RCS

CAG’s Compliance Audit Report No.22 of 2023 on “Regional Connectivity Scheme-UDAN (Ude Desh Ka Aam Naagrik)” was presented in the Parliament on 10 Aug 2023. The report being critical of achievements in some sections has embedded positives that must be acknowledged along with ‘intent’ of this scheme. Presented herein the first part is minimal background and framework of the scheme, followed by selected observations of CAG’s report seen relevant to subject title. Stated observations should assist narrowing down to the core subject of Indian helicopter sector. Ibid layout should facilitate reader’s perspective about what went right and what could have been dealt differently to promote helicopter operations under UDAN. Challenges, recommendations and justifications are then put forth to help the larger cause of growth for Indian helicopter industry in immediate future. Background Development of aviation sector has a multiplier effect on the economy. As per an ICAO study – “Economic benefits of civil aviation: ripples of prosperity”, the output and employment multipliers of aviation are 3.25 and 6.10 respectively. This implies that every INR 100 spent on air transport contributes to INR 325 worth of benefits; and every 100 direct jobs generated in air transport sector result in 610 jobs generated in the rest of the economy. In fact, the study attributes over 4.5% of the global Gross Domestic Product (GDP) to civil air transport. National Civil Aviation Policy (NCAP), 2016 envisaged Regional Connectivity Scheme (RCS) to enhance regional air connectivity through fiscal support and infrastructure development. Regional Connectivity Scheme (RCS)-UDAN was thus introduced by Ministry of Civil Aviation (MoCA) to promote regional air connectivity through affordability for enlarging aviation footprint in India. The central idea was to encourage airlines on regional and remote routes via enabling policies and incentives. Proposals to provide connectivity to underserved/ unserved airports were called for from airlines in October 2016 for the first time. First UDAN flight was launched by the Prime Minister on 27th April, 2017 between Shimla to Delhi. Different versions of the scheme since then have been released periodically with the latest, eleventh (11th) version disseminated in July 2023. (RCS Udan version 5.2). Under UDAN-2, focus was extended to hilly areas, North Eastern and island regions for connectivity. Remote areas impracticalto be reached by fixed-wing aircrafts were considered for helicopter operations. In April 2023, under UDAN 5.0,MoCA released a list of heliports from where operations under the scheme were intended. Framework of the Scheme The scheme operates at three levels: • Reduction of operational costs on regional routes. • Providing a market-discovered subsidy for some seats on RCS routes. • Providing a three-year exclusivity period to airline operators for initial business viability. Since airline operators were deemed best to determine routes/networks for integration with existing operations, they were to propose regional routes and seek VGF*, if any. A list of unserved and underserved airports was made available to prospective bidders. Based on a competitive bidding process, operators were awarded limited duration exclusive right to operate on RCS routes. Post this three-year exclusive period, when a route was expected to become self-sustainable/market linked, the VGF support was planned to be withdrawn. *VGF. (Viability Gap Funding) ‘Viability Gap Funding or VGF’ shall mean the financial support provided to the Selected Airline Operator for operation of RCS Flight(s) from the Regional Connectivity Fund pursuant to this Scheme. (RCS, GoI, MoCA, version 5.2, July 2023) Selected airline operator had to provide 50% of flight capacity as RCS Seats (minimum of 9 and a maximum of 40) for operations through fixed wing aircraft, but all passenger seats up to 13 as RCS Seats for operations through helicopters. Airfares on seats for VGF consideration was based on costs from actual industry data on various types of aircraft operating on different route lengths.Remaining 50% of flight capacity (non-RCS seats) was permitted to be sold by airlines at market-determined prices. This provided an opportunity to airlines for experimenting with airfares and market development. In addition to VGF, concessions from Central govt, state govt and airport operators were finalised. Further, a budgetary support of ₹ 4,500 crore was approved (March 2017) by the Cabinet Committee on Economic Affairs. Airports Authority of India (AAI) is the designated nodal agency for implementation of scheme. Development of Helipads/Heliports and water aerodromes was included as per the revised Cabinet Committee on Economic Affairs approval (March 2019) and M/s Pawan Hans Limited was appointed as Nodal Agency by MoCA for providing consultancy for development of all heliports covered under RCS. Extracted Findings of CAG’s Compliance Audit Report No.22 of 2023 (Note: – Up to March 2021, three rounds of bidding for UDAN 1, 2 and 3 were completed and the same were covered under audit) 1. The Scheme is a good initiative for increasing air connectivity as a faster, safer and affordable option of travel for common people, with eco-multiplier effect. ……. However, the implementation of RCS needs to be improved in the light of audit observations made in the Report, to fully leverage the benefits envisaged.[Executive summary of the report]. 2. Upto UDAN-3, 52 per cent (403 out of 774 routes) of the awarded routes could not commence operations and from the 371 commenced routes, only 112 routes (30 per cent) completed the full concession period of three years. Further, out of these 112 routes, only 54 routes (i.e., 7 per cent of the awarded routes) connecting 17 RCS Airports could sustain the operations beyond the concession period of three years, as of March 2023. [Refers to Para 3.1.1 of Report] 3. There was no exercise carried out by MoCA/ AAI to identify eligible heliports on the basis of its potential. The majority of heliports identified for operations from the proposals submitted by helicopter operators either remained un-utilised/under-utilised, or RCS operations from such heliports were discontinued subsequently. [Refers to Para 3.1.3 of report] 4. There were delays on the part of M/s RITES and Pawan Hans Limited besides other reasons as stated by MoCA and abnormally high consultancy charges were charged by the

