India’s regional air connectivity gets a big boost with UDAN

Source: Ministry of Civil Aviation

India’s aviation sector undergoing dynamic transformation in the recent past. The need for improving regional air connectivity by starting air service at smaller cities has been finally addressed. The new Ude Desh Ki Aam Naagrik (UDAN) Scheme by Government of India is trying to solve the issue of last mile air connectivity by starting operations at 43 under-served airports by September 2017 in a first phase. The Civil Aviation Ministry awarded regional air routes to five operators (Alliance Air, Air Odisha, TruJet, Spice Jet, Air Deccan) who won the bid.

The Government is providing ‘viability gap funding’ under the scheme so that air fare for a one-hour journey is capped at Rs. 2,500 per passenger for 50% seats in each flight. The air fare subsidy is shared by Central and State governments. Also, range of tax concessions would be provided to support the scheme. Subsidy would remain for next 3 years while UDAN scheme is for next 10 years. The UDAN scheme is aimed at strengthening air connectivity network of Tier 2 and 3 cities so that large proportion population can benefit. On March 5, Central Government approved a Rs. 4,500-crore plan for the development and up-gradation of 50 under-served or unserved airports and airstrips in India.

Total 128 routes across India were awarded among 5 airlines. Air Odisha tops as it got 50 routes to operate followed by Air Deccan (34), TruJet (18), Alliance Air (15) and Spice Jet (11). The time holds lot of excitement for aviation sector as dream project of the Prime Minister Narendra Modi is all set to change the rules of the game.