IATA Calls for India to Liberalize

February 15, 2012, 11:10 AM

In an industry that is “all turnover with no leftover,” in the words of IATA director general and CEO Tony Tyler, there is an increasing frustration being felt by carriers wanting to fly to India, but with the Indian government failing to indicate an interest in opening up routes.

To tap the huge potential market, the question remains how to work with the regulator on liberalization of rights to fly on certain sectors. “If we could go for open skies, that’s the best,” Goh Choon Phong, Singapore Airlines CEO, told AIN.

Tyler stressed a need to review the industry’s relationship with governments. “When it works, the results are brilliant. Look at our Singapore hosts. We have a world-class airline and a world-class airport. The connectivity that aviation provides to Singapore has enabled it to develop as a successful regional hub for sectors as widely different as finance, healthcare, [et cetera],” he said.

Singapore’s progressive approach, according to Tyler, is an anathema to India.

“Aviation’s development is being held back by government policies,” continued Tyler. “High taxes mean that fuel accounts for an average of 45 percent of an Indian airline’s operating costs, against an industry average of 32 percent. A lack of capacity in the country’s economic heart–Mumbai–restricts connectivity, while development of the new Navi Mumbai International Airport seems to incur a fresh roadblock at every stage of its development. And where world-class infrastructure has been built–as in Delhi–costs are an issue. Proposals to boost charges by 340 percent may earn it distinction as one of the world’s most expensive airports, but it will destroy Delhi’s competitiveness as a hub,” he said in a scathing attack.

“There is a need to reassess policies in order for aviation to reach its potential as a primary contributor to India’s economic growth,” Tyler added.

Interestingly, Garuda, which had planned to start operations to Mumbai, found yields low and pulled back, the airline’s CEO Emirsyah Satar told AIN.

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