UDAN Scheme and Regional Air Connectivity in India

The Regional Connectivity Scheme, better known as UDAN, is a flagship part of India’s civil aviation policy. It seeks to make air travel affordable while linking smaller cities, remote regions and underused airports with the national network.

Launched under the National Civil Aviation Policy, 2016, the scheme uses a market-based bidding model to award regional routes to airlines. It also supports airport revival, helicopter services and last-mile air connectivity in difficult terrain.

What UDAN Aims to Do

• Expand regional air access: Connect unserved airports and underserved airports with limited scheduled flights.
• Make flying affordable: Keep fares within reach of ordinary passengers through capped pricing on selected seats.
• Support local growth: Encourage tourism, trade, employment and regional development in Tier-2, Tier-3 and Tier-4 cities.
• Use existing infrastructure better: Revive idle or underused airstrips and promote viable regional routes.
• Promote remote connectivity: Improve air access in hilly areas, island territories and border regions.

Launch, Duration and Core Mechanism

UDAN was launched on October 21, 2016 by the Ministry of Civil Aviation. It operates under a ten-year framework and is implemented through route bidding by commercial air operators. The first official flight under the scheme was flagged off on April 27, 2017, on the Shimla-Delhi sector.

• Parent policy: National Civil Aviation Policy (NCAP), 2016.
• Nodal ministry: Ministry of Civil Aviation.
• Implementing agency: Airports Authority of India (AAI).
• National UDAN Day: October 21.

UDAN targets the revival of 100 unserved or underserved airports and the development of 1,000 air routes.

Fare Cap and Viability Gap Funding

The scheme follows a subsidised fare model for designated RCS seats. Airlines must reserve at least 50% of passenger capacity, subject to a minimum of 9 seats and a maximum of 40 seats, as RCS seats.

• Fare cap: About ₹2,500 per hour of flight for fixed-wing aircraft, linked to flight duration and distance.
• Passenger share: At least 50% of capacity is kept under the RCS fare structure.
• VGF support: The government gives Viability Gap Funding to airlines to offset losses arising from capped fares.
• Funding source: The Viability Gap Funding is financed through the Regional Connectivity Fund (RCF), raised via a small levy on targeted domestic trunk routes.
• Sharing pattern: 80:20 between the Centre and the concerned state government in standard cases.
• Special regions: For the North-Eastern states, Union Territories, Himachal Pradesh and Uttarakhand, the Centre’s share rises to 90%.

Concessions to Make Routes Viable

To reduce operating costs and improve route viability, the scheme depends on concessions from the Centre, states and airport operators.

• Central Government support: Concessional GST of 1% to 2% on RCS tickets, flexible code-sharing arrangements, and reduced excise duty on Aviation Turbine Fuel at 2% for RCS seats.
• State Government support: Free land for airport expansion, VAT on ATF at 1% or less for 10 years, subsidised power and water, and provision of security personnel.
• Airport operator support: Exemption from landing charges, parking charges and Terminal Navigation Landing Charges (TNLC), along with a 58% discount on Route Navigation Facilitation Charges (RNFC).

Phases and Expansion of UDAN

The scheme has expanded through successive versions, each widening the scope of regional air connectivity.

• UDAN 1.0: Five airline companies were awarded 128 flight routes connecting 70 airports, reviving several dormant airstrips.
• UDAN 2.0: Focused on helipads and helicopter operations in the North-Eastern states and hilly regions.
• UDAN 3.0: Added tourist routes in coordination with the Ministry of Tourism, included water aerodromes for seaplane operations, and expanded coverage in the North-East.
• UDAN 4.0: Emphasised island territories such as Lakshadweep and Andaman & Nicobar Islands, along with hilly states and strategic border locations.
• UDAN 5.0: Removed distance caps between origin and destination and allowed bidding for Category-1 and Category-2 aircraft.
• UDAN 5.1: Strengthened last-mile helicopter connectivity.
• UDAN 5.2: Focused on small aircraft operations under 20-seat capacity.

Types of Infrastructure Under UDAN

• Brownfield airports: Existing or neglected airstrips have been revived, including Jharsuguda in Odisha and Darbhanga in Bihar.
• Greenfield airports: New projects have been developed, including Pakyong in Sikkim and Hollongi in Arunachal Pradesh.
• Water aerodromes: Amphibious aircraft facilities have been activated at sites such as Sabarmati Riverfront and Statue of Unity (Kevadia) in Gujarat.
• Heliports: Built in remote areas of Himachal Pradesh, Uttarakhand and Jammu & Kashmir for emergency and tourist connectivity.

Key Prelims Takeaways

• UDAN stands for Ude Desh ka Aam Naagrik and is the commercial name of the Regional Connectivity Scheme.
• It is part of NCAP 2016 and was launched by the Ministry of Civil Aviation on October 21, 2016.
• The first UDAN flight operated on April 27, 2017 between Shimla and Delhi.
• AAI implements the scheme and route allocation is done through market-based bidding.
• RCS seats are subject to fare caps, with at least 50% of capacity reserved under the scheme.
• VGF is funded through RCF and is shared 80:20 in normal cases and 90:10 for special regions.
• UDAN covers airports, heliports and water aerodromes to improve access in remote and difficult terrain.