Kalaburagi Airport Inaugurated Under UDAN / RCS

News: Kalaburagi airport in Karnataka has been inaugurated. The airport has been built under the UDAN-RCS Scheme.

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.

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

How does the scheme functions?

It has a market-based model to develop regional connectivity. It functions as follows:

• Interested airline and helicopter operators can start operations on un-connected routes by submitting proposals to the Airport Authority of India which is the implementing agency of the scheme.
• The operators could seek a Viability Gap Funding (VGF) apart from getting various concessions. Viability Gap Funding is a government grant provided to the airlines to bridge the gap between the cost of operations and expected revenue.
• State governments are mandated to lower the VAT on ATF to 1% or less, besides providing security and fire services free of cost and electricity, water and other utilities at substantially concessional rates.
• All such route proposals are then offered for competitive bidding through a reverse bidding mechanism and the route is awarded to the participant quoting the lowest VGF per Seat.
• The successful bidder is then given exclusive rights to operate the route for a period of three years. The support from the government would be withdrawn after a three year period, as by that time, the route is expected to become self-sustainable.
• The airlines have to cap airfares for 50% of the total seats at Rs. 2,500 per hour of flight.

UDAN Rounds:

1.       UDAN-RCS 1.0: 5 airline companies were awarded 128 fixed-wing flight routes to 70 airports.

2.       UDAN RCS 2.0: 502 new regional airline and helicopter routes were bid to connect 126 airports and heliports.

3.       UDAN RCS 3.0: 235 routes comprising 189 RCS Routes and 46 Tourism Routes would be connected across all states in India.

Key Features of UDAN 3.0 are:

• Inclusion of Tourism Routes under UDAN 3 in coordination with the Ministry of Tourism
• Inclusion of Seaplanes for connecting Water Aerodromes, and
• Bringing in a number of routes in the North-East Region under the ambit of UDAN

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