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Flying Low

The ambitious UDAN Scheme has got off to a slow start as airlines navigate the challenging operating conditions after the initial enthusiasm.
Ameya Joshi   New Delhi     Print Edition: October 7, 2018
Flying Low

In June 2018, Jet Airways and IndiGo started flights under the ambitious regional connectivity scheme (RCS), christened as UDAN (Ude Desh Ka Aam Nagrik). As Jet's Delhi to Nashik and IndiGo's Hubli to Kochi flights took to the skies, it marked the turning of a new chapter in the history of UDAN-RCS - a scheme that envisages use of small aircraft to connect unserved and underserved airports to regional centres near them.

From finding a mention in the National Civil Aviation Plan, or NCAP, in 2016, until Prime Minister Narendra Modi inaugurated it in April 2017, the scheme - made operational under a team led by Civil Aviation Secretary R.N. Choubey - has managed to connect several remote cities and towns such as Jharsaguda, Jalgaon and Jagdalpur, and also re-connect places such as Shimla, Nanded and Kadappa. The second round of bidding a few months ago attracted as many as 17 airline and helicopter operators, including Jet and InDigo, both of which had not bid in the first round. Apart from this, for some routes, the airlines said no to viability gap funding, or VGF, a mechanism to encourage them to bid for unprofitable routes - a proof of how a dedicated team can bring about big changes in a short span of time.

But has the scheme been an out and out success? Not really, say experts. Though it has covered 453 routes, involving 160 airports, airstrips and helipads, in the initial two rounds of bidding, less than 100 of these are operational. The reasons range from lack of quality infrastructure and delay in clearances to controversy over VGF (scheduled airlines operating from major airports have moved court against the levy of `8,000 per flight for raising money for VGF). The chinks in the scheme's structure are preventing it from living up to its full potential.

A Long Haul

The stakeholders are trying hard to start as many routes as possible but it will take a long time to start services on even half the routes that have been allotted. "Out of 71 RCS airports to be connected in the first two bidding rounds, we have achieved connectivity to 31. The rest are likely to be connected in another six months. Some of these airports are under development," says G.K. Chaukiyal, Member (Operations) at the Airports Authority of India or AAI.

While Jet Airways started operations under UDAN routes at one go this June and SpiceJet has been on the top of the game right from the first round, the problem lies more with the smaller carriers, which have won more routes than others and are now finding it difficult to implement their plans due to several reasons. The list of those that have not started operations after winning the bids includes Ghodawat Group-promoted Star Air, AAA Aviation Private Ltd. and Heritage Aviation Private Ltd.

Then there are states that went all out to attract UDAN flights but could not deliver what they promised. The government made a list of 71 unserved/underserved airports, of which 11 were in Uttar Pradesh, seven in Gujarat and five in Maharashtra. As per the data submitted by the government in Parliament, operations have started at just 31 of these - the highest number is five in Gujarat and four in Punjab. The others are lagging. Eight out of 11 airports in Uttar Pradesh, for instance, are yet to see start of operations. West Bengal and Jharkhand have three airports each under the scheme, but these are yet to see a single flight under UDAN.

"The ministry is helping the smaller operators with timely disbursement of money under VGF. There has been great support from the government, the AAI and the DGCA. The problem is with private airport operators which have offered midnight slots for operations. It is impossible to get loads to remote places at midnight as sometimes the airports cannot operate beyond sunset," says Shaishav Shah, whole-time director of GSEC Ltd, the holding company of Air Odisha and Air Deccan.

The airports under UDAN are owned and operated by different entities, including the AAI, military (Indian Air Force and Army), public sector units and private players. Of the 31 airports that are operational at present, 13 are owned by the AAI, 13 by the military, two each by state governments and private players and one by a PSU.

SHAISHAV SHAH Whole-Time Director of GSEC

The Challenges

A scheme of this scale is bound to face hurdles and RCS-UDAN has had its fair share. The challenges include raising of funds for VGF after scheduled airlines went to court, getting state governments to do their bit (like reducing tax on aircraft turbine fuel), and the complex task of coordination among state governments, local bodies, AAI and private companies to repair these airports.

A relatively tepid response from the big players, especially in Phase I, was also a problem. In Phase I, only SpiceJet and Air India were the major bidders. While the former got 11 routes, Alliance Air, a subsidiary of Air India, got 15. The rest were bagged by Air Deccan (34), Air Odisha (50) and Trujet (18).

But while starting the routes, the smaller airlines faced headwinds - lack of slots at metro airports like Mumbai and Delhi, difficult conditions for import of aircraft, lack of qualified and trained engineering manpower for smaller aircraft and, most important, shortage of pilots. This has led to an infinite delay in expansion of both Air Deccan and Air Odisha, which have since been taken over and now form part of a single holding company of the Adani group.

The government, too, is at a fault, for it opened up every available airstrip in the country for bidding. These included a strategic Indian Air Force base like Awantipur near Srinagar (nobody bid for it) as well as Gandhinagar Airport in Nashik (used by army helicopters). The airlines were wise enough to not bid for these. There are other issues too. A source from MIAL who refused to be identified says, "It is a great scheme but infrastructural challenges cannot be denied. The airport is already grappling with capacity issues and it is nearly impossible to allocate slots during day time. Turboprops slow down air traffic and often consume time that is enough for two A320s or B737s to land or take off."

Take Maharashtra's Sholapur, which last saw air service when Kingfisher Airlines operated flights from Mumbai. Air Deccan has won this route and intends to operate with a B-1900D aircraft. However, the airport has obstructions on the approach path. The state government has not yet helped with the demolition.

In another instance of faulty planning, the Round II of the bidding saw the government open up the Air Force Station in Hindon for regional operations from Delhi as Delhi International Airport had been facing slot constraints. IndiGo won the rights for flights between Hindon and Nashik (Ojar). But at Hindon, which has seen active fighter operations in the past, there isn't any terminal or apron to accommodate civil aircraft or the large number of passengers that are expected to fly from here. There is also no supporting infrastructure such as taxi/bus stands.

G.K. CHAUKIYAL Member, Operations, AAI

Majority of the routes in the first phase were won by Air Odisha and Air Deccan. Both have struggled to get off the ground. While they blame government agencies for delay in infrastructure clearances, lack of slots at major airports or shortage of pilots, they are finding it extremely difficult to cross the hurdles.

Air Deccan, which started flights in Maharashtra, has not seen continuous operations due to some reason or the other. Last time around the airline said the maintenance facilities were in Delhi, another time it was the issue of shortage of pilots and yet another time it was the lack of slots. But the worst are cases where routes have been allotted to airlines that did not have an Air Operating Permit at the time of the bidding. However, the weakest point has been the start of helicopter operations under UDAN with even the state-owned Pawan Hans not being able to start service on all the routes that it has won.

The government has rightly put the Round III bidding on hold, though there are talks of extending the scheme for international operations too.

Conclusion

Experts say these airlines will have to understand that they cannot sustain themselves purely on the basis of routes under UDAN-RCS and it will require considerable skills to plan a mix of UDAN-RCS and other commercial routes on the lines of Trujet, which has a heavy presence of UDAN-RCS routes but is also selectively plying on routes where it makes more commercial sense.

Aviation in India, it seems, has an interesting future.

(The writer is a freelance aviation analyst based in Pune)

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