Regional Connectivity Scheme “UDAN (Ude Desh ka Aam Naagrik)”
UDAN is an innovative scheme to develop the regional aviation market. It is a market-based mechanism in which airlines bid for seat subsidies. This first-of-its-kind scheme globally will create affordable yet economically viable and profitable flights on regional routes so that flying becomes affordable to the common man even in small towns.
The scheme would be in operation for a period of 10 years. The UDAN scheme will be applicable on flights which cover between 200 km and 800 km with no lower limit set for hilly, remote, islands and regions which are security sensitive. The state governments would reap the benefit of the development of remote areas; enhance trade and commerce and more tourism expansion.
The scheme UDAN envisages providing connectivity to un-served and underserved airports of the country through the revival of existing air-strips and airports. The operators could seek a Viability Gap Funding (VGF) apart from getting various concessions.
The scheme aims to boost air travel in Tier II and Tier III cities by capping fares at Rs 2,500 per one hour flight. The Airports Authority of India is the implementing authority of the scheme.
As per the scheme, the Union Government will subsidize the losses incurred by airlines flying out of dormant airports. About 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. State government are bound to provide free security and fire service and utilities at concessional rates.
There will be no landing charges, parking charges and Terminal Navigation Landing Charges will be imposed for RCS flights. Maharashtra has become the first state to sign a MoU with the ministry of civil aviation and the Airports Authority of India for Regional Connectivity Scheme.
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