India’s Ministry of Civil Aviation has faced numerous challenges implementing the UDAN (Ude Desh Ka Aam Nagarik) scheme. This Regional Connectivity Scheme (RCS) aims to develop regional airports and enhance connectivity. Although 74 airports were planned under the scheme, as of May 2014, only 11 greenfield airports have been operationalised.
UDAN is a key component of the National Civil Aviation Policy 2016, designed for a duration of ten years. It aims to boost connectivity in remote and regional areas, stimulate development, foster trade and tourism, make air travel affordable for the masses and create jobs in the aviation sector.
Key Features of the UDAN Scheme
The scheme stipulates airlines cap airfares for half of the total seats at Rs. 2,500 per flight hour. This is made possible via government concessions, aid from airport operators, Viability Gap Funding (VGF) which bridges the gap between operation costs and forecasted revenue, and the Regional Connectivity Fund (RCF) to meet viability gap funding demands. 20% of this fund is contributed by partner State Governments.
Phases of UDAN Scheme
UDAN has been rolled out in five phases since 2017. The first phase focused on linking underserved and unserved airports, while the second aimed to extend air connectivity to more remote parts of the country. The third and fourth phases, launched during 2018 and 2019 respectively, addressed air connectivity in hilly, remote regions, and islands. The fifth, introduced in April 2023, focused on Category-2 (20-80 seats) and Category-3 (>80 seats) aircrafts with no distance limitations between the origin and destination of flights.
Challenges Faced by the RCS Scheme
Despite its noble intentions, the RCS scheme has faced significant challenges. Commercial viability remains a key issue, with many routes under the scheme proving unprofitable even with subsidisation. Out of 479 routes launched to revitalise underused airports, 225 have ceased operations.
Inadequate airport infrastructure is another major roadblock. Many airports in remote regions require upgrades to meet safety standards and manage increased air traffic. Operational costs for airlines are also higher in these areas due to elevated fuel expenditure, maintenance costs, and logistical issues.
Moreover, the RCS flight airfare caps can potentially restrict airlines’ revenue, especially when confronted with high operational costs. This could deter airlines from operating on certain routes. Additionally, the lack of passenger awareness about available UDAN air travel options may limit demand and utilise regional air services.
Potential Solutions and the Way Forward
Despite these hurdles, the Regional Connectivity Scheme has shown potential for regional airport development. Nonetheless, its effectiveness is hampered by issues related to commercial feasibility and airline sustainability. As the aviation sector evolves, addressing these problems will be vital for achieving sustainable air connectivity for smaller areas across the country.
Solving these challenges will necessitate a united effort from the government, industry stakeholders, and local authorities. Enhancing airport infrastructure, streamlining subsidy disbursal, addressing operational constraints, and raising awareness about regional air travel are all critical elements to ensure the success and sustainability of India’s UDAN scheme.