Bhubaneswar: The Odisha Cabinet on Saturday approved a proposal to continue and rationalise State Viability Gap Funding (VGF) support for select international air routes from Bhubaneswar, with the objective of sustaining global connectivity, supporting the Odia diaspora, and boosting aviation-led economic growth.

Proposal aims to sustain Dubai and Singapore routes, rationalise state subsidy

The proposal placed before the State Cabinet by the Commerce and Transport Department of Odisha Government concerns international operations currently run by IndiGo, connecting Bhubaneswar with Dubai and Singapore. These routes were launched earlier with State VGF support to bridge initial commercial viability gaps.

VGF support for Dubai route

Under the proposal, VGF support for the Bhubaneswar–Dubai route is recommended for a further six months during the Winter Schedule 2025 (October 27, 2025 to March 29, 2026). The move comes in view of a sharp decline in passenger load factor following the withdrawal of earlier support, raising concerns over the possible discontinuation of the route.

The support is proposed under the State’s New Destination Policy to ensure continuity of direct international connectivity.

Six-month support for Singapore operations

The Bhubaneswar–Singapore route is also proposed to receive VGF support for a six-month period, with updated cost indexation. Despite its strategic importance, the route continues to face commercial challenges due to low passenger load factors and high operating costs, necessitating continued State intervention.

Withdrawal of VGF from select routes

As part of a rationalisation exercise, the government has proposed discontinuation of VGF support for two international routes:

  • Bhubaneswar–Bangkok, effective October 27, 2025
  • Bhubaneswar–Abu Dhabi, effective December 11, 2025

The step is aimed at optimising public resources while stabilising priority international routes.

Strategic Importance of Dubai and Singapore

Officials noted that Dubai is a major hub for the Odia migrant workforce, and direct connectivity is crucial to avoid reliance on indirect travel through other metros. Singapore, meanwhile, remains a key partner for Odisha in trade, investment, and institutional collaboration.

Sustaining international operations is also essential for retaining airport slots, stabilising routes, and advancing Odisha’s ambition to emerge as a regional aviation hub under the B-MAAN (Building and Maintaining Aviation Assets and Networks) scheme.

Financial outlay and decision framework

The total VGF support proposed for the two routes over the six-month period is estimated at approximately Rs 26.87 crore. The expenditure will be met from the approved allocation under the B-MAAN scheme.

Any further continuation, modification, or expansion of international routes will be decided at the level of the Chief Minister, based on periodic performance reviews of route viability and passenger demand.