India looking to extend UDAN scheme to Bimstec countries
In a bid to boost its engagement with Bimstec, India is looking to expand the UDAN scheme of its aviation policy to countries of this regional bloc, Minister of State for Civil Aviation Jayant Sinha said on Tuesday. “What the government of India would like to see is that we can take the policy design behind UDAN (Ude Desh ka Aam Naagrik or ‘common people of the country can fly’) and extend it across the Bimstec region,” Sinha said while speaking at an event here to mark the 20th anniversary of the establishment of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec). “So if we can link Pakyong (greenfield airport in Sikkim), there is no reason why we can’t link an airport in Bhutan or an airport in Myanmar in the same fashion,” he said. Bimstec comprises Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand. Its main objective is technical and economic cooperation among south Asian and southeast Asian countries along the rim of the Bay of Bengal. Chris Chelios Jersey
Air India has 5 times more debt than Jet Airways, 16 times than IndiGo: A comparison in 15 charts
The disinvestment plans of national carrier Air India are back in news and the government is making all the right noises. Making a case for the sale of the airline, union finance minister, Arun Jaitley said in Dialogue@DDNews programme, “In this country, if 87 or 86 percent flying can be handled by the private sector… then they can also do 100 percent.” Jaitley further said about Rs 50,000 crore of tax-payers’ money that has been pumped into the airline so far could have been invested to improve the education sector. Indeed a valid point, especially considering India’s education budget has remained at a lowly 0.5 percent of GDP over the last few years. What Jaitley said is by and large correct. A look at the air traffic data available from the Directorate General of Civil Aviation (DGCA) shows that Air India’s market share has been on a declining course. From 20.2 percent in 2013-14, the airline’s market share shrank to 17.8 percent in 2015-16. according to DGCA data. Of the 10.38 crore passengers carried by Indian carriers in 2015-16, Air India accounted for 1.85 crore, Jet Airways 2.33 core and budget carrier IndiGo 3.31 crore. IndiGo has witnessed a steady increase in its market share from just 14.1 percent in 2010-11 to 32 percent in 2015-16. Firstpost did an analysis of various parameters of three leading airlines in the country–Air India, Jet Airways and Indigo–in the context of Air India’s selloff plan. Air India and Jet Airways are full service carriers while IndiGo is a budget carrier that is making profit and by far the best performer in the sector. Xavier Rhodes Jersey
‘Govt Sees 2 Conglomerates and 2 Int’l Airlines as Potential Bidders of Air India’
Finance ministry and civil aviation ministry are drawing a road map to divest either a significant part or whole of Air India, according to highly placed sources. One of the sources said four companies, including two Indian conglomerates and two international airlines are being seen as the potential bidders of Air India. Another source said the government is keen to have a clear plan for privatization of Air India by September so that there is a window of six months to carry out the necessary processes before the end of the financial year. “This decision was taken at the top level in the government. If all goes as per plan, by next financial year, Air India will be owned by a private player,” said the second source. In an interview with CNBC TV18’s Shereen Bhan on Monday, Finance Minister Arun Jaitley said, “In addition to the existing players (in aviation), if private players also participate in Air India’s proposed privatization, I think it will add to the competition in terms of quality and the speed of growth of the sector too.” In his interview, Jaitley sounded bullish about aviation sector in India. “Aviation is turning into a good business in our country. Our airports are better than most countries, we have better connectivity. I do see a great future for the aviation sector. We have around 500-600 aircraft. China has 5000. We will definitely have a big number of aircraft flying in 10 years,” he said. Jerick McKinnon Womens Jersey
GMR to build, operate New Heraklion Airport in Greece
