Regional carriers demand slots, aircraft and simpler rules as India relaunches faltering connectivity scheme

New Delhi: India’s ambitious regional air connectivity scheme is facing a daunting challenge, with commercial flights discontinued on nearly half the routes launched so far, even as the government unveils the second phase of the programme Saturday. This underscores the formidable task of connecting remote and unviable routes despite a significant push by the government.

Of the 669 routes made operational since the Ude Desh ka Aam Nagrik (UDAN) scheme started in 2017, commercial flights are currently operational on only 336, according to data reviewed by ET.

The government has spent nearly Rs 4,700 crore subsidising airlines in return for discounted airfares to stimulate demand, and another Rs 4,800 crore building infrastructure at remote airports.


Prime Minister Narendra Modi will unveil the second phase of UDAN, under which the government has significantly increased the outlay to Rs 28,840 crore. Of this, Rs 10,000 crore will go towards subsidies, with the subsidy period extended to five years from three.

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Airline and helicopter operators are pushing for easier access to metro airports and relaxed rules at smaller airfields in the scheme’s second phase.

Many smaller carriers that initially operated these routes have since gone bankrupt or curtailed operations. Others turned unviable once the three-year subsidy period ended.

Two airports in Karnataka — Bidar and Kalaburagi — which had daily flights operated by regional carrier Star Air, fell off the network once the three-year subsidy was exhausted.

"Major gateway airports like Delhi and Mumbai should support regional carriers for the scheme to have full impact,” said Manoj Chacko, MD and CEO at Fly91, which operates a six-aircraft fleet connecting UDAN airports such as Sindhudurg and Jalgaon. “To develop a viable network, it is important for an airline of my size to have connectivity with a major airport.”

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Executives at other regional carriers told ET that timely airport preparedness remains a major hurdle to starting regional flights. Many remote airstrips identified for development into public-use airports haven’t been upgraded due to regulatory bottlenecks and high compliance costs.

"For smaller airlines, who are substantial players in remote connectivity, they cannot start flights despite receiving permission due to airport unreadiness,” said the CEO of an airline operating 20-seater planes. “It becomes a big financial burden”.

Regional carriers also face challenges in securing planes as aircraft leasing companies remain cautious. Vishokh Mansingh, founder-CEO at Vman Aero Services, which has advised many airline start-ups, said states should provide aircraft to smaller operators on lease to help them start operations.

Government officials said the revamped scheme's structure addresses these problems. "The subsidy period has been extended from three to five years to give more support to airlines," an official said.

An additional Rs 2,577 crore has been set aside for airport maintenance in early years, when passenger traffic is too thin for airports to be self-sustaining.