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UDAN Scheme (Yojana) 29 Nov. 2017: Drop in Flight Cancellation Charges

In October 2016, the government started the Ude Deshka Aam Nagarik (UDAN) scheme. Prime Minister Narendra Modi flagged the first flight under this scheme in August this year. Airlines have been receiving increased accusations of canceling tickets for the last one year. Currently, the charges for cancellation of a ticket may vary from Rs 2,950 to Rs 4,000 for domestic flights. But, in the early Christmas for travelers, the government is planning to tell the airlines to put such allegations at a proper level. Under UDAN, the flight tickets were capped over Rs 2,500 per hour, so the cancellation fee should not be higher than the ticket price.

Aviation Minister Jayant Sinha said, “We believe that the cancellation fees are on the higher side and there is a lot of charge for the passenger. The fee is in many cases more than the price of the ticket itself. Under our UDAN (subsidized regional flying) scheme a passenger has to pay Rs 2500 per hour for flying. It is necessary to bring back the fees for cancellation in balance.

Airlines are increasing the charges of cancellation from January 2016. It is alleged that from Rs. 1,800 cancellation charges have now been raised up to Rs 2,400. Now, it is Rs. 3000 in November 2017. Besides working to remove cancellation fees, the government is also working on ‘Passenger Bill of Rights’ (PBOR). PBOR expects that they will clearly tell the rights and duties of the passengers.

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udan scheme yojana reduced cancellation fee

What is UDAN Scheme (Yojana)?

  1. In October 2016, UDAN (Ude Deshka Aam Nagarik) scheme was announced by the Ministry of Civil Aviation in India. And the scheme implemented in January 2017.
  2. Under this scheme, travelers can buy a ticket at Rs. 2500 only. A single traveler can book from 9 to 40 seats under this scheme.
  3. The rate of Rs. 2500 is not for full seats available in flights. If the passenger is taking this scheme then only 50% seats will be related to the scheme. The remaining seats will be priced according to the market rate.
  4. Under this scheme, the maximum cost is Rs.2500. No other charges will be levied at this cost after availing this scheme. This price is valid for only one hour of flights

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The Outcome of the Scheme

This plan was prepared by the Ministry of Civil Aviation for the first time in the month of July. It officially came in the month of October 2016. According to the Ministry, this scheme will be helpful to those common citizens, who have to travel frequently for commercial purposes. Because people know that flights take less time than any other transportation, but fares are much higher than trains or road transport, so the ministry has decided to hold it at the fixed level.

Some of the private airlines voiced against it. According to them, this scheme could be a hindrance to the profit level, although 50% of seats will be available at market value, yet they are not happy with the decision.

UDAN Yojana

Mode of tranportationFlight
PriceRs. 2500
No. of seats9 to 40 per user
Total available seats50% of the total seats
AnnouncedOctober 2016
LaunchedJanuary 2017

UDAN Scheme Routes

S. No.Routes
1Delhi to Bhatinda
2Delhi to Shimla
3Delhi to Kullu
4Delhi to Agra
5Delhi to Pathankot
6Delhi to Pantnagar
7Delhi to Ludhiana
8Delhi to Bikaner
9Jaipur to Agra
10Jaipur to Jaisalmer
11Shilong to Agartala
12Shilong to Aizwal
13Shilong to Dimapur
14Shilong to Imphal
15Shilong to Silchar
16Kolkata to Burnpur
17Kolkata to Cooch Behar
18Kolkata to Durgapur
19Kolkata to Jamshedpur
20Kolkata to Rourkela
21Puducherry to Hyderabad
22Puducherry to Salem
23Puducherry to Chennai
24Ahmedabad to Diu
25Ahmedabad to Dwarka
26Ahmedabad to Jamnagar
27Ahmedabad to Mundra
28Mumbai to Kandla
29Mumbai to Porbandar
30Mumbai to Jalgaon
31Mumbai to Nashik
32Mumbai to Sholapur

Companies Earned Huge by Charging for Cancellation Fees

udan scheme 2017

  1. Indigo is responsible for its revenue earned from the cancellation fee charge under ‘Ancillary Revenue’ for the financial year 2010. These revenues include a large number of items – cargo, special service requests, ticket modification, in-flight sales and cancellation fees. In its annual report, the company reported an increase in subsidiary revenue, which grew by 13.2% to 20,019.98 million (2001 crore) in FY16, to 22,667.58 million (Rs.2266 crore) in FY10.
  2. Jet Airways has mentioned its consolidated financial statements that the income earned by cancellation by 31 March 2017 is Rs 621.1 crore.
  3. However, SpiceJet did not clearly express the earned money by cancellation charges.

According to the data from the General Administration of Civil Aviation, in October 2017, the total amount paid by more than 8,000 passengers to domestic airlines to compensate for the impact of flight cancellations was Rs. 40.51 Lakh.

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