Tag: IATA

India flouting global laws by taxing international air tickets, says IATA

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The International Air Transport Association (IATA) today castigated India for taxing international tickets, as it asked governments to facilitate the growth of worldwide connectivity by avoiding creeping re-regulation, maintaining the integrity of global standards and addressing a capacity crisis.

We must take governments to task. It is unacceptable that global standards are being ignored by the very governments that created them, IATA’s Director General and CEO Alexandre de Juniac said.

Asserting that India was taxing international tickets in contravention of the resolutions of the UN body International Civil Aviation Organisation (ICAO), de Juniac said, India helped develop ICAO resolutions prohibiting tax on international tickets.

Yet it persists in taxing international travel,? he said, apparently referring to the imposition of Goods and Services Tax (GST) and enhancement of its rates on international air tickets, especially business class.

The Indian government had announced the implementation of the GST from July 1, 2017. The tax covers airline products and services including tickets, ancillary, change, refund and other products and fees.

De Juniac was presenting a report on the air transport industry at the opening session of the 74th IATA Annual General Meeting and World Air Transport Summit, which began here today.

On aviation’s core mission to deliver safe, secure, accessible and sustainable connectivity, the state of our industry is strong and getting stronger. And with ‘normal’ levels of profitability we are spreading aviation’s benefits even more widely.

?But there are challenges. Smarter regulation needs to counter the trend of creeping re-regulation. Global standards must be maintained by the states that agreed (upon) them. And we need to find efficient solutions to the looming capacity crisis,? he said.

Alluding to the recent announcements by the Trump administration in the US on imposition of hefty tariffs on import of steel and other products, he warned that the spectre of a trade war looms which would hit the aviation industry as well, specifically in terms of cargo movements and business travel.

The forces of protectionism are gathering strength. Sanctions, tariffs and geopolitical conflicts are the mainstay of daily news. The spectre of trade war looms. Debates on migration and immigration rage. And trust among nations is showing fragility,? the IATA chief said.

He said airlines flew over four billion passengers in 2017 while more than 60 million tonnes of cargo was delivered by air, accounting for a third of the value of goods traded globally.

Every day, goods, people, investment and ideas are connected by aviation. That directly supports 63 million jobs and improves the quality of life for all, de Juniac said.

However, it is a challenging industry to operate?, he said, adding high taxes, costly and ill-conceived regulation, infrastructure capacity constraints, market shifts and the demands of labour are the normal’ repertoire.

Protectionism could derail successful international joint ventures. And fuel costs are expected to be up 25 percent on 2017, he said.

However, despite such a scenario, the aviation industry’s financial foundation has grown stronger, he said, projecting that the airlines would make nearly USD 40 billion this year as passenger demand is expected to grow 7 per cent and cargo by 4 percent.

There are challenges. We will meet them head-on. How by building the partnerships and understanding needed to further the reach and expand the benefits of the amazing industry… I will say it proudly again, we are the business of freedom,? de Juniac said.

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IATA criticises airport privatisation experience; evolves roadmap for governments

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Virtually expressing exasperation over the experience of airport privatisation, global airlines’ body IATA has come out with detailed policy measures for world governments to take up so that public money is not wasted.

Announcing the conclusion of a major study to quantify the performance of airports before and after privatisation, IATA said there was evidence of how privatised airports are more expensive than public, that efficiency of privatised airports is not much better than public airports but, unsurprisingly, profits for privatised airports are much higher.

Clearly, the generally accepted perceptions of introducing privatisation have not held true in the airport sector. Airport charges are higher for privatised airports. This is not what we should accept from privatisation in any sector, Brian Pearce, chief economist of the International Air Transport Association (IATA), said on the sidelines of the World Airport Summit.

He said, our customers (or governments) would not accept it if airline fares increased during privatisation in our sector, and added that operating efficiencies were not much better for privatised airports.

Quoting the findings of the study which examined 90 airports across the world, Pearce said airport privatisation has inevitably failed delivering on expectations because of a range of shortcomings in the process.

Asserting that five out of six best airports in the world were state-owned, he said our goal is to explain to aviation stakeholders why privatisation in the monopoly airport sector is not working for the best interests of long-term social-economic benefits.

Governments have focused on short-term financial gains…alternatives have not been considered. Governments have not developed a robust business case and there was insufficient meaningful consultation with industry, the IATA chief economist said.

