Beijing: Air fares in India were about 300% higher than those in China and some other countries because of high tax rates, Jet Airways chief Naresh Goyal said on Monday, asserting that the aviation industry could not grow with such taxation.
“The Indian (aviation) industry can’t grow with the taxes. In fact, India is the only country in the world to impose a service tax on their airlines. Do you know that the fares of Chinese airlines are a third of the Indian carriers? Why is it so? Because there are no taxes here. In fact, the Indian fares are higher by 200-300% if compared with the world’s other carriers, leave alone Chinese,” Goyal told the news agency here.
Comparing Chinese airlines with their Indian counterparts, he said Chinese airlines were are all state-owned and “have solid government backing, not from now but for a very long time. The Chinese government doesn’t tax their own carriers and there is a lot of state support to them”.
A file photo of Jet Airways chief Naresh Goyal.
Elaborating on Jet’s expansion plans, Goyal said “we want to go to a few places in Europe and we are looking at those destinations which will make money like Paris, Munich and Frankfurt to name a few”.
Regarding joining a global airline alliance, he said “we are in talks both with Star Alliance and Sky Team. Let us see what materializes. That is all I can tell you at this point of time”. Jet Airways was in an advanced stage of joining the Star Alliance earlier, along with Air India whose induction into the global airlines grouping was put off due to its precarious financial health.
Asked about recent reports that his airline was intending to buy 100 Airbus aircraft, Goyal ruled it out saying “we are only planning to induct four more A330-300 aircraft by early part of the next financial year”. To a question on government recently allowing Indian airlines to directly import jet fuel, he said “ATF import is of no use and we are not considering it. When you don’t have the infrastructure to do so, it cannot be an option”. Kingfisher, SpiceJet and Air India have taken steps to go for direct import of aviation turbine fuel.
Though he has not favoured government allowing foreign airlines to pick up stake in domestic carriers, Goyal said he would welcome any such policy initiative by the government.
On the tremendous growth witnessed in the Chinese aviation market and lessons for India, the Jet Airways chief said “no, you can’t compare the Indian market with the Chinese one. The two markets are different in the sense of the kind of travel that takes place in China, the purchasing power of the people and the kind of carriers that exist here. All are different from the ones in our own country”.