DGCA to get more teeth soon
The country’s civil aviation regulator Directorate General of Civil Aviation (DGCA) is likely to get new powers including that of imposing penalties for violations. At present, the watchdog can debar, suspend and even cancel the permission to fly for the carriers as well as individual pilots and engineers. However, it cannot impose any monetary penalty. The government has started working on the proposal, which has been in the works for some time. A senior official from the civil aviation ministry said the procedure to amend the Aircraft Act, 1934 has been initiated and the idea is to have “more graded granular penal provisions” for the DGCA in dealing with violations. The government is actively working on the proposal considering the country’s domestic aviation sector has been seeing healthy double-digit growth for over two years and entry of new players are expected with the inauguration of more flights under the regional connectivity scheme. Lenny Dykstra Jersey
Abolishing FIPB: Would be even better if India modified restriction in aviation, retail
Nothing symbolises how far, and fast, India has moved in terms of opening its markets than last week’s abolition of the Foreign Investment Promotion Board (FIPB). Set up as part of the 1991 economic reforms, the FIPB was a high-level inter-ministerial group that cleared foreign investment proposals in the country at a time when most investment avenues were off bounds. At a time when bringing in foreign investment also meant a plethora of clearances from various ministries, the FIPB served as a one-window clearance—and no matter which ministry it was housed in, the prime minister’s office was always keeping a watch on it. Over a period of time, as the economy grew stronger and corporate India became more competitive, various restrictions on foreign investment started getting relaxed. Indeed, relaxing of FDI restrictions went almost hand in hand with the lowering of import duties since both symbolised the ability of Indian firms to take on global competition. In the initial years, for instance, India restricted how much foreign investment was allowed in the telecom sector; later, however, even 100% FDI was allowed. Till even a few years ago, while foreign pharmaceuticals firms were allowed to set up new plants in India—greenfield, in jargon—they were not allowed to take over Indian firms; indeed, at one time, the fear was foreigners would buy out Indian firms and that this would raise medicine prices and reduce availability. DeMario Davis Authentic Jersey
Sure Mr Jaitley, Air India Can Be Sold But You May Have To Pay Someone To Buy It
No statement made by any NDA minister made so far is as significant as the one made by Finance Minister Arun Jaitley on Saturday (27 May), where he called for the divestment of Air India. “If 86 per cent of the flying can be handled by the private sector, they can handle 100 per cent also,” he said. But his views on public sector banks were underwhelming. While pointing out that we don’t need 30-32 public sector banks of various kinds, his solution seems to be the merger of weak banks. He said, “we want fewer banks, but bigger and stronger banks…”. This is a vain hope. Bigger does not always mean stronger, as the sharp drop in State Bank of India’s consolidated profits post the merger with its five subsidiaries and the Bharatiya Mahila Bank shows. Merging the other losers in the banking sector is hardly going to build a stronger bank. The point is simple: why should not the Air India logic work for public sector banks too? If 30 per cent of banking can be handled by private sector banks, why not 70 per cent – the current share of public sector banks? Why not reduce the public sector banking footprint to a level at which it will not sink the government’s fiscal boat whenever the business cycle goes for a toss? One political answer could be that financial inclusion and social needs are better met by public sector banks, since the private sector is unenthusiastic about creating customers who only entail costs. Out of the 286 million Jan Dhan accounts now in operation, barely 10 million was contributed by private sector banks. Sam Reinhart Jersey
Arun Jaitley for Air India sell-off, says private airlines can handle entire market, no need for state-run co
Finance Minister Arun Jaitley has favoured disinvestment of the loss-making Air India, saying the airlines market share is just around 14 percent whereas the debt burden is Rs 50,000 crore. This is the clearest indication yet from the current NDA regime on possible stake sale in Air India, which is staying afloat on taxpayers money. Air India’s market share today is around 14 percent while the debt is Rs 50,000 crore while the government has not put in money in private carriers, Jaitley said at Dialogue@DDNews programme. To run Air India, around Rs 50,000 crore have been put in and that money could have been used for promoting education, the minister added. “In this country, if 87 or 86 percent flying can be handled by the private sector… then they can also do 100 percent,” Jaitley said. According to him, of the total debt, around Rs 20,000-25,000 crore are related to aircraft valuation. “What to do with the remaining amount… Air India also has some assets,” he said even as he emphasised that the civil aviation ministry is making all efforts to explore all the possibilities. Jaitley further said that when he was civil aviation minister for a brief period during 1999-2000, he pitched for disinvestment of Air India arguing that if it was not done, “nothing will be left to disinvest. That was around 18 years ago”.
