Boeing, Airbus Face Probe in $10.6-Billion Deal With Air India
The Central Bureau of Investigation (CBI) has registered three cases and one preliminary inquiry under sections related to cheating and forgery of Indian Penal Code in the light of orders from the Supreme Court in January this year. The first case has been registered against unknown officials of Ministry of Civil Aviation (Government of India), Air India and unknown private persons to investigate the allegations relating to purchase of 111 aircraft for national airlines costing about Rs. 70,000 crore ($10.6 billion) to benefit foreign aircraft manufactures. Such a purchase caused an alleged financial loss to the already stressed national carriers,” a CBI statement said. The CBI has also said that it has registered case against government officials, Air India and private companies to investigate the allegations of leasing of large number of aircraft without due consideration, proper route study and marketing or price strategy. “It was also alleged that the aircrafts were leased even while aircraft acquisition program was going on,” CBI added. Air India is facing heavy losses and has a debt of approximately $7.8 billion. It is alleged that with the collusion of private players, officials had made arrangements in such a way that Air India flew its aircraft on loss-making routes. The CBI is also investigating the charges of giving up profit-making routes and profit-making timings of Air India in favor of national and international private airlines causing a huge loss to the national carrier. With 140 long-haul fleet, Air India controls 17% market share on international routes and 14.6% of domestic passenger market. Due to continuous losses, Indian government is considering to sell it to private players. “Today, what has happened is (Air India’s) market share is 14%. And the debt is $7.8 billion. Now there are private airlines that are flying — Indigo, GoAir, Spicejet, Jet Airways — there you don’t invest money. But to run Air India, you have invested $7.8 billion. That money is government’s money, that’s your money. It could have been used for school education. And if 86% of flying can be handled by private sector, so it can also handle 100%,” Indian finance minister Arun Jaitley said a few days back. Lance Stephenson Womens Jersey
Ministry will process Niti Aayog report on Air India sale: Arun Jaitley
The Niti Aayog has given its recommendations on the government disinvesting stake in Air India to the Civil Aviation Ministry, which will take a decision on the matter, Finance Minister Arun Jaitley said on Thursday. “The Niti Aayog has given its recommendations to the Civil Aviation Ministry, which will decide on the process of disinvestment in Air India,” Jaitley said in response to a query on the issue at a briefing here on the three years of the NDA government. According to sources here, the Niti Aayog in a recent report has recommended strategic disinvestment from the loss-making Air India, by which government control would be transferred to a private owner. Air India officials said the national carrier has an accumulated debt of around Rs 60,000 crore, which includes around Rs 21,000 crore of aircraft-related loans and around Rs 8,000 crore working capital. Craig Robertson Authentic Jersey
Niti Aayog proposes total privatisation of Air India
The government may look at exiting Air India completely, as the Niti Aayog has proposed total privatisation of the national carrier in a report to the Prime Minister’s Office. To stress its point, the Aayog has cited various international examples of governments selling their entire stakes in airlines and not retaining any shareholding to make them viable. These include British Airways, Japan Airlines and Austrian Air. Aviation minister Ashok Gajapathi Raju said the government is examining the suggestions made by the think tank. “Niti Aayog has made suggestions to make Air India a strong and viable airline. All course of action is being examined by us. We have not closed any option,” he told reporters at a conference held here on the third anniversary of the BJP-led government. Raju was responding to a question on a recent statement made by union finance minister Arun Jaitley, who hinted at a divestment in Air India. Jaitley told state-owned TV news channel Doordarshan that the government is exploring all options with regard to Air India, including bringing in a strategic investor. Sources in the aviation ministry said the government expects to make a decision on the future of Air India within three months. Doug Kotar Authentic Jersey
Average airfares fall 18% last year, says Civil Aviation Min
Average airfares dropped 18 percent in 2016 and additional capacities can further bring down the fares, Union Minister Ashok Gajapathi Raju today said as he disfavoured the idea of capping ticket prices. Scheduled airlines carried more than 10 crore domestic passengers in the year ended March 2017, an increase of around 19 percent compared to the same period a year ago. Briefing reporters about the achievements of the ministry during the three years of the NDA regime, he said the aviation ecosystem has been reshaped for affordable and convenient flying. The civil aviation minister said average fares in the country have come down by 18 percent in 2016. “Average airfare fell by 18 percent in 2016 over average airfare in 2015, making air travel affordable for everyone with unprecedented capacity enhancement in aviation system,” as per a document released by the ministry at the press briefing. Corey Coleman Authentic Jersey
