Cheaper flights on anvil: Government to declare UDAN bid results by March 15

The government will likely announce the winners of its regional connectivity scheme UDAN by March 15, CNBC TV18 reported citing unidentified sources.

It said that 11 companies were learnt to have submitted the bids operating subsidised flights on 200 routes across the country, covering 43 airports.

The government had invited bids from carriers to start regional flights at a discount on routes and airports that are underserved, in order to facilitate cheaper connectivity for a larger section of the society.

The government will choose the eligible airlines to operate flights under UDAN scheme through a reverse bidding process, where the airlines will claim government subsidies and tax incentives in return for flying at tariffs which will be capped.

Reportedly, the 11 airlines that had submitted bids under the scheme include Air India, Spicejet and TruJet, which have small aircraft which are most suitable for operating regional flights. Others who submitted bids included mostly unscheduled and charter operators.

SpiceJet has submitted bids for flights originating from Mumbai, Delhi and Kolkata, and has not sought any government subsidy, CNBC TV18 report said.

The scheme seeks to take the number of active airports in the country to 118 from the current 75, by making operational 43 airports which have high potential under the UDAN scheme. Out of these 43, the government says it has identified 30 airports at which the operations could be started immediately.

RCS (Regional Connectivity Scheme), or UDAN (Ude Desh ka Aam Nagrik), was introduced as part of the National Civil Aviation Policy 2016 and was formally launched in October last year. It aims to provide opportunity to the masses to fly with fiscal incentives, infrastructure support and monetary subsidies such as viability gap funding.

Under the scheme, the routes will be awarded to the carriers for three years. The scheme itself will remain operational for 10 years.

Under UDAN scheme, the fare for a one-hour aeroplane journey of about 500 kilometres or a 30-minute helicopter journey will be capped at Rs2,500, with proportionate pricing for other routes with different lengths and duration.

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