Tigerair, SilkAir keen to link Bhubaneswar with SE Asian hubs

Though Bhubaneswar airport became international in October 2013, no direct international flight has taken off yet

Air carriers from the South-East Asian region, such as Tigerair, SilkAir and Thai Airways, have evinced interest in operating flights connecting Bhubaneswar with destinations such as Singapore, Bangkok and Kuala Lumpur.

The airline players have responded to the Odisha government's Expression of Interest (EoI) floated in July this year. Though Bhubaneswar airport got the tag of an international airport in October 2013, no direct international flight has taken off yet. To begin with, the state government has decided to run international flights to attractive destinations in South-East Asia. And, to incentivise the air operators, the state government has agreed to provide Viability Gap Funding (VGF) in the form of subsidy grant. The subsidy grant will be valid for six months from the date of starting commercial flights. The continuation of subsidy grant would depend on the trend in passenger traffic.

“A few operators have shown interest to run their flights. But they have quoted a higher subsidy grant which we are not in a position to offer. We are going to invite the interested air carriers shortly for a discussion”, said a government official.

SilkAir, a wholly owned subsidiary of Singapore Airlines, had earlier proposed to run flights connecting Bhubaneswar with Singapore via Kolkata and Vishakapatnam. The operator runs scheduled passenger services from Singapore to 43 cities in Southeast Asia, South Asia, China and Australia. As the regional wing of Singapore Airlines, SilkAir serves the short haul destinations in the Singapore Airlines Group network.

According to the EoI floated by the state government, prospective airlines interested in operating flights are to indicate their minimum subsidy per flight. The state government reserves the right to negotiate the subsidy amount with the lowest quoted support by concerned interested party for arriving at the minimum demanded subsidy required to start the international flight operations.

The prospective air carriers are required to operate flights from Bhubaneswar to Singapore/Bangkok/Kuala Lumpur at least two to three days in a week, preferably on alternate days.

The subsidy would be given if there are regular flights on scheduled days irrespective of the passenger flow. If the operator choses to increase or decrease the frequency as per demand, the state government would vary the subsidy grant accordingly.

If an operator is already running flights between an Indian city and Singapore/Bangkok/Kuala Lumpur and is keen to use Bhubaneswar airport as a hopping destination, the state government would offer subsidy grant if the operator reserves 30 per cent of the seats for Bhubaneswar bound or outbound passengers. The subsidy would be provided on monthly basis.

To incentivise global flight operations, the state government has already announced the complete waiver of VAT (value added tax) on aviation turbine fuel (ATF).