• UDAN takes off: Government invites airlines to kickstart regional flights

    The Government kick-started the regional air connectivity (RCS) scheme on Friday by inviting initial proposals from operators to fly to airports which do not have regular flights.

    Operators have a six-week window (till December 2) to submit their initial proposals. The Government will take two-three days to scrutinise the proposals and the entire process is likely to take 10 weeks to complete. “We hope to have the first flight (under RCS) by January. I am cautiously optimistic about it,” Ashok Gajapathi Raju, Minister for Civil Aviation, said at the launch of the scheme.

    Under the Ude Desh ka Aam Nagrik (UDAN) scheme , two weeks after the initial scrutiny, the Government will invite counter proposals from various operators keen to operate on RCS routes and announce the winner within 14 days.

    The scheme, which provides Viability Gap Funding for operators who cap fares on these flights at ?2,500, allows only one operator to fly on a RCS route for three years. “The idea of the scheme is to get those who wear Hawai chappals on to hawai jahaj (aeroplane),” said Jayant Sinha, Minister of State for Civil Aviation.

    Tepid response

    However, the industry’s response to the proposals was tepid. While Ashwani Lohani, Chairman and Managing Director, Air India, said his airline will “definitely” participate, Phee Teik, Chief Executive Officer, Vistara Airlines, said the airline will be able to make a comment on whether the policy was good or bad only after going through it.

    Issues to be resolved

    “The scheme is a step in the right direction to promote the movement of people within the country,” he said. Vistara is the brand name of the joint venture domestic airlines between Tata Sons and Singapore Airlines.

    Ajay Singh, Chairman, SpiceJet, while welcoming the Government’s initiative felt that there were some issues with the scheme which he will raise with the Government and hoped that they would be resolved.

    “One of the major issues is slot availability because small towns must connect with large towns. At the big airports like Mumbai, Delhi, Bengaluru, Chennai and Hyderabad slots must be available for RCS. Private operators (of airports) have traditionally been reluctant to give such slots. We will see whether they provide them or not. Besides, it is not clear if the concessions are provided at the smaller and larger airports. That impacts economic viability of the whole project,” he added.

    Singh was also of the opinion that the Government should fund such a scheme from its own budget rather than imposing more of a tax on consumers. “We oppose it from the perspective that there could surely be other ways to fund a scheme which is nationally so important,” he said.

    Funding RCS

    In fact, in what could be bad news for flyers between major cities, the Government will notify its proposal on a levy or the quantum of fee on a per departure basis on flights between the major cities by the end of the month, to fund the regional connectivity scheme.

    The airlines are likely to pass on this marginal increase in their operating costs to passengers which will see domestic airfares increase again. Jordan Willis Jersey

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