Budget 2026: Can UDAN Deliver Sustainable Regional Air Connectivity?

As the Union Budget 2026 approaches, regional air connectivity has emerged as a key test of the government’s long-term aviation ambitions. Launched in 2017, the Regional Connectivity Scheme – Ude Desh ka Aam Nagrik (UDAN) was designed to make air travel affordable while improving access to unserved and underserved regions across the country.

How DoesThe UDAN Scheme Work?

UDAN follows a market-driven model where airlines bid for regional routes based on demand and commercial viability. Selected routes receive Viability Gap Funding (VGF) along with cost concessions from the Centre, state governments and airport operators. The aim is to bridge the gap between operating costs and expected revenues, making regional routes financially viable for airlines.

Progress Achieved So Far in UDAN Scheme

Since 2017–18, a total of 923 routes have been awarded under the UDAN scheme. Of these, 657 routes are currently operational. The programme has connected 93 unserved and underserved airports, including 15 heliports and two water aerodromes.

These routes have carried over 1.6 crore domestic passengers through more than 3.27 lakh UDAN flights. The expansion has played a meaningful role in improving last-mile connectivity, especially in remote and smaller towns.

Challenges On The Ground

Despite visible progress, UDAN has faced several operational challenges. Around 123 routes were discontinued before completing their three-year tenure. The reasons include COVID-19 disruptions, aircraft shortages, maintenance issues, runway and airport constraints, and weak passenger demand on certain routes.

Currently, 15 UDAN airports remain non-operational due to factors such as weather limitations, VFR-only operations, airline and aircraft availability issues, and low traffic uptake. These airports are spread across states such as Punjab, Uttar Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Sikkim and West Bengal.

What Lies Ahead For UDAN?

Over the past nine years, the government has conducted 14 bidding rounds across five versions of the UDAN scheme, highlighting continued efforts to refine the model. A modified UDAN scheme is now at the approval stage.

The revised version aims to add 120 new regional destinations, enable air travel for 4 crore passengers over the next 10 years, and expand connectivity through helipads and smaller airports, especially in hilly, aspirational and North-Eastern districts.

Since inception, ₹4,494 crore has been disbursed as VGF to support regional routes.

Read more: Union Budget 2026: Who Are the Key Officials Working Behind the Scenes?

Conclusion

With aviation demand rising and aircraft shortages limiting capacity, Budget 2026 will be crucial for the future of regional air connectivity. Higher allocations, quicker approvals and a sharper focus on route sustainability will be key to ensuring that UDAN not only expands connectivity but remains viable in the long run.

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