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Imposing levy on airlines can disrupt competitive conditions: IATA chief

IATA's Chief Alexandre De Juniac Said That India Will Benefit From The Regional Air Connectivity Plan But Imposing Levy On Carriers Can Also Lead To Disruption Of Competitive Conditions.

PTI | Updated on: 11 Dec 2016, 09:47:26 PM
An airline (Image Source: Getty)


International airlines grouping IATA's chief Alexandre de Juniac claimed that India was among the "most open" aviation markets. 

Further, he also said that the country will benefit from the regional air connectivity plan but imposing levy on carriers can also lead to disruption of competitive conditions.

While being appreciative of the Indian government putting in a "consistent plan" for the aviation sector, Juniac also emphasised the need to have the right infrastructure and lower costs for the airlines.

"In general, we are not favouring levies because we think that it is a disruption or disturbance in the competitive conditions," Juniac told PTI in an interview. His comments come against the backdrop of the government levying up to Rs 8,500 per flight on major routes from December 1 in order to fund its ambitious regional connectivity scheme.

The scheme -- UDAN (Ude Desh ka Aam Naagrik) -- seeks to connect small cities by air as well as make flying more affordable for the masses.

"Regional connectivity is good for air traffic but using levy, tax or cross-subsidy system, let's name it as it is, is not convincing," he said, adding that it is being opposed by many operators as something which would not be efficient.

"We think that if you want to develop regional connectivity, first of all we need to have right infrastructure, airports and the lowest costs. So, for us there is a very clear link between the level of cost and the dynamism of aviation, the flow of passengers," Juniac said.

To provide viability gap funding for the flights operated under UDAN, a levy would be imposed on every departure on major air routes such as New Delhi, Mumbai, Chennai, Hyderabad, Bengaluru and Kolkata. 

Under the scheme, fares for one-hour flights would be capped at Rs 2,500.Juniac took over as the Director General and CEO of the International Air Transport Association (IATA) in September this year and has already visited India in his new role.

The grouping represents more than 265 airlines from across the world.

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First Published : 11 Dec 2016, 09:37:00 PM