Now, a government subsidy for cheaper air travel in Asia

New Delhi: In a bid to spur traffic growth on international routes, the Centre on Wednesday unveiled the draft scheme for launching subsidised flights to cities in the Asian region such as Singapore, Bangkok, Dhaka and Kuala Lumpur.

The scheme is the international version of domestic UDAN that promises to give wing to the common man by offering tickets priced below Rs 2,500. But unlike domestic UDAN, which is being funded by levying a fee on each departing flight connecting major cities, the international UDAN would be partially funded by state governments that opt for the scheme.

According to the draft scheme, state governments will identify the routes to be connected, and airline operators will assess demand on the identified routes and submit proposals for providing air services.
So far, only Assam has shown an interest in supporting international flights from its capital city of Guwahati and is learnt to have in-principle committed Rs 100 crore for promoting international air connectivity (IAC) from the state.

Apart from financial support from states, the airline selected to operate subsidised flights could also get discounts from state-owned Airports Authority of India (AAI) for landing, parking and housing. The international air connectivity scheme UDAN (International) has also proposed to provide exclusive rights to the selected airline for three years from the date of commencement of a flight. During this period, no other airline would be granted any subsidy on this route.

“Subsequent to the completion of such period of three years, the subsidy support under the scheme to the selected airline shall be discontinued,” the draft scheme said.

The draft scheme said that the subsidy support would be provided to selected airlines only for the passenger seats which remain unsold at the time of flight operation from the total number of passenger seats for which subsidy is requested.

The general public and stakeholders can give their suggestions and views on terms of the scheme by September 4, 2018. The draft scheme has laid down eligibility criteria for bidding of the international routes. Under this, the airline operators which are designated airlines of India – as per the applicable rules – as on March 31 would qualify for participation in the scheme. Operations under the scheme will be permitted through fixed wing aircraft only with passenger seating capacity of more than 70 seats.

“The selected airline shall be obligated to commence IAC flight operations on an IAC route within a period of 90 days from the issuance of letter of award (LoA) unless any extension is granted by the implementing agency,” the draft said.