Modified UDAN gives regional airlines a longer funding period while progressively reducing support, according to provisions presented at the Civil Aviation Ministry's July 16, 2026 workshop in Delhi. The scheme had been launched on July 4. Its design changes both the duration of assistance and the conditions under which operators must develop a route.
The workshop table sets funding at 75 percent of awarded viability-gap support in year three, 50 percent in year four and 25 percent in year five. Those percentages make the fifth-year payment one-third of the third-year payment, for the same awarded base. Extending assistance therefore still leaves an operator facing a substantial decline during the supported period. The percentages apply to funding, not to passenger ticket prices.
The July 17 government backgrounder adds an important commercial detail: route exclusivity remains limited to three years. In years four and five, funding continues at reduced levels after that exclusive period. The timetable combines a gradual withdrawal of assistance with an earlier end to protected operation, placing demand development at the centre of route planning.
Airport costs receive a separate response. The backgrounder describes three years of operations and maintenance support, capped at Rs 3.06 crore annually per airport and Rs 0.90 crore per heliport or water aerodrome. This addresses recurring aerodrome costs rather than the airline's own viability-gap payment.
The distinction matters because an airline and its departure airport face different accounts. A route can depend on both a carrier willing to operate it and an aerodrome able to maintain services. Financing only one leaves the other cost centre exposed. Modified UDAN places these two forms of operating support alongside infrastructure development.
