India’s Ministry of Civil Aviation has developed a draft blueprint for “UDAN International,” a plan designed to spur tourism through government-supported international flight routes for domestic airlines. This three-year scheme is primarily catered towards the state governments eager to improve air connectivity on certain foreign routes via offering subsidies to airlines. The Airport Authority of India (AAI) will oversee the execution of the scheme.
Procedure and Key Aspects to Note
The process commences as a state identifies the international routes it wants to invigorate. Following this step, AAI will calculate a subsidy amount. Airlines subsequently submit their proposals, demonstrating which routes they’d like to connect and how much subsidy they need. Financial aid will come from the International Air Connectivity Fund (IACF), a pool built up by the contributions of the state government. The initiative is exclusively geared towards domestic airlines.
Fixed-wing aircraft with seating capacity for over 70 passengers are suitable for operations under this scheme. The airline companies will need to maintain between three to seven departures on each route weekly throughout at least three days.
The central government has given airlines the green light to form code-sharing agreements with international and domestic airlines under UDAN international. Once an airline secures a specific route, they enjoy the exclusive right to subsidies for that route for three years.
No Fare Capping
Unlike the Ude Desh Ka Aam Nagrik (UDAN) scheme for domestic routes, the absence of fare capping is a significant distinction within this plan. The new international destinations aim to attract individuals with expendable income seeking to travel via air for tourism purposes.
Under UDAN, flight fares are capped at ₹2,500 for one hour of flight on a fixed-wing aircraft, making air travel more affordable.
About Ude Desh Ka Aam Nagarik (UDAN)
UDAN, introduced in 2016, is a program designed to make air travel accessible for people by offering subsidized ticket prices. The scheme seeks to bolster flight connections to smaller, less served areas by utilizing underutilized airports.
Under the UDAN system, fares are capped for a specific number of seats, and the government provides a viability gap funding (VGF) to airlines to compensate for the below-market pricing. This step helps maintain economic sustainability while ensuring affordable rates for passengers.
