UDAN Scheme: Launch Year, Objectives, Status, and Significance

PWOnlyIAS February 07, 2024 07:09 2182 0

UDAN Scheme is a regional airport development and Regional Connectivity Scheme (RCS) of GoI, launched in 2017. Click to download UDAN Scheme UPSC pdf, here.

UDAN Scheme: Launch Year, Objectives, Status, and Significance

Introduction to UDAN Scheme: Ude Desh ka Aam Naagrik

UDAN Scheme (Ude Desh ka Aam Naagrik) is a regional airport development and Regional Connectivity Scheme (RCS) of the Union Government of India which aims to provide connectivity to un-served and under-served airports of the country through the revival of existing airstrips and airports.

Overview
UDAN Full Form	Ude Desh ka Aam Naagrik
UDAN Scheme Launch Year	2017
Nodal Ministry	Ministry of Civil Aviation
UDAN Scheme Objective	Air Connectivity to unserved and under-served airports of the country.

Components of UDAN Scheme

Enhancement and Expansion of Airports- The initial component of the UDAN Scheme involves the improvement of existing airports and the establishment of new ones, ultimately fostering swifter regional connectivity.
Capped Airfare and Sustainable Routes- The second component includes introduction of new, capped airfare and the establishment of financially viable regional routes. This initiative aims to enhance accessibility and economic sustainability in underserved regions.

Objectives of UDAN Scheme

Enhancing Accessibility Through Affordable Airfare- Focused on creating economically viable and profitable flights on regional routes to make air travel affordable for the common man, even in small towns.
Catalyzing Mass Connectivity through UDAN- Aiming to stimulate regional air connectivity and ensure accessibility to air travel for the broader population through strategic measures.
Revitalizing Un-Served and Underserved Airports- Envisioning the revival of un-served and underserved airports across the country by rejuvenating existing air-strips and airports, with the scheme operational for a duration of 10 years.
Market-Driven Expansion of UDAN- Operating as a market-driven scheme, UDAN conducts periodic bidding rounds to expand coverage, encompassing more destinations, stations, and routes for sustained growth.
Airlines’ Strategic Role in UDAN Bidding- Illustrating the crucial role of interested airlines in the UDAN scheme, where they assess demand for specific routes connecting airports and submit proposals during bidding rounds.
Inclusive Economic Growth through Rapid Connectivity- Dedicated to fostering inclusive economic development by accelerating connectivity, leading to widespread economic empowerment.
Advancing Air Transport Infrastructure in Remote Regions- Strategic initiatives aimed at advancing air transport infrastructure in remote areas, contributing to comprehensive regional development.

Key Highlights of UDAN Scheme

Integrated with National Civil Aviation Policy (NCAP) – The UDAN Scheme is a key element of the National Civil Aviation Policy (NCAP) which was released by the Ministry of Civil Aviation (India) in 2016.
Strategic Focus on Regional Connectivity- Unveiling the scheme’s primary objective of bolstering connectivity in remote and regional areas of the country, addressing critical aspects of national infrastructure development.
Affordability Initiatives in Air Travel- Understanding the UDAN Scheme’s core mission to enhance accessibility by ensuring affordability in air travel, aligning with broader goals of inclusivity and economic development..
Subsidized Seat Allocation- Nearly 50% of seats on Udan flights are offered at subsidized fares under the scheme.
Viability Gap Funding (VGF)- Participating carriers receive Viability Gap Funding (VGF), an amount shared between the central government and the concerned states.
- The Viability Gap Funding (VGF) Scheme aims at supporting infrastructure projects that are economically justified but fall marginally short of financial viability.
- VGF will be shared between the Ministry of Civil Aviation and the State Government in a ratio of 80:20.
- In case of the North-Eastern states and Union Territories, the VGF sharing ratio will be 90:10.
Joint Funding by Central and State Governments- The scheme is jointly funded by the central government and state governments to support its implementation.
Scheme Duration- The UDAN scheme is designed to run for a period of 10 years.
Potential Extension- There is provision for the scheme’s extension beyond the initial 10-year period.

National Civil Aviation Policy

The National Civil Aviation Policy released in 2016 which aims to create an ecosystem.
Its primary goal is to make flying affordable for the masses and Ensuring safe and affordable travel experiences for air passengers.

Funding Structure Under UDAN Scheme

Central Government	State Government	Airport Operators
Viability Gap Funding (VGF) to the airlines to subsidise the fair cost. Concession on ticket-related taxes. Flight’s code sharing.	Reducing the GST to 1%. Improving fueling infrastructure by coordinating with oil companies. 20 % VGF. Providing free security personnel and land for airport development. Supplying water, electricity, etc., at cheap rates.	No charge for parking, landing, storage, etc. Nil Terminal Navigation Landing Charge. 4% discount on UDAN-RCS flight’s Route Navigation and Facilitation Charge (RNFC).

Evolution of UDAN Scheme

From its inception UDAN Scheme has been transformed to 5 times/phases.

