The Indian government is preparing a plan to offer subsidies to airlines for operating flights from airports that currently have little or no traffic, in an effort to revive underused aviation infrastructure and make better use of billions spent on airport development.

According to people familiar with the matter, the new plan will expand the government’s existing UDAN scheme, which was launched in 2016 to improve regional air connectivity. The upgraded version will include airports that have remained dormant despite having modern facilities and runways. Airlines flying to these airports could receive monthly subsidies in exchange for offering cheaper airfares on selected routes. The amount of support will depend on factors such as ticket prices and the number of passengers carried.

The Ministry of Civil Aviation has not officially commented on the proposal yet.

Since its launch, the Ude Desh ka Aam Nagrik (UDAN) scheme has added 649 new regional routes and brought 93 airfields into operation, many of which earlier had only basic infrastructure. However, several newly built airports, including those in Azamgarh (Uttar Pradesh) and Muzaffarpur (Bihar), continue to see no passenger traffic, despite being equipped with full airside and city-side facilities.

The government now plans to redesign the subsidy mechanism. While the earlier system involved airlines bidding for support to operate certain routes, the revamped model may include both auction-based and direct incentive options to make participation easier and faster.

Officials say at least a dozen of India’s 140 airports recorded zero passengers between December and March this year, highlighting the challenge of matching infrastructure growth with actual demand. Similar issues exist in parts of Asia and Africa, but the scale of the problem is far larger in India due to its rapid airport expansion over the past decade.

By recalibrating the UDAN program, Prime Minister Narendra Modi’s government hopes to balance India’s aviation map, easing congestion at metro airports while encouraging traffic to smaller cities. However, experts believe the scheme’s success will depend not only on subsidies, but also on a realistic assessment of local demand, better last-mile connectivity, and closer coordination between central and state agencies.

To address broader transport inefficiencies, the government is also planning to set up a national Transport Planning Authority, aimed at improving coordination across different infrastructure projects such as airports, highways, and railways.

The revised plan for the UDAN program is expected to be presented to the Prime Minister’s Office soon, officials said.