Centre moots overseas UDAN
16, Aug 2018
Prelims level : Schemes Mains level :
Why in news?
- The government is planning to extend its regional connectivity scheme Ude Desh Ka Aam Nagrik (UDAN) to overseas locations also as part of which it is evaluating plans to link Guwahati to Dhaka, Kathmandu, Kuala Lumpur, Yangon, Singapore and Bangkok.
Draft of the scheme:
- The scheme is designed for State governments that are keen to promote air connectivity on international routes identified by them and for which they are willing to provide subsidy to airlines.
- As per the draft, a State will identify international routes for which the Airports Authority of India (AAI) will determine a subsidy amount per seat and invite bids from domestic carriers. This will be followed by airlines submitting their proposals, which will include the routes they wish to connect as well as the subsidy needed by them.
- The airlines will bid on the percentage of flight capacity for which they require financial assistance, provided that the figure doesn’t exceed 60% of the flight capacity. The entity that quotes the lowest amount will be awarded subsidy for a particular route.
- However, the government will grant financial aid only for the actual number of passenger seats that are unsold, even if the airline had sought subsidy for a higher percentage of seating capacity at the time of bidding.
- An airline that is awarded a particular route will have exclusive rights to a subsidy on that route for a period of three years. The scheme is meant for domestic airlines.
- Only fixed wing aircraft with more than 70 seats can be operated under the scheme and airlines will have to conduct a minimum of three and a maximum of seven departures on a given route on three days in a week.
Key difference between Regional connectivity scheme and UDAN international:
- The key difference between this scheme and the regional connectivity scheme (RCS) for domestic routes is that there is no capping of fares. Under RCS, fares are capped at ₹2,500 for one hour of flight on a fixed wing aircraft in order to make air travel affordable, which was why the scheme was called Ude Desh Ka Aam Nagrik (UDAN).
- The primary objective of Regional Connectivity Scheme – UDANis to facilitate regional air connectivity by making it affordable as stated in the RCS document released by the Ministry of Civil Aviation.
- With the launch of Regional Connectivity Scheme (RCS) UDAN (‘Ude Desh ka Aam Nagrik’) the aviation sector is set to get a big boost and tap huge market of middle-class flyers living in Tier-2 and Tier-3 cities. This is the first-of-its-kind scheme globally which harnesses the power of the markets to provide a public good.