Odisha govt paid over Rs 170 Crore in 2 years for empty flight seats!

The Odisha government had launched international flights to attract tourists and investment. However, the government is now spending nearly Rs 8 crore per month to compensate airlines for unoccupied seats. RTI data reveals that over Rs 170 crore has been paid in two years under the viability gap funding scheme.

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According to sources, in a major tourism push, the State government introduced direct international flights from Bhubaneswar to some of the key destinations—Dubai, Bangkok, and Singapore. However, an RTI response has revealed that the initiative is costing the State heavily due to low passenger turnouts.

Since the inaugural Dubai flight took off on May 15, 2023, operated by InterGlobe Aviation Ltd (IndiGo), Bangkok and Singapore were added. These routes were part of a strategy to attract foreign tourists and investments, boosting the local economy and employment.

Yet, data under the Right to Information (RTI) Act reveals a different picture. In the last two years, the State government has paid more than Rs 170 crore to IndiGo in viability gap funding (VGF) to offset losses for empty seats. An agreement with IndiGo states that the government will bear the cost of unoccupied seats to ensure regular operations.

On average, the government is paying close to Rs 8 crore every month, as planes continue to fly with significant vacant seats. Seat vacancy data shows 8.61% on Dubai flights, 19.27% on Bangkok routes, and a staggering 35.66% on flights to Singapore.

While the direct flights have reduced travel time by 19 hours to Dubai compared to earlier routes via Delhi, Hyderabad, or Mumbai, high ticket costs remain a barrier. A round trip to Dubai costs approximately Rs 30,000, compared to Rs 20,000 for Bangkok or Singapore.

The international connections have certainly opened routes to Southeast Asia, the Gulf, and even Europe via transit hubs. But tourism-related benefits are yet to reflect in passenger footfall.

Meanwhile, the central government has spent Rs 4,000 crore over eight years under VGF for 92 new domestic and international air routes across India.

Despite the effort, the Odisha government has yet to explain why passenger volume hasn’t increased even two years after the flights were launched. Questions remain about the sustainability and public return on this high-cost aviation investment.

Tour operators say the issue lies in the lack of effective promotion to attract inbound international tourists. “Odisha is not adequately being marketed as a destination abroad. Strong marketing with good accountability is needed to improve the situation,” said tour operator Gagan Sarangi, adding that the State must step up its global outreach efforts.

Reported By: Surya Narayan Panda, Laxminarayan Kanungo