Government to Extend UDAN Viability Support to Airlines from 3 to 5 Years, Says Civil Aviation Minister Ram Mohan Naidu

The Centre will extend Viability Gap Funding (VGF) for airlines operating under the UDAN regional connectivity scheme from 3 years to 5 years, Union Civil Aviation Minister Ram Mohan Naidu said, as per an ANI news report.  

The revised support will be introduced in phases, with full funding available during the first two years before reducing gradually over the remaining 3 years. 

The revised funding structure provides 100% support in the first 2 years, followed by 75%, 50%, and 25% in the third, fourth, and fifth years respectively. The earlier version of the scheme provided financial support for three years. 

₹29,000 Crore Set Aside for Next 10 Years 

The government has set aside ₹29,000 crore for the next phase of the UDAN scheme, which will continue for another 10 years.  

The latest phase was launched by Prime Minister Narendra Modi in Jodhpur on 4 July after the completion of the scheme's first decade. 

The ministry has set a target of connecting 120 new destinations over the next 10 years and enabling around four crore passenger journeys.  

The plan also includes the development of 100 additional airports and 200 heliports during the same period. 

Changes to Scheme Coverage 

The revised UDAN scheme expands the scope of viability gap funding and introduces operational and maintenance support for selected Tier-2 and Tier-3 airports.  

The changes are for supporting air services on regional routes where passenger demand may take longer to reach commercially viable levels. 

Speaking at a workshop on the next phase of UDAN in New Delhi, Naidu said the focus will now be on improving connectivity between airports as aviation infrastructure continues to expand across the country. 

Scheme Continues Beyond Initial 10-Year Period 

Launched in 2016, UDAN was introduced to improve regional air connectivity by supporting flights to underserved and unserved destinations. The scheme completed its initial 10-year period this year and has now been extended for another decade. 

According to the Civil Aviation Ministry, the next phase will also include measures to support domestic aircraft manufacturing, strengthen the maintenance, repair and overhaul (MRO) sector, and generate employment linked to the aviation industry.  

The revised framework is expected to guide the implementation of regional connectivity projects over the next 10 years. 

Read More: EPFO Wage Ceiling Hike to ₹25,000 Deferred for Now! 

Conclusion  

The next phase of the UDAN scheme combines longer viability support for airlines with plans to add new destinations, airports and heliports as part of the government's regional aviation programme. 

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