Govt to unveil Rs2,500 an hour regional air connectivity scheme on Friday

Air travel in the country will become cheaper with the government's Udey Desh Ka Aam Nagrik (UDAY) scheme coming into effect on Friday (21 October) allowing the common man to fly at fares as low as Rs2,500 for an hour's flight.

Under the draft scheme to augment regional connectivity unveiled on 1 June, government fixes the all-inclusive fares at Rs2,500 for one-hour flights, in an attempt to make air travel affordable for the common man.

Union civil aviation minister Ashok Gajapathi Raju is expected to announce the final contours of UDAN scheme on 21 October, sources said.

Under the regional connectivity scheme, which is part of a larger scheme to boost the domestic aviation sector, the government seeks to provide air services between unserved and under-served areas.

Domestic aviation sector is clocking over 20 per cent passenger growth since more than a year now, with the number of passengers flown by the Indian carriers surging to 23.46 per cent in September.

The government expects the first flight under regional connectivity scheme to take off by the end of this year or early January 2017.

To further boost air connectivity, government also plans to upgrade 50 unserved and underserved airports in the country.

There are 394 unserved and 16 under-served airports in the country.

The International Air Transport Association (IATA), in its latest 20 years forecast, projects India to add 322 million new fliers in its total 442 million air passengers by 2035.

The government also proposes to extend viability gap funding (VGF) under the regional connectivity scheme while the states concerned are required to offer certain concessions such as providing police and fire services free of cost.

VGF will be created by way of charging a small levy per departure on all domestic flights on certain routes and small aircraft below 80 seats. Central and state governments will be sharing the VGF amount.

The government has, in August, notified excise duty of 2 per cent for jet fuel purchased from airports that come under RCS, which is part of the new civil aviation policy.