UDAN-II TAKES-OFF, BIG BOOST TO RE­GIONAL CONECTIVITY

With ad­di­tion of heli-ser­vices in the scheme, UDAN is go­ing to make jour­neys to the hills much faster and com­fort­able

SP's Airbuz - - Table Of Contents - BY RO­HIT SRI­VAS­TAVA

ON JAN­UARY 24, 2018, the Min­istry of Civil Avi­a­tion (MoCA) crossed an­other mile­stone in its ef­forts to bring the smaller cities of In­dia on the avi­a­tion map. Minister of Civil Avi­a­tion P. Ashok Ga­jap­athi Raju, along with Minister of State (MoS) Jayant Sinha, awarded the con­tracts for the sec­ond round of Re­gional Con­nec­tiv­ity Scheme (RCS) UDAN. Speaking on the oc­ca­sion, Ga­jap­athi Raju said, “Udan-II has ad­dressed the prob­lem of air con­nec­tiv­ity in the dif­fi­cult ar­eas which are ba­si­cally ar­eas with hilly tracks, where road con­nec­tiv­ity is low or prob­a­bly has no train con­nec­tiv­ity. We will con­nect 29 un­served air­ports, 13 un­der­served air­ports to 36 served air­ports and 31 he­li­pads.”

He also stated that in the ini­tial round, pro­pos­als for 48 RCS routes and for 50 RCS routes in the counter bid­ding round, were with­out Vi­a­bil­ity Gap Fund­ing (VGF). “This tells us that prob­a­bly the scheme is get­ting the de­sired re­sults and will not re­quire any form of sub­sidy af­ter some­time and is mov­ing to­wards self sus­tain­abil­ity,” the Minister added. In the first round of the scheme, 128 re­gional routes were awarded to five air­lines – Al­liance Air,

Spice­Jet, Turbo Megha Air­ways (TruJet), Air Odisha and Air Dec­can (Dec­can Char­ters).

UDAN – Ude Desh Ka Aam Naa­grik – Re­gional Con­nec­tiv­ity Scheme (RCS) of the MoCA was launched by the Minister of Civil Avi­a­tion P. Ga­jap­athi Raju on Oc­to­ber 21, 2016, and had im­me­di­ately com­menced the e-bid­ding process to se­lect air­line oper­a­tors for mount­ing RCS op­er­a­tions. This in­no­va­tive scheme aims to cre­ate af­ford­able yet eco­nom­i­cally vi­able flights on re­gional un­served or un­der­served routes. It is a mar­ket-based scheme in which air­lines bid for seat sub­si­dies.

Build­ing upon the Minister’s state­ment, Jayant Sinha, in his open­ing state­ment, said, “UDAN-I was out­stand­ingly suc­cess­ful.” On the first round of the scheme, Jayant Sinha said that with about 30 new air­ports and fund­ing of about 213 crore, the scheme had al­ready demon­strated a real rev­o­lu­tion in re­gional con­nec­tiv­ity. “In UDAN-II, not only have we built on that tremen­dous start, we have in fact en­hanced it even more. So, in 16 months of UDAN, we are go­ing to have 56 un­served air­ports and 31 un­served he­li­pads that are go­ing to be added to the avi­a­tion net­work. In UDAN-II we have 29 air­ports, in ad­di­tion to the air­ports we had in UDAN -I, as well as 31 he­li­pads that are go­ing to be added to the avi­a­tion net­work.” Ex­press­ing his plea­sure on the suc­cess of the scheme, Jayant Sinha said, “This is an as­tound­ing in­crease in the re­gional con­nec­tiv­ity and re­ally demon­strate the rev­o­lu­tion avi­a­tion is turn­ing out to be for the peo­ple of this coun­try.” The pro­pos­als with low­est VGF were se­lected.

THE SCHEME. As re­ported ear­lier by SP’s AirBuz, the air­fare cap un­der RCS-UDAN for fixed-wing air­craft ranges from 1,420 for 151 km to 3,500 for above 800 km. The MoCA has signed a me­moran­dum of un­der­stand­ing (MoU) on RCS-UDAN with 16 state gov­ern­ments/union ter­ri­to­ries to pro­vide con­ces­sions as men­tioned in the RCS scheme. The UDAN scheme of­fers 50 per cent sub­sidy to air­lines on these routes, route mo­nop­oly for three years and a host of other con­ces­sions at land­ing air­ports. It ex­pects the air­lines to cap fares at 2,500 for one hour flight on re­gional routes. The scheme that would be funded through the Re­gional Con­nec­tiv­ity Fund (RCF) cre­ated from levy of 7,500 and 8,500 charged to the air­lines on a per-flight ba­sis, could see un­served air­ports such as Jaisalmer, Bikaner, Jal­gaon, Akola, Kunj Vi­har and oth­ers be­ing con­nected through sched­uled flights.

To make it com­mer­cially vi­able for air­lines to op­er­ate flights to these air­ports at fares capped at 2,500 for one hour flight, the gov­ern­ment has com­mit­ted to cover any short­fall in op­er­a­tional cost through VGF and has also of­fered a three-year ex­clu­siv­ity to air­lines on the RCS routes. Be­sides these, it will also of­fer con­ces­sions on other ser­vices and tax re­lief on avi­a­tion tur­bine fuel (ATF) at un­der­served and un­served air­ports. The gov­ern­ment is look­ing to cre­ate an RCF of 500 crore for VGF of 12 months and any short­fall would be met by Air­port Author­ity of In­dia

THE UDAN SCHEME OF­FERS 50 PER CENT SUB­SIDY TO AIR­LINES ON THESE ROUTES, ROUTE MO­NOP­OLY FOR THREE YEARS AND A HOST OF OTHER CON­CES­SIONS AT LAND­ING AIR­PORTS

