1. Flying made easy for common man: Aviation Minister awards 128 routes under UDAN; here’s all you need to know!

Flying made easy for common man: Aviation Minister awards 128 routes under UDAN; here’s all you need to know!

Fulfulling Narendra Modi's vision of regional connectivity, Aviation Minister Ashok Gajapathi Raju on Thursday awarded 128 routes to a total of five operators under UDAN wherein fares are capped at Rs 2,500 for one-hour flights. "

By: | Updated: March 30, 2017 6:11 PM
. “UDAN network will cover the whole country, giving a major economic boost to hinterland areas,” the minister said.

Fulfulling Narendra Modi’s vision of regional connectivity, Aviation Minister Ashok Gajapathi Raju on Thursday awarded 128 routes to a total of five operators under UDAN wherein fares are capped at Rs 2,500 for one-hour flights. “UDAN network will cover the whole country, giving a major economic boost to hinterland areas,” the minister said. He also added that UDAN will have a positive effect on the economy, in terms of employment and investment. Further, chalking out the details of the scheme, MoS Aviation Jayant Sinha said that the first flight under Regional Connectivity Scheme will take place in April. “Criteria on the basis of which airlines were selected was the extent of VGF – viability gap funding – demanded by them. UDAN will stimulate the growth of regional aviation market in India,” he said. “India launched the Regional Connectivity Scheme to get more people flying in what is already the world’s fastest-growing aviation market. Under the scheme, the government has capped fares and is offering incentives to attract airlines to fly less traversed routes. The government will also provide Rs 2.05 billion for financial support to boost airline travel between smaller cities,” Sinha added. Here’s all about the scheme:

1) Over 45 unserved and under-served airports would be connected under the scheme — UDAN (Ude Desh ka Aam Naagrik) that seeks to make flying more affordable.

2) The operators are Air India subsidiary Airline Allied Services, SpiceJet, Air Deccan, Air Odisha and Turbo Megha. They would be operating 19-78 seater aircraft.

3) 13 airports in Tier II and Tier III cities which did not have many flights in a week will see more flights. The airports that would be connected under UDAN include Bhatinda, Puducherry and Shimla

 

4) On each flight, 50 per cent of the seats would have a cap of Rs 2,500 per seat/hour, Civil Aviation Secretary R N Choubey said. Under UDAN, the operators would be extended viability gap funding.

5) The amount is estimated to be around Rs 205 crore per annum for the operators chosen in the first round of bidding, Choubey added.

 

 

Minister of State for Civil Aviation Jayant Sinha said the scheme provides for various benefits including no airport charges and three-year exclusivity on the routes.

Key UDAN features

The airfare for a one hour journey of approximate 500 km on a fixed wing aircraft or for a 30 minute journey on a helicopter would be capped at Rs  2,500, with proportionate pricing for routes of different stage lengths/flight duration. The selected airline operator would have to provide 50% of the flight capacity (subject to a minimum of 9 and a maximum of 40) as RCS Seats for operations through fixed wing aircraft and a minimum of 5 and a maximum of 13 RCS Seats on the RCS Flights for operations through helicopters and would be given a three years exclusivity of operations.

To reduce the cost of operations of airlines on flying such routes, a financial stimulus in the form of concessions from Central and State government, airport operators and the Viability Gap Funding to the interested airlines would be provided to kick-off operations from such airports, so that the passenger fares are kept affordable.

Bidding process

UDAN is a key component of the National Civil Aviation Policy (NCAP) which was released by the Ministry on 15th June 2016. AAI followed a transparent bidding process by inviting interested bidders/airline operators to submit theirInitial Proposals under the provisions of Regional Connectivity Scheme and subsequently inviting counter proposals against such Initial Proposals. This was followed by the opening and scrutiny of technical bids, and subsequently financial bids, for Initial Proposals as well as Counter Proposals. The routes/networks are awarded to bidders who submitted valid proposals and quoted the lowest viability gap funding(VGF) from the government for such routes/networks.

Effective implementation

To ensure effective implementation of the Scheme and quick commencement of operations, MoCA and AAI, in parallel, are also undertaking a number of activities such as coordinating with various regulatory agencies like Directorate General of Civil Aviation (DGCA), Bureau of Civil Aviation Security ofIndia (BCAS) and the State Governments for various facilitating actions.

(With inputs from ANI)

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