Only 1 of 4 in UDAN routes survive on completion of 3 years
- Only one out of four routes under the low-cost flying scheme called UDAN have survived after completing the government's subsidy period of three years, according to information shared by the Ministry of Civil Aviation before a Parliamentary panel.
- Of the 94 RCS-Udan routes that have completed 3-year tenure till 30.11.2021, only 22 routes are in operation.
Ude Desh Ka Aam Nagrik (UDAN) scheme
- The scheme was launched in 2016 and is also known as regional connectivity scheme (RCS).
- The aim of the scheme was to take flying to the masses and improve air connectivity to tier-2 and tier-3 cities.
- Under the scheme, airlines have to cap fares at ₹2,500 per seat per hour of flight for 50% of the seats in a plane for which they receive a viability gap funding (subsidy) from the government along with some other benefits.
- The government expected that after the expiry of the three-year subsidy period, airlines would be able to sustain the routes without outside support.
- The scheme document says the key guiding principle is to encourage ""sustainability of operations under RCS in the long term — such that the connectivity established is not dependent on VGF in perpetuity"".
- It also recognises that select areas may need funding support for longer periods.
- Under the UDAN Scheme up till now, approval has been given to four phases- UDAN 1, UDAN 2, UDAN 3 and UDAN 4.
Progress of scheme
- Since 2017, there have been seven rounds of bidding for routes during which 948 have been awarded to airlines and helicopter operators.
- Of these 403 routes have commenced operations.
- Of the 154 unconnected airports (including 14 water-aerodromes and 36 heliports have been identified for operation of RCS flights) planned to be revived, 65 have resumed flights.
- The government has also told the parliamentary committee that 300 routes ""have been affected due to poor demand on account of Covid-19 pandemic situation"".
- This means that the routes have seen demand plummet in view of which the government has allowed airlines to reduce their frequency to 60%, on the condition that the subsidy too will be cut proportionately.
Challenges in commencing flights on awarded routes
- Difficult airline business which has low yield and high operating costs
- Lack of slots at congested airports like Delhi and Mumbai
- Non-availability of smaller planes and maintenance issues which require procurement of spare parts from abroad.
- Delays in completing airport development work due to lack of funds and non-availability of land.
- Stakeholders should work towards making the UDAN scheme sustainable on its own and improve its efficiency.
- Airlines should undertake marketing initiatives so that more and more people can take benefit of the UDAN scheme.