A decade ago, Indore residents wishing to travel by air faced a limited proposition: flights to Mumbai and Delhi primarily. Direct regional flights connecting Indore to Pune, Hyderabad, or Ahmedabad simply did not exist. The friction—lost business time, increased transportation costs, operational complexity—represented a tax on economic integration.
Today, Indore is connected to 50+ destinations through the Ude Desh ka Aam Nagrik (UDAN) regional connectivity scheme, fundamentally rewriting India’s aviation geography and enabling middle-class populations in Tier-2 and Tier-3 cities to access air travel affordably for the first time.
Wings India 2026 celebrated a defining milestone: 15 million passengers have traveled on UDAN routes since the scheme’s 2016 inception. More significantly, UDAN has transformed regional connectivity from a niche political initiative into a commercially viable ecosystem supporting 40+ domestic carriers, 100+ regional routes, and measurable economic impact on underserved communities.
The Market Failure UDAN Addressed
The fundamental challenge in regional aviation is brutal economics. Airlines operating routes between Tier-2 and Tier-3 cities face unit economics so poor that commercial operation is impossible without subsidies. Tier-2 city populations are insufficient to sustain frequent flights. Distances are short enough that operating costs per available seat-kilometer exceed revenue per seat-kilometer at commercial fares. Aircraft utilization is low because regional routes cannot support multiple daily frequencies.
The Government of India addressed this market failure through UDAN, offering subsidies that compensate airlines for operating uneconomic routes, effectively creating demand where market alone could not justify supply.
The mechanism is straightforward: airlines bid for routes, agree to fare caps (typically ₹5,000 or approximately $60 USD for flights up to 500 kilometers), and receive subsidies covering the difference between operating costs and fare-cap revenue. Airlines bid based on aircraft deployment costs, frequency commitments, and operational efficiency.
The results exceeded expectations. From 2016 to 2026, UDAN created a parallel aviation ecosystem serving populations historically excluded from air connectivity. Over 60 cities are now connected through UDAN, many of which had zero commercial air connectivity in 2016.
Economic Impact Beyond Passenger Counts
The 15-million-passenger milestone is remarkable, but deeper economic impacts merit attention:
Tourism Accessibility: Tier-2 destinations including Jabalpur, Indore, Varanasi, and others have experienced tourism growth as air connectivity becomes affordable. Heritage sites, religious pilgrimage routes, and regional cultural attractions are now accessible to price-sensitive travelers previously limited to surface transportation.
A Varanasi hotel operator reported 40% year-on-year increase in bookings since UDAN routes began service in 2019. The accessibility enabled by air connectivity transformed pilgrimage economics—senior citizens and persons with disabilities can now undertake journeys that previously required physical stamina precluding access.
Business Connectivity: Regional entrepreneurs can attend business meetings in major hubs without losing entire days to surface transportation. An Indore businessman can attend morning meetings in Delhi and return home by evening—previously impossible through road or rail. This connectivity enables participation in national market opportunities previously foreclosed by transportation friction.
Medical Access: UDAN routes have enabled regional patients to access tertiary care hospitals in major metros. A patient in Jabalpur can reach a Delhi cancer center for specialized treatment with minimal travel burden—previously requiring 24+ hours by surface transportation. State governments have leveraged UDAN connectivity for emergency patient transport, dramatically reducing mortality in cases requiring specialized surgical intervention.
Employment Migration: UDAN enables labor mobility for workers seeking employment in major cities while maintaining family ties in home communities. Daily commutes become possible on certain routes; weekly or monthly visits become affordable for workers in major metros maintaining family in hometowns.
Disaster Response: UDAN routes have been activated for emergency response during natural disasters. The 2023 Uttarakhand floods demonstrated UDAN’s utility for evacuation, medical supply transport, and relief operations in affected regions.
The Aircraft Economics
UDAN’s viability depends on aircraft tailored to regional economics. Regional jets including Embraer’s E175 and emerging entrants including HAL’s SJ-100, Czech L-410 NG, and Russian IL-114-300 represent aircraft optimized for 2-3 hour flights with 50-100 passenger capacity.
