Cheaper options for flying abroad: Aviation policy grounds 5/20 rule for airlines
New entrants into the Indian skies will get to the lucrative overseas market relatively more easily and air travellers could look for more — perhaps cheaper — options in flying abroad and improved regional connectivity in the domestic sector. These and various tax sops for investors in India’s underdeveloped maintenance, repair and overhaul (MRO) infrastructure are the highlights of the country’s first comprehensive civil aviation policy likely to be approved by the Cabinet shortly. Currently, under the so-called 5/20 rule, domestic airlines can fly abroad only when they have acquired a fleet of at least 20 aircraft and have flown in India for five years. However, sources privy to the final draft of the policy — the initial version was put up for public comments more than six months ago — said once the 20-aircraft fleet is ready, these airlines could start flying out of the country, subject to the caveat that one-fifth of the capacity is deployed for domestic operations. The new policy, which would also give foreign airlines the opportunity to increase their flights out of India thanks to a provision to auction unused traffic rights under bilateral pacts. While domestic airlines, often not able to fully use these rights, are worried that their market share could shrink as a result of the move, the government reckons that a liberal policy would benefit air travellers. Besides, the policy would also permit “open skies” between India and SAARC nations and countries beyond 5,000 km radius of Delhi, doing away with the restrictions on traffic rights. The policy, analysts say, is likely to bring cheer to passengers from smaller towns as it caps the fare at R2,500 per flying hour, thanks to a viability gap funding. Although the initial proposal was to levy a 2% cess on metro routes to finance the VGF, this, sources said, has been dropped. “We could raise money through auctions of ‘bilaterals’ but a final decision in this regard has not been taken yet,” a top government sources said The proposal to dilute the 5/20 rule has divided the sector with new airlines like the Tata Sons-promoted AirAsia India and Vistara backing it while the older domestic airlines like IndiGo, SpiceJet, GoAir and Jet Airways opposed it citing unfair advantage to new airlines. Ratan Tata, chairman emeritus of the Tata Group, had chipped in, calling the rule protectionist and monopolistic. “The abolition of the five-year rule would allow newer airlines to join older ones in flying abroad on routes that are more profitable,” Amber Dubey, partner, KPMG told FE. “The proposed changes in bilateral rights usage would indicate the country’s intention to eventually move to a completely liberalised ‘open sky’ policy. The auctioning method would ensure that there are more seats and options available to the travellers, thus bringing affordability,” Dubey added. While the policy seeks to encourage airlines to fly to under-served and unserved destinations, it also has a focus on developing no-frills airports at unused airstrips across the country. Identification of such routes would be subject to state governments’ forgoing value-added tax on aviation fuel. Service tax on tickets on regional flights may be removed. Industry experts say that these proposals, if implemented, would provide the much-needed affordable connectivity to travellers besides incetivising smaller aircraft fleets. Further, the policy intends to cut down taxes associated with MRO companies. This would ensure that a significant portion of nearly Rs 5,000 crore annual MRO business attributed to the country is brought to the country. Due to excessive taxation in the country, only 10% of the potential business is currently transacted locally while the rest is outsourced to neighbouring countries. “It will be clarified that MRO, ground handling, cargo and ATF infrastructure co-located at an airport will also get the benefit of ‘infrastructure’ sector, with benefits under Section 80-IA of Income Tax Act,” the draft policy had said. Additionally, there was also a proposal to exempt service tax on MRO output services. However, sources said, the finance ministry has shot down the proposal, saying it would result in disruptions in the Cenvat chain. “With the incentives proposed in the policy, the MRO sector would become affordable. This will attract not only domestic but international carriers as well, which currently fly empty planes to Dubai, Singapore, Sri Lanka and Malaysia for these services,” Abhay Krishna Agarwal, partner, infrastructure, EY, told FE. The ease of doing business is also envisaged to be enhanced by allowing airlines to enter into code-share agreement without prior government approval as is the current norms. A code-share agreement between two airlines allows one airline to sell seats on a flight run by another airline with the airline code and flight number of the marketing airlines. This helps in seamless connectivity for passenger Reggie Nelson Jersey
