More reports on: Government policies

UDAN in flight mode; 5 airlines win bids to fly 128 routes

30 March 2017

Five airlines, including national carrier Air India's subsidiary and Spicejet have won bids to operate on 128 routes connecting 70 airports (of which 31 are unserved) under the regional connectivity scheme where fares are capped at Rs2,500 for one-hour flights.

Air Odisha Aviation got maximum number of 50 routes followed by Air Deccan (34) and Turbo Megha Airways (18). The AI subsidiary Airline Allied Services would operate on 15 routes while SpiceJet won bids for 11 routes.

The first flight under UDAN (Ude Desh ka Aam Naagrik) is expected to start next month, civil aviation secretary R N Choubey said.

UDAN flights would connect airports spread across over 20 states and union territories, including Punjab, Uttar Pradesh, Madhya Pradesh, Maharashtra, Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Tamil Nadu and Puducherry.

The airports that would be connected under UDAN include Bhatinda, Shimla, Bilaspur, Neyveli, Cooch Behar, Nanded and Kadapa.

On each flight, 50 per cent of the seats would have a cap of Rs2,500 per seat/hour, Choubey said.

Under UDAN, the operators would be extended viability gap funding - for which money is partly raised through a levy of up to Rs8,500 on flights operating in major routes like Delhi and Mumbai.

The viability gap funding amount is estimated to be around Rs205 crore per annum for the operators chosen in the first round of bidding, Choubey said.

Asked about the increased levy on fliers on longer routes that would garner funds for UDAN, Choubey said it would translate to an average increase of Rs50 per passenger on the major routes where the levy is imposed.

"That is the ball park figure which is less than 1 per cent of average ticket price," he noted.

Choubey said airports coming under this round of UDAN are in "ready to fly or nearly ready to fly conditions" and the next round of bidding would commence shortly.

Minister of State for Civil Aviation Jayant Sinha said the viability gap funding would be in place for three years for the airlines concerned from the date of starting operations in a particular UDAN route.

The scheme also provides for various benefits, including no airport charges and three-year exclusivity on the routes.

SpiceJet's CMD Ajay Singh said the airline would not be availing viability gap funding.

Airports Authority of India (AAI) is the implementing agency for UDAN.

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