GMR Airports Limited said that it has been selected to develop, operate and manage the new international airport of Heraklion at Crete in Greece in partnership with Greek infrastructure firm Terna SA. This will be the second project to be handled by the subsidiary of GMR Infrastructure Ltd in Europe, after it developed Istanbul’s Sabiha Gokcen airport. The company said in a press release on Wednesday that it will be the designated airport operator in the consortium for this project. “The scope of the project involves design, construction, financing, operation, and maintenance and exploitation of the New Heraklion Crete International Airport. The concession period for the project will be 35 years, including phase 1 construction of five years,” it said. “This new airport will definitely boost the tourism industry and aid the growth of international tourists that Greece has been witnessing over the past couple of years,” the press release quoted GMR Airports’ business chairman Srinivas Bommidala as saying. “The airport is in line with the asset-light strategy we have adopted for overseas expansion and will see GMR participate in project management and commercial management in addition to airport operations.” GMR Airports, which has built and operates airports in Delhi and Mumbai, had last year won the competitive bid for development and operation of the Rs 3,000 crore Mopa Greenfield Airport in Goa. The concession period for the greenfield project will be 40 years, with a possible extension of another 20 years through a bid process. The airport will also be built under the build-operate-transfer or BOT model. The company has also developed the Mactan Cebu International Airport in Philippines. Corey Davis Authentic Jersey
Air India new fleet plan on hold after privatisation proposal
Air India’s plans to expand its fleet with new aircraft seems to have hit an air pocket following the NITI Aayog’s proposal to the PMO its total privatisation which made the national carrier’s future course uncertain. Decisions earlier approved by the airline’s board of directors regarding acquisition of newer versions of aircraft are currently “on hold” and tenders for procurement of new planes have been deferred till there is a clarity, an airline source said. Air India’s board of directors had in March approved a proposal to induct seven Boeing 787-9 aircraft in its fleet with the aim to improve connectivity to Canada, the USA and Australia. The airline was planning to float tenders for procuring these aircraft on lease this month, which has now been deferred. “The decision (of floating tenders) is on hold until there is a clarity on the airline’s future,” a top Air India official said. Similarly, plans to procure 10 more ATR aircraft by Air India’s regional arm, Alliance Air, which has been awarded several routes under the Centre’s regional connectivity scheme UDAN, have been put on the back-burner, the official said. Alliance Air currently has 10 ATRs in its fleet and has recently placed orders for leasing of 10 more such planes by the end of this fiscal. As part of its fleet expansion plans, Alliance Air has proposed to take its ATR fleet strength to 30 over a period of time. On the other hand, Air India is also leasing 22 Airbus A320 Neos, of which four have already joined the fleet. According to the source, the airline had planned to issue bids for seven more such planes but now there is uncertainty over these tenders as well. However, as of now, there is no change in plan to take the deliveries of the remaining four of the total 27 Dreamliners (Boeing 787-800s) that the airline had ordered in 2006, which are to be inducted in its fleet between July and October, the source said. The state-owned carrier has a total 103 planes of which 42 are wide-bodied Boeing 777s, 747s, 787s and 61 narrow- bodied Airbus 319s, 320s and 321s. Its low-cost subsidiary Air India Express has 23 Boeing 737s. Union Finance Minister Arun Jaitley has favoured privatisation of Air India and the civil aviation ministry is looking at all options to make the airline strong and viable. According to Minister of State for Civil Aviation Jayant Sinha, a cabinet note in this regard is likely to be prepared shortly. Air India has piled up over Rs 50,000 crore debt mainly because of high maintenance cost and lease rent. It made an operational profit of Rs 105 crore in the financial year ending March 2016, the first time since the merger of then Air India and Indian Airlines into one entity Air India Limited in 2007. Kyle Beckerman Authentic Jersey
In Air India sell-off bid, banks and oil companies may be ultimate losers
