Bhubaneswar, March 21: The state government today served show-cause notice on private airline Air Odisha Aviation Private Limited for discontinuing service to Rourkela, Sambalpur and Jeypore from the city without informing it.

However, Air Odisha authorities said the air service had resumed after receipt of 70 per cent of government subsidy today. According to the agreement, the government has to pay subsidy at the rate of Rs 222 per nautical mile.

The intra-state air service, which had started on January 25, was discontinued from Saturday.

The private air company had threatened to stop the service if the arrear government subsidy was not released by today. Air Odisha's director (operation) S.K. Pani told The Telegraph: "We had written a letter to the state government to this effect on Saturday."

However, additional secretary in charge of the civil aviation wing of the state government R.S. Gopalan said: "They had not informed us before discontinuing the air service. We only came to know about it from the media. This is clear violation of terms and conditions of the MoU signed with the air company."

Gopalan said the state government had issued a notice on Air Odisha to show cause within seven days. "The government will take a call after receipt of the reply," he said.

The official, however, denied that there had been inordinate delay in release of the subsidy. "The delay was only for seven days because of shifting of our office. We have released a sum of Rs 41 lakh, about 70 per cent of the subsidy claim of Rs 60 lakh today," he said.

Pani said: "It's not true that we had stopped the air service from Saturday for non-release of subsidy. The air service to Rourkela was cancelled on Saturday due to inclement weather. The flight to Jeypore was also cancelled today morning for the same reason."

Thanking the government for its prompt action, Pani said: "The service has been restored. We are going to operate the flight as usual tomorrow. The guests of the National Institute of Technology (NIT), Rourkela are travelling tomorrow in our flight."

Reacting to the news, chairman of the Rourkela Chamber of Commerce and Industries Subha Pattnaik said: "It is a good news for the entire city that the flight will not stop. But, Air Odisha should develop a business plan, so that it would not depend on subsidy so much."

According to the schedule, the nine-seater aircraft departs Bhubaneswar at 7am and arrives in Rourkela at 8.30am and after a 15-minute stopover, it flies back at 8.45am. The charges varies between Rs 2,500 to Rs 4,000 depending on availability of tickets.

Similarly, the cost of ticket between Bhubaneswar and Sambalpur is Rs 2,500. Sanjeev Panda, an investment company manager, who hails from Sambalpur, said: "Many people commute to Bhubaneswar from Sambalpur by private cars or rented vehicles, on which they usually spend around Rs 4,000 to Rs 6,000. Moreover, the journey also takes around eight hours. Now, the travellers have got an option to fly to Bhubaneswar from Sambalpur in an hour and at less cost of Rs 2,500 due to the air service."

ADDITIONAL REPORTING BY RAJESH MOHANTY IN ROURKELA AND SUBRAT MOHANTY IN SAMBALPUR