CEA wonders whether Air India should ‘exist at all’
Air India’s performance has improved with competition posed by private players, Chief Economic Advisor Arvind Subramanian said today, but wondered whether the state-owned airline should “exist at all”. The national carrier, staying afloat on a Rs 30,000-crore bailout package from the central government, is working on ways to improve its financial position. In the last fiscal ended March 2016, the airline had posted an operational profit of Rs 105 crore. “Air India with IndiGo and Jet Airways is very different from Air India without… Whether Air India should exist at all even with Jet Airways and IndiGo is another question which we don’t want to go into now,” Subramanian said. The point is competition has actually improved Air India’s performance, he added. Subramanian was delivering the keynote address at the national conference on economics of competition law here. Despite a debt of Rs 46,570 crore, including Rs 15,900 crore on account of aircraft acquisition, Air India managed to report an operating profit in 2015-16. In the Union Budget 2017-18, the airline has been allocated Rs 1,800 crore as part of the Rs 30,231 crore financial bailout package. Last month, the government informed Parliament that Air India is expected to post an improved operating profit margin this year even as liquidity constraints continue to impact the carrier’s smooth performance.
With only 13 Of 125 Airports Making Profit, Here’s What Government Is Planning
Airports may soon become the new go-to spots – malls, shopping centres and business hubs with state-of-the-art facilities – as part of a government plan to pull them out of red. Only 13 of the country’s 125 airports have been making profits, despite the government’s plans to boost under-utilized airports through Rs. 2,500 flights and other measures. The government expects that utilising the 55,000 hectares of land under airports across the country will help boost profit margins. But generating revenue would involve the change of land use. Under the existing Airport Authority of India Act, land under airport can only have limited use – mostly for hotels and car parking. This means that the revenue of airports come mainly from airlines, most of which are struggling to make profits. “We want to make use of land optimally and have commercial exploitation of the land to help raise resources for airport authority,” Minister of Civil Aviation Ashok Gajapathi Raju told NDTV. The change was promised by Union finance minister Arun Jaitley in his budget speech last month. The Finance Minister had said the Act will be amended to ensure “effective monetisation of land assets”. “The resources so raised will be utilised for airport upgradation,” the finance minister had said. Jeff Bagwell Womens Jersey
Lessors should furnish info on aircraft for probes, says AAIB
Aviation regulator DGCA should put in place norms to ensure lessors provide information about their aircraft leased to domestic airlines whenever there is a probe, as per a recommendation by AAIB. It has been made by the Aircraft Accident Investigation Bureau (AAIB) while submitting its report on an emergency landing incident of a SpiceJetBSE -4.77 % aircraft last year. The report, which was submitted to the Directorate General of Civil Aviation (DGCA) in November 2016, was made public this week. SpiceJet’s Mumbai-Delhi flight, with 158 people on board, had made an emergency landing at the Mumbai airport on March 19, 2016. The A-319 aircraft involved in the incident was wet-leased from Bulgarian operator BH Air. No one was injured in the incident. Under DGCA regulations, a domestic airline operator is required to maintain a detailed maintenance and operational information about leased aircraft. In its report, AAIB said BH Air “did not respond to the request of SpiceJet (the lessee) for incident information that was made after the validity of the wet lease period”. When a plane is taken on wet lease, the lessor also provides crew, maintenance and insurance. Against this backdrop, the report has recommended that provisions should be there to ensure lessors share information about aircraft whenever required for the investigation purpose. “Provision should be made in DGCA regulations to ensure the lessor must provide aircraft incident/accident information to the lessee whenever required for incident investigation,” it said. AAIB investigates serious incidents and accidents involving Indian aircraft that are referred to it by the civil aviation ministry. During the investigation, AAIB found that the leased aircraft had suffered failure of hydraulic system. Donte Moncrief Womens Jersey
Flying in and out of Delhi set to get cheaper
