In January 2024, InterGlobe Aviation Ltd revealed that passengers pay Rs 5.48 per km for IndiGo flights, cheaper than Ola’s Rs 9/km. PM Narendra Modi expressed pride in making air travel more affordable than taxis, realizing the dream of connecting small towns with big cities.
PM Modi’s words underscore the remarkable 7-year transformation of India’s Aviation Industry through UDAN since 2016. In May 2021, a mere 21 lakh Indians took to the skies. Fast forward to December 2023, 517 routes have linked 76 airports, 9 Heliports, and 2 Water Aerodromes, providing affordable travel to over 130 lakh individuals in previously underserved or unserved locations. UDAN has brought a paradigm shift in the Indian aviation industry making it people friendly and less of an elite man’s domain.
The rise of Kolhapur, a Tier II city, attracting over 39,000 air passengers post-UDAN’s launch reflects India’s untapped potential. UDAN embodies inclusivity and the aspirations of New India taking flight. Beyond connectivity, UDAN fosters regional development which is echoed by an International Civil Aviation Organization report suggesting that improved air services spur a 3% economic growth and 6% employment rise.
Before 2015, a mere 65 airports were constructed over 67 years, averaging one per year. The focus was primarily on six metro cities, capturing 65% air connectivity and 61% air traffic. However, since 2017, 9 airports are constructed and made operational every year, redistributing 70% of the load to small and medium cities. The surge in air traffic has slashed airline operating costs by 12-13%, rendering air travel more affordable. It is mesmerizing to know that UDAN allows travelers to fly to and from remote airports such as Hubballi and Baldota in Karnataka, Burnpur in West Bengal, Darbhanga in Bihar, Hissar in Haryana, and Kannur in Kerala, to mention a few.
Going further UDAN, aligning with “growth through inclusion,” reduces urban-rural disparity, transforming the aviation sector from over-regulation to an open, liberal, and investment-friendly industry in India. Today the aviation industry witnesses growth in passenger, freight, and aircraft movement, paving the way for India to potentially become the world’s largest domestic civil aviation market in 10 to 15 years, as noted by Union Minister Jayant Sinha. The International Air Transport Association (IATA) anticipates India to surpass the UK and secure the third position in terms of Air travel by 2025.
Launched in 2016, this transformative scheme aimed to connect underserved and unserved airports in the country and has undergone several modifications in the past 7 years. Initially capping travel costs at Rs 2,500 for distances less than 500 kms, subsequent versions expanded connectivity. UDAN 2 launched in 2017 involved major players like SpiceJet, IndiGo, Jet Airways, Air India’s Alliance Air, and helicopter operators like Heligo Charters, Heritage Aviation, Pawan Hans, and Skyone Airways, enhancing accessibility to remote areas. UDAN 3 targeted hilly and remote regions, while UDAN 4 extended connectivity to islands. UDAN 5 was the one which helped in further liberalizing air travel by focusing upon Category-2 (20-80 seats) and Category-3 (>80 seats) aircrafts.
Apart from a superb connectivity scheme, UDAN is a unique collaborative model involving all stakeholders. While government-administered, it actively partners with states, airlines, and airports. Stakeholders contribute through monetary or non-monetary incentives, and the Indian government provides budgetary support for infrastructure.
The scheme’s intent becomes evident as airlines initiate operations on routes with limited immediate commercial viability, driven by their faith in the government’s collective efforts to bring prosperity. Airports have waived charges for parking, navigation, and terminal services. States have reduced VAT to 1%, offering electricity, water, and utilities at concessional rates. The Central government, through Viability Gap Funding, ensures profitability for airlines while reflecting a true spirit of ‘collaborative federalism’. The substantial Rs 1228 crores subsidy signifies the government’s dedication to making air travel accessible, swiftly propelling the common man towards their dreams.
UDAN encapsulates the logic that an increased connectivity will lead to the development of remote areas, enhance trade and commerce, and expand tourism. The major success of UDAN is the fact that it has attracted no litigation till date and all the differences between stakeholders have been resolved within the realm of the administrative framework on the premise of mutual trust and a zeel towards the betterment of India. Only a few government schemes can claim such a distinction.
Taking a step further, UDAN has also launched its versions of Krishi UDAN, Lifeline UDAN and International UDAN widening the scope of the scheme towards enhancing cargo logistics at high-potential airports for perishable agricultural produce, supply of medical facilities and connecting non-metro cities with international airports. For example, during the covid lockdown in 2020, Lifeline UDAN allowed airlines to participate in the shipment of medical cargo without losing time and to the satisfaction of health authorities at the Centre and states. An ability to fine-tune and adapt the framework to address new challenges is clearly a key strength of this policy approach.
A few years ago, inclusive growth in aviation would have sounded conjectural but today UDAN has not just given our aviation sector a new outlook but has helped in bringing in employment, improved ease of doing business, boosted the economy and led to a rise in domestic tourism.
In conclusion, while witnessing rapid growth in air traffic, the UDAN scheme’s significance is underscored by the fact that 95% of the country’s population is yet to experience air travel. With plans to operationalize 1000 new routes, introduce 100 airports, establish 10 water aerodromes and capacity enhancements, UDAN has provided us valuable lessons on inclusivity, collaboration, adaptability and resilience.
Author : PrasadRaje Bhopale
Author Description : PrasadRaje Bhopale, with a dual Master’s in Economics and Public Leadership, is a seasoned Political Consultant known for shaping effective election campaigns across several states. His impactful roles extend to being Deputy CEO at Swan Foundation and Co-Founder/Vice-President at BCE Foundation, reflecting a commitment to both politics and social impact.
Disclaimer : The views, thoughts, or opinions expressed in this blogs belong solely to the author, and do not necessarily reflect the views of author’s employer, organisation, committee or any other group or individual.
