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GENERAL TOPICSPosted by C C ASHOKA Sat, March 03, 2018 10:11:01

India is rapidly expanding its aviation network beyond its biggest cities, developing airports at 18 smaller and unserved destinations over the past year and seeking to bring commercial flights to at least five more towns over the next few months. “By March end, we aim to operationalise others such as Adampur in Jalandhar and Salem in Tamil Nadu,” a senior official at the stateowned Airports Authority of India (AAI) told ET.

Another 12 airports, to be put up for bids, are in various stages of development and may take more than a year to be ready. To be sure, industry sources are somewhat sceptical about the fate of all of these links, and believe that some may require complex issues to be solved before flights were to begin. Under the UDAN plan, which seeks to democratise and broaden aviation linkage in a nation where flying still remains beyond the reach of many citizens, the government is building airports in unserved or under-served locations, offering incentives for airlines to fly to these destinations.

As part of that plan, several new airports were built over the past year. Among those where commercial flights have begun operation or are ready for take-off are Mundra and Jamnagar in Gujarat (private airports run by the Adani Group and Reliance IndustriesBSE -0.50 %, respectively), Jalgaon in Maharashtra, Bhatinda in Punjab, Kadapa in Andhra Pradesh and Vijayanagar in Kanataka. The last location is also a private airport operated by the JSW Group.

Among those that could technically be bracketed under W-I-P (work in progress) are Burnpur in West Bengal, Sholapur in Maharashtra, and Utkela and Jeypore in Odisha. The commencement of regional flights to airports such as Kanpur and Allahabad is also pending the resolution of a legal conflict between IndiGoBSE -0.40 % and the Delhi airport operator over the terminal the airline will operate from in the capital. IndiGo has filed a petition in the Delhi High Court, challenging the GMR-led International Airport's (DIAL) direction to the airline to shift a part of its operations from Terminal 1 to Terminal 2 of the airport.

IndiGo, SpiceJetBSE -0.04 % and Jet AirwaysBSE -0.54 % are among the national scheduled carriers that have bid for routes under the regional connectivity scheme. India has 450 unused airstrips and airports. The scheme has a 10-year review period, and 65 locations are connected by routes that have been put up in the two rounds of bidding so far.

Some of the new regional carriers have questioned the move to bid out routes involving airports that are far from complete. Under the scheme, it is up to an airline to suggest and bid for routes that it deems viable after having done its due diligence on air travel demand and viability. The ministry of civil aviation then puts the route up for counter-bidding by other airlines. In fact, for unserved or unused airports requiring investments of more than? 5 crore for upgradation, bidder has to give a bank guarantee of ?1 crore. It is returned to the airline after a year of operations.

“Many of these airports run into conflicts over land acquisition, at times with the state government. We have bid for an airport after another airline did a due diligence. Now we see that the airport is stuck. We have to rework our entire network plan accordingly,” said a senior executive at an airline.

Experts, however, disagree on the success parameters and operational soundness of the regional connectivity scheme.

“The government has been proactive in operationalising unserved airports under the UDAN scheme. It is valid to get an airline to commit to operate at such airports and then develop/operationalise them. Otherwise we risk spending taxpayers’ money on assets that remain unused,” said Peeyush Naidu, a partner at Deloitte.

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