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Ude Desh ka Aam Nagrik (Udan), a journey from Hawai Chappal to Hawai Jahaj!
India is the World’s third largest market in aviation sector and rapidly growing. The growth is not just due to international but also domestic travel spurt. One of the key drivers for the domestic spurt has been the UDAN scheme, launched as a Regional Connectivity Scheme (RCS), providing connectivity to underserved airports in India. As of 09.02.2023, around 467 RCS routes have been operationalized.
Civil aviation sector in India has seen a complete democratization, and those who could only watch aircrafts fly are today flying under UDAN Scheme. The National Civil Aviation Policy, 2016 envisages as one of it’s key components the UDAN scheme, with the objective being to connect small and medium cities with big cities in India through air service.
The first Delhi-Dharamshala-Delhi Indigo Flight on March 26, 2023 is one such step in the direction under the UDAN Scheme to benefit direct connectivity from all over India benefitting at least half of the population of the state of Himachal Pradesh. The State of Himachal has been provided 44 routes under UDAN, of which 22 are already operational.
Dharamshala (the seat of the Dalai Lama) airport had seen its first flight in 1990, subsequently saw its operations expanding. In Dharamshala the number of air traffic movements have gone up by 110% in the past 9 years from 28 per week in 2013-14 to 50 movements as on March 26, 2023.
Government’s commitment to develop civil aviation infrastructure in the states under the UDAN scheme is also evidenced with the operationalisation of airports in 5 Northeastern states, namely, Mizoram, Meghalaya, Sikkim, Arunachal Pradesh and Nagaland in the past 8 years.
The development of the airports in small and medium cities has been the catalyst for the growth of trade and tourism in various states in India.
Aim of UDAN Scheme
Under the UDAN scheme, the common man’s dream to travel by air is being sought to be fulfilled. This is made possible as the airfare for a one-hour journey by a ‘fixed wing aircraft’ or half an hour’s journey by a ‘helicopter’ for about 500 km, has been fixed at Rs.2500/- averaging Rs 5 per km (which is lesser than taxi travel cost). The UDAN scheme saves time and money for the common man and boosts local businesses, employment and tourism in small and medium cities.
How does UDAN Scheme Work?
Aviation companies bid for air routes. The company that asks for the lowest subsidy is awarded the contract. Under this fare for each flight, the airline has to book half, or a minimum of 9, or a maximum of 40 seats. Along with this, through this scheme, the Government wants to connect the small cities of the country with the airplane facility.
Government’s Role in UDAN Scheme
The Government compensates in the form of Viability Gap Funding (VGF) to airlines for losses due to low fares, funded by the levy of a small fee on the flights operated on certain categories of domestic routes and state government contributions. The recently announced Budget 2023- 24 has also increased the allocation to the scheme to 1244 crores. Apart from this, the Airports Authority of India has waived off the airport fee such as landing charges, parking charges, Terminal Navigation Landing Charges, for the same. Further, the state governments are also providing security, electricity, and fire-fighting facilities free of cost. These benefits are provided for a period of 3 years.
Target of UDAN Scheme
- In the future, under this scheme, 1 crore passengers will be able to travel every year.
- 11000 new routes along with additional 100 airports will be operationalized in the future under UDAN. 10 water aerodromes will be introduced for 28 heliports and sea-planes. 10 airports have been proposed in the North-Eastern states.
- For the sake of balanced regional development, air services will be expanded equally across five geographical regions in the country under this scheme.
- Air transportation facility for agricultural products is to be initiated through Krishi Udan Scheme. This will be especially beneficial for North-Eastern and backward districts.
- Under this scheme, the target is to provide tickets at an affordable rate to 1 crore people annually.
- More than 300 cities of the country will get connected to each other through air routes under the UDAN scheme, out of which more than 150 cities have already been connected.
The UDAN scheme will increase connectivity among the unserved and underserved airports in tier two and tier three cities. Due to this scheme, the airfares to get to a city covered under the scheme has become almost comparable to rail ticket prices. Further, the scheme covers not only the regular airplanes and airports but also helicopters, heliports, water aerodromes and advance landing groundings. The impact of the scheme on both passenger and freight flights will undoubtedly give wings to domestic migration and tourism, economic growth and foreign and other investments across sectors and across the country. Gone are the days of over-regulation of the aviation sector and in comes an era of growth and prosperity with the scheme undoubtedly increasing accessibility of flying to India’s aam nagrik.
Niti Sudhakar, Founding Partner, DGS Associates and
Aditi Warrier, Senior Associate, DGS Associates