Tuesday, July 20, 2021

Only half of UDAN routes operational, Covid-19 to hit scheme further: ICRA

Mumbai: Only 47 per cent of the awarded routes have been operationalised under the government's regional air connectivity scheme and the second wave of Covid-19 pandemic will impact the scheme further, rating agency ICRA said in its report on Tuesday.

The civil aviation ministry launched the UDAN ( Ude Desh Ka Aam Nagrik) scheme in 2016 to connect unserved and underserved airports. The first flight under the scheme took off in April 2017.

The number of new RCS routes which started operations increased at a healthy pace and stood at 102 and 120 routes in FY19 and FY20, respectively, but have declined to 77 in FY21 due to the Coronavirus (Covid-19) pandemic, ICRA said. Only 39 per cent of unserved and underserved airports have been operationalised, it said.

The scheme is funded through a Rs 50 levy on flight tickets on major routes. The levy contributes to 80 per cent of viability gap funding provided to the airlines and the balance 20 per cent is provided by state governments.

Shubham Jain, SVP & group head, Corporate Ratings, ICRA, said, “The slow progress of UDAN implementation is attributable to delayed upgradation of infrastructure and readiness of airports, due to lack of adequate right of way (including insufficient runway lengths) at some of the RCS airports and delays in securing necessary regulatory approvals. Low demand on few routes awarded, adverse and unpredictable weather conditions leads to inconsistent operations and have also resulted in closure of operations by some airlines in a few cases. The second wave of the pandemic, which started from mid of March 2021 would further impact the UDAN scheme going forward with aviation being one of the worst-hit infrastructure sectors.”

20/04/21 Aneesh Phadnis/Business Standard

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