PM Modi To Launch First UDAN Flight Today. Details On The Low-Cost Scheme

Prime Minister Narendra Modi is set to launch today the maiden flight under the government's ambitious UDAN plan to provide connectivity to far and remote areas of the country. The Shimla-Delhi flight will be operated by Alliance Air, the regional arm of Air India. Under the UDAN or 'Ude Desh ka Aam Naagrik' scheme, fares have been capped at Rs 2,500 for one hour flight. The Civil Aviation Ministry has already awarded 128 routes connecting 70 airports to five airlines under the UDAN scheme: Air Alliance Air, SpiceJet, Air Deccan, Air Odisha and Turbo Megha. On each flight, 50 per cent of the seats would have a cap of Rs 2,500 per seat/hour. These flights would connect airports spread across over 20 states and union territories.

Under the UDAN scheme, the government will extend subsidy in the form of viability gap funding to the operators flying on these routes. Apart from various incentives, the operators of such flights would be extended viability gap funding - for which money is partly raised through a levy of on flights operating in major routes like Delhi and Mumbai. The viability gap funding would be in place for three years for the airlines concerned from the date of starting operations in a particular UDAN route. Other benefits include zero airport charges for the operators and three-year exclusivity on the routes.

The government has set up an inter-ministerial committee to monitor the regional air connectivity scheme UDAN which seeks to make flying affordable by connecting unserved and under-served airports. Besides, the panel would be responsible for coordination among stakeholders, including state governments, for "time bound" implementation of the scheme.

The government had on July 1 unveiled the draft UDAN scheme which fixed all-inclusive fares at Rs 2,500 for one-hour flights in its attempt to make flying affordable for the common man. The Ude Desh ka Aam Naagrik scheme seeks to provide air services between unserved and under-served areas. There are 394 unserved and 16 under-served airports in the country.

SpiceJets CMD Ajay Singh said the airline would not be availing viability gap funding. Amber Dubey, partner and head of aerospace and defence at KPMG in India, said timely payment of viability gap funding to the operators would be key to sustainable operations.