India Confirms Second Phase of UDAN Scheme — 70 New Routes Planned

July 11, 2026 4 min read

The Ministry of Civil Aviation has confirmed plans to launch the second phase of its regional connectivity scheme, expanding routes to 100 previously underserved cities across India. The announcement comes five years after UDAN — short for Ude Desh ka Aam Naagrik — first took off, delivering mixed results that include both genuine success stories and financially struggling airlines. Officials argue the programme remains essential for connecting remote communities to the national air network, even as critics question whether the model is sustainable.

What UDAN Set Out to Do

India launched UDAN in 2017 with a straightforward ambition: make air travel affordable for the common citizen by subsidising airport fees and offering flight operators attractive route bundles. The scheme targeted small cities that lacked commercial flights, using a competitive bidding process to award routes to airlines willing to keep fares below a set cap. Under the original framework, participating carriers received viability gap funding while state governments waived landing charges at regional airports.

By 2023, UDAN had connected 75 airports that previously saw no scheduled commercial service. Remote destinations such as Jhansi in Uttar Pradesh and Itanagar in Arunachal Pradesh gained their first regular flight connections under the programme. Passenger numbers grew from roughly 15 million annually in pre-UDAN years to over 30 million on regional routes by 2022.

The Mixed Record on the Ground

Not every route has thrived. Several airlines, including Air India subsidiary Alliance Air, reported persistent losses on thinner routes, leading to service suspensions in some regions. Demand at certain airports fell short of projections, forcing operators to consolidate frequencies or abandon unprofitable legs entirely. A 2023 parliamentary standing committee report noted that financial sustainability remained a concern for multiple carriers involved in the scheme.

Airport operators have also faced challenges. Infrastructure upgrades at smaller airfields — necessary to handle increased traffic — stretched state budgets, particularly in economically weaker regions. Some states failed to release their promised share of viability gap funding, creating cash flow problems for participating airlines.

Why India Is Pressing Ahead Anyway

Despite these setbacks, the government views UDAN as a long-term infrastructure bet rather than a short-term profit centre. Regional aviation connectivity fits within the broader Viksit Bharat vision, which aims to develop physical infrastructure across underserved parts of the country. Officials contend that benefits — job creation, tourism revenue, and improved access to healthcare and education — extend well beyond airline balance sheets.

India's geographic scale makes the challenge distinct from that of smaller nations. Tens of millions of citizens in hill states, island territories, and inland districts still face multi-day surface journeys to reach major cities. For them, even infrequent regional flights represent a meaningful change in mobility options. The government has also pointed to post-pandemic recovery in passenger traffic as evidence that underlying demand exists, even if early implementation stumbled.

What Phase Two Will Look Like

Under the expanded scheme, authorities plan to add 25 airports not previously covered by UDAN, targeting locations in the Northeast, coastal districts, and interior areas of central India. The Ministry of Civil Aviation has indicated it will simplify bidding procedures and adjust viability gap funding rates to reflect higher fuel costs and operational expenses that have squeezed airline margins since 2020.

Helipads and water aerodromes will feature more prominently in Phase Two, addressing connectivity gaps in difficult terrain where building conventional runways proves impractical. Seaplane services connecting islands in the Andaman and Nicobar archipelago and parts of Kerala have already attracted commercial interest, with operators submitting proposals under the revised framework.

Challenges Ahead for Regional Carriers

Whether the revised funding model will prove sufficient to keep smaller carriers operational remains unclear. SpiceJet, which had invested heavily in regional routes under UDAN, faced severe financial difficulties in 2023 and reduced its domestic network substantially. IndiGo and Air India have shown limited appetite for ultra-thin routes, leaving smaller regional operators to shoulder much of the expansion burden.

Aircraft availability presents another constraint. The global supply chain for regional turboprop aircraft remains tight, with delivery timelines stretching beyond 2027 for new orders. Airlines already committed to UDAN routes say they cannot add capacity quickly enough to meet government targets without significant fleet investment. Maintenance infrastructure for regional aircraft also lags in smaller cities, creating operational risks that some carriers are reluctant to absorb.

What to Watch in the Coming Months

The Ministry of Civil Aviation is expected to finalise the Phase Two bidding round by the end of the current financial year, with first flights on new routes likely to commence by early 2026. State governments in Assam, Odisha, and Rajasthan have already committed to providing additional incentives for carriers willing to serve remote destinations. Whether those incentives prove sufficient to attract competitive bids — and whether winning airlines can sustain operations — will test whether India's regional aviation ambitions finally achieve the scale its planners envisioned.