Flying in and out of Delhi may get much cheaper by coming summer break. The Supreme Court has directed the long-standing legal tussle over Delhi International Airport Pvt Ltd (DIAL) levying 96% higher charges on airlines — which are passed on to flyers as overpriced fares — than prescribed by a government agency be resolved by April-end. The Airports Economic Regulatory Authority (AERA) had in December 2015 slashed Delhi Airport charges by a steep 96% for the period April 1, 2014, to March 31, 2019 (second control period). While this should have meant a sharp drop in airline charges, and thereby significantly lower fares, DIAL continues charging the higher tariff that AERA had approved for April 1, 2009, to March 31, 2014 (first control period). The Delhi Airport operator took legal recourse for not implementing the lower tariff order. AERA moved the AERA Appellate Tribunal (AERAAT) on this issue but the matter has been pending for a long time. Air India on January 24, 2017, filed a special leave petition (SLP) in SC on DIAL’s alleged over-charging in the current period. AI took this move due to “delay” in AERAAT deciding on the case because of the tribunal’s “frequent disbandment and reconstitution”. “DIAL has been unjustly enriched by Rs 7,257.15 crore approximately on account of revenue generated from tariff charges for the period starting from April 1, 2014, till June 30, 2016… DIAL is currently recovering Rs 300 crore (approximately) per month, and if it is permitted to continue doing so… then by the end of the second control period (March 2019), there would be a total collection of Rs 17,157.15 crore (approximately) as against target revenue of Rs 7,709.61 crore, straightaway leading to the excess collection of Rs 9,447.54 crore over and above target revenue,” Air India’s SLP says. Echoing AERA fears, AI also says in its petition that “there are no means as to how excess revenue earned (by DIAL) could be refunded to the ultimate payer.” AERA estimates that due to DIAL charging the older, higher charges, passengers flying in and out of Delhi will pay about Rs 9,450 crore as extra charges in just over three years. On February 23, 2017, a two-Judge bench of Supreme Court heard AI’s petition. The court then gave this order: “Having regard to the facts and circumstances of this case, we request the AERA Tribunal to take up the matter at an early date so as to dispose of the same within a period of two months from today. As prayed, list the matter in the last week of April 2017.” DIAL did not comment on this development until the time of going to press. Its top officials had recently told TOI that the excess collection made in the second collection period can be recovered through “truing up mechanism”. Tom Rathman Jersey
Employees demand answers from indebted flight carrier Air Costa
Andhra Pradesh-based regional airline Air Costa suspended its flight operations, citing ‘financial difficulties’ on Tuesday barely four years into operations. Allegedly mired in debt, the company, which had four Embraer-190 aircraft when it started off in 2013, has been left with none with the planes seized by its lender GE Capital Aviation Services (GECAS). Sources in the airline confirmed that the company has been struggling financially since 2015. Sixteen flights to eight destinations were affected on Tuesday, but Air Costa said they will resume on Thursday or Friday. Employees said the management did not keep them in the loop regarding the grounding of operations. The beleaguered airline has reportedly defaulted on payments to its lender. Sources in the company said some employees have not been paid since December 2016. Bruce Boudreau Jersey
Karipur airport runway to operate round-the-clock from March 1
The runway of the Karipur airport, which had been partially closed during the last 18 months to facilitate runway strengthening works, would become operational round-the-clock from Wednesday. The runway had been closed for eight hours daily from September 1, 2015 as part of the Rs 60-crore re-carpeting works. The 24-hour opening of runway is expected to provide relief to thousands of expatriates from Malabar. Though the works have been completed, the DGCA and Union civil aviation ministry are yet to give any positive signals about revoking the ban on operation of wide-bodied aircraft, imposed on May 1, 2015. Meanwhile, an upgraded instrument landing system (ILS) and single touch down zone lighting system, which would enhance the safety of aircraft operations, have also been installed at the airport. “Though the runway will be operational round-the-clock from Wednesday, the operators will take some more time to change their schedules. The upcoming summer schedule would see the airlines making use of the fully operational runway,” said airport director K Janardhanan. The new ILS installed at a cost of Rs 3 crore enables landing even in poor visibility conditions and provides precision lateral and vertical guidance to an approaching aircraft, using a combination of radio signals. AAI officials said that the single touch down lighting system would help prevent the possibility of overshooting of the runway by aircraft. Janardhanan said the airport was expecting a tremendous growth in the domestic sector in the coming months. “We are looking to achieve a 100% growth. We have just four flights now but we have received proposals for five additional flights. Among them are a new Indigo flight to Chennai which will start operations from March 1. Also on the cards is an Air Carnival service to Chennai,” he added. Bobby Baun Womens Jersey
