Ministry of Civil Aviation Launches Round 4 of RCS- UDAN

by Suman Gupta

Focus on Priority Regions North East Region, Hilly States, J&K, Ladakh and Islands

New Delhi December 2019: Following the three successful rounds of bidding, the Ministry of Civil Aviation has launched the 4^th round of Regional Connectivity Scheme (RCS)- UdeDeshKaAamNagrik( UDAN) to further enhance the connectivity to remote and regional areas of the country. Focus of this round would be the priority areas like NER, Hilly States, J&K, Ladakh and Islands. Some of the key features of the Scheme are:

Revision of (Viability Gap Funding) VGF cap – The provision of VGF for Category 2 / 3 aircraft (more than 20 seater) has been enhanced for operation of RCS flights in Priority Area(s) (Union Territories [UT] of Ladakh and Jammu & Kashmir; the States of Himachal Pradesh, Uttrakhand, North Eastern State; UT of Lakshadweep and Andaman & Nicobar). The VGF cap applicable for various stage lengths for operation through category 1 / 1 A aircraft (below 20 seater) has also been revised to further incentivize the operation of small aircraft under the Scheme.

Promoting short-haul routes – The provision of VGF would be restricted for routes with stage length up to 600 kms, for operation of Category 2 / 3 aircraft, beyond it no monetary support would be provided. The table for provision of VGF for various stage lengths would be available for stage length up to 500 kms.

Well defined Prioritization framework – Airports that has already been developed by AAI would be given higher priority for award of VGF under the Scheme, followed by airports not part of the above list but located Priority Area(s) would be given a priority, followed by airports located in areas other than Priority Area(s).

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, provided that the total scheduled flight operation submitted as part of the Technical Proposal, is conformed and adhered to within a period of one year.

Inclusion of helicopter and sea plane operation under NSOP license – The operation of helicopter and sea plane would be allowed under this round.

Process of bidding

AAI invites interested bidders/airline operators to take part in the bidding process. The bidding document has been uploaded on to the portal (https://www.aai.aero/en/rcsudan/rcs-udan-4.0) or website: https://www.mstcecommerce.com/eprochome/rcs/index.jsp. The bidders are encouraged to go through the document and submit the queries, if any by 11/12/2019. The timelines of the entire bidding process has been provided in the Notice of Commencement of 4th Round of Bidding for ‘Selection Process for Selected Airline Operator under Regional Connectivity Scheme-UDAN Version 4.0, November, 2019, uploaded at the AAI / MSTC website, the link for which is provided above.

Progress of UDAN 1, 2 and 3

In the last three years MoCA has successfully completed three rounds of bidding under the Scheme and awarded about 700 routes.

The table on progress of RCS UDAN is provided below (as on 31^st of October, 2019):

Efforts are made to develop the airports and operationalize the pending routes. Many of these routes will be operationalized during the winter schedule 2019.

MoCA aims to operationalize 1000 routes and more than 100 airports in the next five years. This would be achieved by focusing on operationalizing routes in Priority Areas. AAI would focus on developing no-frills airport in the future and routes connecting such airports would be prioritized for award of VGF. The market would be incentivized to develop short haul routes only, providing connectivity to nearby airports.