Udan Scheme and Regional Air Connectivity in India

The Regional Connectivity Scheme (RCS), commercially known as UDAN (Ude Desh ka Aam Naagrik), is a key component of India’s National Civil Aviation Policy (NCAP) 2016. Launched on October 21, 2016, by the Ministry of Civil Aviation, the policy aims to make air travel affordable and accessible to the common citizen while stimulating regional economic development, tourism, and job creation. The first official flight under the scheme was flagged off on April 27, 2017, connecting Shimla to Delhi. The scheme operates on a ten-year duration framework, leveraging a market-based bidding mechanism to award routes to commercial air operators.

Key Objectives and Financial Framework

The operational philosophy of UDAN centers on connecting unserved (airports with no scheduled flights) and underserved (airports with fewer than seven scheduled flights per week) airfields across Tier-2, Tier-3, and Tier-4 cities.

• Fare Capping: Participating airlines must reserve at least 50% of the passenger capacity (or a minimum of 9 and maximum of 40 seats) as RCS seats. Fares for these seats are capped at roughly ₹2,500 per hour of flight for fixed-wing aircraft, indexed to flight duration and distance.
• Viability Gap Funding (VGF): To offset operational losses incurred due to capped fares, the government provides financial subsidies directly to airlines. The VGF is shared between the Central Government (80%) and the concerned State Governments (20%). For North-Eastern states, Union Territories, Himachal Pradesh, and Uttarakhand, the Central share increases to 90%.
• Regional Connectivity Fund (RCF): The VGF is financed through a dedicated corpus raised by levying a small fee on targeted domestic trunk routes.

Concessions Provided by Stakeholders

To lower operating costs for regional air carriers, central, state, and airport operators offer direct policy concessions:

Evolutionary Phases of UDAN

The scheme has evolved across multiple specialized iterations to expand geographical coverage:

• UDAN 1.0: Five airline companies were awarded 128 flight routes connecting 70 airports, reviving several dormant airstrips.
• UDAN 2.0: Prioritized helipads and helicopter operations in the North-Eastern states and hilly regions to solve terrain-based isolation.
• UDAN 3.0: Expanded scope to include tourist destination routes in coordination with the Ministry of Tourism, inclusion of water aerodromes for seaplane operations, and routes in the North-East.
• UDAN 4.0: Focused on island territories (Lakshadweep, Andaman & Nicobar Islands), hilly states, and strategic border locations.
• UDAN 5.0, 5.1 & 5.2: Removed distance caps between origin and destination, allowed operators to bid for Category-1 (20–80 seats) and Category-2 (>80 seats) aircraft, boosted last-mile helicopter connectivity (5.1), and focused on small aircraft (5.2) operating under 20-seater capacities.

Key Infrastructure Types Activated

• Brownfield and Greenfield Airports: Revived neglected airstrips (e.g., Jharsuguda in Odisha, Darbhanga in Bihar) alongside developing new greenfield projects (e.g., Pakyong in Sikkim, Hollongi in Arunachal Pradesh).
• Water Aerodromes: Activated amphibious aircraft operational sites like Sabarmati Riverfront and Statue of Unity (Kevadia) in Gujarat.
• Heliports: Infrastructure built in remote areas across Himachal Pradesh, Uttarakhand, and Jammu & Kashmir to improve emergency and tourist transit.

Fact Sheet

• Nodal Ministry: Ministry of Civil Aviation.
• Implementing Agency: Airports Authority of India (AAI).
• Parent Policy: National Civil Aviation Policy (NCAP) 2016.
• National UDAN Day: Celebrated annually on October 21.
• Inaugural Flight Sector: Shimla to Delhi (operated on April 27, 2017).
• Target: Operationalizing 100 unserved/underserved airports and 1,000 air routes.
• VGF Sharing Ratio: 80:20 (Standard States) and 90:10 (NE States, UTs, and Hilly Regions).
• Key Air Carriers: Alliance Air, IndiGo, SpiceJet, Star Air, FlyBig.