The International Air Transport Association (IATA) has asked India for action on reducing tax, ensuring capacity and keeping costs in check for the aviation industry.

In his keynote address to the Confederation of Indian Industry, IATA’s Director General and CEO, Mr Tony Tyler, said, “A bright future is at hand for Indian aviation if we can find common purpose among all stakeholders. India must not settle for a bronze medal in global aviation. If we can take deliberate action on a handful of critical issues – reducing taxes, ensuring capacity and keeping costs in check – a gold is entirely possible,” he said.

Mr Tyler said if critical problems were not comprehensively addressed, investors – foreign, domestic, aviation or otherwise – would be few. Turning his attention to Air India, he said that the airline was on “Government-provided life support of financial bailouts and other forms of protection”. But, long-term State aid has not rehabilitated the business and, in the meantime, it is having a destructive impact on the market, he added.

“Governments must lay the foundations for fair competition and regulate safety, security and sustainability. Urgent and co-ordinated actions are needed to resolve Air India’s problems.”

On airport charges, Mr Tyler said the recent 346 per cent increase in charges at Delhi would add over $400 million in operating costs for airlines providing connectivity to India, apart from affecting travel demand by five to seven per cent.

“I urge the Government to initiate deliberations on utilising the 46 per cent concession fee (which the airport operator has to pay) to offset the increase in aeronautical charges and the cost for passengers,” he added.

(This article was published on July 25, 2012)
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