UDAN scheme revamp: Govt extends airline support to 5 years, expands VGF eligibility

The government will extend financial support to airlines operating under the UDAN regional connectivity scheme from three years to five years in a phased manner to improve the viability of regional routes, Union Minister of Civil Aviation Ram Mohan Naidu said on Thursday.

On the sidelines of a UDAN workshop, the minister told reporters that the revamped scheme -- which has been extended for another 10 years -- will also widen the eligibility criteria for airports to receive viability gap funding (VGF).

"Earlier, an airport was classified as unserved or underserved if it had fewer than seven flights a week. We have now increased that threshold to 14 flights a week, which will allow more routes to receive viability gap funding," Naidu said.

The minister said the government is expanding airport infrastructure at a rapid pace and is now focused on improving regional connectivity through policy changes.

"We are creating either a new terminal or a new airport every single month. Now we have to improve connectivity, and for that we have brought changes to the existing UDAN scheme," he said.

The minister also announced operational and maintenance (O&M) support for airports in Tier-2 and Tier-3 cities that are struggling to break even because of low passenger traffic.

"Some airports are facing losses due to lower passenger volumes. The government will extend a helping hand by providing operational and maintenance support wherever airports are unable to meet their operational expenses," he said.

The minister reiterated the government's target of building 100 airports and 200 heliports over the next decade, saying close coordination with states would be critical to achieving the goal.

"We have had 100 per cent participation from all states and Union Territories in the workshop. This shows the enthusiasm for the UDAN scheme and reflects the partnership between the Centre, states and other stakeholders," he said.

On the Supreme Court seeking a detailed report from the Centre on rising airfares, Naidu said the government would explain its regulatory framework in detail.

"Dynamic fare pricing is an internationally accepted practice and is essential for promoting the aviation sector and improving connectivity. That is why airlines in India are allowed to follow dynamic pricing," the minister said.

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