Indian airline operators on Thursday warned the government against imposing a levy on air tickets to fund HIV/Aids programmes, part of a new global initiative to broaden access to drugs in development countries.
Fourteen countries have pledged to implement the “international air ticket solidarity levy”, which was launched by the United Nations in June and originated three years ago with the presidents of France and Brazil, Jacques Chirac and Luiz Inacio Lula da Silva.
As the country with the largest HIV/Aids case-load in the world, India will be a key beneficiary of an initiative that aims to create scale economies in the purchasing of drugs from global pharmaceutical companies.
Its booming civil aviation industry and fast-growing economy also make India’s participation in the scheme important to the programme’s success in bringing affordable treatment to other developing countries.
India’s participation is seen as a matter of national prestige, with various government ministries – including civil aviation, finance, foreign affairs and health – discussing the tax, proceeds from which would go to an international drug purchase facility.
“We are talking to the finance ministry to levy a cess [levy] on domestic and international air tickets,” Ajay Prasad, civil aviation secretary, said. “We have not finalised the magnitude … It will be decided soon, keeping in mind interests of consumers.”
France implemented the levy on air travel on July 1 and is due to be followed by Brazil, Chile, Congo, Cyprus, France, Gabon, Côte d’Ivoire, Jordan, Luxembourg, Madagascar, Mauritius, Nicaragua, Norway and the UK.
“The ministry will not want to impose this on the airlines unilaterally, but there’s no doubt that generating more resources domestically would certainly help India in its own fight against HIV,” said Denis Broun, country co-ordinator of UNAIDS in India.
“India is still very donor-dependant, with the government contributing at best $80m a year to the $500m annual expenditure planned over the next five years. Donor money has to be negotiated regularly and is not always agreed.”
Operators in the fiercely competitive Indian airline sector said the government risked stifling the take-up of low-cost air travel and needed first to improve woeful infrastructure before imposing unrelated new taxes on a nascent industry.
“Indian airlines already face fuel and airport charges 60 per cent higher than the international average,” said Capt. G.R. Gopinath, chief executive of Air Deccan. “Affordable and rapid connectivity is central to sustaining our high growth rate.”
“The government should first of all sort out pathetic service at airports as every minute spent hovering above Delhi, Bangalore and Mumbai airports costs us Rs2,000 in extra fuel and today there’s no flight that doesn’t hover for at least 20-30 minutes.”
France argues that as air transport is one of the industries that benefits most from globalisation, “it is therefore appropriate for this industry to help redistribute the benefits of globalisation”.
Philippe Douste-Blazy, the French foreign minister, says the French air ticket tax – which ranges from €1 for a domestic economy fare to €40 for a business class seat to a non-EU destination – would alone raise €200m a year for the facility.