Monday, May 22, 2017

Why UDAN hasn’t taken off too well, yet

New Delhi: Two months may be too soon to judge UDAN, the Centre’s regional air connectivity scheme (RCS). However, given the fanfare with which it was announced on March 27 — the first flight on the Shimla-Delhi sector was inaugurated by Prime Minister Narendra Modi — and the fact that the next round of bidding to expand regional air connectivity is expected in June, it is perhaps time to take stock.

Air Odisha and Air Deccan, which were awarded the maximum number of routes under the RCS in March, are yet to announce their launch dates and also firm up the aircraft they plan to operate. SpiceJet, which was also awarded routes, has not revealed its plans till date. The only two airlines that have taken off are Alliance Air and TrueJet, and both carriers are having to deal with the vagaries of the RCS’ hasty launch.
To begin with, Alliance is taking a load penalty on its Delhi-Shimla route as its aircraft cannot carry a full flight of passengers to Shimla or back.

In the case of Maharashtra’s Nanded airport, the runway is safe but does not meet the technical standards for operating commercial flights that TruJet operates. This would mean that TruJet, too, cannot fly full capacity.

A top official of the Ministry of Civil Aviation said regulator DGCA had certified the Nanded airport fit for safe operations and had given it three months to strengthen the runway so that TruJet could take a plane full of passengers. But operations have already begun, and Ministry officials say the decision to fly is left to the airline that won the route.

The situation is no brighter for Air Odisha and Air Deccan either. Given that the airlines are required to start operations within six months of being awarded the bids, the two airlines may need to speed up their processes. DGCA sources maintain it will require a minimum of 75 days to examine all documentation and to issue Air Operator Permits to existing Non-Scheduled Operators, provided all compliances — having the requisite number of pilots, cabin crew and aircraft maintenance engineers, and approval of flight safety — have been met for RCS.

This means the two carriers could be skating on thin ice — the six-month period gets over September-end. However, Air Deccan officials say the airline will start operations and maintain that a final clearance from the DGCA will not take long. Meanwhile, the Centre is now looking at tweaking the scheme before the next round of bidding for routes.

The proposed changes could have financial implications for the five airlines that won the routes in the first round, and could disadvantage them against new entrants, especially as the government is clear that the changes will not be implemented retrospectively.
21/05/17 Ashwini Phadnis/Business Line