The Indian government is working on expanding the Regional Connectivity Scheme (Ude Desh ka Aam Nagrik - UDAN) to cover popular tourist destinations in the country, Minister of State for Civil Aviation Jayant Sinha has told parliament.

According to the Business Standard, the revamp of the government-run programme was launched at the request of the Ministry of Tourism.

UDAN currently covers under- and unserved airports, most of them in remote parts of India. The scheme offers exclusive traffic rights and, when needed, subsidies to the airlines which connect the secondary and tertiary airports with major hubs in the country.

The expansion would most likely also include only domestic services. The government earlier this year floated the idea of including international routes under the scheme but these plans have not yet materialised.

The announcement comes amid the decision of Kannur to pull out of UDAN and terminate its participation in the scheme. The new airport in the northern part of Kerala, one of the southernmost Indian states known for its tourism industry, has decided that by awarding exclusive traffic rights under the UDAN scheme it would be jeopardising its own financial situation.

Under the UDAN rules, participating airports are not allowed to charge landing or passenger fees for flights operated under the scheme. The local authorities are also obliged to forego most of the locally-levied taxes, including the fuel tax.

Kannur, which inked a Memorandum of Understanding with SpiceJet (SG, Delhi Int'l) and IndiGo Airlines (6E, Delhi Int'l) earlier this year for a total of twelve UDAN-covered routes has argued that it would fare better if it allowed open competition on market terms on these services. Previously, only the route to Mumbai Int'l was set to be open to all carriers.

The airport is due to open in September 2018 as a domestic-only facility. The local authorities have been pressuring the government to allow international flights to Kannur as quickly as possible in a hope to boost tourist arrivals to the region. Air India Express previously announced it would launch services from Kannur to each of Dubai Int'l and Mangalore in September 2018 but has since postponed these plans.

The Indian government has so far awarded 403 domestic routes in two UDAN allocation rounds. In the first round, completed in March 2017, the authorities selected Alliance Air (India), Deccan Charters, Air Odisha, TruJet, and SpiceJet as designated operators. In the second round, allocated at the end of 2017, successful fixed-wing applicants included Alliance Air, Fly Hornbill, Star Air (India), Heritage Aviation, IndiGo Airlines, Jet Airways, Mehair, Pinnacle Air, SpiceJet, Turbo Aviation, TruJet, and Zoom Air (India).