The success of UDAN RCS I and II has given a boost to small operators to be a part of the growing passenger air traffic
The UDAN Regional Connectivity Scheme (RCS) is planned to activate dormant airports and add new runways and routes to foster business, tourism, and most importantly, make air travel affordable for everyone. When it was initially announced by the ministry of civil aviation in 2017, many were doubtful whether it could be implemented properly. However, UDAN’s Round 1 took off successfully connecting 16 new regional airports in the first round of bids. And now UDAN is well on its way into concluding Round 2.
After the second round of bidding in UDAN, as of now, air travellers can fly with known names such as Jet Airways, IndiGo and Pawan Hans all over the country. In all, 109 regional airports and heliports have been connected.
The second round saw several Tier 2 and Tier 3 cities such as Kargil in Jammu and Kashmir join the network. Besides these airports, 14 helipads in Uttarakhand, eight in Arunachal Pradesh, six in Himachal Pradesh, five in Manipur and four in Assam have been pressed into service in UDAN 2, making it easier for people in these regions to fly to other cities.
UDAN Round 2 should be concluding soon, probably in the next month or so as operators have to start services within this time-frame after the award of the contract, subject to the Airports Authority of India (AAI) getting the airport/heliport ready.
UDAN RCS gives India’s aviation sector a boost by giving a chance to small and first-time operators to be a part of the rapid growth in passenger traffic. According to latest statistics from the ministry of civil aviation, passenger traffic has grown by over 62 per cent in the four-year period between 2014 and 2018, as against 18 per cent in the preceding four-year period. Under the UDAN scheme, 27 airports are now operational in Tier 2 and Tier 3 cities. In the ports sector, traffic volume in major ports increased by 17 per cent in the period between 2014 and 2018.
UDAN makes regional connectivity work through a combination of market-based mechanism and government support. The aviation operations are highly cost-intensive which include aircraft purchase, airport fees, cabin and technical crew compensation, fuel and maintenance expenses and UDAN ensures route profitability to airlines for sustaining their operations through reducing operating costs of the airlines by eliminating airport charges on UDAN routes, providing a market-based subsidy for half of the seats, and subsidising Air Turbine Fuel (ATF).
These two rounds of bidding have seen newer players such as Heritage Aviation, Maritime Energy Heli Air Services, Turbo Aviation, Zoom Air and Pinnacle winning bids to operate flights. Robust regional connectivity is also expected to deliver an economic boost to remote locations that make it to the country’s new aviation map.
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