CAPA India: Fare affordability in India will continue under GST; high dom growth to continue

CAPA India CEO Kapil Kaul commented (22-May-2017) on the impact of the GST introduction on aviation in India, noting that it was earlier believed that a GST rate of 18% might be applied to air travel and "hence the government's decision to levy only 5% on economy class fares and 12% on business class means that there will be minimal change from current levels" of 6% and 9% respectively. He noted that the affordability of fares in India "will continue which is positive for consumers", indicating that the "government was sensitive to the potential impact of higher fares on the industry". As a result, CAPA India expects the high domestic growth rates to continue in the near term, with further upside possible in one to two years as the GST provides a boost to economic growth.