Ude Desh ka Aam Naagrik (UDAN) (let the country's typical person fly), a dream project of the Central Government, is celebrating its fifth anniversary this year.
The scheme's take-off was slow but gained momentum even as newer airlines like Star Air started exploring this vast untapped market. Analysts say UDAN is a gamechanger in the aviation sector and has ensured that the 'common man' can commute between smaller cities in a short time, which otherwise would take hours, at an affordable cost.
Today, over 415 UDAN routes connect 66 underserved/unserved airports, including heliports and water aerodromes, while over 92 lakh people have benefited from the scheme. The scheme has so far resulted in more than 1.79 lakh flights. As of March 21, 2022, the total receipt/collection in the Regional Air Connectivity Fund Trust was ₹2,459 crore, and viability gap funding disbursed to the selected airline operator under UDAN was ₹1,784 crore, according to the Minister of State in the Ministry of Civil Aviation VK Singh in a written reply to a question in Rajya Sabha recently.
The Civil Aviation Ministry plans and commits to construct 100 new airports by 2024 in India with 1,000 new routes under the UDAN scheme by 2026. Under the scheme, the fare for 500 km is a mere ₹2,500, which is lesser than a taxi fare (₹10 to ₹15 per km). The UDAN scheme has transformed the way people travel in Tier-2 and Tier-3 cities. Regional airports like Jharsuguda, Kishangarh, Belgaum and Darbhanga have witnessed exponential growth in air traffic. The scheme also sparked an increase in helicopter services in hilly areas and islands through heliports.
Better connectivity
The scheme has led to the development of new greenfield airports such as Pakyong near Gangtok in Sikkim, Tezu in Arunachal Pradesh and Kurnool in Andhra Pradesh. According to government data, the scheme also led to a 5 per cent incremental growth in domestic passenger share of non-metro airports.
A spokesperson for SpiceJet said over 34 lakh passengers have flown on its UDAN flights. SpiceJet connects 15 domestic destinations, including Kandla, Jaisalmer, Porbandar, Pakyong, Khajuraho, Bhavnagar and Kushinagar, with key metros under the scheme. Simran Singh Tiwana, the CEO of Star Air, said, “UDAN has inspired start-ups like us by creating a platform where airlines can step up to better regional connectivity. The scheme facilitated and promoted unconventional routes by connecting small city airports, which led to connecting remote cities that were never connected by air. Opening new markets unlocks new opportunities and results in overall economic growth.”
Under UDAN, Star Air flies to 16 airports, including Ahmedabad, Ajmer (Kishangarh), Bengaluru, Belagavi, Delhi (Hindon), Hubballi, Indore, Jodhpur, Kalaburagi, Mumbai, Nashik, Surat, Tirupati, Jamnagar, and Nagpur. "We are adding Bhuj and Bidar to our network in the coming week," he said. "We have carried approximately four lakh passengers under the scheme so far," he said.
However, there are still specific issues that will hurt the scheme's full implementation. "One may cite Covid lockdown and restrictions as reasons for not bringing noticeable traffic. However, other explanations have not supported the initiatives.
B Govindarajan, Chief Operating Officer of Chennai-based Tirwin Management Services, says complex terminal processes, even for short-duration flights, and the airline's schedule integrity may force passengers to look at alternate modes of transportation. "There have been occasions when flights get delayed or cancelled at the last minute either because of low load factor or some technical issues, thereby giving the impression that the service itself is poor, pointed out Govindarajan. The solution lies in establishing a sustainable business module for UDAN to redefine the terminal processes so passengers don't spend more time in terminals, and exemptions from the tax include corporate taxes and taxes on Aviation Turbine Fuel.
Hopefully, the UDAN scheme, the first of its kind to stimulate regional connectivity through a market-based mechanism, will receive more incentives to make it a significant contributor to the country's economy.