Cabinet Extends UDAN Scheme To 2036 With ₹28,840 Crore Outlay Amid 50% Route Closure Rate
· Free Press Journal
The Union Cabinet approved a major overhaul and a 10-year extension of the regional connectivity scheme (RCS), known as UDAN (Ude Desh ka Aam Nagrik) with a budgetary commitment of Rs28,840 crore. However, government data shows that almost 50% of the UDAN routes started in the past have shut down, while airline operators claim a lack of profit.
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Major Overhaul
On Wednesday, the Union Cabinet approved the modified UDAN scheme by extending it till 2036 to boost regional connectivity. The updated scheme aims to upgrade 100 unserved airstrips into full-fledged airports. Simultaneously, 200 modern helipads will be constructed at an investment of Rs3,661 crore over eight years, with an estimated budget of Rs15 crore per helipad.
Moreover, the new RCS scheme will provide viability gap funding (VGF) support to airline operators worth Rs10,043 crore for 10 years, which was earlier provided for only three years. The budget also includes funds towards operation and maintenance support worth Rs2,577 crore for around 441 aerodromes with a three-year support with capped annual costs. The new scheme aims to connect 120 new destinations, serving 4 crore people over 10 years.
Turbulent Track Record
While the government hailed the move as a cornerstone of the "Vikasit Bharat 2047" vision, the announcement comes amid mounting concerns about the long-term commercial viability of regional flights. Recent data indicates a turbulent track record for the scheme, with a significant portion of previously launched routes failing to stay airborne.
According to the Ministry of Civil Aviation’s data, a total of 663 routes have been launched as of February 28, 2026, connecting 95 unserved or underserved airports. However, about 327 of these routes have been discontinued, amounting to over 49% of the total. The ministry said that the discontinuation of the routes is owed to a variety of factors like the COVID-19 pandemic, aircraft shortage, supply chain issues, aircraft maintenance, airport or runway maintenance, and low passenger demand on some routes, among others.
Idle Infrastructure
Of these 327 routes, only 167 connect to airports that transitioned from unserved or underserved to served status. The data also showed that around 15 airports developed under RCS, at a cost of Rs831.33 crore, do not have scheduled flights anymore.
The aviation industry expressed mixed feelings about the extension of the RCS. While most of them appreciated the extension of VGF by 10 years, a few operators on RCS routes said that operations are only feasible until VGF is provided. “Once the VGF stops after three years, it is no longer possible to sustain the operations. These routes do not generate profits like other routes,” said an official associated with a regional airline.
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Avani Singh, founder and CEO of SkyHop Aviation, called the announcement historic, saying that the massive budget will help connect India like never before. “The enhanced VGF is a significant step that will help make regional and emerging segments like seaplane operations more sustainable over the long term. It will give operators, investors and lessors the confidence to invest and build connectivity to areas that have so far remained out of reach.”
Industry experts and airline operators believe that low load factors, infrastructure gaps such as a lack of night-landing facilities and all-weather navigation systems, as well as subsidisation of only 50% of seats, are among the headwinds that lead to closures.