The primary objective of regional connectivity scheme (RCS) is to facilitate/ stimulate regional air connectivity by making it affordable. As per an ICAO study – “Economic benefits of civil aviation: ripples of prosperity”, the output and employment multipliers of aviation are 3.25 and 6.10 respectively.
Features of UDAN Program
- The operation of the Scheme is through a market mechanism where
. operators will assess demand on routes
. submit proposals for operating/ providing connectivity on such route(s)
. seek VGF, if any, while committing to certain minimum operating conditions
. the same shall be finalized in interaction with other market participants
- Support to airline operators through
. concessions by Central Government, State Governments and airport operators to reduce the cost of airline operations on regional routes
. financial (viability gap funding) support to meet the gap, if any, between the cost of airline operations and expected revenues on such routes.
- RCS is one of the key elements of National Civil Aviation Policy (NCAP) 2016, which envisions domestic ticketing of 30 crores by 2022 and 50 crores by 2027.
- Among the commitments of the States are those to
. make sufficient land available
. ensure adequate security
. provide essential services at concessional rates for the airports or air strips
. the Centre would like the States to provide minimum land, free of cost, for development of the RCS airports
- The regional connectivity scheme will be applicable on route length between 200 to 800 km with no lower limit set for hilly, remote, island and security sensitive regions.
Outcomes of UDAN
- With ‘Ude Desh Ka Aam Nagrik’ (UDAN), the aviation industry has successfully managed to create a capacity of 1 crore seats resulting in a significant increase in domestic passenger traffic in India.
- Data from IATA shows that in March 2018, India registered the highest domestic load factor of 87.8% across the top seven aviation markets in the world.
- There has been a commendable uptick of 242% in air passenger traffic on RCS routes, between April 2018 – April 2019, as per estimates from MakeMyTrip, India’s leading online travel company.
- With latent demand now being met by efficient and better connectivity in Tier II and Tier III cities, there is an assured promise of an improved economic landscape in these markets.
