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UDAN – Taking Common Indian to New Heights

UDAN

In a democracy, the mandate of an elected government is not limited to just taking the legacy of governance forward; it is to transform lives of citizens and facilitate fructification of their aspirations. For a Nation where feudal Lordships gave way to feudal Netas, a large section of citizenry came to believe that certain utilities and services were ‘not’ meant for them. For example, air travel, which for long, due to sheer unaffordability, became the privilege of a small populace. Travelling by air was a distant dream for Indians, similar to other distant goals like owning a house or access to affordable healthcare. In his bid to deliver ‘Sabka Saath, Sabka Vikas’ and converge India towards an equitable social construct, the Prime Minister launched ‘UDAN’ Ude Desh Ka Aam Nagrik, aimed at boosting regional connectivity and promoting affordable air-travel.

Passenger traffic grew by 17% in 2017-18 and 23% in 2016-17. Such encouraging levels of growth not only reflect the burgeoning economy, but also the growing aspirations of Indians. It is in this line, to build an inclusive social ecosystem that UDAN was launched.

Figure 1: Source: http://dgca.gov.in/reports/stat-ind.htm

How does UDAN work?
  • The UDAN program is aligned to the Regional Connectivity Scheme (RCS), one of the key components of the National Civil Aviation Policy. The overarching theme of RCS is reflected in UDAN i.e. connect un-served and under-served regions through revival of unutilized airports increasing capacity utilization of existing regional airports.
    • Central Government: through reduction in excise duty and service tax, permissions to trade Available Seat kilometer (ASKM) for Non-RCS (UDAN) Seats and other possible concessions
    • State Governments: Reduction in VAT rate on air turbine fuel, free of cost security and fire services, along with subsidized utilities like electricity and water
    • Airport operators waive off landing and parking charges
  • Financial support is extended through State and Central concessions to provide the stimulus required to kick-start operations at these airports. Moreover, Viability Gap Funding (VGF) will also be available for airline operators at these airports, to ensure flight fare is affordable. Total VGF is estimated at over Rs. 600 crore
    • Fixed-wing operations: Rs. 487 crore per annum
    • Helicopter operations in the priority areas: Rs.130 crore per annum

Figure 2: Source: http://www.pibregional.nic.in/PressReleseDetail.aspx?PRID=1517684

  • 78 airports are being connected through UDAN:
    • Currently serving: 36 airports
    • Currently underserved: 13 airports
    • Currently unserved: 29 airports

31 heliports are being connected through helicopters in the priority areas.

These support mechanisms ensure the airline operators have adequate financial incentive to operate on these routes and participate in RCS.

  • Affordable pricing
    • Airline operators selected for VGF provide at least 9 and maximum of 40 UDAN Seats at subsidized rates through fixed wing aircraft
    • On each such route, frequency ranges between three and maximum of seven departures per week
    • Fair: One hour journey of approximately 500 km on a fixed wing aircraft or a 30 minute journey on a helicopter is capped at Rs. 2,500. Pricing for further distance or duration is in proportion to the unit capped price.

As air passenger traffic almost doubled from 2014 to 2018, it is clear that there is discernible improvement in quality of life of common citizens. The Prime Minister has time and again stressed on the importance of meeting regional aspirations, and pushing federal growth one step ahead. UDAN is designed to make regions self-sufficient, promote regional economies and connect regional participants at a national level. UDAN marks the mindset shift from air travel, a luxury for ‘few’ to a service for ‘all’.

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