Why in the News?

• The Union Cabinet has approved a revamped UDAN Scheme with higher funding and extended subsidy support.

What’s in Today’s Article?

• UDAN Scheme (Objectives, Key Features, Funding Mechanism, Achievements, Challenges, etc.)
• News Summary

UDAN Scheme

• The Ude Desh ka Aam Nagrik (UDAN) scheme was launched in 2017 under the Regional Connectivity Scheme (RCS) to enhance air connectivity to underserved and unserved regions.
• Objectives

• Improve regional connectivity across Tier-2 and Tier-3 cities.
• Make air travel affordable for common citizens.
• Promote balanced regional development.
• Enhance the infrastructure utilisation of unused and underutilised airports.

• Key Features

• Airlines are selected through a competitive bidding mechanism.
• Viability Gap Funding (VGF) is provided to airlines to operate on less profitable routes.
• 50% of seats are offered at a capped fare of around Rs. 2,500 per hour of flight.
• Focus on connecting remote, hilly, and island regions.

• Funding Mechanism

• Initially funded through a Regional Connectivity Scheme levy imposed on flights operating on major routes.
• The levy subsidised airlines operating on regional routes.

• Achievements of the Scheme

• Over 600 routes have been operationalised since launch.
• More than 90 airports, including many previously unused airstrips, have been revived.
• Improved last-mile connectivity in remote areas such as the North-East and hilly regions.

• Challenges

• Low route viability after subsidy withdrawal.
• Limited passenger demand in certain regions.
• Operational challenges such as infrastructure gaps and airline sustainability.
• High discontinuation rate of routes after the subsidy period.

News Summary

• The government has approved a major revamp of the UDAN scheme to address structural issues and improve sustainability.
• Increased Funding and Scope
  • The revamped scheme has a total outlay of 28,840 crore, which marks a nearly six-fold increase from the earlier allocation.
  • The scheme now goes beyond airport redevelopment to include support for operations and maintenance.
• Extension of Subsidy Period

• Subsidy support for airlines has been extended from three years to five years.
• This aims to improve route viability and reduce premature discontinuation.

• Shift in Funding Source

• Subsidy funding will now come directly from the government exchequer instead of the RCS levy.
• This marks a significant policy shift in financing the scheme.

• Viability Concerns Highlighted
  • The revamp was triggered by poor performance under the earlier scheme:

• Over 90% of routes fell into disuse after subsidy withdrawal.
• Only about 7%-10% of routes remained viable beyond the subsidy period, as noted by a CAG report.
• Out of 663 routes launched since 2017, 327 have been discontinued.

• Airport Infrastructure and Expansion

• 100 additional airports will be redeveloped with an outlay of Rs. 12,159 crore.
• Around 441 aerodromes will receive operational and maintenance support.
• This reflects a shift from infrastructure creation to sustained operational support.

• Focus on Last-Mile Connectivity

• Development of 200 helipads to improve connectivity in remote regions.
• Investment in helicopters and small aircraft to strengthen regional aviation networks.

• Support for Aircraft Procurement

• Procurement of HAL Dhruv helicopters for Pawan Hans.
• Procurement of HAL Dornier aircraft for Alliance Air.
• This aims to enhance fleet availability for regional routes.