Oil marketing companies and banks may find themselves at a loss as the government tries to reduce Air India’s borrowings before putting up the debt-ridden national carrier for sale. The Civil Aviation Ministry and the Finance Ministry are in the process of meeting banks and oil companies to get haircuts for Air India’s debt, ET Now reported citing unnamed sources in the Civil Aviation Ministry. According to the report, the two ministries are meeting banks to get haircuts for Air India’s debt and simultaneously are also holding meetings with oil companies to reduce Air India’s dues. the report adds that the government absorbing a part of Air India’s debt is an option to find a good buyer for the beleaguered airline, with the Cabinet to take a final call on the quantum of disinvestment in Air India. Last week, in an obvious reference to potential difficulties in finding a willing buyer for the debt-laden behemoth, Civil Aviation Minister, Ashok Gajapathi Raju had proclaimed that it might be difficult to find any ‘bakras’ to buy Air India. “There are hardly any bakras around,” Minister for Civil Aviation Ashok Gajapathi Raju said in an interview to CNBC TV18. “To get one is difficult, and businessmen are businessmen,” he added. HomeIndustry In Air India sell-off bid, banks and oil companies may be ultimate losers In Air India sell-off bid, banks and oil companies may be ultimate losers The Civil Aviation Ministry and the Finance Ministry are in the process of meeting banks and oil companies to get haircuts for Air India’s debt before putting up the debt-ridden national carrier for sale. By: FE Online | Published: June 7, 2017 1:08 PM 23 SHARES Facebook Twitter Google Plus Oil marketing companies and banks may find themselves at a loss as the government tries to reduce Air India’s borrowings before putting up the debt-ridden national carrier for sale. (Image: Reuters) Oil marketing companies and banks may find themselves at a loss as the government tries to reduce Air India’s borrowings before putting up the debt-ridden national carrier for sale. The Civil Aviation Ministry and the Finance Ministry are in the process of meeting banks and oil companies to get haircuts for Air India’s debt, ET Now reported citing unnamed sources in the Civil Aviation Ministry. According to the report, the two ministries are meeting banks to get haircuts for Air India’s debt and simultaneously are also holding meetings with oil companies to reduce Air India’s dues. the report adds that the government absorbing a part of Air India’s debt is an option to find a good buyer for the beleaguered airline, with the Cabinet to take a final call on the quantum of disinvestment in Air India. Last week, in an obvious reference to potential difficulties in finding a willing buyer for the debt-laden behemoth, Civil Aviation Minister, Ashok Gajapathi Raju had proclaimed that it might be difficult to find any ‘bakras’ to buy Air India. “There are hardly any bakras around,” Minister for Civil Aviation Ashok Gajapathi Raju said in an interview to CNBC TV18. “To get one is difficult, and businessmen are businessmen,” he added. You may also like to watch: Air India Offering Tickets At Price Of Rajdhani: Find Out Details Last month, Finance Minister, Arun Jaitley confirmed the government’s intent to exit the ailing state-run carrier, in order to lighten the debt load without apparently losing much of the value that it provides to the country’s aviation industry. “History has given us a second chance that a good investor should come, which has credibility so civil aviation ministry will consider it,” Arun Jaitley said, referring to proposed disinvestment of Air India, in an interview to Doordarshan TV. Air India, under intense competition from leaner, more efficient and often cheaper private airlines, is reeling with a debt of about Rs 50,000 crore, with about Rs 28,000 crore in working capital debt, and about Rs 4,000 crore in interest burden alone. It has not turned a profit since at least the year 2007. “To run Air India, you have invested Rs 50,000 crore. That money is government’s money, that’s your money. It could have been used for school education,” Arun Jaitley said during the interview. The carrier has received bailout packages worth about Rs 24,000 crore out of a total Rs 30,000 crore approved but has failed to revive its fortunes amid private airlines continuously gaining market share. Denis Savard Authentic Jersey
Privatising Air India to change the perception about Modi government’s reformist credentials
There is a buzz in the air about the possible privatisation of Air India (AI), that quintessential public sector white elephant. Since 1991, this has been seen as the ultimate litmus test of every Indian government’s reformist convictions, which none has yet managed to conquer. That is ironic, since on several occasions the respective governments of the day have managed far more substantial economic reforms. Consider two examples from either end of the 26 years since liberalisation began. First, Prime Minister Narasimha Rao’s dismantling of industrial licensing was much more impactful than the government getting out of any one company or sector. Similarly, the enactment of the Goods and Services Tax (GST) by the present government heralds a seismic shift in India’s economy. While Rao deftly used India’s looming international repayments default to push through his reform, Prime