Airports Authority of India, the Implementing Agency has finalized the awarding of 78 routes identified in first phase of round 4.0 of Regional Connectivity Scheme (RCS)- UDAN (Ude Desh ka Aam Nagrik) to the Selected Airline Operators (SAOs).

Salient features of the Scheme

    1. Demand driven: The Scheme is market driven where airline operators assess demand on routes and bid for it through a transparent bidding mechanism.

    2. Affordability: One of the objectives of the Scheme is to make air travel affordable for the general public. Hence airfare on certain number of seats in an aircraft are capped. The airfare is indexed to change in CPI-IW, US-INR exchange rate, and ATF prices.

    3. Viability Gap Funding (VGF): VGF support is a monetary assistance that is provided by MoCA to the airline operator to enable them to successfully run the routes. VGF support is market determined, though a competitive bidding mechanism where the airline operators bid for the route in the form of VGF per seat. The VGF per seat is capped. Separate table of VGF cap per seat is provided for different types of aircraft. VGF per seat is also indexed to change in CPI-IW, US-INR exchange rate, and ATF prices.

    4. Minimum performance level: The airline operators are required to conform to certain specification for operating routes under the Scheme. Some of them are: Providing 50% of the RCS Flight Capacity as RCS seats, with minimum of 9 and maximum of 40 RCS seats in an aircraft. The number of RCS flights to be operated in a week shall be minimum of 3; and a maximum of 7. For operation in Priority Area(s) the maximum number of RCS flight allowed in a week is relaxed to 14. The operator is obligated to operate at least 70 % the total scheduled flight in a period of one year.

    5. Exclusivity of operation: The airline operators are provided exclusivity to operate the RCS route for the period of three years.

    6. Tenure of the Scheme: The scheme to be applicable for a period of 10 years, subjected to periodic review. VGF support for the RCS route is available for a period of three years only.

    7. Type of aircraft / helicopter: The Scheme allows operation through various type of aircrafts including sea planes and helicopters.

    8. Eligible operators: The operator should have Schedule Operator Permit (SOP) / Schedule Commuter Operator (SCO) permit to operate the routes covered under the Scheme. The operation through Non Scheduled Operator Permit (NSOP) is also allowed as a temporary measure, but only for helicopter and seaplane operations.

    9. Two heliports- Geleki & Misa & two water aerodromes- Kavaratti & Minicoy have been identified for operation of RCS flights under RCS-UDAN 4.0.

About UDAN - Regional Connectivity Scheme

National Civil Aviation Policy 2016 (NCAP 2016) mentions about

    • to enhance regional connectivity through fiscal support and infrastructure development.

    • to establish an integrated eco-system which will lead to significant growth of civil aviation sector, which in turn would promote tourism, increase employment and lead to a balanced regional growth

As the Indian economy grows, air connectivity can provide required impetus to the economic growth of regional centers (towns / cities). Thus to sustain and nurture a competitive market environment, NCAP 2016 provides for a Regional Air Connectivity Scheme.

Objectives

    • The primary objective of RCS is to facilitate / stimulate regional air connectivity by making it affordable.

    • Promoting affordability of regional air connectivity is envisioned under RCS by supporting airline operators through 

    • Concessions by Central Government, State Governments (reference deemed to include Union Territories as well, unless explicitly specified otherwise) and airport operators to reduce the cost of airline operations on regional routes / other support measures and 

    • Financial (viability gap funding or VGF) support to meet the gap, if any, between the cost of airline operations and expected revenues on such routes.

(The author is a trainer for Civil Services aspirants. The views expressed here are personal.)