Home World Business With UDAN, IOC to work on a new low-cost infra model

With UDAN, IOC to work on a new low-cost infra model

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At least 44 such airports are set to come up at various cities across the country

Shine Jacob  |  New Delhi  May 6, 2017 Last Updated at 21:57 IST

With the government coming up with the UDAN (Ude Desh Ka Aam Naagrik) scheme to boost regional air connectivity, aviation turbine fuel players, too, are gearing up to cater to the growing market. State-run Indian Oil Corporation (IOC) has said that the company is working on a low-cost model for infrastructure at the upcoming smaller in the country. 


At least 44 such are set to come up at various cities across the country in the  first phase of UDAN. “We are working on a low-cost model for infrastructure at RCS airports, as it offers a huge potential for business. We are yet to finalise on the investments that will go into it,” said B Ashok, chairman, IOC. 


In India’s market, the state-run oil major has an edge over others with more than 60 per cent of the market share. Private players such as (RIL) and Essar Oil, too, are slowly increasing their market share in the segment. 


The aims to connect remote unserved and underserved regions in India by reviving existing airstrips and airports, for which the government has zeroed in on a total of 100 According to estimates, Indian Oil Aviation Service refuels over 1,750 flights every day. On an average, more than one airplane is filled up per minute.. 


During the financial year 2016-17, India saw a cumulative growth of 12.1 per cent in consumption. In March, the growth was 10.4 per cent. According to  a report by (PPAC), this is the highest growth in annual consumption of jet fuel since 2007-08, mainly owing to a growth of 21.76 per cent in domestic passenger traffic during the current year. Passengers carried by domestic airlines during March 2017 were 9.04 million as against 7.87 million during March 2016, thereby registering a growth of 15.8 per cent.


Ashok added that the company has lined up a Capex plan of above Rs 20,000 crore for the financial year 2017-18. 


Through UDAN scheme, cities such as Jalgaon, Ludhiana, Bikaner, and Shimla are set to enter into India’s aviation map. The scheme is set to revolutionise the aviation sector as 50 per cent of the seats will be capped at as low as Rs 2,500, while the rest of the tickets will be given on market-based prices.  


IOC’s plan comes at a time when it is set to tie up with Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) for a joint venture to manage fuelling facilities at all controlled by the Authority of India (AAI).  

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