Regional Connectivity Scheme-UDAN to see quarterly revision in caps put on air tickets, the Civil Aviation Ministry has said.
UDAN or Ude Desh ka Aam Naagrik is a low cost Regional Connectivity Scheme (RCS) launched by the Indian aviation industry’s Ministry of Civil Aviation (MoCA).
Previously reported for taking flying to the masses by capping airfares for as low as INR 2,500, the scheme will now see revisions in its prices every three months. The alterations will be based on the inflationary trends and the quarterly revision will be for both – caps on ticket prices under RCS and Viability Gap Funding (VGF) for the participating carriers. While the revision in prices of air tickets will be linked to inflation, VGF would be altered after considering inflation, cost of aviation turbine fuel and the rupee-dollar exchange rate.
“Both airfare and VGF caps will be revised on a quarterly basis. While the airfare cap will be indexed to inflation, the VGF caps as well as VGF amounts determined for specific routes will be indexed to ATF prices and exchange rate of INR vis-a-vis the US Dollar in addition to inflation,” the Civil Aviation Ministry has said.
UDAN is a first-of-its-kind scheme globally to stimulate regional connectivity through a market-based mechanism. It is committed to providing air connectivity to currently underserved and unserved airports in India and has already taken its first flight.
In April, flights between the Shimla-Delhi corridor were flagged off along with the Kadapa-Hyderabad and the Nanded-Hyderabad sector.
Under the first phase of the scheme, five airlines won bids to operate on 128 routes connecting 70 airports, of which 31 are unserved. The bidding for the second phase of RCS is set to happen within the next three months.