According to estimates, over 1.61 crore passengers have travelled on approximately 3.38 lakh UDAN flights to date.
| Photo Credit:
SRIRAM MA
The draft Modified UDAN policy is expected to extend the viability gap funding (VGF) support from the existing three-year period to five years, with a tapering structure aimed at ensuring affordable fares for a longer time period, sources told businessline.
As of now, the proposal is under consideration by the Central government and is expected to be taken up by the Union Cabinet soon. If approved, the revised framework is proposed to come into effect from April 1, 2026.
Under the existing Regional Connectivity Scheme structure, VGF support is available for three years.
Extended Support
On its part, the draft Modified UDAN framework proposes extending this support up to five years, with funding tapering progressively from the third year onwards — 75 per cent in year three, 50 per cent in year four, and 25 per cent in year five.
The move, sources said, is aimed at keeping air fares affordable for a longer duration while encouraging airlines to build traffic and operational stability in a phased manner.
Besides, the gradual reduction in support is expected to help routes transition towards self-sustainability without the abrupt withdrawal of subsidies.
Unified Framework
The Modified UDAN proposal also seeks to bring aerodrome development and route development under a single scheme umbrella, incorporating policy and operational enhancements for a proposed ten-year tenure.
Furthermore, the expanded framework aims to connect 120 additional destinations and enable travel for nearly four crore passengers over the next decade, as announced in the Union Budget 2025-26.
The focus will be on underserved and unserved regions, including aspirational districts, hilly areas, the North-East, Himalayan and island states and union territories.
According to sources, to address implementation gaps seen in earlier rounds, the draft framework proposes measures to tackle land acquisition delays, technical and regulatory bottlenecks, aircraft availability issues, leasing challenges, and maintenance support constraints.
Funding Model
On the financial aspect, sources said that the scheme would be primarily funded through Central Government budgetary support, supplemented by state government contributions and the regional connectivity scheme levy on certain commercial flights.
To enhance affordability and improve airline economics, the draft also proposes revising the cap on regional connectivity scheme seats for aircraft with more than 80 seats to 50 per cent of total capacity.
Accordingly, the move is expected to allow a greater number of passengers to avail subsidised fares while enabling airlines to deploy larger aircraft more viably on regional routes.
Infra Push
On the infrastructure front, airport and helipad development is proposed to be undertaken through a challenge-mode prioritisation framework.
Notably, States would submit preferred aerodromes for consideration, with projects ranked through a structured scoring system evaluating state government financial commitment, location, development potential and infrastructure readiness.
The budgetary support would prioritise projects in the Himalayan and Island regions, the North-East and aspirational districts.
Launched in 2016 under the National Civil Aviation Policy, UDAN was designed to make regional air travel affordable and economically viable while expanding connectivity to new routes and airports.
Growth tally
According to official data, around 649 routes have been operationalised out of 915 valid routes awarded, connecting 93 unserved and underserved airports, including 15 heliports and two water aerodromes.
More than ₹4,300 crore has been disbursed as VGF and around ₹4,638 crore invested in airport development so far.
In addition, estimates show that over 1.61 crore passengers have travelled on approximately 3.38 lakh UDAN flights to date.
Published on March 2, 2026