UDAN Regional Connectivity Scheme (RCS)

04 Aug 2023 UDAN Regional Connectivity Scheme (RCS)

This article covers “Daily Current Affairs” and the topic details “UDAN Regional Connectivity Scheme (RCS)”. The topic “UDAN Regional Connectivity Scheme (RCS)” has relevance in the Development section of the UPSC CSE exam.

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Why in the news:

225 out of 479 RCS routes have stopped operating, despite the collection of ₹2,038 crore from airlines and passengers on profitable routes to subsidize routes under the regional connectivity scheme.

UDAN Regional Connectivity Scheme (RCS)

Key Points:

• Objectives: The UDAN (Ude Desh Ka Aam Nagarik) scheme was launched by the Ministry of Civil Aviation to enhance regional airport development and connectivity in India. Its main objectives include improving air connectivity to remote areas, promoting trade, commerce, and tourism, providing affordable air travel for the common people, and generating employment in the aviation sector.
• Fare Caps: Under the scheme, airlines are required to cap airfares for 50% of the total seats at Rs. 2,500 per hour of flight. This is achieved through financial incentives, concessions from Central and State governments, and Viability Gap Funding (VGF) provided to airlines to bridge the gap between operational costs and expected revenue.
• Regional Connectivity Fund: The Regional Connectivity Fund (RCF) was established to meet the viability gap funding requirements under the scheme, with partner State Governments contributing a 20% share.

Phases of UDAN Scheme:

• Phase 1: Launched in 2017, aimed at connecting underserved and unserved airports in the country.
• Phase 2: Launched in 2018, focused on expanding air connectivity to more remote and inaccessible parts of the country.
• Phase 3: Launched in November 2018, with a focus on enhancing air connectivity to hilly and remote regions.
• Phase 4: Launched in December 2019, aimed at connecting islands and other remote areas.
• Phase 5: In April 2023, Phase 5 was initiated, concentrating on aircraft falling under Category-2 (20-80 seats) and Category-3 (>80 seats), with the added benefit of no distance restrictions for flights between the origin and destination.

Benefits of UDAN scheme

• Enhances regional connectivity by linking underserved and unserved airports.
• Promotes economic growth and tourism in remote areas.
• Subsidized airfares make air travel affordable for common people.
• Boosts local businesses and employment opportunities.
• Reduces travel time, increasing efficiency and productivity.
• Encourages investments in airport infrastructure development.
• Facilitates medical emergencies by enabling faster access to healthcare facilities.
• Helps in the development of a robust aviation ecosystem in smaller cities and towns.
• Promotes balanced regional development and reduces the urban-rural divide.

Challenges to the UDAN RCS Scheme:

• Commercial Viability: Many identified routes have been found to be commercially unviable, making it challenging for airlines to operate profitably despite subsidies.
• Infrastructural Constraints: Lack of adequate airport infrastructure in remote regions hampers air operations and requires upgradation to meet safety and traffic demands.
• Subsidization Complexities: Some routes faced challenges as they remained commercially unviable even with subsidies, leading to operational issues.
• High Operating Costs: Airlines operating in remote areas experience increased operating costs, affecting profitability due to higher fuel expenses, maintenance costs, and logistical challenges.
• Airfare Caps: The cap on airfares can impact airlines’ revenue potential, particularly when operating costs are high, potentially discouraging airlines from certain routes.
• Passenger Awareness: The lack of awareness among potential passengers about regional air travel options under UDAN has a negative impact on both demand and utilization.

Way Forward:

• Enhance Infrastructure: Focus on developing and upgrading airport infrastructure in remote areas to support increased air traffic and safety.
• Subsidy Rationalization: Streamline subsidy disbursal to ensure it aligns with the commercial viability of routes and encourages airlines to operate on regional routes.
• Operational Efficiency: Address operational constraints and reduce operating costs for airlines operating in remote areas.
• Public Awareness: Promote regional air travel awareness among potential passengers through marketing and outreach campaigns.
• Public-Private Partnerships: Foster collaborations between the government and private sector to improve regional airport development and connectivity.
• Continuous Evaluation: Regularly assess the performance of the RCS scheme, make necessary adjustments, and learn from previous phases to enhance its effectiveness.

Addressing these challenges and adopting strategic measures will contribute to the success and sustainability of India’s UDAN Regional Connectivity Scheme, promoting greater regional air connectivity and economic development across the country.

SOURCE:https://www.thehindu.com/news/national/some-rcs-routes-collapse-airports-fall-into-disuse/article67136014.ece

Q.1 Which of the following statements regarding the regional air connectivity scheme (UDAN) in India are correct?

1. Under the scheme, airlines are required to cap airfares for 50% of the total seats at Rs. 2,500 per hour of flight.
2. The partner State Governments have to contribute a 20% share.

Select the correct answer using the codes below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

ANSWER: C

Q.2 Which of the following statements regarding the UDAN (Ude Desh Ka Aam Nagrik) scheme is/are correct?

1. UDAN is a regional connectivity scheme currently active in North Indian states only.
2. UDAN routes are exclusively operated by government-owned airlines to ensure the accessibility of remote regions.

Select the correct answer using the code given below:

1. 1 only
2. 2 only
3. Both 1 and 2
4. None of the above

ANSWER: D

Q.3 Discuss the significance and impact of the UDAN (Ude Desh Ka Aam Nagarik) scheme on enhancing regional airport development and connectivity in India. 

rishabh