Doha: The IATA on Monday appealed to the Narendra Modi-led government to slash taxes, restrain private airport operators from levying high charges and relax "excessive" regulations in the aviation industry to maximise India's full potential to generate economic growth.
"You are a great country, a sleeping economic giant. You have great opportunities and capabilities that very few countries have. But unfortunately, the previous administration did not make the maximum use of the hidden Indian potential," Akbar Al Baker, CEO of Qatar Airways who is the President of the 70th International Air and Transport Association (IATA) assembly being held here said.
"I was very touched to hear the speech of Prime Minister Modi when he said that if each Indian takes one step forward, that will be 1.2 billion steps and this really is correct for India.
"And for the aviation industry in India, the potential is so huge that even if you allotted capacity to every airline that is applying to fly to India, you will still have load factors in excess of 80 percent.
"So I would urge Prime Minister Modi's government to look at aviation as a very important tool to generating economic growth in India because it is only aviation that will bring you trade, tourism, in return bring more employment and bring economic prosperity for the Indian people who have upto now been deprived so much economic opportunities that they have in their country.
"I hope this is a very strong message to whoever is listening," Al Baker said.
IATA, the trade association for world's airlines, Director General & Chief Executive Officer Tony Tyler said he too had "quite a long wish-list for the new government coming to power in India."
"To share a few, it would be to "stop political interference" in the industry, reducing excessive regulations, slashing of state taxes on jet fuel and to build the Navi Mumbai airport.
"I hope to visit India in not too long and perhaps discuss those and other ways (to help the aviation industry) with the new government and we wish the new government every success in maximising the potential of the Indian aviation industry," Tyler said.
They were replying to a question on their wish-list for the new government to develop Indian aviation.
Both Tyler and Al Baker also hit out at the excessive charges being levied on the airline industry in India with the former saying "governments are basically selling off airport franchises at hugely valued prices and ... Often this is because private companies see huge opportunities to take advantage of the poor regulations and overcharge the airlines and their passengers."
"Yes they invest money in developing airports but because of poor regulations, we (airlines) end up paying excessive amounts of money to the (airport) developers. Sometimes the developers pay huge amounts of royalty to the government as in the case of India.
"And the money wholly comes from the airlines and the passengers and this is something that we are very concerned about. The regulatory regime is not strong enough to control the charges levied by the airports. That's the case in India." Tyler said.
Al Baker also said that most importantly, the Indian government should "rein in the private airport owners, restricting them from levying the strong charges which the IATA DG (Tyler) has already raised several times with the authorities because it is untenable for airlines who already have very low margins to keep on paying such high airport charges.... Which are unnecessary.
"The (private) owners of these airports should also realise that they will get better returns (through airlines increasing operations) than from levying high charges."
Earlier in this inaugural speech at the two-day IATA annual general meeting, Tyler said "in Asia and Latin America, governments are aggressively pursuing public-private partnerships for airport development. We have seen enough failures of poorly structured initiatives to be deeply concerned about the consequences."
Speaking on the profitability of the industry in Asia-Pacific,he said the airlines in this regional were expected to earn USD 3.2 billion in 2014, compared to USD 2.0 billion in 2013. Profit per passenger in this region was below the global industry average at USD 2.98, as was the net margin of 1.6 percent. Passenger demand in the region was expected to experience a healthy growth of 7.4 percent.
However, "the region's financial performance has been dragged down by difficulties in the Indian market. It is hoped that the new government will address the persistent problems of high fuel taxes, insufficient capacity in Mumbai, high infrastructure costs, and onerous regulation," the IATA DG said.
He said the solutions to these challenges "have a political dimension and need government action. That action must be taken with the understanding that these are critical building blocks for efficient global operations."
IATA also said in March that some 240 carriers representing 84 percent of global air traffic had revised down their profit forecast for 2014 to USD 18.7 billion from USD 19.7 billion.
Tyler stressed that through consultations with the aviation industry, "infrastructure can be developed based on what airlines need and can afford. And that is a guaranteed win-win scenario."
He also emphasised that the market power that most airports have, needed "a counter-balance with effective independent regulators applying well-established international norms. That will bring about fair charging regimes which facilitate the enhanced connectivity that communities everywhere are seeking."
