‘Airfares And Travel Packages Will Play An Important Role In Boosting Tourism’

Peter Leuthi, COO, Jet Airways, a speaker at the IATO convention, talks to Jyoti Koul on the aviation scenario
in India

Do you think higher tax on aircraft leasing, increase in service tax and not capping sales tax on ATF at four per cent will negatively impact tourism?

The entire scope of making travel by air more affordable is indeed by reducing costs to a competitive level available on international markets. This specifically refers to ATF, airport costs, sales taxes and recent taxes on leasing of aircraft. As long as tourism is considered a luxury item on a governmental level, the feeling that the different services can sustain high taxation is extremely damaging for the growth of travel by air and for tourism in general.

What role can a no frill and private airlines play?

The no frill airlines and all carriers in India will play an important role in increasing travel by air and to give a push to tourism. Airfares as well as travel packages will play an important part in boosting tourism. Easy access via the travel agents and the internet will further promote travel to the customers. Each business model will however play its own role.

As a private network carrier, Jet Airways will be able to offer great point-to-point services as well as good connectivity within India. Our newly introduced through check-in system in Mumbai airport and soon to be offered in other metros will enhance the easiness of connecting with the international airlines and thus enhance travel for tourists as well as business and visitors at large.

What must be done immediately to increase seat capacity and reduce fares to maintain tourist flow?

On the domestic operations front, the airlines have at present a sizable over capacity. These empty seats will serve the market and permit airlines to offer attractive prices. At the same time, the low cost carriers (LCC) will enlarge the capacity available within India, which will further promote demand. Such a situation often creates very attractive travel opportunities to customers. At times, it will generate new traffic and possibly convert train passengers to use flying on their new mode of travel.

On the international markets, India exceeds more capacity during the different season. One way is to allow the private airlines to compete as designated carrier on these international routes and on the other, more immediate period, the government can enlarge the seats offered in and out of India which indirectly also helps the domestic operators to fill the available capacity within India. As to the airfares, prices can be adjusted when some of the key issues are addressed.

What steps should the private sector take to sustain the boom and increase numbers?

I think the fourth step is to address the issue of adequate capacity availability in general not only to and from India but also within India. As long as the infrastructure remains with its known limitations (number of flight movements per hour, parking bays, limited terminal space etc) sustaining a tourist growth will be difficult if no relief is in sight