Thursday, May 04, 2017

Flight of the common man

A regional connectivity scheme, UDAN (Ude Desh ka Aam Naagrik/Let The Common Man Fly) is aimed at reviving dormant airstrips in the country and helping passengers in Tier-II and Tier-III cities fly by air. At the heart of UDAN is the government’s decision to cap airfares at affordable levels — Rs. 2,500 for an hour’s flight — aimed at attracting people from the hinterland.

Recently, five airlines — Air India, SpiceJet, Turbo Megha, Air Odisha and Air Deccan — won bids for 128 routes connecting 70 cities under the scheme.

Almost 10 crore domestic air tickets were sold in 2016, showing a robust growth of 23% compared to 2015. The government expects the number of tickets sold to go up to 30 crore by 2022 with the help of UDAN. Minister of State for Civil Aviation Jayant Sinha said recently that under the first phase of the scheme, 12 underserved airports and 50 unserved airports will be covered.

Airfare for a one-hour journey (covering approximately 500 km) is to be capped at Rs. 2,500 per seat. The airlines will be provided subsidy for three years in the range of Rs. 2,470-Rs. 5,100 depending on the type of aircraft and distance covered.

To ensure that they are able to retain business, airlines will get exclusive rights to fly on a regional route for the first three years. Routes are awarded through a reverse bidding auction, so the airline that asks for the least subsidy support gets the exclusive right to fly.
04/05/17 Somesh Jha/The Hindu