IATA wants govt to slash taxes to make sector viable

To make the fledgling Indian aviation sector viable, global body of airlines, International Air Transport Association (IATA) today asked the government to reduce a variety of taxes and charges, some of which, it said, violated international obligations.

Warning that the global crisis in aviation was "deepening", the IATA said India was "one of the epicenters with potential losses of $1.5 billion this year.... The most urgent (measure) is to address taxation, which is crippling the industry."

However, IATA Director General and CEO Giovanni Bisignani welcomed the scrapping of 5 per cent customs duty on jet fuel and passage of the legislation to set up the Airport Economic Regulatory Authority (AERA) by Parliament.

"AERA has an important role to play. Now that Parliament has approved (the bill), there is no time to waste in quickly setting up and staffing the agency," he said in a statement released here.

Maintaining that AERA was a step in the right direction but was "only part of the solution", Bisignani said in order to help reverse the state of Indian air transport sector, "We need a comprehensive policy approach in addition to establishing AERA."

Stressing the urgent need for "reasonable" taxation in India, he said the service tax on premium class tickets, air navigation charges, landing and parking charges were "contrary to the International Civil Aviation Organisation's resolution calling for a reduction of taxes. Taxing overflight charges also breaches India's international obligations".