India gives UDAN another decade to fly & generate Rs 60,000 crore; MoUs in 2-3 weeks

The Centre expects to complete the signing of agreements with all states for the next phase of the UDAN regional connectivity scheme within the next two to three weeks, Union civil aviation minister Ram Mohan Naidu said on Tuesday.

Naidu said 21 states have already signed MoUs with the Ministry of Civil Aviation, while West Bengal is scheduled to sign its agreement on September 28.

"On the 28th we have the MoU signing with West Bengal also, and the other states are just trying to finalize the MoU document so very soon, probably in two to three weeks, we are going to close all the MoUs," Naidu said at a press conference after the MoU signing ceremony for the upcoming phase.


The UDAN scheme, which has completed 10 years, has now been extended for another decade, with the government projecting an economic impact of up to Rs 60,000 crore.

Naidu said the earlier phase of the regional connectivity programme helped operationalise more than 90 airports and provided subsidised air connectivity to around 1.54 crore passengers over the past decade.

"It is indeed a very important day for us in the Ministry of Civil Aviation as we have done MoUs with the states. It is a revolutionary scheme in the country which has propelled regional connectivity across the country," Naidu said.

Faster airport construction

The government has also changed its approach to airport development under the extended scheme, with key projects to be taken up through a challenge model.

Naidu said the move is aimed at reducing the time taken to construct airports. Under the new framework, projects are expected to be completed within 18 months after construction begins, compared with an earlier average gestation period of three years.

"We have extended it for 10 more years, taking some observations from the earlier UDAN. Rather than taking all the airports at once, we have created a system where the most important ones go on a challenge mode to increase the speed with which the airports are getting constructed," the minister said.

The government plans to deploy nearly Rs 30,000 crore over the next 10 years for the scheme. With contributions from states and other stakeholders, the investment could potentially double.

Naidu also said the government wants at least five domestic airlines to operate fleets of 100 aircraft or more each. The expansion is intended to support rising passenger demand and the longer-term Viksit Bharat 2047 vision of having more than 350 operational airports.

SpiceJet under regulatory watch

On SpiceJet, Naidu said the airline continues to be monitored by the Directorate General of Civil Aviation (DGCA), including on operational and, to some extent, financial matters.

"The immediate activity in the ministry regarding SpiceJet is that we have operational and both to a certain extent financial scrutiny also being done from the ministry through the DGCA because we don't want safety to be at any... any lapse in safety shouldn't be there," Naidu said.

He said the government remains in discussions with the airline but has to operate within the statutory framework applicable to private carriers.

The Centre had earlier extended support to SpiceJet through the Emergency Credit Line Guarantee Scheme (ECLGS) during difficult conditions for the aviation industry, including the impact of the West Asia crisis. Under the scheme, Rs 150 crore was disbursed to the airline.

Naidu said SpiceJet and its lenders will have to resolve the remaining financial arrangements, while reiterating that passenger safety and avoiding disruption to air travel remain the ministry's priorities.

(With ANI inputs)