The International Air Transport Association (IATA) has asked the Indian government to have flexible parameters that can be reviewed by the regulators while deciding on the new greenfield policy for airports in the country.
“We believe it makes no sense to fix a per passenger yield at the outset of the concession contract that is set to run for four decades. We know from bitter experience in Brazil and elsewhere that selecting the company that simply proposes the highest concession fee does not yield good long-term results,” Alexandre de Juniac, Director-General and Chief Executive Officer, IATA, said on Tuesday. He was speaking at the inauguration of the International Aviation Summit-India, jointly organised by the Ministry of Civil Aviation, the Airports Authority of India and IATA.
The government proposes a greenfield policy for awarding new airports with the Jewar airport which will serve as the second airport for the National Capital Region. The date for bidding for this airport has not been announced.
The IATA DG also pointed out that applying GST to international tickets violates the International Civil Aviation Organisation’s principles and India’s international obligations. India imposes GST at the rate of 12 per cent on business class tickets and 5 per cent for economy class tickets sold for international travel.
“These deviations from global standards may have short-term revenue benefits for the government but they weaken India’s competitiveness by raising the cost of connectivity. And in the current form, airlines continue to face many compliances challenges. We need to resolve these issues soon,” the IATA DG said.
He said infrastructure funding needs a closer look and private capital fuelled many phenomenal developments at Indian airports.
“Infrastructure issue is critical for India’s future. Band-Aid solutions will not do the job. India needs a comprehensive and strategic masterplan for its airport infrastructure,” the Juniac said.