Government should allow foreign airlines to bid for Air India: IATA chief executive
, ET Bureau|
Dec 11, 2017, 12.44 AM IST
The Indian government should sell its entire stake in Air India, a top executive at the International Air Transport Association (IATA) said.
In an interview with ET, IATA DG and CEO Alexandre de Juniac said the government's decision to divest stake in the national carrier was a good move.
"We support privatisation of Air India. But the company has to be privatised in right conditions," De Juniac said.
Specifying on the right conditions, he said the government should not keep any stake in the carrier post privatisation.
"For sale process, the government can keep a part stake initially but the government should eventually exit Air India. The government could allow foreign carriers also to bid for Air India. We do not see any problem in countries owning stake in any other carrier, as various global carriers have such stake, recognising that the government have to decide on the limits of it," De Juniac said.
The government has decided to privatise Air India and is in the process of finalising the procedure of its sale.
ET was the first to report that the government has decided to sell Air India, Air India Express and AI-SATS, and while its three other subsidiaries will be sold separately.
IATA is also of the view that the Indian aviation market, which is the fastest growing market in the world, will continue to grow. However, its feels the infrastructure constraints and taxation issues might be detrimental to the growth of aviation in the country.
"We are worried about how large airports are getting saturated. Mumbai has saturated and also the cost of infrastructure is too high. India is a promising market and infrastructure and taxation issues need to be resolved as early as possible," De Juniac said.
IATA wants that the government should try to control the increase in cost of airport infrastructure post privatisation, as it hugely impacts airlines' cost of operations.
On the goods and services tax (GST), De Juniac said there are issues that need to be resolved.
"GST is a good reform and is definitely a better tax structure but the devil lies in the details and we have some issues with it," he said. "Fees and charges imposed on passengers should not be included while calculating GST and ancillary revenues and fares should not be charged under same GST rates."
He said IATA also wants GST purposes and definitions of 'continuous journey' and 'stopovers' under the law and rules on service where it is rendered by a provider other than the service provider, charging the revenue (interline/code-shares).
In interline and code share agreements, fares may be charged by a certain airline but the flight is operated by some other airline. (The correspondent was in Geneva at the invitation of IATA)
In an interview with ET, IATA DG and CEO Alexandre de Juniac said the government's decision to divest stake in the national carrier was a good move.
"We support privatisation of Air India. But the company has to be privatised in right conditions," De Juniac said.
Specifying on the right conditions, he said the government should not keep any stake in the carrier post privatisation.
"For sale process, the government can keep a part stake initially but the government should eventually exit Air India. The government could allow foreign carriers also to bid for Air India. We do not see any problem in countries owning stake in any other carrier, as various global carriers have such stake, recognising that the government have to decide on the limits of it," De Juniac said.
The government has decided to privatise Air India and is in the process of finalising the procedure of its sale.
ET was the first to report that the government has decided to sell Air India, Air India Express and AI-SATS, and while its three other subsidiaries will be sold separately.
IATA is also of the view that the Indian aviation market, which is the fastest growing market in the world, will continue to grow. However, its feels the infrastructure constraints and taxation issues might be detrimental to the growth of aviation in the country.
"We are worried about how large airports are getting saturated. Mumbai has saturated and also the cost of infrastructure is too high. India is a promising market and infrastructure and taxation issues need to be resolved as early as possible," De Juniac said.
IATA wants that the government should try to control the increase in cost of airport infrastructure post privatisation, as it hugely impacts airlines' cost of operations.
On the goods and services tax (GST), De Juniac said there are issues that need to be resolved.
"GST is a good reform and is definitely a better tax structure but the devil lies in the details and we have some issues with it," he said. "Fees and charges imposed on passengers should not be included while calculating GST and ancillary revenues and fares should not be charged under same GST rates."
He said IATA also wants GST purposes and definitions of 'continuous journey' and 'stopovers' under the law and rules on service where it is rendered by a provider other than the service provider, charging the revenue (interline/code-shares).
In interline and code share agreements, fares may be charged by a certain airline but the flight is operated by some other airline. (The correspondent was in Geneva at the invitation of IATA)
