IndiGo – the largest airline in the country, is also the biggest receiver of Viability Gap Funding (VGF) consistently for the last three financial years. This information was shared by Sh. Murildhar Mohol – Minister of State for Civil Aviation in Rajya Sabha – the upper house of Indian Parliament, in response to a question by Kartikeya Sharma – Member of Parliament, Rajya Sabha – representing Haryana.
In the last three financial years, a total of INR 2231.3 crore VGF was paid to various airlines in the country to operate on routes under the Regional Connectivity Scheme (RCS) – UDAN (Ude Desh ka Aam Nagrik). In the last financial year, the VGF paid was INR 807.02 crores.
IndiGo – the largest carrier in the country was leader in this area as well with INR 298.98 crore VGF. Alliance Air – the only state owned airline in India now, was paid INR 130.05 crore in FY23024. SpiceJet came in third with INR 129.99 crore VGF bagged in the last financial year, while Star Air came in fourth with INR 116.76 crore VGF. Flybig – which moved from ATRs to Twin Otters raked in INR 64.52 crore VGF. The others who were the beneficiaries of VGF were IndiaOne, Fly91, Pawan Hans and Heritage Aviation, amounting to INR 68.72 crore VGF.
IndiGo might have a large share in the VGF distribution, it is a mere 0.4% of its total revenue for the last financial year. The high amount amidst others is purely because of the scale that the airline deploys within RCS-UDAN. Passengers also benefit from this, since a larger carrier helps connect to a wider network as compared to a small carrier where flights operate in isolation and a passenger may need to book two different tickets to travel to major metros with the eternal risk of losing the money if the connection is missed, due to delay in the first leg.
Question Details: Unstarred question number 21, answered on 22-July-2024
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