Foreign air carriers cannot get on board international Udan scheme

Foreign airlines will not be able to participate in the international Udan scheme that seeks to connect Guwahati and Vijayawada with neighbouring countries to begin with.

Earlier this week, the civil aviation ministry issued draft rules for international Udan, which is a state government-led initiative to open up overseas air routes.

The Assam and Andhra Pradesh governments, participating in the scheme, are offering subsidy to airlines. They have identified six routes from Guwahati and two from Vijayawada. Unlike domestic regional connectivity flights, there will be no fare cap for overseas Udan flights.
 

Foreign airlines have been excluded from the scheme. Only those Indian carriers that had the approval to operate international flights as of March can bid for subsidy. This means that AirAsia India and Vistara cannot bid for routes.

 

Joint secretary (civil aviation ministry) Usha Padhee said bidding under the scheme was expected by September-end. While the launch deadline is yet to be fixed, it will not be later than six months, she added.

The scheme document would be updated when more states join the scheme, she said.

An airline can seek subsidy for up to 60 per cent of deployed seats. Selected carriers will enjoy exclusivity in subsidy support on a particular route for three years from the date of launch.

IndiGo has shown interest in the scheme, while Jet Airways and Vistara say they are studying the proposal. SpiceJet and AirAsia declined to comment, while Air India and GoAir did not respond. 

UDAN ROUTE FROM GUWAHATI AND SUBSIDY PER SEAT

Dhaka             Rs 2,370

Kathmandu Rs 2,710

Kuala Lumpur Rs 7,350

Yangon            Rs 4,770

Singapore Rs 7,880

Bangkok          Rs 4,400 

Route from Vijayawada*

Singapore and Dubai 

*Ministry of Civil Aviation has not disclosed subsidy per seat proposed by the Andhra Pradesh government
 

Note : Assam govt has committed ~1 billion annually for three years in subsidy support

"We believe in creating markets and welcome partnerships with airports and governments to create more air connectivity for Indian fliers. IndiGo is a leader in Vijayawada and Guwahati and continues to look for new and better ways to serve these regions. IndiGo will look at all markets as potential opportunities," the airline said.

At present, DrukAir of Bhutan is the only airline offering international flights to Guwahati.  DrukAir operates twice a week from Paro to Bangkok via Guwahati. 

In 2017, international traffic to and from Guwahati was around 90,000. This is equivalent to around 250 passengers daily. International traffic data from Vijayawada was not immediately available.

Foreign carriers such as FlyDubai and Novoair of Bangladesh had expressed desire to launch foreign services from Guwahati. An aviation expert questioned the reason behind excluding foreign airlines "If the idea is to promote connectivity, why not encourage foreign airlines to participate in the scheme. Foreign airlines could ask for a level playing field and complain that Indian carriers are receiving an unfair advantage," he added. Sources point out that the Odisha government gives viability gap funding to AirAsia Malaysia flights and such subsidies are not unusual. Padhee said international Udan will work within the provisions of bilateral agreements. "We believe there will be a positive response. We expect fares to be reasonable and there will be a demand for the routes. The government has committed Rs 1 billion annually for three years and releasing funds in this fiscal year will not be an issue," said Ashutosh Agnihotri, secretary (transport), Assam government.