Govt Plans to extend UDAN Scheme to International Flights

Govt Plans to extend UDAN Scheme to International Flights

Govt Plans to extend UDAN Scheme to International Flights: After the Success of the regional connectivity scheme or UDAN (Ude Desh ka Aam Naagrik) has urged the Government to extend the scheme for international flights, aviation secretary Rajiv Nayan Choubey said. Here, we will provide all the important details about Why Govt Plans to extend UDAN Scheme to International Flights.

He further said that the Government of Assam wants to connect Guwahati airport with some of the South East Asian destinations. UDAN scheme is extended in order to provide more service to the citizens of Assam.

Govt Plans to extend UDAN Scheme to International Flights

Govt Plans to extend UDAN Scheme to International Flights

What Initiatives will be taken by Government to Expand UDAN Scheme to International Flights?

“The Assam government has expressed interest to invest Rs100 crore a year, for three years, (a total of Rs300 crore) to start flights to South East Asian destinations,” Choubey said at the Wings India 2018. For the Project, Central Government will handle all the bidding process and money will be invested by the state government. As per now, no other state has shown interest for investment in this project.

The civil aviation ministry also wants to make certain changes in the Airport Economic Regulatory Authority (AERA) Act, which will then reduce the role of airport regulator in fixing tariffs while allowing private developers to monetize land, Choubey said. He also added that Government is working on a new concession model agreement, which should be out in the next six months.

Concession model agreement is mainly the framework or guideline which specifies the incentives the private operators get in running an airport. Moreover, Government wants to make changes in Airport Authority of India Act to allow various developers of brown field airports in order to monetize city-side land, which is not currently allowed. Due to this, there is lack of private sector investment in this field.

He said, “The Act specifically mentioned that the land usage of the city-side airport will be for passengers. There is a limit to how many hotels you can build outside the airport only for passengers. There is a need to relax that. We are working on amending the Airports Authority of India Act towards that end”. He further added that the Government is looking at different models in order to expand airport infrastructure such as land pooling, where land is made available to townships with airports and exchanging prime land in cities with land in outskirts for building airports, while monetizing the city land parcels.

What kind of Model will be made by Government to expand UDAN Scheme to International Flights?

The Government is searching a model to develop state by creating joint ventures. This ventures will be between state government holding 49% and AAI holding 51%. In this venture, state govt funds the losses which are in caused by such airports for the first 10 years while capital expenditure to develop such airports is spend by the Airports Authority of India. Choubey said, “Currently about 116 airports can be built under this project.

As the estimation of Aviation Consultancy CAPA, investments of about $45 billion will be needed for airport expansion and construction by 2030 in order to keep in pace with the projected growth with airport traffic, which would then reach 1 billion annual passengers by 2030.

Choubey said AAI capital expenditure will rise up to 5 times to
Rs 15,000 crore a year along with adding the balance sheet of public sector airport operator will be used to boost growth. He said, as per now 80 of 120 AAI Airports are functional, and the aim of government is to make airports efficient to handle huge traffic. Indian passenger in flights will grow about 17.5% in the year 2017-18 as compared to 20% in the last three years.

Choubey said, “Our country has witnessed the highest domestic passenger growth globally in the last 3-4 years and the nearest rival is some 30-40% behind us”. In order to handle more passengers, Government is working to put into action air strips which are not used since independence.

Out of 56, 18 airstrips are currently in operation, the government’s aim is to operationalize all these air strips. “We expect to double the airport capacity (from current level) in the next 4-5 years and achieve over 15% annual compound annual growth rate”, choubey said. This much growth will only be possible until the prices of one oil barrel are below $80.

The government is expected to seek Expressions of Interest (EoIs) for Air India and Pawan Hans in the next fortnight, Choubey said.

“Our ministry is presently engaged in the important task of finding buyers for Air India, its subsidiaries and Pawan Hans. We are committed to take it forward very, very fast,” he said.

“We expect that the EoIs for Air India should come out possibly in couple of weeks. A revised EoI for Pawan Hans will also be coming forward around the same time,” Choubey added.

Due to all the above reasons, Govt Plans to extend UDAN Scheme to International Flights. If you found this information valuable, then please share it with your friends and followers.