(AAI), which would be later re­cov­ered through a levy. The UDAN scheme is a key com­po­nent of the Na­tional Civil Avi­a­tion Pol­icy (NCAP) which was re­leased by the MoCA on June 15, 2016. THE UDAN-II. To ex­pand re­mote area con­nec­tiv­ity, the scheme in its sec­ond leg is fo­cus­ing on the pri­or­ity ar­eas cov­er­ing the States of Jammu and Kash­mir, Hi­machal Pradesh, Ut­tarak­hand, North East­ern Re­gion, An­daman and Ni­co­bar Is­lands and Lak­shad­weep Is­lands. In this leg of the scheme, MoCA has made pro­vi­sion for ‘Pri­or­ity RCS Route’ in which at least one of the ori­gin and des­ti­na­tion air­ports is an RCS air­port- un­der­served Air­port or un­served Air­port un­der the scheme lo­cated in pri­or­ity area(s). Any air­port with no more than 14 sched­uled com­mer­cial flight depar­tures per week, is known as ‘ Un­der­served Air­port’. Min­i­mum three flights in week with VGF and a max­i­mum can go up to 14 depar­tures per week from the same RCS Air­port. RCS Flights are op­er­ated on at least three days of the week. The Pri­or­ity RCS routes will only have Cat­e­gory-1A air­craft ( pas­sen­ger seats less than nine) will be al­lowed to fly on the pri­or­ity RCS routes only.

The high­light of the sec­ond leg is the in­tro­duc­tion of the heli-

copter ser­vice on the pri­or­ity ar­eas. The num­ber of RCS seats can­not be more than 13 in an RCS flight ir­re­spec­tive of the seat ca­pac­ity of the he­li­copter. Up to ten per­cent of the es­ti­mated an­nual inflows in the RCS will be through he­li­copters. The sec­ond round saw 141 pro­pos­als (in­clud­ing 33 for he­li­copters) from 17 ap­pli­cants. AAI, the im­ple­ment­ing agency, has is­sued Let­ter of Awards for 90 pro­pos­als. The UDAN-II is ex­pected to add 26,50,000 seats, through fixed-wings air­craft, to be cov­ered by air­fare cap of 2,500 for one hour of fly­ing and around two lakh RCS seats per an­num are ex­pected to be pro­vided through he­li­copter op­er­a­tions. The ex­e­cu­tion of these pro­pos­als will re­quired VGF es­ti­mated at 487 crore per an­num for fixed-wing op­er­a­tions and 130 crore per an­num for he­li­copter op­er­a­tions in the pri­or­ity ar­eas.

“Till about one and a half years ago, in our coun­try, only 76 cities were con­nected through sched­ules op­er­a­tions. This meant that in sev­enty years since in­de­pen­dence 76 air­ports get­ting con­nected meant roughly adding one air­port per year,” Ra­jiv Nayan Choubey, Sec­re­tary, Civil­ian Avi­a­tion said. “In last one and half years of UDAN, we have sud­denly added 56 more air­ports,” he added. The Sec­re­tary also men­tioned the cities which are the high­light of the project such as Kargil which will have air con­nec­tiv­ity for the first time. Hubli, in Kar­nataka, is go­ing to be con­nected to nine other cities in the coun­try. The green­field air­port of Kan­nur in Ker­ala will be con­nected to eight cities on its in­au­gu­ra­tion. Sim­i­larly, Al­la­habad is get­ting con­nected to 12 cities in the coun­try.

The Gov­ern­ment has ap­proved a grant of 4,500 crore for the up­grade or re­vival of air­ports in In­dia. Cur­rently, un­der UDAN-I, around 25 air­ports are be­ing up­graded through an in­vest­ment of 250 crore. The 56 un­served air­ports/he­li­pads will also be cov­ered un­der this scheme. To en­sure flow of fund for the scheme, AAI will trans­fer 200 crore out of its div­i­dend to be paid to the Gov­ern­ment of In­dia, di­rectly to the RCF which will meet this year’s re­quire­ments for the scheme. The same ex­er­cise will be car­ried out in the next fi­nan­cial year so that there is no ad­di­tional bur­den on the air­lines or pas­sen­gers. For the next fi­nan­cial year the re­quire­ment for the scheme is around 500 crore. Gov­ern­ment has de­cided that no air­lines will be al­lowed to be out of pocket on the ac­count of VGF not be­ing re­leased.

Since the flag­ging off of the first UDAN flight un­der RCS on Shimla-Delhi sec­tor by Prime Minister Naren­dra Modi, on April 27, 2017, flights un­der UDAN-I have com­menced from 16 RCS air­ports namely, Agra, Bhatinda, Gwalior, Kadapa, Kandla, Lud­hi­ana, Mysore, Nanded, Pondicherry, Por­ban­dar, Ozar (Nasik), Shimla, Vidyana­gar, Bikaner, Jaisalmer and Jal­gaon. Si­mul­ta­ne­ously, Prime Minister Modi also flagged off the in­au­gu­ral UDAN flights on Kadapa–Hy­der­abad and Nanded-Hy­der­abad sec­tors. Air­line will have to start their ser­vices within six months for all the lo­ca­tions awarded un­der UDAN-I ex­cept for the air­ports which are un­der­go­ing or re­quir­ing ex­pan­sion.

THE UDAN SCHEME IS A KEY COM­PO­NENT OF THE NA­TIONAL CIVIL AVI­A­TION POL­ICY (NCAP) WHICH WAS RE­LEASED BY THE MOCA ON JUNE 15, 2016

ATR 72-600 IndiGo on the ground at the ATR De­liv­ery Cen­tre

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