Ministry of Civil Aviation Launches Round 4 of RCS- UDAN

News: Ministry of Civil Aviation has launched the 4th round of Regional Connectivity Scheme (RCS) – Ude Desh Ka Aam Nagrik (UDAN)

Facts:

About UDAN Scheme:

• The Regional Connectivity Scheme (RCS)-Ude Desh ka Aam Naagrik (UDAN) scheme was launched in 2017 by the Ministry of Civil Aviation. The scheme is a component of the National Civil Aviation Policy (NCAP), 2016.
• The scheme would be in operation for a period of 10 years.
• Aim: To develop a regional aviation market. It seeks to connect under-served and unserved airports in India through the revival of existing airstrips and airports.
•  Under the scheme, airlines have to cap airfares for 50% of the total seats at Rs. 2,500 per hour of flight.
• The losses for the price cap is compensated by a mechanism called Viability Gap Funding– A government grant provided to the airlines to bridge the gap between the cost of operations and expected revenue.

Objectives:

• Create affordable yet economically viable and profitable flights on regional routes.
• Development of remote areas and enhancing trade and commerce and tourism expansion.
• Employment creation in the aviation sector

About UDAN 4.0

• The focus of UDAN 4.0 is on priority areas like North East Region, Hilly States, Jammu and Kashmir, Ladakh and Islands.

Key features of UDAN 4.0:

•  Revision of (Viability Gap Funding) VGF cap – The provision of VGF for Category 2 / 3 aircraft (more than 20 seaters) has been enhanced for the operation of RCS flights in the priority areas.
• Promoting short-haul routes – The provision of VGF would be restricted for routes with stage length up to 600 km. Beyond it, no monetary support would be provided.
• Well defined Prioritization framework – Airports that have already been developed by AAI would be given higher priority for the award of VGF under the Scheme.
• Flexibility to change the frequency of flight operation – The Selected Airline Operator (SAO) would be allowed to change the frequency of flight operation, during the tenure of flight operation of the given route.
• Inclusion of helicopter and seaplane operation: The operation of helicopter and seaplane would be allowed under this round.

Additional Information:

National Civil Aviation Policy (NCAP), 2016:

• It aims at making flying affordable to the masses and convenient
• It also seeks to establish an integrated ecosystem that will lead to significant growth of the civil aviation sector to promote tourism, employment, and balanced regional growth.
•  It further aims to enhance regional connectivity through fiscal support and infrastructure development and enhance ease of doing business through deregulation, simplified procedures and e-governance.