Gopinath hails removal of levy; calls for holistic policy

GR Gopinath, CMD, Deccan Charters explains to CNBC-TV18 that though he welcome the decision of the government to remove the airport levy, a holistic policy was needed to increase the number of airline passengers from the current level of just 3 percent.

Below is an edited transcript of the interview on CNBC-TV18. Q: Is it a big relief for the aviation sector now that the government has decided to do away with the airport levy that was controversial and had the airlines and passengers crying foul?
A: I think this was one of a group of levies that constituted one of the biggest impediments to the growth of the air-passenger base as only 3 percent of India travelled by air. A lot of charges in the airports have gone up disproportionately and very arbitrarily and I think one of the reasons was the government itself which took away 46 percent of the revenue.
So, the entire aviation sector needs to be viewed comprehensively to bring in a lot of changes in policies that will enlarge the passenger-base as only when more passengers fly, will these taxes come down.
However, we must compliment the civil aviation minister for this bold step and by raising fresh equity, the airport authority and the flight operators must invest in the aviation sector. I think the airports are shooting themselves in the foot by limiting the air-passenger base. Q: The airport operators argue that they are already facing a significant funding viability gap and that the removal of this levy is only going to make matters worse. Do you expect the airport authorities to challenge the government's decision in the courts?
A: We have a regulator, but the regulator is regulating a monopoly and not competition. So, it's upto a third party to look at the airport levies comprehensively and figure out what needs to be done to ensure that there is equity for all stakeholders including airports. In the current scenario, there is a lot of arbitrariness in the aviation sector and almost all the airlines are losing money. So, why should profits be guaranteed to the airports?