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The Geneva-based International Air Transport Association has expressed concern about the proposed increase in rates in Indian airports. “Airports can increase charges to make good the revenue shortfall. This is not a luxury airlines enjoy.
Airlines cannot raise their fares by 340 per cent because they are operating in a competitive market. Airports are not operating in a competitive environment,” the IATA Chief Economist, Mr Brian Pearce, told Business Line.
IATA points out that if the increase was very hefty, it would be very damaging for the growth of travel. The Delhi airport operator Delhi International Airport Limited had wanted to hike airport charges by more than three fold.
The global body feels that one of the issues faced here is that a very large part of what is earned by the airport goes to the owner, which does make it very difficult for the airport to generate the returns for its shareholders.
IATA has also welcomed the broad consensus in the Government on allowing foreign airlines to acquire a 49 per cent stake in Indian carriers.
“Yes it is a welcome step. This liberalisation of the markets will help treat the airlines like an industrial sector.
It is definitely a good thing. India is one of the star economies.
It is an attractive market that is registering double digit expansion in traffic.”
IATA feels that the advantage of liberalising foreign direct investment will open the opportunity for Indian airlines to get better connected through the network of overseas airlines. On the carbon tax being imposed by the European Union on flights by commercial airlines, IATA feels it is distorting competition.
“Say the hub passenger travel by a Middle Eastern airline. Will that airline have to buy allowances for flying from Europe to Middle East hub.
And what happens when that passengers flies on to India or elsewhere without paying anything?
But if you are flying from India to Europe you have to buy allowances for the whole period. So the flight becomes more expensive,” Mr Pearce said.
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