New Delhi: The civil aviation ministry has acceded to a request from some airlines that will allow them to potentially ply bigger aircraft for UDAN flights and also be more flexible in how they integrate such routes into their overall operations.
UDAN—or Ude Desh Ka Aam Nagrik, which loosely translates as “let the common man fly"—is a regional aviation scheme that encourages airlines to fly to underserved airports at low fares. The airlines have to sell a certain number of seats (between nine and 40 currently) on such flights at a maximum of Rs2,500 per hour of flying. In return, they receive a subsidy from the government.
The changes agreed to by the ministry were prompted by the need for airlines to have greater network and commercial flexibility, a government official said, asking not to be identified.
This has been provided for in the new bidding round that starts this month.
One change is that airlines can now make the UDAN destination part of a connecting flight. For instance, if the destination is Kanpur, they can use the seats declared on a one-stop flight, say a Mumbai-Delhi-Kanpur flight or a Delhi-Kanpur-Kolkata one.
“This was not allowed earlier," the official said.
To make sure that the purpose of connectivity is not diluted, the airline will have to declare 70% of seats on any such flight as UDAN seats irrespective of the kind of aircraft they are using. They will however only be paid subsidy for a maximum of 40 seats.
Typically airlines use small 70-seater planes for regional flights but some underserved airports can also handle bigger aircraft such as the Airbus A320 and Boeing 737.
InterGlobe Aviation Ltd-run IndiGo and Jet Airways (India) Ltd, both of which had not participated in the first round of UDAN and are expected to do so in the ongoing round, had specifically raised this query with the ministry.
Spokespersons for both airlines did not reply to an email seeking comments.
The ministry has also done away with the stipulation that requires two airports to be 150km away from each other to qualify for UDAN flights. It has also allowed helicopters to participate in UDAN, and, in mountainous regions, four-seater aircraft.
The ministry has however kept the exclusivity clause intact—this makes sure that whoever wins a bid on a particular route has an exclusivity over it for three years.
Five airlines—Air India, SpiceJet, Turbo Megha, Air Odisha and Air Deccan—were allotted 128 routes to fly in the first round of UDAN in March.
The underserved airports connected in the first round are: Gwalior, Kadapa, Puducherry, Porbandar, Bathinda, Bikaner, Ludhiana, Kandla, Nanded and Shimla.
“Air India just started Bikaner. SpiceJet is saying it will start Jaisalmer from next month," said a second government official who did not wish to be named. Jaisalmer and Bikaner in Rajasthan are popular with tourists.
Air Deccan and Air Odisha have also applied for commuter airline licences to operate flights. Both are being processed.
The interest of big airlines in UDAN scheme will pose a challenge to the smaller players, said the second government official.
“The smaller players have been opposing such network relaxations. Big airlines can have economies of scale—they can use the same airport staff and other infrastructure for regional flights; commuter airlines have to start from scratch," this person added.