UDAN takes off as Modi flags off first flight to Shimla

Prime Minister Narendra Modi today flagged off the first flight under the UDAN scheme that offers to make air travel much cheaper and affordable for people in smaller cities in the country.

Modi flagged off the first flight on Shimla-Delhi sector, which will be operated by Alliance Air, a subsidiary of national carrier Air India, at a special starting fare of Rs2,036.

Simultaneously, Modi also flagged off the inaugural UDAN flights on Kadapa – Hyderabad and Nanded-Hyderabad sectors.

Under the regional connectivity scheme 'UDAN' travellers can avail of low-cost flights by paying a maximum of Rs2,500 for a 500 km flight. Service charges and taxes have been dropped.

Government subsidises the regional connectivity scheme by imposing a small levy on existing routes.

Speaking on the occasion, Modi said, ''I want to see people who wear hawai chappal (rubber slippers) in a hawai-jahaz (airplane).''

"To make air travel accessible to citizens in regionally important areas, the Ude Desh ka Aam Naagrik (UDAN) RCS (Regional Connectivity Scheme) was launched in October 2016," the PMO said in a tweet on Wednesday.

The UDAN Scheme is a key component of the National Civil Aviation Policy (NCAP), which was released on 15 June 2016. "Airfare for a 1-hour journey of approximately 500 km on a fixed wing aircraft or for 30 minute journey on a helicopter would be capped at Rs. 2,500," the PMO said.

"This with proportionate pricing for routes of different stage lengths and flight duration," it said.

The scheme to provide air connectivity to currently underserved and unserved airports, UDAN was developed through extensive consideration of various issues and consultations with stakeholders.

This is also the first-of-its-kind scheme globally to stimulate regional connectivity through a market-based mechanism.

The Airports Authority of India (AAI), the implementing agency, has issued Letter of Awards for 27 proposals received under RCS-UDAN. Key features of the proposals awarded by AAI include:

  • A total of 70 airports to be connected, including 27 currently served airports, 12 currently underserved airports and 31 currently unserved airports;
  • There is a good geographical spread in the proposals - 24 airports in the west, 17 in north, 11 in south, 12 in east and 6 in north-east covering 22 states and 2 union territories through 27 route proposals;
  • Of the routes and network awarded 16 proposals are for single routes (connecting two cities) and 11 are for networks (connecting three or more cities).
  • Six proposals have been bid with zero viability gap funding (VGF) reflecting the fact that there is potential latent demand;
  • VGF outflow on 27 proposals will be around Rs200 crore and will provide around 6.5 lakh RCS seats.

The airfare for a one-hour journey of appximately 500km on a fixed wing aircraft or for a 30-minute journey on a helicopter would be capped at Rs2,500, with proportionate pricing for routes of different stage lengths and flight duration. The selected airline operators would have to provide 50 per cent of the flight capacity (subject to a minimum of 9 and a maximum of 40) as RCS seats for operations through fixed wing aircraft and a minimum of 5 and a maximum of 13 RCS seats on the RCS flights for operations through helicopters and would be given a three years exclusivity of operations.

To reduce the cost of operations of airlines on flying such routes, a financial stimulus in the form of concessions from central and state governments, airport operators and the viability gap funding to the interested airlines would be provided to kick-off operations from such airports, so that the passenger fares are kept affordable.

State government will provide a certain share of viability gap funding (20 per cent for states other than North-East states where the ratio will be 10 per cent). Till now 19 states and 3 UTs have signed MoU whereas 5 more states have given consent to sign MoU.