1. Regional Connectivity Scheme Ministry of Civil Aviation
Ude Desh ka Aam Naagrik (UDAN)
2nd Round of Bidding
Ministry of Civil Aviation
Government of India
May 24, 2017

2. Glimpse of 1st Bidding Round

3. Timelines of the 1st Bidding Round
S.N.
Activity / Milestone
Timeline 1
Release of the draft Regional Connectivity Scheme / UDAN
1st July 2016 2
National Level Stakeholder’s Consultations
29th July 2016 3
Launch of Regional Connectivity Scheme / UDAN
21st October 2016 4
Start of 1st round of bidding 5
Pre-bid Meeting with prospective bidders / stakeholders
11th November 2016 6
Date for releasing of Corrigendum / Final Bidding Documents to start the e-bidding process
5th December 2016 7
Last date of declaration of stage length and flight duration
2nd January 2017 8
Last date and time for submission of bids (Initial Proposals)
16th January 2017 9
Invitation for submission of Counter Proposals (Bids)
18th January 2017 10
Last date and time for submission of Counter Proposals
1st February 2017 11
Date and time of opening of Technical bids (initial & counter proposals);
3rd February 2017 12
Date and time of opening of Financial bids (initial & counter proposals) – Phase 1
23rd February 2017 &
8th March 2017 13
Issuance of Letter of Award (LOA)
30th March 2017 3

4. Successful Completion of the 1st Bidding Round
45 number of proposals were received from more than 10 distinct applicants
27 number of proposals were awarded
Awarded proposals involve
31 Unserved Airports, 12 Underserved Airports and 27 served airports
128 unserved / unconnected routes
5 airline operators 4

5. Scheme Aspects for Stakeholder Inputs

6. Referred Scheme Section / Clause Considerations for the Stakeholders
Specific Aspects for Stakeholder Inputs 1/8
S.N.
Referred Scheme Section / Clause
Considerations for the Stakeholders
Scheme Objectives and Guiding Principles
1.4 Definitions
Clause a)
One of the existing requirements for a route to be classified as an RCS Route is
a) At least one of the origin or destination points is either (a) an RCS Airport satisfying the definition of Underserved or Unserved Airport on the first day of each proposal window in which an application is made pursuant to this Scheme; or (b) an RCS Helipad
Presently, the Scheme only allows a route to be classified as RCS Route if at least one of the origin and/or destination airport is Underserved or Unserved.
In order to further encourage intra-regional connectivity, one of the possible options could be to consider a route between two airports both of which are neither Underserved nor Unserved as RCS Route, subject to the satisfaction of other conditions of classifying a route as an RCS Route as provided in the Scheme. Also, given that both the airports shall not be Underserved or Unserved, such an RCS Route may only be permitted concessions (without VGF and exclusivity), as provided by central / state government / airport operators, applicable under the Scheme for a year without any airfare cap.
The stakeholders are requested to share their views on the above along with other suggestions, if any. 6

7. Referred Scheme Section / Clause Considerations for the Stakeholders
Specific Aspects for Stakeholder Inputs 2/8
S.N.
Referred Scheme Section / Clause
Considerations for the Stakeholders
2. 
Scheme Objectives and Guiding Principles
1.4 Definitions
Clause c)
One of the existing requirements for a route to be classified as an RCS Route is
c) the stage length (in km as per the flight path declared by AAI) between the origin and destination airports is not less than 150 Kms for operations through fixed wing aircraft
Presently, the Scheme does not consider a route with stage length of less than 150 Kms for operations through fixed wing aircraft as RCS Route.
Suggestions / comments are invited from the Stakeholders on relevant aspects related to this provision such as:
Whether the routes below 150 km, for operations through fixed wing aircraft, be considered as RCS Route.
If the answer to (a) above is yes, should such operations be permitted only for specific areas/regions within the country.
Given lack of availability of data for cost of operations for such small stage lengths, should the VGF be linearly proportioned on the basis of stage length by considering the VGF Cap for Km slab as the reference value.
Should the Airfare Cap as applicable for Km be applied on all stage lengths less than equal to 150 Kms., etc. 7

8. Referred Scheme Section / Clause Considerations for the Stakeholders
Specific Aspects for Stakeholder Inputs 3/8
S.N.
Referred Scheme Section / Clause
Considerations for the Stakeholders
3. 
Features of the Scheme
2.8 Exclusivity of operations
Clause 2.8.2
The Selected Airline Operator shall be granted an exclusivity for operating air transport services / flights for a period of three (3) years from the commencement of operations on an RCS Route under the Scheme.
The Scheme currently provides exclusivity to Selected Airline Operators for a period of three (3) years. The exclusivity under RCS can be considered to have two components: i) Exclusivity of operations on RCS Routes; and ii) Exclusivity of VGF support and other concessions.
The Ministry has received varied feedback on the period of exclusivity from various stakeholders and therefore, the stakeholders are requested to share their views on following aspects regarding the period of exclusivity of operations:
Whether the period of exclusivity be reduced from the existing 3 years and if so, to what period. 8

