Central Idea

Union Civil Aviation Ministry inaugurated a new phase of the Ude Desh Ka Aam Nagrik (UDAN) scheme, or UDAN 5.2, to improve last-mile connectivity in remote regions of the country through small aircraft.
There have been aspersions regarding the success of the UDAN regional connectivity scheme (RCS) since ONLY 11 of the 74 Greenfield airports are decently operational.

Progress till now

Route Closures: Out of the 479 routes launched under RCS, 225 have ceased operations, leading to significant route closures.
Commercial Viability: Around 70 of the routes were found to be commercially unviable even with subsidies, leading airlines to discontinue their operations.
Three-Year Sustainability: The objective of RCS was for airlines to become self-sustaining after three years, but only 58 out of 155 routes completed this period successfully.
Incomplete Infrastructure: Some airports, such as Thanjavur, Moradabad, Saharanpur, and Ayodhya, were not ready for operations, leading to the discontinuation of 12 routes.

UDAN Scheme, initiated in 2016, aims to enhance aviation infrastructure and air connectivity in Tier II and Tier III cities.
It was formulated based on the review of The National Civil Aviation Policy (NCAP)-2016, with the goal of fulfilling the aspirations of the common citizen.
The scheme, designed to last for 10 years, operates with a self-financing mechanism through the establishment of the Regional Connectivity Fund (RCF).
The RCF funds the viability gap funding (VGF) requirements of the scheme by levying certain domestic flights, thereby stimulating growth and development in the aviation sector.
As part of the scheme, the Airports Authority of India has waived the airport fee.

Route Discontinuance: Some routes launched under UDAN have been discontinued, raising concerns about their sustainability.
Challenges in Expansion: Efforts to improve connectivity to hilly regions and islands through helicopters and seaplanes have faced hurdles due to land unavailability and operational difficulties.
Unrecovered since the Pandemic: The COVID-19 pandemic has adversely affected the aviation industry, further impacting the sustainability of airlines.

Financial Constraints: Many smaller airlines struggle with insufficient funds, making it difficult to maintain aircraft, pay rentals, and provide staff salaries.
Maintenance Issues: Smaller players often have limited aircraft that are poorly maintained, and acquiring new planes is expensive.
Pilot Availability: The availability of pilots can be a challenge for smaller airlines, leading to higher costs when hiring foreign pilots.
Competition: Routes dominated by bigger domestic players like IndiGo and SpiceJet tend to see better success rates.

Extended Subsidy Period: Airlines need an extension of the subsidy period to develop routes sustainably and achieve self-sufficiency.
Addressing Pandemic Impact: The impact of the COVID-19 pandemic on travel restrictions and passenger safety should be considered when evaluating the losses incurred by airlines.
Collaboration and Support: The government and stakeholders need to collaborate to address financial constraints and maintenance issues faced by smaller airlines.
Continuous Evaluation: Regular evaluation and necessary adjustments in the UDAN scheme are essential to overcome challenges and ensure successful implementation.

While India has made significant strides in airport development, challenges related to commercial viability and infrastructure readiness must be addressed to ensure sustainable air connectivity across the nation.
Renewed focus on the UDAN scheme and optimizing airport infrastructure can pave the way for a robust aviation sector that benefits smaller cities and contributes to the overall growth of the nation’s economy.