India, China to lead aviation industry growth: IATA

Dec 13 2012, 20:22 IST
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SummaryGlobal aviation industry would improve its profit from USD 6.7 billion to an estimated USD 8.4 billion.

India, China and Latin America would continue to lead the growth next year in the global aviation industry which would improve its profit from USD 6.7 billion to an estimated USD 8.4 billion, IATA said today.

While Chinese domestic market continues to expand "very strongly" despite a slowdown earlier this year, the Indian market by contrast went into a "sharp reverse" in 2012 following the problems faced by Kingfisher Airlines and the slowdown in the Indian economy, the top brass of the International Air Transport Association (IATA) said here.

IATA officials were critical of India on issues relating to the privatisation of airports in Delhi leading to high airport charges as well as taxation.

"India, for example, developed Delhi into a first class hub airport with the participation of private partners. The facilities are great. But the structure of the concession agreement requires the concessionaire to return 46 per cent of topline revenue to the government," IATA Director General and CEO Tony Tyler said, adding that the airport regulator AERA approved a hike of 346 per cent in airport charges.

"That is unacceptable for the industry.

And a more realistic concession agreement might have prevented it," he said in reply to questions.

However, he pointed out that "since our protests," the Indian Civil Aviation Ministry "has directed the airports to remove airport development fees (from January 2013).

The challenge now is to make sure that this is implemented."

Asking governments to "ensure that privatisation is well regulated," the IATA chief said "the tax receipts from the economic activity generated through aviation-enabled connectivity far outweigh the short-term economic gain of a misguided privatisation." On issues relating to high taxation on aviation and jet fuel, Tyler was severely critical of UK government for imposing Air Passenger Duty, calling it "the biggest tax on aviation in the world."

Maintaining that IATA would continue to talk to UK government on this "crippling" duty, he said the global airlines' body would keep on fighting similar departure taxes in Germany, Austria and other countries.

"We will be vigilant in providing strong arguments against other governments wishing to increase tax burden."

Making a presentation on the global financial outlook of the aviation industry, IATA Chief Economist Brian Pearce said China, India and Latin America would continue to lead the growth in passenger and air cargo traffic.

By 2016, "we would see that 38 per cent of global air travel will focus on routes to, from, or within Asia-Pacific," said

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