UDAN Scheme Current Affairs

Government sets up inter-ministerial panel to monitor UDAN

The Union Government has set up an ‘Inter- Ministerial Monitoring-cum-Coordination Committee’ to monitor the UDAN (Ude Desh Ka Aam Naagrik) scheme.

UDAN is regional air connectivity scheme (RCS) which seeks to make flying affordable by connecting unserved and under-served airports.

Key Facts
  • The committee will be responsible for coordination among stakeholders, including state governments for “time-bound” implementation of the scheme.
  • It will also monitor schemes of promotion of regional connectivity by way of revival of unserved and under-served airports/airstrips and UDAN.
  • It will be chaired by Civil Aviation Secretary and will have representations from the ministries of Finance, Defence, Home as well as Petroleum and Natural Gas.
  • Airports Authority of India (AAI) Chairman, representatives from the Directorate General of Civil Aviation (DGCA), BCAS (Bureau of Civil Aviation Security), officials of airlines and states concerned will be also its part.
Background

The Union Civil Aviation Ministry already has awarded 128 routes connecting 70 airports to 5 airlines, under the scheme UDAN Scheme. In the flights operated under RCS, around 50% of the seats will have a fare cap Rs 2,500 per seat/hour. Apart from various incentives, the operators of such flights will be extended viability gap funding (VGF) for which money is partly raised through a levy imposed on flights operating in major routes. The VGF will be in place for three years for the airlines concerned from the date of starting operations in a particular UDAN route. Operators will be provided also other benefits such as zero airport charges and three-year exclusivity on the routes.

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Government announces regional aviation routes and airlines under UDAN scheme

The Union Civil Aviation Ministry has announced regional aviation routes and airlines after the first round of bidding under UDAN (Ude Desh ka Aam Naagrik) Scheme.

In the first round, as many as 128 routes connecting 70 big and small airports across the country were selected and all flights will become active within 4-6 months.

Key facts
  • The airlines selected under this round are SpiceJet, Air India subsidiary Alliance Air and regional airlines Turbo Megha Airways, Air Deccan and Air Odisha Aviation
  • Some of the inactive airports selected are Shimla, Bikaner, Agra, Gwalior, Rourkela, Kadapa, Jharsuguda, Vidyanagar, Burnpur, Kullu, Diu, Mysore, Shillong, Jagdalpur, Salem, Utkela, and Hosur.
  • The regional airlines will connect these destinations with their nearest bigger airports such as Delhi, Chennai, Bhubaneswar, Bengaluru, Ahmedabad, Mumbai and Jaipur, among others.

UDAN Map

About UDAN Scheme

  • UDAN is an innovative scheme to develop the regional aviation market. It is a market-based mechanism in which airlines bid for seat subsidies.
  • Under this scheme, half of the seats on the plane will be capped at Rs. 2,500 per hour’s flight. Government will subsidise the losses incurred by airlines flying to dormant airports by charging Rs. 2,500 per hour’s flight.
  • 80% of the subsidy will be collected by charging a levy of up to Rs. 8,500 on each departing flight of domestic airlines and the rest 20% will come from the respective State governments.
  • Government will provide subsidy to airlines for first three years of operations when they will have exclusive flying rights on the selected routes.
  • Once the market in these routes gets jump started, it will operate on a commercial basis as per market forces of supply and demand.
Comment

UDAN is first-of-its-kind scheme globally that aims to create affordable yet economically viable and profitable flights on regional routes. It will also strive to make flying affordable to the common man even in small towns. The scheme will help to stimulate growth (in terms of employment and investment) in the regional aviation market and connect underserved and unserved airports in the hinterland areas that were not having flight services.

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