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Foreign airlines to get subsidy under the govt's Udan scheme

FINANCIAL CHRONICLE
Published : Jun 28, 2018, 11:49 am IST
Updated : Jun 28, 2018, 11:49 am IST

The Centre has launched a regional connectivity scheme (RCS) named UDAN to help common man in smaller towns to fly.

Foreign carriers such as Singapore International Airlines (SIA), Thai Airways and Malaysian Airlines would be entitled for subsidy from India if they are selected to operate cheaper flights between India and Asean nations under the international UDAN scheme.
 Foreign carriers such as Singapore International Airlines (SIA), Thai Airways and Malaysian Airlines would be entitled for subsidy from India if they are selected to operate cheaper flights between India and Asean nations under the international UDAN scheme.

New Delhi: Foreign carriers such as Singapore International Airlines (SIA), Thai Airways and Malaysian Airlines would be entitled for subsidy from India if they are selected to operate cheaper flights between India and Asean nations under the international UDAN scheme.

The Centre has launched a regional connectivity scheme (RCS) named UDAN to help common man in smaller towns to fly. It provides a viability gap support to airlines for making these flights cheaper. Buoyed by its success, it now plans a similar scheme for connecting Indian cities with those in Asean block.

Both domestic and international carriers, designated by India and Asean nations, can participate in the scheme subject to the provisions under the bilateral air service agreements (ASAs). On Asean routes, the government has proposed to provide the financial support for one year and for limited number of seats.

As per a civil aviation ministry note, the selected airlines for international UDAN would have to operate a minimum of three  and a maximum of 7 flights per week to be eligible for the financial support. The aircraft operated on these routes would have at least 50 seats.

“Monetary support, capped to a specific number of seats per aircraft, will be provided to selected airlines. Monetary support will be in the form of viability gap support per seat,” it said.

The international UDAN routes would be point-to-point with non-stop flights. The state governments would specify the routes and invites bid from the market.

The aviation ministry is working on a proposal under which state governments will provide funds for launching affordable flights to member states of the regional grouping.

Assam has already shown keen interest in part-funding international flights operating out of its capital Guwahati and may earmark Rs 100 crore for this in the first year.

This means that no additional levy would be imposed on passengers to support international UDAN as against the RCS for local routes.

An amount of up to Rs 8,500 is being levied from scheduled airlines operating in major routes in the country to raise money towards the RCS fund.

Tags: air service agreements, asean, udan scheme, international flights
Location: India, Delhi, New Delhi