UDAN round 5.3 reopens bidding for routes discontinued before 3-yr tenure

So far, 12 bidding cycles across 5 Rounds of UDAN have been conducted, he added in the communique.

RCS-UDAN is a market-driven scheme aimed at connecting unserved and underserved airstrips/airports. Airlines bid for these routes based on listed destinations, with bidding rounds conducted periodically to cover more destinations and routes.

Interested airlines submit proposals based on their demand assessment for particular routes during bidding under UDAN. Airports included in the awarded routes requiring upgradation are developed under the 'Revival of unserved and underserved airports' scheme.

Once development is complete, Selected Airline Operators (SAOs) commence operations on the awarded UDAN routes, receiving financial support through Viability Gap Funding (VGF) to bridge any gap between operational costs and expected revenues.

Delays in operationalizing airports can occur due to various reasons, including land unavailability, technical and operational constraints, delays in obtaining Scheduled Commuter Operators Permits by new entrant airlines, and issues such as non-availability of suitable aircraft, leasing issues, and maintenance problems of small aircraft. SAOs receive various concessions from the Central Government, State Governments, and airport operators, the minister told the lower house of parliament.

Airport operators do not levy Landing and Parking Charges on RCS Flights, and the AAI does not impose Terminal Navigation Landing Charges (TNLC) on these flights. Route Navigation and Facilitation Charges (RNFC) are discounted to 42.50% of normal rates for RCS Flights, and SAOs are allowed self-ground handling at all airports under the scheme.

The Central Government imposes an excise duty of 2% on Aviation Turbine Fuel (ATF) purchased by SAOs from RCS Airports for the initial three years. SAOs are free to enter code-sharing arrangements with both domestic and international airlines.

State Governments at RCS Airports within their states reduce VAT on ATF to 1% or less for ten years.
They also provide minimum land, if required, free of cost and free from encumbrances for airport development, along with multi-modal hinterland connectivity.

Additionally, they offer security and fire services free of cost and provide electricity, water, and other utility services at substantially concessional rates at RCS Airports.

So far, Rs.3587 crores has been disbursed to the Selected Airline Operators towards Viability Gap Funding (VGF) as per the provisions of the scheme.