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Business News/ Economy / Govt wants to know why UDAN didn’t always fly
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Govt wants to know why UDAN didn’t always fly

The assessment will aim to determine the reasons behind airlines’ failure to launch flights or continue flying them despite the subsidy offer

Government data shows that 260 flights and routes are operational under the UDAN scheme as of date. (iStock)Premium
Government data shows that 260 flights and routes are operational under the UDAN scheme as of date. (iStock)

NEW DELHI:The civil aviation ministry will soon start a detailed evaluation of routes awarded under the government’s regional connectivity initiative, known as the Ude Desh ka Aam Naagrik (UDAN) scheme, which offers flight subsidies to underserved or unserved destinations.

The assessment will aim to determine the reasons behind airlines’ failure to launch flights or continue flying them despite the subsidy offer, two officials familiar with the development said on condition of anonymity.

The detailed assessment is happening at a time about 46% of the total flights, which started operating under the regional connectivity scheme (RCS), have been discontinued due to low demand, lack of support from state governments and infrastructure constraints. The government auditor has also raised concerns about the lower-than-anticipated success of the scheme.

Government data shows that 260 flights and routes are operational under the UDAN scheme as of date. Of the 1,154 routes awarded under the scheme, spanning Phase 1 to Phase 4 until 16 May, airlines have initiated flights on only 475 routes.

One of the officials said one of the objectives of the study is to understand the factors that resulted in an inactive route and to identify the shortcomings. The scheme, launched for a period of 10 years in October 2016, may be tweaked based on the results of the study if the government decides to extend its tenure.

“The study will focus on what went right for the UDAN routes which started operations after being allocated and what went wrong for routes which were allocated but did not commence flights," the official said.

“The idea is to identify the areas where either the policy support was not sufficient to support an airline and the areas where an airline was completely responsible for failing to start flights despite policy support," the person added.

While launching the scheme, the fare for half the seats on a one-hour journey of around 500 kilometres on a fixed-wing aircraft or a 30-minute journey on a helicopter was capped at 2,500, with proportionate pricing for routes of different distances and flight duration. The capping is subject to indexation as per the specified formula.

In a recent audit of the scheme by the Comptroller and Auditor General of India, the government auditor stated that UDAN is a “good initiative" for increasing air connectivity as a faster, safer and affordable option of travel for common people, and the number of passengers travelled on the regional routes under UDAN increased from around 263,000 in FY18 to 2.5 million passengers in FY23.

However, the implementation of the regional connectivity scheme needs to be improved to fully leverage the benefits envisaged, the auditor observed. CAG also noted that up to the UDAN-3 phase, 52%, or 403 out of 774 of the awarded routes, could not commence operations, and from the 371 commenced routes, only 112 routes, or 30%, completed the full concession period of three years.

Further, out of these 112 routes, only 54 routes, or 7% of the awarded routes connecting 17 RCS airports, could sustain the operations beyond the concession period of three years as of March, the CAG report added.

“This scheme has been an important milestone in the air connectivity ecosystem in a country like India that has a large potential for increased air traffic. The aim of the study will be to fine-tune the scheme framework so that we can expect maximum impact in the upcoming rounds of the scheme and make the existing regional air network more robust," the second official said.

The latest regional rounds of UDAN 5 are currently focusing on increasing air connectivity to heliports, small aircraft and seaplane operations.

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Published: 21 Aug 2023, 11:41 PM IST
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