The International Air Transport Association (IATA) has called on the government of India to maximise the potential contribution of aviation to India’s development by addressing infrastructure constraints that it says “limit growth” and policies that impose “excessive costs” on aviation.
India’s aviation market is set to grow significantly in the years ahead and IATA says global connectivity that only aviation can provide is a critical driver of all modern economies and the financial struggles of India’s airline industry put the stable development of connectivity at risk.
The association says India’s carriers are suffering a ‘double-whammy’ of steeply rising fuel costs and the decline in the value of the Indian Rupee.
IATA says fuel costs is particularly acute for Indian carriers for which fuel makes-up 34 per cent of operating costs – well above the global average of 24 per cent.
IATA’s director general and chief executive officer, Alexandre de Juniac (pictured above) said it is very difficult for airlines to make money in the Indian aviation market. “India’s social and economic development needs airlines to be able to profitably accommodate growing demand,” he said.”
“We must address infrastructure constraints that limit growth and government policies that deviate from global standards and drive up the cost of connectivity,” added de Juniac.
De Juniac’s remarks came in an opening address to the International Aviation Summit in Delhi, co-hosted by the Indian Ministry of Civil Aviation (MoCA), the Airports Authority India (AAI) and IATA. The joint Summit commemorates the approaching milestone of 50-straight months of double-digit domestic growth for Indian aviation.
He also called for work in four priority areas: developing a comprehensive and strategic masterplan for India’s airports, removing all obstacles to successfully open Navi Mumbai as quickly as possible, modernising airport processes using technology in line with global standards and flexibly using military airspace to expand airspace capacity for civil operations.
IATA also noted its concerns on government proposals for concession contracts at newly developed greenfield airports and also encouraged the government to look at ways to improve India’s competitiveness by aligning with global standards and reducing excessive government imposed costs.