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India 22-Oct, 2024

UDAN scheme marks 8 years; extended for 10 more years to boost regional air connectivity in India

By: Team India Tracker

UDAN scheme marks 8 years; extended for 10 more years to boost regional air connectivity in India

Under the UDAN program, the Indian aviation industry has experienced an enormous transformation. Image Source: India.com

Over the last ten years, domestic air travel has more than doubled, and Indian carriers have greatly increased their fleet sizes.

As the Regional Connectivity Scheme (RCS) – Ude Desh Ka Aam Nagrik (UDAN), launched in 2016, approaches its 8th anniversary, Joint Secretary in the Ministry of Civil Aviation, Asangba Chuba Ao, on Sunday highlighted its remarkable progress. He mentioned that there are currently 601 active routes and that the program has benefited about 1.44 crore individuals. Prime Minister Narendra Modi marked the day by laying the foundation stones and inauguration of new airports in Varanasi. Launched on October 21, 2016, the UDAN (Ude Desh ka Aam Nagrik) program seeks to make air travel accessible and inexpensive for the average citizen.

Under the UDAN program, the Indian aviation industry has experienced an enormous transformation. States and Union Territories are successfully connected via 601 operationalized routes, including helicopter routes. Remarkably, almost 28 percent of these pathways go to the most isolated areas, improving accessibility over difficult terrain. Over 1.44 crore passengers may now travel on more than 2.8 lakh flights thanks to the operationalization of 86 aerodromes, which include 71 airports, 13 heliports, and 2 water aerodromes. The total distance traversed by fixed-wing operations since their commencement is around 112 crore kilometers, or about 28,000 round trips around the world. 

Number of Airports in India

Source: Ministry of Civil Aviation

From 74 in 2014 to 157 in 2024, the nation's operating airport count has doubled, with plans to raise it to 350–400 by 2047. Over the last ten years, domestic air travel has more than doubled, and Indian carriers have greatly increased their fleet sizes.

An important factor in the revival of India's civil aviation sector has been the RCS-UDAN program. It has sparked the rise of numerous new and prosperous airlines within the last seven years. The program has helped regional airlines including Flybig, Star Air, IndiaOne Air, and Fly91 create sustainable business plans and support the growing regional aviation industry.

In addition to providing last-mile connectivity to tier-2 and tier-3 cities, RCS-UDAN is a major player in the rapidly growing tourism industry. While UDAN 5.1 is concentrated on increasing helicopter services in hilly areas to promote tourism, hospitality, and local economic growth, initiatives such as UDAN 3.0 have established tourism routes connecting a number of locations in the Northeast region.

On April 27, 2017, the inaugural UDAN aircraft departed, linking the vibrant city of Delhi with the tranquil slopes of Shimla. This first flight signaled the start of a revolution in Indian aviation that would allow more citizens to travel to the skies. UDAN operates on a market-driven model, where airlines assess demand on specific routes and submit proposals during bidding rounds. The scheme incentivizes airlines to connect underserved regions by offering them support through Viability Gap Funding (VGF) and various concessions provided by airport operators, the Central Government, and State Governments.

Minister of Civil Aviation K Rammohan Naidu, during the celebration of 8 years of the UDAN scheme announced that the scheme will be further extended for a period of 10 years. The ministry is presently assessing the scheme's financial feasibility and streamlining of procedures, according to Civil Aviation Secretary Vumlunmang Vualnam.

Source: Directorate General of Civil Aviation

India is the third-largest domestic aviation market and the aviation sector in India has shown substantial growth, with a 15 percent YoY increase in total air passengers handled at Indian airports reaching 37.6 crore in FY24. 

The International Air Transport Association (IATA) predicts that by 2030, India would surpass both China and the United States as the third-largest air passenger market globally. Additionally, the number of aircraft operating in the sector has increased due to the growing demand in the industry.

A comprehensive five-year plan to construct and extend over fifty airports in smaller cities has been launched by the Central Government. Under the direction of the Airports Authority of India (AAI), this strategic effort seeks to improve airport infrastructure through a range of projects that the union government, state governments, and private entities will carry out between now and 2030.

Also, a lot of new airports are being constructed. The then Minister for Civil Aviation Jyotiraditya Scindia in 2022 had stated in the Lok Sabha that the Airport Authority of India (AAI) and other airport developers have targeted capital outlay of ₹91,000 crore in the next five years for expansion and modernisation of existing terminals, new terminals and strengthening of runways among other activities. Out of this, ₹60,000 crore (approx.) has been allocated for development of existing airports and ₹38,000 crore (approx.) has been allocated for establishment of new Greenfield airports. 

The establishment of seven greenfield airports as international airports—Mopa in Goa, Navi Mumbai in Maharashtra, Karaikal in Puducherry, Jewar (Noida) in Uttar Pradesh, Dholera and Hirasar in Gujarat, and Bhogapuram in Andhra Pradesh—has received "in-principle" approval from the Indian government. The Airports Authority of India (AAI) has undertaken the development of two of these seven airports, Hirasar and Dholera, using its own funds for a total project cost of ₹1405 crore and ₹1305 crore, respectively. Concerned airport developers are in charge of funding the remaining greenfield airport projects. Additionally, the timetable for finishing the airport projects is dependent on a number of variables, including the purchase of property, the availability of necessary approvals, financial closure, etc.

MoCA has granted 'in principle' approval\ to various State Governments, who have undertaken development of Greenfield Airports under Public Private Partnership (PPP) mode with private investment including Kannur in Kerala (₹2342 crore), Durgapur in West Bengal (₹670 crore), Mopa in Goa (Rs 3400 crore), Navi Mumbai (₹19,646 crore) and Sindhudurg (₹520 crore) in Maharashtra, Bhogapuram in Andhra Pradesh (₹2500 crore) and Noida (Jewar) (₹10,056 crore) in Uttar Pradesh.

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