Let domestic carriers fly freely, global airlines body tells India

Geneva: The International Air Transport Association (IATA) has advised the Indian Government to set domestic carriers free from policy interventions. It wants the Government to refrain from micro-managing the aviation industry, such as in ticket pricing.
IATA has projected a dismal picture for the global aviation industry in 2012 with a fall in profitability and profit margin. However, it believes airlines in Asia-Pacific will be in a better situation in comparison to their global counterparts. IATA represents 240 airlines accounting for 84 per cent of global air traffic.
Mr Tony Tyler, Chief Executive Officer and Director General, IATA, said, “Indian Government should focus on safety, security and commercial freedom of the industry, reduce or eliminate taxes on jet fuel and make effort for expansion of infrastructure such as Mumbai Airport and air navigation system.”
Jet fuel contributes up to 45 per cent in operating cost for an Indian carrier in comparison to 30 per cent for any international carrier.
Mr Brian Pearce, IATA's Chief Economist, added that there was enormous potential for the Indian carriers. Domestic demand is strong. “We see the travel is very low, but potential is very high. Now it is a challenge for the Indian carriers to be profitable,” he said.
The three listed domestic carriers — Jet, Kingfisher and SpiceJet — posted losses for the quarter ended September 30.
07/12/11 Shishir Sinha/Business Line

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Categories: Indian Aviation- In General Dec 2011