Airlines are not ‘demons’, says Ashok Gajapathi Raju
Airlines might not be “angels but definitely they are not demons”, Civil Aviation Minister Ashok Gajapathi Raju today said amid concerns over arbitrary hike in airfares and emphasised that carriers have been responsive during crises. Making it clear that there would not be a “simplistic solution” to deal with exorbitant rise in airfares, he reiterated that capping would not be the answer as that would also push the floor prices. To buttress his stance against capping, the minister cited an analysis done last year which showed that only around 1.7 per cent of the tickets sold were in the higher fare bucket. “Caps and floors are very interesting but we should not land up in a situation that pushes up the price of over 90 per cent of passengers to benefit around 1.7 per cent of the passengers,” Raju said in response to a query on whether the government would look at capping airfares. Stressing that the overall objective is to ensure reasonable pricing of air tickets, the minister said airlines have been responsible in keeping fares reasonable during Chennai and Srinagar floods. “They (airlines) might not be angels but they definitely are not demons. We need to work with them and find a solution (for higher airfares). These are problems which do not lend itself to a simplistic solution,” Raju said. Earlier this month, he had ruled out the possibility of capping airfares in the backdrop of passenger complaints of arbitrary tariff hikes, saying competition among the airlines will take care of the problem. When asked about the latest FDI reforms in aviation sector, he said the move would help more players to come into the country. To a query on whether the government would be setting up a Civil Aviation Authority (CAA), Raju said, “You see, I don’t subscribe to changing the name of DGCA. You tell me what you expect this authority to do. If you want me to change the name board, then it is not a good idea.” The previous UPA government had proposed to replace Directorate General of Civil Aviation (DGCA) with Civil Aviation Authority (CAA) having full functional and financial autonomy to give the regulator more teeth. Stephon Tuitt Jersey
Air operator permit policy to be amended for new FDI norms
The government today said it will amend the existing policy for grant of air operator permit (AOP) to bring it in line with its recent decision to allow 100 per cent foreign direct investment in domestic airlines. It would also be “examining” the substantial ownership and effective control (SOEC) norms of the various countries which permit more than 49 per cent foreign direct investment (FDI) in their airlines, Civil Aviation Secretary R N Choubey told reporters on the sidelines of an aviation event here. Under the current norms, AOP or flying licence is granted to a company only if its chairman and two-third Directors are Indian citizens and its substantial ownership and effective control is vested in Indian nationals. “The policy relating to AOP being given, that policy will be completely aligned with the FDI Policy. So if there is something when higher FDI investment is not resulting in AOP being given, then the AOP requirement will be to that extent will be amended,” Choubey said. Foreign investors, barring overseas airlines, are now allowed to have up to 100 per cent stake in local carriers under the recently liberalised FDI norms. Under the new set-up, 49 per cent FDI will be through the automatic route and for anything beyond, government nod will be required. At present, up to 49 per cent FDI is permitted in scheduled airlines. However, foreign airlines, under the norms, canot invest more than 49 per cent in the domestic carriers. The requirement of SOEC comes up at two places– for grant of AOP to an Indian citizen and at the place where India has to grant bilateral rights, he said. “For the purpose of granting AOP, because the FDI limit has been increased, therefore, correspondingly the AOP requirement of substantial ownership and effective control will also have to be aligned with it. That will require amendment,” he said. As far as bilateral rights are concerned, the requirement of SOEC is also a condition from International Civil Aviation Organisation (ICAO) and not of a particular government or country, he said. “All that it means is that if you are having more than 49 per cent then there may be an issue in getting the bilateral rights for flying abroad. But if you wish to fly within the country, then there is no bar,” he said. When asked why an airline with 100 per cent investment from a foreign country will fly only domestic, Choubey replied, “India itself is a huge market. So somebody if wishes to use its domestic market they can do so.” There are also code shares, the rules regarding which have been also liberalised, Choubey said, adding, “If they wish to grow within the country and also take up the code shares, they can do so.” He said the purpose of allowing overseas investors own up to 100 per cent stake in Indian carriers is to encourage investments in domestic operations. To a question whether domestic carriers owned 100 per cent by foreign investors will be allowed to fly international skies, Choubey said, “We are examining whether they can fly abroad. But presently, it appears that ICAO regulations are binding on signatory countries.” “We will examine what other countries who are similarly placed are going in respect of the carriers being allowed to fly abroad and then will take a call,” Choubey said. When asked how would the government ensure that foreign airlines comply with the 49 per cent FDI ceiling, he said, “As part of the approval, a very thorough due diligence will be done to ensure that directly or indirectly foreign airline ownership does not exceed 49 per cent, which is mandated.” Shaun Alexander Jersey
