Beginning April, passengers may be able to fly on as many as 128 routes connecting 70 big and small airports across the country by paying ₹2,500 for an hour’s flight.
The Centre on Thursday announced a list of routes awarded to five airlines which will operate flights under its regional connectivity scheme (RCS), named UDAN ( Ude Desh ka Aam Naagrik ).
“We will be adding 43 new destinations with the launch of RCS,” Civil Aviation Minister Ashok Gajapathi Raju said. “Flying was a rich man’s prerogative earlier, but now it has also become a common man’s prerogative.”
Turbo Megha Airways
Low cost airline SpiceJet, Air India subsidiary Alliance Air, along with regional airlines Turbo Megha Airways, Air Deccan and Air Odisha Aviation won the rights to operate flights under the regional connectivity scheme under which half of the seats on the plane will be capped at ₹2,500 per hour’s flight.
Some of the inactive airports that will soon witness regional flights include Shimla, Agra, Bikaner, Gwalior, Kadapa, Rourkela, Jharsuguda, Vidyanagar, Burnpur, Diu, Shillong, Kullu, Mysore, Jagdalpur, Salem, Utkela, and Hosur.
The regional airlines will connect these destinations with their nearest bigger airports such as Delhi, Bengaluru, Chennai, Bhubaneswar, Mumbai, Ahmedabad, and Jaipur, among others.
Civil Aviation Secretary R.N. Choubey said the first regional flight may likely begin its operations in April. “Fortunately, in the first round of bidding, the airlines focussed on airports that are ready to take flights. The deadline to start operating regional flights is September,” he said.
Subsidy on losses
As per the scheme, the Centre will subsidise the losses incurred by airlines flying out of dormant airports to help airlines charge ₹2,500 for an hour’s flight.
Eighty % of the subsidy will be 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.
The Centre had asked airlines to submit their proposed routes along with subsidy amount required to operate the regional flight. This was followed by counter bids from other airlines and the one asking for the least financial support won the bid.
The government will provide subsidy to airlines for first three years of operations when they will have exclusive flying rights on the selected routes.
“The scheme has a unique market based design. We have a successful national and international aviation market but an underdeveloped regional market. This scheme will stimulate growth in the regional aviation market and will connect underserved and unserved airports that really didn’t have flight services,” Minister of State for Civil Aviation Jayant Sinha said.
Mr. Sinha said the airlines that won the first round of bidding under the scheme would require a subsidy of ₹205 crore for running their operations. This would ultimately lead to the creation of 13 lakh seats in the regional aviation market.
“This is really about bootstrapping and creating a market which is not a perpetual subsidy,” Mr. Sinha said. “Once the market gets jump-started, it will operate on a commercial basis as per market forces of supply and demand,” he added.
