Indian aviation outlook very good but infra worrisome says IATA

The outlook for the fastest growing Indian aviation market is “very good” but infrastructure and taxation issues could be detrimental for its growth, according to global airlines’ grouping IATA chief Alexandre de Juniac.

Clocking high double-digit growth for more than two years, India’s domestic aviation market is one of the fastest growing in the world. Even as he emphasized that the country’s aviation market is “promising”, the IATA’s Director General and CEO said there are concerns with respect to certain aspects.

“India outlook is very good because it is the fastest growing market… (but) we have some concerns about the Indian market. Infrastructure, taxes which are too high (and) not totally clear about the new GST,” de Juniac told in an interview here.

According to him, there are a lot of taxation issues and they could be “detrimental to the development of aviation”.

With respect to the Goods and Services Tax (GST), de Juniac said it is a better system even though the devil is in the details. Exclusion of airport fee and charges levied on ticket from the transaction value for GST purpose are among the issues being flagged by the IATA. On whether the risks in the Indian aviation market could possibly outweigh its growth potential, de Juniac replied in the negative even as he asserted that the government should take the right decisions in terms of costs, charges and infrastructure.

“We think that probably the most worrisome item is infrastructure. If you don’t have the capacity or the costs are high, it is an enormous obstacle for the development of aviation which cannot be overcome. Infrastructure is the key issue,” he noted.