Govt Targets to Operationalise 100 Airports by 2024

The Government has set a target to operationalise 100 airports by 2024 subject to the availability of supporting infrastructure such as land, statutory approvals, etc. Officials said that nearly 68 airports had been operationalised for Regional Connectivity Scheme (RCS)-UDAN (Ude Desh Ka Aam Nagrik) flights since the inception of the UDAN scheme.

Selected Airline Operators (SAOs) have operationalised 425 UDAN routes involving 68 airports/heliports/water Aerodromes across the country. SAOs have been operating many routes even after the scheme’s three years of the exclusivity period.

However, the COVID-19 pandemic has adversely affected the aviation sector, including domestic RCS flight operations. Suspension of scheduled commercial operations in view of COVID-19 posed several challenges. Passenger demand came down drastically making the operation of flights unviable.

Moreover, the financial health of the airlines was impacted by the collapse of revenue streams coupled with high fixed costs resulting in a liquidity crunch. The Government introduced specific policy reforms for the sustainability of operations of RCS-UDAN post-COVID 19. These operational and financial flexibilities/relaxations and economising measures are deemed mutually beneficial for all stakeholders by maintaining the benefit of air connectivity to passengers.

Also Read: On-time Performance of Various Airlines Declined in May and June

Regional Connectivity Scheme is a market-driven scheme. Under the scheme, airlines assess the demand and nature of supply required on a particular route and based on their analysis participate in the bidding process to be conducted from time to time.

A recent Parliament reply said the primary objective of RCS is to facilitate/stimulate regional air connectivity by making it affordable. Promoting affordability of regional air connectivity is envisioned under RCS by supporting SAOs through a concession by Central Government, State Governments/UTs, and airport operators to reduce the cost of airline operations on regional routes and financial (Viability Gap Funding or VGF) support to meet the gap, if any, between the cost of airline operations and expected revenues on such RCS routes. Central Government and State Governments share Viability Gap Funding (VGF) in the ratio of 80:20 whereas for the States in the North-Eastern region/Union Territories (UT”s) the ratio is 90:10.

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