"Perfect storm" could hit aviation, if steps not taken: IATA

New Delhi, Sep 29 (PTI) Warning that some Indian airlines
could fold up if structural changes were not carried out
immediately, the I.A.T.A. has asked the government to take
speedy steps to enable the industry weather the "perfect
storm" of high costs and falling demand.

"India is among the most expensive places on the planet
to buy aviation turbine fuel (A.T.F.) from. In August, it was
58 percent more expensive to buy fuel in Mumbai for domestic
flights than in Singapore," International Air Transport
Association (I.A.T.A.) Managing Director and C.E.O. chief
Giovanni Bisignani told P.T.I. in an interview here.

Observing that the Indian aviation industry was passing
through a "fragile and delicate moment", he said some airlines
could go bust in the coming few months if "structural changes
are not carried out expeditiously".

As many as 25 carriers worldwide have folded up
operations in the past several months due to huge losses, the
latest being Italian national carrier Alitalia, leading to
over 100,000 jobs in the aviation sector being lost.

He projected a cumulative loss of USD 1.5 billion for
Indian carriers this year, second largest after that in the
U.S., and warned that the "dream of liberalisation can turn
into a nightmare" if speedy action was not taken to counter
"the perfect storm of burgeoning costs and falling demand".

The I.A.T.A. chief identified three priority areas in
which urgent action was required. These are -- reducing costs,
improving infrastructure and adopting global standards on
safety, security and other issues.

Observing that privatisation in civil aviation has not
yielded positive results worldwide, he asked the government
not to project the country's emerging aviation sector "only as
a market" but take the lead through innovative initiatives.

"I can go on giving examples of places where
privatisation has failed. Privatisation around the world has
not worked. I can give you examples from Australia to many
other places ... Don't repeat the mistakes or the phantom
experience of the U.K.," Bisignani said.

Taking note of charges levied on overflights and for
landing at Indian airports, he said these "breach India's
international obligations under the Chicago Convention."

The service tax charged by the government on premium
class tickets for international travel from India ran
"contrary" to the International Civil Aviation Organisation
(I.C.A.O.) resolution 8632 calling for reduction in taxes.

"These are embarrassments for a country that is a
long-standing member on the I.C.A.O. Council," Bisignani said.

Recommending urgent investments to create aviation
infrastructure, he referred to the Mumbai airport and said,
while there was no possibility of creating a third runway
there, the greenfield airport under construction at Navi
Mumbai can cater to only 10 million passengers instead of a
100 million handling capacity that was required there.

"Mumbai needs an airport that can adequately serve the
financial capital of the world's second-most populous nation.
That means thinking much bigger and planning for capacity in
the 100 million passenger range like Delhi, Seoul, Hong Kong
and Dubai," he said.

Welcoming the setting up of a high-level committee to
study the problems of the industry, he said he was "concerned
about speed" in decision-making. "In India, decision making
process is slow ... a very wise decision taken too late does
not make any sense," he said.

Bisignani also sought passage of the legislation to
establish the Airports Economic Regulatory Authority
(A.E.R.A.) but wanted the body to have "adequate teeth" to
regulate airport charges and set standards on other issues.

He pointed out that the growth in the sector had slowed
from 33 percent in 2007 to only 7.5 percent in the first
half of this year and "went negative in the last two months."

On infrastructure costs, the I.A.T.A. chief said India
"does not measure up and there is no transparency in the cost
base for either airport or air traffic control."

Regarding security issues, he said India had taken "a
major diversion in security" by not agreeing to non-standard
data transmission for Advance Passenger Information (A.P.I.).

"This is a serious flaw for India's A.P.I. at a time when
increased cooperation is needed," he said, adding that global
standards have played a crucial role in development of air
transport and "should be at the heart of India's aviation
policy and commercial development".

Describing himself as "an India-optimist", Bisignani
said while Civil Aviation Minister Praful Patel has done "a
great job" in liberalising the aviation industry and setting
the wheels of growth in motion, "it is the responsibility of
the government as a whole now to follow up and address the
issues of the prevailing crisis with quick decisions based on
global standards."