Fares for an hour long flight will be capped at Rs 2,500 per passenger.
New Delhi:
The Narendra Modi government is all set to launch UDAN, the newly coined acronym for its policy to connect small towns and cities with hour long flights that will cost no more than Rs 2,500.
UDAN - Udega Desh Ka Aam Nagrik - is part of the new civil aviation policy that was launched in June this year and aims to boost regional connectivity.
To kick-start the regional connectivity scheme, the government has identified 22 airports that are either unused or under-utilized airports where there is readymade infrastructure like terminal building, fire services and air traffic control towers to start flights immediately if airlines bids for these routes.
Some of these identified airports include Bikaner and Jaisalmer in Rajasthan, Bhavnagar and Jamnagar in Gujarat, Bhatinda and Pathankot in Punjab, Allahabad in Uttar Pradesh, Lakhimpur and Jorhat in Assam among others.
Here's how the policy will work: airlines will be asked to bid for routes that connect small towns to cities. Fares for an hour long flight will be capped at Rs 2,500 per passenger. If the actual cost of a seat exceeds this amount, the government will pay the difference.
And the government will collect this money from airlines that are operating on profitable routes.
In technical terms, it is called Viability Gap Funding. So far, two options have been discussed: either the government charges a 2 per cent cess from passengers flying on profitable routes or charge Rs 8,000 from the airlines every time they land in a metro airport.
Airlines have not commented officially but many are apprehensive that it will push up their costs and fares on the profitable routes like Delhi-Mumbai.
Questions have also been raised if the government can cap fares without changing the law on aviation.
"We have already clarified from the ministry, based on our own discussions with the Law Ministry. We think within the current legislation that we have can look forward to this kind of arrangement,"Jayant Sinha, the junior minister for Aviation, told the media.
UDAN - Udega Desh Ka Aam Nagrik - is part of the new civil aviation policy that was launched in June this year and aims to boost regional connectivity.
To kick-start the regional connectivity scheme, the government has identified 22 airports that are either unused or under-utilized airports where there is readymade infrastructure like terminal building, fire services and air traffic control towers to start flights immediately if airlines bids for these routes.
Some of these identified airports include Bikaner and Jaisalmer in Rajasthan, Bhavnagar and Jamnagar in Gujarat, Bhatinda and Pathankot in Punjab, Allahabad in Uttar Pradesh, Lakhimpur and Jorhat in Assam among others.
Here's how the policy will work: airlines will be asked to bid for routes that connect small towns to cities. Fares for an hour long flight will be capped at Rs 2,500 per passenger. If the actual cost of a seat exceeds this amount, the government will pay the difference.
And the government will collect this money from airlines that are operating on profitable routes.
In technical terms, it is called Viability Gap Funding. So far, two options have been discussed: either the government charges a 2 per cent cess from passengers flying on profitable routes or charge Rs 8,000 from the airlines every time they land in a metro airport.
Airlines have not commented officially but many are apprehensive that it will push up their costs and fares on the profitable routes like Delhi-Mumbai.
Questions have also been raised if the government can cap fares without changing the law on aviation.
"We have already clarified from the ministry, based on our own discussions with the Law Ministry. We think within the current legislation that we have can look forward to this kind of arrangement,"Jayant Sinha, the junior minister for Aviation, told the media.
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