Jewar Airport: UP govt to give Rs 4,000 crore under first phase
The Yamuna Expressway Industrial Development Authority (YEIDA) will be the nodal agency to set up the international airport in Jewar, Greater Noida. The decision has been taken at a high-level meeting held in Lucknow on Tuesday. “YEIDA will work on behalf of the Uttar Pradesh government and start acquiring land for the airport. Funds amounting to nearly Rs 4,000 crore for the first phase of the project will be provided by the state government,” Prabhat Kumar, chairperson, YEIDA, told TOI from Lucknow. Chief secretary Rajive Kumar; director, civil aviation department, UP, Devendra Swarup; principal secretary, industries Alok Sinha and Prabhat Kumar attended the meeting.. “Turning down the formation of a special purpose vehicle (SPV) to generate money for land acquisition, it was decided that YEIDA will start the land acquisition with money provided by state government,” said Kumar, who is also the divisional commissioner, Meerut. “The airport project is proposed to be developed in three phases on a 3,000-hectare land. In the first phase, we need nearly 1,250 hectares (3,000 acres). To acquire this land, we will require Rs 4,000 crore. However, at least four runways will have to be readied in the first phase itself to accommodate aircraft. Considering this, it will be feasible to acquire the entire 3,000-hectare in the first phase itself,” he said. “For undertaking this mammoth task, we will need at least Rs 9,000-10,000 crore for land acquisition. These funds will be generated by the state government,” he added. “Nearly, 3,000 rural homes will have to be shifted from the path of the proposed airport and these families will have to be rehabilitated,” he said. In the meeting, it was also decided that a techno-economic feasibility report (TEFR) shall be readied along with the land acquisition process. “A TEFR for the project has already been compiled in 2007-08. However, this report will either have to be taken up afresh or the old one updated. We will soon appoint a consultant for this purpose,” he said. “Once the TEFR is done, environment clearances for the airport will also be sought. This work will be undertaken parallel with land acquisition,” he said. The move comes close on the heels of the state government getting preliminary nod from the Union ministry of civil aviation and also a site clearance certificate from the ministry of defence (MoD) for the proposed project. The UP civil aviation department has also sought clearance from the ministry of home affairs and would soon be approaching the ministry of finance and department of customs. Once it gets the requisite clearances, the state government will have to approach Union ministry of civil aviation for final approval. The airport is proposed with a view towards easing the burden on Delhi’s IGI international airport. Bill Barber Authentic Jersey
Kishangarh Airport to be commissioned by August, says AAI
In yet another achievement for the Airports Authority of India (AAI), the Kishangarh airport in Rajasthan is likely to be operational by next month. AAI officials believe the new airport will cater to tourists who visit Ajmer on regular basis. Sudhir Raheja, Member (Planning) of the AAI, said, “Hostile to smile was the motto we were working on. Eventually, we won the trust of the people and were helped by the people and state government, and today, this airport is ready. Licensing work is underway and I expect that airport will be commissioned in August. A.K.Pathak, Executive Director of the AAI, said, Kishangarh Airport is one of the very important airports in the Rajasthan region. Ultimately”, Kishangarh Airport will feed our Ajmer Sharif as this carries religious value and lot of domestic as well as international tourists visit Ajmer every year. It will also serve the large marble business community.” Located about 100-kilometers from Jaipur, the airport will cater not just to Kishangarh, but also to Ajmer and Pushkar, the nearby cities that see a massive footfall of tourists who visit the Ajmer Sharif Dargah and the annual Pushkar fair. The Kishangarh airport will cater to a big mass of people who come to this city for its mega marble market. Raheja further stated, At present, the length of the runway is 6,000 feet on which ATR-72, owned by Spice Jet and soon-to-be-acquired by Indigo and Q 400, an 80 seater aircraft, owned by Air-India will be operating from here. We hope that the kind of marble market it has, religious tourism it (Ajmer) has will certainly bring more connectivity to the airport. This airport will be viable and we’ll see operators getting a large number of passengers using the Kishangarh airport in near future.” The Airports Authority of India manages 125 airports, which include 18 international airports and 78 domestic airports. Many new airports are coming up which will help improve air connectivity in near future. Bryan Bulaga Womens Jersey
Boeing expects India to order up to 2,100 aircraft over 20 years