There was also lack of transparency in the transaction process and often the process is driven by unsolicited proposals, interested private parties or financiers, he said, adding there were also ?poor regulatory safeguards.

There is a lack of bidder selection criteria and often the highest bidder is simply selected; and/or there are vague or provider-biased concession contract terms,” he added.

However, Pearce and Director of Global Airport Development and Fuel at IATA Hemant Mistry maintained that the body was not opposed to privatisation of airports.

Pearce and Mistry said the airlines’ body and consultancy firm Deloitte have published guidance materials for governments considering public-private partnerships (PPP) and other forms of privatisation programs for airport infrastructure.

“Airports provide critical infrastructure. It is important that governments considering privatisation or PPP take a long-term view and focus on solutions that will maximise the economic and social benefits of connectivity.

“The aim of Airport Ownership and Regulation is to help governments make better-informed decisions using best practices gleaned from decades of experience with the good, the bad and the ugly of airport privatisations,” said Alexandre de Juniac, IATA’s Director General and CEO.

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Airline profits this year unlikely at December forecast level, says IATA chief

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Profits in the airline industry are unlikely to reach the record levels forecast in December due to a jump in fuel costs, the head of the world’s leading air transport group said on Thursday.

International Air Transport Association (IATA) Chief Executive Alexandre de Juniac said his organization will issue fresh forecasts next week, and that airline profits were still likely to be robust.

The December projections were based on oil at $60 per barrel, Juniac said. Brent crude LCOc1 is currently over $77 per barrel, having risen roughly 15 percent so far this year.

“We are probably at the peak of the (profit) cycle. Next year we don’t know yet but probably less positive,” Juniac said at a media event ahead of the organization’s annual meeting starting on Sunday.

Airline operators such as Singapore Airlines Ltd (SIAL.SI) and Malaysia’s AirAsia Group Bhd (AIRA.KL) posted strong profits in the latest quarter ended March amid a tourism boom in the region.

In December, IATA predicted a record $38.4 billion net profit for the airline industry in 2018, with $27.9 billion coming from U.S. and European airlines. IATA represents some 280 airlines comprising 83 percent of global air traffic.

Juniac said higher fuel prices had not yet been passed on in fares and that infrastructure and labor costs as well as taxes were rising.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Flying is the safest mode of transport, says IATA report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Flying is by far the safest mode of transport, shows a report by International Air Transport Association (IATA).

The report which gives detailed data compiled by Northwestern University, states that 2017 was the safest year for aviation since 2005. According to the report, 2017 witnessed improvements in nearly all of the key air transport safety metrics both, globally and in most regions.

Commercial aviation, as per the report, had a fatality rate of just 0.07 per billion passenger miles, while the corresponding rate for motorcycles was more than 3000 times higher than that of commercial aviation.

The fatality rate for cars was 7.3%, 100 times higher than commercial aviation.

Ferry, train and bus had the fatality rates at 3.2%, 0.43% and 0.11% respectively.

The report states that more than 4.1 billion travelers flew on 41.8 million flights in 2017 and the air passenger demand forecast is expected to grow by 6.0% this year.  The passenger strength is likely to double over the next twenty years.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Vistara joins global airlines’ body IATA ahead of international operations

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Tata-SIA joint venture airline Vistara has joined the 280-members global airlines’ body IATA ahead of its plans to launch international operations by the
second half of this year.

Till now, only two Indian carriers – Air India and Jet Airways – were part of the International Air Transport Association (IATA), which has 280 airlines as its members, representing as much as 83 percent of the total air traffic
across 120 countries.

The membership will enable Vistara to collaborate with other international member airlines for codeshare and interline agreements, and provide a seamless travel through an extended global network to the passengers to and from India,  the airline said in a release.

“We’re extremely proud to join the international community of IATA members. This membership couldn’t have come at a better time as we gear up to launch our international operations soon,” Vistara chief executive officer Leslie Thng
said in a release.

The Delhi-headquartered full service carrier had earlier in September last year completed the IATA Operational Safety Audit (IOSA), a pre-requisite for an IATA membership.

