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IATA Critiques Disappointing GST Hike on Premium Air Travel, ETInfra

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India is the world’s third-largest aviation market, with passenger traffic projected by the government to double to 500 million by 2030.

The International Air Transport Association (IATA) has criticised the Goods and Services Tax (GST) Council’s decision to raise GST on non-economy class air tickets from 12 per cent to 18 per cent, calling the move “disappointing” and “without justification”, reports news agency PTI.

The GST Council, comprising representatives of the Centre and states, on Wednesday approved a two-rate structure of 5 per cent and 18 per cent as part of a wider revamp. The new rates will take effect from 22 September. GST on economy class tickets remains unchanged at 5 per cent.

IATA concerns

Sheldon Hee, Regional Vice President – Asia Pacific at IATA, said, “Tax on non-economy air travel has risen dramatically – GST is at 18 per cent after yesterday’s announcement, compared to the 8.6 per cent rate in 2017 under the service tax regime. Aviation has potential to contribute to India’s economic growth, both directly as Indian airlines grow, and indirectly through increased connectivity for travellers and businesses alike. It is therefore disappointing to hear of a decision to increase the GST on non-economy travel with no clear justification.”

He added that a “whole-of-government approach” was required to ensure the sector’s growth, cautioning that the policy risked dampening demand and undermining profitability.

“Asia Pacific airlines are forecast to only earn $2.60 per passenger in 2025. Taxing premium travellers, where these customers often make a difference to a route’s viability, is counterproductive,” Hee said.

Impact on market

India is the world’s third-largest aviation market, with passenger traffic projected by the government to double to 500 million by 2030.

Jitin Makkar, Senior Vice President and Group Head of Corporate Sector Ratings at rating agency ICRA, noted that the increase in GST on premium, business and first-class air travel would likely be passed on to consumers.

“However, this should not have a significant impact on the business class segment, considering this segment’s low price elasticity, though there could be some amount of downtrading to the economy segment,” he said.

No comments were available from domestic airlines.

  • Published On Sep 5, 2025 at 11:11 AM IST

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Air India and Air Astana sign codeshare agreement to boost India–Kazakhstan connectivity

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L-R: Peter Foster, the Air Astana Group’s Chief Executive Officer ; Campbell Wilson, Chief Executive Officer & Managing Director, Air India

Air India and Air Astana, the flag carrier of Kazakhstan, have signed a new codeshare agreement to offer more flight options to travellers.

The codeshare partnership enables cooperation between the two carriers on trunk routes between Kazakhstan and India, covering Air Astana routes operated between Almaty and Delhi, and Almaty and Mumbai. With this, Air India will place its ‘AI’ designator code on Air Astana’s flights to and from India, providing its customers convenient access to Almaty, a rapidly growing tourism and business hub in Central Asia.

Air India customers travelling to Almaty from points beyond Delhi and Mumbai will be able to conveniently travel on a single ticket and check-in their baggage through to Almaty at the point of origin.

Campbell Wilson, Chief Executive Officer & Managing Director, Air India, said “Our new codeshare partnership with Air Astana creates stronger air links to Kazakhstan, a fast-growing market with immense potential for tourism. Beyond serving leisure travel demand, our partnership will also support trade and cultural exchanges between our two countries, while bringing a new destination in Central Asia closer to our customers.”

Peter Foster, the Air Astana Group’s Chief Executive Officer, commented on the codeshare with Air India, “We are delighted to have concluded a comprehensive code share agreement with Asia’s oldest airline. Air India is an exceptionally well-managed business, which operates a comprehensive network of flights to, from and across India, the world’s most populous country and one of the fastest growing travel markets. India is of key strategic importance to the Air Astana Group as we increase flights from Kazakhstan to Delhi, Mumbai and Goa. The code share will accelerate the increasingly strong business, tourist and student traffic flows between our two countries”.

The new arrangement builds on an existing interline partnership between Air India and Air Astana that came into effect earlier in 2025. Under the interline agreement, Air India customers already have convenient connections via Almaty to multiple destinations across Central Asia and China including Astana (Kazakhstan), Bishkek (Kyrgyzstan), Tashkent (Uzbekistan), Dushanbe (Tajikistan) and Urumqi (China).  Air Astana enjoys access to 18 destinations across Air India’s domestic network and 9 international destinations via Delhi and Mumbai.

With this step-up to a codeshare agreement, travel between India and Kazakhstan becomes more convenient for customers while also opening a wider network of destinations through a single booking and check-in process.

Subject to regulatory approvals, the codeshare flights will be progressively made available for sale across Air India’s booking channels, including the airline’s official website, mobile app, and through travel agents worldwide.



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Pilgrimage travel emerges as fast-growing tourism segment: MMT

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India’s tourism sector is witnessing a strong surge in pilgrimage travel, with accommodation bookings across 56 spiritual destinations rising by 19% in FY24-25, according to MakeMyTrip’s latest report. The trend highlights how religious journeys are becoming a major driver of travel demand, spreading beyond traditional hubs into newer destinations.

The report notes broad-based growth, with 34 destinations recording double-digit increases and 15 posting over 25% expansion. Established centres such as Varanasi, Ayodhya, Puri, Amritsar and Tirupati continue to attract large footfalls. Simultaneously, emerging locations like Khatushyam Ji in Rajasthan, Omkareshwar in Madhya Pradesh and Thiruchendur in Tamil Nadu are witnessing rapid growth, signalling a widening spiritual canvas.

Pilgrimage trips are increasingly characterised by short, purpose-led stays. Over half of the travellers (53%) opt for single-night visits, while only 5% extend their stay beyond four nights. Interestingly, more than 63% of bookings are made within six days of travel, underlining the last-minute planning habit typical of Indian travellers.

Group travel is another defining feature. Nearly 47% of pilgrimage trips are booked by families, friends or community groups, compared to 39% in leisure tourism. This collective nature underscores the deeply shared and cultural dimension of spiritual journeys, where religious visits are often seen as community experiences.

Accommodation supply has also expanded rapidly to meet rising demand. Over the past three years, more than one-third of all hotel rooms at pilgrimage centres have been added, along with a sharp increase in homestays and hostels. Premium stays are gaining traction too, with bookings above INR 7,000 per night rising by over 20% in FY24-25.

Interestingly, a growing number of travellers are combining spirituality with leisure. MakeMyTrip found that while 52% of holiday packages were booked exclusively for pilgrimage, nearly 48% blended spiritual destinations with cultural or recreational stops. This dual demand is prompting the industry to innovate, positioning pilgrimage not just as faith-based travel but also as a holistic cultural tourism experience.



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These national parks will reopen for tourists in October

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Wildlife adventures in October

Every year, India’s national parks close during the monsoon to protect both wildlife and visitors. Come October, as the rains retreat and the forests burst back into life, many of these parks reopen their gates. It’s the perfect time for safaris, so get ready for some exciting wildlife adventures.



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