Geneva: Alexandre de Juniac, a former chairman & CEO of Air France-KLM, became the seventh person to head world airlines’ trade body, International Air Transport Association (IATA) when he took on the role of Director-General and CEO from September 1, 2016. A French national, de Juniac faces some tough challenges ahead that which includes protectionist policies and trade wars. In an interview with a group of Indian journalists, he shares the organisation’s stand on the Indian aviation industry, including privatisation of airports.
While IATA does not really make an intervention with regard to how governments run their aviation industry, how does the industry body like yours view divestment of Air India?
We obviously don’t have a position on the divestment. What we can say is that if it has to be done then it should maintain or improve the competitiveness of the market. It should also devout the same resources accorded to Air India to be extended it to the other airlines as well. It should also not harm the interest of any competing airlines, including international airlines. There should be fairness, equality and transparent.
During the last two years, several Indian domestic airlines have shut down including Jet Airways. How does IATA view this scenario?
When big players go bankrupt it raises several questions. Firstly, we can see that the operating cost for airlines in India is too high. While the competition is quite high, there is an enormous pressure on P&L and combine that with high infrastructure costs and fuel charges, you know where they are heading. High costs makes life difficult for the operators. What the government should do is to lower the costs relating to taxation. We know that the Indian government is trying to privatise airports but it is not a magical solution. We have a list of do’s and don’ts on how to carry out privatisation. In one case, we had warned about the consequences of awarding a contract to a company which had promised highest possible revenues. We knew that the operator will increase airport charges. It did happen and later the government asked them to lower these charges.
12/12/19 K Giriprakash/Business Line
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While IATA does not really make an intervention with regard to how governments run their aviation industry, how does the industry body like yours view divestment of Air India?
We obviously don’t have a position on the divestment. What we can say is that if it has to be done then it should maintain or improve the competitiveness of the market. It should also devout the same resources accorded to Air India to be extended it to the other airlines as well. It should also not harm the interest of any competing airlines, including international airlines. There should be fairness, equality and transparent.
During the last two years, several Indian domestic airlines have shut down including Jet Airways. How does IATA view this scenario?
When big players go bankrupt it raises several questions. Firstly, we can see that the operating cost for airlines in India is too high. While the competition is quite high, there is an enormous pressure on P&L and combine that with high infrastructure costs and fuel charges, you know where they are heading. High costs makes life difficult for the operators. What the government should do is to lower the costs relating to taxation. We know that the Indian government is trying to privatise airports but it is not a magical solution. We have a list of do’s and don’ts on how to carry out privatisation. In one case, we had warned about the consequences of awarding a contract to a company which had promised highest possible revenues. We knew that the operator will increase airport charges. It did happen and later the government asked them to lower these charges.
12/12/19 K Giriprakash/Business Line
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