The International Air Transport Association (IATA) has asked India to formulate a national aviation policy and improve infrastructure to facilitate growth in the sector.
“Running an airline is a tough business and operating in India presents bigger challenges than most other markets,” says Tony Tyler, IATA director-general, in his keynote address at the inaugural India Aviation Day which IATA is jointly organizing with the GMR Group and the Confederation of Indian Industry.
“Solutions to these [problems] must be coordinated across all ministries and levels of government. That is why I have called for India to formulate a national aviation policy. “The call was not for special favors or preferential treatment. But rather for a coordinated policy framework that would facilitate growth,” he says.
Tyler says the agenda to improve infrastructure, reduce costs and evolve a more reasonable tax structure is absolutely critical to India’s long-term success.
“India is the great potential market of the future, and the industry here has only just begun to realize its enormous promise. If we are to realize that future, we must successfully overcome some major issues,” Tyler says.
He notes that “globally, fuel averages a third of an airline’s cost. In India it accounts for 45%. And on top of that, India imposes a service tax, which goes against international aviation rules.”
A stronger aviation sector will act as a catalyst for wider economic benefits. “Growth is important for India—not just the aviation industry. Indian economic growth is running at about 5%. That’s near half of what it used to be.”
Tyler suggests a series of measures, including safety tips that the industry and the government could take on a near- to medium-term basis to deliver tangible benefits.