UDAN Scheme (Ude Desh ka Aam Naagrik) is a regional airport development and Regional Connectivity Scheme (RCS) of the Union Government of India which aims to provide connectivity to un-served and under-served airports of the country through the revival of existing airstrips and airports.

Components of UDAN Scheme

• Enhancement and Expansion of Airports- The initial component of the UDAN Scheme involves the improvement of existing airports and the establishment of new ones, ultimately fostering swifter regional connectivity.
• Capped Airfare and Sustainable Routes- The second component includes introduction of new, capped airfare and the establishment of financially viable regional routes. This initiative aims to enhance accessibility and economic sustainability in underserved regions.

Objectives of UDAN Scheme

• Enhancing Accessibility Through Affordable Airfare- Focused on creating economically viable and profitable flights on regional routes to make air travel affordable for the common man, even in small towns.
• Catalyzing Mass Connectivity through UDAN- Aiming to stimulate regional air connectivity and ensure accessibility to air travel for the broader population through strategic measures.
• Revitalizing Un-Served and Underserved Airports- Envisioning the revival of un-served and underserved airports across the country by rejuvenating existing air-strips and airports, with the scheme operational for a duration of 10 years.
• Market-Driven Expansion of UDAN- Operating as a market-driven scheme, UDAN conducts periodic bidding rounds to expand coverage, encompassing more destinations, stations, and routes for sustained growth.
• Airlines’ Strategic Role in UDAN Bidding- Illustrating the crucial role of interested airlines in the UDAN scheme, where they assess demand for specific routes connecting airports and submit proposals during bidding rounds.
• Inclusive Economic Growth through Rapid Connectivity- Dedicated to fostering inclusive economic development by accelerating connectivity, leading to widespread economic empowerment.
• Advancing Air Transport Infrastructure in Remote Regions- Strategic initiatives aimed at advancing air transport infrastructure in remote areas, contributing to comprehensive regional development.

Key Highlights of UDAN Scheme

• Integrated with National Civil Aviation Policy (NCAP) – The UDAN Scheme is a key element of the National Civil Aviation Policy (NCAP) which was released by the Ministry of Civil Aviation (India) in 2016.
• Strategic Focus on Regional Connectivity- Unveiling the scheme’s primary objective of bolstering connectivity in remote and regional areas of the country, addressing critical aspects of national infrastructure development.
• Affordability Initiatives in Air Travel- Understanding the UDAN Scheme’s core mission to enhance accessibility by ensuring affordability in air travel, aligning with broader goals of inclusivity and economic development..
• Subsidized Seat Allocation- Nearly 50% of seats on Udan flights are offered at subsidized fares under the scheme.
• Viability Gap Funding (VGF)- Participating carriers receive Viability Gap Funding (VGF), an amount shared between the central government and the concerned states.
  • The Viability Gap Funding (VGF) Scheme aims at supporting infrastructure projects that are economically justified but fall marginally short of financial viability.
  • VGF will be shared between the Ministry of Civil Aviation and the State Government in a ratio of 80:20.
  • In case of the North-Eastern states and Union Territories, the VGF sharing ratio will be 90:10.
• Joint Funding by Central and State Governments- The scheme is jointly funded by the central government and state governments to support its implementation.
• Scheme Duration- The UDAN scheme is designed to run for a period of 10 years.
• Potential Extension- There is provision for the scheme’s extension beyond the initial 10-year period.

Funding Structure Under UDAN Scheme

Evolution of UDAN Scheme

The UDAN Scheme has undergone multiple transformative phases since its inception in 2017. Each version has brought forward unique strategies to bridge the gap between metropolitan and regional air travel, addressing infrastructural and economic disparities across regions.

The scheme’s evolution reflects the government’s adaptive approach in tackling connectivity challenges and aligning the initiative with national development goals.

From its inception UDAN Scheme has been transformed to 5 times/phases.

• UDAN Scheme 1.0:

  • Initiated with 5 airlines, UDAN 1.0 awarded 128 flight routes to 70 airports, including 36 newly operational airports.

• UDAN Scheme 2.0:

  • In 2018, 73 underserved and unserved airports were announced, marking the inclusion of helipads for the first time under UDAN.

• UDAN Scheme 3.0:

  • Introduced Tourism Routes in collaboration with the Ministry of Tourism.
  • Included Seaplanes for connecting Water Aerodromes.
  • Expanded UDAN to cover numerous routes in the North-East Region.

• UDAN Scheme 4.0:

  • Launched in December 2019, UDAN 4.0 focused on the North-Eastern Regions, Hilly States, and Islands.
  • Prioritized airports developed by the Airports Authority of India (AAI) for Viability Gap Funding (VGF).
  • Incorporated operations of helicopters and seaplanes.

• UDAN Scheme 5.0:

• • Launched in 2022
  • The latest round introduces several changes:
    • Focus on Category-2 (20-80 seats) and Category-3 (>80 seats) aircraft.
    • Removal of the 600 km cap on stage length, allowing flights on any distance.
    • Increased Viability Gap Funding (VGF) cap to 600 km for both Priority and Non-Priority areas (from the previous 500 km).
    • Shorter deadline for commencement of operations, reduced to 4 months from the earlier 6 months.
    • The same route would not be awarded to a single airline more than once, whether in different networks or in the same network.
    • Exclusivity of operation provided to an airline will be withdrawn if the average quarterly Passenger Load Factor (PLF) is higher than 75% for four continuous quarters.

