Tony Tyler, the out-going Chief Executive Officer, International Air Transport Association (IATA), told select Indian media people that there was a lot that he did not like about the proposed civil aviation policy.

Edited excerpts from a media interaction.

You have been leading IATA for about 5 years, how much progress have you been able to make with the Indian Government in sensitising it to issues that affect international and Indian carriers?

It is always hard to tell how effective you have been in your advocacy efforts because they (Government) are making policy all the time. You cannot always say how much of what you have said has influenced them.

But there is still a lot that the Indian Government needs to do. We think that on airport charges the Government needs to let the Airports Economic Regulatory Authority do its work because at the moment legal challenges are getting in the way of AERA’s recommendation on reduction in charges at Delhi airport.

Our argument is that the GST regime should be rated at zero for international air transport services in line with OECD recommendations on sale of air tickets. The taxes on fuel are another problem.

We are still to see the civil aviation policy even though there is a lot we do not like about it.

Could you name what you do not like about the policy?

The 2 per cent Regional Connectivity Fund. This levy is going to increase the cost of air travel. It will dampen demand. It is against ICAO principles. We do not like the look of that.

We do not like the idea of auctioning unused Indian bilateral traffic rights to foreign carriers. This is something which does not happen anywhere in the world. It is a very strange idea and not one we would like to see happen. It undermines the whole principle of bilateral traffic rights exchange. If you want to change the system.. fine... change the system but auctioning is a very strange way to go ahead.

When you say change the system what exactly do you have in mind?

At the moment the world operates on bilateral traffic rights being exchanged. I am not saying that is the best system but that is the system. Change the system but do not start looking for ways of making money.

What is your recommendation to the Indian Government? Not look at auctions but look at something like an open sky or something?

If the Indian Government wants to see more air services they should negotiate different air services agreements. But auctioning of unutilised Indian bilateral rights which Indian carriers should be using to foreign carriers is a potential can of worms.

It will also distort the market in the sense that the dominant carrier will become even more powerful. It is not a formula for healthy competition.

Besides, on the issue of environment, CO2 reporting and monitoring should be aligned and made compatible with the ICAO methodology. It is very difficult, expensive and time consuming for airlines to have accounts for carbon emission using different matrices. It should be aligned internationally.

Sections of this Government are advocating divestment of Air India. Does IATA have a view on this?

No, we do not have a view or position on that. It is not so much the ownership which matters but providing a level playing field and providing the conditions for aviation to thrive.

What is your view on the 5/20 rule which says that a domestic airline must have a fleet of at least 20 aircraft and five years of domestic flying before it can fly overseas?

We do not like the alternate proposal which is domestic flying credits. It is just bringing in another highly complicated and burdensome (method). Adding regulatory cost to what is already a highly regulated industry and introducing yet another variable for airlines to consider when they are planning routes.

It completely negates the Government’s desire to simplify the ease of doing business in India. My answer on the 5/20 rule is that if it did not exist today you probably will not invent it. You have got it and now you are in a difficult position because now you have got it and what do you do with it. It may be an unfair rule but it is equally unfair to get rid of it. It is a lose, lose.

The Government should think carefully before bringing any more rules or systems which only makes the tangled web even more complicated.

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