Rs. 2,500 For 1-Hour Flight: PM Modi Launches Low-Cost UDAN Scheme

PM Modi also flagged off UDAN flights on Kadapa-Hyderabad and Nanded-Hyderabad sectors

Prime Minister Narendra Modi on Thursday flagged off the maiden flight under the government’s ambitious UDAN or ‘Ude Desh ka Aam Naagrik’ scheme, aimed at stimulating regional connectivity through a market-based mechanism. The inaugural flight – flagged off by PM Modi from Shimla – was on the Shimla-Delhi route. Under the Ude Desh ka Aam Naagrik (UDAN) scheme, airfare for an hour’s journey (approximately 500 km) on a fixed wing aircraft or for a 30-minute journey on a helicopter would be capped at Rs. 2,500, the Prime Minister’s Office has said. Also part of the UDAN scheme, inaugural UDAN flights the Kadapa-Hyderabad and Nanded-Hyderabad sectors were also flagged off by the prime minister.

This marked Prime Minister Modi’s first visit to Shimla after assuming office. The airport at Jubbarhatti, which is 22 km from Shimla and is located 2,196 metres above sea-level, was shut for scheduled flights since September 6, 2012.

The UDAN Scheme, a key component of the National Civil Aviation Policy (NCAP), was released on June 15 last year.

The Civil Aviation Ministry has already awarded 128 routes connecting 70 airports to five airlines under the UDAN scheme: Alliance Air, SpiceJet, Air Deccan, Air Odisha and Turbo Megha. On each flight, 50 per cent of the seats would have a cap of Rs. 2,500 per seat/hour. These flights would connect airports spread across over 20 states and union territories.

Under the UDAN scheme, the government will extend subsidy in the form of viability gap funding to the operators flying on these routes. Apart from various incentives, the operators of such flights would be extended viability gap funding – for which money is partly raised through a levy of on flights operating in major routes like Delhi and Mumbai. The viability gap funding would be in place for three years for the airlines concerned from the date of starting operations in a particular UDAN route. Other benefits include zero airport charges for the operators and three-year exclusivity on the routes.

Amber Dubey, partner and head of aerospace and defence at KPMG in India, said timely payment of viability gap funding to the operators would be key to sustainable operations. (With agency inputs)