VI­A­BIL­ITY GAP FUND­ING FOR UDAN

SP's Airbuz - - News Brief -

Terming the gov­ern­ment’s re­gional air con­nec­tiv­ity scheme UDAN a big suc­cess, Spice­Jet chief Ajay Singh has said the air­line has not taken the vi­a­bil­ity gap fund­ing (VGF) so far as the routes op­er­ated by it un­der the scheme are fi­nan­cially vi­able on their own. UDAN (Ude Desh ka Aam Naa­grik) aims to con­nect un­served and un­der-served air­ports as well as make fly­ing more af­ford­able for the masses. Spice­Jet has bagged routes in the first and sec­ond rounds of bid­ding un­der the scheme. “On UDAN, our phi­los­o­phy at Spice­Jet is that wher­ever VGF is not re­quired, we will not take it be­cause the gov­ern­ment should use the money where it is re­quired,” Ajay Singh said. “So far this has proved to be right be­cause all the sec­tors we are fly­ing as yet are fi­nan­cially vi­able with­out VGF,” he said.

Air­lines par­tic­i­pat­ing in the scheme are ex­tended VGF which is shared by the re­spec­tive state gov­ern­ment and the Cen­tre as well as cer­tain other in­cen­tives. The Cen­tre con­trib­utes 80 per cent of the VGF amount, while the re­main­ing comes from the state gov­ern­ments con­cerned and in the case of North-East­ern states and union ter­ri­to­ries, the shar­ing ra­tio is 90:10. The CMD Spice­Jet said that UDAN has been a big suc­cess as so many un­used air­ports in smaller cities are now com­ing into use. The bud­get car­rier Spice­Jet op­er­ates an av­er­age of 402 flights daily to 51 des­ti­na­tions, in­clud­ing seven in­ter­na­tional ones. It has a fleet of 38 Boe­ing 737NG and 22 Bom­bardier Q400s.

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