The International Air Transport Association (IATA) has said that the fuel costs account for a higher percentage of the total costs of Indian aviation firms compared to their international counterparts.

The Association said that fuel costs account for 45 per cent of the total costs for domestic firms while compared to 30 per cent for global carriers. The airlines in the country faced huge losses amid growing domestic air traffic and high costs of fuel and airport duties.

IATA has recommended that the Indian government should deregulate the sector and free the firms from measures like price control. It also said that the authorities should reduce taxes including that on jet fuel.

IATA chief Tony Tyler has said that the government should focus on building infrastructure and the air navigation system in the country. He also advised against micro managing of the sector, which is facing a severe cash shortage.

The sector accounts for five per cent of GDP in India and provides Rs 290 crore in taxes, four million jobs directly and seven million jobs indirectly through tourism and other activities. Even as the sector will see a substantial growth, but the financial recovery will be slow in the coming years