Why in News?

• Out of the 479 airport routes that were revived by the Union Government, under the Regional Connectivity Scheme - UDAN, 225 have ceased operations.

What’s in Today’s Article?

• About UDAN Scheme (Objectives, Working, Funding Pattern, Phases, Achievements, etc.)
• News Summary

About Regional Connectivity Scheme – UDAN:

• UDAN (Ude Desh Ka Aam Naagrik) is a regional connectivity scheme launched by the Government of India, as a part of the National Civil Aviation Policy in 2016.
• UDAN, which will be in operation for a period of 10 years (2016-26), envisages providing connectivity to un-served and underserved airports through revival of existing airports and air strips.
• The objective of the scheme is to take flying to the masses by improving air connectivity for tier-2 and tier-3 cities, and subsidising air travel on these routes.
• The routes are awarded after a bidding process, and the winning airlines are given certain incentives, along with viability gap funding (or a subsidy) equivalent to 50% of the seating capacity on their aircraft.
  • In return, the airlines sell 50% of their seats at a flat rate of Rs 2,500 per hour of flight, in order to make air travel affordable.
• Implementing Agency: Airport Authority of India (AAI) 

Funding Pattern for the Scheme:

• Concession by Central Government, State Governments/UTs and airport operators to reduce the cost of operations on regional routes; and
• Financial Viability Gap Funding (VGF) support to meet the gap, if any, between the cost of airline operations and expected revenues on such routes.
  • VGF will be shared between Ministry of Civil Aviation and the State Government in the ratio of 80:20 whereas for the States in North-Eastern region/UTs the ratio will be 90:10.

Different Phases of the Scheme:

• UDAN 1.0:5 airlines companies were awarded 128 flight routes to 70 airports.
• UDAN 2.0:
  • In Phase 2, helipads were also connected.
  • In this phase, Central government awarded contracts to 15 airliners to operate in 325 routes across hilly, remote areas.
  • It involved connecting 56 new airports and helipads to 36 existing aerodromes, as per the Ministry of Civil Aviation.
• UDAN 3.0:
  • Inclusion of Tourism Routes under Phase 3 in coordination with the Ministry of Tourism.
  • Inclusion of Seaplanes for connecting Water Aerodromes.
  • Bringing in a number of routes in the North-East Region under the ambit of UDAN.
• UDAN 4.0:Phase 4 of the scheme was launched in December 2019 with a special focus on North-Eastern Regions, Hilly States, and Islands.
• UDAN 4.1:
  • Launched in March 2021, the UDAN 4.1 round is focused on connecting smaller airports, along with special helicopter and seaplane routes.
  • In addition to these, some new routes have been proposed under the Sagaramala Seaplane Services in consultation with the Ministry of Ports, Shipping, and Waterways.
• UDAN 5.0:
  • Launched in April 2023, the UDAN 5.0 round is focused on Category-2 (20-80 seats) and Category-3 (>80 seats) aircrafts.
  • There is no restriction on the distance between the origin and the destination of the flight.
  • Airlines would be required to commence operations within 4 months of the award of the route; earlier this deadline was 6 months.

Performance of the Scheme:

• Since the launch of modern civil aviation in India in 1911, only 76 airports had been connected by scheduled commercial flights.
  • The number of operational airports has gone up to 141 from 76 in 2014.
• With 479 new routes initiated, UDAN Scheme has provided air connectivity to more than 29 States/ UTs across the country.
• More than one crore passengers have availed the benefits of this scheme.

News Summary:

• According to the Ministry of Civil Aviation, out of the 479 airport routes that were revived by the Union Government, under the Regional Connectivity Scheme, 225 have ceased operations.
• Of the 225 routes that have ceased operations, 128 routes shut down even before completing the mandatory three-year period under the scheme.
• Airlines found 70 of these routes to be commercially unviable despite the subsidy, while the remaining 58 have been cancelled either due to “non-compliance” by the airline operator, or the airline surrendering routes, or the airline companies shutting down.
• As many as 97 routes shut down after completing the three-year period during which the government provides support.
• The objective of the scheme was that after the three-year period, airlines would be able to sustain operations on their own without government support.
  • However, out of the 155 routes that have completed three years, only 58 have survived.