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Udan Upshot: 36 of 108 airports to have single airline operator

Alliance Air, a unit of Air India, leads the charge of keeping previously underserved routes on the aviation map. IndiGo, SpiceJet and Truejet too will enjoy monopoly in some airports.

April 02, 2021 / 02:15 PM IST

India has been adding operational airports at breakneck speed. The summer schedule will see 108 operational airports. A lot of this has been possible due to a sustained focus on Regional Connectivity Scheme (RCS) - UDAN (Ude Desh ka Aam Nagrik).

The scheme initially envisioned connecting the unserved and underserved airports of the country. But change is afoot. While route pairs (origin and destination airport) were bid out, the Airports Authority of India (AAI) continued to invest in airports where the Selected Airline Operator (SAO) was willing to start services.

This led to more airports becoming operational. As the route level bidding started, airlines bid for all routes from a particular airport and this helped reduce costs for the airline and offer better routing options for aircraft. For example, now IndiGo, India’s largest airline, operates one aircraft on the Bengaluru-Kurnool-Visakhapatnam and back the same way. Likewise, Alliance Air, an Air India unit, operates flights to Jagdalpur from Hyderabad and Raipur with a single aircraft.

That is not the only interesting upshot.

Now, some of India’s airlines will have a monopoly in 36 out of the 108 airports. Alliance Air, the subsidiary of the national carrier that uses only the smaller ATR planes, has the most number of such airports. The airline secured permits to operate to 14 such stations and it doesn’t have to worry about competition from a competitor. Alliance Air, or Air India Regional as it is branded on the aircraft, has been a monopoly operator to certain stations such Shimla, Kullu and or Agatthi for several years.

Close

With the advent of RCS-UDAN, the list has got longer. Air India Regional serves places such as Ludhiana, Pantnagar, Bilaspur and Jagdalpur in the fertile plains of North India or the hinterland.

Next in the pecking order is Trujet, which has expanded on the back of RCS-UDAN, making the most of what a regional carrier can do with subsidy from the government. The airline is the sole operator at eight stations. Of these eight, Keshod will be operational soon while it already has flights to Kadapa, Vidyanagar, Jalgaon, and Salem, among others.

IndiGo, India’s largest carrier by domestic market share, recently launched flights to Kurnool. The airline is the only operator at this town in Andhra Pradesh. Tuticorin, Jorhat and Agra are other airports that are now IndiGo monopoly airports.

SpiceJet, which has maximum presence under RCS-UDAN, also has four monopoly stations. This includes Pakyong in Gangtok, where it resumed flights recently. In addition to Pakyong, SpiceJet is the sole operator at Kanpur, Gwalior and Adampur.

Star Air, the Bengaluru-based airline, which is the sole regional jet operator in the country operates over half its schedule under RCS-UDAN. However, the airline is more focused on connecting unserved routes than airports and it has only one airport where it enjoys a monopoly. That is Hindon, which is becoming an alternative to the Delhi airport.

Flybig, the Indore based carrier, would have two monopoly airports under its belt when it launches its operations in the North East. The airline has bid and won many routes in the North East. The airline will operationalise airports at Tezu and Rupsi. Tezu will get Arunachal Pradesh back on the air map while Rupsi region is a gateway for road entry to Bhutan along with being close to tourist spots of Buxa tiger reserve and Jaldapara national park.

National carrier Air India will ensure that it keeps Khajuraho and Nanded on the air map, along with providing military charter services to Thoise.

Are all airports operational?

The only problem is that not all of these 36 are operational. While the schedule has been approved for airlines, airlines like Flybig are in the process of acquiring additional aircraft which will start operations to places like Rupsi or Tezu.

Similar is the case of Keshod in Gujarat. The airport got its licence in March and Trujet already has a scheduled approval in place but the sale of flights is yet to begin.

What does it mean for passengers?

On monopoly routes, airlines typically have full control of prices (often higher) But on Udan routes, it is different. The scheme subsidises a percentage of seats, with a maximum of up to 40 seats in an aircraft.

That means that a substantial chunk of costs is borne by the government and airlines cannot price tickets at any rates just because there is demand. However, few seats are open for commercial operations and thus on such routes as well, there are occasions when airfares are high.

Tail Note

The ambitious RCS-UDAN scheme envisioned building the station and route in such a manner that air travel becomes a commodity. We would know if the scheme was a success or not in its long-term goal only around 2022—when the majority of the routes will see their concession period end. The scheme started in April 2017 but the initial routes were majorly won by Air Odisha and Air Deccan and struggled to take off. The following bidding rounds saw participation from Spicejet and IndiGo and a substantial number of routes were started

Airports like Bhatinda have been dropped off the air map as the operations are not economically feasible. This comes after Alliance Air ran operations for three years at the airport.

The next two years will be critical for the scheme. Else these airports, which see only one airline operating, are at serious risk of losing connectivity in few years.
Ameya Joshi runs the aviation analysis website Network Thoughts.
first published: Apr 2, 2021 02:02 pm

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