Cabinet leases AAI land at Indore airport for development of centre for perishable cargo
The Cabinet today approved a proposal for leasing out land parcel owned by Airports Authority of India (AAI) for setting up a centre for perishable cargo at Indore airport. “The creation of Centre for Perishable Cargo is expected to cater to the employment needs of the local population and has significant employment potential. A total number of 113 persons will be required to manage the CPC,” an official release said. For setting up the CPC, land measuring 1,500 square metres would be leased out to MP Warehousing Logistics Corporation (MPWLC) by AAI. The centre is to be established by MPWLC at Devi Ahilya Bai Airport , Indore, under public private partnership model. The leasing out of the land would help Madhya Pradesh government promote its agriculture and horticulture sectors. According to the release, Madhya Pradesh government’s proposal to have such a centre comes in the backdrop of huge demand of export of pharmaceuticals, poultry products and horticulture products in Malwa region in the state. “This centre will be a state of art facility… It will provide a world class facility under one roof to cater to all requirements of the traders and maintain the quality of produce,” the release said.Cabinet approves l The Cabinet, chaired by Prime Minister Narendra Modi , gave the approval for leasing out land at its meeting. Geronimo Allison Jersey
Babus tried to ‘scuttle’ Maha CM’s plan for Smart City project near Panvel
Red-tape did not even spare chief minister Devendra Fadnavis, as babus scuttled his plan to open up a huge area in 11 villages near Panvel for a Smart City project, and a month later, after he was was apprised of the blunder, it was brought back on track. Had it not been corrected, it would have been big blow to even Prime Minister Narendra Modi, whose Make in India mission propagates easy access to land and infrastructure for quick industrialization. On February 17, when Fadnavis, as Cidco chairman, signed a Rs 10,000 cr land deal with villagers to develop a Smart City along the Pune Expressway during the recent Make in India summit at BKC, it came to light that at the same time his trusted Mantralaya babus took away the deal from under his nose by transferring the strategic rural area (9,000 acres) to another department through a government resolution (GR). The land is close to upcoming Navi Mumbai airport and is being eyed as the next industrial hub, with international majors like Foxconn being promised land in its proximity. The CM’s March 18 deal with the local body of Khalapur and 10 other villagers will make available 9,000 acres within a year, for development of another Smart City around the international airport. But the urban development (UD) department officials released a GR that same day, that instead of Cidco, the land comes under the Maharashtra State Road Development Corporation’s (MSRDC) jurisdiction. Either the officials were unaware that these villages were part of the Cidco deal or it was a tug-of-war between politicians and administrators who, at least for a month, forced the CM to fall back on his promise the day he made it. It took a month for him to get a GR that restored the land to Cidco, giving a lease of life to the first-of-its-kind CM-villagers agreement. Though senior MSRDC officials said the change in agency would not have made a difference to the project, experts closely attached to the deal said it may have taken few more years for MSRDC to come up with its own Smart City detailed project report (DPR) and then discuss it with villagers to seal the deal. The officials said the land in 11 villages, out of 85 they already possessed, was a smaller portion and they were not averse to giving it to Cidco. “The political leadership was to decide. Even if the land was retained, we could have developed it into a new urban magnet as MSRDC too has a strong force of chief engineers and planners who are capable of implementing such projects,” they said. MSRDC is developing a new office in Navi Mumbai for this purpose. Cidco officials said though MSRDC could implement infrastructure projects like an expressway, Cidco being a developer of cities, had