Airlines can bolster India’s economic growth if the government cuts taxes and spells out an aviation policy to help them expand, said Willie Walsh, chief executive of International Consolidated Airlines Group SA (IAG), which runs British Airways and the Spanish carrier Iberia.
Walsh, who was in New Delhi on Tuesday to attend an aviation conference, welcomed the aviation secretary’s statement that the government will encourage Indian carriers to fly international routes, a sector dominated by foreign airlines.
“(But) I think there is a contradiction... there is very high level of tax here,” he told reporters at the sidelines of the conference. “You can’t expect airlines to grow and help fuel further economic growth and at the same time impose very high levels of tax either through the fuel tax or service tax. That’s clearly going to damage the airlines. So I think the call for a more comprehensive aviation policy is a good call.”
Jet fuel in India is considered to be among the most expensive globally. Indian carriers have sought reduction of state-level sales tax on the fuel.
Overseas carriers currently control 60% of international air traffic to and from India, while Air India Ltd, Jet Airways (India) Ltd and Kingfisher Airlines Ltd account for the rest.
Civil aviation secretary Nasim Zaidi had said earlier on Tuesday the government will back Indian carriers to fly to overseas destinations and utilize their capacity optimally.
16/03/11 Tarun S/Live Mint
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