Prime Minister Narendra Modi led NDA government has launched a new scheme named as UDAN (Udey Desh ka Aam Nagrik) to make the air travel cheaper. Under the new UDAN scheme, people in tier 2 and tier 3 cities can fly at just Rs. 2500/- per hour.
Objective of UDAN – Udey Desh ka Aam Nagrik
The main objective of the UDAN scheme is to provide the cheaper air travel opportunity to all the people in the country. The scheme also aims to make operational almost 50 underutilized airports across the nation.
UDAN Scheme Fares
Under the UDAN scheme, the fare for regional domestic flights will be capped at Rs. 2500/- per hour of flight for a fixed wing aircraft. One hour of flight can cover about 500 Kilometers, hence, the fare will be about Rs. 5 per kilometer, way cheaper than most cab services in the country.
For journey on a helicopter, the fare will be capped at Rs. 2500/- for every 30 minutes, i.e. Rs. 5000 per hour.
Under the UDAN scheme, the airline operator will have to provide a minimum of 9 and a maximum of 40 UDAN seats in each flight to domestic regions. While, in case of flights through helicopter, a minimum of 5 and maximum 13 UDAN seats to be provided by the operator.
Under UDAN scheme, fare for 50% of the seats of flights will be capped at Rs 2,500 while the rest will be sold on the basis of current market price.
The selected operators will also need to operate at least 3 UDAN flights and a maximum of 7 departures every week.
UDAN Scheme – How it will Work
The central government would provide concessions to the selected airlines in form of reduced excise duty, service tax, permission to trade ASKMs for Non-RCS (UDAN) Seats and flexibility of code sharing at the RCS (UDAN) airports. On the other hand, state governments will have to lower the VAT on ATF to 1% or less.
The state governments would also have to provide security and fire services free of cost and electricity, water and other utilities at substantially concessional rates.
The airlines shall not be charged landing and parking charges and terminal navigation landing charges by the airport operator. The airport operator would also have to provide discounts on route navigation facility charges.
Selection of UDAN Airports
The selection of Airports under the UDAN scheme will be done in consultation with the state governments. The focus will be on starting operations on un-served airports and revival of dysfunctional airports.
A Regional Connectivity Fund under the UDAN scheme will be setup to which the partner State Governments (other than North Eastern States and Union Territories where contribution will be 10 %) would contribute a 20% share to this fund.
The flights under the new UDAN scheme are expected to be operational by January 2017.