No proposal from Qatar Airways for airline in India: Aviation Minister
Union Civil Aviation Minister Ashok Gajapathi Raju says that the Ministry has not received any proposal from Qatar Airways for setting up a domestic airline here. The airlines Chief Executive Officer, Al Baker had announced the intention to set up a 100 per cent owned airline in India at a trade event in Berlin Germany earlier this year. The Qatar Investment Fund is expected to partner with Qatar Airways in the project. Meanwhile the proposal of Qatar Airways for setting up a domestic airline here has been opposed by the Federation of Indian Airlines, a grouping of domestic airlines. Cam Neely Jersey
Should Air India be sold? Aviation Minister says ‘hardly any bakras around’ to buy
Amid speculation that Air India may be privatised, Civil Aviation Minister Ashok Gajapathi Raju said on Wednesday that there were “hardly any bakras (scapegoats) around” to buy the loss-making national carrier unless its massive debt was written off first. Speaking to CNBC-TV18, Raju said all options were on the table with regard to reviving the airline. He said Air India’s finances were bad because of legacy and other issues and turnaround plans have failed to significantly improve its balance sheet. “Business-as-usual is not an option,” said the minister, echoing statements had made the previous day. “Taxpayers’ money cannot be committed for an eternity.” Raju’s comments came amid suggestions from the NITI Aayog, the government’s policy think-tank, that Air India’s debt be written off and a strategic disinvestment should follow. It noted that world over, governments have pulled out of national carriers and India should consider following suit. “I have a fascination for Air India and I am still searching for ideas,” said Raju. “I want it to survive and don’t want it to go the Kingfisher way.” Malik Jackson Jersey
23 Blatant irregularities hastened Air India’s downfall: CBI
The Central Bureau of Investigation’s three FIRs in the ‘Air India scam’ which took place during the UPA regime have alleged blatant irregularities which hastened the downfall of the national carrier. The FIRs, accessed by TOI, said the civil aviation ministry decided to purchase 111 aircraft for Air India costing about Rs 70,000 crore at a time when the airline was showing a profit of about Rs 100 crore and didn’t have the capacity to purchase even a few aircraft. Due to this particular decision, the airline immediately went into huge losses, which increased every year to reach tens of thousands of crores, the CBI said, quoting from the allegation levelled by activist-lawyer Prashant Bhushan in his PIL before the Supreme Court. The FIRs mentioned an internal Air India report of 2000-01 which said the airline should only lease aircraft and not go for purchase. The view was overruled by the aviation ministry, the FIR said, quoting from Bhushan’s allegations which led the SC to direct a CBI probe. It was decided in 2004-05 that Air India will buy 68 aircraft instead of 28, as originally planned, a decision which quadrupled the expenditure from Rs 10,000 crore, as originally estimated, to Rs 44,000 crore. This apart, the government also decided to buy 43 planes for Indian Airlines at a cost of Rs 8,399 crore. “Concerns regarding potential difficulties of Indian Airlines in successfully funding the acquisition process with a positive NPV (net present value) was raised within civil aviation ministry, but were ignored,” the CBI FIR said, referring to one of the main allegations which led the court to direct the CBI to probe the alleged scam. Interestingly, the CBI said the acquisition programme had been under consideration since 1996 but never got traction, until 2004 when it suddenly picked up speed. “Between August 2004 and December 2005, the proposals were formulated by Air India, approved by its board, examined and approved by ministry, Planning Commission, department of expenditure, group of ministers and the cabinet,” the FIR said. Not just that, Air India signed the contract with Boeing to buy 68 aircraft on the same day, December 30, 2005, that the government cleared the purchase order. The CBI said NACIL (National Aviation Company of India Ltd), incorporated to merge Indian Airlines and Air India, had an equity base of only Rs 145 crore, yet it made a commitment to pay Rs 44,000 crore for procuring 111 new aircraft. It said loans for the purchase were taken from US and Indian banks, pushing the airline into debt and huge losses. Similarly, the CBI FIR into the leasing of planes said the ministry and officials of Air India/Indian Airlines decided to lease planes “dishonestly without due considerations regarding proper route study and marketing or price strategy”. “The leasing was done despite airline running with very low load because of largescale aircraft acquisition and several flights, especially overseas flights running almost empty at a huge loss,” the CBI said. For example, Air India leased 15 expensive planes when it did not have pilots to fly the aircraft, the FIR said, emphasising that this was “known to everyone”. In another instance of alleged irregularity, Air India dry leased four Boeing 777s for a period of five years in 2006 even when new planes for the airline were set to arrive in July 2007. This “resulted in five Boeing 777s and five Boeing 737s standing idle, leading to an estimated loss of Rs 840 crore during 2007-2009”, the CBI said. The third FIR to probe Air India giving up profitable routes and schedules for private airlines alleged that “foreign airlines were given unrestricted entry into India and major routes were given to them without taking any reciprocal benefits”. Air India gave up Kolkata-Bangkok, Kolkata-Dhaka, Doha-Kochi, Kochi-Kuwait and domestic routes like Ahmedbad-Jaipur, Mumbai-Vadodara, Pune-Goa and Mumbai-Patna and others. “On all these routes, private airlines like Jet Airways, Kingfisher, Go Air, Indigo, Spicejet, Paramount Airways etc started operating and made profits,” the FIR said. On lucrative routes like Mumbai-Dubai and Mumbai-Doha, Air India reduced its flights and gave private airlines major market share, it added. Maliek Collins Authentic Jersey
