Govt gets 45 proposals under UDAN; first flight likely in March

UDAN provides for various incentives to airlines with fares for one-hour flights capped at Rs 2,500

The first flight is likely to take off in March under the government's ambitious regional connectivity scheme, which has received as many as 45 initial proposals from 11 bidders.

The scheme UDAN (Ude Desh Ke Aam Naagrik), which seeks to boost regional air connectivity, provides for various incentives to airlines with fares for one-hour flights capped at Rs 2,500.

An official release on Wednesday said Airports Authority of India (AAI) has received 45 initial proposals from 11 bidders covering more than 200 regional connectivity scheme (RCS) routes.

"These initial proposals cover as many as 65 airports, of which there are 52 unserved and 13 underserved airports as per the provisions of the scheme," the release said.

AAI is the implementing agency for the scheme.

Sources said that the first flight under the scheme is likely to begin in March and the award of routes in this regard is expected by mid-February.

While the deadline for submitting initial proposals ended on January 16, the counter bids for them can be submitted till February 1. After that, the routes would be awarded to bidders who quote the lowest Viability Gap Funding (VGF) requirement against the routes.

Under UDAN, the participating airlines would be extended VGF — that would be jointly funded by the Centre and the State government concerned.

Towards VGF, the government has started charging Rs 8,500 levy per departure of flights on major routes.

Sources said the Civil Aviation Ministry is expected to garner about Rs 35 crore every month from collecting the levy.

To ensure that operations on ground start with minimum time-gap after the bidding is completed, the release said, "parallel action" has been initiated by the Ministry with AAI, state governments, aviation regulator DGCA and Bureau of Civil Aviation Security (BCAS).

The scheme is likely to give a major boost to tourism activities and employment generation in hinterland and Tier-II and Tier-III cities, Civil Aviation Minister Ashok Gajapathi Raju was quoted as saying in the release.

UDAN, which would be in place for 10 years, was launched in October 2016 and seeks to provide connectivity to unserved and underserved regions through revival of existing air strips and airports.