Iran News ...


1/2/03

MP says foreign participation as only solution to rescue airlines

Neishabour, Khorasan prov, Jan 2, IRNA -- A member of Majlis Development Commission Mehdi Ayati said here Wednesday that the only way to rescue the airline industry is to have foreign participation in the sector.

"It is not conceivable that the industry's problems will be resolved by hiking air fares," the MP from Birjand said.

Ayati told IRNA that the proposed 50 percent increase of air fares will not be a remedy to modernized airports facilities or to renovate the aviation fleet.

The proposal will only lead to added pressures on the low income citizens, "notably those living in smaller cities and who, generally earn less than their fellow citizens living in larger cities."

He said that the economic justification postulating that the domestic airline fares should raise to match those of international rates does not make sense at the current level of income earned by Iranians who are making much less than the world average.

"They (Iranians) earn revenues based on rials and have to spend on products and services which are based on dollars," he noted.

Ayati said currently the average income per capita of Iranians is much less than those in the neighboring nations, and "even pales incomparison with those of the many third world countries. "This is totally unacceptable."

He said almost all the members of Majlis Development Commission are against the proposed 50 percent hike in the ticket prices. However, "legally the Majlis is unable to take action to prevent the proposal from being implemented."

Meanwhile, Managing Director of Iran National Carrier (Iran Air) Davoud Keshavarzian said here Tuesday that sanctions on airplane purchases, price stability and economic system are the most important impediments facing civil aviation in Iran.

"Sanctions prevent Iran from purchasing aircraft, even if only 10 percent of the parts are US-made," he told IRNA.

On the rise in domestic flight fares, he said transportation fares are determined based on cabinet directives and implemented by the Road and Transport Ministry.

Keshavarzian said the Economic Council has approved a 21 percent increase in transportation rates and a Majlis oversight commission has also approved it.

Following the liberalization of foreign exchange rates, the airlines have been calling for increase in plane ticket prices, "which was finally approved by the Road and Transport Ministry."

Alluding to the air fares in the previous years, he said three years ago when the rial/dollar exchange rate stood at rls 3,000 and fuel prices at rls 350, "the Economic Council set rls 11,800 or dlrs 33 for one-hour of domestic flight."

Before the cabinet directive, the one-hour rate for domestic air flights equalled rls 135,000 or less than dlrs 18 and "now the new rate is rls 203,000 or dlrs 25.5."

Keshavarzian further said instances where the passengers are entitled to financial damage due to flight delays, have to be explicitly printed on tickets, "otherwise the airlines are not liable to reimburse fares or pay financial damage to passengers."

... Payvand News - 1/2/03 ... --



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