The ambition is to make flying accessible and bring smaller towns into the mainstream | Photo Credit: SRIRAM MA

India’s regional connectivity push received a fresh boost last week, with the Cabinet approving a ₹28,840-crore outlay for the Udan (Ude Desh ka Aam Nagrik) scheme. Spread over the next decade, the funding aims to expand last-mile air connectivity through new airports, helipads, and continued viability gap funding (VGF) support to airlines. Clearly, the ambition is to make flying accessible and bring smaller towns into the mainstream.

There is no denying that Udan has delivered some gains since its launch in 2016. Over 16.3 million passengers have flown on subsidised routes, many of them first-time flyers. The number of operational airports in India has more than doubled to 165 in a decade, including several towns in the North and North-East. Yet, there are concerns about sustainability. A number of routes launched with initial enthusiasm have failed to survive after government support tapered off. Of the 925 routes awarded, only 663 became operational, and as many as 327 were eventually discontinued. Similarly, while 95 airports, including heliports and water aerodromes, were developed under the scheme, 13 of them are now idle despite substantial public investment. The reasons for this churn are varied. Some routes collapsed due to airline failures or fleet shortages, while others were undermined by other constraints and errors. The case of Pakyong airport in Sikkim, shut since June 2024 due to terrain and weather challenges, highlights the operational complexities of regional aviation. In other instances, routes were awarded to airlines that lacked the capacity to deliver, leading to premature discontinuation.

Udan 2.0 seeks to address some of these gaps. The provision of up to ₹3 crore annually for operations and maintenance of smaller airports for three years is a step in the right direction. Extending VGF support from three to five years, with tapering from the third year onwards, also reflects an attempt to provide a longer runway for routes to mature. However, these tweaks may not be enough to ensure commercial sustainability. Demand in smaller towns is price-sensitive, with limited willingness to transition to market-based fares once subsidies are withdrawn. Moreover, strong competition from road and rail networks continues to erode the passenger base on short-haul routes.

Cost structures present another hurdle. It is logical to favour smaller aircraft with fewer than 20 seats for low-demand routes, but operating such aircraft is expensive. The scheme does little to address high operating costs, including maintenance, fuel, and crew availability. The shortage of trained pilots and engineers willing to operate out of remote locations complicates matters. A sharper focus on route economics and performance accountability is called for. A recent Parliamentary sub-committee recommendation for periodic review of Udan routes, with clearly defined entry and exit criteria, offers a pragmatic way forward. Indeed, the mistakes of Udan 1.0 should not be repeated.

Published on April 2, 2026