Boeing Co said on Monday it expects Indian airlines to order up to 2,100 new aircraft worth $290 billion over the next 20 years, calling it the highest-ever forecast for Asia’s third-largest economy. India is one of the world’s fastest-growing aviation markets with domestic passenger traffic growing at more than 20 percent a year over the last few years. “The increasing number of passengers combined with a strong exchange rate, low fuel prices and high load factor bodes well for India’s aviation market, especially for the low-cost carriers,” said Dinesh Keskar, senior vice president, Asia Pacific and India sales at Boeing Commercial Airplanes. The world’s biggest maker of jetliners said it expected passenger growth of about 8 percent in South Asia, dominated by India, over the next 20 years, compared with the world average of about 4.7 percent. Boeing could increase the projection next year depending on how India’s regional connectivity scheme pans out, Dinesh Keskar added. Last year, India overhauled rules governing its aviation industry, liberalising norms for domestic carriers to fly overseas and spreading the country’s air travel boom to smaller cities by capping air fares and opening airports. Boeing said it expected single-aisle planes, such as the next generation 737 and 737 Max, to account for the bulk of the new deliveries, with India likely to take 1,780 such aircraft. The U.S. planemaker dominates the wide-body aeroplane market in India, while competitor Airbus SE sells the bulk of small planes preferred by low-cost carriers (LCCs) such as InterGlobe Aviation Ltd’s IndiGo. Low-cost carriers dominate Indian skies and account for more than 60 percent of flights in the country. Boeing plans to plug this gap in its portfolio with the 737 MAX 10 single-aisle jet which it launched at an air show in Paris in June, following runaway sales of Airbus’ A321neo. Boeing expects worldwide demand for 41,030 aircraft over the next 20 years, putting India’s share of the total at about 5 percent. Jordan Wilkins Jersey
Regional connectivity scheme to open new routes: Boeing
The regional connectivity scheme is going to allow new routes to be opened up in India, Boeing said today. “We expect RCS to allow new routes to be opened up, which will create a market of our Boeing 737, as airlines upgrade the aircraft on routes that opens up with regional connectivity,” said Dinesh Keskar, Senior Vice President, Sales, Asia Pacific and India, Boeing. Keskar said it today announcing the market outlook for India. Boeing said that Indian carriers would require about 2100 airplanes worth $290 billion over a period of 20 years. “Of the total demand, a large number 1780 airplanes required will be single-aisle aircraft,” said Keskar. Mark Bavaro Womens Jersey
Airlines may hit air pocket on proposed accounting norms
Domestic airlines will see “varying effects” on their profits in the coming years as they will be required to show all aircraft leases on their balance sheets under a new accounting standard, according to experts. Leasing of aircraft rather than outright purchase is a common practice in the airlines industry worldwide. Once the new accounting standard is in place, the carriers would have to show all such leases on their respective balance sheets which would result in “substantial new assets and liabilities”. The Indian Accounting Standard 116 (Ind AS 116) — which sets out the principles for recognition, presentation and disclosure of leases — is proposed to be effective from April 2019. Implementation of this standard is expected to have significant impact on the financials of airlines. At present, many airlines keep the leasing expenses off the balance sheet and under the new standard, all leasing contracts would be reflected in it. Besides, experts opined that it would make aircraft sale and lease back practice less attractive as airlines would have to recognise assets and liabilities arising from the lease back. “Airlines industry will now be required to recognise all the leases on the balance sheet. As a result, airlines’ industry will account for substantial new assets and liabilities. “… the standard (Ind AS 116) is expected to have varying effects on each airline entity based on number of aircrafts taken on leases by that particular entity,” ICAI President Nilesh Shivji Vikamsey told PTI. Most carriers are already seeing wafer thin margins as deeply discounted fares and rise in aviation fuel prices along with staff costs take a toll on their overall profitability. Against this backdrop, the new accounting standard is likely to further trim their bottomline on account of leasing costs. The objective of the Ind AS 116 is to ensure that lessees and lessors provide relevant information in a manner that faithfully represents those transactions, the ICAI (Institute of Chartered Accountants of India) said in its draft exposure on the standard. Ind AS 116 is the equivalent of IFRS (International Financial Reporting Standards) 116. The standard would impact the reported assets and liabilities of airline industry depending on the nature and significance of former off balance sheet leases, Vikamsey said in a detailed response on queries related to Ind AS 116. Those airlines having almost all the aircraft on leases are expected to change significantly in contrast to others having few planes on lease, he added. Pratiq Shah, Partner at consultancy Deloitte Haskins & Sells LLP, told PTI that the standard can be expected to have a significant impact, particularly for entities that have previously kept a large portion of their financing off-balance sheet in the form of operating leases. Under this standard, the operating lease-style accounting treatment would be available only for short-term leases or those that have less than 12 months tenure and those for low value assets. To a query on if there would be an immediate impact on the financials of Indian carriers after Ind AS 116 implementation, he said those airlines that have chosen the option to lease aircraft with an intention to keep them off- balance sheet would see a change in the financial statements. When asked about the possible impact of Ind AS 116 on its balance sheet, a senior Air India official said all future lease rentals would have to be shown as liabilities and the aircraft as assets. Ryan Grant Jersey