expertise and machinery to quickly develop new cities and maintain them. “Instead of giving all the land to Cidco, as in earlier projects, villagers will be partners and will earn perpetual benefits with the increase in land value and growth in investment in their area,” said Anil Sule, an ex-urban planner, who is involved in conceiving the SPV and terms and conditions of the agreement between the villagers and Cidco. THE DEAL The purpose | Creation of smart cities around upcoming Navi Mumbai airport Special Purpose Vehicle * 15,000 persons from 11 villages have volunteered land partnership through a special purpose vehicle * The villagers have land spread across Khalapur, about 20-30km from Panvel * Cidco will retain 15% land and it will use 25% for creating civic amenities * The remaining 60% will belong to villagers and land lease holders, who will be the stake-holders with a primary share of Rs 4,050 per acre * Over the next five to 10 years, all villagers can get about Rs 2,500 per square metre (Rs 1-1.5 cr per acre) as compensation through land leases that are expected once the city’s development begins * By 2017, hundreds of domestic and international majors wanting to invest in a big way in Mumbai metropolitan region may have land easily available from this SPV, constituting villager land-owners * The deal was one of the major agreements Maharashtra signed to gather over Rs 8 lakh crore investment assurances from foreign and domestic companies during the Make in India Week Demetrius Harris Womens Jersey
Gujarat CM to launch smart village drive on May 22
Chief minister Anandiben Patel is expected to launch the smart village programme on May 22, the second anniversary of her government. She will felicitate villages that have 100% toilet facility. The CM will attend the Accessible India campaign workshop on May 21. The CM will also attend Lok Samvad Setu programme in Umparpada and Ankleswhar in central Gujarat on May 20, and in Olpad and Choryasi on May 19. Patel will be present at an education department workshop and announce various projects on May 25. She will dedicate a new science college and girls’ hostel in Jetpur in Rajkot on May 31. GCCI poll process begins: Twenty forms were taken by aspiring candidates on day one of form distribution at the Gujarat Chamber of Commerce and Industry (GCCI), on Tuesday. The election process for 24 seats of the GCCI executive committee and posts of office-bearers has begun. The forms for both GCCI and Business Women Wing were made available from Tuesday. The last date to file nominations is May 28 and last date to withdraw nominations in June 1. Voting will be held on June 18 from 10 am to 4 pm. City student gets scholarship: A student from the city-based Cept university, Mitraja Vyas, a senior researcher at the Design Innovation and Craft Resource Centre of the institute, has received a research scholarship from the Charles Wallace India Trust and Simon Digby Memorial Charity to conduct a short research project in the UK. The research project is titled ‘Vernacular Furniture of Gujarat’. Alex Anzalone Jersey
Digital energy cluster to attract global energy players to SmartCity Kochi
The digital energy cluster, coming up as part of SmartCity Kochi, will be the first-of-its-kind in India as it will help harness affordable energy for generations. The cluster will comprise industries that will develop clean energy technology for the energy industry domain and technical training centres. It will provide facilities like digital technology labs, testing centres, technology and services hosting infrastructure and remote operations support, like Cloud, infrastructure services, engineering services and supply chain management among others. It will also consist of remote real time operations support centre for global energy giants. The digital energy cluster, to be established by KenCel Infratech Pvt ltd formed by Texas based technology company along with a leading Indian builder, will come up in 4.37 acres with an area of 7.61 lakh sq ft. It is expected to attract major international players of the energy sector and will open up avenues of high-end and highly skilled job opportunities for about 10,000 skilled professionals. The prospective global clients will be oil and gas operators, petroleum and energy related companies, renewable energy leaders and technology providers, thereby making it a unique IT-energy zone inside SmartCity. “The combined strength and expertise of global leaders of energy industry including renewable energy and information technology, coupled with excellent trainable talents available in Kerala will bring a new trend in development and specialization and thus open gates to world renowned companies in the energy industry to Kochi,” said Dr. Baju George, CEO SmartCity Kochi. Jason Pierre-Paul Womens Jersey
