Ude Desh ka Aam Nagrik: An Initiative by Indian Government

By: Simarjeet Singh

The Government has started the Ude Desh ka Aam Nagrik (UDAN) scheme under the regional air connectivity (RCS) scheme in which the fares on the flights will be capped at Rs 2,500 for 1 hour, allowing only one operator to fly on a RCS route for three years. On Friday the Government invited initial proposals from operators to fly to airports which do not have regular flights.

This scheme will be funded by imposing a fee on aircraft landing at bigger airports. Aviation secretary RN Choubey on Friday said the levy, "which will be a very nominal one" will be announced by the month-end. It is estimated that if airlines pass on this levy to flyers, the increase in cost per ticket is unlikely to be more than Rs 60.

Aviation minister Jayant Sinha said. "We have taken three crucial steps to strike a balance between affordability for the common man and profitability for regional operators. Firstly, successful bidders will now have exclusive rights to operate on a regional route for three years, up from the previous plan of one year. Secondly, a UDAN flight operating from a small city to a metro like Delhi or Kolkata will have to pay no airport charges at the bigger airport. And finally, we have made it possible for entrepreneurs to lease planes in small numbers also to become regional operators. Earlier it was not possible to do so,"  

Operators have a six-week window (till December 2) to submit their initial proposals. The Government will take two-three days to scrutinise the proposals and the entire process is likely to take 10 weeks to complete. The aviation minister is hoping to have first flight (under RCS) by January.

The Aviation minister said that India has 16 airports not being utilised to their fullest, which get less than seven flights a week. "These include places like Agra, Gwalior, Allahabad and Tezpur. Then there are 15 to 20 airports which are ready but don't get regular flights (like Jaisalmer). From January, 30 airports will be ready to receive regional flights under UDAN scheme."

The UDAN scheme will promise new routes and more passengers for the marquee airlines and other leading airlines and on the other hand for the fresh airlines, there is the opportunity of new and scalable business. Airport operators will also see their business expanding. So it will also a push to our manufacturing sector as well as make in India.

However, the industry’s response to the proposals was not up to the mark. While Ashwani Lohani, Chairman and Managing Director, Air India, said his airline will “definitely” participate, Phee Teik, Chief Executive Officer, Vistara Airlines, said the airline will be able to make a comment on whether the policy was good or bad only after going through it.

Ajay Singh, Chairman, SpiceJet, while honouring the Government’s initiative felt that there were some issues with the scheme which he will raise with the Government and hoped that they would be resolved

“One of the major issues is slot availability because small towns must connect with large towns. At the big airports like Mumbai, Delhi, Bengaluru, Chennai and Hyderabad slots must be available for RCS. Private operators (of airports) have traditionally been reluctant to give such slots. We will see whether they provide them or not. Besides, it is not clear if the concessions are provided at the smaller and larger airports. That impacts economic viability of the whole project,” he added.