Odisha Cabinet Approves ₹26.87 Crore VGF for IndiGo's Dubai and Singapore Routes
In a significant move to bolster international air connectivity, the Odisha state cabinet, chaired by Chief Minister Mohan Charan Majhi, has approved ₹26.87 crore as viability gap funding (VGF) for IndiGo airlines. This financial support is designated for a six-month period, spanning from October 27, 2025, to March of the current year, to ensure the continuation of direct international flights from Bhubaneswar to Dubai and Singapore.
Government's Rationale for Sustained Support
Briefing the media after the cabinet meeting, Chief Secretary Anu Garg outlined the key objectives behind this decision. The cabinet cleared the VGF support to sustain international connectivity, support the Odia diaspora, and strengthen Odisha's aviation-led economic growth, she stated. Garg further indicated that the government remains open to extending the subsidy beyond March, noting that the chief minister will take a final call on any further extension. Sources suggest that clarity on VGF beyond March will likely be provided in the upcoming state budget.
Addressing Concerns and Historical Context
The cabinet's approval comes amidst growing concerns from the Odia community residing in the UAE and industry bodies, including the Hotel and Restaurant Association of Odisha. These concerns were amplified after IndiGo halted bookings for the Dubai and Singapore routes beyond March, raising fears of potential discontinuation.
The Bhubaneswar-Dubai and Bhubaneswar-Singapore routes were initially launched in 2023 with state VGF support. This funding was crucial to bridge the gap between operational costs and ticket revenue during the initial phase when passenger load factors were low. A government statement explained that the fresh VGF support was approved due to a sharp decline in passenger load following the withdrawal of earlier subsidies, which threatened the commercial viability of these routes.
Strategic Rationalization of Routes
In a parallel decision aimed at optimizing public resources, the cabinet has decided to discontinue VGF support for two other international routes:
- The Bhubaneswar-Bangkok route, effective from October 27, 2025.
- The Bhubaneswar-Abu Dhabi route, effective from December 11, 2025.
It is noteworthy that IndiGo has already ceased direct services to Abu Dhabi since December 11. However, its Bangkok service continues to operate, with bookings available beyond March. This rationalization strategy is designed to stabilize priority international routes while ensuring efficient use of state funds.
Importance of Sustained International Connectivity
The government emphasized the critical importance of maintaining direct flights to Dubai and Singapore. Dubai serves as a vital hub for the Odia migrant workforce, making direct connectivity essential to reduce dependence on indirect travel via other metropolitan cities. Meanwhile, Singapore remains a key partner for Odisha in areas of trade, investment, and institutional collaboration.
Sustained international operations are also pivotal for retaining valuable airport slots, stabilizing air routes, and advancing the state's broader ambition of emerging as a regional aviation hub. This vision is part of the B-MAAN (Building and Maintaining Aviation Assets and Networks) scheme, which aims to enhance Odisha's aviation infrastructure and connectivity.
The cabinet's decision underscores the state's commitment to fostering economic growth through enhanced air connectivity, supporting its diaspora, and strategically investing in aviation assets to position Odisha as a key player in regional air travel.
