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Govt unveils UDAN, fares capped at Rs 2500 for 1-hour flights

Govt unveils UDAN, fares capped at Rs 2500 for 1-hour flights
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NEW DELHI: Come January and the Modi government will roll out its ambitious plan to introduce budget regional flying by connecting small towns by flights whose fares will be capped at Rs 2,500 for a one-hour flight.

Termed "Ude Desh ka Aam nagrik" or UDAN, this regional connectivity scheme (RCS) will be funded by levying a fee on aircraft landing at bigger airports. Aviation secretary R N Choubey on Friday said the levy, "which will be a very nominal one" will be announced by the month-end. It is estimated that if airlines pass on this levy to flyers, the increase in cost per ticket is unlikely to be more than Rs 60.

Existing airlines are opposing the move to introduce one more levy on flyers in the form of RCS fee and they feel the government should have found some other way of funding this scheme instead of taxing passengers more.

However, aviation minister Jayant Sinha tried to allay their fears. "We have taken three crucial steps to strike a balance between affordability for the common man and profitability for regional operators. Firstly, successful bidders will now have exclusive rights to operate on a regional route for three years, up from the previous plan of one year. Secondly, a UDAN flight operating from a small city to a metro like Delhi or Kolkata will have to pay no airport charges at the bigger airport. And finally, we have made it possible for entrepreneurs to lease planes in small numbers also to become regional operators. Earlier it was not possible to do so," Sinha said.

The minister said India has 16 under-served airports, which get less than seven flights a week. "These include places like Agra, Gwalior, Allahabad and Tezpur. Then there are 15 to 20 airports which are ready but don't get regular flights (like Jaisalmer). From january, 30 airports will be ready to receive regional flights under UDAN scheme."

For flights under UDAN, the government has now started inviting proposals from aircraft operators who want to operate to under or unserved airports. Successful bidders, who will be chosen selected on who seeks the lowest viability gap funding from the RCS fund, will have exclusive rights to operate a route for three years.

The fare cap of Rs 2,500 per hour will be reviewed periodically as it will be linked to consumer price index. Airfares under RCS will vary from Rs 1,420 to Rs 3,500 for fixed-wing aircraft.

For helicopters, half-an-hour ride under the scheme would cost Rs 2,500 and for over one-hour duration, the cap would be Rs 5,000. On each RCS route, the minimum frequency of flights would be 3 and a maximum of 7 in a week.

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