Civil Aviation Ministry: UDAN 5.0 launched to enhance connectivity to remote areas

The government has launched the fifth round of the Regional Connectivity Scheme UDAN  to further enhance the connectivity to remote and regional areas of the country.
With this, the Ministry of Civil Aviation (MoCA) initiated the process of inviting bids from airlines for various routes under this fifth round of bidding for its regional connectivity scheme UDAN by releasing a bid document.

According to a statement from the ministry released, some of the key features were the earlier stage length cap of 600 km is waived off and there is no restriction on the distance between the origin and destination of the flight; viability gap funding (VGF) to be provided will be capped at 600 km stage length for both Priority and Non-Priority areas which were earlier capped at 500 km and no predetermined routes would be offered.

Only Network and Individual Route Proposal proposed by airlines will be considered and the airlines would be required to submit an action/business plan after two months from the issuance of letter of authorisation (LoA) wherein they submit their aircraft acquisition plan/availability of aircraft, crew, slots, etc. at the time of the technical proposal.

The statement mentioned the same route would not be awarded to a single airline more than once, whether in different networks or in the same network and added “Exclusivity will be withdrawn if the average quarterly passenger load factor (PLF) is higher than 75 per cent for four continuous quarters, to prevent exploitation of the monopoly on a route.”
According to the statement, 25 per cent of the Performance Guarantee to be encashed for each month of delay up to four months, to further incentivise quick operationalization.
A performance guarantee is an enforceable commitment by a corporate entity to supply the necessary resources to a prospective contractor and to assume all contractual obligations of the prospective contractor.

The ministry also mentioned that airlines would be required to commence operations within four months of the award of the route. Earlier this deadline was six months.
It also added that a list of airports that are ready for operation or would soon be ready for operations has been included in the scheme to facilitate quicker operationalization of routes under the Scheme. Novation process for routes from one operator to another is simplified and incentivised. Novation refers to the process of substituting an existing contract with a replacement contract, where the contracting parties reach a consensus.

Union Minister of Civil Aviation Jyotiraditya Scindia in the statement said, “UDAN has proved to be a lifeblood of many regions which are now well connected with places across the country. This new & stronger version of the scheme will raise the momentum, connecting new routes, and bring us closer to the target of operationalising 1,000 routes & 50 additional airports, heliports, and water aerodromes in the near future.”