Jet Airways may virtually merge with KLM-Air France
Within 24 hours of KLM-Air France, Virgin Atlantic and Delta announcing a blockbuster global deal, ET NOW exclusively learns the Indian skies may also soon be a part of this grand alliance. Sources tell ET Now that Jet Airways is in advanced talks with KLM-Air France for a strategic cooperation that could function as a virtual merger of the two airlines. Simultaneously, Jet is in talks with the US-based carrier Delta for an equity stake sale, and the talks are on to finalise the valuations. The stake sale to Delta may follow the virtual merger with KLM-Air France These two separate transactions will enable Jet to join the mega alliance announced on Thursday July 27 i.e. Delta buying a 10% stake in KLM-Air France, and KLM-Air France buying a 31% stake in Virgin Atlantic. Sources say Jet and KLM-Air France are hoping to sign a “metal neutrality”pact next month that would entail flight scheduling, pricing and revenue management. As per a metal neutrality pact, the airlines concerned are indifferent to whose planes are used to carry passengers. The Jet Airways stock jumped nearly 4% on the news-break. Responding to ET Now, Jet Airways spokesperson said, “Jet Airways enjoys and continues to develop its codeshare partnerships with KLM Royal Dutch Airlines and Air France, over its European gateways in Amsterdam and Paris, to cater to growing traffic flows to/from Europe and North America. As a policy, the airline does not comment on speculation.” Jim Otto Jersey
Aviation industry says bye bye to YY Fares
One of the earliest relics of the global aviation industry will soon be buried. YY Fares, the multilateral interlineable fares from the International Air Transport Association (IATA) will be rescinded from October 31, 2018. The Association, which represents 275 airlines across the world, said in early July that “the rescinding of YY fares reflects the dramatic transformation that continues to take place in the distribution of airline products.” YY Fares were established in 1945, enabling a flier to travel anywhere in the world on a single ticket in a single currency. This facility threw open the world as a travel destination for the customer as he could now fly on different airlines and have his luggage checked through to final destination. That was the essence of multilateral interlineable fares. “It was like an open ticket,” says an official from a leading travel company. “Those times, till the 1990s, an airline would only fly to a limited number of destinations. YY fares would help a flier to travel on multiple airlines using a that open ticket,” he adds. For instance, a flier from Mumbai would take an Air India flight to Frankfurt; and use the same ticket to fly onward to, say Paris, on a Lufthansa flight. YY Fares were honoured by all member-airlines of IATA, which used to submit coordinated international fares and rates to governments for approval. These fares later came to be known as IATA YY Fares. It was a big achievement in enabling global travel. “YY fares were the backbone of global airfares for much of the last 70 years,” said Alexandre de Juniac, IATA’s Director General and CEO in a press release. Technology evolves But as the IATA Director General and CEO notes, the relevance of YY Fares has been overtaken by changing markets and consumer demands. Over the seven decades as the world economy opened and competition increased, airlines began opting out of the system. One, these carriers were expanding their own market presence, flying to newer destinations. Also, instead of an umbrella agreement, airlines began focusing on code-sharing agreements and joint ventures. Code-sharing is an arrangement when two or more airlines share the same flight. For instance, recently Jet Airways signed a codeshare agreement with Aeromexico, allowing one airline to book its passenger on the partner’s flight. As the usage of YY Fares reduced, the IATA in 2006 converted the coordination of YY fares from physical meetings to a web-based system known as e-Tariffs and generates Flex fares. In Flex fares a premium was added to the average of the highest carrier fares for the complete flexibility that the YY Fares offered. But as competition increased, fewer and fewer airlines were using YY Fares. Lufthansa for instance stopped accepting YY Fares in 2007. In India, there are few at present who are aware of YY Fares. “In fact very few in our office even know about YY Fares,” exclaimed the official from the travel company quoted earlier. Little wonder that YY fares today account for just 0.03 per cent of tickets sold. Francois Beauchemin Authentic Jersey
As divestment looms, Air India’s Boeing order to end by Mar 2017 as 6 planes join fleet
