Small-town airports, big bill: ₹900 crore spent on non-operational UDAN hubs

The total expense of the government is nearly ₹900 crore on 15 regional airports that are currently non-operational. These airports, which were built under the Union government’s UDAN (Ude Desh Ka Aam Nagrik) connectivity scheme, continue to incur expenses while their flights remain suspended.

The total expenses over eight years from 2017, as per documents submitted by the civil aviation ministry to Parliament, highlight the fraught nature of expansion in the aviation sector. While the civil aviation ministry has disbursed over ₹4,300 crore in subsidies to help keep regional routes running, the troubles at these hinterland airports have brought to the fore the huge gap between aspirations and reality on the ground.

“Subsidy-based schemes like UDAN generally do not work in aviation," said Mark D. Martin, founder and chief executive at Martin Consulting, an aviation consultancy firm, adding, commercial viability comes when there is demand. “Once the three-year subsidy or VGF (viability gap funding) period ends, many of the flight operations turn unviable, or people may not be willing to pay for high-priced tickets."

Queries emailed to the civil aviation ministry have yet to receive a response.

A case in point is Uttar Pradesh, which has five of the seven airports inaugurated in 2024 that have gone silent. The remaining two are in Madhya Pradesh. From Shimla to Sikkim’s Pakyong, these facilities across the country face problems as varied as technical hurdles, pilot shortages, and the exit of small-budget airlines.

Tough times

The 15 airports that are ‘temporarily non-operational’ include the six in Uttar Pradesh—Aligarh, Azamgarh, Ambikapur, Moradabad, Shravasti and Kushinagar—two each in Madhya Pradesh and Punjab—Datia, Chitrakoot, Ludhiana and Pathankot—and one each in Odisha, Himachal Pradesh, Gujarat, Sikkim and Karnataka—Rourkela, Shimla, Bhavnagar, Pakyong, and Kalaburagi.

All these airports fall under the Regional Connectivity Scheme (RCS) or UDAN. The scheme was launched in October 2016. The first flight under the scheme took place in April 2017. The Union government has invested ₹4,638 crore in airport development under RCS apart from the VGF subsidy.

Under UDAN, there are 93 airports in smaller towns and cities, of which 78 are operational. It helps connect hundreds of thousands of people who fly from smaller towns.

Shimla, the airport where the first UDAN flight took off in April 2017, is an example of the struggle. Despite suspended operations, the ministry continues to incur an expense of ₹116.70 crore for its maintenance, as per December 2025 disclosures by minister of state for civil aviation Murlidhar Mohol.

The Pakyong airport in Sikkim, built at a cost of ₹605 crore, has seen maintenance expenditure of ₹178.75 crore. At the other end of the spectrum, Pathankot remains the least expensive non-operational site, costing ₹5.18 crore in upkeep.

Seasonal trouble?

For the ongoing winter schedule (beginning October 2025 and ending in March 2026), the civil aviation ministry had said that there were 126 operational airports in India, with Amravati, Hissar, Purnea and Rupsi being the new airports where operations were proposed by various scheduled airlines.

The ministry stated that operations were suspended at seven of the 15 non-functional airports during this period.

“At present, fifteen airports…are temporarily non-operational under the UDAN Scheme due to various reasons, including completion of the three-year VGF tenure, poor visibility conditions at VFR (Visual Flight Rules) airports, daytime runway closures, shortage of aircraft, leasing issues, temporary discontinuation of operations by the airline concerned, novation of contractual obligations to other operators, and low passenger load factors (PLF), etc.," minister Mohol told the Rajya Sabha on 1 December 2025.

Even new entrants have hit a wall. Operations at the Moradabad airport were suspended in November 2024 by the then operator, FlyBig. The airline discontinued its flight operation due to poor visibility in North India and the non-availability of requisite equipment at the Moradabad airport, Parliament was informed last year. The government has still incurred a cost of ₹30.41 crore for its upkeep and maintenance.

Subsequently, FlyBig shut down in October 2025, with Moradabad airport now having no flight operations.

Aviation consultant Martin points to the failure of airlines like FlyBig and TruJet, which were heavily reliant on UDAN to have commercially viable operations.

Martin said that geography and proximity to major hubs dictate success. “An airport like Hindon became viable as it is located near Delhi and in a way acts as a satellite airport too. It also has some demand coming in from nearby areas like Noida. But that may not be the case for all airports," he explained.

Some industry players hold out hope. “You need viable airline operators with clear business plans to come in and operate under the regional connectivity scheme," said Manoj Chacko, founder and managing director of FLY91, a regional airline that started operations in 2024. “Some of the airports have infrastructure, but there are not enough airlines to operate."

If the right business case is made, there will indeed be commercial viability across some airports that connect smaller towns to larger cities, he said. “For instance, the Shimla-Delhi route did have regular flights at one point. So there could still be demand in that segment if the right business case is made."

Chacko said places like Maharashtra’s Jalgaon and Sindhudurg have become popular under the regional connectivity scheme.

FLY91’s hubs include Goa and Hyderabad, from where it operates its fleet of three ATRs.