All you wanted to know about International UDAN

Anand Kalyanaraman | Updated on October 22, 2018

Recently, the Airports Authority of India, on behalf of the Ministry of Civil Aviation, the Centre and the Assam government invited proposals from bidders for selection under a new International Air Connectivity Scheme. The last date for submission of bids is November 22. This international air connectivity scheme is being referred to as International UDAN or Overseas UDAN.

What is it?

International UDAN is an extension of the domestic UDAN scheme that rolled out last year. Udaan means flight in Hindi and UDAN in this context is ‘Ude Desh Ka Aam Naagrik’. That is, let the common citizen of the country fly. UDAN in its domestic avatar seeks to boost air connectivity by linking up un-served and under-served airports in Tier 2 and Tier 3 cities with the big cities and also with each other. This is done by offering cheap tickets to passengers and the Central and State governments paying a subsidy to the airlines to enable them to offer cheap tickets. Two rounds of bidding have happened under domestic UDAN and many flights have commenced, with some routes doing well and others not so much.

Under International UDAN, the plan is to connect India’s smaller cities directly to some key foreign destinations in the neighbourhood. Such direct air connectivity, it is hoped, would promote the development of the city and the State by wooing tourists and businesspeople to travel via smaller towns, instead of their flying through the metros. The scheme seeks to make use of the open skies policy that India has with other Asian countries that allows direct and unlimited flights to and from these nations to 18 Indian destinations. Now, these routes are untested, and airlines could be understandably reluctant to ply them. To encourage them to participate, the government offers a subsidy in the form of pre-decided payout per seat. Airlines are required to bid on the number of passenger seats per flight for which such support is required.

Unlike in domestic UDAN where both the Centre and the State government share the subsidy, it is only the State government that will provide the financial support for flights under international UDAN. But like the domestic UDAN, the financial support and flying exclusivity on the route will be for three years. Only Indian carriers can participate in the international UDAN scheme, and only aircraft with capacity of 70 seats or more can fly the foreign routes.

Why is it important?

After the Assam government’s initiative to connect Guwahati under the international UDAN scheme, more tenders could be in the offing on behalf of other States. That’s a good thing. It has been well-established that air connectivity, domestic and international, can give a strong boost to tourism, investments, economic growth and job creation to a region. Many of India’s relatively smaller cities have high potential in terms of tourism and commerce. Direct international flights can give them a well-deserved leg-up. If State governments are willing to foot the bill to get such foreign flights rolling, they deserve a thumbs-up.

Why should I care?

Unlike in domestic UDAN, you cannot get cheap tickets under international UDAN. But what you may get, in the long run, are new opportunities for employment and business. This will flow from faster development of the country’s hinterland, once the smaller cities are connected directly to some key foreign destinations.


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Published on October 22, 2018

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