UDE DESH KA AAM NAAGRIK (UDAN)/REGIONAL CONNECTIVITY SCHEME (RCS)

Objectives

Facilitate /stimulate regional air connectivity by making it affordable by supporting airline operation through:

Concessions by Central Government, State Governments and airport operators

Financial (Viability Gap Funding or VGF) support

To provide connectivity to unserved and underserved regions through revival of existing air strips and airports.

Under-served airports are those which do not have more than 7 flights a week (14 for priority areas), while unserved airports are those where there are no scheduled commercial flights.

Ministry aims to operationalize 1000 routes and more than 100 airports in the next 5 years.

Salient Features

  • Airports Authority of India (AAI) is designated as implementing agency
  • It is a key component of National Civil Aviation Policy, 2016.
  • The scheme would be in operation for a period up to 10 years from the date of notification of the Scheme Version 1.0.
  • It has a unique demand and market-based model to develop regional connectivity. RCS will be operational only in States and at airports/aerodromes/helipads which commit and support the scheme by providing concessions as required in the scheme.
  • Airfares on regional flights are capped at 2,500/ hour of approximately 500 km on an aircraft or for a 30 min on helicopter.
  • Airlines have to provide 50% of the seats (minimum of 9 and a maximum of 40 UDAN Seats) at subsidized rates. Remaining 50% seats will be priced at market rate. For helicopters, if seats are less than or equal to 13 then it is required to provide 100% as RCS seats, but if capacity is more than 13 then maximum 13 will be considered as RCS seats.
  • Support in the form of Concessions and Viability Gap Funding will be provided to selected operators for RCS routes under the scheme.
  • Centre will share 80% of the VGF collected by charging a levy of up to ₹8,500 on each departing flight of domestic airlines and the rest 20% will come from the respective state governments (other than NE states, UK, HP and UTs which will contribute 10%).

Regional Connectivity Fund would be created for this purpose.

However, for the routes classified as State RCS Routes and Lakshadweep Specific Route, the State Governments and Ministry of Home Affairs respectively, shall be responsible for reimbursing 100% of the VGF under the scheme.

State governments have to provide free security & fire service, utilities at concessional rates, free land for RCS airports etc.

Airport/Aerodrome/Helipad operators: No landing charges, parking charges and Terminal Navigation Landing Charges will be imposed for RCS flights etc.

In case any rehabilitation/upgradation of infrastructure is required at airports/water aerodromes/helipad to make them operational for RCS operations, it can be undertaken by AAI upon payment of required costs from respective State Government/airport/Water Aerodrome/Helipad operator. Ownership will not change however.

In last 3 rounds, around 700 RCS routes were awarded, 106 airports and 31 heliports were constructed and 232 RCS routes were operationalized.

Recently, 4th round of bidding for UDAN was launched to further enhance the connectivity to remote and regional areas and develop the airports and operationalize the pending routes.

It will focus on priority areas like Hilly states, North East Region, Ladakh, Jammu and Kashmir and Islands. (3-14 flights per week as compared to non-priority areas where it is 3-7 flights per week)

Revision of (Viability Gap Funding) VGF cap-

✓ provision of VGF for Category 2/3 aircrafts (> 20 seats) has now been enhanced to all flights that would operate in Priority areas.

✓ VGF cap applicable for various stage lengths for operation through category 1/1

A aircrafts (<20-seater) has also been revised.

  • Promoting short-haul routes– provision of VGF would be restricted for routes with stage length up to 600 kms for Category 2/3 aircrafts
  • Well defined Prioritization framework for award of VGF- descending order of priority will be: Airports already developed by AAI, followed by airports not part of the above list but located in Priority Area(s), followed by airports located in areas other than Priority Area(s).
  • Flexibility to change the frequency of flights by Selected Airline Operator provided that the total scheduled flights is adhered to within a period of 1 year.
  • It will allow operation of helicopter and sea planes.

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