India’s New UDAN Regional Flight Plan Awaits Cabinet Approval

India’s civil aviation authorities have submitted a revised regional air connectivity proposal under the UDAN (Ude Desh Ka Aam Naagrik) scheme for Union Cabinet approval, signalling a potentially broader framework aimed at deepening flight access to underserved cities across the country.

The revamped UDAN plan, awaiting consideration by senior policymakers, proposes adjustments to fare caps, revisions to the viability gap funding (VGF) model and expanded aircraft eligibility on designated routes. The scheme, originally intended to stimulate scheduled services to smaller airports by subsidising carriers and capping passenger fares, has historically relied on financial incentives to bolster yields on thinly trafficked city pairs. The current iteration seeks to refine those mechanisms to better align airline economics with long-term sustainability and connectivity goals.

One of the central proposed changes is an update to the subsidy structure. Civil aviation planners have indicated that higher fare bands and recalibrated VGF allocations could encourage participation by a wider cross-section of carriers, including those operating larger regional aircraft and more substantial narrowbody jets. Previously, UDAN incentives were largely focused on turboprop operations and smaller medium-range sectors, which restricted both capacity and range. Larger aircraft participation could open up longer and higher-demand regional links that carry both commercial and business traffic.

Expanding aircraft eligibility also aims to enhance operational flexibility for airlines. Allowing operators to deploy higher-capacity jets on subsidised routes can help spread costs over more seats and potentially improve load factors, a key metric that dictates route viability. Airline network planners eyeing growth in markets such as central and eastern India have expressed optimism that broader aircraft options could make marginal routes commercially tenable even beyond the life of subsidies.

Airport operators and state governments have welcomed the Cabinet submission as a step toward improved regional infrastructure utilisation. Secondary and tier-2/3 airports — many of which have struggled to sustain scheduled services post-pandemic — could see heightened runway use and ancillary revenue generation if the revised UDAN plan secures approval. Improved access could also benefit non-aviation economic sectors such as tourism, logistics and corporate travel in remote and emerging urban centres.

The proposed UDAN revisions also include provisions for optimising route exclusivity and slot protection, which have been points of contention in earlier programme phases. By codifying longer periods of route protection for airlines that commit to underserved city pairs, policymakers hope to secure service continuity and reduce abrupt withdrawal of flights once subsidised support phases out.

Passenger groups and market analysts have broadly supported the Cabinet submission, noting that expanded city-to-city connectivity can reduce travel times and dependency on costly surface transport for many regions. Affordable air access has a multiplier effect on local economies and fosters integration of hinterland cities into national growth trajectories, particularly where rail or road connectivity is limited.

The aviation ministry is expected to brief the Union Cabinet on the fiscal implications of the expanded scheme, including the total quantum of VGF outlays and the long-term trajectory for sustainable regional connectivity. Broader bilateral air service agreements and state-level route activation strategies may also be discussed as part of the policy’s approval process.

As India’s domestic market matures and competition intensifies among carriers vying for regional share, the revised UDAN framework could become an instrumental policy lever for network expansion. Airlines and regional operators are watching closely as industry stakeholders prepare for the Cabinet’s decision, which could reshape the landscape of scheduled air services beyond major metros and into India’s periphery markets.

The broader objective remains clear: integrating tier-2 and tier-3 cities into the national air travel fabric while ensuring that flight operations are commercially sustainable and responsive to demand patterns. Cabinet approval of the new UDAN plan would mark a significant milestone in that strategic pursuit.