Steep operational costs and low air fares in India are causing sustained losses for domestic airlines, Jet Airways chief Naresh Goyal said today.

"While the growth outlook for our industry is very promising, Indian carriers are faced with stiff headwinds, both from the cost and revenue standpoint, which pose a serious risk to realising the potential," he said at a CII conference on 'Building the future of Indian aviation' here.

On the high costs facing the Indian airline industry, Goyal said the factors included a depreciating rupee against the dollar, escalating jet fuel prices, high taxes and rising infrastructure costs as per a report by PTI. 

Meanwhile, the Director General of International Air Transport Association, Mr Tony Tyler, had said that the 346 per cent increase in rates at Delhi Airport will add $400 million to airline cost. Mr Tyler said the impact on travel will be 5-7 per cent. 

"Aviation should be seen as an enabler of growth, creator of jobs including skilled jobs rather then an activity to be taxed" Tyler said.

While aviation infrastructure had improved considerably, "these improvements have come at a very steep price for both airlines and consumers in the form of significantly higher fees and charges," Goyal maintained.

On the other hand, the Jet Chairman said domestic air fares in India were "far cheaper than fares in other large aviation markets for sectors of similar distances." Giving an example of a domestic sector with a distance of over 2,000 kms, he said compared to India, the air fares in China were 87% higher, in the US 119% higher, in Canada 162% higher and in Australia 182 per cent.

He said thus Indian carriers operate in an environment where the operating costs are much higher than other large aviation markets, while the fares are lower. "The combined effect of these has been sustained losses for the Indian carriers."

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