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HindustanTimes Thu,17 Apr 2014

Aviation

High costs to deter FDI in airlines: IATA
PTI
Geneva, December 25, 2012
First Published: 21:08 IST(25/12/2012)
Last Updated: 22:06 IST(25/12/2012)

Foreign airlines would not pick up stakes in cash-strapped Indian carriers unless steps are taken to stem high costs of aviation operations in India, International Air Transport Association (IATA) chief Tony Tyler said on Tuesday.

“No, I don’t think it (allowing foreign airlines to invest in Indian carriers) is a game changer but it is a good thing,” said Tyler. “But it will not solve the problems of Indian aviation. It is a step in the right direction but not the panacea that some believe it is.”

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“As long as high taxes prevail, high airport costs and congestion, and poorly developed air navigation (services) means more congestion, high cost of operations exist, you are not going to get a lot of people to invest in airlines,” the director-general and CEO of IATA said.

Observing that there were restrictions on investing in airlines around the world, which was “a problem for the industry”, Tyler said “any move that we see in liberalising, is a good thing.”

“But unless conditions in India are improved for airlines, you are not going to see a flood of foreign carriers coming into the industry. Because foreign capital needs a return just as anywhere else.” he added.


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