Govt to take up highway projects worth Rs 1.5 lakh crore in Bihar, says Nitin Gadkari
The Centre will take up highway projects worth Rs 1.5 lakh crore in Bihar and is committed to package announced by Prime Minister Narendra Modi, Union Minister Nitin Gadkari said. The Prime Minister in the run up to Assembly polls in Bihar last year had announced to provide a special package of Rs 1.25 lakh crore for Bihar. “In our five years regime we will do work worth Rs 1.5 lakh crore in Bihar. Whatever package the Prime Minister declared, that will be done,” Road Transport and Highways Minister Nitin Gadkari said addressing the media. Gadkari said as of now the total projects approved in Bihar by the Centre stood at Rs 60,000 crore. Bihar has 4,967 km of National Highways including the 2,100 km approved by the Centre recently, he said. “We will increase it by another 2,000 km,” the Minister said adding, currently work is on 77 projects worth Rs 20,000crore in the state and another 27 projects worth Rs 5,000 crore will be awarded soon. He said under the Setu Bharatam projects, 13 railway over bridges (RoBs) will be built in the state at a cost of Rs 900 crore. Frederik Gauthier Jersey
Govt approves Rs 2,272 cr highway project in Karnataka
The government today approved a Rs 2,272 crore highway project in Karnataka. “CCEA approves development of four-laning of Hubli-Hospet Section of NH-63 in Karnataka,” an official spokesperson said after the Cabinet Committee on Economic Affairs (CCEA) meeting. The project pertains to widening of the 144 km stretch. “Four-laning would cost Rs 2,272.20 crore, and the total length is approximately 144 km,” he said. Mike Piazza Jersey
Haryana govt to develop two-lane highway
Haryana government has decided to develop a two-lane highway along the banks of Western Yamuna Canal connecting Karnal, Panipat and Sonipat districts as well as Bawana and Rohini in Delhi, to provide an alternative route to decongest National Highway 44. This came out in a meeting presided by Chief Minister Manohar Lal Khattar to review pending issues of metro and other railway projects here today. The proposed 121.302-km-long highway, which would cost about Rs 1,400 crore, would be constructed from Ghogripur near Karnal to Outer Ring Road near Haidarpur Water Treatment Plant in Delhi region, an official release stated. It would be constructed under a scheme of National Capital Region Planning Board, Khattar said. Reviewing various projects, the Chief Minister directed Public Works (Building and Roads) Department officers to construct a “magnificent and glorious” Swarn Jayanti Dwar at the entry point of Gurgaon from Delhi. He also directed the officers to construct welcome gates on the inter-state border at the remaining 27 entry points to the state to commemorate the golden jubilee of Haryana. Describing the railway link between Kurukshetra and Haridwar of “vital significance”, Khattar said there is no direct railway link between the two holy cities and directed the officers to explore the possibilities of starting a Delhi-Haridwar route via Ambala and take up the issue with Railways. Khattar also directed them to frame a policy in consultation with National Highway Authority of India (NHAI) for rescheduling of toll taxes at various locations so that the rates can be reduced. The state government has decided to elevate the existing Rohtak-Gohana railway line in Rohtak city at a cost of about Rs 230 crore. This would be a first-of-its-kind in the country, said Khattar. The Chief Minister also reviewed the progress of Sonipat-Jind and Rohtak-Meham-Hansi railway lines. He also reviewed the progress of Metro projects in Haryana and gave necessary directions to the officers concerned. The meeting was told that Gurgaon metro — Badarpur to YMCA in Faridabad and Sikanderpur Station to NH 8, Gurgaon — have already been made operational. The metro link from Sikanderpur station to Sector 56, Gurgaon, Bahadurgarh metro project and Ballabhgarh metro project are under implementation and would be completed by the end of 2017. The state government has requested Delhi Metro Rail Corporation (DMRC) to carry out a techno-feasibility study of three projects — metro connectivity from HUDA City Centre to Old Faridabad, extension of Delhi Metro till Kondli and metro connectivity between Faridabad and Gurgaon. Adrian Amos Jersey
National Highways Authority joins Masala bond drive
: National Highways Authority of India has invited banks to submit expressions of interest for an offering of Masala bonds at a minimum tenor of five years to raise the rupee equivalent of $750 million, according to market sources. These will be the company’s debut Masala issue. India Ratings, CARE and CRISIL have assigned AAA ratings to NHAI’s long-term domestic borrowing programme. Despite interest from issuers, no Masala bond issues have been completed yet, but there is a strong pipeline building from public sector companies. NHAI says it will consider issuing offshore rupee bonds of 10, 15 and 20 years. It has given banks until the end of this month to respond. Earlier this week, India’s largest power company, NTPCBSE -2.10 % , had said it was looking to raise $250 million from an offering of Green Masala bonds, according to market sources. NTPC was said to have mandated Barclays, Citigroup, Deutsche Bank, HSBC and SBI Capital Markets for the offering. Last week, Rural Electrification Corp sent a request for proposals to raise $100 million from Masala bonds, with a greenshoe option to increase the size for up to $200 million. The Reg S bonds were to have a tenor of three years and one day. The proceeds will be for financing infrastructure projects in the power sector. Banks have until July 4 to respond to REC’s call for proposals. REC is rated Baa3 and BBB by Moody’s and Fitch, equivalent to the sovereign rating of India. ICRA and CARE have assigned AAA ratings to REC’s local bonds. Bradley McDougald Jersey
