Airlines clock good growth; carried over 78 lakh people in March 2016
With the aviation sector continuing to see a spurt in traffic, many domestic airlines posted good growth as they ferried 78.72 lakh passengers in March with no-frills carrier IndiGo carrying most passengers during the same period. While the overall passenger growth stood at around 5.3 per cent, the market share of IndiGo jumped to 38.4 per cent in March, followed by Jet Airways at 17.6 per cent and Air India (14.7 per cent). Latest data from aviation regulator DGCA released today showed that local airlines carried 78.72 lakh passengers last month compared to 74.76 lakh in February. Over the past several months, more number of people have been travelling by air. In terms of Passenger Load Factor (PLF) — an indicator of filled seats — SpiceJet was on top with 91.1 per cent, followed by GoAir (86.3 per cent), IndiGo (85.1 per cent), AirAsia (82.7 per cent) and Air Costa (82.1 per cent). Among other airlines, the PLF of Jet Airways was at 79.1 per cent while that of JetLite and Air India stood at 77 per cent and 75.7 per cent respectively. According to the Directorate General of Civil Aviation (DGCA), PLF of airlines slightly decreased last month, primarily due to the end of tourist season. Except for IndiGo, GoAir and Trujet, rest of the carriers saw their market share either decline or remain flat in March. IndiGo’s market share rose to 38.4 per cent compared to 36.8 per cent in February while that of GoAir rose to 8.3 per cent from 8 per cent during the same period. Market share of Jet Airways fell to 17.6 per cent from 18.4 per cent. Air India saw its share drop to 14.7 per cent last month from 15.4 per cent seen in February. In the case of SpiceJet, the market share slipped to 12.8 per cent in March from 13.1 per cent in the previous month. Start-up carriers AirAsia and Vistara’s market share remained unchanged at 2.2 per cent and 2 per cent, respectively in March. “Passengers carried by domestic airlines during January-March 2016 were 230.03 lakh as against 185.46 lakh during the corresponding period of previous year thereby registering a growth of 24.03 per cent,” DGCA said. The figures are based on passengers carried by 11 airlines — Air India, Jet Airways, IndiGo, JetLite, SpiceJet, GoAir, Air Asia, Vistara, Air Costa, Air Pegasus, and Trujet. Meanwhile, the overall cancellation rate of scheduled domestic airlines stood at 1.29 per cent in March. “During March 2016, a total of 737 passenger-related complaints had been received by the scheduled domestic airlines. The number of complaints per 10,000 passengers carried for the month of March 2016 has been 0.9,” DGCA said.
Deal signed for development of occupational map in aviation
The Indian arm of global consultancy KPMG has collaborated with the Aerospace and Aviation Sector Skill Council (AASSC) to develop occupational map for the aerospace and aviation sector. The agreement, signed between KPMG India and AASSC, provides for design and development, manufacturing and assembly, airline operations, airport operations and MRO (maintenance, repair and overhauling), a statement by the consultancy said today. The occupational map will list the possible job roles along with the skill levels in each sub-sector, the statement said. Subsequently, KPMG will develop National Occupational Standards (NOS) for 70 job roles where there is high demand, it said. “This is a humungous task as there is a need to work with various industry players in the aerospace and aviation sector while drafting the NOS and getting their validation. After going through an elaborate process, the NOS for each job role shall be notified by the Central government,” the statement said. According to a study instituted by the Civil Aviation Ministry, the domestic aviation sector is projected to employ nearly four million people in two decades, driven by improved economic activities and labour productivity. “Our estimate indicates that by 2035, the Indian civil aviation sector (across the study segments of airport, airlines, cargo, MRO (Maintenance, Repair and Overhaul) and ground handling) will employ 0.8 to 1 million personnel directly and another 3 million indirectly (for 1 direct job about 3.5 indirect jobs are created),” the study said. While emphasising the need for having skill development programmes across various levels in the sector, the study suggested setting up of the National Civil Aviation Training Entity (NCATE). Formed under the government and industry led initiative of skilling Indian labour force, Aerospace and Aviation Sector Skill Council (AASSC) is the apex body in skill development.
