Bhubaneswar, Feb. 17: The state government today signed a memorandum of agreement with Malaysia-based budget airline AirAsia to start flight services to Kuala Lumpur.
The service would begin in March.
The agreement was signed at the secretariat in the presence of chief secretary Aditya Prasad Padhi.
"This will be the first direct international flight from Odisha. According to the agreement, there will be two or three flights per week. The operator has been selected through competitive and transparent bidding process. With this flight service, people of the state will have an option to fly directly to South Asia," said tourism director Nitin Bhanudas Jawale.
The government will also provide subsidy to the airline in the form of viability gap funding. The funding is usually given by a concerned government to support projects that are economically justified, but not financially viable.
Sources said the state government would provide a subsidy of around Rs 1.8 lakh for each trip to the airline if it transports less number of passengers than what was mentioned in the agreement. Earlier, the state government had reduced the value added tax on aviation turbine fuel to zero per cent for direct international flights from the state.
The state government hopes that with the new international flight service, other sectors such as tourism, trade and hospitality would also benefit.
"Though Odisha has no direct links with Malaysia, the flight service will be a perfect gateway to travel destinations such as China, Japan and other South-East Asian destinations. Besides, tourists coming to Odisha will no longer have to come via Calcutta. This will save a lot of time," said an official.
AirAsia's chief executive officer Aireen Omar said they would shortly announce the date of operation. In January, international cargo operations had began from Biju Patnaik International Airport.
Sources said that initially, the airline would use a plane with a seating capacity of 130-140. Later, if the demand increased, AirAsia would introduce a bigger aircraft. In the second phase, a Bhubaneswar-Bangkok flight is expected to start operations.