9. Referred Scheme Section / Clause Considerations for the Stakeholders
Specific Aspects for Stakeholder Inputs 4/8
S.N.
Referred Scheme Section / Clause
Considerations for the Stakeholders
3. 
Features of the Scheme
2.8 Exclusivity of operations
Clause 2.8.2
The Selected Airline Operator shall be granted an exclusivity for operating air transport services / flights for a period of three (3) years from the commencement of operations on an RCS Route under the Scheme.
b. Should there be different exclusivity period for operations and for concessions under the Scheme. For instance, the exclusivity for operations could be provided for 1 year and the VGF and other concessions could be exclusively available for 3 years to the Selected Airline Operator. This means that if any other airline intends to start operations on an RCS Route after a period of 1 year without any VGF or other concessions, it may be permitted to do the same.
c. Should there be different exclusivity periods for different regions. For instance, operations in hilly regions or islands may require higher exclusivity period as compared to operations in plain regions. Therefore, one option could be to keep the exclusivity period as 3 years for operations in the hilly regions and islands and reduce it to 1 year in plains.
The stakeholders are requested to share their views on the above along with justifications / rationale as well as share other suggestions, if any. 9

10. Referred Scheme Section / Clause Considerations for the Stakeholders
Specific Aspects for Stakeholder Inputs 5/8
S.N.
Referred Scheme Section / Clause
Considerations for the Stakeholders
4. 
Operating Mechanism of the Scheme
3.3 Minimum Performance Specifications for an RCS Flight
Clause
Clause 3.3.2
For fixed wing aircraft, a Selected Airline Operator shall be required to provide fifty percent (50%) of RCS Flight Capacity as RCS Seats, subject to a minimum and maximum of 9 RCS Seats and 40 RCS Seats respectively per RCS Flight.
The number of RCS Flights to be operated in a week with VGF shall be minimum of three (3) and a maximum of seven (7) departures per week from the RCS Airport.
Presently, the Scheme specifies the minimum and maximum number of RCS Flights permitted in a week as part of Minimum Performance Specifications (MPS).
The stakeholders are requested to share their views on:
What should be the minimum number of RCS Seats mandated in a flight (For instance, currently it is 9 RCS Seats). If less than 9, then how will the requirement for providing both RCS and Non-RCS Seats in a flight be met. Should that continue to be a 50% minimum requirement?
Should a requirement of minimum and maximum number of RCS Flights in a week be translated to the number of minimum and maximum number of RCS Seats in a week? If yes, please explain with adequate justifications? 10

11. Referred Scheme Section / Clause Considerations for the Stakeholders
Specific Aspects for Stakeholder Inputs 6/8
S.N.
Referred Scheme Section / Clause
Considerations for the Stakeholders
4. 
Operating Mechanism of the Scheme
3.3 Minimum Performance Specifications for an RCS Flight
Clause
Clause 3.3.2
For fixed wing aircraft, a Selected Airline Operator shall be required to provide fifty percent (50%) of RCS Flight Capacity as RCS Seats, subject to a minimum and maximum of 9 RCS Seats and 40 RCS Seats respectively per RCS Flight.
The number of RCS Flights to be operated in a week with VGF shall be minimum of three (3) and a maximum of seven (7) departures per week from the RCS Airport.
Should translating the minimum requirements to RCS Seats be permitted only in specific regions like hilly regions and islands where the daily/weekly frequency required may be more
Should seasonal flights be permitted under RCS? If so, for which category of places / cities, respective periods; and comments on the sustainability and integrity of routes. Also, if yes, will the airline operators be willing to agree for an Airfare Cap for busy seasons when the ability to make more profits through market determined fares could be higher. Also, how will the integrity of schedule be maintained and certainty of flight availability be provided to the passengers.
Any other suggestion, justification for providing better operational flexibility to the Selected Airline Operators. 11

12. Referred Scheme Section / Clause Considerations for the Stakeholders
Specific Aspects for Stakeholder Inputs 7/8
S.N.
Referred Scheme Section / Clause
Considerations for the Stakeholders
5. 
Operating Mechanism of the Scheme
3.5 Network Proposal
Clause 3.5.2
A Network Proposal shall have more than one (1) route and can be combination of RCS Routes and Non-RCS Routes.
The Applicants shall be required to ensure that all routes in a Network Proposal, including the Non-RCS Routes, are connected using the same aircraft (type) through the same frequency (number of flights) per week.
The stakeholders are requested to share their views on
Whether Non-RCS Routes should continue to be included as part of Network Proposals under the Scheme.
If the answer to (a) above is yes, should the compliance requirements for frequency, maintaining the integrity of the network etc. be limited to RCS Routes in a network.
In case of above, how will the passengers get a certainty about schedule of the network, including for Non-RCS Routes. 12

13. Referred Scheme Section / Clause Considerations for the Stakeholders
Specific Aspects for Stakeholder Inputs 8/8
S.N.
Referred Scheme Section / Clause
Considerations for the Stakeholders
6. 
Annexures
Annexure – 3: VGF Caps under RCS
VGF Caps for operations through Helicopters
There was limited interest from helicopter operators as part of the First Round of Bidding process. Please share views / suggestions on how can the operations through helicopters be incentivized under the Scheme. For instance:
Is the level of normative VGF Caps as currently provided for helicopter operations for various stage sufficient for operations?
Additionally, should there be different VGF Caps for different helicopter categories (for instance, i) Light; ii) Medium and Heavy) as in the case of fixed wing aircraft.
Any other suggestions. 13

14. Way Forward

15. Specific Aspects for Stakeholder Inputs 8/8
S.N.
Activity / Milestone
Timeline 1
Invitation of Stakeholder Inputs
24th May 2017 2
Stakeholder Consultation Workshop
7th June 2017 3
Last date for the submission of inputs
9th June 2017 4
Decisions by MoCA / AAI on the inputs received / Finalization of Scheme Document
By 30th June 2017 5
States/ UT ‘ROUTES’ event
7th July 2017 15

16. Thank you