The Centre unveiled a regional connectivity scheme, known as UDAN (Ude Desh ka Aam Nagrik), with flights priced at Rs.2,500 for one hour of flying time to and from regional airports, but raised the subsidy amount to be paid to regional airlines from the level proposed in a draft scheme.
Even as the government said the first flight from smaller cities under the scheme should take off by January, it remained tight-lipped on the amount of levy to be imposed on flyers on regular routes to fund the subsidy. The government will provide subsidies to regional airlines to offer half the seats on a discounted rate.
“We want the regional aviation market to flourish in the country,” Minister of State Civil Aviation Jayant Sinha said, adding that 16 airports are ready to fly under the regional connectivity scheme from January.
On the day of its launch, airlines expressed concerns on the modalities of the Centre’s regional connectivity scheme, with SpiceJet chief Ajay Singh pointing out that concessions need to be extended to large airports to which flights will be connected from regional airports.
“It is unclear if the concessions will be provided at both small and large airports. A clarification on whether concessions on small airports will be given on the larger airports is required as it will impact the economic viability of the entire project,” Mr. Singh said..
Under the scheme, airlines will be offered a slew of sops at smaller airports such as waiver of landing and parking charges. “Extending the airports benefits for flights operating from small to major airports under the scheme is under active consideration of the government,” Civil Aviation Secretary R. N. Choubey said. The government will notify the levy amount to be charged to finance the regional connectivity fund by October 31.
The subsidy amount has been increased from the draft scheme released earlier this year. Airlines will now get subsidy in the range of Rs.2,350-Rs.5,100 per seat for three years.