UDAN success: How small-town India is flying high in 13 months

By: |
New Delhi | Published: May 21, 2018 1:55:22 AM

In the 13 months since the scheme was launched, 25 tier-II and III cities have joined the aerial network, with many more to follow

udan, aviation sectorBefore UDAN or the Regional Connectivity Scheme (RCS) was introduced in April, 2017, India had a total of 75 airports connected by scheduled commercial flights.

Thirty-five kilometres from capital Gangtok, a town of nearly 36,000 residents is bracing itself for its date with history. Pakyong, in eastern Sikkim, would soon be a fixture on the aviation map of the country, with Bombardier Q400 aircraft ensuring air travel to the town. Made possible by the ambitious UDAN (Ude Desh ka Aam Nagrik) scheme, that would be no ordinary achievement for a state which was yet off-limits for India’s rapidly expanding aviation network.

Before UDAN or the Regional Connectivity Scheme (RCS) was introduced in April, 2017, India had a total of 75 airports connected by scheduled commercial flights. In the 13 months since, 25 new airports and airstrips, belonging to states and privately-held, have been added to the aerial network, with airlines, both new and established ones, lapping up over 300 routes in the first two rounds of bidding under UDAN. The third phase of allocation of UDAN routes may happen in the coming months. The ministry of civil aviation is currently reviewing the progress made by carriers in the first round. Interestingly, the ministry is contemplating promoting seaplanes to boost tourism under the scheme, after the introduction of helicopter routes in the last round.

Airports at Adampur and Pathankot in Punjab, Vijaynagar in Karnataka and Rourkela in Odisha have been turned around for civilian use under the scheme. While the Pathankot airport was revived after seven years, the airstrips at Rourkela and Vijaynagar were hitherto being operated by corporates for business purposes. Karnataka’s Hubli airport saw flights starting earlier this month. Kadapa, Kandla, Nanded, Ozar (Nashik), Pondicherry, Porbandar, Vidyanagar, Jalgaon, Diu and Mundra are amongst the other places that have launched operations. The RCS, launched to make air travel to small towns affordable and revive the country’s unserved and under-served airports, caps airfare for a one-hour journey on a fixed-wing aircraft at Rs 2,500.

Airlines plying on regional routes have claimed significant passenger load factor so far. “We are seeing a fantastic response on our UDAN route flights. Occupancy is over 90% on most routes,” Chairman & MD, SpiceJet, Ajay Singh had said. “Passenger response is very good. We are getting an average 70% occupancy on RCS routes,” says Senthil Raja of Turbo Megha.

India is the world’s fastest growing domestic aviation market. As per civil aviation regulator DGCA, Indian airlines handled over 11.7 crore travellers in 2017, posting 17.3% growth on y-o-y basis. Experts believe regional connectivity is critical if this high growth is to be sustained. “Adding airport capacity at metros is important. But for high growth, developing regional connectivity is the way forward. With economic prosperity and reasonable airfares, more and more people in tier-II and tier-III cities will travel by air. That is where UDAN will play a critical role,” says an aviation analyst.

Not just established players, the Viability Gap Funding (VGF) model under UDAN scheme has also attracted new carriers like Air Deccan and Air Odisha. These airlines picked up the bulk of RCS routes in the first phase. “New airlines picked up the real UDAN routes in tier-II and tier-III cities. Their progress is very important for the success of this scheme,” he adds.

By Arun Nayal

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.