Slash taxes if you want aviation to grow: IATA
IATA Director General and CEO Alexandre de Juniac said in India, among other countries, privatisation of airports has been partly a good thing, partly a bad one
CANCUN (Mexico): If India wants its aviation sector to grow, it should lower the entire burden of taxes and charges on it, global airlines body IATA has said.
“We have always said to the (Indian) government to please lower the taxes if you want aviation sector to develop and bring much more prosperity and much more additional taxes at the end of the day, than you will lose by a lower rate of tax on aviation,” IATA Director General and CEO Alexandre de Juniac said.
In a wide-ranging interview on the sidelines of the recent World Air Transport Summit, he said, “in India, we have a problem of course. Airspace, fuel and other charges are too high. If they want to develop aviation, they should lower the taxes and the costs”.
When told that the government has fixed the Goods and Services Tax rate on air tickets at 5 and 12 per cent for domestic and international travel, respectively, de Juniac said he was talking about the entire financial burden on the airline industry.
The financial burden includes the total costs on aviation fuel and an array of charges on airports, navigation, landing and parking, he added.
About his comments that privatisation of aviation infrastructure, including airports, has failed to deliver benefits to the industry in India, Australia and some other countries, the IATA chief said, “in India, among other countries, privatisation of airports has been partly a good thing, partly a bad one”.
“It’s a good thing that there has been a significant improvement in infrastructure in major cities like Delhi and Mumbai. But privatisation has been bad because of the very, very high charges the airlines have to pay. (There is) an unbearable increase in airport charges,” he said.
Noting that the government also takes away 40-45 per cent of the revenue of the airports back to the Indian budget, de Juniac said, it is something that pushes the charges and the prices through the roof. “... so infrastructure improvement comes at an unreasonable cost for the airlines,” he added.
In India, four major airports — at Delhi, Mumbai, Bengaluru and Hyderabad — are run on public private partnerships.