The Journey of UDAN: Soaring Towards Inclusivity in Indian Aviation. In a country where the sky often symbolizes hope and aspiration, the dream of flying has remained an elusive luxury for many. This dream began to take shape with the launch of the Regional Connectivity Scheme (RCS) – UDAN, or “Ude Desh ka Aam Nagrik,” on October 21, 2016. Spearheaded by the Ministry of Civil Aviation (MoCA), UDAN aims to enhance regional air connectivity from unserved and underserved airports across India, making air travel affordable. As it celebrates its seventh anniversary, UDAN stands as a testament to the commitment of the Indian government to improve infrastructure and connectivity, especially in remote regions. The first UDAN flight took off on April 27, 2017, connecting the serene hills of Shimla to the bustling metropolis of Delhi. This inaugural flight marked the beginning of a transformative journey in Indian aviation that would open up the skies to countless citizens. UDAN operates on a market-driven model, where airlines assess demand on specific routes and submit proposals during bidding rounds. The scheme incentivizes airlines to connect underserved regions by offering support through Viability Gap Funding (VGF) and various concessions provided by airport operators, the Central Government, and State Governments.
Support Mechanisms
The government has implemented several supportive measures to attract airlines to operate flights in less lucrative markets:
- Airport Operators: They waive landing and parking charges for RCS flights, and the Airports Authority of India (AAI) does not levy Terminal Navigation Landing Charges (TNLC) on these flights. Moreover, a discounted Route Navigation and Facilitation Charge (RNFC) is applied.
- Central Government: Excise duty on Aviation Turbine Fuel (ATF) purchased at RCS airports capped at 2% for the first three years. Airlines are also encouraged to enter code-sharing agreements to expand their reach.
- State Governments: States have committed to reducing VAT on ATF to 1% or less for ten years and providing services such as security, fire, and utility at reduced rates.
This collaborative framework has fostered an environment where airlines can thrive while serving regions that have long been overlooked. To know more, read the attached briefings.
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