New Delhi : The first flight under the government’s regional connectivity scheme or Ude Desh ka Aam Naagrik—UDAN—is already witnessing an existential crisis, barely a week after launch.
The Shimla-Delhi route, launched by Prime Minister Narendra Modi on April 27 amid fanfare, is turning out to be a financial burden for Alliance Air, the operator of the route. Unable to meet even the cost of operating the aircraft for the route, the airline has sought financial support from Himachal Pradesh government. There has, however, been no response to the proposal as yet.
“We have requested for about Rs 1, 40,000 per day of flying from Himachal Pradesh. We are awaiting their reply and will send them a reminder soon. If they do not respond, then it is a call between the aviation ministry and us whether to continue flying or not,” a senior official from the airline told Cogencis.
“At the moment, all subsidised tickets on the route are booked till June 30, but during monsoon there will be hardly any flyers other than locals or people who are required to go… tourist would not come and this will induce a lot of stress on our financials,” the official said.
Under the scheme, fare for half the seats for a one-hour journey of around 500 km on a fixed wing aircraft or a 30-minute journey on a helicopter has been capped at Rs 2,500, with proportionate pricing for routes of different distances and flight durations.
The airline operator under the scheme will have to provide half the seats of the flight—minimum of nine and maximum of 40—in a fixed-wing aircraft at a price lower than the specified cap for that sector. This means Alliance Air will have to sell the entire 15 seats at the subsidised fare of Rs 2,036 as half of the seats on an UDAN flight are capped.
As for the Delhi-Shimla route, the airline will have to sell 24 seats at the subsidised rates and the remaining 11 seats can be market-determined. “This is a loss-making route, we are not even talking about break-even as of now. We cannot earn anything more than Rs 2,000 on the 15 seats from Shimla and as far as Delhi-Shimla is concerned, until I sell the 11 non-subsidised at 12,000 rupees each…” the official said.
The airline currently sells the non-subsidised seats on Delhi-Shimla flight at fares ranging between Rs 5,800 and Rs 19,000. But, according to the airline, there are hardly any takers.
Under the 1st phase of the scheme, airlines will get subsidy from regional connectivity fund. The centre will contribute 80 per cent to the fund, the remaining 20 per cent will be given by participating states.