Paris,21.06.2023: Embraer has signed a long-term Pool Program services agreement with Star Air to support the airline’s growing E175 fleet. Star Air has leased four E175s in 2022 and two of them have started operations since May 2023. The contract provides access to the Pool Program, which includes component exchanges and repair services for a wide range of repairable components for the airline’s E175s. The E175 Pool Program agreement is in addition to the ongoing pool program for Star Air’s fleet of five ERJ145s. Star Air’s 12-month average schedule reliability stands at 99.67%, one of the highest among ERJ145 operators. “We thank Star Air for their continued trust in us as they expand the Pool Program coverage across their growing fleet. We stand hand in hand with them as they further connect several regions of India,” says Johann Bordais, President & CEO, Embraer Services & Support. “As Star Air spreads its wings across the country, the Pool Program will enable us to leverage on the reliability and performance of the E175s and the expertise of Embraer’s support and services team,” says Capt. Simran Singh Tiwana, CEO of Star Air. Star Air’s operations will benefit from the AHEAD (Aircraft Health Analysis and Diagnosis) Premium which comprises early detection capabilities by monitoring systems trends and patterns, to increase aircraft availability, minimizing unexpected maintenance downtime, reducing technical interruptions, and avoiding flight cancellations. This is aimed at enhancing the dispatchability of Star Air’s E175 fleet. Star Air is an all-Embraer jet operator, and flies to multiple destinations across India, both scheduled and non-scheduled (charter) flight services. Star Air is the first airline to offer business class seats on regional routes. The Embraer Pool Program is designed to allow airlines to minimize their upfront investment in high-value repairable inventories and resources, while taking advantage of Embraer’s technical expertise along with its vast component repair service provider network. The results are significant savings on repair and inventory carrying costs, reduction in required warehousing space, and the virtual elimination of the need for resources required for repair management, while ultimately providing guaranteed performance levels. Currently, the Pool Program supports more than 50 airlines worldwide.

Paris Air Show, 19.06.2023: At the Paris International Air Show, De Havilland Aircraft of Canada Limited (De Havilland Canada) and flybig signed a Purchase Agreement to acquire two Twin Otter Series 400 aircraft and a Letter of Interest to acquire 10 new DHC-6 Twin Otter Classic 300-G aircraft. “We are proud to welcome flybig as our first Twin Otter Series 400 operator in India, and for them to explore a potential future purchase of 10 new DHC-6 Twin Otter Classic 300-G aircraft,” said Brian Chafe, Chief Executive Officer, De Havilland Canada. “Helping connect remote communities is at the heart of what these aircraft are all about.” “Twin Otters are the perfect aircraft for India’s UDAN regional airport development program, part of the Regional Connectivity Scheme (RCS) for improving underserviced air routes and connecting Tier 2 and Tier 3 communities,” said Sanjay Mandavia, Chairman and Managing Director of flybig. “Our two Series 400 aircraft will help realize our Honorable Prime Minister Narendra Modi’s vision to connect India’s hinterland, and we are looking forward to working with De Havilland Canada on potential future acquisitions of the new Classic 300-G.” Joining the current DHC-6 Twin Otter Series 400, the new DHC-6 Twin Otter Classic 300-G is the fifth generation of the Twin Otter aircraft. All DHC-6 Twin Otters carry passengers, transport VIPs, move cargo, conduct medivac operations, and perform special missions in the world’s most unforgiving environments. When mounted on amphibious floats, these aircraft move seamlessly between paved surfaces and water-landing areas.

