News: The Union Government approved the Modified UDAN Scheme for FY 2026–27 to FY 2035–36, shifting focus from route subsidies to long-term regional aviation infrastructure development.

Current Landscape

• India is the world's 3rd-largest domestic aviation market (after the USA and China).
• Operational airports increased from 74 (2014) to 165 (July 2026).
• 679 UDAN routes operational, connecting 95 airports, heliports, and water aerodromes.
• Tier-2 & Tier-3 airports recorded 23% annual growth in express cargo.

Major Government Initiatives

• UDAN (2016): Affordable regional air connectivity through subsidised routes.
• Krishi Udan Scheme: Air transport support for agricultural and perishable produce.
• 100% FDI (Automatic Route): Allowed in greenfield airports.
• GIFT City: Promotes domestic aircraft leasing.
• National Green Aviation Policy & SUGAM: Targets 100% renewable energy and net-zero airport operations by 2030.

Key Challenges

• High route mortality after subsidies end.
• High Aviation Turbine Fuel (ATF) costs.
• Aircraft shortages due to global engine supply issues.
• Shortage of trained pilots and maintenance personnel.
• Underutilised regional airports lacking night landing and instrument landing systems.

Recent Reforms

Modified UDAN (2026–2036):

• ₹28,840 crore allocation.
• Develop 100 airports and 200 helipads.
• Viability Gap Funding (VGF) extended from 3 to 5 years.
• GAGAN Navigation: Indigenous satellite-based navigation for precision all-weather landings.
• ATF Stabilisation Fund: ₹10,000 crore fund to reduce fuel price volatility.
• Hub-and-Spoke Framework: Strengthens connectivity between Tier-2/Tier-3 cities and major airports.