Home / Politics / Policy /  Government to soon award new subsidised flight routes under UDAN

NEW DELHI : The government is planning to soon award fresh routes under its regional connectivity scheme Ude Desh ka Aam Naagrik or UDAN to make travelling to the hills, the northeast region and Indian’s islands easier and cost effective.

The government wants to ensure that the convenience of air travel is available to the underserved parts of the country through a demand driven scheme, which is subsided by the central and state governments.

Centre provides viability gap funding to airlines and waives certain airport charges to make these services sustainable, while states waive local levies on jet fuel. In the last three rounds, the Centre had awarded over 600 regional connectivity routes to airlines. Up and down services connecting two airports are taken as two routes.

“The aim is to have 1,000 well served regional connectivity routes under UDAN. We hope to achieve this over the next few years," said a government official, adding that Jammu & Kashmir, Himachal Pradesh, Uttarakhand, northeastern states and Andaman and Nicobar and Lakshadweep islands are the priority in the forthcoming round.

“The interest from airlines is strong," said the official, who spoke on condition of anonymity.

Rolled out in 2016, UDAN has led to affordable air connectivity from several previously underserved or unserved airports such as Bhatinda and Ludhiana. However, services from some places have not taken off yet.

The move to scale up subsidised regional air connectivity is also a part of the government’s efforts to boost tourism, which is a job creating sector in many states. Prime Minister Narendra Modi had in his Independence Day speech this year sought to promote tourism within the country.

State-owned airport developer Airports Authority of India (AAI) is trying to revive unserved and underserved airports and air strips of the state governments. The civil aviation ministry has a target of taking the scale of air travel to one billion passengers a year in 15-20 years, nearly four times the 265 million recorded in 2016-17.

In the last round of UDAN routes awarded, 235 routes were given to 11 airline operators including InterGlobe Aviation Ltd-owned IndiGo, SpiceJet Ltd and to the now bankrupt Jet Airways (India) Ltd.

The air travel boom in the country has been driven by low cost carriers but volatility in currency and jet fuel prices and intense competition for market share have been threatening the sustainability of India’s aviation sector.

India’s largest carrier by market share IndiGo reported a net loss of 1,062 crore in the second quarter ended September of the current fiscal, a historically weak quarter for the company, despite revenue from operations jumping 31% from the year-ago period to 8,105 crore.

Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
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