Subsidy Snag For UDAN Foreign Flights From Bhubaneswar

Bhubaneswar: Plans to start overseas flights from Bhubaneswar under the UDAN International scheme might not take off owing to subsidy related issues.

Under the central scheme, the state government needs to extend a 100 per cent subsidy (viability gap funding) to the airlines that agree to operate flights to key destinations in India’s neighbourhood.

Civil Aviation Minister Jyotiraditya Scindia in a video conferencing on August 26 had requested chief ministers of Kerala, Madhya Pradesh, Maharashtra, Nagaland and Odisha to instruct officers concerned to initiate action on matters such as deposition of funds with the Regional Air Connectivity Fund Trust and viability gap funding support for international UDAN flight operations.

The Ministry has decided to lunch flights to Dubai, Abu Dhabi, Bangkok, Kulala Lumpur, Colombo, Singapore and Kathmandu from Bhubaneswar.

A senior official of the Commerce and Transport Department argued that if the state government is to provide 100 per cent subsidy then it should have a say in the bidding process. “Participating in the bidding by the Ministry will not be beneficial for the state government. It will only provide the subsidy, but will have no control over the airlines,” the official maintained.

“If the state government invites bids, it will then have a better bargain on the subsidy amount. The government can also discuss the terms of operations, including the period of subsidy and how long an airline will continue with the services if it is stopped,” the official added.

The official further said that the state government will provide the subsidy for the UDAN International scheme if the Ministry implements the existing centre-state subsidy share ratio for the RCS UDAN Scheme (80:20).

Talking about the proposal of the Ministry, Managing Director of Hotel Crown Debashis Patnaik suggested that the state government should launch international flights at least in two routes.

“As the AirAsia has its flight operations from Bhubaneswar to Kuala Lumpur, it will not be wise for the state government to run more flights on these routes by providing subsidy. Rather, the state government should opt for Bangkok and Dubai. If the government opts for the flight operations to Bangkok from Bhubaneswar, the passengers will get the connecting flights to Australia, New Zealand, Singapore, Kuala Lumpur, Japan and South Korea. Besides, the flight service to Dubai will enable the passengers to get the connecting flights to the US and the European countries at an affordable airfare,” Patnaik pointed out.

It is believed that such direct air connectivity would promote the development of the city and the state by wooing tourists and businessmen to fly via smaller towns, instead of the metros. The scheme seeks to make use of the open skies policy that India has with other Asian countries that allow direct and unlimited flights to and from these nations to 18 Indian destinations.