Analysis: UDAN 4.0 is an improved version but still comes up short

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Last week saw the much-delayed fourth round of the Regional Connectivity Scheme (RCS)–UDAN (Ude Desh Ka Aam Nagrik) being awarded. The scheme, which was kicked off in October 2016 to enhance regional air connectivity and make it affordable to the masses, has been moving along in fits and starts. The last round was before the 2019 general elections, followed by UDAN 3.1 that saw routes from constituencies of incumbent ministers being offered - and bagged by state-owned Air India regional. UDAN 4.0 – a much-needed intervention to keep the scheme alive, seems to be timely.

The Airports Authority of India (AAI) lists 50 airports (including heliports) and 268 routes under operation as part of the ambitious scheme. However, not much thought seems to have gone in making up this list which, unfortunately, includes Sikkim’s Pakyong—where operations have been long suspended—and among the routes are those started by Jet Airways—which stopped flying in April 2019.

The last few rounds have been unsuccessful, including the one for international UDAN. But the routes either did not start or did not scale up. The initial objective of UDAN was to connect un-served and underserved routes. However, while the first round of the bidding saw many such airports up for bids, the subsequent rounds saw the contours of the scheme being changed to include specific routes.

This meant that we had routes like Hubli–Goa—which is a mere 150 kms by road. The new rules also meant that multiple operators could operate on the same route, taking away the exclusivity clause for a single operator. Some routes saw airlines pull out of UDAN due to sustainability issues and another set of routes saw double daily flights suddenly where none existed until then!

With UDAN 4, an attempt seems to have been made to turn the clock back, offering as it does routes that have no connectivity or have very little connectivity. The focus is back on the North-East which has poor alternative modes of transport due to the region’s hilly terrain and also on routes in Uttar Pradesh which has one of the lowest density of airports for its population!

1. Tezu (Arunachal Pradesh)
2. Rupsi (Assam)
3. Bilaspur (Chattisgarh)
4. Hissar (Haryana)
5. Moradabad (Uttar Pradesh)
6. Aligarh (Uttar Pradesh)
7. Chitrakoot (Madhya Pradesh)
8. Shravasti (Uttar Pradesh)
9. Bareilly (Uttar Pradesh)
10. Passighat (Arunachal Pradesh)
11. Gelaki (Assam)
12. Minicoy (Lakshadweep)
13. Kavaratti (Lakshadweep)

The RCS-UDAN scheme began with much fanfare as Prime Minister Narendra Modi flagged off the first flight (Delhi–Shimla) in April 2017. The exclusivity period of the flights under the first phase was three years, which would have come to an end in April 2020. While the month of April did not see commercial flight operations due to a nationwide lockdown following the coronavirus pandemic, the idea of letting airlines develop commercial potential in three years seems to have taken a backseat.

Another route which merits a mention is the one between Kochi in Kerala and Agatti in Lakshadweep. The route is exclusively operated by Air India regional and finds its place in the UDAN 4.0 list of routes awarded! While both these are remote areas with not many options to travel, if such re-bid continues then we are at serious risk of not encouraging the airlines enough to develop markets and be self-sustaining.

While the government hasn’t released details about the awardees and the routes, the past record is not encouraging. Jet Airways suspended operations as it ran out of money, leading to the suspension of multiple routes under RCS-UDAN. Airlines like Air Odisha, Air Deccan and Zoom Air faced an even worst fate since they could not start most of the routes allocated to them. Likewise, smaller players which could manage to start have not been able to sustain operations due to a lack of aircraft and shortage of manpower, among other reasons.

The most surprising part of UDAN 4.0 has been the allotment of 11 routes to a little known company Air Taxi. Without any prior experience in scheduled commercial service, the operator intends to provide a three-seater ride – less than the average family size in the country in most cases! Another airline, Flybig is basing its plans around UDAN. With the earlier focus on 9 subsidised seats and later a cap of 40 percent of total seats when longer routes which needed relatively bigger aircraft to fly were in place, a three-seater plane really knocks the scheme off completely, since it’s unclear how one can one subsidise a small part of three seats?!

No doubt, the scheme was started with the best of intentions with “Hawaj Chappal in Hawai Jahaj” being the mantra! But good intentions alone don’t make government schemes successful - for arguably there are no schemes that are written with bad intentions!

In the case of RCS-UDAN, the challenge has been the readiness or the lack of it, both on the part of the airlines and the government. For instance, Spicejet has won multiple routes which connect sea ports. These include tourist places as well as those without significant other means of transport in the Andamans. But the airline has not been able to start operations as the infrastructure is not ready.

A relentless pursuit is needed to get much-needed infrastructure ready in time to ensure that the scheme really has 50 operational airports or 268 operating routes and not just a cumulative number with many slipping out but still listed!