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.

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.

Month: Current Affairs - March, 2017