Modi govt mulls UDAN for less than 9-seater planes, more incentives for North-East

Moneycontrol News

The government will likely allow airlines to operate planes having less than nine seats under its regional connectivity scheme, according to aviation secretary RN Choubey.

"We are actively considering allowing less than nine-seater planes to fly under RCS. There are four-seater planes also which can be flown, particularly in areas like Arunachal," he told stakeholders attending a meeting on RCS.

The government's regional connectivity scheme or UDAN, as it is called, aims to connect unserved and underserved airports in the country through a subsidy scheme. UDAN is an acronym for 'Ude Desh Ka Aam Nagrik'.

Expanding on Arunachal, Choubey said the government was also considering more incentives for subsidised flights in the North-East.

"Watch out for the revised scheme," he said as he asked stakeholders to wait for guidelines for the second round of auctions, likely to be held in the first week of next month.

Viability gap funding, exclusivity and a fare cap are the three pillars of the government’s regional connectivity scheme or UDAN.

Under the scheme, the government auctions selected unserved and under-served routes with the award going to the company that asks for lowest viability gap funding. The winner gets a 3-year exclusive right to operate flights on the route. The fare for half the seats in a flight is capped at Rs 2,500 for an hour of a flight journey of approximately 500 km and a 30-minute helicopter journey.

The selected airline provides 50 percent of the flight capacity – with a minimum of 9 and maximum of 40 seats for planes and a minimum of 5 and maximum of 13 seats for helicopters - under the regional connectivity scheme.