The Centre has begun formulating the draft for the “UDAN (Ude Desh ka Aam Naagrik) 2.0” scheme, which aims to support last-mile connectivity through the development of cost-effective airport infrastructure, sources told businessline.

The regional air connectivity UDAN scheme was launched in 2016 for a period of 10 years. The new version of the scheme will support the last-mile air connectivity programme beyond 2026.

Notably, the new iteration of the scheme, unofficially known as “UDAN 2.0,” intends to provide a cost-effective means to develop and operate over 100 underutilised airstrips in the country.

As of now, the Ministry of Civil Aviation has operationalised 86 aerodromes—comprising 71 airports, 13 heliports, and two water aerodromes under the scheme.

Besides, the scheme, which is in the draft stage, sets out a clear roadmap for first identifying those airstrips out of over 100 such infrastructure sites that hold immediate potential to harbour financially viable flight operations based on the location’s nearby captive population, industries, and places of tourism.

Furthermore, the draft scheme proposes to reduce the running cost of small regional airports and advance landing grounds (ALGs), which were earlier used for military operations.

It is estimated that on average, running operations at such an airport or ALG costs around ₹7 to ₹10 crore per annum.

“We are studying ways to reduce expenses while ensuring that these flights remain viable under the scheme’s funding structure,” sources said.

“The idea is to allow technological interventions to reduce cost and increase efficiency, wherever possible.”

Apart from reducing expenses, the new scheme will look at ways to ease operational regulations so that airlines or helicopter operators can start flights to last-mile destinations while offering affordable fares.

A case-in-point, sources cited are the recent guidelines for seaplane operations that have reduced infrastructure requirements and eased regulations.

“The key focus of ‘UDAN 2.0’ is to ease regulations so that airports, heliports in Tier III and IV cities, or ALGs, become financially feasible for flight operations,” sources said.

Additionally, the draft emphasises various ways to ease the entry barriers for new airlines, helicopters, seaplanes, and light aircraft operators.

The cost element, sources added, is the single biggest entry barrier for new players to enter the segment.

“More players are required to provide affordable air fares and to create the last-mile connectivity infrastructure that is needed,” sources told businessline.

The market-driven model of the first UDAN scheme allow airlines to assess demand on specific routes and submit proposals during bidding rounds.

It incentivises airlines to connect underserved regions by offering them support through Viability Gap Funding (VGF) and various concessions provided by airport operators, the central, and state governments.

Since its inception, the scheme has facilitated the travel of over 1.44 crore passengers across more than 2.8 lakh flights.

The scheme has operationalised 601 routes, including helicopter routes, while the number of operational airports in the country has doubled from 74 in 2014 to 157 in 2024. The Central government aims to increase the number of operational airports to 350-400 by 2047.

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