Thursday, January 04, 2018

UDAN gets a boost from states, companies

Mumbai: In a move that could give a boost to air carriers under the regional connectivity scheme, state governments and corporates are coming forward to underwrite flight seats for their employees.

The Uttar Pradesh government is the first to take up this initiative, its chief secretary Rajive Kumar told ET in a recent interview.

"The government has decided to underwrite a few seats for our own officers' travel. We are in talks with airlines that have won the bids for operating to airports in the state," said Kumar.
The Narendra Modi government has pushed for connecting small towns through the Ude Desh Ka Aam Nagrik (UDAN) scheme, under which new and existing airlines fly to remote airports at rates subsidised by the government.

Under the scheme, a 19-seater aircraft for example, has nine of its seats already underwritten by the Central government so that seats can be sold for Rs 1,500-1,800. Additional costs are recovered through a viability gap funding scheme or a corpus.

Seats underwritten by state governments and companies will be outside those covered by the Centre under the scheme. The move effectively means more airline seats are filled and not necessarily at subsidised rates.
03/01/18 Anirban Chowdhury/Economic Times