UDAN Scheme Faces Financial Turbulence As 75 Per Cent Of Country’s Airports Report Losses In FY18

The centre’s regional connectivity scheme (RCS) UDAN may be facing trouble taking flight as almost three-fourths of the country’s airports under the supervision of the Airports Authority of India (AAI) have been incurring losses, reports Financial Express. The UDAN scheme is intended to ensure that airports are built in unserved and underserved parts of the country.

“The cost of infrastructure and operational cost of managing an airport is extremely high. An airport in a small city needs the same equipment as are required for large airports like Mumbai. It requires the same kind of air-conditioning and amenities,” explained a former board member of the AAI.

During a Lok Sabha session, Civil Aviation Minister Suresh Prabhu stated that out of the 129 airports in India, 94 registered a loss in FY18.

The government had initiated the UDAN scheme in October 2016, awarding routes from 73 airports in smaller towns to certain airlines.

Under UDAN there is a cap on air ticket prices while airport charges that airlines have to pay have been purposely kept low to ensure financial viability.

Prabhu blamed the losses as a result of low revenue generation which had not been enough to meet the overall expenditure of the airports under the UDAN scheme.