The problems within the UDAN scheme: – INSIGHTSIAS

GS Paper 3:

Topics Covered: Infrastructure- airways.

 

Context:

So far, the AAI has awarded 948 routes under UDAN, of which 403 routes have taken off that connect 65 airports and 8 heliports. However, some of the routes launched have discontinued.

• This was because of the failure to set up airports due to lack of availability of land, airlines finding the routes difficult to sustain, and adverse impact of the COVID-19 pandemic.
• Poor financial health of many smaller, regional carriers have been a bane for the scheme.

 

About UDAN scheme (Ude Desh Ka Aam Nagrik) Scheme:

• The scheme is aimed at enhancing connectivity to remote and regional areas of the country and making air travel affordable.
• It is a key component of Centre’s National Civil Aviation Policy led by Prime Minister Narendra Modi and launched in June 2017.
• It is also known as the regional connectivity scheme (RCS) as it seeks to improve air connectivity to tier-2 and tier-3 cities through revival of unused and underused airports.
• Under the scheme, nearly half of the seats in Udan flights are offered at subsidised fares, and the participating carriers are provided a certain amount of viability gap funding (VGF) – an amount shared between the Centre and the concerned states.
• The scheme will be jointly funded by the central government and state governments.
• The scheme will run for 10 years and can be extended thereafter.

 

Key features of the scheme:

1. Airlines are awarded routes under the programme through a bidding process and are required to offer airfares at the rate of ₹2,500 per hour of flight.
2. At least 50% of the total seats on an aircraft have to be offered at cheaper rates.
3. In order to enable airlines to offer affordable fares they are given a subsidy from the Government for a period of three years.
4. The Government had also earmarked ₹4,500 crore for revival of 50 airports in the first three years.

 

UDAN 4.0:

• The 4th round of UDAN was launched in December 2019 with a special focus on North-Eastern Regions, Hilly States, and Islands.
• The airports that had already been developed by Airports Authority of India (AAI) are given higher priority for the award of VGF (Viability Gap Funding) under the Scheme.
• Under UDAN 4, the operation of helicopters and seaplanes is also been incorporated.

 

What have been the challenges?

• Poor financial health of many smaller, regional carriers have been a bane for the scheme.
• Many players don’t have more than one or two planes and they are often poorly maintained. New planes are too expensive for these smaller players.

 

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InstaLinks:

Prelims Link:

1. When was UDAN scheme launched?
2. Implementation and funding of the scheme.
3. Overview of the National Civil Aviation Policy.
4. Under the scheme, who provides Viability Gap Funding (VGF) to subsidise the airfare?
5. Role of state governments under the scheme.

Mains Link:

Discuss the performance of UDAN scheme.

Sources: the Hindu.