October 20, 2020

1.5 years after launch, UDAN remains a mixed bag as two airlines fail to perform

Date : Oct 07, 2018, 08.50 PM IST

Sources : economictimes.indiatimes.com

Seventeen months since its launch, over 4.5 lakh people have flown on the government’s
subsidised UDAN (Ude Desh ka Aam Nagrik) scheme where fares are capped at Rs 2,500
per hour of flying. The Airports Authority of India (AAI) has released figures from this
regional connectivity scheme (RCS) from April 27, 2017, to September 23, 2018. The
number could have been much higher but for the dismal performance of two small airlines
that bagged a lion’s share of RCS routes but have been unable to start flying majority of
them.
According to the AAI data for the 17 months of UDAN, a total of 15,723 flights were
operated by seven airlines on about 60 routes. A total of 7.5 lakh passengers flew on
these flights, of which almost 4.6 lakh took the subsidised fares with the remaining taking
higher non-subsidised fares.

The figures could have been much better, but for the performance of Air Deccan and Air
Odisha. Last March, the government had awarded 128 RCS routes out of which 50 and 34
were bagged by Air Odisha and Air Deccan, respectively. However, AAI data shows both
these airlines have operated very few flights on less than 10 routes each, like Nasik-Pune,
Shillong-Agartala, Ahmedabad-Mundra and and Raipur-Jagdalpur.
Total number of passengers flow on RCS flights by Air Deccan and Air Odisha was 5,093
and 1,842, respectively. Even their combined passenger carriage of 6935 is less than 1%
(0.9% to be precise) of the 7.5 lakh passengers who have flown on RCS flights. The data
shows on none of these routes has either Air Deccan or Air Odisha flown more than 1,000
passengers.

The Shillong-Dimapur route awarded to Air Deccan and started on May 1, 2018, lists ‘one’
as the total number of passengers flown till September 23. The return sector, DimapurShillong,
lists two as the total number of passengers flown on this route since launch.
Contrast this with Alliance Air whose ATR-42 has been flying on Delhi-Shimla launch route
April 27, 2017. Due to runway length issues, the aircraft can’t have more than 35 people
on board on Delhi-Shimla sector and not more than 15 on the return flight. Despite these limitations, Alliance Air has flown 14,041 passengers on this sector.

“We are issuing notices to them to cancel the routes given to these two airlines and where
they have not started operations despite giving repeated deadlines, all of which have
lapsed. Once these routes are taken from them, they will again be bid out. While there is
no rule to bar these airline to bid for the same routes again, past performance of airlines
will be a key consideration in award of those routes,” said a senior aviation ministry official.
Till now two rounds of bidding for RCS sectors have been conducted in which 328 routes
have been awarded and of these 98 have been operationalised so far, said an official.

Another official said the idea of RCS is to allow small operators to also come forward and
safely link unconnected or under-connected (less than 7 flights a week) airports. “Our job
is to ensure safety of passengers. Rest market forces will determine. If an airline has a bad
track record in terms of cancelling flights or on time performance, passengers will not
choose that. RCS is a unique concept. We will take cancelled routes of laggard airlines
and give them to others,” said another official.

The RCS figures managed to touch the 7.5-lakh passenger mark thanks to Air India’s
subsidiary Alliance Air which launched the scheme with its Shimla-Delhi flight and currently
operates 10 routes;with eight routes; Jet with six; IndiGo NSE -7.34 %
with five and Turbo Megha with nine routes. These airlines are going to start more RCS
routes shortly and have ordered large number of turboprops to ride on the regional wave.
Since September 1, 2017, the government charges Rs 5,000 per domestic flight to create
a regional connectivity fund that will be used to provide viability gap funding to RCS flights.
This VGF enables capping of fares for UDAN flights at Rs 2,500 per hour.

The RCS scheme was launched in Shimla by PM Modi on April 27, 2017, by flagging off
an Air India Delhi-bound flight.

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