UDAN 5.0 was launched by Civil Aviation Ministry to improve remote connectivity

The Ministry of Civil Aviation (MoCA) has commenced the fifth round of the Regional Connectivity Scheme – UDAN, which aims to improve connectivity to remote and regional areas of India. On Friday, the MoCA released a bid document and invited bids from airlines for various routes under this scheme.

There will be no restrictions on the distance between the origin and destination in the latest round of bidding, and the authorities have waived the stage length cap of 600 km. As per the Ministry’s tweet, the bid is only open for Category 2 (20-80 seats) and Category 3 (>80 seats) aircraft operations.

On Friday evening, the Ministry released a statement outlining the latest changes to flight regulations. Among the notable changes were the removal of the earlier stage length cap of 600 km and the elimination of restrictions on the distance between flight origins and destinations. The authorities have increased the Viability Gap Funding (VGF) cap for both Priority and Non-Priority areas to 600 km from the previous cap of 500 km. Furthermore, the authorities will no longer offer predetermined routes.

The authorities will only consider network and individual route proposals from airlines and will require them to submit an action/business plan within two months of receiving the Letter of Authorization (LoA). This plan should detail aircraft acquisition plans, crew availability, slot availability, and other relevant information.

UDAN

The statement also clarified that the authorities would not award the same route to any single airline more than once, whether within the same network or across different networks. If the average quarterly passenger load factor (PLF) exceeds 75% for four consecutive quarters, the authorities will withdraw exclusivity to prevent the exploitation of monopolies on certain routes.

To further incentivize prompt operationalization, the statement declares that 25 percent of the Performance Guarantee will be encashed for each month of delay of up to four months. A Performance Guarantee is a binding commitment made by a corporation to provide necessary resources to a potential contractor and to take on all contractual obligations of the contractor.

In addition, the ministry stated that airlines must initiate operations within four months of receiving the route award, a change from the previous deadline of six months. The scheme now includes a list of airports that are ready for operation or will soon be ready, facilitating swift operationalization of routes. The novation process for transferring routes from one operator to another is simplified and incentivized.

Novation is the process of replacing an existing contract with a new contract that both contracting parties have agreed to.

In his statement, Jyotiraditya Scindia, the Union Minister of Civil Aviation, expressed that the UDAN program has been crucial for many areas that are now connected to various parts of the country. He further added that the new and improved version of the scheme would enhance its impact by establishing new routes and moving towards the objective of operating 1,000 routes, as well as 50 more airports, heliports, and water aerodromes shortly.

Also Read: Latest Indian Aviation News and Aviation News

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