UDAN Scheme 1.0:
- Initiated with 5 airlines, UDAN 1.0 awarded 128 flight routes to 70 airports, including 36 newly operational airports.
UDAN Scheme 2.0:
- In 2018, 73 underserved and unserved airports were announced, marking the inclusion of helipads for the first time under UDAN.
UDAN Scheme 3.0:
- Introduced Tourism Routes in collaboration with the Ministry of Tourism.
- Included Seaplanes for connecting Water Aerodromes.
- Expanded UDAN to cover numerous routes in the North-East Region.
UDAN Scheme 4.0:
- Launched in December 2019, UDAN 4.0 focused on the North-Eastern Regions, Hilly States, and Islands.
- Prioritized airports developed by the Airports Authority of India (AAI) for Viability Gap Funding (VGF).
- Incorporated operations of helicopters and seaplanes.
UDAN Scheme 5.0:

- Launched in 2022
- The latest round introduces several changes:
  - Focus on Category-2 (20-80 seats) and Category-3 (>80 seats) aircraft.
  - Removal of the 600 km cap on stage length, allowing flights on any distance.
  - Increased Viability Gap Funding (VGF) cap to 600 km for both Priority and Non-Priority areas (from the previous 500 km).
  - Shorter deadline for commencement of operations, reduced to 4 months from the earlier 6 months.
  - The same route would not be awarded to a single airline more than once, whether in different networks or in the same network.
  - Exclusivity of operation provided to an airline will be withdrawn if the average quarterly Passenger Load Factor (PLF) is higher than 75% for four continuous quarters.

Some Program Under UDAN Scheme

Lifeline UDAN
- Launched to facilitate the transportation of medical cargo during the pandemic, Lifeline UDAN commenced operations in March 2020. It played a crucial role in operating 588 flights, transporting nearly 1000 tonnes of voluminous cargo and essential medical services across various parts of the country.
Krishi UDAN
- Introduced to enhance the value realization of agricultural products, particularly in the Northeastern Region (NER) and tribal districts.
International UDAN

- The International UDAN initiative aims to establish direct connections between India’s smaller cities and key foreign destinations in the neighboring regions.

Performance So Far: UDAN Scheme

Growth in Connected Airports
- Prior to the UDAN Scheme, India had only 76 airports with scheduled commercial flights since 1911. Since 2014, the operational airports have grown significantly to 141, showcasing substantial growth in air connectivity.
Expansion of Routes

- The UDAN Scheme has introduced 479 new routes, creating an extensive network that now spans over 29 States and Union Territories. This expansion has effectively connected previously underserved areas, contributing to enhanced air connectivity.
Passenger Outreach
- The UDAN Scheme has significantly improved passenger accessibility and convenience. More than one crore passengers have availed the benefits of this scheme, enjoying improved air travel opportunities and enhanced connectivity.

Challenges For UDAN Scheme

Commercial Viability of Routes- Some routes identified under UDAN face commercial unviability for airlines due to low demand, impacting profitability. Operations on 225 out of the 479 launched routes have been discontinued.
Inadequate Airport Infrastructure- Remote regions encounter challenges as they lack sufficient airport infrastructure.Upgradation and improvements are imperative to meet safety standards and accommodate increased air traffic.
Viability Gap Funding Issues- Challenges arise in providing subsidies and viability gap funding to airlines on selected routes, particularly those deemed commercially unviable.
Cap on Airfares- The imposed cap on airfares for RCS flights has the potential to impact airlines’ revenue, potentially discouraging them from operating on specific routes.
Lack of Awareness- Limited awareness among potential passengers regarding air travel options under UDAN may restrict demand and the utilization of regional air services.
High Operational Expenses- Airlines operating in remote areas frequently encounter heightened operating costs, which encompass increased fuel expenses, maintenance expenditures, and logistical challenges. These factors collectively impact the profitability of airline operations in such regions.

Way Forward to UDAN Scheme

Collaborative Approach- Government, aviation industry stakeholders, and local authorities should collaborate to address challenges and devise effective solutions. So that UDAN scheme can reach to its highest potential
Investment in Remote Airport Infrastructure- Prioritize investments in improving airport infrastructure in remote regions to manage increased air traffic and ensure adherence to safety standards.
Awareness Campaigns for Regional Air Travel- Launch awareness campaigns to inform potential passengers about the availability and benefits of regional air travel under UDAN.
Continuous Monitoring and Evaluation- Regularly monitor and evaluate the performance of routes and airports to identify any issues and implement necessary improvements.
Encouraging Innovation in Aviation- Promote innovation in the aviation sector to discover novel solutions that enhance connectivity and reduce operational costs.
Reevaluation of Airfare Cap- Reevaluate the airfare cap for RCS flights, aiming to strike a balance between affordability and ensuring sustainability of airlines’ revenue.

