News: Kalaburagi airport in Karnataka has been inaugurated. The airport has been built under the UDAN-RCS Scheme.
About UDAN Scheme:
- The Regional Connectivity Scheme (RCS)-Ude Desh ka Aam Naagrik (UDAN) scheme was launched in 2017 by the Ministry of Civil Aviation. The scheme is a component of the National Civil Aviation Policy (NCAP), 2016.
- The scheme would be in operation for a period of 10 years.
- Aim: To develop a regional aviation market. It seeks to connect under-served and unserved airports in India through the revival of existing airstrips and airports.
- Create affordable yet economically viable and profitable flights on regional routes.
- Development of remote areas and enhancing trade and commerce and tourism expansion.
- Employment creation in the aviation sector
How does the scheme functions?
It has a market-based model to develop regional connectivity. It functions as follows:
- Interested airline and helicopter operators can start operations on un-connected routes by submitting proposals to the Airport Authority of India which is the implementing agency of the scheme.
- The operators could seek a Viability Gap Funding (VGF) apart from getting various concessions. Viability Gap Funding is a government grant provided to the airlines to bridge the gap between the cost of operations and expected revenue.
- State governments are mandated to lower the VAT on ATF to 1% or less, besides providing security and fire services free of cost and electricity, water and other utilities at substantially concessional rates.
- All such route proposals are then offered for competitive bidding through a reverse bidding mechanism and the route is awarded to the participant quoting the lowest VGF per Seat.
- The successful bidder is then given exclusive rights to operate the route for a period of three years. The support from the government would be withdrawn after a three year period, as by that time, the route is expected to become self-sustainable.
- The airlines have to cap airfares for 50% of the total seats at Rs. 2,500 per hour of flight.
1. UDAN-RCS 1.0: 5 airline companies were awarded 128 fixed-wing flight routes to 70 airports.
2. UDAN RCS 2.0: 502 new regional airline and helicopter routes were bid to connect 126 airports and heliports.
3. UDAN RCS 3.0: 235 routes comprising 189 RCS Routes and 46 Tourism Routes would be connected across all states in India.
Key Features of UDAN 3.0 are:
- Inclusion of Tourism Routes under UDAN 3 in coordination with the Ministry of Tourism
- Inclusion of Seaplanes for connecting Water Aerodromes, and
- Bringing in a number of routes in the North-East Region under the ambit of UDAN
National Civil Aviation Policy (NCAP), 2016:
- It aims at making flying affordable to the masses and convenient
- It also seeks to establish an integrated ecosystem that will lead to significant growth of the civil aviation sector to promote tourism, employment, and balanced regional growth.
- It further aims to enhance regional connectivity through fiscal support and infrastructure development and enhance ease of doing business through deregulation, simplified procedures and e-governance