25 Jan 2018 13:41 IST

UDAN-II to link 109 locations

Govt likely to provide ₹213 crore as viability gap funding

A total of 109 airports and heliports around the country have been awarded to various airlines and helicopter operators under the second round of bidding for the government’s Regional Connectivity Scheme (RCS), UDAN.

The locations being linked include Kargil in Jammu & Kashmir, which will be on the air map for the first time, Tezu (Arunachal Pradesh), Darbhanga (Bihar), Hubli (Karnataka), Hissar (Haryana), Thanjavur and Vellore (Tamil Nadu), Gaucher (Uttarakhand), Jalgaon and Ozar (Nashik) in Maharashtra, and Bathinda in Punjab. Arunachal Pradesh, Assam, Himachal Pradesh, Manipur and Uttarakhand will also have cities being connected by helicopter operations. Helicopter operations have been allowed under UDAN for the first time.

 

This increase in domestic air connectivity will not place any additional burden on existing fliers as the Finance Ministry has allowed the Ministry of Civil Aviation to retain a portion of the dividend the Airports Authority pays the Centre to meet the financial needs of providing viability gap funding (VGF) for regional flights, RN Choubey, Secretary, Civil Aviation, said. To get airlines interested in operating to smaller cities, the government is offering VGF if the operators are willing to price at least 50 per cent of the seats on these flights under ₹2,500 for one hour of flying, subject to a maximum of 40 seats. The rest of the seats can be priced at market rates.

While the government’s annual allocation of funds due to VGF was in the region of ₹620 crore during the first round of UDAN, it is likely to be around ₹213 crore in the second round, Choubey said.

The existing proposal of levying a fee of ₹5,000 on a flight operated by an Airbus A-320 variety of aircraft to fund the scheme will remain, Choubey added.

In a shift from the first round of bidding held last March,several airlines have sought to operate flights under the RCS scheme without seeking any VGF from the Centre. Officials indicated that SpiceJet and IndiGo had put in almost 20 proposals to operate flights without seeking VGF. The actual number of flights that the two airlines operate without any financial support from the government could be more.

“We are probably getting the results that we desired from the scheme now as it seems to be moving towards becoming self-sustaining,” said Ashok Gajapathi Raju, Civil Aviation Minister.

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