HAL’s H-228 commuter aircraft addresses a specific UDAN segment: ultra-short-runway operations enabling service to aerodromes where conventional jets cannot operate. India has developed 150+ aerodromes on the “National Civil Aviation Policy-approved aerodrome network”—smaller facilities lacking full commercial infrastructure but capable of supporting regional aviation with appropriate aircraft.
Wings India 2026 featured customer demonstration flights of the H-228, explicitly targeting state governments, charter operators, and UDAN-scheme participants assessing aircraft suitable for remote and underserved routes.
Expansion Challenges
UDAN’s next phase requires addressing fundamental constraints:
Route Viability: Not all UDAN routes are economically sustainable. Some depend on perpetual subsidies because underlying demand does not justify commercial pricing. Identifying commercially viable routes (where subsidies can eventually end) versus perpetual-subsidy routes (where alternatives should be explored) is critical to program sustainability.
Pilot Availability: UDAN’s expansion is constrained by pilot availability. Regional routes require crews, and India’s pilot training infrastructure, though expanding, remains insufficient to supply crews for 100+ new routes annually. Wings India 2026 featured an Aviation Job Fair addressing this bottleneck explicitly.
Aircraft Supply: Regional aircraft manufacturers cannot keep up with demand. Embraer, ATR, and established manufacturers have order books extending 5+ years forward. New entrants including HAL’s SJ-100 and international partnerships (Embraer-Adani, OMNIPOL-Sakthi, United Aircraft-Flamingo) are essential to unconstrain aircraft supply.
Infrastructure: Many smaller airports lack facilities for full commercial operations—passenger terminals, ground handling, maintenance capabilities, ATC services. Infrastructure modernization—being addressed through AAI’s ₹15,000-crore investment program—is critical to enabling further UDAN expansion.
Vision 2047: 400+ Airports, Ubiquitous Connectivity
Prime Minister Modi stated that by 2047, India will operate 400+ airports. If achieved, this would position India alongside the United States in airport density, enabling aviation connectivity to reach virtually every significant population center.
The second phase of UDAN, currently under government consideration, will expand the scheme to additional routes, identify commercially viable regional airlines (reducing long-term subsidy dependence), and develop aircraft purpose-built for regional operations.
Sustainability Pathways
UDAN’s long-term viability depends on gradually reducing subsidy dependence as routes mature and demand develops. Three pathways are evident:
Route Maturation: As regions develop economically and populations increase, some routes transition from loss-making to profitable operations. Routes connecting Pune-Ahmedabad and Bangalore-Hyderabad, launched under UDAN subsidies in 2018, are now commercially viable—demonstrating that subsidies are temporary market development mechanisms, not permanent crutches.
Regional Carrier Development: Dedicated regional carriers—including Akasa Air (focused on regional routes) and others—are emerging to operate UDAN routes more efficiently than full-service carriers. These carriers operate smaller aircraft (20-70 seats), leverage lower cost structures, and demonstrate path to commercial profitability.
Population Growth & Demand Development: Tier-2 and Tier-3 cities are India’s fastest-growing urban centers. As populations expand and middle classes develop, underlying demand for air travel increases, transitioning routes from subsidy-dependent to commercially viable.
Aviation as Public Good
UDAN demonstrates that aviation—historically accessible only to urban elites—can be reimagined as a public good accessible to middle-class and aspirational populations across India. The 15-million-passenger milestone is an achievement in democratizing transportation access and beginning to integrate India’s fragmented domestic economy through affordable, convenient air connectivity.
Over the next decade, UDAN will likely expand to 150+ routes, serve 50+ million annual passengers, and gradually transition substantial portions of the scheme from subsidized to commercially viable operations. The goal—enabling every Indian to experience air travel at least once in their lifetime—is no longer aspirational fantasy but achievable policy objective given current trajectories.
– Srinivasa Rao Srikantam
