Round 2 Of UDAN: Government May Ease Entry Barriers To Get More Carriers On Board
Prime Minister Narendra Modi while flagging off first UDAN flight under RCS in Shimla, Himachal Pradesh. (Source: Narendra Modi’s Twitter Handle)

Round 2 Of UDAN: Government May Ease Entry Barriers To Get More Carriers On Board

The civil aviation ministry plans to invite bids from airlines under phase two of the regional connectivity scheme, UDAN, during the first week of July, Aviation Secretary RN Chaubey told BloombergQuint on Tuesday. Chaubey added that he expected participation from a larger basket of carriers, including market leader IndiGo.

Chaubey based his optimism on IndiGo’s announcement that it will procure 50 ATR 72-600 turboprop aircraft, typically used for regional operations to smaller airports. The budget carrier is setting up a separate division to handle regional operations.

Among the top five airlines by market share, only SpiceJet Ltd., and national carrier Air India's subsidiary Alliance Air had participated in round one of the scheme.

The government is working towards putting 50 new airports on the map by the end of 2018, Chaubey said, adding that the investment in each of them wasn't expected to be large. The government started (or in some cases re-started) operations from 33 airports under the first phase of UDAN, with the first flight taking of from Himachal Pradesh's capital, Shimla.

Chaubey said ahead of the next round of bidding, the government is working on amendments to the UDAN scheme to reduce entry barriers and increase competition. The draft of these amendments will be released, inviting comments from the public, in the next two weeks. Some of the changes were likely to benefit smaller carriers, he said.

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