Minister Narendra Modi had to manage his economic magnum opus without any such crisis for cover. The former is often appreciated for his shrewd use of the old adage to never waste a good crisis, and the latter deserves similar kudos for sheer persistence. For GST did not arrive on autopilot. No stone was left unturned to make it happen, despite many setbacks along the way, including widespread rumours last year that the government was no longer serious about it. Nevertheless, to investors and markets there is something sexy about privatising a marquee Public Sector Undertaking (PSU) that does not seem to be matched by more structural reform, at least in the short term. That could be for a variety of reasons, one being that the fiscal benefits of privatising a prominent PSU boondoggle are immediately visible. The bleeding of public finances that is stanched may be relatively small compared to, say, the fiscal deficit. But it is more or less undisputed, whereas agreeing on the exact long-term benefits of a deeper reform is usually beset with many ifs, ands, or buts. Despite sporadic PSU selloffs, it has long been known that India finds it difficult to decisively put behind decades of misguided government efforts at running commercial enterprises. Even using the term privatisation has proved a taboo, with euphemisms like strategic disinvestment being favoured instead. Other attempts at political correctness have included reliance on Public Private Partnerships (PPPs) as an alternative to encouraging outright private sector investment. That camouflage opened the doors for private investment into such previously forbidden areas as infrastructure, where the gap between what is needed and available from public coffers is gargantuan. But the results have been discouraging, mostly due to the public sector partners’ bureaucratic DNA overpowering their role as the fig leaf in these projects. That such subterfuge was felt necessary despite the desperate need for private investment, says a lot about Indian politicians’ diffidence about selling reforms on merit and logic. It should be instructive that reformist legends like Thatcher and Reagan were not alone in having to market their policies. Even autocratic China’s Deng Xiaoping, who otherwise had no need to persuade the Chinese public about anything much, turned salesman for economic reforms. There are indications that change is in the air. Modi’s aggressive marketing of his Aadhaar-linked rejig of the cooking gas subsidy, as well as his political pitch for GST during recent state election campaigns, augur well. If enough of his colleagues take the cue – not to mention down and out opposition leaders looking for a new game plan – it might even represent a turning point. Taking stock of this government’s track record on economic reforms would have to acknowledge not just the once- in-a-generation GST, but also a bunch of other measures. Those should include mid-level efforts on both the legislative front, such as the one permitting more Foreign Direct Investment (FDI) in the insurance sector, as well as executive fiats, like the recent one abolishing the Foreign Investment Promotion Board (FIPB) altogether. There are a number of other such measures, such as the deregulation of diesel pricing, the bankruptcy law, permitting the private sector to invest in railways and defence, and back into commercial coal mining. But there remain a number of items on investor and markets’ wish lists that are still pending, including labour law reform, deregulation of kerosene and fertiliser pricing, and many more. When many commentators were critical of the government’s cautious approach to reforms back in 2015 and 2016, they may not have fully understood the dynamics of political capital. For instance, its lack of numbers in the Rajya Sabha could not be overcome, leading to an early setback in the ambitious attempt to redo the land acquisition act. But irrespective of whether or not commentators have given enough credit to this government’s economic reforms in the meantime, they can today rightfully ask for greater boldness from it. And the PM, his pockets bulging with the most political capital he has ever had till now, would do well to heed them. On Air India, finance minister Arun Jaitley was reported to have said that if the private sector could run 86% of civil aviation, it could very well run 100%, and without a Rs 50,000 crore public subsidy for one airline. If that sentiment is translated into action, it would dramatically change the perception about this government’s reformist credentials. Saku Koivu Womens Jersey
Regional connectivity: Airlines flag slot problems
