What is the UDAN Scheme?
UDAN, which stands for 'Ude Desh ka Aam Nagrik' or 'Let the Common Citizen of the Country Fly', is a Government of India initiative launched in 2016. Before this, air travel was heavily concentrated around a handful of major cities, leaving hundreds of smaller
towns and remote regions with poor or no air connectivity. The scheme’s core mission is to change that by making flights affordable and accessible across Tier-2 and Tier-3 cities. It aims to stimulate economic growth, boost tourism, and promote balanced regional development by reviving a vast network of unserved and underserved airports. The first flight, connecting Shimla to Delhi in April 2017, symbolized this new ambition to bring every corner of India onto the national aviation map.
The Engine: How Viability Gap Funding Works
The main hurdle for regional routes has always been financial viability; airlines had little incentive to fly to places with low initial demand and high operating costs. UDAN’s solution is a clever financial model called Viability Gap Funding (VGF). In simple terms, VGF is a subsidy provided to airlines to bridge the gap between the cost of operating a flight and the revenue earned from capped fares. Airlines bid for specific routes, and the operator asking for the lowest subsidy wins the contract. In exchange for this financial support, which is shared by the central and state governments, airlines must offer at least 50% of their seats at a capped fare, which was initially around ₹2,500 for a one-hour flight. This turns commercially unviable routes into attractive business propositions, at least for an initial three-year exclusivity period.
The Scorecard: Routes, Airports, and Passengers
A decade since its launch, UDAN has significantly altered India's domestic aviation landscape. The number of operational airports in the country has more than doubled, increasing from 74 in 2014 to 166 by mid-2026. As of early 2026, the scheme has successfully operationalized over 660 routes, connecting 95 airports, including heliports and water aerodromes in remote, hilly, and island regions. These routes have served over 1.68 crore passengers through more than 3.5 lakh flights, demonstrating a tangible shift in regional mobility. Places that were once a day’s journey by road or rail, like Jharsuguda, Darbhanga, and Hubli, are now just an hour's flight away from major hubs, boosting local economies and tourism.
Turbulence and Challenges
Despite its successes, the journey has not been without turbulence. A significant challenge is the sustainability of routes after the three-year VGF support ends. Reports have indicated that a substantial number of awarded routes have either ceased operations or were never started, often due to low passenger demand, which makes them unprofitable for airlines once the subsidy is withdrawn. According to one report, nearly half of the operationalised routes were discontinued for various reasons, including runway limitations and the financial health of smaller regional carriers. This raises critical questions about the long-term viability of the network and its dependence on government support. Ensuring that these routes can stand on their own commercially remains a key hurdle.
The Next Leg: Modified UDAN and the Future
The government is now doubling down on its vision with 'Modified UDAN'. Approved in March 2026 for the decade running from 2026 to 2036, this next phase has a massive outlay of over ₹28,000 crore. The focus is on strengthening the ecosystem for the long haul. The plan includes developing 100 new airports from existing airstrips, modernising 200 helipads to improve last-mile connectivity in difficult terrains, and providing operational and maintenance support to smaller airports to ensure they remain functional. This renewed commitment signals a strategic shift from just launching routes to building a durable, self-sustaining regional aviation network that can continue to grow and integrate the nation for years to come.
