Union Civil Aviation Minister Jyotiraditya Scindia. | Photo credit: PTI
The government has launched the fifth cycle of the regional connectivity program – UDAN – to further improve connectivity to remote and regional areas of the country.
With this, the Ministry of Civil Aviation (MoCA) on April 21 launched the airline bidding process for various routes under this fifth tender for its UDAN regional connectivity scheme in issuing a tender document.
According to an April 21 Civil Aviation Ministry tweet, only Category 2 (20-80 seats) and Category 3 (>80 seats) aircraft operations will fall in this round with no restrictions on the distance between the origin and destination. , with removal of the stage length cap of 600 km.
According to a ministry statement issued on the evening of April 21, some of the main features were that the previous stage length cap of 600 km is removed and there are no restrictions on the distance between the origin and the destination of the flight; Viability Gap Funding (VGF) to be provided will be capped at a stage length of 600km for priority and non-priority areas which were previously capped at 500km and no pre-determined route would be offered.
Only network and individual route proposals proposed by airlines will be considered and airlines would be required to submit an action/business plan two months after issuance of the Letter of Authorization (LoA) in which they would submit their aircraft acquisition plan/availability of aircraft, crew, slots, etc. at the time of the technical proposal.
The statement mentioned that the same itinerary would not be assigned to the same airline more than once, whether in different networks or in the same network and added: “The exclusivity will be withdrawn if the average quarterly load factor in passengers [PLF] is greater than 75% for four continuous quarters, to avoid the exploitation of the monopoly on a route.
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According to the statement, 25% of the performance bond is to be cashed for each month of delay up to four months, to further encourage rapid operationalization. A performance bond is an enforceable commitment by a legal entity to provide the necessary resources to a potential contractor and to assume all of the potential contractor’s contractual obligations.
The ministry also mentioned that the airlines would be required to start operations within four months of the route being awarded. Previously, this period was six months.
He also added that a list of airports that are ready or soon to be operational has been included in the program to facilitate faster operationalization of routes under the program.
The novation process for routes from one operator to another is simplified and incentivized. Novation refers to the process of replacing an existing contract with a replacement contract, where the contracting parties come to a consensus.
Union Civil Aviation Minister Jyotiraditya Scindia said in the statement, “UDAN has proven to be a lifeblood for many regions which are now well connected to places across the country. This new, stronger version of the program will increase momentum, connecting new routes, and bring us closer to the goal of operationalizing 1,000 routes and 50 additional airports, heliports and water aerodromes in the near future.”