The Grand Vision of UDAN
Launched in 2016, the Ude Desh ka Aam Naagrik (UDAN) scheme was a revolutionary idea. Its goal was to connect India's unserved and underserved towns, making air travel accessible to the common citizen. The model seemed simple: airlines would bid for commercially
challenging routes, receiving Viability Gap Funding (VGF) from the government to subsidise operations. In return, a portion of seats on these flights would be sold at a capped, affordable price—initially around ₹2,500 for a one-hour flight. This was designed to turn dusty airstrips into bustling airports and make flying as common as taking a train.
The Affordability Puzzle
The promise of a ₹2,500 flight ticket was central to UDAN's appeal. This fare cap, however, only applies to a percentage of the seats on each flight. The rest are sold at market rates, which can be significantly higher. For airlines, the economics are punishing. The VGF is intended to cover the loss on capped-fare seats, but high operational costs, including aviation turbine fuel and maintenance at smaller airports, mean margins are razor-thin or non-existent. This creates a constant tension between the policy's social goal of affordability and the market reality of running a profitable airline, a puzzle that remains difficult to solve.
The Challenge of Route Viability
Herein lies the scheme's biggest hurdle: keeping planes in the air. The data reveals a stark picture. Of the hundreds of routes launched under UDAN, a significant portion have been discontinued. According to government data from early 2026, out of 663 operationalised routes, 327 were later shut down. The reasons are numerous: low passenger demand making routes commercially unviable, especially after the initial three-year subsidy period ends; a shortage of suitable small aircraft; and operational issues at poorly equipped airports. Competition from improved rail services, like the Vande Bharat Express, also poses a significant threat on shorter routes.
Beyond the Ribbon-Cutting
Inaugurating a new airport terminal is a powerful political statement, but it doesn't guarantee connectivity. Across the country, stories have emerged of shiny new airports that see few or no flights just months after launch. In Uttar Pradesh, for example, several airports inaugurated after 2021 saw commercial services cease within months. This 'ghost airport' phenomenon highlights a fundamental disconnect: building infrastructure is one thing, but creating sustainable demand is another. Without proper demand assessment, route planning, and last-mile connectivity from the airport to the city, these expensive assets risk becoming underutilised monuments to ambition.
A New Flight Plan: Viksit UDAN
Acknowledging these challenges, the government has launched a revamped version of the scheme, called 'Viksit UDAN'. This new phase, announced in 2026, comes with a massive outlay of nearly ₹29,000 crore over ten years. The focus is two-fold: a stronger emphasis on building robust infrastructure, including developing 100 aerodromes, and providing continued financial support for airlines. The VGF support period has been extended to encourage airlines to stick with routes for longer, hopefully allowing them time to become self-sufficient. The plan also includes developing hundreds of modern helipads to improve connectivity in remote and hilly areas.
