UDAN 2.0 targets India’s next 120 destinations

India is expanding its regional aviation map. The harder question is whether those connections can stay in the air.

On September 22, the Civil Aviation Ministry signed 21 MoUs with states and Union Territories under the next phase of the UDAN regional connectivity scheme, moving the programme from policy discussions towards implementation. The government is targeting 120 new destinations and four crore additional passengers over the next decade, alongside the development of 100 airports from existing unserved airstrips and 200 modern helipads.

But the significance of Modified UDAN lies less in the size of those targets than in what has changed underneath them.

What is changing?

The original UDAN, launched in 2016, was designed to make flying affordable and connect underserved and unserved regions. By February 2026, 663 routes had been operationalised across 95 airports, heliports and water aerodromes, carrying more than 1.62 crore passengers on over 3.41 lakh flights, according to the government.

The new phase, approved for 2026–27 to 2035–36 with a Rs.28,840-crore outlay, is designed around a different problem: how to build an aviation network that does not depend indefinitely on initial government support. The framework identifies affordability, operational sustainability, a transparent Challenge Mode for infrastructure projects and indigenous manufacturing as its four pillars.

That shift matters because a route existing on paper is not the same as a route remaining commercially viable.

Why the new model?

Under the revised framework, airline operators can receive viability-gap funding for up to five years, with support tapering from the third year. The government has earmarked Rs.10,043 crore for such support over the decade. The stated logic is to give airlines more time to develop markets while gradually moving routes towards commercial sustainability.

The challenge is visible in the earlier experience of UDAN. By July 2026, reporting indicated that nearly half of the routes launched under the programme had subsequently been discontinued. Some routes struggled once initial support ended, exposing the gap between creating connectivity and sustaining demand for it.

Modified UDAN is therefore attempting to intervene earlier — at the infrastructure and route-selection stage.

What does ‘Challenge Mode’ change?

For the first time in this framework, states and UTs can nominate airstrips and helipads they believe have potential for development through a dedicated portal. Airlines can subsequently bid for identified UDAN routes through a competitive route-bidding process.

That gives state governments a more direct role in deciding where connectivity should be built, based on local requirements rather than relying solely on a centrally determined network.

The infrastructure ambition is equally substantial: 100 airports are to be developed from existing unserved airstrips, while 200 modern helipads are planned, particularly for remote, hilly, island and aspirational regions. The scheme also provides three years of operations-and-maintenance support for around 441 aerodromes.

But can infrastructure create demand?

This is where the next decade of UDAN will be tested.

An airport can shorten a geographical distance, but it cannot by itself guarantee enough passengers, affordable fares, suitable aircraft or viable operating economics. The revised scheme recognises this by putting sustainability alongside affordability rather than treating infrastructure creation as the endpoint.

The government is also attempting to address the supply side. Modified UDAN proposes the acquisition of two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air, linking regional connectivity with the larger objective of building domestic aviation capacity.

The question, then, is no longer simply how many airports or routes India can add. It is whether the network can survive after the subsidy-supported beginning.

And where does the Centre–State model fit?

The 21 MoUs signed this week establish a framework between the Centre, participating states and AAI for identifying, developing and operationalising aviation assets. West Bengal is scheduled to sign its agreement on September 28, according to the Civil Aviation Minister.

That makes the next phase more decentralised in its infrastructure planning — but also places greater responsibility on states to identify locations where connectivity can translate into sustained use.

For UDAN, the first decade demonstrated that government intervention can bring aviation to places that commercial airlines might otherwise overlook. The second decade is asking a more difficult question: what happens after the aircraft arrives?

That is the real test of Modified UDAN — not how widely India can draw its aviation map, but how many of those new connections can remain economically and operationally viable once the initial push begins to taper.