Airport readiness first stop in UDAN course correction

The Centre is looking to remodel its regional air connectivity scheme by placing greater emphasis on airport readiness before seeking bids from airlines for operating flights.

Towards this, the government is likely to provide financial support in the upcoming Union budget for the development of unserved airports and airstrips across the country, besides enhancing scrutiny on route feasibility, said people aware of the matter.

The UDAN (Ude Desh ka Aam Nagrik) scheme was started in 2017 to get more people flying in what is already the world's fastest growing aviation market.

Under the scheme, the government caps airfares and incentives, including subsidy, to attract airlines for operating on less traversed routes. However, the scheme got a mixed response so far with only about 60 percent of the original 615 routes currently operational.

The Comptroller and Auditor General (CAG) in a report issued last year said it observed significant delays in the revival of identified airports under the scheme with work commencing at only 61 percent of those airports.

“Airlines have pointed out that despite successfully bidding for the routes, they are unable to commence operations as the airports aren’t ready," a government official said. "For smaller airlines, who are substantial players in remote connectivity, it becomes a big financial burden as they have already signed lease agreements for planes and hired manpower. So airports need to be ready when the routes are being offered."

Under UDAN, airlines must start flights within four months of successfully bidding for a route, enjoying a three-year exclusivity period on these routes. This insulates them from any competitive pressure during the period. These remote airports also have lower aviation turbine fuel tax rates and do not levy airport fees.

“There are various reasons for delay in getting the airport ready. For instance, remote location of the airports under UDAN, delays in availability or acquisition of land, delays in obtaining statutory clearances are some of the reasons,” the official said.

Meanwhile, the civil aviation ministry plans to seek an extension of the UDAN scheme beyond the initial 10-year period through 2026. Civil Aviation Minister Ram Mohan Naidu said the ministry is looking to tweak the scheme to ensure that air connectivity continues on the existing routes under UDAN.

However, the finance ministry has asked the civil aviation ministry to only work on those airports which are viable for long term air connectivity.

“The number of airports being targeted will come down as those with chances of sustained air connectivity will be only bid out. Airlines will be penalised if they don’t start flights within a stipulated time when the airports are ready,” the official said.

Multiple airports developed under the scheme like Pakyong in Sikkim, Solapur and Sindhudurg in Maharashtra or Kushinagar in Uttar Pradesh don’t have any flights currently.

"INR 5.19 crore from budgetary support incurred on the terminal building at Kushinagar is lying unutilised since its completion," CAG pointed out in its report.