Only aviation companies can fly with Kingfisher logo, warns United Breweries
Beermaker United Breweries has said the Kingfisher logo that belonged to Kingfisher Airlines can only be used for aviation and warned of legal challenges if it is used in other categories. In the first official comment on the issue after the banks’ decision to auction the logo, United Breweries, the maker of Kingfisher and Kalyani Black Label beers, said a buyer will be able to use the logo only to set up another airline and for nothing else. Using the logo for any other purpose will be legally challenged by UB since it holds exclusive rights to the brand, the company warned. Lenders to Kingfisher Airlines had called for bids for the logo in a public notice on March 29 as part of efforts to recover dues of more than Rs 9,000 crore. The public notice specified that the logo belonged to the airline and would be sold with other trademarks such as Fly Kingfisher, the logo of the Flying Bird Device and the word mark ‘Fly the Good Times’. The logo and the name Kingfisher, associated with the popular brand, were also used by the airline company when Vijay Mallya pushed his group into aviation in 2007. The airline’s logo is slightly different from the beer logo but it is not very obvious and UB officials feel the scope for mischief is high in case the buyer happens to be a rival beer or alcohol manufacturer. UB Managing Director Shekhar Ramamurthy told ET that the Kingfisher mark belongs to United Breweries Limited. “We also have exclusive rights to the Kingfisher trademark in a few other categories such as merchandising material, clothing, etc. The trademark that is being put up for sale by SBI (State Bank of India) is for the airline category only. Any prospective buyer cannot use it in any category where we have exclusive usage rights,” he said. UB officials said the company is not responsible for or connected to any guarantees made by United Breweries Holdings owned by Mallya. “The lenders need to do their homework before the public bids,” another UB Group official said. “They have to tell possible buyers what they can do with that logo and brand. We will legally challenge plans for any other category.” Bankers are not very enthused about the sale of the Kingfisher brand and trademark, which will go under the hammer on April 30 for a reserve price of Rs 366.7 crore. “We are not expecting any bids at the auction, but we have to follow the process,” said a banker on the condition of anonymity. “If we don’t put these intangible assets on the block there will be pressure from the Central Bureau of Investigation and Central Vigilance Commission alleging that we didn’t do our fullest to recover dues.” Sources also said that before Kingfisher Airlines went bellyup, banks had valued the brand and trademark at Rs 160 crore, but later an external agency had assigned a value of Rs 4,100 crore to the Kingfisher brand in 2011. The Kingfisher brand name was pledged to 14 lenders, including SBI, IDBI Bank, Punjab National Bank, Bank of India and Bank of Baroda under a debt recast agreement. Alpana Parida, president of brand consultancy DY Works, said while other airlines connote flying, travel or hospitality, Kingfisher Airlines stood for the ‘king of good times’. “This essence allows the brand to stretch across multiple categories. The brand transcended a direct association with its now-beleaguered promoter… The promise of good times allows the brand to stretch and (it) can be even used to sell newer categories such as real estate and fashion,” she said.
Aviation ministry cuts down airport entry passes for staff of MPs and ministers
The next time you encounter a minister or parliamentarian at the airport, the posse that typically follows them everywhere will likely be missing. In a bid to secure airports further post the terror attack in Brussels, the civil aviation ministry has decided to cut down on the number of airport entry passes (AEPs) being provided to the staff of union ministers and MPs. Henceforth, only one member from the staff will have full access at the airports. Others, if sought, will get limited access till the security check area. Until now, there was no limit on the issue of such access cards. “There is no need for so many people to enter the airport to drop the minister or MP, as airlines and airport operators provide them with protocol officers to look after their requirements and drop them till the aircraft,” said a senior civil aviation ministry official, who did not want to be named. The proposal has been approved by both civil aviation ministers — cabinet minister Ashok Gajapati Raju and minister of state Mahesh Sharma – soon after the terrorist attack on the Brussels airport. A lot of AEPs issued to the officials of the civil aviation ministry will also be withdrawn, said the official. “The ministry has started rejecting requests for AEP and we have rejected a proposal for AEP from a union minister’s personal secretary,” said another civil aviation ministry official. Demand to curtail the number of these permits was always there, but it couldn’t be implemented because of opposition from its beneficiaries. The ministry was until recently liberal in issuing the access cars and requests from any MP or minister was immediately process without asking any question. “There are lot of things that we want to do, but are unable to do,” said a top ministry official. “The Brussels strike surely acted as an enabler in achieving this.” Analysts say such permits should be completely abolished. “I do not understand the logic behind passes to receive ministers or MPs from inside the aircraft. This does not happen anywhere in the world,” said Shakti Lumba, former head of operations at Air India and IndiGo. On the security point of view, Lumba said, a bigger worry is temporary airport employees involved in ground handling. “These people have access to baggage, aircraft and other sensitive installations at the airport. The government needs to ensure that such employees are not temporary because airlines, normally, outsource these services to contractors.” The civil aviation ministry, along with the Bureau of Civil Aviation Security – the aviation security wing of the government – in a series of measures have also stopped sale of visitor tickets at all airports. “The ban on entry of visitors inside the airport was immediately put in place after the attack in Brussels,” said one of the ministry officials cited earlier.
