Connecting the Skies

The Ministry of Civil Aviation (MoCA), under its National Civil Aviation Policy, 2016, introduced the Regional Connectivity Scheme – Ude Desh ka Aam Nagrik (RCS-UDAN) – to enhance regional connectivity, develop economically sustainable routes and make air travel affordable. A market-driven scheme, the RCS has been initially launched for a period of 10 years. The central and state governments, along with airline operators, have been providing numerous concessions under the scheme to make flying affordable for all.

Seeking to enhance regional connectivity, the scheme aims to connect minor hub airports to the metro hub airports of Delhi, Mumbai, Bengaluru, Chennai, Kolkata and Hyderabad. The RCS has a provision of viability gap funding (VGF) for airline operators for a period of three years from the commencement of operations to make operations in underserved and unserved regions financially viable. Initially, the focus of the scheme was primarily on underserved and unserved airports. Eventually, enhancing connectivity on tourism routes, and, to hilly regions and the north-eastern states through helicopters and water aerodromes was brought under the scheme’s ambit.

As of January 31, 2020, three rounds of the RCS have been successfully closed. A total of 688 routes have been awarded, while 250 routes have been operationalised under the scheme. The first round of bidding initially saw the award of 130 routes. However, 74 of them have been cancelled owing to non-compliance. Under the second round of bidding, the MoCA awarded 305 routes, of which 68 routes were eventually cancelled. Under UDAN III and UDAN 3.1, 335 routes were awarded, of which 18 routes have been cancelled as of January 2020.

Following the three successful rounds of bidding, the MoCA has launched UDAN IV to further enhance connectivity to remote and regional areas of the country. About 11 airlines have submitted bids for the fourth round of bidding. The bidding process under UDAN IV is in the final stages and is expected to be completed by end February 2020.

RCS going forward

The MoCA plans to operationalise about 1,000 RCS routes in the next five years. While the ministry has already awarded close to 688 routes in the past three rounds of the RCS, it aims to award an additional 300-320 routes in future rounds. It has already awarded routes connecting 76 unserved airports in the past rounds, of which 24 airports had been operationalised by October 2019. It further aims to develop/operationalise 59 new airports, 31 heliports and 10 water aerodromes in the next five years. The scheme provides flexibility to operators to form networks from the prescriptive list of underserved/unserved airports. This has led to low-hanging routes being picked up in the past three rounds. In future rounds, the focus of the ministry will be to award short-haul routes only. Further, it has been realised that in the earlier rounds of the RCS, connectivity to the north-eastern region and not pick up in a big way. This has been primarily due to airport constraints in handling larger aircraft, disruptions due to adverse weather conditions and failed economics of small aircraft. Going forward, the MoCA’s focus will be on enhancing connectivity to the Northeast. To achieve this, operators will be incentivised with higher VGF per RCS seat for operation using smaller aircraft. However, issues such as lack of infrastructure and delays in environmental clearances have been affecting the performance of the RCS. Though the government has taken numerous initiatives under the scheme to ensure regional air connectivity across the country, far more still needs to be done to resolve the aforementioned issues.

Based on a presentation by Captain R.K. Malik, Executive Director, RCS and Security, Airports Authority of India, at a recent India Infrastructure conference