UDAAN Scheme: All You Need To Know

January 27, 2017 Share Like Labels: bet

UDAN applicable on all flights covering a distance between 200 KM and 800 KM
UDAN seats are available at subsidized rates
Minimum seats per carrier is 9 and maximum is 40 per carrier
There is no lower limit set for remote, hilly, security and island regions
UDAN caps the fare for short distance flights
Geographical means of coverage viz. North East, North, South, West and East
Airports selection under UDAN operations would be done with the consultation of the state government
Accordingly concessions would be made available under UDAN
Most of the un served and under served airports would be covered under UDAN
Tenure of UDAN scheme is fixed at ten years

Viability Gap Funding (VGF) provided to airlines to kick off operations under UDAN keeping passenger fares affordable
Market based model will be followed for VGF
First, operators submit their proposals to implementing agencies
Operators selected through competitive bidding process
Reverse bidding adopted to select the lowest VGF quote
Regional connectivity fund (RCF) created to meet VGF under UDAN
RCF levy for domestic flights from the states is fixed at 20%
Financial stimulus in the way of Central and State government concessions, tax concessions
Exemptions given on landing and parking charges for airlines under UDAN
Funding support given for first three years of operation only

Airlines is a luxury product and often seen as alienated from common man
UDAN tries to break this idea but the subsidies given under UDAN will be a burden to Government
No mechanism to monitor the beneficiaries of UDAN
Regional connectivity would increase but already the existing airlines are operating flights with more passengers and exceeding their quota of regional connectivity
UDAN finances and supports airlines only for three years under the perception that within three years the routes will become sustainable
It does not consider the hike in fuel cost within these three years
Airlines high levy of ATF tax is an area of concern
Increase in air traffic due to UDAN may cause environmental hazards in the form of air pollution

UDAN would help in reviving existing airports and air strips
Employment would be generated
Indian Economy would see a boost
The scheme ensures growth, affordability, development and connectivity
Business would enhance with quick movement of goods and export products
Remote areas would get developed
Commerce, tourism and trade would enhance
New form of air transport in the form of small aircrafts and helicopters would increase connectivity
Start up airlines will increase with new opportunities in aviation sector
Incumbent airlines will get more passengers and new routes
Overall, common man will get to enjoy the luxury of air transport at affordable rates under UDAN scheme

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