IATA urges India to end aviation crisis
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The International Air Transport Association (IATA) has urged India’s aviation sector to adopt an “India Inc” approach to resolve the ongoing crisis and improve competitiveness in the sector. In a statement, the global aviation body called for those in charge of aviation to reduce cost, cuttaxes and expand capacity, particularly in Mumbai.
“Indian aviation is in a multi-faceted crisis. Before aviation can deliver greater benefits to the Indian economy, the crisis must be resolved with co-ordinated public policies. It’s time for a grand plan to build India’s aviation future and thereby strengthen the Indian economy. To do that, we need an ‘India Inc.’ approach that addresses the crippling issues of high costs, exorbitant taxes and insufficient infrastructure,” said Tony Tyler, IATA’s Director General and CEO, in his keynote address to the Confederation of Indian Industry (CCI).
Tyler called for urgent action for issues like high cost, taxation and capacity building. “Infrastructure cost and taxes need urgent attention. I urge the government to initiate deliberations on utilizing the 46% concession fee to offset the increase in aeronautical charges and the cost for passengers. This could be the basis for a way forward that protects the interest of Delhi airport operators, its customers, the fare-paying public, and the economy,” Tyler opined.
The association also touched upon the issue of taxation. Currently, the Ministry of Finance imposes a service tax on air tickets, landing and navigation charges, while this contravenes International Civil Aviation Organisation (ICAO) policies. ““Reducing the tax burden on connectivity will be a critical element of success for both these efforts with more competitive business travel, more cost-efficient shipping and a more inviting welcome for 90% of international tourists who arrive by air,” he added.
Lastly, Tyler called for expedited work to expand capacity in Mumbai. A new airport is needed in Mumbai or economic opportunities will be lost. I am pleased to see that Prime Minister Manmohan Singh has recognized the urgency of the situation and thrown his weight behind moving the Navi Mumbai airport project forward on a fast track. The 12th Indian Five Year Plan projects 274 million passengers flying in 2017. A ‘super-fast track’ way forward may have to be developed to meet that expectation,” said Tyler.