Budget 2026 may open the skies to more towns, making air travel simpler and cheaper for everyone

As the Union Budget approaches, regional air connectivity remains a key test of the government’s aviation ambitions. Launched in 2017, the Regional Connectivity Scheme – Ude Desh ka Aam Nagrik (UDAN) was conceived as a market-driven model to make flying affordable and connect India’s unserved and underserved regions.

Under the scheme, airlines bid for regional routes based on demand and commercial viability, with selected routes supported through Viability Gap Funding (VGF) and cost concessions from

the Centre, states, and airport operators.

Progress so far has been significant, though uneven. Since 2017–18, 923 routes have been awarded, of which 657 are currently operational. These routes have connected 93 unserved and underserved airports — including 15 heliports and two water aerodromes — carrying over 1.6 crore domestic passengers on more than 3.27 lakh UDAN flights.

Challenges, however, persist. A total of 123 routes were discontinued before completing their three-year tenure, largely due to COVID-19 disruptions, aircraft shortages, maintenance issues, airport and runway constraints, and weak passenger demand on certain sectors.

At present, 15 UDAN airports remain non-operational, citing factors such as weather limitations, VFR-only operations, airline and aircraft availability issues, and low traffic uptake. These include airports across Punjab, Uttar Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Sikkim, and West Bengal.

Over the past nine years, the government has conducted 14 bidding rounds across five versions of the UDAN scheme, reflecting ongoing efforts to tweak the model and improve route viability and airline participation.

More recently, the government has announced a modified UDAN scheme, currently at the approval stage, which aims to:

• 
  

  Add 120 new regional destinations

  
  


• 
  

  Enable air travel for 4 crore passengers over the next 10 years

  
  


• 
  

  Expand connectivity through helipads and smaller airports, particularly in hilly, aspirational, and North-Eastern districts

  
  

Financial support remains a cornerstone of the programme. Since inception, ₹4,494 crore has been disbursed as VGF to airlines to bridge the gap between operating costs and expected revenues on regional routes.

As aviation demand surges and aircraft shortages continue to constrain capacity, Budget 2026 will be closely watched for higher allocations, faster approvals for the modified UDAN scheme, and a sharper focus on route sustainability — critical to ensuring that regional connectivity doesn’t just take off, but stays airborne.