UDAN completes 6 years, PM Modi says enhanced connectivity a big boost to commerce, tourism

Udan scheme: Prime Minister Narendra Modi on Wednesday lauded the regional connectivity scheme UDAN (Ude Desh Ka Aam Nagrik), which completed six years. Launched in 2016, UDAN was first-of-its-kind scheme anywhere in the world, which was conceived to push India’s regional aviation market by improving the viability of unserved and underserved regional routes. Airlines compete for air routes and participate in bids. The contract is granted to an airline that bids for the lowest subsidy.

PM Modi flagged off the first flight between New Delhi and Shimla under the scheme on April 27, 2017. Speaking about the scheme, PM Modi said: “The last 9 years have been transformative for India’s aviation sector. Existing airports have been modernised, new airports have been built at a quick pace and record number of people are flying. This enhanced connectivity has given a big impetus to commerce and tourism.”

To date, the government has brought in multiple editions of the scheme. Last week, the Centre started the fifth phase of the Regional Connectivity Scheme (RCS)-UDAN. On April 21, the Ministry of Civil Aviation (MoCA) initiated the process of inviting bids from airlines for various routes under the fifth round of bidding for its regional connectivity scheme UDAN by releasing a bid document.

Speaking about the scheme and its reach at BT MindRush 2023, Civil Aviation Minister Jyotiraditya Scindia said that the UDAN (Ude Desh Ka Aam Nagrik) programme, which is based on the Viability Gap Funding model, has made significant changes in the connectivity in the country's regional territories.

He said: “In the last six years, 463 routes that were never thought to be feasible have been made possible through the UDAN scheme. About 74 airports, like Kishangarh in Rajasthan, Rupsi in Assam, Darbhanga, and others, were built and made functional in the last 6 years. We have flown around 1 crore, 16 lakh passengers through Udan.”

Speaking about UDAN’s reach and wide network, Scindia said the scheme is not just for the farmers or just the common man, it is for the entrepreneurs and new airlines. “Many routes, which were started under the Udan scheme, have now become viable. Udan scheme is for three years, but many airlines are still flying those routes because now customers want to travel by air. Udan has made multiple routes within the country go sustainable,” Scindia said at BT MindRush 2023.

Highlights of Udan 5.0

Under Udan 5.0, the government will introduce the demand-driven mode in which, the airlines bidding under the scheme will be allowed to propose the routes.

Thereby, the airlines will be allowed to select the routes they want to bid for. Therefore, the airlines will have more choice in terms of operating in routes that they feel will have high demand.

Under the 5.0 version of the scheme, only category 2 (flights with a capability of 20–80 seats) and category 3 (flights with a capability of more than 80 seats) aircraft will be operational.

 The viability gap funding, a grant provided under the scheme with the intention of making a project financially sustainable, has also been revised. It has been increased from 500 km to 600 km for both priority and non-priority sectors.

The fifth stage of the Udan will connect over 50 wildlife and tourist destinations.

The airlines will be required to submit an action/business plan two months after the Letter of Authorization (LoA) has been issued, in which they need to outline their plan for buying aircraft and their capacity for hiring crew, using slots, and other details.

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Watch: ‘The sky is the limit’ as Civil Aviation Minister Jyotiraditya Scindia aims to make India a global aviation hub: Key highlights from BT MindRush