Nikita Vashisht Moneycontrol News
The Ministry of Civil Aviation on January 25 awarded routes to airlines under the third phase of its regional connectivity scheme (RCS) or UDAN (Ude Desh ka Aam Nagrik). SpiceJet bagged the maximum routes by obtaining rights to fly over 22 routes, followed by IndiGo with 12 routes and Ghodawat Enterprises with 10 routes.
Suresh Prabhu, Union Minister for Civil Aviation, called the scheme a "gamechanger" for the sector and said that announcement of routes on the eve of Republic Day was the gift of the ministry to the citizens.
Moneycontrol was the first to report that Centre would announce the routes this week. Aviation Secretary, RN Choubey, had confirmed about the development to Moneycontrol.
UDAN 3: Detailed report card
The ministry revealed that 73 networks, consisting of 235 routes have been identified in the third phase of the RCS. Of these, 23 are priority routes (routes connecting hilly areas of Himachal and Uttrakhand, north-east states and J&K), 166 routes other than priority and 46 routes proposed by the ministry of tourism.
A proposal, essentially is, a network of routes where one major airport in a city is connected to various other airports.
UDAN 3 has added certain routes proposed by the ministry of tourism in order to provide air connectivity to tourist spots within states. Such routes would connect airports to tourist destinations in order to boost tourism in the state.
The financing of such routes will be done by the tourism ministry.
The 235 routes will now provide connectivity to 16 new airports, 17 under-served airports, 50 served airports and six aerodromes, taking the total connectivity to 89 airports under the third phase.
Airlines that will fly
While initially 15 airlines had shown interest to fly under UDAN 3, 11 airlines have managed to bag routes. These are Alliance Allied Services (subsidiary of Air India; right proposals), Andaman Airways Pvt Ltd (one proposal), Aviation Connectivity and Infrastructure Developers Pvt Ltd (one proposal), Ghodawat Enterprises Pvt Ltd (10 proposals), Heritage Aviation (one proposal), Interglobe Aviation (IndiGo; 12 proposals), Jet Airways India (five proposals), SpiceJet Ltd (22 proposals), Turbo Aviation Pvt Ltd (two proposals), Turbo Megha Airways Pvt Ltd (two proposals) and Zexus Air Services Pvt Ltd (six proposals).
SpiceJet has also won the rights to operate international flights under the UDAN International scheme.
"SpiceJet will fly to Dhaka and Bangkok from Guwahati under the international plan... While we would prefer the airline to fly daily flights between Guwahati and Dhaka/Bangkok, it will initially start off with three flights a week and expand as per booking trends," a senior government official said.
The difference, however, between UDAN and UDAN international is the way they are priced. Under domestic RCS, the government has capped the fares at Rs 2,500 for every one hour flight. The fares for international will, however, be market determined.
"No capping of funds/prices will be done under UDAN International. They will be determined as per market trend," aviation secretary, Choubey, said.
The government, this time, has done due diligence while inspecting the airlines. Choubey said that fair amount of consideration was given to those airlines that are in a position to undertake such operations and flights.
This was the reason why regional airlines such as ZoomAir, Air Odisha and Air Deccan were not given any routes under the third phase.
Senior officials had said that they had declared their bids "invalid" due to failing financial conditions.
"We would have given them routes but they have failed to meet their previous commitments," Choubey had told Moneycontrol.
Prabhu also said that there are 21 routes yet to be awarded that have been identified in consultation with state governments.
"We will open bids for these routes from February 8," he said.
State-wise analysis
All the states have bagged at least one new route under the UDAN scheme in this phase. Uttar Pradesh, however, emerged as the outlier state with as many as 28 airports being approved for the scheme.
While Chandigarh, Goa, Haryana, Meghalaya and Uttrakhand got single airport connectivity, Chattisgarh, Delhi, J&K, Manipur, Mizoram, Nagaland, Tamil Nadu and Tripura got two airports approved.
Furthermore, Uttar Pradesh got 28, Rajasthan got 12 and Maharashtra and Gujarat, each, got nine airports approved for the connectivity scheme.
The third phase will augment RCS flight seat capacity by 69.30 lakh and will cost Centre Rs 1,167 crore annually.
According to government sources, state governments of Madhya Pradesh, Uttar Pradesh and Andaman and Nicobar Island will provide additional monetary incentives to the airline operators.
Centre provides funds to airline operators through a viable gap funding (VGF) mechanism.
UDAN 1 was launched in April 2017 with five airlines receiving rights to operate on 128 routes. The second phase, which focused more on hilly and terrain areas, saw many heliports and helipads being approved for better connectivity. 15 airlines on 325 routes, including those having chopper operations, were awarded routes during the second round in January 2019.
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