The ministry of civil aviation is trying to make certain changes in the regional connectivity scheme — before the second round of bidding — to make it more investor- and business-friendly. Sources said the proposed changes deal with exclusive rights to fly on the commercially lucrative routes, added benefits for airlines operating on the routes in smaller towns and backward regions, and acquisition of aircraft by the regional airlines. The ministry is satisfied with the response to the first round of bidding, but it still wants to change certain things to make the scheme more robust, investor-friendly and beneficial for people residing in the smaller towns and cities.
In the second round of bidding and the subsequent ones, the ministry wants to do away with the provision of granting exclusive rights to the airline which will operate in commercially lucrative sectors. Other airlines in the subsequent bids will be able to operate on the same route. Right now successful bidders have exclusive rights for three years. On the other hand, for the non-lucrative sector, exclusive rights will be increased from the current three years to five or six years.
Apart from this, officials will have a stricter monitoring process on acquisition of aircraft by the regional carriers. Both Deccan Air and Air Odisha are yet to get their respective aircraft. The next round of bidding could start by July and the officials are expecting bids from more scheduled commercial operators in this round, especially after IndiGo signed the term sheet to acquire 50 ATR aircraft. The only hindrance is that some of the airports in places such as Jamshedpur still don’t have the capacity to land an ATR 72 or Bombardier Q400 aircraft.
In the first round of bidding under RCS (UDAN in Hindi) which got over in January, two scheduled commercial airlines – Air India and SpiceJet – and three regional carriers – Turbo Megha, Air Deccan and Air Odisha Aviation — emerged as the successful bidders. Air India subsidiary Alliance Air was awarded 15 routes, while SpiceJet was awarded 11 routes. Regional carriers bagged most of the routes, with Air Odisha getting 50 routes, Air Deccan, 34 and Turbo Megha 18 routes.