UDAN scheme
News –
- Karnataka’s Infrastructure Development Minister M.B. Patil recently stated that airports in tier-II cities are not financially viable after the three-year incentive period under the UDAN scheme.
UDAN (Ude Desh ka Aam Nagrik) scheme
- Launched in – October 2016
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- It is India’s flagship regional connectivity program designed to make air travel affordable and accessible for the common citizen.
- The scheme focuses on connecting underserved and unserved airports in Tier-2 and Tier-3 cities.
Key Features of UDAN
- Affordable Fares: Airfares are capped for approximately 50% of the seats on each flight. For example, a one-hour flight (~500 km) is capped at roughly ₹2,500 (subject to indexation).
- Viability Gap Funding (VGF): To encourage airlines to fly less profitable regional routes, the government provides financial subsidies (VGF) to cover the gap between operating costs and capped fare revenue.
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