Ban on 2,000 cc diesel vehicles in NCR continues till further order
The December 2015 order of the Supreme Court had imposed a ban that was effective till March 31, 2016. Supreme Court has decided to continue the ban on registration of diesel vehicles with engine capacity of 2,000 cc and above in the national capital region. The December 2015 order of the court had imposed a ban that was effective till March 31, 2016. Companies were hopeful of a favourable decision. The ban, imposed to address rising pollution in Delhi, is a first of its kind and companies like Mahindra & Mahindra, Toyota, Mercedes and Jaguar Land Rover among others took a huge blow on sales. Dealerships of these companies in NCR have also faced hardships. New Delhi’s ban on new diesel cars has unsettled the industry, its salesmen and investors, who warn the uncertainty surrounding it could derail a tentative recovery in auto sales. Chief Justice of India T S Thakur, one of the three judges hearing the case, said the court would consider whether to impose an environmental cess on the sale of diesel cars in New Delhi.
Domestic natural gas prices cut almost 20%
Domestic natural gas prices will be almost 20 per cent cheaper in the April-September 2016 period. The price for the period will be $3.06 per million British thermal unit on a gross calorific value basis. The government also announced the price cap of $ 6.61 per mBtu on a gross calorific value basis for natural gas from deepwater, ultra deepwater and high temperature high pressure areas. Earlier in March, the government approved pricing and marketing freedom for natural gas produced from such difficult areas. However, the pricing freedom is subject to a price cap which is determined by the lowest among landed cost of imported fuel oil, weighted average of imported fuel oil, imported coal and imported LNG or the landed cost of imported LNG. The price ceiling will be applicable from April-September 2016 before it is revised again. The domestic natural gas price is as per a formula approved by the government in September 2014 In the September 2015-March 2016 period the price of domestic natural gas was $3.82 per mBtu on a gross calorific value basis.
GSPC interest payout 10 times the revenues: CAG
Even as the country is infuriated with the big-ticket defaulters pushing the banks to the brink, it is the Gujarat government-run Gujarat State Petroleum Corporation Ltd (GSPC), that has now assumed a dubious distinction of becoming an iconic PSU, burdened with heavy debt and interest payouts being more than ten-times its revenues from oil & gas production. The latest Comptroller and Auditor General of India (CAG) report on GSPC, revealed that the company had failed to address “properly the risks associated with cost, technology and price in development of the Krishna-Godavari (KG) Block. The Field Development Plan for DDW field did not take into account the fact that the project was not viable at the government-approved gas prices prevalent at that time..” This, according to CAG, resulted in uncertainty regarding the future prospects in the block where the company has invested around Rs 195.76 billion. CAG report found that GSPC’s total borrowings rose by 177 per cent during 2011-15 from Rs 71.2667 billion to Rs 197. 1627 billion, mainly due to development activities in KG block. The interest payout increased substantially from Rs 9.8171 billion in 2011-12 to Rs 18.0406 billion in 2014-15. While company’s revenues from production fell from Rs 2.3030 billion in 2011-12 to Rs 1.5251 billion in 2014-15 mainly due to lower oil prices and fall in gas production from 119.24 million cubic metres to 50.21 million cubic metres. Company’s Hazira block has been the main producing block with more than 70 per cent contribution to total gas output. “GSPC has been a centre of corruption. Even after wasting huge money, GSPC has zero commercial production from KG Basin. When Narendra Modi was chief minister in Gujarat, he made tall claims of 20 TCF gas find in KG Basin. In reality, there wasn’t even 2 TCF which was recoverable. People are being misguided. Also, the CAG report has noted that GSPC had surrendered 11 blocks overseas and written off about Rs 17.34 billion. Whose loss is it ultimately?” Congress leader and National Spokesperson, Shaktisinh Gohil told BusinessLine. The apex audit body also noted that GSPC did not exercise its right to conduct audit of its JV accounts, which had outstanding dues of Rs 23.2952 billion. In November 2009, GSPC’s Management Committee had approved the FDP for Deen Dayal West (DDW) area with commercial production estimated in December 2011. But the trial production could be taken up only in August 2014 and the commercial production is yet to be started. While submission of FDP, GSPC had assumed gas price of $5.7 per million British thermal unit (mmBtu), but the Central government-approved formula put the gas price at $4.2 per mmBtu. Wrong estimation has escalated the costs. Against the FDP estimates of $547 million, the tender cost for offshore facilities rose to $810 million. But the actual cost stood at $1,058 million.
