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Why It’s Hard For Airlines To Thrive In Indian Market?

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India’s regulatory and tax framework around fuel hits airlines serving this market even harder.

Fuel accounts for about 34% of an Indian airline carrier’s costs, where it is only 24.2% globally.

Why It’s Hard For Airlines To Thrive In Indian Market?
Why It’s Hard For airlines To Thrive In Indian Market?

Excessive taxes as well as poor infrastructure make it hard for airlines to generate revenue India, the International Air Transport Association (IATA) stated.

The IATA’s CEO Alexandre de Juniac recently said that “India’s regulatory and tax framework around fuel hits airlines serving this market even harder.”

According to IATA’s view, the increase in fuel prices influences Indian airlines more than overseas ones.

When you compare fuel costs in India to other countries, fuel accounts for about 34% of an Indian airline carrier’s costs, where it is only 24.2% globally.

The IATA’s CEO also said that “there is no real competition for fuel suppliers at (Indian) airports, so there is little commercial incentive to keep fuel prices competitive,”

Juniac further said at the International Aviation Summit held recently in New Delhi, “adding insult to injury, GST is then applied to the throughput fees, the infrastructure fee and the into-plane service fee.”

The International Air Transport Association is a trade association of the world’s airlines. Consisting of 290 airlines, primarily major carriers, representing 117 countries, the IATA’s member airlines account for carrying approximately 82% of total Available Seat Miles air traffic.

IATA supports airline activity and helps formulate industry policy and standards. It is headquartered in Montreal, Quebec, Canada with Executive Offices in Geneva, Switzerland.