IATA on Wednesday asked Indian government to set the country's aviation industry free by expeditiously reducing taxes, especially those on jet fuel, instead of 'micro-managing' the cash-strapped sector.
"The service tax on tickets, the high jet fuel prices due to taxation which account for 45 per cent of the Indian aviation industry's cost in comparison with 30 per cent for airlines in other parts, should be reduced or eliminated," IATA director general and chief executive officer Tony Tyler said in Geneva.
"Indian government should focus on safety, security and commercial freedom of the industry and not indulge in micro-management of the industry through (checks) on ticket pricing," he told the global briefing of the International Air Transport Association in Geneva.
"We urge the Indian government to set the aviation industry free (from policy interventions like checking airfares).
"Concentrate
on building infrastructure and the air navigation system. There is a lot the Indian government can do," he said, adding that the state taxes on jet fuel were having 'a significant drag on the Indian carriers'.
In India, the aviation industry contributes five per cent of gross domestic product, around Rs 291 crore (Rs 2.91 billion) in tax contributions, provides four million jobs and another seven million jobs through tourism and related activities, he said.
"We hope these numbers will have a good impact on government policies," Tyler said in reply to questions.
"We have good relations with the Indian authorities and are seeking o persuade them of the benefits that can be derived from the civil aviation industry."
Maintaining that the Eurozone crisis was bound to hit the markets in Asia and other parts of the world soon, the IATA chief warned of deep losses for the global airline industry next year if the European economic situation continued to be grim.