Global body says Indian aviation sector 'in crisis'
The director general of the international air transportation body said
on Wednesday that India's aviation sector is in crisis. He added that
the aviation sector was reeling from high costs, rising taxation and
India's major carriers, including state-owned Air India, lost around
$2 billion in the last fiscal year to March and are carrying debts of
some $20 billion.
"India's aviation is in a multi-faceted crisis.
Before the aviation sector can deliver greater benefits to the Indian
economy, this crisis must be resolved," IATA director general Tony Tyler
The global aviation industry is watching the Indian sector
with concern, Tyler told a business audience in New Delhi, noting that
of India's six main carriers only privately owned Indigo is making
"The financial situation of Kingfisher (owned by liquor
baron Vijay Mallya) is dire and (state-run) Air India is on government
life support," Tyler said.
Tyler called for coordinated government and private sector policies to nurse the sector back to health.
He said that the aviation sector was reeling from high costs, rising taxation and inadequate infrastructure.
Tyler also urged the government to reduce charges at Indian airports.
authorities recently approved a 346 percent increase in charges at
Delhi airport -- adding more than $400 million in costs for airlines,
The government is considering allowing foreign
airlines to take stakes in domestic carriers, a step that carriers such
as debt-laden Kingfisher see as a potential lifeline.
"critical domestic problems are not addressed, foreign investors will
not be lining up to put their cash in Indian airlines," Tyler warned.
"Under current circumstances, investors cannot see how they could ever see a return," he said.