New Delhi, 24th April 2023: Following the four successful rounds of bidding, the Ministry of Civil Aviation has launched the 5th round of the Regional Connectivity Scheme (RCS) to further enhance the connectivity to remote and regional areas of the country and achieve last mile connectivity. Key Features of UDAN 5.0 are as follows: *This round of UDAN 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. *No predetermined routes would be offered. Only Network and Individual Route Proposal proposed by airlines will be considered. *The airlines would be required to submit an action/business plan after 2 months from the issuance of LoA wherein they submit their aircraft acquisition plan/availability of aircraft, crew, slots, etc. at the time of the Technical Proposal. *The same route will not be awarded to a single airline more than once, whether in different networks or in the same network. *Exclusivity will be withdrawn if the average quarterly PLF is higher than 75% for four continuous quarters, to prevent exploitation of the monopoly on a route. *25% of the Performance Guarantee to be encashed for each month of delay up to 4 months, to further incentivize quick operationalization. *Airlines would be required to commence operations within 4 months of the award of the route. Earlier this deadline was 6 months. *A list of airports that are ready for operation or would soon be ready for operations has been included in the scheme to facilitate quicker operationalization of routes under the Scheme. * Novation process for routes from one operator to another is simplified and incentivized. Commenting on the launch of UDAN 5.0, the Minister of Civil Aviation & Steel, Shri Jyotiraditya Scindia said, “UDAN has proved to be a lifeblood of many regions which are now well connected with places across the country. This new & stronger version of the scheme will raise the momentum, connecting new routes, and bring us closer to the target of operationalizing 1000 routes & 50 additional airports, heliports, and water aerodromes in the near future. अब उड़ेगा देश का हर आम नागरिक!” UDAN Scheme has benefitted a diverse set of stakeholders. Passengers have got the benefits of air connectivity, airlines have received concessions for operating regional routes, unserved regions have received the direct and indirect benefits of air connectivity for their economic development. It is another step towards the prime minister’s vision of the common man traveling by air at affordable and subsidized airfares.

In the medical term “Golden Hour” is a crucial time as it decides the life of any critical patient. To ensure timely transfer of any such patient the state nodal agency for aviation’ GUJSAIL’ started medical Emergency Services through its air ambulance in Gujarat in March 2022 which has proved to be life savior for many citizens at a very affordable cost. The Government of Gujarat has always been a beacon in leading the way for path breaking concepts in India and showing the way for others to follow. Such leadership also comes with a strong sense of responsibility, ownership and accountability. The state operated air ambulance is the first and only one of its kind in India in service as of today. Under the leadership of the 17th Chief Minister of the state of Gujarat Shri Bhupendra Bhai Patel, this project was inaugurated in March 2022 as a service to the residents of Gujarat as a subsidised service to save lives and bring state of the art medical services to those who otherwise could not have afforded such treatment. The advancement of medical care and technology, especially during the COVID-19 pandemic, has now brought high-technology driven medical care in centers of excellence and super specialty which are largely in metros, which meant that patients in smaller towns and cities had to either endure long and uncomfortable journeys to such specialised care centers which also included the danger of interim medical care during transportation. The Civil Aviation Department, Government of Gujarat launched services of Air Ambulance for the residents of Gujarat, in March 2022, by using the state owned Beechcraft Super King Air B200 aircraft for patients who would need expedited transfer across the state for medical care. This was based on the ‘Golden Hour’ philosophy that if treatment can be provided in the first 24 hours after a traumatic incident or injury the chances of survival for a patient increase significantly. This involved retro-fitting the 23 year old aircraft with full ICU capabilities on-board in addition to bringing an ICU/ER experienced Medical Services Team to mobilise patients with severe distress to be moved. The Civil Aviation Department launched services when the first patient was shifted from Rajkot to Chennai, with Paraquat poisoning. Unfortunately, the patient had mistakenly consumed the pesticide for which there is no known antidote and had to be moved to MGM Hospital in Chennai for higher-care and course of treatment. Similarly since then the air ambulance has provided relief and succor, on several occasions, to those who need it. One such incident was on the day of Diwali where a patient had to be moved urgently to Chennai, keeping aside personal priorities, the pilots and the medical crews were immediately deployed and the flight was operated to save a life. Such dedication and answer to the call of duty to go above and beyond from both the pilots and the medical crew demonstrated the seriousness and high professional standards that are in place for such critical requirements. Another critical role the air ambulance plays today is in the area of organ transplant. Organs such as heart and lung are time bound and have to be transferred within a defined time in order for the sacrifice made by the donor to be successful. One such example was when the team operated for a patient who was admitted for a heart transplant at CIMS Hospital in Ahmedabad and the donor was in Surat and retrieved the organ and transferred to the destination and the transplant was completed in less than 3 hours from the retrieval well within the limit for such an operation. In the past 9-months, the Civil Aviation Department operated Air Ambulance has done over 6 organ transplants providing critical transfers in a time bound manner. As per information available to us, this is possibly the highest number of organ transfers in the country done by an Air Ambulance again showcasing the excellence and high standards of professionalism in the Department. About GUJSAIL Gujarat State Aviation Infrastructure Company Limited (GUJSAIL) is the nodal agency for development of aviation and related infrastructure in the state of Gujarat. GUJSAIL is a public sector company set up by the Government of Gujarat (GoG) with a view to building infrastructure and providing trained human resources for the fast growing civil aviation sector in Gujarat. The Director-Civil Aviation & Accountable Manager of GUJSAIL is Sqn. Ldr. (Capt.) Ajay Chauhan (ADC), a decorated helicopter pilot who has served in the Indian Air Force flying highly technical and complex missions of national importance.

