Government aborts flight of Air Odisha

BHUBANESWAR: Four months after the much-hyped launch of intra-State air operations, the State Government on Tuesday terminated agreement with Air Odisha Aviation Pvt Ltd which was providing air connectivity to multiple destinations.

The Centre for Modernising Government Initiatives (CMGI), an arm of General Administration Department, cancelled the Air Service Operation Agreement (AOA) with the operator citing 'breach of terms and conditions' with effect from June 1 (Wednesday).

In the termination notice, Executive Director of CMGI NK Sethi directed Air Odisha to remove its aircraft from the Government hangar and vacate the premises, where the City-based company ran its office, within 15 days.

On May 26, the Government had slapped a show cause notice on Air Odisha asking it to explain by May 30 why the AOA should not be terminated.

The CMGI had raised objections over Air Odisha not promoting CMGI though the intra-State air service was a joint venture initiative and the State Government paid about `222 per nautical miles as subsidy.

It also flagged issues relating to online booking and delay in refund in case of cancellations. Similarly, the over-the-counter sale of tickets, not mandated in the agreement, was also raised in the show cause notice. Sources said the triangular air operation, instead of direct service, was a major violation of the agreement as pointed out by CMGI.

What also raised the hackles of the Government was Air Odisha getting embroiled in controversy over troubles with shareholders. At least three complaints were filed against the company for not honouring the shareholders' agreement.

Similarly, allegations of non-payment of dues to Dublin-based ITCL Ireland Ltd, which had leased out its aircraft to Air Odisha Aviation Private Ltd, proved another thorn in the flesh.

On its part, Air Odisha submitted its reply on Monday but the CMGI said the explanation was not satisfactory as the operator failed to 'cure the breach' within the stipulated time.

Contacted, Director of Air Odisha Santosh Pani said the company was given too little time to explain its side and sought intervention of Chief Minister Naveen Patnaik.

On January 19, the CM had launched air operations to Sambalpur, Rourkela, Jharsuguda and Jeypore from Biju Patnaik Airport here.