- UDAN scheme in India aims to connect small towns through subsidized air routes and develop regional airports. Over 12 million passengers have flown without flights since its inception, and more airports are being built.
- However, the scheme has faced challenges, with only 54 out of 128 awarded routes being operational by 2020. Air traffic on UDAN routes decreased by more than 20% in December 2022 primarily to the COVID pandemic.
- The next phase of UDAN will focus on improving last-mile connectivity in remote areas, promoting the operations of small aircraft.
Even with one of the fastest-growing aviation markets in the world, India has millions of passengers who have never set foot in a plane. While affordability continues to be a barrier for many, accessibility and connectivity have also been big reasons for a significant number of passengers not taking a flight.
To solve this problem, the Indian government started a regional flying scheme called UDAN a few years ago. Airlines were incentivized to operate routes to certain destinations, and newer airports were built while some existing ones were upgraded. So, how much has this initiative achieved? Let’s find out.
What is UDAN?
The Government of India unveiled the UDAN (Ude Desh Ka Aam Nagrik) scheme in October 2016. The term UDAN loosely translates to “flying made possible for the common citizen.” The project aims to connect small towns in India through subsidized air routes and to develop regional airports.
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Under this scheme, the government provides funding through various concessions at the central and state levels and through airport subsidies. The central government also provides what is known as Viability Gap Funding (VGF) to make routes financially viable for commercial airlines. VGF is reduced if the passenger load factor remains high and is discontinued after three years when the route becomes self-sustainable.
Support also comes from reducing various taxes and waiving several charges at airports, such as parking and landing fees for UDAN flights.
More than 12 million passengers have flown without flights
The Minister of State in the Ministry of Civil Aviation, Gen. VK Singh, recently revealed that more than 12 million people have traveled on UDAN flights since the scheme started. He added that more than 145 airports, including nine heliports and two water aerodromes, have been built/made operational so far.
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Furthermore, approval has also been given for the revival and development of 100 unserved and under-served airports, helipads, and water aerodromes by 2024. However, the scheme has not been without its roadblocks.
In 2017, five airlines — SpiceJet, Alliance Air, TruJet, Deccan Charters, and Air Odisha — were awarded 128 routes. By 2020, only 54 routes were operational. Deccan Charters and Air Odisha bagged two-thirds in the first round of bidding, but they performed so poorly that those routes had to be cut.
Data from December 2022 also revealed that air traffic on UDAN routes decreased by more than 20% compared to the year before, significantly affected by the COVID pandemic.
The central government is expected to reveal the next phase of the UDAN scheme, in which it plans to focus on the last mile connectivity in remote areas. According to the Financial Express, the scheme will attempt to promote operations of small aircraft that can seat between 9 and 20 passengers. The report quotes a source as saying,
“The scheme will promote connectivity to many airstrips and airports which have shorter runways like Pantnagar, Aligarh as well as Advance Landing Ground (ALG).
“This version will provide operational flexibility to small aircraft operators. Under this version, operators will be able to service a maximum of 40% of their annually quoted RCS (regional connectivity scheme) seats and a minimum of 10% in a quarter.”
While UDAN has had its ups and downs, the scheme has benefited millions of those who, until not too long ago, did not have access to air connectivity. Hopefully, as it enters its next phase, more people from India’s tier 2 and 3 towns, including many first-time flyers, can take advantage of its benefits.
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With inputs from Financial Express