Finding Out the Real Reason Why All Indian Aeroplanes Have the ‘VT’ Call Sign
There is a VT on an Indian aircraft. Have you ever wondered what it represents? According to experts, a radio call sign or registration
The 2026 Indian Union Budget is expected to reiterate the importance of improving regional connectivity through the Regional Connectivity Scheme (UDAN). The aviation sector is less focused on new declarations and more on delivery. According to an ICRA report, domestic air passenger traffic for the seven months of FY26 was 944.5 lakh, while infrastructure constraints at major airports turned out to be more visible.
According to government data, the number of airports in India has gone up from 74 in 2014 to 163 in 2025, and the Centre has set an ambitious target to scale this up to 350–400 airports by 2047. The next budget will prioritize continuity, mainly in regional connectivity, airport capacity expansion and tourism-led demand creation, instead of unveiling new fiscal support.
The development of the aviation industry has also contributed to employment and economic output. As stated by IATA, India’s aviation sector has around 369,700 people and produces USD 5.6 billion in output, accounting for 0.2% of India’s GDP. Including indirect employment, the industry currently has more than 7.7 million jobs and demand for pilots, engineers, ground staff, etc., will rise sharply as it expands.
Against this backdrop, Budget 2026–27 will focus on implementation rather than on growing scope. Industry participants expect continued funding and policy backing for UDAN, mainly to improve connectivity to underserved and unserved destinations.
The Budget will focus on establishing new airports and increasing capacity at key airports to address the current airport infrastructure constraints faced by airlines.
Internationally, the budget will depend on allowing measures instead of heavy fiscal outlays. According to ICRA, the advancement of medical tourism, which attracts more than a few million foreign patients annually, and further streamlining of e-visa facilities will be in focus.
The last Budget adopted a measured stance on aviation spending. The Ministry of Civil Aviation was allocated Rs 2,400.31 crore, a decline of around 10% from the previous year’s revised estimates.
Within this, the modified UDAN scheme received Rs 540 crore even as the government signalled that the next phase of aviation development would be driven more by infrastructure creation and regulatory reform than by direct subsidies.
The UDAN programme was positioned as a lasting connectivity engine, with the objective of adding 120 new destinations and allowing air travel for an additional 4 crore passengers over the next decade.
The government’s commitment to airport expansion, including a broader target to develop 50 new airports over the next half a decade and to enhance the capacity at metro hubs.
Progress has been uneven since the last budget. UDAN has so far operationalized over 650 routes, connecting 93 airports, such as 15 heliports and two water aerodromes.
According to PIB, over 1.56 crore passengers have travelled on RCS–UDAN flights so far, with 3.23 lakh regional flights operated nationwide. To keep these routes viable, about Rs 4,300 crore has been spent on Viability Gap Funding.
The commissioning of the Navi Mumbai International Airport in December 2024 was a key breakthrough. It was built with a total expenditure of more than Rs 19,650 crore. The new airport has the capacity to handle 20 million passengers annually in its first phase, with capacity increasing to 90 million in the years to come. This will ease pressure considerably on Mumbai’s congested aviation system in the long run.
In comparison, the Noida International Airport in Jewar has been slower than expected. Though much of the infrastructure is ready and the project will cost Rs 6,500 crore, operations will begin only in early 2026, delaying much-needed capacity for the NCR.
Simultaneously, development at prevailing airports has struggled to keep up with mounting demand. Passenger traffic at Indian airports will grow at an annual rate of 7% until 2027, according to CareEdge Ratings. In the last decade, there has been a growth of about 10–12% in the Indian domestic air traffic.
Despite the continuous growth, airline finances are under strain. Net losses for the domestic aviation industry will increase to Rs 9,500–10,500 crore in FY26, approximately double the projected Rs 5,500 crore loss in FY25, driven by a slowdown in passenger growth and rising costs linked to aircraft deliveries.
ICRA expects domestic passenger traffic growth of 4–6% in FY26 and approximates the industry’s interest coverage ratio to remain weak at 1.5–1.7 times.
Passenger traffic grew 7.6% in the last financial year to 16.53 crore, but development in the current year has been moderated by cross-border tensions, global disruptions, travel hesitancy following the June 2025 aircraft tragedy and air traffic control-related disruptions.
With the next financial budget for India, expected soon in 2026, the aviation sector is expecting much from it. What becomes a reality and what remains only in discussion remains to be seen. But one thing is very clear: the Indian aviation industry is on an upward trajectory due to technological developments and financial support. With this development in the industry, there will be various opportunities to make the most of.
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