Global airline body International Air Transport Association (IATA) says running an airline is a tough business and operating in India presents bigger challenges than most other markets and the sector has to overcome huge obstacles to get onto a sound financial footing.
“India has a huge potential as it is a country of 1.2 billion people most of whom still travel using the vast rail network. But to realise this potential some issues like high operating costs, expensive fuel and other similar issues must be overcome,” said IATA’s Director General and CEO Tony Tyler in his keynote address at the inaugural India Aviation Day which IATA is jointly organising with the GMR Group and CII.
Accordingly, IATA Chief asked the Government to improve infrastructure and cut costs and excessive taxation on aviation by preparing a national aviation policy in India.
“Solutions to these must be coordinated across all ministries and levels of Government. That is why I have called for India to formulate a national aviation policy,” he said.
He added that aviation sector is contributing only 1.5 per cent to the overall GDP which could rise immensely if bottlenecks are removed.
“Stronger aviation sector would act as a catalyst for wider economic benefits. Growth is important for India - not just the aviation industry. Indian economic growth is running at about five per cent. That’s near-half of what it used to be,” he said.
Maintaining that aviation and aviation-related tourism in India supported 1.5 per cent of GDP or over `900 billion of business and 1.8 per cent of the workforce -- which is 8.8 million jobs.
“And these are good jobs. For those 1.7 million directly employed in transport, each generates about 1.3 million rupees in value added to the Indian economy -- or about ten times the Indian average,” the IATA chief said.
The government should focus on improving infrastructure, reducing costs and evolving a more reasonable taxation structure. These remain “absolutely critical to India’s long- term success,” Tyler said.
He suggested a series of measures that industry and government could take on a near-to-medium term to deliver tangible benefits, including in the fields of safety, security and e-freight.
Referring to the proposal to establish a Civil Aviation Authority (CAA) to replace DGCA, he said India should take full advantage of the IATA Operational Safety Audit (IOSA) and the IATA Safety Audit for Ground Operations (ISAGO) to enhance capacity building and skill development.
“As India turns a new page in its safety regulation, I urge the incoming CAA to consider incorporating the IOSA standards into India’s safety oversight framework for airlines. And ISAGO will be valuable tool for enhancing safety on the ground,” the IATA DG said. Pointing out that security was top priority not only of governments but also airlines, the IATA chief was of the opinion that the current ‘one-size-fits all’ perspective to security for both cargo and passengers was not sustainable.
“We need an approach that focusses on outcomes and not processes. And we should make the best use of scarce resources by taking a risk-based approach -- recognising that the vast majority of cargo and passengers pose absolutely no threat to aviation or national security,” Tyler said.