You are here: Home » News-IANS » Business-Economy
Business Standard

UDAN high on promise, low on delivery

IANS  |  New Delhi 

The hype around (Ude Nagrik) scheme and low entry-barrier prompted a rich from to approach the Airports Authority of (AAI) to launch on select routes. But his initial enthusiasm soon fizzled out.

The much-publicised or regional connectivity scheme (RCS), now in its third year, also seems to have lost steam with the latest data showing that a fourth of the routes out of 688 awarded so far getting regular flights.

While 18 routes awarded to and Air Odisha have been cancelled due to prolonged grounding of flights, as many as 10 routes awarded to crisis-hit are under review and may soon be cancelled.

"We had relaxed the regulations to allow more entities to participate in the scheme. A from came to discuss the launch of services but did not follow up. There are many issues such as availability of funds, cost of operations and weak demand preventing the spread of RCS," said a handling the flagship scheme.

A total of 688 routes have been awarded to various air-operators in three rounds of bidding.

In the first round of bidding, the government in March 2017 awarded 128 routes to five airlines for 43 un-served destinations. As many as 325 routes were awarded to 15 in January 2018 under RCS-2.

The Civil Ministry in January this year awarded 235 routes, comprising 189 RCS and 46 tourism routes, across 29 states to airlines under the third phase of the scheme.

The government has promised to make affordable for the common man and provides subsidy by way of lower tax rates, waiver of airport charges and other concessions to airlines for cheaper air tickets. The ticket price has been capped at Rs 2,500 on RCS routes connecting smaller towns.

The slow pace in growth of RCS flights, however, means lower subsidy outgo for the government. Going by the fund requirement, if all the routes awarded so far become operational, the total subsidy could go up to Rs 1,800 crore while the available funds from all sources are about Rs 1,000 crore.

"The disbursement on account of subsidy has been low as not many routes have been operationalised," the said.

(Nirbhay Kumar can be contacted at nirbhay.k@ians.in)

--IANS

nk/sn/rtp/mr

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, May 12 2019. 13:32 IST
RECOMMENDED FOR YOU
RECOMMENDED FOR YOU