Non-availability of take-offs and landing slots at Mumbai, Bengaluru, Pune, Hyderabad and Chennai is posing a threat to the success of the regional air connectivity (RCS) scheme, airline operators pointed out at a meeting convened by the Karnataka government on Tuesday. Representatives of all major carriers including IndiGo, Jet AirwaysBSE 0.61 % and Air India participated in the meeting and listed the issues they are facing with regard to regional connectivity, and gave suggestions to infrast ructure minister RV Deshpande and additional chief secretary, infrastructure development DV Prasad. The turboprops too would need peak-hour slots if regional connectivity scheme has to meet passenger needs, they said. The second round of bidding under the regional connectivity scheme will happen next week, and the Ministry of Civil Aviation is trying to make the scheme simpler and more attractive for airline operators. The Centre and the states are consulting airline operators and compiling their suggestions before going for the second round of bidding which also involves routes to small airports in Karnataka, among the others. The airline executives told Deshpande that since airlines deploy smaller aircraft such as ATR for RCS operations, ATRs usually take more time for take-offs compared to larger aircraft. Metro airports prefer slotting bigger aircraft to turboprops precisely because of this reason. This is a minor roadblock as well. The other problem they are facing, the executives said, is shortage of parking area at major airports which has come in the way of exploring newer routes under the RCS scheme.The success of the RCS scheme depended more on the government fixing the infrastructure issues at large airports. A BlueDart executive suggested to the government to extend the RCS scheme beyond passengers, and include cargo flights as well. The potential in the cargo sector, according to an observer, could be bigger than that of passenger sector. “Karnataka is very enthusiastic to promote regional connectivity, and we are also keen to have no-frills airports that will meet the passenger needs at fewer costs,” said Prasad, the additional chief secretary, infrastructure. Minister Deshpande and Prasad explained the facilities available at regional airports in Karnataka, and the concessions the state government is offering to airline operators. The minister urged the airlines to operate more flights from Mysuru, Hubli and Belgaum. Michael Roberts Jersey
Want regulators, pilots to work together: Jayant Sinha
Union minister Jayant Sinha has said that regulators and pilots should work together in a “very collaborative manner”, amid DGCA complaining to the police against some pilots. The Directorate General of Civil Aviation (DGCA) has filed a police complaint against 34 pilots of Jet Airways, IndiGo, SpiceJet and GoAir for allegedly posting “obscene” messages on a WhatsApp group against officials at the regulator. Following the complaint, Delhi Police had yesterday questioned 13 pilots. When asked about the incident involving the pilots and the DGCA, Sinha said it was “unfortunate”. “It is obviously quiet distressing that (such) kind of language has been used and of course, we are hoping that… cooler minds will prevail and the matter will settle down,” the Minister of State for Civil Aviation said. “We obviously want our regulators and our pilots to be working together in a very collaborative and cooperative manner,” he said. Jayon Brown Authentic Jersey
No gradual stake sale: Air India may be privatised at one go
Privatising Air India at one go is a view that has emerged strong among the many that the Narendra Modi government is grappling with regarding the future of the airline. Business Standard has learnt from sources who are involved in this process that once a final decision to divest a stake in Air India is taken, there won’t be any gradual stake sale. In a single stroke, the government will cede control by reducing its stake to either below 49 per cent, or exit the national carrier completely. “No investor, domestic or foreign, will be interested in buying a minority stake in Air India. There won’t be a 10, 15, 20 per cent stake sale. It has to be privatisation at one go. The decision to be taken is whether the government will bring down its ownership to below 49 per cent or exit altogether,” said a senior government official. The official said that a number of departments in the government, including the Prime Minister’s Office, civil aviation ministry, and finance ministry, are considering various options regarding the national carrier, which is laden with a debt of Rs 46,570 crore. A number of informal discussions have taken place on this. The consensus view is that there is no sense in the Centre divesting stakes and retaining ownership. The final decision would be taken by the Cabinet in the next couple of months, sources said. Derek Watt Authentic Jersey