The Ude Desh Ka Aam Naagrik (UDAN) scheme, launched by the Government of India in 2016, aimed to enhance regional connectivity by reviving existing airports and air strips, providing air travel opportunities to underserved and un-served cities. The scheme offers incentives and viability gap funding to airlines to operate on these routes and make air travel affordable. While the UDAN scheme has made significant progress in connecting various regions, recent reports indicate some turbulence in its performance.
The UDAN Scheme
The UDAN scheme is a regional connectivity initiative launched under the National Civil Aviation Policy in 2016. It aims to connect tier-2 and tier-3 cities by providing financial support to airlines operating on unprofitable routes. The winning airlines receive subsidies equal to 50% of their seating capacity, and in return, they offer 50% of their seats at a fixed rate of Rs 2,500 per hour of flight.
The Different Phases of the UDAN Scheme
The UDAN scheme has progressed through multiple phases, each with specific objectives and focus areas. From UDAN 1.0 to UDAN 5.0, the scheme has expanded its reach to cover remote areas, hilly states, islands, and tourism routes. With each phase, the government has attempted to improve air connectivity across the country.
Performance Analysis of the UDAN Scheme
Despite its ambitious goals, the UDAN scheme has encountered some challenges and setbacks. Out of the 479 airport routes revived under the scheme, a significant number of them (225) have ceased operations. This raises concerns about the long-term sustainability of the scheme and the viability of these routes.
Reasons for Route Closures
The closure of 225 routes can be attributed to various factors. Around 128 routes shut down even before completing the mandatory three-year period under the scheme. Airlines found 70 of these routes commercially unviable, despite the subsidies provided. The remaining 58 routes were canceled due to non-compliance by the airline operators, voluntary surrendering of routes, or airlines shutting down.
The Challenge of Sustainability
The UDAN scheme was designed with the objective that after the initial three-year period of government support, airlines would be able to sustain operations independently. However, only 58 out of the 155 routes that have completed three years have survived without government support. This indicates that many routes still face challenges in becoming self-sustaining, raising questions about the effectiveness of the scheme in achieving its long-term goals.
Government Interventions and Solutions
To address the challenges faced by the UDAN scheme, the government may need to reevaluate its approach. Identifying routes with potential demand, revising subsidy structures, and conducting comprehensive market studies can help in determining the viability of routes before awarding them. Moreover, fostering competition among airlines bidding for routes could lead to better outcomes for passengers and the aviation sector as a whole.
Success Stories and Positive Impact
While the UDAN scheme faces challenges, it has undoubtedly made a positive impact on air connectivity in various regions. More than 29 states and union territories have been connected, and over one crore passengers have availed the benefits of this scheme. The success stories should be highlighted to encourage further efforts and improvements.