Govt explores options to fund Udan scheme as airlines face low demand

Domestic flights, including those under the regional connectivity scheme, resumed on May 25 after a suspension of two months

The civil aviation ministry is searching for solutions to fund the regional connectivity scheme (RCS) even as only 136 of the 268 Udan routes are currently operational because of low demand.

While there is no concrete proposal as of now, possible options include raising funds through securitisation of ticket levy and reduction in number of subsidised seats on routes with higher demand, a ministry official said.

The three-year-old scheme, known as Udan, is funded through Rs 50 levy on flight tickets on major routes. The levy contributes to 80 per cent of the viability gap fund (VGF) provided to the airlines, and