Government to Revamp UDAN Scheme with Focus on Airport Readiness

09 Jan 2025 CW Team

The Indian government is set to revamp its regional air connectivity scheme, UDAN (Ude Desh ka Aam Nagrik), by prioritising airport readiness before inviting airlines to bid for operating routes. Financial support for the development of unserved airports and airstrips across the country is expected to be a key focus in the upcoming budget, along with stricter assessments of route feasibility, according to sources. Launched in 2017 to boost air travel in the world’s fastest-growing aviation market, the UDAN scheme caps airfares and provides subsidies to airlines for operating on less frequented routes. However, the scheme has faced challenges, with only 60% of the original 615 routes currently operational. A report by the Comptroller and Auditor General (CAG) last year highlighted significant delays in reviving identified airports, with work initiated at only 61% of the planned sites. Airlines have raised concerns about financial burdens resulting from unready airports despite winning bids, as they incur costs from leasing planes and hiring staff. Under the scheme, airlines must commence flights within four months of winning a bid and enjoy a three-year exclusivity period on the routes, shielding them from competition. Remote airports also benefit from reduced aviation turbine fuel (ATF) tax rates and waived airport fees. The civil aviation ministry plans to propose extending the scheme beyond its initial 10-year term, which ends in 2026, to further support regional connectivity. (ET)

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