Logistics

Regional air routes: Govt seeks feedback on proposed changes in second round of bidding

Ashwini Phadnis New Delhi | Updated on January 11, 2018

regional routes

Changes not to affect those who won routes in the first round

The Government is seeking the comments of stakeholders on four changes it plans to bring during the second round of bidding for award of rights to fly under its regional air connectivity scheme (RCS) UDAN. These include whether the minimum distance to be flown to be eligible to fly under the scheme should be changed and whether the exclusivity of flying on a route should be reduced to one year from the current three years.

The Government expects to award routes under the second round of RCS in August this year.

Comments have also been sought on what should be the minimum number of RCS seats mandated on such flights. Currently, an operator has to offer a minimum of 9 seats at a fare of not more than ₹2,500 for a one hour flight. It is proposed that while subsidy on seats will still be on a minimum of 9 seats, an airline will have the flexibility to operate say three flights a day with a four seater aircraft and claim subsidy which is currently not the case. The Government’s argument is that such a move will give greater flexibility to the players to plan the size of aircraft and their operations.

Explaining the rationale behind seeking changes in the exclusivity clause, R.N. Choubey, Secretary Civil Aviation gave the example of a point informally suggested by the Maharashtra Chief Minister. "The Chief Minister pointed out that Shirdi airport is likely to commence operations soon. If we put it under RCS scheme then only one airline will get to fly from Shirdi airport. Whereas in the assessment of the State Government there is a far greater potential for Shirdi to have flights,” Choubey said.

Asked whether the Government will wait for operationalisation of the flights awarded in the first round of bidding before the second bidding round starts, the Secretary said that the second round of winners will be announced before the first round of bidding is fully operationalised. Of the five airlines which won the right to operate flights under the first round of RCS in April only Alliance Air, the regional arm of Air India, and Trujet have started operations. The other three – SpiceJet, Air Odisha and Air Deccan have not yet started their RCS operations.

Choubey was also of the view that the changes in the second round of bidding will not affect those who won routes in the first round. “The changes are prospective and they will not affect the existing players who have already been awarded,” he pointed out.

Ashok Gajapathi Raju, Union Civil Aviation Minister, added, “We would like to have suggestions across the board so that we can benefit out of the whole exercise and become better.”

Govt may tweak norms in Round 2 of bidding

Next round of bidding under UDAN scheme likely in three months, says Jayant Sinha

Published on May 24, 2017

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