India’s crude output falls but consumption soars
Domestic crude oil production fell for the fourth straight year in 2015-16, even as oil consumption rocketed 11%, pushing up India’s import dependence. A collapse in oil prices coupled with a rapid economic growth helped push up oil consumption at home. More vehicle purchases, increased use of diesel for irrigation due to weak monsoon and rising air traffic chiefly drove up consumption to 183.5 million metric ton (mmt), compared with 165.5 mmt in the previous year. In comparison, India produced just 36.9 mmt of crude oil in 2015-16, lower than 37.5 mmt in the previous year. The country’s largest oil producer, state-run Oil and Natural Gas Corporation (ONGC), witnessed an output decline to 18.5 mmt from 18.6 mmt in the previous year. Oil producers have been struggling with ageing fields where outputs have been falling. Their inability to bring fresh big reserves into production lately has kept production stagnant. “The bigger problem is that the exploration activity didn’t pick up in the last decade,” said Gaurav Moda, consultant at KPMG, underlining the need to enhance exploration activity in the country to be able to accelerate output in the future. Without which, Moda says, India’s dependence on overseas oil will only grow in future. India’s import dependence in oil rose to 81% in 2015-16 from 78.5% in the previous year. Just last year Prime Minister Narendra Modi had set a target of bringing this down to 67% by 2022. The government has unveiled new exploration policies for its oil and gas blocks lately, aiming to plug loopholes in its previous policies that encouraged only limited participation of resource-rich foreign oil companies and couldn’t dramatically boost the domestic output. India imported 202 mmt of crude oil in 2015-16, nearly 7% higher in volume, but paid just $64 billion, 43% lower due to the global oil collapse. Natrural gas consumption marginally rose to 52 billion cubic meters, aided by 14% rise in imports while domestic production fell 4%. Lower prices have raised consumption of gas by industry and the transport sector. The consumption of petrol and diesel rose 14% and 7.5% respectively even though the government imposed more taxes and didn’t pass on the entire benefit of crude oil plunge to the consumers. The consumption of aviation turbine fuel (ATF), which contribute about 40% of airlines’ operating cost, grew 8.8% as airlines lowered fares and attracted more passengers.
Diesel Vehicles To Be Imposed With 30 Percent Green Tax
Diesel vehicles in India are being deemed as polluting and dangerous to the environment. Now the diesel vehicles could be imposed with a green tax up to 30 percent. The suggestion was provided by Environment Pollution Control Authority (EPCA). A final decision on imposing of 30 percent green tax on diesel vehicles will be made on April 30, 2016. The goal is to regulate the use of diesel vehicles that ply on Indian roads. The main focus is to improve the quality of air in the country and the impact of diesel exhaust on health. Currently, the Delhi Government has banned the sale of diesel vehicles in the capital. No manufacturer is permitted to sell diesel vehicles over 2,000cc in the Delhi-NCR region. In an attempt to curb rising air pollution, the Delhi Government has reintroduced the odd/ even driving scheme. Green Tax will be applicable on all diesel vehicles that ply on Indian roads. This will provide authorities to check toxic emissions from diesel vehicles. Officials could also keep track the number of diesel-powered vehicles that ply on the road and could even stop high-polluting vehicles on roads.
