India's regional connectivity scheme – known as Ude Desh ka Aam Naagrik (UDAN) – will be rejigged to allow more airlines to participate. Under the new proposal, airlines would be able to access the scheme on underserved routes, not just underserved airports, reports The Business Standard.
Finalised earlier this year, UDAN is intended to improve regional connectivity in parts of India that have little or no aviation services through a scheme of cross-subsidisation. Additionally, airport navigation and landing charges were exempted from UDAN flights.
A total of 72 airports were included in the first round of allocations, covering 128 routes. Airlines which will receive subsidies under the scheme include Alliance Air (India) (9I, Delhi International), Deccan Charters (Bengaluru International), Air Odisha (Bhubaneshwar), and TruJet (TRJ, Hyderabad International). Although it was awarded routes, SpiceJet (SG, Delhi International) did not apply for Viability Gap Funding.
In the next round of allocations, the government will relax restrictions to make the scheme simpler and more attractive. Options include allowing connections between Tier I cities that are not currently connected, and also cities that are less than 150 kilometres apart. The government is also looking at changing the three-year route exclusivity clause and increasing the number of subsidised seats.
Civil Aviation Minister, Jayant Sinha, says that UDAN is the "single best thing that has happened" in India's aviation history.
"At the speed with which UDAN is going and the bet that IndiGo has taken to add 50 ATRs, we are going to rapidly add airports and we will hopefully have 200 airports in near future," Sinha said.
According to Sinha, 1.3 million seats have been added to India's aviation sector with government input of INR2 billion (USD31.7 million).
A decision on the changes to be implemented will be made following a stakeholder meeting in June.
