Explanation:

The Ministry of Civil Aviation took a major step on 21/10/2016 towards making flying a possible thing for the small town common man. The Civil Aviation Minister Shri P Ashok Gajapathi Raju launched this scheme namely UDAN at New Delhi. It’s full form is “Ude Desh Ka Aam Naagrik”. UDAN is an innovative scheme to develop the regional aviation market.
More about UDAN Scheme

UDAN is a market-based mechanism in which airlines bid for seat subsidies.
This first-of-its-kind scheme globally will create affordable yet economically viable and profitable flights on regional routes so that flying would be affordable to the medium class Indian people who belong to small towns.
The scheme would be in operation for a period of 10 years.

Objective of UDAN scheme

The scheme UDAN will provide a win-win situation for all stakeholders.
The citizens would find more job opportunity and will be also benefited of affordability, connectivity and more jobs.
The BJP Govt would be able to expand the regional air connectivity and market.
The state governments would gain the benefit of development of remote areas.
It will enhance trade and commerce and more tourism expansion.
For incumbent airlines there was the promise of new routes and more passengers while for and start-up airlines there is the opportunity of new, scalable business.
Airport operators will also see their business expanding as would original equipment manufacturers.

UDAN scheme will boost air travel between smaller cities, fares for one-hour flights will be capped at Rs 2,500. This scheme is likely to be launched in January, 2017. The UDAN scheme (an acronym for Ude Desh Ka Aam Naagrik or “helping the average Indian fly”) has been devised to increase connectivity. So far, two options have been discussed yet:–

i) Government will charge 2% cess from passengers flying on profitable routes, or

ii) It will ask airlines to pay Rs. 8,000 every time they land at an airport in a major city or metro.