Livemint: March 30, 2017
New Delhi: The civil aviation ministry on Thursday awarded first-ever regional flights based on a new subsidy model to five airlines that will expand flights to many new airports in the country.
Air India, Air Deccan, SpiceJet, Air Odisha and Turbo Megha have got rights to fly 128 routes which will require them to cap half the seats at about 50% of the fare.
Many of these airports will be served for the first time. These include airports like Shimla, Kandla, Puducherry, Bhatinda, Cooch Behar and Bilaspur among others.
Aviation secretary R.N. Choubey said Rs205 crore of subsidy will be provided to these airlines. Routes will be exclusive for three years.
UDAN, the regional aviation scheme which will be in operation for 10 years, envisages providing connectivity to unserved and underserved cities and towns by reviving existing airstrips and airports.
This would be achieved by providing financial stimulus in the form of central and state government concessions, as well as viability gap funding for interested airlines to kick off operations while ensuring passenger fares are kept affordable.
The fare for a one-hour journey of about 500km on a fixed wing aircraft or a 30-minute journey on a helicopter will be capped at Rs2,500, with proportionate pricing for routes of different lengths and duration.
However, many airlines like IndiGo, SpiceJet, GoAir and Jet Airways have gone to court against the levy imposed by the government on existing flights to fund UDAN. Since the levy was introduced by the government in December most have not paid the sum accrued from the levy to the government.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.