UDAN 5.0

News Highlight

Civil Aviation Ministry launches UDAN 5.0 to enhance connectivity to remote areas further.

Key Takeaway

• The government has begun the fifth phase of the Regional Connection Scheme — UDAN — to connect the country’s rural and regional communities.
• With this, the Ministry of Civil Aviation (MoCA) began requesting airline bids on April 21.
• It has released a bid document for various routes under this fifth round of bidding for its regional connectivity initiative UDAN.
• According to a tweet from the Ministry of Civil Aviation on April 21, only Category 2 and Category 3 aircraft operations are permitted.
• It will be included in this round with no distance restrictions between the origin and destination, and the stage length cap of 600 km will be lifted.

UDAN 5.0

• About
  • The Ministry of Civil Aviation launched the initiative to promote regional airport development and regional connectivity.
  • It is part of the 2016 National Civil Aviation Policy.
  • The programme is valid for a duration of ten years.
• Objectives
  • Improve aviation connection to India’s distant and regional areas.
  • Remote area development, increased trade and commerce and tourism expansion.
  • Make economic air travel available to the whole public.
  • Job creation in the aviation industry.
• Key Features
  • Under the scheme, airlines must set airfares for 50% of total seats at Rs. 2,500 per hour of flight time.
  • This would be achieved through;
    • A financial boost in the form of concessions from the federal and state governments and airport operators.
    • VGF (Visibility Gap Funding) – A government payment given to airlines to bridge the gap between operating costs and predicted income.
    • The Regional Connectivity Fund (RCF) was established to address the scheme’s viability gap financial requirements.
    • The partner state governments would contribute 20% to this fund.

Previous Phases of the Scheme

• Phase 1 began in 2017 to connect the country’s underserved and unserved airports.
• Phase 2 began in 2018 to increase air connectivity to more rural and inaccessible areas of the country.
• Phase 3 began in November 2018 to improve air connectivity to the country’s hilly and inaccessible regions.
• Phase 4 of the UDAN scheme was launched in December 2019, focusing on connecting islands and other remote areas of the country.

Achievements under the UDAN Scheme

• The plan has also been able to give a reasonable level of air connectivity to Tier-2 and Tier-3 cities at low costs, altering how people travel.
• The number of operational airports has increased from 74 in 2014 to 141 today.
• Under the UDAN initiative, 68 underserved/unserved destinations have been connected, including 58 airports, 8 heliports, and 2 water aerodromes.
• With the launch of 425 new routes, UDAN has offered air connectivity to more than 29 states and territories nationwide.
• More than one crore travellers have benefited from this scheme.

Challenges Associated with UDAN Scheme

• Pandemic
  • Due to low demand, most 300 routes have been impacted.
• Market-driven scheme
  • The failure of UDAN is significant because it is a market-driven plan.
  • It falls to the government to make the routes far more profitable for airline businesses.
• High operating costs
  • The civil aviation ministry also admitted to a parliamentary committee of the aviation industry.
  • Given the low yields and high running expenses, it is a challenging ecology to be a part of.
• Delayed upgradation of infrastructure
  • The poor development of UDAN implementation is due to delayed infrastructure and airport preparedness upgrades.
  • As well as a lack of proper right of way at some RCS airports.
  • It also causes delays in obtaining appropriate regulatory permissions. 
• Lower demand
  • Inconsistent operations are caused by low demand on the few routes given.
  • As well as severe and unpredictable weather conditions.
  • In a few situations, this has resulted in the closure of operations by some airlines.

Way Forward

• Viable regional aviation ecosystem
  • Creating a competitive and successful regional aviation environment is crucial for Indian aviation’s orderly evolution.
• Need to develop airports
  • Most importantly, airports in these areas must be developed to make them operationally viable for 70-80 passenger aircraft.
• Accessibility
  • The government should also guarantee these airports are accessible from neighbouring catchment areas.
• Taxes on fuel need to be reduced
  • It has been a demand in the industry for a long time.

Pic Courtesy: Zee Business

Content Source: The Hindu

Read More…