Govt tweaks UDAN scheme, focuses on NE states, other areas

New Delhi: Increasing the viability gap funding for helicopter operations and allowing smaller planes are among the changes announced by the government to the ambitious regional air connectivity scheme.

Announcing the changes made to the scheme after detailed consultations with stakeholders in the past few months, Civil Aviation Minister Ashok Gajapathi Raju said the scheme is being liberalised, especially in the sense of focusing on priority areas.

Focusing on priority areas, that includes north-eastern states and Himachal Pradesh, the civil aviation ministry has tweaked the RCS also known as UDAN (Ude Desh Ka Aam Naagrik).

In the second bidding round that started today, smaller aircraft would be allowed to operate RCS flights in priority areas, including north-eastern states and Uttarakhand.

The winners of the second round of bidding under UDAN are to be announced by November-end.

The viability gap funding (VGF) caps for helicopters will be increased and 10 per cent of the estimated annual inflows in the regional connectivity fund (RCF) will be earmarked for operations through helicopters.

According to the ministry, up to 13 passenger seats for helicopters will be considered as RCS seats.

Under UDAN, helicopters can operate for priority areas.

"If we do not encourage helicopters, then priority areas might remain unserved. To give a boost to the priority areas... We have done the tweaking of the scheme," civil aviation secretary R N Choubey told reporters here.

He said the main thrust is on priority areas -- North- Eastern region, J&K, Himachal Pradesh, Uttarakhand, island territories of Andaman & Nicobar and Lakshwadeep.

Under UDAN, where fares are capped at Rs 2,500 for one- hour flights, the participating airlines are provided VGF from the RCF.

Both central and respective state governments contribute to the RCF.

"We expect that in this part of the financial year, it is happening from the middle of the financial year, roughly about Rs 300 crore is the requirement. Then we will see what is the response in the second bidding round and then accordingly call will be taken with regard to RCS (Regional Connectivity Scheme) levy," Choubey said.

Amid concerns that exclusivity for an RCS flight operator could also result in less number of flights to the particular area, the norms have been tweaked.

While keeping the three-year exclusivity for the selected operator in a particular RCS route, the ministry has decided that another entity can start operations provided there is a no-objection certificate from the former.

This provision would help ensure sustainable operations on RCS routes.

Another change is that RCS routes will be considered even for those where the stage length is less than 150 kilometres.

This will provide enhanced connectivity and ease the formation of networks under the scheme, the ministry said.

To provide more flexibility to selected airline operators, the maximum number of flights with VGF have been increased to 14 for priority areas. These operators can also increase the number of flights on RCS routes to any number and the minimum performance specifications would not be applicable on non-RCS routes.

While noting that significant response is expected in the second round of bidding, he said there will be no compromise on safety and security of flights.

In the first around of bidding, as many as 128 routes connecting 70 airports were on offer.

As per the ministry, 16 RCS routes have been operationalised and 8 unserved and underserved airports have been connected so far.

As many as 21 unserved and underserved airports to be connected shortly, while 14 aerodromes are under upgradation.

"We find that first round (of UDAN) is more or less on track," Raju said.

Out of broadly 43 airports, both unserved and under served which have been awarded, about 30 would be operationalised by September 30. Remaining airports would require some renovation and upgradation which would be completely very quickly, Choubey said.

The revised norms in the scheme is a step in the right direction, Business Aircraft Operators Association (BAOA) President Rohit Kapur said.

"We are hopeful that proposed changes will encourage participation from small aircraft operators in the second round of bidding," he added.