Stop the flights of fancy

There are better uses for money govt plans to spend on UDAN

Alok Tiwari

There is little doubt that India’s aviation sector is booming. FY 2025 saw nearly four crore people taking to the skies. The market is growing at over 8% each year, more than double the global average of about 3.5%. India’s airlines have about 1500 airliners on order. The sector contributes 1.5% to India’s GDP and employs more than 75 lakh people. It would, then, seem odd to trash a scheme designed to boost this sector. The reference here is to Ude Desh ka Aam Nagarik (UDAN) scheme, now in its fifth iteration, that has just got an allocation of Rs 28,800 crore from the central government, albeit to be spent over the next ten years.

The scheme specifically aims to open newer routes for aviation sector by subsidising the tickets to an extent. These routes must link to smaller towns and cities or relatively remote and underserved areas like the northeast. In its latest avatar, it also aims to provide funding for airports at such places where normal commercial considerations deem them unviable. It also seeks to promote helicopter operations by helping set up helipads are hundreds of places. The ostensible aim of the scheme is to democratize air travel by bringing it to smaller towns and, by implication, to ordinary people.

What can be wrong with such a scheme? For one, history. The earlier versions of the scheme have failure written all over it. Of the 600-odd routes started under it, more than half either never took off or shut down shortly afterwards. The reasons were varied but basically, it is low demand and extreme price sensitivity of Indian market. Though the fare was capped at Rs 2500/- for over half the seats in UDAN flights, even that proved too much for the real aam nagarik. Those who flew were the relatively better off and their numbers were not enough to keep the flights going.

The small number of flights also meant that the airports that were set up specifically to take advantage of this scheme also never became viable. Six of them in Uttar Pradesh shut down. Many in other states never got started or are being continued with financial aid from state governments. State governments across the country are in a race to set up airports in smaller cities without much consideration to demand from the area. The airlines are then pressured by politicians to start services from here. This also affects the already precarious financial health of airlines in India.

Noble as the goal may be, there is really no need to democratize air travel. At least in a country like India. Flying is the least ecofriendly mode of travel. It is also almost fully dependent on foreign countries not just for supply of planes but also for fuel. It is prone to geopolitical shocks like the current one that pose existential threat to it. But more than that, the sector is booming by itself. There is no need to give a leg up to something that is already up and running. Its organic growth will eventually ensure that air travel is democratized. That will happen in an economically viable and sustainable manner.

Until then, whatever we varnish the whole thing with, UDAN scheme basically subsidizes air travel. To the extent it takes away resources from other sectors, it is inexcusable. Booming sectors of the economy should contribute to the exchequer rather than be a drain on it. If the government must spend money on transport sector, then railways are something that really need it. It is not only ecofriendly but can really aid everyone, the poor and the rich, travel faster and better. India has complete supply chain for it within the country and can develop it further.

Even with existing technology there is scope to almost double the average speed of our passenger trains by eliminating choke points, bottlenecks and capacity constraints on tracks. Our “superfast” trains trundle along at 55-65 kmph on average. That’s because they spend more time stopping at bottlenecks than running at designated speeds. This could easily be upped to 100kmph. Millions will benefit if that happens. Programmes to double, triple, and quadruple tracks could be speeded up. Dedicated freight corridors should be completed early and used.

This will help the mobility needs of true aam nagarik. China built its high-speed train network of thousands of kilometres within a couple of decades. If we can achieve even half of that, we will be able to eliminate need of flights for distances up to 1000-1500 kms. That will save money on jet fuel and help cut down pollution. It will also generate many more jobs and enable a lot more people to travel than aviation. A train track potentially can serve many places along the entire route while a flight only serves two end points.

This is not to argue against aviation. It will always have its place. Just that we should not be throwing good money after bad chasing unrealistic goals. There is nothing wrong if more places get air connectivity. But it must happen in a viable manner, not by subsidizing ticket price. Instead of making air tickets cheaper for people in smaller towns, government should think of boosting purchasing power of people there. This must be done by incentivizing industry to locate in those places. Smaller cities need investments and job opportunities. Right now, they are draining talent while bigger cities are bursting at the seams.

If we can do that, there will be demand-led growth in air travel. Something that relies on subsidy is always vulnerable to policy shocks. Priorities of government can change over time and the whole thing collapses once the subsidy support is withdrawn. If the airports and flights depend upon strength of local economy, they will be more resilient and less likely to shut down.

This column appeared in Lokmat Times on Apr 2, 2026