The Ministry of Civil Aviation (MoCA) introduced the fifth edition of its regional connectivity scheme, UDAN, to boost connectivity to remote regions in the country. On Friday, it released a bid document inviting bids from airlines for many routes. In the current round of bids, the Ministry has permitted aircraft operations of Category 2 (20-80 seats) and Category 3 (>80 seats) only with the stage length cap of 600 kilometres waived and no restriction on the distance between the origin and destination.
The Viability Gap Funding (VGF) will be capped at 600 kilometres stage length for Priority and Non-Priority regions, earlier limited to 500 kilometres, and no predetermined routes will be offered. Only Network and Individual Route Proposal by airlines will be considered. The carriers will need to submit a business plan two months after issuing the Letter of Authorisation (LoA), which includes details of their aircraft acquisition plan, aircraft availability, slots, and crew, among other things.
No airline will receive the same route in the same or different networks more than once. Moreover, airlines will lose exclusivity if the average quarterly Passenger Load Factor (PLF) is above 75 per cent for four consecutive quarters to avoid monopoly exploitation on a route. In addition, the deadline for airlines to commence operations has been reduced from six to four months. In fact, 25 per cent of the Performance Guarantee will have to be encashed for each month of delay till four months to further promote quick operationalisation.
The scheme also lists the airports ready for operation or soon-to-be ready for operations to speed up the process. Novation, the process of substituting an existing contract with a replacement contract, where the contracting parties reach a consensus, for routes from one operator to the other, which has been simplified and incentivised. The new scheme will boost the momentum, connect new routes, and move towards operationalising 1,000 routes and 50 more airports, heliports, and water aerodromes soon.