3rd June 2022; Bangalore: Star Air,the aviation arm of Sanjay Ghodawat Group has announced start of flight operation between Bhuj and Ahmedabad as its 17th destination under the RCS UDAN. The airlines will operate Embraer 145 jets for direct and connecting flights between Bhuj, Ahmedabad, and Belagavi as part of its summer 2022 schedule, w.e.f 03rd June 2022. The launch of the new route heralds the beginning of a new era for Gujarat, as it advocates for better connectivity within the state and the rest of the country. Commenting on the milestone achievement, Shrenik Ghodawat, MD – Star Air, said, “We are pleased to announce Bhuj as our 17th destination. The launch of Bhuj would provide easy access to tourist attractions like the famous Rann Utsav, the Aina Mahal, and religious destinations including the Swaminarayan temple. Enhanced connectivity in Bhuj, will boost tourism, trade, and commerce in Gujarat. We hope to continue connecting many other regional cities to the travel map of India in the times to come.” Star Air will operate five times a week between Bhuj, Ahmedabad, and Belagavi on Monday, Wednesday, Thursday, Friday, and Saturday. The schedule of these flights has been planned to offer passengers the most reasonable prices under the popular UDAN scheme. This historic flight service between Ahemdabad and Bhuj covers 297kms of the distance between these cities in just 60 minutes instead of 6+ hours via other modes of transport. Currently, Star Air operates scheduled flight services to 17 Indian destinations that include Ahmedabad, Ajmer (Kishangarh), Bengaluru, Belagavi, Delhi (Hindon), Hubballi, Indore, Jodhpur, Kalaburagi, Mumbai, Nashik, Surat, Tirupati, Jamnagar, Hyderabad, Nagpur, and Bhuj.

New Delhi, 30th March 2022: The Minister of Civil Aviation Jyotiraditya Scindia and Minister of State for Civil Aviation (Gen)Dr V.K Singh (Retd) inaugurated the direct flight between Bhopal and Chennai by Indigo yesterday. The airline will be deploying its A320, a 150-seater twin turbofan engine passenger aircraft and is primarily used on Domestic routes. With this new flight launch, total number of departures from Bhopal on average will be10 daily flights with 44 daily departure flights from the state of Madhya Pradesh. Speaking on the occasion, Jyotiraditya Scindia said, “It is a fortunate day for me that heart of India (Bhopal)is being connected to the centre of development, business, progress as well as religious emotions (Chennai). From July 2021, Bhopal which was previously connected with 5 cities, is now connected 10 cities – Bengaluru, Mumbai, Delhi, Hyderabad, Pune, Prayagraj, Agra, Ahmedabad, Raipur and Chennai. There is also an increase in weekly flights from Bhopal from 94 to 216 flights, an increase of 150%.”

