A Vision of Regional Connectivity
Launched in 2016, the UDAN scheme was a flagship government initiative designed to make air travel affordable and widespread. The core idea involved reviving unserved and underserved airports across the country. Airlines were offered Viability Gap Funding
(VGF)—a government subsidy—to operate on these routes, with a portion of seats on each flight capped at a low price, such as ₹2,500 for a one-hour flight. The goal was twofold: stimulate regional economic growth and integrate remote areas into the national mainstream. In its initial years, the scheme saw remarkable expansion, with hundreds of new routes connecting dozens of smaller airports, from the hills of the northeast to the plains of central India.
The Reality of Grounded Flights
Despite its ambitious goals and significant government spending, the scheme is facing severe turbulence. As of mid-2026, nearly half of the 669 routes launched under UDAN since its inception have been discontinued. Reports indicate that commercial flights are operational on only 336 of these routes. This high attrition rate raises serious questions about the long-term sustainability of the programme. The government has invested thousands of crores in subsidies for airlines and in developing airport infrastructure, yet the outcome has been a patchwork of successes and failures.
The Airline Viability Challenge
From a utility perspective, the primary issue is commercial viability for airlines. The three-year VGF period was designed to help airlines establish a route, after which it was expected to become self-sustaining. However, this has often not been the case. Once the subsidy ends, airlines face the full operational costs on routes that often have low passenger demand. Many smaller carriers that were the backbone of the scheme have either gone bankrupt or curtailed their operations. For example, services to airports in Karnataka's Bidar and Kalaburagi were discontinued by a regional carrier after the subsidy period expired, highlighting the dependency on government support. Low passenger load factors mean that even with fare caps removed, flights often remain unprofitable.
The Passenger Demand Mismatch
The scheme's success hinges on a simple premise: if you build it, they will come. However, demand has been a persistent puzzle. In many cases, there's a mismatch between the routes offered and the actual travel needs of the local population. For short distances, improved road and rail networks, including new Vande Bharat Express trains, offer a cheaper and often more convenient alternative, making short-haul flights redundant before they can even establish a foothold. Factors like last-mile connectivity to and from these regional airports, inconvenient flight timings, and the lack of a comprehensive travel ecosystem also deter potential passengers. As a result, many routes suffer from chronically low passenger numbers, making them commercially unviable for airlines.
Infrastructure and Operational Hurdles
Even when there is potential demand, infrastructure limitations pose a significant barrier. Many regional airports and airstrips identified under UDAN were not ready for commercial operations due to regulatory hurdles, high compliance costs, or incomplete upgrades. Some airports lack essential equipment like Instrument Landing Systems (ILS), leading to frequent flight cancellations, especially in bad weather. Furthermore, major gateway airports like Delhi and Mumbai have limited slots for regional carriers, making it difficult for smaller airlines to create a sustainable hub-and-spoke network that connects small towns to major economic centers.
