Govt tweaks UDAN scheme, focuses on NE, other region

Announcing the changes made to the scheme after detailed consultations with stakeholders in the past few months, Civil Aviation Minister Ashok Gajapathi Raju said the scheme is being liberalised, especially in the sense of focusing on priority areas.

Focusing on priority areas, that includes north-eastern states and Himachal Pradesh, the civil aviation ministry has tweaked the RCS also known as UDAN (Ude Desh Ka Aam Naagrik). In the second bidding round that started on Thursday, smaller aircraft would be allowed to operate RCS flights in priority areas, including north-eastern states and Uttarakhand.

The winners of the second round of bidding under UDAN are to be announced by November-end.

The viability gap funding (VGF) caps for helicopters will be increased and 10 per cent of the estimated annual inflows in the regional connectivity fund (RCF) will be earmarked for operations through helicopters.

According to the ministry, up to 13 passenger seats for helicopters will be considered as RCS seats. Under UDAN, helicopters can operate for priority areas.

"If we do not encourage helicopters, then priority areas might remain unserved. To give a boost to the priority areas... we have done the tweaking of the scheme," civil aviation secretary R N Choubey told reporters here.

He said the main thrust is on priority areas – North- Eastern region, J&K, Himachal Pradesh, Uttarakhand, island territories of Andaman & Nicobar and Lakshwadeep.

Under UDAN, where fares are capped at Rs 2,500 for one- hour flights, the participating airlines are provided VGF from the RCF. Both central and respective state governments contribute to the RCF.

"We expect that in this part of the financial year, it is happening from the middle of the financial year, roughly about Rs 300 crore is the requirement. Then we will see what is the response in the second bidding round and then accordingly call will be taken with regard to RCS (Regional Connectivity Scheme) levy," Choubey said.

Amid concerns that exclusivity for an RCS flight operator could also result in less number of flights to the particular area, the norms have been tweaked.

While keeping the three-year exclusivity for the selected operator in a particular RCS route, the ministry has decided that another entity can start operations provided there is a no-objection certificate from the former.