According to the ministry, the aim of UDAN 5.0 is to enhance connectivity to remote and regional areas of the country and achieve last-mile connectivity.
The UDAN Scheme has been advantageous to various stakeholders including passengers who have enjoyed improved air connectivity, airlines that have been incentivised to operate regional routes and unserved regions that have received the direct and indirect benefits of air connectivity, contributing to their economic growth.
“UDAN has proved to be a lifeblood of many regions which are now well connected with places across the country. This new and stronger version of the scheme will raise the momentum, connecting new routes and bring us closer to the target of operationalising 1,000 routes and 50 additional airports, heliports and water aerodromes in the near future,” said Jyotiraditya Scinda, Minister of Civil Aviation & Steel.
The new round of UDAN will focus on Category-2 (20-80 seats) and Category-3 (>80 seats). The earlier stage length cap of 600 km has been waived off and there is no restriction on the distance between the origin and destination of the flight.
Further, the Viability gap funding (VGF) to be provided will be capped at 600 km stage length for both Priority and Non-Priority areas, which was earlier capped at 500 km. No predetermined routes would be offered. Only Network and Individual Route Proposal proposed by airlines will be considered. The airlines would be required to submit an action/business plan after 2 months from the issuance of LoA wherein they submit their aircraft acquisition plan/availability of aircraft, crew, slots, etc. at the time of the Technical Proposal, the ministry said.
The same route will not be awarded to a single airline more than once, whether in different networks or in the same network. Exclusivity will be withdrawn if the average quarterly PLF is higher than 75 per cent for four continuous quarters, to prevent exploitation of the monopoly on a route.
Airlines would be required to commence operations within four months of the award of the route. Earlier this deadline was six months.
The Novation process for routes from one operator to another has been simplified and incentivised. 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 operationalisation of routes under the Scheme.
25 per cent of the Performance Guarantee will also be encashed for each month of delay up to four months to further incentivise quick operationalisation.