IndiGo appoints Rohit Philip as Chief Financial Officer
IndiGo today announced the appointment of former United airlines executive Rohit Philip as Chief Financial Officer effective July 18, 2016. “Rohit will report to Aditya Ghosh, President and Whole Time Director and he succeeds Pankaj Madan who is leaving IndiGo to pursue other interests,” the airline said in a release. “We are fortunate and excited at Rohit joining the IndiGo team. His enormous and varied experience and understanding of the airline industry will greatly strengthen our team as we continue to build a world class, national air transportation network,” IndiGo President Aditya Ghosh was quoted in the release. Rohit will be joining IndiGo from Xerox Corporation based in Norwalk, USA , a leading global document management and business services company where he served as Corporate Vice President & Treasurer. Earlier, Rohit had worked at United Airlines for 17 years where he was Senior Vice President, Corporate Strategy and Business Development. At United he also held various other senior executive roles including Vice President – Financial Planning and Analysis; Assistant Treasurer – Corporate Finance; and Vice President – Finance & CFO, Mileage Plus Holdings Prior to Xerox, Rohit was the President and Group CFO of Anand Automotive Limited, a leading Auto components supplier in India, the release said. Rohit is a 1995 MBA from Cornell University and a 1992 mathematics graduate from St Xavier’s College, University of Mumbai . Brandon Fusco Jersey
Singapore Airlines’ India-bound flights move to Terminal 3 at Changi airport
Singapore Airlines (SIA) has moved its India-bound flights to Terminal 3 at the Changi Airport in the city state, replacing Terminal 2. The South-East Asian full service carrier, which also holds 49 per cent stake in Vistara along with Tata Sons who owns majority 51 per cent, flies to six Indian airports from Singapore. “From May 17, all Singapore Airlines flights to India & South Africa will depart from Terminal 3,” according to the airline’s website. Flights operated by SilkAir will remain at Terminal 2, along with all Singapore Airlines flights from Singapore to Dhaka, Colombo, Male and Dubai, it said. In India, SIA operates to NEW DELHI , Mumbai , Bangalore Kolkata, Chennai and Ahmedabad. Indian passengers accounted for a little over six per cent in the overall passenger traffic growth at Changi airport last year. Bernie Kosar Jersey
Gujarat urges Aviation Minister Ashok Gajapathi Raju to connect Kandla to Delhi, Mumbai by air
Gujarat Civic Finance Minister Saurabh Patel has written to Union Civil Aviation Minister Ashok Gajapathi Raju , requesting him to introduce Air-India flights on the Kandla-Mumbai and Kandla-Delhi routes. “Lack of air connectivity is hampering development of Kandla, which houses Kandla Port and entire eastern region of Kutch district which has been booming with industrial and commercial activities,” Patel said in a letter to Raju. “Kandla’s poor air connectivity has a negative impact on the Port and SEZ, hampering the movement of high value goods. With the Mundra SEZ, the air services from Kandla becomes imperative,” Patel said. The nearest airport to Kandla is at Bhuj at a distance of about 60 kms. From Bhuj, Air India runs a single flight while Jet Airways operates two flights a day, which is inadequate to meet the ever increasing demand of about 3,000 medium and large-scale industries located in Kandla, he said. “The air traffic is so high in the region that these three flights find it difficult to meet the passenger demand. It compels them to either go to Rajkot or Ahmedabad to catch flights for Mumbai and Delhi ,” Patel said. He said the two routes will be profitable for the national carrier as there are no other airline services operating on them. A delegation of Federation of Kutch Industries association (FOKIA) and Kutch Timber Merchants Association will meet chairman and managing director of Air India Ashvin Lohani in Delhi and put forth their request. Sam Koch Womens Jersey
CBM to contribute 5% of India’s gas production by 2017: Pradhan
