In order to push direct international flights from Bhubaneswar to foreign soil, the Odisha Government has decided to provide subsidy to airlines.
Senior officials reveal that such a proposal has been received green signal of Chief Minister Naveen Patnaik as several international operators have shown keen interest to start direct flights from the Bhubaneswar airport as the State Government bears the Viability Gap Funding (VGF).
Providing subsidy grant as VGF would help international airlines as there is little traffic directly from Bhubaneswar to foreign countries. Airlines like Silk Air, Tiger Air and Air Asia have applied to the State Government to avail such subsidy to run their flights to Singapore and Bangkok.
Now, the State Government would hold discussions with the international players and decide the most economical proposal received from these three airlines, said sources in the Government.
While the Government of India declared the Bhubaneswar airport an international one on September 20, 2012 and the existing old terminal has been renovated for facilitating international airlines, there are hardly any direct flights from Bhubaneswar to international destinations.
The Odisha Government has requested the Central Government to operate direct international flights from Bhubaneswar to any destinations in the Middle East or South Asian countries.
The Central Government also agreed that even if a hopping flight, the passengers can remain seated in the aircraft, either at New Delhi, Kolkata or Mumbai as the case may be and the same Aircraft can transport the passengers to the foreign disembarking station. Similarly the return journey can be arranged.
Accordingly, the State Government had reduced Value Added Tax (VAT) on aviation turbine fuel (ATF) to zero for international flights. But this is not happening now. However, the present international flight is being operated on the Hub and Spoke Model, making New Delhi as the Hub. So, the present arrangement cannot be termed an international flight.
So, the State Government has decided to provide subsidy to the airlines so that tourists can fly directly to Singapore and Bangkok, said sources.
As the State Government is taking up suomoto initiative to have direct international flights from Bhubaneswar to South Asian countries by providing subsidy, it is expected that the Government of India would reimburse the same to the State Government, said a senior official.