Additional levy of upto Rs 120 at Mumbai airport from April 1
Flying out of the Chhatrapati Shivaji International Airport here is set to get costlier with an additional levy of up to Rs 120, to fund the metro rail connectivity to the aerodrome, coming into effect from Friday. Tariff regulator Airports Economic Regulatory Authority (AERA) had in January this year allowed Mumbai International Airport Limited (MIAL) to charge an additional levy of Rs 20 from each domestic flier and Rs 120 from each international traveller as development fee to fund a metro rail project. The additional levy would be applicable from April 1, 2016 and remain in force till March 31, 2021, AERA had said in its order. MIAL is a 26:74 joint venture between the GVK group led consortium and the Airports Authority of India. The private airport operator currently levies a development fee of Rs 600 from an international passenger and Rs 100 from a domestic traveller. MIAL had last year sought AERA’s permission to charge additional development fee, to fund the metro rail project. Mumbai Metro Rail Corporation (MMRC), the project implementing company for all metro rail corridors across the western metropolis, is to construct a 32.5-km underground line, connecting Colaba in South Mumbai to SEEPZ in western Andheri suburb.
Chandigarh airport to be named after Bhagat Singh; Haryana Assembly gives green signal
The Haryana Assembly on Thursday unanimously passed a resolution to name Chandigarh airport after freedom struggle icon Shaheed Bhagat Singh. As soon as the Question Hour ended, Parliamentary Affairs Minister Ram Bilas Sharma moved the resolution in this regard. Later, it was unanimously passed with ruling BJP and main opposition Indian National Lok Dal (INLD) MLAs supporting it. Opposition Congress MLAs were not present as they have not been attending the assembly session to protest the six-month suspension of their three MLAs for tearing copies of the Governor’s address. On the resolution passed on Thursday, Sharma told the House that the state government would soon write to the Union Civil Aviation ministry in this regard.
Flying in and out of Mumbai to get costlier due to scarcity of landing slots
Flying in and out of Mumbai is set to get expensive, because the city’s airport has run out of landing slots, threatening to create a demand-supply mismatch soon with the nation’s airline passenger traffic growing at 20 per cent annually. The Mumbai airport hasn’t allowed addition of any new flights from the summer schedule that began this month, airline executives said. This at a time when carriers announced an 18.6 per cent increase in flights on domestic routes during the summer schedule. With airlines following dynamic pricing, not enough services to meet passenger traffic in Mumbai could drive up the cost of air travel to India’s commercial capital. “Failure to add capacity from the Mumbai airport, which is India’s second largest airport, can badly impact the growth of the sector,” said asenior airline executive, who didn’t want to be named.
Karnataka to rebuild Kalaburgi greenfield Airport
The State government will soon take up the task of completing the much-delayed Kalaburagi green-field airport project. Replying to a debate on the state budget, Siddaramaiah said new tenders will be floated soon to take up the work on the project which has remained suspended for over 3 years now. The CM renewed promise came in the backdrop of his meeting with leader of the Congress in the Lok Sabha M Mallikarjun Kharge who sought more funds from the state government for projects in Hyderabad-Karnataka region. Soon after the meeting, Kharge had supported Siddaramaiah’s decision to set up the Anti-Corruption Bureau (ACB) recently. Siddaramaiah also announced take up two other projects including the development of railway line
Aviation flying high with domestic air traffic growth over 20%
The recent data presented by Directorate General of Civil Aviation ( DGCA) shows that February is the fifth consecutive month where domestic passenger traffic grew over 20% on a year-on-year basis. In February, Indian airlines flew 7.4 million passengers as against 6 million passengers in the corresponding month of the last year, indicating a jump of 24.7%. The firm trend in traffic and lower fuel prices are expected to support valuation of aviation stocks in the short and medium term. There are a few factors which have contributed to the growth in passenger traffic. First, airlines have been passing on the benefit of lower crude oil prices to travellers. Second, as rail fares have increased in the recent months, the difference in fares of rail and airlines has narrowed for key routes such as Mumbai-Delhi, Mumbai-Bengaluru, and Mumbai-Chennai. It has been observed that the difference between the fares of rail (AC 2-tier) and air is in the range of Rs 700-800 on these key routes. Due to this, there has been a meaningful migration of travellers from rail to air.