Budget 2025: UDAN Scheme To Reach 120 New Destinations, Serving Millions of Air Travelers in the Next Decade
Moneylife Digital Team 01 February 2025
In her Union Budget speech for FY25-26, finance minister (FM) Nirmala Sitharaman unveiled a revamped version of the UDAN (Ude Desh Ka Aam Nagrik) scheme, aimed at further boosting regional air connectivity across India.
 
The enhanced initiative will expand to 120 new destinations, expected to serve four crore additional passengers over the next decade.  FM Sitharaman also announced plans to develop greenfield airports in Bihar to address the state's future aviation needs.
 
Launched on 21 October 2016 as part of the National Civil Aviation Policy, UDAN has already facilitated travel for 15mn (million) passengers across 619 routes connecting 88 airports, which include two water aerodromes and 13 heliports. Initially set for a 10-year run, the scheme was extended by another 10 years in October 2023.
 
The first UDAN flight, operated by Alliance Air, took off from Shimla to Delhi on 27 April 2017. 
 
Since its inception, the scheme has undergone five bidding rounds, with the most recent, UDAN 5.3, launched in January 2023. Over time, 619 routes have been established across 34 states and Union Territories, including 64 helicopter and 53 tourism routes.
 
The scheme has progressively expanded with 56 routes in UDAN 1.0, 156 in UDAN 2.0 and 165 in UDAN 3.0. Subsequent rounds added 54, 46, and 26 new routes in UDAN 4.0, 4.1, and 4.2, respectively. Data from the Airports Authority of India (AAI) shows that 88 airports have been operationalised under this initiative.
 
One of the highlights of the UDAN scheme is its affordability, with a cap of Rs2,500 on a one-hour fixed-wing flight or a 30-minute helicopter ride. Airlines operating on UDAN routes are supported through funding from central and state governments, union territories, and airport operators, including viability gap funding (VGF) to help offset operational costs.
 
The scheme prioritises underserved airports those with just one flight a day and unserved airports with no flights. Since its launch, 13 airlines, including new carriers like Fly91, Air Taxi, IndiaOne, Star Air and FlyBig, alongside established airlines like IndiGo, SpiceJet and Alliance Air, have been awarded regional connectivity scheme (RCS) routes.
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