Udan: Govt may revise lower limit of subsidised seats

Don't want to miss the best from Business Standard?

The government is likely to revise the minimum number of seats on which it will give subsidy to airline operators for serving tier-II and tier-III cities under its regional connectivity scheme (RCS).

The revised norms will be applicable for the second phase of RCS, which is likely to commence within the next three months, according to an official of the Ministry of Civil Aviation.

The scheme, also known as UDAN (Ude Desh ka Aam Nagrik), seeks to connect unserved and underserved airports and provides for capping of fares at Rs 2,500 per hour.

Currently, airlines are required to offer 50 per cent of total seats on an aircraft at discounted fares. 

The number of discounted seats should be at least nine and should not exceed 40.

In return, the Centre and the state government concerned provides subsidy to the airline for the number of seats offered under the scheme.

"We are exploring ways to introduce flexibility in the number of seats under RCS. We will be releasing simplified modalities shortly," said the official.

The move follows feedback from airline operators who expressed their willingness to induct aircraft with four to six or more seats and requested that subsidy be provided for these flights as well, the source added.

For the next round of bidding, the ministry will also be eliminating certain airports, including those at Juhu, Jalandhar and Kanpur, because of poor runway condition.

Under the first round of RCS, 128 routes were awarded to five airlines in March.