Policy

Regional air routes: Govt may tweak norms in Round 2 of bidding

Our Bureau New Delhi | Updated on January 11, 2018 Published on May 03, 2017

There is likely to be a revision to the minimum number of seats on which the government will provide subsidy to an airline for operating to airports in tier II and tier III cities under the regional air connectivity scheme.

The regional air connectivity scheme, popularly called UDAN ( Ude Desh Ka Aam Naagrik) seeks to give people in tier II and III cities an opportunity to fly at a ticket price of ₹2,500. Airlines operating under the UDAN scheme have to ensure that the tickets prices of at least 50 per cent of the seats on their flights are available at a price of ₹2,500 for an hour of flying.

The Centre and States provide viability gap funding for the airlines operating on the UDAN routes to ensure profitability of these flights.

Currently an airline operating under the UDAN is entitled to subsidy on a minimum of 9 and a maximum of 40 seats on a flight. The government’s rethink comes after requests from operators that they were willing to induct aircraft having four to six or more seats and requesting that subsidy be provided for these flights also.

These changes are among those being considered when the government calls bids from airlines for operating on more routes under the UDAN.

The second round of bidding for these routes is expected towards the end of June this year although the Ministry of Civil Aviation officials admit that meeting the end June deadline to start the bidding process might be difficult.

The second round of UDAN will also see the government drop some airports including Juhu in Mumbai, and Jalandhar. The lack of adeqaute traffic from Jalandhar is the reason for its being dropped, said a senior Ministry official. Besides a better airport existed at Adhampur which was close to Jalandhar. The first round of bidding ended in March with the government awarding five airlines — Air Odisha, Air Deccan, Alliance Air, SpiceJet and Trujet the right to operate UDAN flights.

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Published on May 03, 2017
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