The government has cancelled the Delhi network of Air Odisha and Air Deccan, two of the five airlines which took part in the first round of UDAN or the regional airport development and regional connectivity scheme of the government.

"They had not started operations even after repeated extension of deadlines, they are facing some financial troubles as well," a senior official aware of the development told CNBC-TV18. "This would not have much impact on these routes but as for the smaller airports, we don't want to cancel, we want to give them a long rope."

Under the first phase of UDAN or Ude Desh ka Aam Naagrik, Air Odisha's Delhi sector comprised of Delhi-Gwalior-Lucknow-Gorakhpur, Delhi-Kanpur-Varanasi and Delhi-Dehradun, while that of Air Deccan included Delhi-Pantnagar-Dehradun, and Delhi to Kullu, Shimla, Agra, and Ludhiana.

Last week, the civil aviation ministry had sent a showcause notice to Air Odisha on the sudden suspension of operations at Jharsuguda airport. The airline has written back to the government saying that it will be in a position to start operations from November 1 as its BEACH-1900 D aircraft is fit to fly, people familiar with the matter told CNBC-TV18.

"That after the inauguration of Jharsuguda airport, Odisha, on September 22 and Jagdalpur airport, Chhattisgarh, on June 14, we started flight operations accordingly. But after few days, the aircraft required some major maintenance for which spare parts were needed and the same were not readily available... However, after much trial, we got the spare parts and the aircraft is now ready to fly within a week by November 1 and thereafter the operations would be uninterrupted," the carrier said in a written reply to the ministry in a letter dated October 25, a copy of which has been reviewed by CNBC-TV18.

The airline also said that a Sharjah-based investor is ready to invest capital in its business, which will make "operations on all of its 50 routes foolproof."

The investor is also ready to provide four of its ATR-72-600 aircraft to Air Odisha for UDAN flights and the airline will soon be seeking import permission from the ministry for these aircraft very soon, the letter said.

"After obtaining import permission from the government, these ATR aircraft will be brought to India within 15 days. But as per CAR (civil aviation requirements) regulations, this is a new type of aircraft and may take two months for the certification process," the airline told the ministry.