Airlines told to rejig UDAN flights to cut viability gap funding by 40%
February 08, 2021
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The Ministry of Civil Aviation has asked all airlines to either reduce the frequency of flights or the number of seats per flight such that their overall Viability Gap Funding (VGF) requirement on routes over 500 km, awarded under the UDAN scheme, is lowered by 40 per cent. According to industry sources, the Ministry has sent an email to all airlines operating Regional Connectivity Scheme (RCS) routes awarded under UDAN 1, 2, 3, 3.1 and 4, since its inception in 2017.
RCS, or more popularly known as UDAN (Ude Desh ka Aam Naagrik), is a government initiative to connect the country s under- and un-served airports. The government provides Viability Gap Funding for a set time period to airlines operating on these routes.