Phase 2 remote airport links
Airports Authority of India (AAI), the implementing agency, has issued Letter of Awards for 90 proposals received under Regional Connectivity Scheme (RCS) for everyone to fly (UDAN) after completion of the Second round of bidding.
Key features of the proposals awarded by AAI include:
Airports to be connected: Total 78 airports i.e., 36 currently served airports, 13 currently Underserved Airports and 29 currently Unserved Airports (25 distinct airports after removing the 4 overlapping airports from UDAN-1) will be connected. In addition, 31 helipads/ heliports will be connected through Helicopters in the Priority areas.
Viability Gap Funding (VGF) Outflow: These proposals will required VGF estimated at Rs.487 crores per annum for Fixed wing operations and Rs.130 crores per annum for Helicopter operations in the Priority areas.
Fixed wing aircrafts proposals are expected to provide around 26.5 lakh RCS seats per annum, each of which will be covered by airfare cap of Rs.2,500 for approximately one hour of flying.
In addition, around 2 lakhs RCS seats per annum are through Helicopter operations.
UDAN is a key component of the National Civil Aviation Policy (NCAP) which was released by the Ministry on 15th June 2016.
Ministry of Civil Aviation (MoCA) has launched RCS in October, 2016 with prime objective to facilitate/stimulate regional air connectivity by making it affordable for masses.
After the 1st Round of successful bidding under RCS-UDAN, MoCA had launched the 2nd Round on 24th August, 2017.
RCS- UDAN is very innovative and based on a unique business model formulated for the first time at Government framework level.
The operation of the Scheme is through a market mechanism where operators will assess demand on routes, submit proposals for operating/providing connectivity on such route(s), seek VGF, if any, while committing to certain minimum operating conditions and the same shall be finalized in interaction with other market participants as provided for in this Scheme.
The Scheme has been implemented with extensive Stakeholders’ consultation in a transparent manner.
In pursuance to the vision of Government to provide impetus to the RCS-UDAN, MoCA had organized several interactive events to further widen the consultative process with the Stakeholders.
Stakeholders were encouraged to share their views/suggestions along with justification/rationale for the proposed changes to enable MoCA/AAI make informed decisions on various matters.
Key UDAN features:
The passenger airfare for one hour journey of 500 km on a fixed wing aircraft or for a 30 minute journey on a helicopter would be capped at Rs.2,500, with proportionate pricing for routes of different stage lengths/flight duration.
The selected airline operator would have to provide 50% of the flight capacity (subject to a minimum of 9 and a maximum of 40) as RCS Seats for operations through fixed wing aircraft and a maximum of 13 RCS Seats on the RCS Flights for operations through helicopters.
Where the fixed wing aircraft has less than 9 passenger seats, then all such seats would be RCS seats.
Selected Airline operator would be given a three years exclusivity of operations. To reduce the cost of operations of airlines on flying such routes, a financial stimulus in the form of concessions from Central and State government, airport operators and the Viability Gap Funding to the interested airlines would be provided to kick-off operations from such airports, so that the passenger fares are kept affordable.
State Government will provide a certain share of VGF (20% for States other than North-East States where the ratio will be 10% of VGF determined).
For this, 29 States and Union Territories have signed MoUs. fii-news.com
