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GENERAL TOPICSPosted by C C ASHOKA Tue, January 30, 2018 10:07:41
AAI awards 325 routes to 15 operators; 56 new airports, helipads to be connected under UDAN 2

In June 2016, the Narendra Modi government launched the National Civil Aviation Policy, the first comprehensive policy on civil aviation, with great fanfare. It not only aimed to make regional air connectivity a reality but also make flying affordable for the masses along the way - think airfare capped at Rs 2,500 per seat per hour. The Regional Connectivity Scheme (RCS), also known as UDAN (Ude Desh Ka Aam Nagrik), thus took off in 2017 with five airline operators being awarded 128 routes in the first round of bidding.

And yesterday, the government announced results of second round of bidding under the scheme: The Airports Authority of India (AAI), the implementing agency, has awarded 325 routes to 15 airlines and helicopter operators. In the bargain, 25 new airports and 31 new helipads will now be connected to the existing network. "This is the first time that helicopter [services] are coming under Udan," said Civil Aviation Minister Ashok Gajapati Raju.

The emphasis this time round was on enhancing air connectivity to hilly and remote areas with poor roads and possibly zero train network. A whopping 40% of the total routes in UDAN 2 were awarded to the newly-created category of 'priority areas' that include Jammu and Kashmir, the hill states and the Northeast apart from Andaman and Nicobar Islands and Lakshadweep Islands. With this, the government aims to connect around 41 airports and helipads in Arunachal Pradesh, Assam, Manipur, Jammu and Kashmir, Himachal Pradesh and Uttarakhand.

Of the 19 states that stand to benefit from UDAN-II, Uttarakhand leads the pack with 15 airports and helipads coming under the scheme. Sikkim, likewise, has much to cheer with flights set to connect Pakyong to Delhi, Guwahati and Kolkata. Then there is Kargil airport, which so far was used only for defence-related flights. The timeline set for 75% of the new routes is reportedly six months-the remaining will take longer.

"There has been an astounding increase in regional aviation and an explosion of connectivity in previously unserved areas since the commencement of the UDAN programme one-and-a-half years ago," said Minister of State for Civil Aviation Jayant Sinha at a programme awarding the winning bids. According to Raju, UDAN 1 and 2 have added around 80 airports-the country previously had 75 airports connected by scheduled airlines. The number of passengers flown may be rather underwhelming-UDAN has only added 3-4% to the total passenger trips in the country-but it's a step in the right direction.

On the reason for the disappointing numbers is that Air Odisha Aviation and Air Deccan, which had bagged the lion's share of routes in the first round of bidding, are reportedly yet to start flying on a majority of them. In UDAN 2, of the 90 proposals awarded to 13 airline companies for fixed-wing aircraft operations, the maximum have been bagged by Interglobe Aviation, the parent company of IndiGo Airlines, followed by SpiceJet. Among the major aviation players, Jet Airways, too, bid for routes. Meanwhile, Pawan Hans has scored maximum in the helicopter proposals category. Let's hope they take to the skies sooner.

The scheme is being part-funded by AAI, which has given Rs 200 crore in the current fiscal and is likely to contribute Rs 500 crore in the next fiscal. This contribution will come from the dividend that AAI pays to the government annually, in addition to the levy of Rs 5,000 per flight being imposed on non-RCS operations.

The second round of RCS will need Viability Gap Funding (VGF)-government subsidy basically--of Rs 620 crore, while the first round required Rs 213 crore. According to Raju, it was encouraging to see that many participants in UDAN 2-like SpiceJet and IndiGo-sought no subsidy. "This tells us that the scheme is getting the desired result and that it will not require any subsidy after some time and is moving towards self-sustainability," he added.

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