Indian Govt. provides financial support of Rs 1,465 Cr to airlines for UDAN flights
Under the UDAN plan, the government has provided airlines with a total financial support of over Rs 1,465 crore in order to make airfares cheaper to the general public.
Alliance Air earned Rs 418 crore in viability gap financing (VGF) from the government to operate UDAN flights, according to official statistics. Turbo Megha Airways, a regional airline, has obtained a VGF worth Rs 372.74 crore from the government to operate low-cost flights.
RCS-UDAN (Regional Connectivity Scheme – Ude Desh Ka Aam Nagrik) aims to make flying a reality for even the poorest of people.
Because smaller cities are not financially feasible for airlines to fly to, the government gives viability gap money (VGF) or a subsidy to make routes lucrative and cheap.
In October 2016, the Ministry of Civil Aviation introduced RCS-UDAN to boost regional air connectivity and make air travel more affordable for the general public.
Eligible airlines get discounts from the federal government, state governments, and airport operators as part of the programme, which lowers the cost of operations on regional routes. They get financial assistance (VGF) to cover the difference, if any, between the cost of airline operations and predicted regional income.
SpiceJet has received a total VGF of Rs 273.42 crores among the major UDAN flight operators over the years.
IndiGo, the country’s largest carrier, has received Rs 258.10 crore in funding to operate UDAN flights.
VGF of Rs 5.27 crores and Rs 81.34 crores were given to Deccan Charters Pvt Ltd and Ghodawat Enterprises Pvt Ltd, respectively.
So far, 13 air operators have received financial assistance under the UDAN initiative.
“UDAN has transformed the way people travel in Tier-2 and Tier-3 cities. Under UDAN, the Airports Authority of India (AAI), the Implementing Agency, has awarded 948 routes to connect hitherto unserved/underserved areas, tourist destinations, North-Eastern Region, etc,” Minister of State for Civil Aviation VK Singh said in written reply to a question in Rajya Sabha last week.
“Out of these 948 awarded routes, 403 UDAN routes have commenced connecting 65 UDAN airports including 2 Water Aerodromes and 8 Heliports, as on 14.12.2021,” he further said.
