Air traffic under UDAN 22 percent lower than last year: Sources

Flight

The Indian aviation market has been among the quickest to recover from the pandemic.

However, high jet fuel prices disrupted aviation supply chains, and the financial health of domestic airlines has taken its toll on India's Regional Connectivity Scheme (RCS)-UDAN (Ude Desh ka Aam Nagrik).

RCS-UDAN aims to develop under-served airports and routes, with capped/subsidised airfares, in an attempt to make air travel affordable for India’s economic development.

Per route, the scheme offers financial support to the airlines for three years. Operators who won the bids for these routes were expected to develop the market so that the route could survive without subsidy.

The number of passengers carried under UDAN in 2022-23 (till November 30) had fallen to around 18 lakh, government officials said. This is 22 percent lower than the traffic in the same period in 2021-22, and around 15 percent lower than 2019-20, per government data.

In 2021-22, air traffic under the UDAN scheme rose to nearly 33 lakh in the 12 months ending March 2022, on the back of pent-up demand for travel after multiple lockdowns.

“Passenger traffic under UDAN had risen due to limited railway operations, relatively cheap ticket prices due to government fare caps, and pent-up demand as people had been forced to stay at home for most of 2020,” a government official said.

He added that in 2022-23 air traffic under UDAN had fallen mainly due to high ticket prices, which have risen almost every month after the fare caps were removed.

“Ticket prices on some UDAN routes have risen by as much as 200 percent compared to 2019,” the official added.

He added that passenger traffic on some routes had dropped by as much as 50 percent compared to 2021-22 due to improved railway connectivity and higher ticket prices.

"On most UDAN routes tickets start around Rs 4,000, while a train ticket starts at about Rs 500 for the same journey. This makes air travel uncompetitive," the official said.

Another official said that due to capacity constraints following the grounding of planes, around 50 routes under UDAN were currently non-operational.

Per Directorate General of Civil Aviation (DGCA) restrictions in effect till October 31, SpiceJet was confined to operating at only 50 percent of its capacity, while around 30 planes of IndiGo were grounded due to a lack of  Pratt and Whitney engine spares (added, please see).

"Flights to airports like Kishangarh, Hubballi, Kalaburagi, Bidar, etc., have been stopped by the airlines," the official said. He added that the government could not force airlines to operate on certain routes even though the airlines had won bids to operate these routes.

Data provided by CAPA (Centre for Asia Pacific Aviation) India reveals that of the 70 airports set up under UDAN, 46 are underserved airports with less than seven scheduled commercial flights per week. Another 17 are unserved airports with no scheduled commercial flights. The remaining seven are merely helipads.

An Airports Authority of India (AAI) official said that a major reason for the drop in passengers was the high rate of flight cancellations on UDAN routes.

"FlyBig, Alliance Air, Star Air, and SpiceJet, the biggest operators under the UDAN scheme, have had the highest number of flight cancellations in the last six months," he said. He added that customers were now wary of booking UDAN flights as they feel these flights are likely to get cancelled.

Per DGCA data, FlyBig had reported the highest number of cancellations in six of the seven months between April and October. Alliance Air reported the highest cancellations in September.

The fall in passenger traffic along with cancellations by the airlines highlights the vulnerability of the routes under the scheme.

Earlier this year, a report submitted to parliament by the Standing Committee on Civil Aviation said that only one out of four routes under the scheme were operational at the end of the government’s subsidy period of three years.

Of the 94 RCS-UDAN routes that had completed three years till 30 November 2021, only 22 routes were in operation, the report said.

Market experts and industry participants said that the viability of routes under UDAN had taken a hit due to the high cost of fuel following the pandemic.

“Private airlines have taken a massive hit to their finances due to the pandemic and are not in a position to operate any loss-making routes. Back in 2019, airlines were making profits and operating UDAN flights was necessary for the growth of overall passenger traffic in India," an official from Indigo said.

At the start of 2021, Aviation expert Ameya Joshi analysed that only 207 of the  299 RCS-UDAN routes were operational.

The scheme was initiated on 21 October 2016 with the objective to fulfil the aspirations of people, with enhanced aviation infrastructure and air connectivity in tier II and tier III cities.

As on 29 November 2022, after four rounds of bidding under UDAN, 453 routes have commenced, operationalizing 70 airports including two water aerodromes and nine heliports.

The UDAN scheme is applicable for a period of 10 years from the date of its notification. The central government has set a target of operationalising 1000 UDAN routes, and revive/develop 100 unserved & underserved airports/heliports/water aerodromes by 2024.