The Centre will extend financial support for airlines operating under the UDAN regional connectivity scheme from three years to five years, a move aimed at giving carriers more time to make regional routes commercially viable, according to ANI.
The revised support structure, announced by Union Civil Aviation Minister Ram Mohan Naidu, will introduce a phased reduction in viability gap funding (VGF), allowing airlines to gradually transition towards self-sustaining operations instead of facing an abrupt withdrawal of government assistance after three years.
Funding support to be tapered over five years
Speaking to ANI on the sidelines of a UDAN workshop, Naidu said the scheme’s financial assistance would continue for five years under a tapered approach.
“We are going to extend the scheme facility, which was earlier given for three years. Now we are going to do it for five years in a tapered approach. So starting from 100 per cent in the first two years, then 75 per cent, 50 per cent and 25 per cent in the next three years,” he told ANI.
The revised model is intended to provide airlines with greater operational certainty on regional routes, which often take several years to build sustainable passenger demand.
Launched in 2016, UDAN (Ude Desh ka Aam Nagrik) is the government’s flagship regional connectivity scheme designed to make air travel affordable while improving connectivity to underserved and unserved airports across the country.
UDAN enters its next phase
The minister said the original 10-year tenure of the scheme has now concluded and the government has launched a revamped version that will continue for another decade, according to ANI.
“Today, from the ministry, we have conducted a workshop for the UDAN scheme, which is going to be extended for the next 10 years. This has been launched by our Prime Minister on the 4th of July in Jodhpur, and there has been a lot of excitement in the civil aviation industry in the country on how we are going to implement it for the next 10 years,” he told ANI.
Naidu also said the government has earmarked an outlay of Rs 29,000 crore over the next 10 years to strengthen the country’s regional aviation ecosystem.
Highlighting the focus on improving connectivity, he said India has been rapidly expanding its aviation infrastructure through new airports and terminal buildings but the next priority is ensuring better air links.
“We are creating airports every single month; we are creating either a new terminal or a new airport in the country, but now we have to look forward to how we improve the connectivity,” Naidu told ANI.
According to the minister, the extended funding support and continued investment under the revamped UDAN scheme are expected to encourage airlines to operate more regional routes while improving air connectivity to smaller cities across the country.