New Delhi, 22 November 2021: Prime Minister Shri Narendra Modi ji has democratised the Indian Air Space, said Union Minister for Civil Aviation Shri Jyotiraditya M Scindia during the Udan Utsav celebrations at Veer Surendra Sai Airport in Jharsuguda, Odisha on Monday.He said that the development of Jharsuguda airport is a perfect example of cooperative federalism and a great success story of Udan scheme. It is an example of how the center and state’s joint work could do wonders, the minister added. Shri Scindia said that while all the airports around the country were witnessing a steep decline in the number of flyers during the Covid pandemic time, Jharsuguda airport was among those few, which witnessed something different. “The number of flyers across the country during the pandemic saw a decline of 62% while Jharsuguda during the same time, witnessed a mere drop of 5%. This shows the potential of the district and the region at large,” he said. The minister while speaking about the success of Udan scheme over the years, has said that the country had only 72 airports since independence while after 2014, under the able leadership of Prime Minister Shri Narendra Modi ji, the number of airports now stood at 136. “We have set a target to increase this number by 220 in the next five years which will include helipads and water aerodromes. The number of airlines, routes have also increased significantly over the years due to the advent of Udan scheme,” Shri Scindia added. Speaking of the glory of the rich land of Jharsuguda and terming it as the Power House of Odisha and India at large, Shri Scindia said that the place, which is a house to many brave freedom fighters, natural and cultural resources, is aptly chosen to celebrate the Udan Utsav. Shri Scindia also announced the Special Joy Ride, an air ride, being planned for elderly and children during the Udan Utsav celebrations which will also commemorate the ongoing Azadi Ka Amrit Mahotsav. Talking about airport expansions in Odisha, the minister said the Greenfield Airport at Puri and the Phase II expansion of Veer Surendra Sai Airport in Jharsuguda will commence following responses from the state government. During the event, the minister interacted with the airport directors/officials and beneficiary flyers of Udan who were connected from different parts of the country through Video conferencing. The minister also unveiled a “Socio-economic Impact Study Report of UDAN Scheme conducted by Indian School of Business. He also witnessed the exchange of partnership agreement between Udan and Make My Trip. On the occasion, the results of UDAN Logo competition were announced. The minister also flagged off new air route between Shilong and Dimapur under RCS Scheme. The event on Monday was attended by Sundargarh MP JualOram, Bargarh MP  Suresh Pujhari, state Transport Department Minister Padmanav Behera, MLA Brajrajnagar Kishore Kumar Mohanty, Chairman Airport Authority of India Sanjeev Kumar, Secretary, Ministry of Civil Aviation,  Rajiv Bansal and other senior officials of the ministry and the airport.

New Delhi, 18th October 2021: In order to further boost up aerial connectivity in the North east, Alliance Air today started flight services to 6 new destinations in the region.Union Minister of Civil Aviation,Jyotiraditya Scindia, MoS, Civil Aviation, Gen Dr. V K Singh (Retd.) along with Rajeev Bansal, Secretary,MoCA virtually flagged off the new routes expanding the aerial connectivity of North-East India. The routes commencing operations from today are Kolkata – Guwahati, Guwahati – Aizawl, Aizawl – Shillong, Shillong – Aizawl, Aizawl – Guwahati, and Guwahati – Kolkata.Dr. R. Lalthangliana, Minister of Health and Family Welfare, Higher and Technical Education, Commerce and Industry,Robert Romawia Royte, MoS for Sports and Youth Services, Tourism and Information and Communication Technology along with other important members of the state government joined the event virtually from the Lengpui Airport, Aizawl, Mizoram. The Civil Aviation Minister said, “Mizoram is the gateway to North-East India. The city has an immense amount of importance for its tourism & economic sector.I assure you, that MoS General Dr. V K Singh (Retd.) and I will personally visit Mizoram very soon.” The minister further mentioned, “I am delighted to mention the fact that Alliance Air’s most ATR aircraft are deployed on the North-Eastern routes. Today, we are further establishing seamless connectivity across entire North-East India by connecting 4 cities with one flight. This underlines the due importance given to the North-East by the Ministry of Civil Aviation under the leadership of our Prime Minister. Under the UDAN scheme,we have connected cities that had no mention on the aviation map of the country. We have already started 60 airports, and 387 routes, out of which 100 routes are awarded in North East alone, & 50 are already operational. Moreover, In 2014, only 6 airports were operational in North East, now we have grown to 15 airports in a short span of 7 years. Therefore, this further highlights the due importance of the North-Eastern states for this government. In addition to this, under the KRISHI UDAN Yojna, we have identified 16 airports to enhance the export opportunities of the region establishing dual benefits of enhancement of cargo movements and exports.” Today’s flight launch has expanded the aerial connectivity of the North-East by connecting multiple states hitherto not connected via flights. The flight connectivity on these routes has been a long-pending demand of the natives of the regions. With these new flights, travellers from Guwahati, Aizawl and Shillong will get multiple options for onward connectivity to the rest of the country. In the constant endeavour to bolster the regional connectivity of the country, the first direct flight on the Tirupati-Delhi route was also started yesterday connecting one of the best heritage cities of the country with the capital of the country.