Natural gas from coal bed methane is likely to contribute to five per cent of national gas production by 2017, Minister of State for Petroleum and Natural Gas, Dharmendra Pradhan, said in a tweet late last night. He wrote this after a meeting with CBM producers in India who, he said, had invested Rs. 10,000 crore collectively in CBM blocks. Coal bed methane refers to a reserve of natural gas stored in coal seams. With India having the fourth largest proven reserves of coal globally, according to the Directorate General of Hydrocarbons, the country holds significant prospects for exploration and production of CBM, which is also seen as a clean energy source. Currently, Great Eastern Energy Corporation and Essar OIl are the only two CBM-gas producing blocks in the country, both from separate reserves in Raniganj, West Bengal. Reliance Industries has reportedly begun test production from its two blocks in Madhya Pradesh. However, pricing is crucial to encouraging more production, as the government has reduced the price for domestic gas from $4.24 per million British thermal unit (mmBtu) last year to $3.06 mmBtu this April, in line with falling gas prices globally. Rodney Gunter Womens Jersey
Snapdeal parent Jasper Infotech, to continue high-octane acquisition strategy in new fiscal
Jasper Infotech, which owns and operates India’s largest online marketplace Snapdeal.com, will continue its frantic pace of deal making in the new fiscal, as it continues building an entire web and mobile ecosystem of goods and services. The New Delhi-headquartered company, which announced five acquisitions in the financial year ended March 31, will continue to hunt for buyouts that will augment its two primary businesses – ecommerce and payments – as well as in the logistics space. “The pace will be similar… We look for amazing, stellar teams, and we invest a lot of time and energy in getting to know them before we do a transaction….We are investing behind technologies, which we do not have,” Kunal Bahl, chief executive of Jasper Infotech, told ET. Jasper Infotech has emerged as one of the most aggressive players in the Indian startup mergers and acquisitions landscape, compared to its peers, having announced about nine buyouts in 2015 calendar year, including its acquisition of digital payments platform Freecharge in April, for about $400-$450 million in a cash-and-stock deal, the largest in the Indian startup ecosystem till date. Additionally, it kicked off the new fiscal by announcing its acquisition of predictive marketing technology startup Targeting Mantra for an undisclosed sum in May. “India is the last large frontier for the internet and commerce globally. Our objective of acquiring them is for their fantastic team and certain tech capabilities, which can plug and play with us very, very well, especially in the area of personalization,” Bahl said. Bahl also told ET that the SoftBank, Foxconn and Alibaba Group-backed company has also received feelers from startups, based in geographies, such as the US, among others, for potential acquisitions, and the company is considering them. “A lot companies from the US have also approached us, which are working in areas of core tech, such as payments. They feel that the talent and the technology transcends geographical boundaries. Therefore, why not talk to a company like Snapdeal, which is on an upswing, and become partners with them?” said Bahl. While Bahl declined to provide further details, this would indicate that the company could acquire other ventures for Freecharge, which has now emerged as the focal point of its ecosystem. The company announced its acquisition of Silicon Valley-based Reduce Data, a programmatic display platform, in September last year. The Snapdeal co-founder, who along with childhood friend and IIT Delhi alum Rohit Bansal, formed the company in 2010, declined to however to provide the company’s capital expenditure outlay for the proposed acquisitions in the new fiscal. The announcements come about three months after the company closed a $200 million round of funding led by Ontario Teachers’ Pension Fund and Iron Pillar, a new technology-focused venture capital fund that advised a Singapore-based entity Brothers Fortune Apparel that represents several Chinese high net worth individuals. Prior to that, in August, the company had closed a $500 million round led by Foxconn, SoftBank and the Alibaba Group. However, it has been facing growing pressure from rivals, Flipkart and Amazon India. In its annual report, Japanese technology, media and telecom investor giant SoftBank, the largest stakeholder in Snapdeal, indicated that the online marketplace’s gross merchandise sales, which do not include discounts and returns, grew by 90% for the year ended March 31. This, however, implies a sharp slowdown in sales, given that the investor had said the company had recorded a 301% jump in gross sales for the 12 month period before that. Coty Sensabaugh Authentic Jersey