Aviation ministry to plan path for AI this week
The flight path for Air India’s future may be drawn as early as next month. With finance minister Arun Jaitley saying the government is open to disinvesting in the airline, the aviation ministry will this week begin internal deliberations on the issue. Apart from this, the Niti Aayog is also learnt to be in advance stages of finalising its recommendations for the debt-ridden Maharaja. “Internally within the ministry we will take a call on how to take the FM’s statement forward. Once the ministry makes up its mind on the issue of disinvesting in AI, we will take the matter to the Cabinet for approval. If the Cabinet gives its nod, then the department of disinvestment will implement the same,” said a top aviation ministry source. The doubt in everyone’s mind is whether AI — with its debt burden of almost Rs 52,000 crore — will get a buyer. Sources said the government may informally find out if some serious player is willing to run the airline, then it will take the process forward. The FM has also said that this will happen only if there is a strategic buyer. “We hugely respect FM’s opinion that instead of putting thousands of crores in AI, that money can be spent on social sector schemes. We will very soon decide whether we can move in the direction of divesting in AI as that is the fundamental question, along with will there be a buyer and how to attract one, given the issues with AI,” said the ministry source. Quenton Nelson Jersey
Legacy issues continue to drag down Air India’s financial performance: Ashok Gajapathi Raju, Civil Aviation Minister
Even as the government has rolled out a national aviation policy and the Regional Connectivity Scheme (RCS) has been kicked off, the civil aviation ministry still needs to sort out several issues. Civil aviation minister Ashok Gajapathi Raju tells FE’s Malyaban Ghosh while Air India’s operational performance has improved, its legacy issues continue to drag down the airline’s financial performance. The turnaround plan has not helped solve any of the financial problems of the airline, the minister says. Excerpts: Has Air India’s performance improved in the past three years? If you look at different parameters, like the passenger load factor (PLF), on time performance (OTP) and utilisation of aircraft you will find that it has definitely improved from what it was during the period before that.On the financial side the problem still persists because there are legacy issues and the interest cost of R4,500 crore is hurting. Personally, I would like to see Air India to survive. However, if you leave it like that then chances of survival will become bleaker with every passing day because the financials are getting eroded. The turn around plan (TAP) or the financial reconstruction plan were good intentions and money has been infused from the government’s kitty, but it has not solved any problems. Beyond the period stipulated under the TAP, Air India would still be at square one. There is a lot thinking and suggestions going on to reduce Air India’s debt. Do you think issues related to lack of discipline among AI’s crew and pilots have reduced? I think discipline among Air India’s crew and other employees have improved otherwise their OTP numbers would not have improved. They have simulators in Mumbai and Hyderabad whose utilisation were quite low but now that has picked up and are close to the internationally accepted norms. Their efficiency would not have gone up if had there been a discipline issue among the employees. Their performance shows they are capable of performing but the financials are so bad that it is pulling them down. Kevin Labanc Womens Jersey
Airports Authority of India plans to integrate terminals at airport
The Airports Authority of India is moving closer to building new terminals proposed as part of phase II expansion of Chennai airport. A detailed project report has been submitted and a tender will soon be floated to find a contractor. The proposal to build two buildings after demolishing the old ones and integrate them with the steel and glass terminals currently being used was announced when the new terminals were inaugurated in 2013. Airport director G Chandramouli said, “We will be holding meeting with stakeholders [airlines and terminal users] to finalise details.” The buildings, AAI hopes, will help push the aiport’s passenger capacity to 30 million from the existing 23 million. The old domestic building is lying unused while the old international building has been integrated with the new building and is being used as an international arrival. As the phase II expansion was taking time, the authorities demolished a wall, expanded the arrival area and installed more baggage conveyors for international passengers a year ago. Sources said that the design of the new building would be in sync with the steel and glass buildings that were opened in 2013. Xavier Rhodes Womens Jersey
100% FDI in Airlines Poses Threat To National Security
Allowing 100% foreign direct investment (FDI) in scheduled Indian carriers could poses a serious “security threat” to the country’s “national security”, the Federation of Indian Airlines (FIA) has told the government. FIA has termed the government’s decision to relax the foreign investment norm to 100% as “unprecedented” in its latest salvo against the move. The decision on FDI has not only left the aviation industry bewildered but even many in the government have questioned the move. FIA consists of IndiGo, SpiceJet, Jet Airways and Go Air, which have a combined domestic market share of around 80%. “By India permitting 100% FDI in scheduled airlines, the Indian government will have no visibility on where control lies. Such a move could also have serious repercussions on India’s national security,” FIA said in a letter earlier this month. “Such foreign owned and controlled ‘’Indian’’ airlines will also gain unhindered access to defence airfields in India. In this connection, it is also pertinent to note that countries, whose diplomatic relations with India are strained, may also use this window (of opportunity) to gain access to India,” it pointed out. The FIA has argued that “no substantive country” allowed 100% FDI in airlines. “While the purported objective appears to be to bring in substantial investment into India, in fact, little or no investment will result from this, In addition, this decision will result in permanent damage to the domestic aviation industry and to India’s aim of building global international hub airports and global airlines in India. This decision has the potential to create permanent foreign monopolies on key routes into and out of India to the detriment of the Indian consumers.” Kyle Williams Jersey
