The International Air Transport Association (IATA) has called on the Indian government to help maximize the potential of aviation in the country by improving infrastructure and addressing government policies that hinder the industry.
In his opening address to the International Aviation Summit in Delhi, IATA Director General and CEO Alexandre de Juniac said current infrastructure woes affected airlines negatively and he urged the government to support the “business of freedom” by making the necessary moves to alleviate such problems.
“While it is easy to find Indian passengers who want to fly, it’s very difficult for airlines to make money in this market,” he said.
We must address infrastructure constraints that limit growth and government policies that deviate from global standards and drive up the cost of connectivity
“India’s social and economic development needs airlines to be able to profitably accommodate growing demand. We must address infrastructure constraints that limit growth and government policies that deviate from global standards and drive up the cost of connectivity.”
Indian airlines are suffering as a result of steeply rising fuel costs and the decline in value of the Indian Rupee. This is aggravated by the fact that fuel takes up 34% of operating costs for Indian carriers, which is much higher than the global average of 24%.
De Juniac pin-pointed four areas to improve the infrastructure in India, which included developing a comprehensive and strategic masterplan for the country’s airports, opening Navi Mumbai airport as quickly as possible, modernizing airport processes using technology in line with global standards (broad implementation of One ID), and allowing flexible use of military airspace to expand airspace capacity for civil operations.
Creating a better environment for aviation to do business can and will progress the nuts and bolts of India’s development day to day
IATA also encouraged the government to look at ways to improve India’s competitiveness through regulation by aligning with global standards and reducing excessive government-imposed costs, including zero-rate Goods and Services Tax (GST) for international travel in line with ICAO principles.
Addressing the issue of jet fuel, IATA said a more competitive market could be created by initiatives such as removing fuel throughput fees in line with global best practice, regulating transparency in pricing of jet fuel and reducing excise duty on fuel.
“Creating a better environment for aviation to do business can and will progress the nuts and bolts of India’s development day to day,” said de Juniac.
“Safe, secure and sustainable air links make our world a better place. That is why I call aviation the business of freedom. And the government and industry share a privileged responsibility to work together for its success.”