Air India will take delivery of six more planes from Boeing by March, marking the completion of the orders the state-owned carrier had placed with the world’s largest aerospace company as far back as December 2005, according to a company official. The company is going ahead with the purchase of the planes even as the government explores options to sell its stake in the loss-making airline. There will be three Boeing 777-300 ER and as many 787-8 planes delivered to the national airline by the end of the current financial year. “The airline may be making losses but it will be sold on a going concern basis. The purchase of the planes is a contract that needs to be honoured,” the official said. Under the first contract, eight Boeing 777-200LR and 15 Boeing 777-300ER planes were ordered. While all planes of the first type were delivered, three of 777-300ER remain. Of the eight Boeing 777-200LR planes, Air India sold five in order to rationalise the fleet and reduce operational losses. Similarly, as many as 27 Boeing 787-8 Dreamliner planes were ordered under the second win for the US company in 2005. Of these, 24 have been delivered. Air India has a fleet of 119 planes with 44 wide-body Boeing planes and 65 narrow-body Airbus planes. The rest are smaller ATR planes that fly on regional routes. The government’s plan to sell its stake in the airline is on track with the group of five ministers, appointed to look into the divestment, holding its first meeting on June 21. While Interglobe Aviation, the company behind India’s largest airline IndiGo, has expressly stated its intent to buy Air India, reports say Tata Sons and private equity firms KKR and Warburg Pincus have also shown interest in buying the airline. From commanding a 35 percent share in the mid-2000s, Air India’s domestic market share has reduced to just 14 percent. The airline stands behind IndiGo and Jet Airways in the pecking order. On the overseas traffic to and from India, it has a 17 percent share. The airline, surviving on a Rs. 30,231-crore government bailout package, has accumulated losses of around Rs. 52,000 crores and as much debt. The package, approved by the previous government in 2012, called for staggered equity infusion over nine years. It has so far received Rs. 23,993 crores under the package. The airline reported an operating profit of Rs. 105 crores in 2015-16 though this was contested by Comptroller and Auditor General which said it was actually an operating loss of Rs. 321 crores. The national carrier hasn’t made a net profit in at least a decade. Emmanuel Sanders Authentic Jersey
Tigerair-Scoot deal may push India-Singapore fares down by 15%
Indian international fliers can expect fares on the India-Singapore route and beyond to fall by about 15% with the merger of Tigerair and Scoot, both budget carriers owned by Singapore Airlines. Nine months after Scoot and Tigerair announced their intention to pursue a single brand and operating licence under the Scoot brand, all Tigerair flights out of India started operating under Scoot on Tuesday. “There will be two key things for a consumer — first, fares are expected to come down by 15% due to merged operations of both the airlines and passengers will also be saved from the hassle of flying and connecting through the network of two different airlines,” Bharath Mahadevan, country head, India, at Scoot, told ET on Tuesday. Xavier Ouellet Womens Jersey
CAG seeks details of plan to float trust for UDAN
The Comptroller and Auditor General (CAG) has sought details of the aviation ministry’s plan to create a trust to fund the government’s regional connectivity scheme (RCS), which was launched three months ago. “They wanted to know about the composition of the trust and other details about the trust, which has been created to keep it out of the tax ambit,” said an official who did not want to be named. “A trust ensures that there is no tax element in the subsidy payments made to airlines.” CAG officials visited the aviation ministry to make their inquiries, according to three people with knowledge of the matter. The government offers subsidies under RCS to airlines for connecting unserved and underserved airports at a fare of Rs 2,500 per hour of flight. The government has created a Regional Connectivity Fund (RCF) that collects money from airlines to pay for the scheme. The subsidy will be paid through a Regional Connectivity Trust (RCT), which is what the CAG is asking about. The CAG team was informed that the trust is headed by the Airports Authority of India (AAI) chairman and members include others from the agency, said the people cited above. AAI is the nodal body for payment of the RCS subsidy to airlines operating regional flights. When contacted, CAG sources told ET they don’t comment on any audit until it is complete and the report has been submitted. The aviation ministry and AAI didn’t respond to emails seeking comment. The first flight under RCS or Ude Desh ka Aam Nagrik (UDAN) scheme was launched with Air India’s Shimla-Delhi flight in April. In the first phase, flights will be launched on 128 regional routes that will connect 43 airports across the country, the government has said. However, ratings agency ICRA has estimated that UDAN’s impact will be marginal at 0.4% of total passenger traffic in FY2018. Harold Landry Jersey