Tarun Karthick
Sri Vijaya Puram, 02 June 2025
In recent years, the Andaman and Nicobar Islands have finally begun to capture the attention of mainland India. Thanks to the growing influence of social media, the Islands now find a place in many conversations as families plan their next exotic getaway. The pristine beaches, rich biodiversity, and untouched landscapes have slowly but steadily earned a spot on the bucket list of countless travellers.
The recent tourism seasons have brought a welcome surge in visitors, providing a much-needed boost to the Islands’ economy. Tourism today is the single largest source of private-sector employment for Islanders, making it not just an industry but a lifeline. Recognizing this, the Andaman and Nicobar Administration has taken several progressive steps to nurture and grow the sector.
Despite this growing popularity, challenges remain. Chief among them is the distance from the Indian mainland and the high cost of flights to and from the Islands. These factors often place the destination out of reach for the average Indian tourist. While domestic tourism has been growing, there’s a parallel hope simmering quietly among Islanders—the growth of international tourism. A steady influx of foreign tourists could bring in greater prosperity and open up new avenues for employment and cultural exchange.
On 16th November 2024, that hope took wing when history was made at Sri Veer Savarkar International Airport in Sri Vijaya Puram (Port Blair). An AirAsia flight from Kuala Lumpur touched down, marking the start of international flight operations from the Islands. It was the first time an international commercial aircraft had operated out of Sri Vijaya Puram, and for many, it symbolized a new era.
The initial response to the new route was promising. Passenger numbers were steadily growing, and the connection between Port Blair and Kuala Lumpur was beginning to take shape. But just as momentum was building, AirAsia announced the suspension of the route. On 10th April 2025, the last flight took off, grounding the dreams of many. According to local tourism stakeholders, the decision was largely driven by the high cost of operations that the airline could no longer sustain.
What followed was a sustained and determined campaign by the local tourism community. Delegations of stakeholders met with authorities, including the Hon’ble Lieutenant Governor, urging for immediate intervention. Their primary demand: financial rebates and incentives that could make international operations viable again.
On the last day of May 2025, their efforts finally paid off. The Airports Authority of India (AAI) announced a major relief package—waiving off the User Development Fee (UDF) entirely for the first year of any international airline operation from Sri Vijaya Puram. In the second year, operators would receive an 85% rebate, and in the third year, a 65% rebate.
The UDF, which stands at ₹709 + GST per departing passenger, is a significant cost burden, especially for new flight operations as it adds to the cost and makes it extremely difficult for airlines to offer cheap promotional fares. Removing this for the first year means airlines can lower their fares while still protecting their profit margins, potentially finding a pricing sweet spot that makes the route viable.
This announcement was soon followed by another crucial development. Reports indicate that the Ministry of Defence, which controls the runway and much of the airport infrastructure, has given in-principle approval for waiving landing charges for international flights. This move, would remove another major operating expense, making the proposition even more attractive to international carriers.
The Islands also enjoy a unique advantage when it comes to fuel pricing. As per the latest available data, Andaman and Nicobar has the lowest VAT on Aviation Turbine Fuel (ATF) in the country—just 1%. For international flights, VAT is reportedly completely exempt. Given that ATF constitutes a significant portion of an airline’s operating cost, this exemption makes Sri Vijaya Puram one of the most financially viable locations in India for international operations.
All signs point to a serious and sustained effort by both the Andaman and Nicobar Administration and the Government of India to create a conducive environment for international airlines. The waivers on UDF, landing charges, and VAT on fuel combine to form a powerful incentive package.
The road ahead may still be challenging. Airlines will need to evaluate demand, manage operations, and assess long-term viability. But with these steps, the groundwork has been laid. The message is clear: the dream of international connectivity is alive—and it’s closer than ever to becoming reality once again.
Our wings may have been clipped momentarily, but the skies remain open. And if all goes well, we may soon see Sri Vijaya Puram reconnecting with the world—restoring not just flights, but hope, opportunity, and pride for every Islander.