Cochin Shipyard stuck with three LNG carriers as private companies back out
State-run Cochin Shipyard may alone have to build three liquefied natural gas (LNG) carriers as private yards baulk, raising the risk of delivery delays for GAIL’s ship charter plan, a key ‘Make in India’ initiative in the oil sector. GAIL plans to charter at least nine LNG vessels to bring home from the US up to 5.8 million ton of gas annually from early 2018. After multiple tenders and extensions, the company has received bids from two Japanese consortiums for this. Each bidder had to bid for at least three ships of which at least one has to be made locally. “Bids are not fully aligned with the tender,” a source close to GAIL said. The Japanese consortiums have sought several deviations in their bids and GAIL executives will spend a month or so talking to bidders, understanding their points, persuading them to withdraw those deviations and reach a common ground, sources said. Once the common ground is reached on techno-commercial criteria, probably in two months, GAIL will open price bids, a source said. GAIL may award fewer than nine LNG carriers, sources said, as it is looking to partly sell gas at source in the US and may not need to bring the entire commodity home. Since transporting gas from the US is fairly expensive, GAIL is also exploring the option to swap some of its US gas for five years. It has floated tenders seeking vendors interested in taking its gas from the US for own consumption or clients and delivering the equivalent quantity in India. The Japanese consortium of Mitsui OSK Lines Ltd (MOL), Nippon Yusen Kabushiki Kaisha Ltd (NYK Line) and Mitsui & Co Ltd has bid to supply six vessels while the other group of Mitsubishi Corporation, Kawasaki Kisen Kaisha Ltd (K Line), Gas Log Ltd and Foresight Oil Ltd has bid for four ships, sources close to GAIL said. Both the consortiums have partnered with Cochin Shipyard to meet the local manufacturing condition, sources said. Cochin Shipyard has no experience in building LNG ships, which require far more sophisticated technology than ordinary carriers. Which is why Cochin has partnered with Samsung, which would help build a third of the LNG ships in India while building the balance at its Korean shipyard. Earlier two other Korean shipmakers – Hyundai and Daewoo – were keen on participating in the process but dropped plans after their local partners L&T and Pipavav shipyards respectively pulled back. A source close to GAIL played down fears of delivery risk by allowing Cochin to build all three local vessels, arguing the yard would have nearly six years to deliver the first ship and another year for additional ships. The usual time to build an LNG vessel is 30-33 months, he said, adding that Samsung can do most of its design and engineering at its Korean shipyard and undertake only key construction works at Cochin, helping save time. The vessels from foreign shipyards have to be delivered between January-May 2019 and from Indian shipyards between July 2022 and June 2023, according to the tender document. An LNG vessel on average cost about $200 million.
GST Bill: Government will again try to convince Opposition, says Venkaiah Naidu
Stressing that the Goods and Services Tax (GST) Bill is the need of the hour, Union Minister M Venkaiah Naidu today said the government will again try to convince the Opposition so as to ensure passage of the legislation in second part of the Budget session beginning April 25. “Yes, GST…we have almost completed discussion with majority of the parties. There are one or two issues and that also we will try to convince Opposition and we want to get it passed because GST is the need of the hour,” the Parliamentary Affairs Minister told reporters here. On Congress’ charge that the government has not approached the opposition for resolving issues concerning the crucial GST Bill, Naidu said, “We have been talking to Congress and we will be talking to them finally also before listing the Bill… I am optimistic (the GST bill will be passed during this session).” The second part of the Budget session of Parliament will commence on April 25 and continue till May 13, he said, adding “13 Bills will be taken up in Lok Sabha as per the schedule and we are also planning to take up even the GST also. We are in discussion with other parties (on GST).” The GST Bill, which seeks to replace a slew of central and state levies with a uniform rate, was passed by Lok Sabha in May and is pending ratification by Rajya Sabha where the ruling NDA does not have a majority. Naidu said during this session, Parliament will be discussing mainly financial business comprising discussion and voting on demands of Ministries in Lok Sabha and discussion of selected ministries in Rajya Sabha. Appropriation Bills of Railways and General Budget and the Finance Bill will also be discussed, he added. Discussion for demands of grants for the Ministries of DoNER, HUPA, Skill Development, Social Justice, Civil Aviation and Tourism will be taken up in Lok Sabha while in Rajya Sabha, Ministries of Health and Family Welfare, HRD, Finance, MSEM and External Affairs (if time permits) will be taken for discussion, he said. “Budget is presented and referred to Standing Committees and the Standing Committees have completed their report and will report back to Parliament. On the basis of the Standing Committees report, Parliament will discuss the issues,” Naidu said. The minister said Parliament will also take up Bills to replace two Ordinances – The Uttarakhand Appropriation (Vote on Account) Ordinance, 2016 and the Enemy Property (Amendment and Validation) Second Ordinance, 2016. “Both Ordinances were issued earlier and both have to be approved by Parliament,” he said. Rajya Sabha will take up Bills on Appropriation Act, Whistle Blowers Protection, Industries Regulation, Mines and Minerals, Child Labour Prohibition and Anti-Hijacking, he said.