As hints get stronger, privatisation of Air India is now looking inevitable
The government may soon offload the loss-making Air India with Finance Minister Arun Jaitley favouring divestment of the national carrier. Mired in debt for years, the state-owned airline has been staying afloat on taxpayers money and the government now seems to think that it is not worth spending more funds on its revival. In an interview with DD News over the weekend, Jaitley said that Air India’s market share today is around 14 percent but the debt is Rs 50,000 crore. “In this country, if 87 or 86 percent flying can be handled by the private sector… then they can also do 100 percent,” he added. This has been the strongest indication from the NDA government regarding privatisation of the state-owned airline. Recently, the government seems to have warmed up to the idea of divesting its stake in Air India. The statement by Arun Jaitley resonates with the views of many top government officials who have recently floated the idea of privatising the carrier. The aviation ministry is currently exploring various options, while the government’s policy think-tank NITI Aayog is also looking into the issue, including a possible strategic sale. Back in 2012, the Manmohan Singh-led United Progressive Alliance government had gave a Rs 30,000 crore bailout package spread over a decade to prop up Air India’s equity. Out of this fund, the company has already received Rs 22,280 crore. In an interview, then Civil Aviation Minister Ashok Gajapathi Raju told The Hindu that despite the Rs 30,000 crore bailout package approved for Air India in 2012, the national carrier remained a debt trap. He had said that the government cannot commit the taxpayers’ money for an eternity to revive the ailing company. Dennis Rodman Authentic Jersey
UDAN: Truejet, Alliance Air set to spread wings; check out the fares structure
Occupancies on the first of the UDAN routes, Delhi to Shimla, are nudging 100%, with apple traders, employees of the Indian Statistical institute (ISI) and tourists making use of the new service. In contrast, passenger loads on the other two Udan routes, operated by TrueJet, are around 60% currently, company sources said. The average uncapped fare on the Simla-Delhi route, which was around Rs 17,000-Rs 18,000 when operations kicked of on April 27, have come down to levels of Rs 15,000. The capped fare from Delhi to Simla is Rs 2,304 and the government provides a subsidy of Rs 3,340. Alliance Air, a subsidiary of Air India, offers 48 seats from Delhi to Simla and 15 on the return flight. The subsidised fare on the Hyderabad – Cuddapah route is Rs 1,920 and the subsidy received by the airline is Rs 3,402; on the Cuddapah – Hyderabad route the fare is Rs 2,000 while the government funds a subsidy of Rs 3,456. For the Nanded – Hyderabad route the current fare is Rs 1,610 and the subsidy provided is Rs 3, 060. “The uncapped fares are not too high since we want to generate demand. We hope to increase the occupancy on these routes in the next six months,” an executive from TrueJet told FE. Both Alliance Air and TrueJet plan to add routes and acquire more ATR aircraft. Alliance Air will start its operations on Delhi – Gwalior, Gwalior -Indore and Indore – Mumbai route from May 31. TrueJet will acquire two ATR 72-500 and one ATR 72-600 aircraft in the coming month to expand its fleet to seven ATR aircraft. Tyler Higbee Jersey
Why is the Government treating Boeing with kid gloves?
Even after chronic technical failures of Dreamliner aircraft and Air India’s reputation taking a beating, the government is yet to take the US-based aircraft manufacturer, Boeing to task. In the last 3 weeks, a number of flights between Kolkata and Delhi were cancelled due to technical snags in the Dreamliner and such glitches are being reported very often in the airline’s international sectors as well. Air India’s Engineering Union had urged the management last year to defer deliveries of the remaining aircraft. It also urged that the manpower for frequent unscheduled snags be compensated, including damages for hampering the airline’s on-time performance. But, the Ministry of Civil Aviation has still not initiated any action and is rather still taking delivery of the 5 remaining aircraft. Meanwhile, according to officials, Boeing is in talks with Air India to revise the delivery schedule for the remaining aircraft. Boeing wants to deliver all of them by March 2018. On the other hand, the Central Bureau of Investigation (CBI) is yet to conclude its investigation into this deal. The Comptroller and Auditor General (CAG) had in its report, submitted to Parliament in 2011, found fault with the then Aviation Minister, Praful Patel, for not supporting the airline, which has lurched from one crisis to another over the past few years and now finds itself in a debt trap. Malik Jefferson Authentic Jersey