Performance So Far: UDAN Scheme

• Growth in Connected Airports

  • Prior to the UDAN Scheme, India had only 76 airports with scheduled commercial flights since 1911. Since 2014, the operational airports have grown significantly to 141, showcasing substantial growth in air connectivity.

• Expansion of Routes

• • The UDAN Scheme has introduced 479 new routes, creating an extensive network that now spans over 29 States and Union Territories. This expansion has effectively connected previously underserved areas, contributing to enhanced air connectivity.

• Passenger Outreach

  • The UDAN Scheme has significantly improved passenger accessibility and convenience. More than one crore passengers have availed the benefits of this scheme, enjoying improved air travel opportunities and enhanced connectivity.

Key Innovations and the Road Ahead for Regional Connectivity

As India charts its course towards becoming a $5 trillion economy, innovative approaches under the UDAN Scheme have positioned regional air connectivity as a critical enabler. The scheme continues to be fine-tuned to match evolving transportation needs, infrastructure demands, and passenger expectations.

The road ahead focuses on expanding route sustainability, boosting private sector participation, and integrating advanced technologies into regional aviation planning.

Key innovations and future directions include:

• Digital Monitoring via UDAN 5.0 (2023): Leveraged real-time route tracking and improved VGF disbursement mechanisms.

• Emphasis on Green Aviation: Initiatives to integrate sustainable practices like biofuel usage and electric aircraft for short-haul routes.

• Airport Infrastructure Development: Focus on upgrading terminal capacity, air navigation facilities, and cargo capabilities in Tier-2 and Tier-3 cities.

• Enhanced Private Participation: Encouraging public-private partnerships (PPP) in airport operations and route development.

• Long-Term Vision: The government aims to operationalise 1,000 UDAN routes and develop 220 airports by 2047, in line with India@100 aspirations.

By fostering inclusivity, affordability, and last-mile connectivity, the UDAN Scheme is redefining India’s aviation landscape for generations to come.

Challenges For UDAN Scheme

• Commercial Viability of Routes- Some routes identified under UDAN face commercial unviability for airlines due to low demand, impacting profitability. Operations on 225 out of the 479 launched routes have been discontinued.
• Inadequate Airport Infrastructure- Remote regions encounter challenges as they lack sufficient airport infrastructure.Upgradation and improvements are imperative to meet safety standards and accommodate increased air traffic.
• Viability Gap Funding Issues- Challenges arise in providing subsidies and viability gap funding to airlines on selected routes, particularly those deemed commercially unviable.
• Cap on Airfares- The imposed cap on airfares for RCS flights has the potential to impact airlines’ revenue, potentially discouraging them from operating on specific routes.
• Lack of Awareness- Limited awareness among potential passengers regarding air travel options under UDAN may restrict demand and the utilization of regional air services.
• High Operational Expenses- Airlines operating in remote areas frequently encounter heightened operating costs, which encompass increased fuel expenses, maintenance expenditures, and logistical challenges. These factors collectively impact the profitability of airline operations in such regions.

Way Forward to UDAN Scheme

• Collaborative Approach- Government, aviation industry stakeholders, and local authorities should collaborate to address challenges and devise effective solutions. So that UDAN scheme can reach to its highest potential 
• Investment in Remote Airport Infrastructure- Prioritize investments in improving airport infrastructure in remote regions to manage increased air traffic and ensure adherence to safety standards.
• Awareness Campaigns for Regional Air Travel- Launch awareness campaigns to inform potential passengers about the availability and benefits of regional air travel under UDAN.
• Continuous Monitoring and Evaluation- Regularly monitor and evaluate the performance of routes and airports to identify any issues and implement necessary improvements.
• Encouraging Innovation in Aviation- Promote innovation in the aviation sector to discover novel solutions that enhance connectivity and reduce operational costs.
• Reevaluation of Airfare Cap- Reevaluate the airfare cap for RCS flights, aiming to strike a balance between affordability and ensuring sustainability of airlines’ revenue.

Recent Developments in UDAN Scheme

• RCS-UDAN was awarded the Prime Minister’s Award for Excellence in Public Administration under Innovation Category for the year 2020.
• Republic Day Tableau for 26th January 2022 on UDAN was adjudged as the Best Tableau by the Ministry of Defence.

• The Ministry of Civil Aviation has launched the International Air Connectivity Scheme (IACS) under the “Ude Desh ka Aam Nagrik (UDAN)” initiative.
• International Air Connectivity Scheme (IACS) 
  • It aims to enhance air connectivity between specific Indian States and designated international destinations, with the aim of fostering socio-economic growth within the Indian state.
  • The State Governments of Assam, Manipur, and Tripura have identified routes connecting Guwahati, Imphal, and Agartala with selected international destinations, including Bangkok, Dhaka, Kathmandu, Yangon, Hanoi, Mandalay, Kunming, and Chittagong.
  • Concerned airport operators are tasked with the development and upgradation of airports to meet international standards, ensuring the facilitation of smoother international air travel experiences.
• Recently UDAN (Ude Desh Ka Aam Nagrik i.e. let the country’s common man fly) Scheme which focuses on improving unserved air routes in  underserved regions of India, completes its 6th year in 2023.

SWOT Analysis of UDAN Scheme