‘MoU signed with centre to start regional air services’
Chief Minister Raman Singh on Tuesday informed Chhattisgarh Assembly that the House had earlier passed a private resolution for enabling air connectivity for remote pockets of Jashpur, Ambikapur, Raigarh, Jagdalpur and Korba regions. In a written reply to member R K Rai, the Chief Minister informed that the State Government had floated tenders in 2009 and again in 2014 for air service operators to invite bids for starting air services within the State but the services could not be started due to technical reasons. He informed that as per the Regional Connectivity Scheme of the Central Government, the State has signed a MoU with the Central Government to start regular and low fare air services in selected regions of Jashpur, Ambikapur, Raigarh, Jagdalpur and Korba. Calvin Pickard Authentic Jersey
India’s first inaugurated heliport in inaugurated in Delhi’s Rohini
Built by Pawan Hans Limited, a Public Sector Undertaking of the Ministry of Civil Aviation, India’s first heliport has been inaugurated in north Delhi’s Rohini on Tuesday. Union Civil Aviation Minister Ashok Gajapathi Raju inaugurated the heliport. Pawan Hans Ltd Chairman and Managing Director B P Sharma said, “The heliport has come up at an investment of Rs 100 crore.” The heliport has a terminal building having capacity of 150 passengers, four hangars with parking capacity of 16 helicopters and nine parking bays. It also has a maintenance, repair and overhaul facility. The heliport will play an important role in providing various helicopter services ranging from offshore transport, connecting remote & inaccessible Islands of Andaman & Nicobar and Lakshadweep promoting heli-tourism in India. Delhi’s LG said, “I am glad to learn that the Pawan Hans Ltd has developed Nation’s 1st Integrated Heliport at Rohini, Delhi to take the growth story of aviation in India to new horizons.” The heliport will be used for providing services for disaster management, emergency medical services, law and order surveillance. “Rohini facility is India’s first integrated facility for rotor wing aircraft including their landing and takeoff. It has a terminal building that can cater to 150 passengers per day besides separate air traffic control (ATC), fire and fuelling services,” Sharma said. Earlier in February 2016, Pawan Hans carried out trial sorties from the heliport and had planned to go for full scale chopper operations from May. It is expected to reduce congestion at the Delhi Airport. Jurrell Casey Jersey
Air Costa suspends operations
Air Costa(LB, Vijayawada) has announced it has temporarily suspended all flight operations effective immediately. In a statement issued to the Indian press on Tuesday, February 28, a spokesman said the airline had failed to resolve unspecified “financial issues” with GECAS from which it leases four EMB-190s. “We are trying to resolve the issue,” he was quoted by the PTI News agency. “We are also in advanced stage of talks for fund infusion in the airline.” Services are expected to remain suspended until Wednesday, March 1, at the earliest. Antoine Bethea Womens Jersey
Several airports remain unused in India, says Ashok Gajapathi
Union Minister for Civil Aviation P Ashok Gajapathi Raju suggested better utilisation of the airports under Airport Authority of India as 70 of 125 airports are operational and rest left to cattle grazing. India has 400 airports including many in the private sector. Addressing an interactive session organised by CII Visakhapatnam chapter, the minister said tax on aviation contributes to the economy as much as Rs 11,000 crore and Rs 3,350 crore to the State exchequer every year. More will be added with increased air connectivity. It is since two and half years, the ministry has been working on the regional connectivity which generates lot of interest in different sectors. Also as part of improving the connectivity, there are 44 airlines which have been given destinations to connect within India. In the near future, there will be approximately 35 new destinations likely to be added. The Minister stated that after bifurcation, Andhra Pradesh is one of the lowest in the aviation tax. It has seen a tremendous growth in the passenger traffic with Vijayawada at 71 per cent, Vizag 65 per cent, Tirupati and Rajahmundry 51 per cent each. C.J. Mosley Womens Jersey