Bagdogra backs CM flight path - Tax waiver fuels air traffic growth

Sanjay Mondal, TT: Chief minister Mamata made the proposal moments before she took off for London on Sunday to scout for investment, choosing Air India's Calcutta-Delhi-London flight in the absence of direct connectivity with Europe. The sales tax sop at Bagdogra airport is valid for three years, starting August 2013. 

"Since the announcement, there has been an increase in the number of flights and passengers. Several airlines have contacted us to start new flights," Rakesh Sahay, the director of Bagdogra airport, told Metro. In 2012-13, the total number of flights to and from Bagdogra was 7,376. 

The number increased to 9,374 in 2014-15 (till February). The number of passengers shot up from 6.66 lakh in 2012-13 to 9.48 lakh in 2014-15 (till February). Bagdogra airport has gained 2,000 more flights and three lakh more passengers a year since sales tax on aviation turbine fuel was waived in 2013, the statistics backing Mamata Banerjee's offer of a tax break to international airlines ready to start direct flights between Calcutta and Europe.

Vistara, a joint venture between the Tatas and Singapore Airlines, chose Bagdogra over Calcutta and started a New Delhi-Bagdogra-Guwahati flight last April. "We have plans to operate flights to and from Calcutta as well," an official of the airline then said.

On Monday, when asked whether tax on ATF in Calcutta - it is the highest among the metros -was preventing Vistara from starting operations, a spokesperson for the airline declined to comment.

IndiGo has also added three new flights to its Bagdogra operations since ATF tax was waived. Before the tax break, the low-cost carrier would operate a lone flight between Bagdogra and Calcutta. Now it operates two flights from Calcutta and one each from Delhi and Guwahati.

"The tax waiver on ATF has definitely been the push factor when it comes to increasing flights to Bagdogra," said an official of IndiGo.

Airport director Sahay said another Bangalore-based airline had recently approached him to start flights.

Since the state government decided to have zero tax on fuel in Bagdogra, Cooch Behar and Andal near Durgapur, Calcutta airport remains the only one where airlines are taxed at the rate of 30 per cent.

Travel industry sources said airfares to and from Bagdogra had declined since the tax waiver. "Earlier, airlines were forced to pass on a percentage of the ATF tax to passengers. So fares were higher, prompting many tourists to opt for overnight trains from Calcutta," said Anil Punjabi, chairman (east) of the Travel Agents' Federation of India.

Two years ago, the average return fare for Calcutta-Bagdogra was between Rs 8,000 and Rs 10,000. Now it is between Rs 5,000 and Rs 6,000.

The bulk of the traffic to and from Bagdogra comprises tourists visiting Darjeeling, Sikkim and Dooars.

At Calcutta airport, officials said they would start approaching European airlines now that the state government had committed itself to a tax waiver. Previous attempts to woo international airlines, including British Airways and Lufthansa, didn't elicit any response.

Even after a tax break, airlines with business-class seats might not be interested in starting direct flights between Calcutta and any European destination because of the historically low demand for high-yield seats in the industry-starved state.

"We intend to approach low-cost airlines of Europe," said airport director Anil Sharma.

Transport secretary Alapan Bandyopadhyay has said he would speak to some low-cost operators during his London trip with Mamata.