Expect first RCS flight by January 2017: Minister

The government on Friday said that it expects the first flight under its Regional Connectivity Scheme (RCS) to be operated by January 2017.

The scheme christened UDAN -- "Ude Desh ka Aam Nagrik" -- will be in operation for a period of 10 years.

The operations under the scheme are intended to provide air connectivity to un-served and remote routes with airfare being capped at Rs 2,500 for an hour's journey of around 500 km.

The allocation of routes under the scheme will be based on a reverse bidding mechanism, with selected airlines' getting a viability gap funding, apart from various other financial concessions for a period of three years.

"We will target the first flights under UDAN to take off by January 2017," Civil Aviation Minister P. Ashok Gajapathi Raju said at the launch event of the scheme here.

The minister said the scheme is a key component of the recently approved National Civil Aviation Policy (NCAP), whose main objective is to "enhance regional connectivity through fiscal support and infrastructure development".

"Cabinet had taken a decision on civil aviation policy four months back; regional connectivity scheme was a major component of it," the minister said, adding: "We are cautiously optimistic about UDAN."

The policy intends to grow regional connectivity via several measures such as incentives, capping of air fares for a limited number of seats and revival of existing air strips and airports.

The scheme is expected to support airlines by providing direct financial support namely VGF, which would be given to the interested airlines to kick off operations to an un-served or under-served airport.

The financial stimulus will be borne by the central and state governments, as well as airport operators.

While, the central government would provide concessions in the form of reduced excise duty and service tax, state governments will have to lower the (VAT) on ATF (air turbine fuel) to one per cent or less.

Besides, the state governments would not charge on security and fire services, whereas electricity, water and other utilities would be provided at concessional rates.

On their part, airport operators shall not impose landing and parking charge and terminal navigation landing fees. They would also offer discounts will be provided on route navigation facility charges.

In addition, a regional connectivity fund would be created to meet the viability gap funding requirements under the scheme.

A RCF levy per departure will be applied to certain domestic flights. This move which has been opposed by some domestic airlines might lead to a hike in air fares.

However, the government maintained that the a marginal rate of levy will be imposed. The levy would be announced by the month end.

According to Minister of State for Civil Aviation Jayant Sinha, UDAN scheme has been launched in-line with Prime Minister Narendra Modi's vision of making air travel affordable.

"RCS is inspired by PM's vision to make air travel accessible to common people. UDAN intends to bring air travel to everybody, especially to under-served airports," Sinha said at the event.

"Hawai chappal wale ko bhi hawai jahaj mein bhitana hai."

Sinha elaborated that the scheme entails a market-based mechanism for seat subsidies, wherein the selected airline operator would be obligated to provide a minimum of 9 and a maximum of 40 seats priced under the capped fares.

"UDAN does something never attempted before, anywhere in the world. We have made flying more affordable by lowering costs across the board," Sinha said.

The scheme is expected to connect 50 airports in the next four years, apart from increasing ticket volume from 80 million to 300 million by 2022.

--IANS

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