Problems within the UDAN scheme

ECONOMY/ GOVERNANCE

• GS-3: Infrastructure (Airports)
• GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation. 

Problems within the UDAN scheme

Context: Government had launched the UDAN scheme nearly five years back with the aim to take flying to the masses. While over 400 routes have been launched by airlines, some of them have been discontinued.

• The first flight under UDAN was launched by PM Modi in April 2017.

What is the UDAN scheme?

• Flying of masses: The Ude Desh Ka Aam Nagrik (UDAN) scheme is a low-cost flying scheme launched with the aim of taking flying to the masses. 
• Air connectivity beyond metros: It is also known as the regional connectivity scheme (RCS) as it seeks to improve air connectivity to tier-2 and tier-3 cities through revival of unused and underused airports. 
• Competitive Bidding Process: Airlines are awarded routes under the programme through a bidding process and are required to offer airfares at the rate of ₹2,500 per hour of flight. At least 50% of the total seats on an aircraft have to be offered at cheaper rates. 
• Subsidy by Government: In order to enable airlines to offer affordable fares they are given a subsidy from the Government for a period of three years.
• Revival of airports: The Government had also earmarked ₹4,500 crore for revival of 50 airports in the first three years.

What is the status of the scheme?

• A total of nine rounds of bidding have taken place since January 2017. The Ministry of Civil Aviation has set a target of operationalising as many as 100 unserved and underserved airports and starting at least 1,000 RCS routes by 2024. 
• So far, the Airports Authority of India (AAI) has awarded 948 routes under UDAN, of which 403 routes have taken off that connect 65 airports, which include eight heliports. 
• Out of the total 28 seaplane routes connecting 14 water aerodromes, only two have commenced.
• However, in reality, some of the routes launched have been discontinued. Though the government in its Lok Sabha reply declined to provide the exact number of the discontinued routes, it provided three reasons why this was happening. 
  • Failure to set up airports or heliports due to lack of availability of land
  • Airlines unable to start flights on routes awarded to them or finding the routes difficult to sustain
  • Adverse impact of the COVID-19 pandemic.
• While the Ministry of Civil Aviation undertook interesting initiatives within the scheme to provide improved connectivity to hilly regions and islands through helicopters and seaplanes, as well as linking Assam with certain international destinations in South Asia and South East Asia, these mostly remain on paper.

What have been the challenges?

• Poor financial health of many smaller, regional carriers have been a bane for the scheme. 
• Take the example of TruJet, a Hyderabad-based airline, which was among the most successful players under the scheme until the pandemic hit the industry. 
  • It has since seen a change in ownership, but awaits infusion of funds to be able to undertake maintenance of aircraft, pay rentals to lessors, give salaries to its staff, etc. 
  • Of its fleet size of six planes, only one plane is currently air worthy and is being used for connecting eight routes out of the total 42 won by the airline. 
• Another examples include Air Odisha and Air Deccan which had won 84 out of 128 routes in the first round of bidding shut shop due to financial troubles and the Government reallocated these routes in subsequent rounds. 
• Many players don’t have more than one or two planes and they are often poorly maintained. 
• New planes are too expensive for these smaller players. For example, Air Odisha had only two planes and if one plane is grounded due to a glitch it impacts their flights. 
• Often, they also have problems with availability of pilots and are forced to hire foreign pilots which costs them a lot of money and makes the business unviable. 
• So far, only those routes that have been bagged by bigger domestic players such as IndiGo and SpiceJet have seen a better success rate.
• Smaller airlines have to compete with big airlines to get pilots and other manpower who have to be paid on par with what major carriers in the market pay even though the size of our pie is much smaller.

What lies ahead for the scheme?

• The Government offers subsidy for a route for a period of three years and expects the airline to develop the route during this time so that it becomes self-sufficient. 
• For example, Kadapa- Hyderabad was launched in 2017. TruJet stopped connecting Kadapa and Hyderabad once the tenure of the subsidy expired. 
• Airlines like TruJet have sought an extension of the subsidy period by two years. Similarly, the only seaplane flight launched remains suspended. 
• SpiceJet’s seaplane flight from Statue of Unity in Kevadiya to Sabarmati Riverfront in Ahmedabad was launched in October 2020 by the Prime Minister and saw a few flights till April, 2021 but has since been suspended due to rise in COVID cases, travel restrictions and keeping passenger safety in mind.

Connecting the dots:

• Reforms in India Civil Aviation Sector
• Aviation Flying for all
• UDAN scheme
• Supersonic Flying