UDAN 5.0 To Spur Air Connectivity To 54 New Travel Destinations

The Ministry of Civil Aviation (MoCA) plans to connect 54 wildlife and tourism destinations in the next phase of the regional connectivity scheme ‘Ude Deshka Aam Naagrik ‘(UDAN) and enhance remote connectivity

The fifth phase of the scheme — to be called UDAN 5.0 — aims to revive the non-operational air strips closer to wildlife sanctuaries, tourist destinations and spiritual places in the country.

The 10 airstrips, which are near a wildlife sanctuary include Nagarjuna Sagar in Andhra Pradesh; Panneri in Assam; Kishanganj in Bihar; Satna, Dhana and Mandla in Madhya Pradesh; Yavatmal in Maharashtra; Sawai Madhopur and Bharatpur in Rajasthan; and Bishnupur in West Bengal.

Moreover, a total of 29 airstrips in proximity to tourist destinations including Chamba, Sidhi, Panchmarhi, Jogbani, Raichur, Hirakund and Kohima are also likely to be proposed for bids in UDAN 5.0.

A total of 15 airstrips in proximity to religious and spiritual destinations have been considered as potential airports under UDAN 5.0. These include Bihar Sariff in Bihar; Dessa in Gujarat; Mantalai in J&K; Hassan and Kolar in Karnataka; Betul, Jhabua, Damoh and Shahdol in Madhya Pradesh; Baripada and Konark in Odisha; Abu Road in Rajasthan; and Akbarpur in Uttar Pradesh.

Madhya Pradesh, Rajasthan and Bihar are likely to be the biggest beneficiaries of this round. Eleven airstrips from Madhya Pradesh and seven each from Bihar and Rajasthan has been included in the list.

Demand Driven

UDAN, hitherto, has been a market driven scheme. With UDAN 5.0, the government has introduced the demand-driven mode in which, the airlines bidding under the scheme will be allowed to propose the routes. Put simply, the airlines will be allowed to select the routes they want to bid for.

The draft of the scheme is ready and the bidding process is likely to commence in the next three months. Airlines will have to go through a two-stage bidding process before the route is awarded.

UDAN Scheme

The UDAN scheme has completed five years of success since the launch of its first flight by Prime Minister Narendra Modi on 27 April 2017. The scheme was initiated on 21 October 2016 with the objective to stimulate air connectivity in tier II and tier III cities for making air travel affordable to the masses.

RCS-UDAN is a market driven scheme. Interested airlines depending upon their assessment of demand on a particular route submit proposal at the time of bidding under UDAN. There is a tentative list of underserved/unserved airports in the scheme document to facilitate the prospective bidders under the UDAN.

Besides, the tentative list of underserved/unserved airports, prospective bidders based on their due diligence of demand formulate routes other than the underseved/unserved airports mentioned in the scheme document and submit its proposal at the time of bidding.

Under the RCS, the airline operators are supported through concessions by the central government, state governments and airport operators to reduce the cost of airline operations on regional routes.

Financial support in the form of viability gap funding (VGF) is also provided to meet the gap, if any, between the cost of operations and expected revenues on such routes.

The VGF is shared between the Centre and the state in the ratio of 80:20.