HC seeks Centre’s response on RBI’s circular on e-retail
Delhi High Court today sought the Centre’s response on a petition challenging a circular by the Reserve Bank of India (RBI), as per which retail trading in any form through e-commerce would not be permissible for companies which receive foreign direct investment (FDI). A bench of Chief Justice G Rohini and Justice Jayant Nath issued notice to the Centre and asked it to file its response within four weeks. The court has fixed the matter for May 24. During the hearing, the counsel appearing for RBI told the bench, which had earlier sought its reply on the plea, that they would file their response soon. The public interest litigation has contended that as per the July 1, 2015 master circular of the RBI, while FDI is allowed in business-to-business (B2B) e-commerce, companies that get FDI cannot undertake single and multi-brand retail trading through e-commerce. It has sought an inquiry into the affairs and transactions of all FDI recipient companies and stop operation of those found to be directly or indirectly carrying out e- commerce in retail sector. The petitioner also said that “100 per cent FDI is permissible through automatic route for buying and selling by a company through the e-commerce platform but this is subject to the condition that such companies would engage only in B2B e-commerce as against business to consumer (B2C) pattern and not in retail trading”. The plea had alleged that “in order to mislead and confuse the competent authorities, the said e-commerce companies are creating a conundrum of group websites/companies amongst the closely held/managed sister companies/business concerns and thereby causing tremendous loss to the government exchequer.” The petition has further claimed that “to circumvent the law, these entities have created a web of connected entities” which carry out different functions, like logistics, handling payments, providing software and technology support and so on. It had sought that “required legal action be initiated” against the companies or e-commerce sites or entities who have violated provisions of FEMA and the rules framed there under.
Ericsson, Nokia, Huawei and Cisco are betting big on India’s ‘smart cities’ project
Global majors such as Ericsson, Nokia, Huawei and Cisco are betting big on India’s ‘smart cities’ project, which is estimated to be an up to $50 billion (Rs 340,000 crore) business opportunity over five years. Players like Ericsson and Huawei have started working on some of the projects in the country, while Nokia could soon bid for some projects. Cisco, on the other hand, is involved in more than 25 cities, including the government’s 20 official smart cities shortlist. The government has defined a smart city in the Indian context as one that provides a decent quality of life to its citizens, a clean and sustainable environment, and supports the application of smart solutions. It has shortlisted 20 cities, including Pune, Jaipur, Surat, Kochi, Ahmedbad, New Delhi, Chennai, Visakhapatnam, Ludhiana and Bhopal, which will be developed as smart cities. The smart city market opportunity in India will be $45-50 billion over the next five years, according to a report by Sustainability Outlook. The electronic equipment business, just for the first phase, will be a $220-250 million opportunity for these vendors. For companies like Cisco, which are largely looking at IT solutions, the opportunity is pegged at around $25 million per city, according to industry estimates. “The Indian government’s vision of a Smart Digital India is creating enormous opportunities,” said Orvar Hurtig, global head of industry and society at Ericsson. The company has identified three key industry segments—public safety, utilities and transport—as its focus areas in the country. The Swedish company has just won its first deal in India in the utilities space—to install 15,000 smart meters in Assam over the next three years for a public sector power company. Ericsson, which earlier created a separate vertical called ‘industry & society’ to tap ‘Smart City’ and ‘Digital India’ opportunities, expects up to 20% of its India sales to come from this segment by 2020. Sales from this segment are negligible now. Sandeep Girotra, Nokia’s head of India market, said the company is in talks with various state governments and the Centre and may soon bid for some projects. “We believe that there is no single approach that fits all cities and each city can have multiple drivers, therefore, it is absolutely vital to engage with state government, city administration and planners to understand their objectives and KPIs,” Girotra added. Cisco, which has worked on more than 120 smart cities globally, is working in 12-13 cities out of the list of 20. Besides, the company has been working in another 14-15 cities, according to Purushottam Kaushik, managing director-sales at Cisco India & Saarc. “We are not just providing its solutions to the authorities, but also providing consultancy services,” Kaushik said.
