To promote regional air connectivity and lower the cost of air travel for the public, the Ministry of Civil Aviation announced the Regional Connectivity Scheme (RCS) Called UDAN (Ude Desh ka Aam Nagrik) on October 21, 2016. UDAN is a self-supporting programme. As of February 28, 2023, 469 UDAN routes, including 9 heliports and 2 water aerodromes, connecting 74 unserved and underserved airports have been operationalized.
Under UDAN, it is intended to help Selected Airline Operators (SAOs) by granting concessions from Central Government, State Governments/UTs and airport operators to reduce the cost of airline operations to lower the cost of airline operations on regional routes and by offering financial support (Viability Gap Financing or VGF support) to fill any financial gaps, if any, between the cost of operations and anticipated revenues on such UDAN routes.
The Airport operators are not allowed to charge RCS flights for parking or landing. On RCS Flights, the Airports Authority of India (AAI) shall not impose any Terminal Navigation Landing Costs (TNLC). AAI will charge Route Navigation and Facilitation Costs (RNFC) on RCS Flights at a discounted rate of 42.5% of Regular Rates. For operations covered by the Scheme at all airports, selected airline operators shall be permitted self-ground handling.
The central government announced a 2% excise duty will be applied to aviation turbine fuel (ATF) purchased by specified airline operators from RCS airports. The freedom to enter into code-sharing agreements with both local and foreign airlines will be granted to a select group of airline operators.
The State Government announced that for the development of RCS Airports, they will give the bare minimum of land, free of charge and unencumbered, as well as any necessary multimodal hinterland link and provide free security and fire protection at RCS airports. At RCS Airports, providing or causing to be provided with electricity, water, and other utility services at significantly discounted rates. Provide a specific portion of the calculated VGF (20% for States other than North-Eastern States, when the ratio will be 10%).
UDAN has identified 56 seaplane routes connecting 25 water aerodromes in the states/UTs of Gujarat, Assam, Telangana, Andhra Pradesh, Andaman and Nicobar Islands, Goa, Himachal Pradesh, and Lakshadweep through several rounds of bidding. UDAN has identified 56 seaplane routes connecting 25 water aerodromes in the states/UTs of Gujarat, Assam, Telangana, Andhra Pradesh, Andaman and Nicobar Islands, Goa, Himachal Pradesh, and Lakshadweep through several rounds of bidding.
As of February 28, 2023, Selected Airline Operators had received VGF funding for the operation of UDAN flights totalling approximately US$ 294.98 million (Rs. 2,433 crores).
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.