Connectivity Scheme‘s objective is to facilitate affordable regional air connectivity;
Airports Authority of India (AAI) is the implementing agency.
It offers concessions to the airlines to encourage them to fly on regional routes.
Concession include operating subsidies like levies or charges imposed by the airport operators, excise duty at 2% and VAT at 1% on aviation turbine fuel, parking charges at airports and exempting these operations from the GST net.
The maximum airfare has been capped at Rs 2500 for a one-hour journey of approximately 500 kilometres on an aircraft or for a 30-minute journey on a helicopter.
The selected airlines will have to commit 50% of the seats on RCS flights (3-7 operational flights/week) and all seats up to 13 passenger seats on helicoptersas RCS seats.
A Regional Connectivity Fund (RCF) will be created to subsidise operations under the RCS.
The central government will fund 80% of the losses incurred and the rest will be covered by the states.
This is provided through the Viability Gap Funding (VGF) to the selected airline operators from RCF, and state governments will be required to reimburse the applicable share.
VGF will be provided for three years from the date of commencement of operations of such RCS flights.
In general, central and state contributions for VGF are 80:20 and for the north-eastern states & union territories it is 90:10.
Benefits under the Scheme will be available for a period of 10 years from the date of its notification.
RCS will be made operational only in states and at airports which are willing to provide concessions required under the Scheme.
Earlier, there was a requirement of 150 km minimum distance between two airports to be qualified for operations under the scheme. But later it was abolished.
Maharashtra is the first state to sign agreement with centre for RCS.
Under UDAN 4.0, Ministry of Civil Aviation identified Bilaspur in Chhattisgarh as a priority airport and focus on routes connecting these airports.
These prescribed routes would be offered for bidding
International UDAN is an extension of the domestic UDAN Scheme which plans to connect India‘s smaller cities directly to some key foreign destinations in the neighborhood.
It seeks to make use of the open skies policy that India has with other Asian countries that allows direct and unlimited flights to and from these nations to 18 Indian destinations.
Unlike in domestic UDAN, it is only the State government that will provide the financial support for flights under international UDAN.
Like the domestic UDAN, the financial support and flying exclusivity on the route will be for 3 years.
Only Indian carriers can participate in the international UDAN scheme, and only aircraft with capacity of 70 seats or more can fly the foreign routes.