All 23 cities in smart city list submit revised urban plans seeking central assistance
All the 23 cities and towns from as many States and Union Territories that were given an opportunity to participate in the ‘Fast Track Competition’ under Smart City Mission submitted their revised plans today. According to a Urban Development Ministry release, the deadline for submission of Smart city proposals ends today. The revised plans of these 23 cities, including 15 capitals, would be evaluated by May 15 this year and those meeting the benchmark set by the winning cities in the first round of Smart City Challenge Competition will be announced for extending central assistance. Bhubaneswar was ranked number one and Bhopal stood last in the first list of 20 mission cities announced earlier on January 28, 2016. Since only 12 States and UTs were represented in the first list, the Ministry offered another opportunity to the unrepresented 23 States and UTs to participate in Fast Track Competition in pursuance of the principle of urban transformation across the country. After evaluation of Smart City Plans of 97 cities in the first round of competition and announcement of the first list, the remaining were informed of the deficiencies in the plans. The inadequacies identified included, lacunae in assessment of cities, disconnect between citizens’ aspirations and vision documents, disconnect between vision document and SWOT analysis, too ambitious nature of plans, mismatch between costs and resource mobilization, lacunae in implementation plans and result orientation. A day after the announcement of the first list of 20 smart cities, Cabinet Secretary P K Sinha had interacted with the Chief Secretaries of all the States and UTs and Municipal Commissioners of all 97 mission cities on the principles of preparation of smart city plans and urged those cities not included in the first list not to lose heart and instead to revisit their plans for addressing deficiencies. During the video-conferencing by Cabinet Secretary, several cities admitted to lacunae in different aspects of plans and assured to correct the same. Urban Development Ministry held a Consultation Workshop for the 23 cities and towns participating in Fast Track Competition besides holding several Studio Workshops wherein respective Smart City Plans were ‘read out to rectify’. The 23 cities that submitted their revised Smart City Plans under Fast Track Competition along with respective rank in the first round of competition are: Warangal, Telangana (23), Chandigarh (24), Lucknow (29), New Town in Kolkata (30), Goa (32), Pasighat in Arunachal Pradesh (39); Dharmashala (59), Faridabad (60); Raipur, Chattisgarh (62); Bhagalpur, Bihar (65), Shillong (70); Namchi, Sikkim (71), Port Blair (73), Diu, Daman & Diu (74), Oulgaret, Puducherry (75), Silvassa, Dadra & Nagar Haveli (78), Imphal, Manipal (83), Ranchi (84), Agartala (85), Kohima 90), Kavaratti, Lakshadweep (95) and Dehradun (97). The regular second round of City Challenge Competition for the remaining 97 cities included in the Smart City Mission got underway on April 1st and these cities will have to submit revised smart city plans by the June end this year. The 23 cities which were included in the Fast Track Competition and failed to be selected can also join this second round of competition, the release said. While 20 smart cities were selected during 2015-16 as per the Mission Guidelines, another 40 would be selected during 2016-17 and the remaining 40 during the next financial year. Each city selected in different rounds of competition will be given central assistance of Rs 200 cr in the first year and Rs 100 cr each during the subsequent three financial years. State governments and respective urban local bodies will provide matching funds to the same amount. Accordingly, each mission city would get a total assistance of Rs 1,000 cr over a five-year period.