IATA voices concern over slowdown in Indian aviation sector

Forum Gandhi | | Updated on: Jan 18, 2019
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Indian aviation sector’s woes may prove to be a hurdle for the industry to achieve double digit growth, according to Alexandre de Juniac, Director-General and CEO, International Air Transport Association (IATA).

At a round-table meeting held in Mumbai, the IATA chief said that the Indian aviation market’s slow pace is a matter of concern. The Civil Aviation Ministry had recently unveiled its ‘Vision 2040’ projecting growth in the Indian aviation industry over the next two decades.

Vision 2040

Speaking about the vision document, Juniac said, “The Vision 2040 is a good way to align all the stakeholder and investors who want to build the infrastructure, it provides a broad horizon. Indian airline sector needs to be strengthened soon and the infrastructure needs to be built sooner, else the congestion could pose to be a big issue in the growth.”

He further said that the vision of inaugurating the Navi Mumbai airport by 2020 was ambitious. “It would take minimum five years to inaugurate the airport,” he said.

Privatisation of airports

According to reports, the tender process for the airport is likely to be carried out by the end of January 2019. The project has seen several delays already.

Commenting on the Airport Authority of India’s bid to invite bids to operate six airports on the basis of ‘per-passenger fee’ (PPF), he said: “We do not recommend the revenue sharing model, it’s a mistake. The PPF process is not the best way to select a private player for the airports.

Currently, India has five major airports which are privately owned in metro cities. He added that privatisation of airports is a concern as it could lead to monopoly.

“Privatisation is not the only way, there are several countries that work quite well, besides privatisation of the airport.” “The government should consult its stakeholders including us.” The IATA chief explained, “At the end of it, it’s the airlines who would have to pay more to utilise these airports which could affect the quality of services and the end customers as well.”

The Director General urged that if privatisation of airports is the only way out, there need to be proper guidelines, rules and regulations to have a smooth flight. He also a strong role of the economic regulators along with proper economic laws.

Call for lower GST

According to reports, the Civil Aviation Minister Suresh Prabhu had released a document that pitched for a lower Goods and Services Tax (GST). He reasoned that “taxes add pressure on the airline’s bottom line”, thus aviation turbine fuel (ATF) needs to be brought under GST “at the earliest.”

Juniac said that the government should ease on taxation policies along with ATF prices and other factors that could pose as an issue for the aviation industry.

Published on January 18, 2019

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