New Delhi: The Government of India is looking to operationalise 100 airports across the country by 2024 with an aim to boost regional connectivity. Opening of the airports could be materialised only if the government can find suitable set-up including land, statutory sanctions and others.
According to concerned officials, around 68 airports are currently handling flights under the Regional Connectivity Scheme (RCS) Ude Desh Ka Aam Nagrik (UDAN) scheme since the commencement of the project. RCS-UDAN was initiated by the government of India’s Ministry of Civil Aviation (MoCA) in order to connect remote areas of the country by air. It also aims to enable common citizens of the nation to fly at affordable costs.
As part of RCS, which is a market driven project, airlines place bid for individual routes after estimating the demand and supply gap on a specific route.
A number of Selected Airline Operators (SAOs) have already begun operating 425 UDAN routes across 68 airports, heliports and water aerodromes in India. SAOs are still managing various routes following the end of three years of exclusivity term as part of the scheme.
The severe impact of Covid-19 on the aviation industry has hit domestic RCS flights. It has also disrupted scheduled commercial flights. The sector has witnessed a fall in passenger demand, thereby making flight operations unfeasible.
In addition, airlines’ financial affairs were affected due to non-generation of revenue, as well as high fixed costs that led to a liquidity crisis.
However, the government has modified various policies, including monetary relaxations to keep the RCS-UDAN afloat post pandemic.
The government intends to support RCS by helping SAOs with concessions from the central and state governments as well as union territories (UTs).
These measures also seek to minimise the cost of airline operations on regional routes.
Furthermore, financial viability gap funding (VGF) is offered to close the hiatus between airlines’ operating expenses and anticipated revenues on RCS routes.
