Beating the Rhetoric
The 1990s saw the opening up of the economy .India was liberalised and with it Indians began to dream of flying. With the opening up of the aviation sector new players entered the market and upper middle class Indians began to fulfil their dreams of travelling in an aircraft. While it did open up flying to some, yet the steep prices ensured that flying still remained a distant dream to many. This was broken for the first time when the first low cost no frills carrier Air Deccan was launched in early 2000s. Air Deccan revolutionised the market with low cost tickets and sought to cover their costs with innovative marketing. However sound financial principles evaded the carrier and finally it had to wind up its operations. Since then however flying costs have come down and more Indians are travelling via aircrafts than ever before. A large number of airports are becoming international airports while existing airports like Delhi airport have become bigger and better.
And yet the question of regional connectivity has continued to haunt lawmakers and aircraft official alike. The air travel pattern in India revolves around a few major sectors and this is where airlines focus on. Regional connectivity is almost non-existent and if it does exist is erratic and costly. All that is poised to change with the launch of UDAN with a maiden fight between Shimla and Delhi. With UDAN or ‘Ude Deshka Aam Naagrik’ (enabling the common man to fly), as the new programme is called, capping the airfare for a one-hour journey on a fixed wing aircraft at Rs2,500, another glass ceiling in air travel has just shattered. What takes roughly 10 hours of road travel can now be covered in an hour and is affordable too; this would contextualise connectivity in a different environment.
In the case of UDAN-1 (the second phase of auctions are expected to be rolled out soon), it brings the country’s Tier-II and Tier-III towns on the country’s air map. Of the 70 airports served in the first phase of UDAN, 31 are currently unserved. One can be sure that this would not have been possible without a host of concessions which would have been shared between the Union government, state government and the airports. However the scheme has been launched in such a manner that the private sector does see potential and newer market in it which is why it has set an active interest. The government estimates UDAN-1 to cost the exchequer Rs 200 crores annually. 50% of the seats will be offered in subsidy through the scheme which will be served on a first come first serve basis.
The prime thrust of the scheme is to reach underserved and unserved airports of the country. The plan includes pulling out a number of airports back from wilderness and bringing them on track. In a way it is also a scheme of first of its kind when government activity is hoped to stimulate private entrepreneurship in the long run. The scheme comes at a crucial time when a number of regional airlines have closed down their operations in the past decade. There is a hope that UDAN will revive these airlines or create new ones in the process once the private sector recognises the market in regional travel.
The UDAN scheme entails the provision of proportionate pricing for routes of different stage lengths/flight duration. The government aims to achieve the affordable pricing through a) a financial stimulus in the form of concessions from Central and State governments and airport operators and (2) a Viability-Gap Funding to the interested airlines to kick-off operations from such airports so that the passenger fares are kept affordable, according to a PIB release.
The 70 airports to be connected in under the UDAN scheme include 27 currently served airports, 12 currently under-served airports and 31 currently unserved airports. Also, 17 out of the 70 airports are in the North, 12 in East, 6 in North-East region, 11 in South and 24 in the West. Hence UDAN seeks to cover the length and the breadth of the country.
The prices have been capped not only for flights but helicopters as well. Prices have been kept at a lower rate so that people are tempted to choose air travel over railway and roads. Seen in the context of a deliberate and multimodal transport policy that is being developed UDAN makes sense. The offshoots of benefits of UDAN may not limit itself to giving a chance for all to fly alone. If it is successful then it may also be able to bring relief to the creaking railway infrastructure which would in turn see development and upgradation. Air travel if availed by a significant part of the population can play a role in reducing pollution as well. Thus seen in totality UDAN seeks to be a game-changer which could very well redefine the way Indians fly. ( Views expressed by the author are personal)