The Government has set a target to operationalise 100 airports by 2024 subject to availability of supporting infrastructure such as land, statutory approvals etc.
Selected Airline Operators (SAOs) have operationalised 425 UDAN routes involving 68 airports/heliports/water Aerodromes across the country. SAOs have been operating many routes even after completion of three years of exclusivity period under the scheme.
However, COVID-19 pandemic has adversely affected the aviation sector, including domestic RCS flight operations. Suspension of scheduled commercial operations in view of COVID-19 posed several challenges. Passenger demand came down drastically making the operation of flights unviable.
Moreover, financial health of the airlines was impacted given the collapse of revenue streams coupled with high fixed costs resulting into a liquidity crunch. The Government introduced certain policy reforms for sustainability of operations of RCS-UDAN post COVID 19. These operational and financial flexibilities/relaxations and economising measures are deemed mutually beneficial for all stakeholders by maintaining the benefit of air connectivity to passengers.
Regional Connectivity Scheme is a market driven scheme. Under the scheme, airlines assess demand and nature of supply required on particular route and based on their analysis participate in the bidding process to be conducted from time to time.
A recent Parliament reply said the primary objective of RCS is to facilitate/stimulate regional air connectivity by making it affordable. Promoting affordability of regional air connectivity is envisioned under RCS by supporting SAOs through concession by Central Government, State Governments/UTs and airport operators to reduce the cost of airline operations on regional routes and financial (Viability Gap Funding or VGF) support to meet the gap, if any, between the cost of airline operations and expected revenues on such RCS routes. Central Government and State Governments share Viability Gap Funding (VGF) in the ratio of 80:20 whereas for the States in North-Eastern region/Union Territories (UT”s) the ratio is 90:10.