Airlines providing regional connectivity to have simple rules for entry and exit: Aviation ministry
The civil aviation ministry has decided to come up with easy entry and easy exit rules for airlines providing regional connectivity, as it wants to ensure maximum industry participation in a programme that seeks to take flying to the masses. “We do not want a situation where tough exit rules discourage airlines or companies from launching airlines to provide regional connectivity. We will provide an easy entry and easy exit option to operators,” aviation secretary RN Choubey. In the easy exit option, any airline that starts operations on regional routes will be allowed to shut shop and leave if it feels that the operations will not be profitable after a stipulated period of time. The duration will be decided at the time when the route is awarded to a particular airline. These rules are likely to be part of the policy on regional connectivity that will be released within 10 days. Consultancy firm Deloitte is preparing the report for the government. Currently, no such exit rules exist for any other category of airlines. Mitch Richmond Womens Jersey
Majority foreign stake puts curbs on overseas flights
Airlines with a majority foreign ownership will not be allowed to fly on international routes, senior Civil Aviation Ministry officials said on Tuesday. On Monday the government liberalised norms in the sector, allowing foreign investors to own up to 100 per cent stake in domestic carriers. The bilateral air traffic agreements that India has signed with most of the countries have ‘substantial ownership and effective control’ (SOEC) clause which may not permit the airlines with majority foreign ownership to fly abroad from India, a senior Ministry official said. At present, India has bilateral air service agreements with 109 countries. “The SOEC clause is applicable at two places – at the stage of air operators’ permit and for bilateral rights to fly abroad,” said another senior official. The ICAO template on air services agreements says the SOEC norms in bilateral agreements address “potential concerns such as safety, security or other economic aspects including potential emergence of “flag of convenience.” However, the template is not binding and the countries are free to set their own terms. India will have to amend the SOEC clause in its agreement with a particular country for allowing an airline with majority foreign control to fly abroad, an official said. “At present, only a couple of countries that India has bilateral agreements with do not acknowledge the SOEC norms,” the official added. James Develin Authentic Jersey
Curb unfair air fare hikes: House panel
A parliamentary standing committee on consumer affairs has asked the civil aviation ministry to put checks on “abnormal increases” in air fares. The panel took up the issue on Monday following reports of high increase in air fare during the jat protest in Haryana. The panel headed by TDP parliamentarian J C Diwakar Reddy also expressed dissatisfaction regarding the present practice of allowing airlines to increase fare upto 10 times of the minimum. The committee has asked the civil aviation ministry to take the views of consumer affairs ministry while making any policy decision. Sources said that some of the MPs, who are members of the panel, also shared their ordeal and experiences with airlines. The members were unhappy that the airlines have been taking fliers for a ride to make profits and there is a need to regulate them. Tracy McGrady Authentic Jersey
FDI Alone Won’t Help – Major Restructuring Needed For AAI Take-Off
The latest foreign direct investment (FDI) reforms in the civil aviation sector should ideally bring the focus back on airport infrastructure in many brownfield ventures which have failed to improve, thanks to the triad of slothful Airports Authority of India (AAI), labour unions and opposition-ruled states blocking such moves. The true test of the benefits of raising FDI in brownfield airports to 100 percent without prior approval (earlier, FDI beyond 74 percent was subject to approval) may actually come when Chennai airport’s ceiling doesn’t crumble every other day. India is one of the fastest growing aviation markets in the world and boasts of some world-class airports in Delhi, Bengaluru, Hyderabad and Mumbai on the one hand, and hundreds of ghost airports with not a single flight on the other. Now that back-to-back reforms for airlines have been unleashed, by diluting the 5/20 restriction for overseas flights and removing caps on foreign investment, it is time the country got its airport infrastructure up and running too. If the airport infrastructure fails to keep pace, the liberalisation in airline ownership and operational conditions would be rather meaningless. Drew Bledsoe Womens Jersey