UDAN takes off

Vayu Aerospace and Defence - - News -

The Regional Air Con­nec­tiv­ity Scheme, pop­u­larly known as UDAN ( Ude Desh ka Aam Na­grik) has been launched with first flight from Simla to Delhi in late April. There are se­lect air­lines to op­er­ate on 128 routes to 70 air­ports.

The Regional Con­nec­tiv­ity Scheme (RCS), also known as UDAN ( Ude Desh ka Aam Na­grik, trans­lated as ‘let the na­tion’s com­mon man fly’) will shortly get un­der­way, with five air­lines, in­clud­ing SpiceJet and Air In­dia sub­sidiary Al­liance Air, win­ning bids to op­er­ate on 128 routes. 70 air­ports, in­clud­ing 31 un­served and 12 un­der-served sta­tions, will be con­nected un­der the new scheme, which will have fares for 50 per cent of seats on each flight capped at Rs 2,500 per seat per hour of travel. Air Odisha re­ceived the max­i­mum num­ber of UDAN routes at 50, fol­lowed by Air Dec­can with 34 and Turbo Megha Air­ways with 18. Al­liance Air will op­er­ate 15 routes, while SpiceJet won bids for 11.

An­nounc­ing the names of win­ning bid­ders and the routes, Civil Avi­a­tion Sec­re­tary RN Choubey said 128 routes are be­ing awarded to five op­er­a­tors, which will fly 19- to 78-seat air­craft con­nect­ing air­ports spread across 20 states and union ter­ri­to­ries, in­clud­ing Pun­jab, Ut­tar Pradesh, Mad­hya Pradesh, Ma­ha­rash­tra, Andhra Pradesh, Gu­jarat, Hi­machal Pradesh, Kar­nataka, Tamil Nadu and Puducherry. Air­ports that will be con­nected un­der UDAN in­clude Bhatinda, Shimla, Bi­laspur, Neyveli, Cooch Be­har, Nanded and Kadapa. Un­der the scheme, op­er­a­tors will be ex­tended ‘vi­a­bil­ity gap fund­ing’ — for which money is partly raised through a levy of up to Rs 8,500 on flights op­er­at­ing in ma­jor routes like Delhi and Mum­bai. The vi­a­bil­ity gap amount is es­ti­mated to be “around Rs 205 crore per an­num” for the op­er­a­tors cho­sen in the first round of bid­ding, said Choubey. When asked how the amount of Rs 205 crore could trans­late in terms of in­creased price on fliers on the ma­jor routes where the levy is im­posed, Choubey said it would be around “Rs 50 per pas­sen­ger. That is the ‘ball park’ fig­ure, which is less than 1 per cent of the av­er­age ticket price.”

Choubey also said that air­ports to be served un­der this round of UDAN are in “ready to fly or nearly ready to fly con­di­tions” and the next round of bid­ding would “com­mence shortly.” Min­is­ter of State for Civil Avi­a­tion Jayant Sinha said cri­te­ria for se­lect­ing the win­ning bid­ders was based on the level of vi­a­bil­ity gap fund­ing each of them sought per seat. The vi­a­bil­ity gap fund­ing would be in place for three years for the air­lines con­cerned from the date of start­ing op­er­a­tions in a par­tic­u­lar UDAN route. The scheme also pro­vides for var­i­ous ben­e­fits in­clud­ing no air­port charges and three-year ex­clu­siv­ity on the routes.

How­ever, SpiceJet CMD Ajay Singh said that the air­line would not be avail­ing vi­a­bil­ity gap fund­ing, while Am­ber Dubey, Part­ner and Head of Aero­space and De­fence at KPMG in In­dia pointed out that timely pay­ment of vi­a­bil­ity gap fund­ing would be key to sus­tain­able op­er­a­tions. “AAI must in­stall fool-proof mon­i­tor­ing mech­a­nism to en­sure no un­due de­lays hap­pen,” he said.

Im­age courtesy In­dian Ex­press

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