SUMMER 5.0: Following the four successful rounds of bidding, the Ministry of Civil Aviation has launched the 5th round of the Regional Connectivity Scheme (RCS) – Ude Desh Ka Aam Nagrik (UDAN) to further enhance the connectivity to remote and regional areas of the country and achieve last mile connectivity. The Viability Gap Funding has been increased to 600 km from 500 km earlier. The stage length cap of 600 km is waived off- no restriction on the distance between the origin and destination of the flight.
Key Features of UDAN 5.0:
- This round of UDAN focuses on Category-2 (20-80 seats) and Category-3 (>80 seats).
- The earlier stage length cap of 600 km is waived off and there is no restriction on the distance between the origin and destination of the flight.
- Viability gap funding (VGF) to be provided will be capped at 600 km stage length for both Priority and Non-Priority areas which was earlier capped at 500 km.
- No predetermined routes would be offered. Only Network and Individual Route Proposal proposed by airlines will be considered.
- The airlines would be required to submit an action/business plan after 2 months from the issuance of LoA wherein they submit their aircraft acquisition plan/availability of aircraft, crew, slots, etc. at the time of the Technical Proposal.
- The same route will not be awarded to a single airline more than once, whether in different networks or in the same network.
- Exclusivity will be withdrawn if the average quarterly PLF is higher than 75% for four continuous quarters, to prevent exploitation of the monopoly on a route.
- 25% of the Performance Guarantee to be encashed for each month of delay up to 4 months, to further incentivize quick operationalization.
- Airlines would be required to commence operations within 4 months of the award of the route. Earlier this deadline was 6 months.
- A list of airports that are ready for operation or would soon be ready for operations has been included in the scheme to facilitate quicker operationalization of routes under the Scheme.
- Novation process for routes from one operator to another is simplified and incentivized.
Commenting on the launch of UDAN 5.0, Union Minister Jyotiraditya Scinda said, “UDAN has proved to be a lifeblood of many regions which are now well connected with places across the country. This new and stronger version of the scheme will raise the momentum, connecting new routes, and bring us closer to the target of operationalizing 1000 routes and 50 additional airports, heliports, and water aerodromes in the near future. अब उड़ेगा देश का हर आम नागरिक!”
About UDAN Scheme
The goal of UDAN scheme is to connect small and medium-sized cities with major cities via air service. UDAN was aimed to meet the common citizen’s desire of flying. Airlines compete for air routes and participate in bids. The contract is granted to an airline that bids for the lowest subsidy. The plan was to place small-town India on the map of aviation by encouraging airlines to fly on regional routes. The Government released National Civil Aviation Policy for the first time in 2016, and the UDAN Scheme was the most essential component of this Policy. Prime Minister Narendra Modi launched the first aircraft from Shimla to Delhi under the UDAN scheme in April 2017.
UDAN Scheme has benefitted a diverse set of stakeholders. Passengers have got the benefits of air connectivity, airlines have received concessions for operating regional routes, unserved regions have received the direct and indirect benefits of air connectivity for their economic development. It is another step towards the prime minister’s vision of the common man traveling by air at affordable and subsidized airfares.