Aviation sector value not well understood by many governments: International Air and Transport Association

NEW DELHI: Governments across the world have gained "substantially" from the airline industry, earning an estimated $ 121 billion in tax revenues this year alone, but the aviation sector's importance was "not well understood" by many of them, global airlines' body IATA has said.

This has forced the International Air and Transport Association (IATA) to appeal to the governments, including the Narendra Modi-led dispensation in India, to slash taxes, restrain private airport operators from levying high charges and relax "excessive" regulations in the aviation industry to maximise its full potential to generate economic growth.

The governments have "gained substantially from the good performance of the airline industry. Airlines and their customers generated an estimated $ 121 billion in tax revenues this year", IATA's Chief Economist Brian Pearce said at the just-concluded World Air Transport Summit in Doha.

The total global tax revenue generated was almost half of the gross value added by the industry paid to governments in payroll, social security, corporate and product taxes.

The value of international trade shipped by air this year has reached $ 6.8 trillion, while people flying this year, including tourists, spent an estimated $ 621 billion, Pearce said.

"But in many countries the value of aviation for governments and the wider economy is not well understood. The commercial activities of the industry remain highly constrained by bilateral and other regulations," he said.

IATA's Director General & CEO Tony Tyler had earlier said his "wish-list" for the new Indian government included stopping "political interference" in the industry, reducing excessive regulations, slashing of state taxes on jet fuel and building the long-awaited Navi Mumbai airport.

He had criticised the high taxes and airport charges in India and indicated his opposition to the privatisation of airports.