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Ministry of Civil Aviation Launches Round 4 of RCS- UDAN

News: Ministry of Civil Aviation has launched the 4th round of Regional Connectivity Scheme (RCS) – Ude Desh Ka Aam Nagrik (UDAN)

Facts:

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.
  •  Under the scheme, airlines have to cap airfares for 50% of the total seats at Rs. 2,500 per hour of flight.
  • The losses for the price cap is compensated by a mechanism called Viability Gap Funding– A government grant provided to the airlines to bridge the gap between the cost of operations and expected revenue.

Objectives:

  • 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

About UDAN 4.0

  • The focus of UDAN 4.0 is on priority areas like North East Region, Hilly States, Jammu and Kashmir, Ladakh and Islands.

Key features of UDAN 4.0:

  •  Revision of (Viability Gap Funding) VGF cap – The provision of VGF for Category 2 / 3 aircraft (more than 20 seaters) has been enhanced for the operation of RCS flights in the priority areas.
  • Promoting short-haul routes – The provision of VGF would be restricted for routes with stage length up to 600 km. Beyond it, no monetary support would be provided.
  • Well defined Prioritization framework – Airports that have already been developed by AAI would be given higher priority for the award of VGF under the Scheme.
  • Flexibility to change the frequency of flight operation – The Selected Airline Operator (SAO) would be allowed to change the frequency of flight operation, during the tenure of flight operation of the given route.
  • Inclusion of helicopter and seaplane operation: The operation of helicopter and seaplane would be allowed under this round.

Additional Information:

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.
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