Recent Developments in UDAN Scheme

RCS-UDAN was awarded the Prime Minister’s Award for Excellence in Public Administration under Innovation Category for the year 2020.
Republic Day Tableau for 26th January 2022 on UDAN was adjudged as the Best Tableau by the Ministry of Defence.

UDAN Scheme

The Ministry of Civil Aviation has launched the International Air Connectivity Scheme (IACS) under the “Ude Desh ka Aam Nagrik (UDAN)” initiative.
International Air Connectivity Scheme (IACS)
- It aims to enhance air connectivity between specific Indian States and designated international destinations, with the aim of fostering socio-economic growth within the Indian state.
- The State Governments of Assam, Manipur, and Tripura have identified routes connecting Guwahati, Imphal, and Agartala with selected international destinations, including Bangkok, Dhaka, Kathmandu, Yangon, Hanoi, Mandalay, Kunming, and Chittagong.
- Concerned airport operators are tasked with the development and upgradation of airports to meet international standards, ensuring the facilitation of smoother international air travel experiences.
Recently UDAN (Ude Desh Ka Aam Nagrik i.e. let the country’s common man fly) Scheme which focuses on improving unserved air routes in underserved regions of India, completes its 6th year in 2023.

SWOT Analysis of UDAN Scheme

Strength	Enhanced Regional Connectivity: Launch of UDAN has significantly improved regional connectivity by connecting underserved and unserved airports, fostering economic growth in remote areas. Affordability: The scheme’s focus on capped airfares for a percentage of seats has made air travel more affordable, encouraging a broader section of the population to fly.
Weakness	Commercial Viability Challenges: Some routes face commercial unviability due to low demand, leading to the discontinuation of several routes. Operational Costs: Airlines operating in remote areas encounter higher operational costs, impacting their profitability. Less Popularity- Travelling by air is still not prevalent among Indian Masses
Opportunities	Infrastructure boost in Air Transport: Investment in air transport infrastructure in remote regions presents an opportunity to handle increased air traffic and it will lead to connectivity of remote areas to the main channel of the country. Encouraging Innovation: Encouraging innovation in the aviation sector can lead to creative solutions to enhance connectivity and reduce operational costs. Like- creation of Greenfield Airport, Solar operated airport. Enormous Job Potential- Creation of regional air transport infrastructure will generate jobs and employment especially in difficult terrain.
Threat	Operational Challenges: Identifying and addressing operational challenges, such as high operating costs and logistical issues, is essential to the sustained success of the scheme. Impact of External Factors: External factors such as pandemics, geopolitical tensions, or economic downturns can impact the overall success and growth of the UDAN scheme.

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Frequently Asked Questions

RCS Ude Desh Ka Aam Nagrik is a government-backed initiative to improve air infrastructure and connectivity in India, especially in remote and underserved regions.

Ude Desh Ka Aam Nagrik scheme is a part of National Civil Aviation Policy (NCAP) 2016 and launched by the Ministry of Civil Aviation (MoCA) under a 10-year vision.

The Udan Scheme was launched as part of the National Civil Aviation Policy (NCAP) 2016 by the Ministry of Civil Aviation (MoCA).

First Component: Develop new airports and enhance the existing regional airports to increase the number of operational airports for civilian flights from 70 to at least 150 airports. Second Component: Adding new flight routes to connect more than 100 underserved airports in smaller towns with each other as well as with well-served airports in bigger cities using the "Viability Gap Funding" (VGF) model.

The scheme aims to provide seamless, cost-effective, time-bound air transportation and associated logistics for all Agri-produce, especially from Northeast, hilly and tribal regions of the country.

There are 499 UDAN routes operationalized. The Regional Connectivity Scheme (RCS) - UDAN (Ude Desh Ka Aam Nagrik), a government-backed initiative to improve infrastructure and connectivity in India, especially in remote and underserved regions, completes six years.

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UDAN Scheme: Launch Year, Objectives, Status, and Significance

Introduction to UDAN Scheme: Ude Desh ka Aam Naagrik

Components of UDAN Scheme

Objectives of UDAN Scheme

Key Highlights of UDAN Scheme

National Civil Aviation Policy

Funding Structure Under UDAN Scheme

Evolution of UDAN Scheme

UDAN Scheme 1.0:

UDAN Scheme 2.0:

UDAN Scheme 3.0:

UDAN Scheme 4.0:

UDAN Scheme 5.0:

Some Program Under UDAN Scheme

Lifeline UDAN

Krishi UDAN

International UDAN

Performance So Far: UDAN Scheme

Growth in Connected Airports

Expansion of Routes

Passenger Outreach

Challenges For UDAN Scheme

Way Forward to UDAN Scheme

Recent Developments in UDAN Scheme

SWOT Analysis of UDAN Scheme

Frequently Asked Questions

What is the RCS UDAN Scheme?

The UDAN Scheme comes under which Ministry?

What is the Udan Scheme Launch Date?

What are Different Components of the UDAN Scheme?

What is Krishi UDAN?

How many routes are there under UDAN?

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