On Friday, the Indian government launched the fifth round of the regional air connectivity scheme (UDAN 5.0) to improve connectivity to remote and regional areas.
Under UDAN 5.0, viability gap funding (VGF) will be limited to 600 kilometers of stage length for priority. For non-priority areas, up from 500 kilometers previously.
Furthermore, no pre-determined routes would be provided. Furthermore, in the civil aviation ministry, only network and individual route proposals from airlines will be considered.
The fifth round of Ude Desh Ka Aam Nagrik (UDAN) or Regional Connectivity Scheme (RCS) will focus on Category-2 (20-80 seats) and Category-3 (more than 80 seats).
According to the release, the earlier stage length cap of 600 kilometers has been lifted, and there are no restrictions on the distance between the flight’s origin and destination.
Indian Govt launches UDAN 5.0
This new and stronger version of the scheme will increase momentum by connecting new routes and bringing us closer to the target of operationalizing 1,000 routes and 50 additional airports, heliports, and water aerodromes shortly.
The release states that under UDAN 5.0, airlines would have to submit an action/business plan after two months have passed since the LoA (Letter of Acceptance) was issued. They would have to include information about their aircraft acquisition strategy. Furthermore, the availability of aircraft, crew, and slots at the time of the technical proposal.
A single airline will not be given the same route more than once. It was added whether it is in the same network or different networks.
Additionally, to prevent abuse of the monopoly on a route, exclusivity will be revoked. Further, if the average quarterly PLF (Passenger Load Factor) is higher than 75% for four consecutive quarters.
Airlines must begin operations within four months of receiving the route award. Previously, this deadline was set for six months.
To further incentivize route operationalization, the ministry stated that 25% of the performance guarantee amount would be encashed for each month of delay of up to four months.
The ministry announced the release of UDAN 5.0, which includes “game-changing features to fly into the future.” Furthermore, the program was launched in 2017.
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