Regional air routes: Govt seeks feedback on proposed changes in second round of bidding
The Government is seeking the comments of stakeholders on four changes it plans to bring during the second round of bidding for award of rights to fly under its regional air connectivity scheme (RCS) UDAN. These include whether the minimum distance to be flown to be eligible to fly under the scheme should be changed and whether the exclusivity of flying on a route should be reduced to one year from the current three years. The Government expects to award routes under the second round of RCS in August this year. Comments have also been sought on what should be the minimum number of RCS seats mandated on such flights. Currently, an operator has to offer a minimum of 9 seats at a fare of not more than ?2,500 for a one hour flight. It is proposed that while subsidy on seats will still be on a minimum of 9 seats, an airline will have the flexibility to operate say three flights a day with a four seater aircraft and claim subsidy which is currently not the case. The Government’s argument is that such a move will give greater flexibility to the players to plan the size of aircraft and their operations. Explaining the rationale behind seeking changes in the exclusivity clause, R.N. Choubey, Secretary Civil Aviation gave the example of a point informally suggested by the Maharashtra Chief Minister. “The Chief Minister pointed out that Shirdi airport is likely to commence operations soon. If we put it under RCS scheme then only one airline will get to fly from Shirdi airport. Whereas in the assessment of the State Government there is a far greater potential for Shirdi to have flights,” Choubey said. Asked whether the Government will wait for operationalisation of the flights awarded in the first round of bidding before the second bidding round starts, the Secretary said that the second round of winners will be announced before the first round of bidding is fully operationalised. Of the five airlines which won the right to operate flights under the first round of RCS in April only Alliance Air, the regional arm of Air India, and Trujet have started operations. The other three – SpiceJet, Air Odisha and Air Deccan have not yet started their RCS operations. Choubey was also of the view that the changes in the second round of bidding will not affect those who won routes in the first round. “The changes are prospective and they will not affect the existing players who have already been awarded,” he pointed out. Ashok Gajapathi Raju, Union Civil Aviation Minister, added, “We would like to have suggestions across the board so that we can benefit out of the whole exercise and become better.” Govt may tweak norms in Round 2 of bidding Next round of bidding under UDAN scheme likely in three months, says Jayant Sinha Yannick Ngakoue Womens Jersey
AAI may get additional land for Surat airport soon
If all goes well, Airports Authority of India (AAI) will be allotted additional chunk of land by the state government for immediate expansion of runway up to 3,810 metre by the end of this year. The district administration had set up teams comprising officers from the department of land resources (DLR), mamlatdar and executive engineer to carry out survey for the 63 hectares of additional chunk of land required for the expansion of Surat airport. Sources said AAI requires 63 hectares of land for immediate expansion of runway up to 3,810 metre and another 800 hectares for future development of Surat airport. AAI intends to construct a parallel runway of 1,525 metre. AAI is ready to spend on the expansion of Surat airport. Things are moving at a fast pace after Union minister of state for civil aviation Jayant Sinha personally urged chief minister Vijay Rupani on the need to allot additional land for the expansion of the runway in March. Official sources said Sinha had met Rupani and urged him to speed up the allocation of additional land, which is required for the expansion of the runway from 2,905 metre to 3,810 metre. Rupani instructed district collector Mahendra Patel to speed up the land allotment, which is lingering on for the last so many years. At present, the total airport land, which includes tarmac, runway and terminal is spread over in 317 hectares. If the state government allocates additional 63 hectares of land, the airport area would total up to around 380 hectares. AAI has taken up expansion of the existing runway from 2,250 metre to 2,905 metre. The work is likely to be completed by June 2017. “We immediately require 63 hectares of additional land from Gujarat government for expanding the runway from 2,905 metre to 3,810 metre in the second phase. With this expansion, Surat will be able to cater to full-fledged international flight operations, like Ahmedabad airport. We have submitted plan details to SUDA for land reservation and things have been set in motion,” said airport director Pramod Kumar Thakre. District collector Mahendra Patel told TOI, “Teams were formed to survey the 63 hectares land required by AAI. We are awaiting the report of the said survey. Once, the report is in, the process of allotting the 63 hectares land will be speeded up.” Jersey