UDAN 5.0 Scheme

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About UDAN 5.0 scheme:

This round of the scheme focuses on Category-2 (20-80 seats) and Category-3 (>80 seats).
The earlier stage length cap of 600 km is waived off and there is no restriction on the distance between the origin and destination of the flight.
Viability gap funding (VGF) to be provided will be capped at 600 km stage length for both Priority and Non-Priority areas which was earlier capped at 500 km.
Airlines would be required to commence operations within 4 months of the award of the route. Earlier this deadline was 6 months.

Key facts about UDAN (UdeDeshkaAamNaagrik)

It is a regional airport development and “Regional Connectivity Scheme” (RCS) of the Union Government of India.
The scheme envisages providing connectivity to un-served and under-served airports of the country through the revival of existing airstrips and airports.
Nodal Ministry: Ministry of Civil Aviation

What are the Components of UDAN?

Airports: The first component is to develop new airports and enhance the existing regional airports to increase the number of operational airports for scheduled civilian flights.
Flight routes: The second component is to add several hundred financially viable, capped airfare, and new regional flight routes to connect more than 100 under-served and un-served airports in smaller towns by using “Viability Gap Funding” (VGF) where needed.

Q1) What is Viability Gap Funding?

Viability Gap Funding (VGF) is a financial instrument used by the Indian government to attract private sector investment in public-private partnership (PPP) infrastructure projects, especially in sectors such as power, transport, and water.

Source: Ministry of Civil Aviation Launches UDAN 5.0