The Ambitious Dream of UDAN
Launched in 2016, the Ude Desh ka Aam Nagrik (UDAN) scheme was a landmark initiative designed to make air travel affordable and connect India’s vast number of unserved and underserved airports. By providing subsidies to airlines, known as Viability Gap
Funding (VGF), the government aimed to cap fares on regional routes, with a one-hour flight costing around ₹2,500. The goal was twofold: to decentralise air travel from major metros and to spark economic growth, tourism, and trade in Tier-2 and Tier-3 cities. In the years since its launch, the scheme has had notable successes, operationalising hundreds of routes and connecting dozens of new airports, heliports, and water aerodromes.
A Growing Number of Grounded Routes
Despite the initial momentum, a significant problem has emerged: many UDAN routes are not surviving. Recent data reveals a stark reality where nearly half of the routes launched since the scheme's inception have been discontinued. According to official figures, of the 669 routes made operational, flights are currently running on only 336. This high rate of failure points to a gap between policy ambition and operational reality. Many routes have been shut down even before completing the mandatory three-year subsidy period, while others become unviable the moment the financial support ends. For instance, airports in Karnataka like Bidar and Kalaburagi saw flights cease once the VGF support was exhausted, with post-subsidy fares jumping so high that demand collapsed.
Why Airlines Are Pulling Back
The reasons behind these discontinuations are complex. The primary challenge is commercial viability. Most regional routes struggle with thin and often seasonal passenger demand, making it impossible for airlines to turn a profit without subsidies. Once the three-year VGF period ends, airlines face a steep drop in passenger numbers as they are forced to raise fares to cover their high operating costs, which can be two to three times the subsidised ticket price. Furthermore, airlines face significant operational hurdles. These include delays in making airports ready for service, with many airstrips needing significant upgrades to meet regulatory standards. A shortage of suitable aircraft, particularly smaller turboprops designed for short runways, also hampers operations. Finally, regional carriers have argued that a lack of access and landing slots at major metro airports like Delhi and Mumbai prevents them from creating a sustainable hub-and-spoke network.
The Risks of Failure
The discontinuation of routes carries significant risks beyond just grounded flights. The government has invested heavily in the scheme, with thousands of crores spent on both airline subsidies and airport infrastructure. When routes fail, this represents a major loss of public funds and leaves newly developed or upgraded airports underutilised or entirely inactive. For the communities in these regions, a discontinued flight means a broken promise of connectivity, hindering local business, tourism, and access to healthcare or emergency services. It also erodes confidence among airlines, with some smaller regional carriers that were key to the scheme's success going bankrupt or significantly curtailing their operations.
Next Steps: A Modified Approach
In response to these challenges, the government has launched a revamped second phase, sometimes called the Modified UDAN or Viksit UDAN. With a significantly increased outlay of nearly ₹29,000 crore, this next phase aims to correct past shortcomings. One of the key changes is extending the subsidy period for airlines from three to five years, giving routes more time to mature and become self-sustaining. The new plan also focuses on developing 100 new airports, building 200 modern helipads, and providing operational and maintenance support for regional aerodromes to address infrastructure gaps. Furthermore, routes that were previously discontinued are being re-evaluated and offered for bidding again, in the hope that a revised strategy can make them successful.
