Centre moots overseas UDAN

• State government will be able to encourage tourism on preferred international air routes by offering subsidy to domestic airlines for a period of three years. The Ministry of Civil Aviation has prepared a draft scheme document for ‘UDAN International’.

• The scheme is designed for State governments that are keen to promote air connectivity on international routes identified by them and for which they are willing to provide subsidy to airlines.

• As per the draft, a State will identify international routes for which the Airports Authority of India will determine amount per seat and invite bids from domestic carriers. This will be followed by airlines submitting their proposals, which will include the routes they wish to connect as well as the subsidy needed by them.

• The airlines will bid on the percentage of flight capacity for which they require financial assistance, provided that the figure doesn’t exceed 60% of the flight capacity. The entity that quotes the lowest amount will be awarded subsidy for a particularly route.

• However, the government will grant financial aid only for the actual number of passenger seats that are unsold, even if the airline had sought subsidy for a higher percentage of seating capacity at the time of bidding.

• An airline that it awarded a particular route will have exclusive rights to a subsidy on that route for a period of three years. The key difference this scheme and the regional connectivity scheme for domestic routes is that there is no capping of fares.

• The Centre has allowed airlines to enter into a code-sharing arrangement with international and domestic airlines for UDAN international. The AAI may also offer additional discounts at its own discretion such as landing, parking and housing charges at airports owned by it.

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