“We welcome Vistara as IATA”s newest member airline. India is a key aviation market ” it is expected to become the third largest aviation market by 2024. We look forward to working with Vistara in shaping IATA’s priorities for India and the global aviation industry,” IATA regional vice president for Asia Pacific Conrad Clifford said.
Vistara currently operates over 730 flights a week to 22 destinations with a fleet of 20 Airbus A320 aircraft.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Passenger occupancy rates in Indian aviation soar to record high, says new report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Passenger occupancy rates of Indian airlines exceeded a record 90 percent for the first time in February 2018, bolstered by the launch of new flights and routes, said a new report by an industry trade group.

February also turned out to be the 42^nd consecutive month of double-digit revenue passenger kilometre (RPK) growth for Indian aviation, said the report by International Air Transport Association (IATA).

RPK is an airline traffic statistic that shows the number of kilometres travelled by paying passengers and is calculated by multiplying the number of such passengers by the distance travelled.

India passenger occupancy rates at 90.3% in February was more than five percentage points higher than China’s and far ahead of the average for all domestic markets (82.3 percent).

India’s feat also marks an all-time high for the seven domestic markets that IATA tracks.

Up, Up and Away!

The near-term outlook for air passenger demand in India remains bright, with the market on track to make it 50 consecutive months of double-digit annual RPK growth in October 2018, according to the report. Air passenger demand in India also rose to 22.9 percent in February, twice the pace of China and well above its five-year average (15.6 percent), added the report.

That means India is on track to surpass the UK as the world’s third largest origin-destination market by the mid-2020s, said IATA.
Passenger demand in India continues to be driven by network growth that translates into savings for air travellers, the report said, adding that the passenger occupancy rates will continue to grow.

(With inputs from PTI)

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India beats China to remain fastest growing airline market, says IATA

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India has retained its position as the fastest growing airline market for the third consecutive year, according to an International Air Transport Association (IATA) and Oxford Economics report.

The report lists factors such as sustained annual growth of between 14-15 percent  in passenger traffic as a major contributor to growth in the sector. The combined passenger traffic is expected to double over the next five years.

Domestic traffic growth is expected to come from the smaller and UDAN cities,  which are seeing rapid development of infrastructure to facilitate air routes.

An addition in capacity of up to 100 million is expected at UDAN scheme airports over the next 3 to 5 years. Increase in passenger capacity at airports such as Navi Mumbai International Airport and Jewar International Airport is also expected to boost passenger numbers.

Arline operators are expected to add between 500-600 aircrafts to their fleets over the next 5-7 years to match passenger numbers.

However, this sudden growth in Airline industry poses challenges such as rising crude oil prices, which would pressure already razor thin margins.

Other concerns include congestion at major airports, which also lead to delay in operations and a fall in operating efficiency of both airlines and airports.

The government’s ambitious UDAN scheme has also failed to attract private investment beyond Tier-1 and Tier-2 cities and connecting airports with regional city centres continues to be a challenge in Tier-3 and Tier-4 cities across the country.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Possible trade war involving the US could impact air travel demand: IATA

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Concerns over a possible trade war involving the US could have a serious dampening effect on global market confidence, spilling over into demand for air travel,” said Alexandre de Juniac, IATA’s Director General and CEO on March 8, 2018.

Juniac said that despite the slower start to 2018, economic momentum is supporting rising passenger demand in 2018.

IATA is International Air Transport Association (IATA).

The association announced worldwide passenger traffic results for January 2018 that showed traffic slowest year-over-year increase of revenue passenger kilometers (RPKs).

IATA said that results were affected by temporary factors including the later timing of the Lunar New Year in 2018 as well as less favorable comparisons with the strong upward trend in traffic seen in late 2016-early 2017.

Talking about India, the report registered a growth of 17.9 percent in January 2018 – a two basis point increase from the previous month.

Even though there is a marginal increase, the data points that the RPK (revenue passenger kilometers) rose from its November record – 16.4 percent – making it among the fastest.

RPK is calculated by multiplying the number of passengers, who pay for the fare, etc. into the distance travelled.
In January this year, Asia recorded a 6.6 percent increase in capacity out of which India has contributed the maximum share. China followed with 8.9 percent rise.

The report says, “For Asia-Pacific carriers, the large markets in India, China and Japan mean that domestic travel accounts for 45% of the region’s operations.”

The European carriers’ demand overtook Asia’s 4.6 percent increase with a 6.0 percent rise in the 30-day period of January 2-18.
The Middle East carriers showed the weakest growth with their demand up by 0.5 percent compared to January 2017.
This, according to the report, is ‘the slowest pace since September 2008.’

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow