DIAL defers charging fee on in-flight food & drinks
Delhi International Airport Ltd (DIAL) today agreed in Delhi High Court to defer till February 8, its decision to charge a fee on in-flight food and beverages provided by private airlines like Spicejet, Indigo, Goair and Jet Airways. DIAL gave this oral assurance before Justice Sanjeev Sachdeva who issued notice to the Ministry of Civil Aviation, DIAL, Airports Authority of India (AAI) and four flight kitchen operators — Oberoi Flight Services, Taj Sats Air Catering Ltd, Ambassador (SkyChef) and Sky Gourmet Catering Pvt Ltd — and sought their replies on a plea by Federation of Indian Airlines (FIA) against the levy of 16 per cent fee on the cost price of food and beverages procured by the carriers. It asked the airlines to provide a copy of their food procurement agreement and the agreements they have with the various flight caterers to provide in-flight refreshments. FIA, which represents Spicejet, Indigo, Goair and Jet Airways, has claimed that as per the letter of November 11, the in-flight kitchen operators had to pay the fees to DIAL with effect from November 15. Another letter of December 1, 2016, which too has been challenged by FIA, had said that DIAL will not allow inside the IGI Airport any flight catering vehicle carrying items procured outside. FIA, represented by senior advocate Rajiv Nayar, has contended that DIAL’s actions will have a direct impact on the airlines as the in-flight kitchen operators will recover the charges from them and this in turn will affect the air fares. DIAL, represented by senior advocate Arvind Nigam, said the airlines cannot carry on the business of flight catering. He contended that once the agreements are perused, it might turn out that the airlines were procuring food through their sister concerns. The judge asked FIA to provide copies of its agreements to DIAL after redacting the confidential portions, but to file unedited copies in a sealed cover before the court and listed the matter for further hearing on February 8. DIAL agreed to defer its decision till then. In its petition, FIA has said that DIAL was already charging a fee from the flight caterers for allowing their vehicles to enter the airport and its latest decision to deny entry to them “amounts to abuse of dominant position”. Carlos Hyde Jersey
Vistara aims to be profitable by 2020-21
Vistara, the joint venture between Tata Sons and Singapore Airlines, aims to be cash positive by 2018-19 and profitable by 2020-21. The estimates were given by the airlne’s CEO Phee Teik Yeoh during the course of the Tata Sons board meetings on June 29 and June 30. The minutes of the board meeting have been reviewed by ET. Yeoh had also proposed an incremental equity requirement of Rs 600 crore. The board finally approved an equity investment of Rs 310 crore. For the year 2015-16, the airline posted a loss of Rs 400 crore. The airline posted revenue of Rs 713.6 crore for the year, missing the budgeted figure by 10%. Yeoh however said the airline is taking revenue enhancement steps including higher aircraft utilization, increasing seats and cargo capacity, innovative pricing, enhanced branding, increase in partnerships with international airlines, better network planning as well as higher perks to corporate clients. Donald Penn Authentic Jersey
Airlines to pay fine if their planes empty human waste mid-air
The menace of human waste being splattered on houses from airplanes while landing, today led the National Green Tribunal to slap a fine of Rs 50,000 on the airline whose aircraft empties toilet tanks on air. The NGT directed aviation regulator DGCA to issue a circular to all airlines, whose planes are involved, to pay Rs 50,000 as environmental compensation. A bench headed by NGT Chairperson Swatanter Kumar passed a slew of directions while disposing of a plea of a retired army officer alleging dumping of human excreta by aircraft over residential areas near the IGI Airport here. Normally, the waste in the aircraft tanks are disposed of by ground handling personnel once the plane lands. However, there are cases where lavatory leaks occur in the air. The tribunal asked the Directorate General of Civil Aviation (DGCA) to issue circular to all ground handling services and airlines to ensure that they do not release waste from human waste tanks while landing or anywhere near the terminals of the IGI Airport. “DGCA shall also issue directions that aircraft on landing shall be subjected to surprise inspection to see that human waste tanks are not empty. If any aircraft is found to be violating such circular or (their) tanks are found empty on landing, they shall be subjected to environment compensation of Rs 50,000 per default,” the bench said. The direction came on the plea of Lt Gen (Retd) Satwant Singh Dahiya who has sought action against the airlines and levy of hefty fines on them for endangering the health of residents, terming their act as violation of the ‘Swachh Bharat Abhiyan’. While issuing directions, the green panel also said it was “surprised” to note the stand taken by the Central Pollution Control Board (CPCB) that on analysing the samples taken from the petitioner’s house, it could be ascertained that it was excreta but its source could not known. “We are surprised to note the stand of CPCB to the extent of coliform and the kind of splashes created on the houses of the petitioner as well as others clearly demostrate that it was human excreta,” the bench said. It added that the amount collected shall be deposited with CPCB for using it for environment protection and a quarterly report shall also be submitted by DGCA before it. Michael Johnson Authentic Jersey
Air India joining UDAN party to take longer on Dornier approval time
With the government preparing for the take off of UDAN, Air India might take longer to play an active part in the ambitious scheme as regulatory approval for the 19-seater Dornier aircraft is likely to happen only by July next year. The national carrier is expected to be a vital clog in the government’s efforts to make flying more affordable by connecting unserved and under-served airports as well as capping fares for one-hour flights at Rs 2,500 under UDAN (Ude Desh Ka Aam Naagrik). To be part of the scheme, Air India is mulling induction of around 10 to 12 Dornier aircraft by its wholly-owned subsidiary Alliance Air. Dornier planes, made by state-owned Hindustan Aeronautics Ltd (HAL), are yet to be utilised for general passenger services and hence would require relevant approval from aviation regulator DGCA. A senior Air India official said a committee has already submitted its report that examined feasibility of inducting Dornier planes into Alliance Air fleet. While a final decision on the report and further moves are expected soon, the official said around 10-12 such aircraft are likely to be inducted. “Once it gets type certified, we may look into it for regional connectivity (scheme)… The report has been submitted but the aircraft is yet to be type certified. By June or July, it would be type certified,” the official said. While the government expects to start the first flight under UDAN from next month, the longer time likely to be taken for type certification of Dornier planes would mean that Air India might take more time before operating higher number of flights under the scheme. Type certification is a process whereby the regulator certifies that a particular model of plane is air worthy. The 19-seater Dornier 228 aircraft are being made by HAL under licence from Swiss technology company RUAG for the armed forces and the European market. Last week, the government told the Lok Sabha that Alliance Air is examining the induction of Dornier aircraft. Alliance Air, which mostly connects Tier-II and -III cities to metro hubs, currently flies to 34 destinations and has 39 daily departures. Under UDAN, the government has listed three categories of aircraft – those having less than 20 seats, 21-80 seats, and 80 seats or more. Paul Carey Womens Jersey
Government convenes meeting with airlines to discuss GAGAN system
With the domestic airlines not showing any keenness to avail the over Rs 700-crore GPS-Aided Geo Augmented Navigation (GAGAN) system even after nearly 18 months of its official launch, the Government would now hold discussions with all stakeholders for its mandatory enabling. Aviation regulator, Directorate General of Civil Aviation (DGCA) has convened a consultation meeting with all stakeholders including airlines here tomorrow to discuss the issue. GAGAN system, which is said to make airline operations more efficient and cut down costs as it reduces separation between aircraft, increase air safety and fuel efficiency, was officially launched by Civil Aviation Minister Ashok Gajapathi Raju in July last year. The National Civil Aviation Policy, announced by the Government in June this year, makes it mandatory for all aircraft being registered in India from January 1, 2019 to be GAGAN enabled. However, most aircraft currently registered in India are not equipped to utilise this technology. “A stakeholder consultation has been planned on the subject on December 21 to plan implementation and address bottlenecks, if any (in the effective use of Gagan system),” a Public Notice issued by the DGCA last week said. Jointly developed by Indian Space Research Organisation (ISRO) and Airports Authority of India (AAI), at an investment of Rs 774 crore, the new system offers seamless navigation to the aviation industry. However, for availing the system, airlines are required to make their fleet the system compliant, which entails huge investments. Sources say that while smaller aircraft like ATRs and Bombardiers which are currently in the Indian carriers’ fleet are already equipped with such a system, bigger planes like Airbus A320, A330, Boeing 737, B777 and B 787s, among others, need to be retrofitted. Eight major domestic carriers — Air India, Air India Express, Jet Airways, JetLite, IndiGo, SpiceJet, GoAir, Vistara and AirAsia — together have 427 such planes currently in operations. “An airline will have to shell out as much as Rs 1-2 crore per aircraft to install such a system. Going by the total of number of these type of planes with the Indian airlines, it requires a minimum investment of over Rs 400 crore,” they said. The issue assumes significance as many airlines/ operators have ordered more aircraft which may not necessarily be equipped with the required airborne equipment, the DGCA notice said adding, equipped operators may also not have trained pilots/ obtained necessary approvals to utilise this technology. The benefits of GAGAN include improved efficiency, direct routes, increased fuel savings, approach with vertical guidance at runways, significant cost savings due to withdrawal of ground aids and reduced workload of flight crew and Air Traffic Controllers. At the time of launch, the Government had claimed that the implementation of GAGAN technology would immediately benefit 50 operational airports in the country. Currently, there are 75 airports which handle scheduled flight operations.
Revised charges for non-major airports effective from Dec 16
Revised charges for airport services as well as those related to air navigation at non-major aerodromes will now be applicable from December 16, the government said today. The government, on November 24, in a notification had said the revised rates would be applicable from December 1. Generally, airports serving less than 12 lakh passengers annually are considered as non-major. The charges for these aerodromes are fixed by Directorate General of Civil Aviation (DGCA) whereas for major airports the rates are determined by Airports Economic Regulatory Authority (AERA). The revised charges for airport services at non-major aerodromes and air navigation services at all airports were notified on November 24. It has now come into force from December 16 instead of the earlier date of December 1, 2016, an Aeronautical Information Circular (AIC) issued today said. Most of the non-major aerodromes are owned, managed and operated by government-run Airports Authority of India (AAI). It levies charges for services, including route and terminal navigational landing fee, as well as parking. Other services for which fee is levied are landing, housing, night parking, extension of watch hours apart from passenger service and user development fee. Shaquille O’Neal Jersey
Airlines may have to bear additional tax burden of Rs 15,000 crore under GST
India’s aviation industry may have to bear an additional tax burden of up to Rs 15,000 crore annually once the Goods and Services Tax is implemented, top industry executives have told the finance ministry. Under the current indirect tax regime, the industry has to pay only about Rs 3,600 crore every year, according to industry estimates, while its annual revenue is pegged at Rs 60,000 crore. The additional tax burden may push airlines, most of which have turned profitable, into losses again, coming as it does at a time when global fuel prices are flaring up. In a meeting with revenue secretary Hasmukh Adhia on Saturday, the airline executives said the industry will have to bear additional taxes on ticket sales, import of aircraft and aircraft parts, lease rentals, and transfer of spares and goods within the country. The executives have also asked for the fuel to be brought under the GST regime–petroleum products are outside its ambit in the proposition–so airlines can claim input credit on the same. But the finance ministry is unlikely to agree to that demand for now. Among those who attended the meeting were members of the Federation of Indian Airlines – IndiGo CEO Aditya Ghosh, SpiceJet chairman Ajay Singh, Jet Airways director-finance Ravichandran Narayan and GoAir general manager-finance Joyakesh Podder – along with executives from national carrier Air India. “We have raised very serious concerns. It will be a massive burden for the industry, which is already operating in a very tough environment,” one of the executives who attended the meeting said on condition of anonymity. The industry submitted a letter to the revenue secretary detailing its concerns. ET has seen a copy of the letter. Earlier this year, the government proposed a historic overhaul of the taxation structure in India, merging most of the existing indirect taxes into a single system – GST. ET had on August 5 first reported on the concerns this would create for the domestic aviation industry. Currently, an airline needs to pay 6% service tax on economy class tickets and 9% on business class, a relaxation on the usual charge of 15%. No such abatement is likely to be available under the GST regime. This will mean an additional indirect tax burden of over Rs 7,000 crore, said an executive, who was present in the meeting In its letter to the revenue secretary, the industry said “the government should maintain current abated tax rate of 6% of economy class and 9% for business class, without any restriction on input credit or categorise airline passenger services under the lowest tax band under GST regime (viz 12%)” . Import of aircraft and aircraft parts are currently fully exempted from basic customs duty and countervailing duty (CVD) as well as special additional duty (SAD). There is no service tax on operating lease of aircraft, neither is there a sales tax or value-added tax on purchase or lease of planes. Under the new regime, according to the letter, CVD and SAD will be subsumed under GST for all imports. This means purchase or lease of aircraft parts will attract GST of 18%, the letter said. This will translate into GST liability of Rs 60 crore on procurement of one aircraft. India’s airlines – led by IndiGo – lease more than 60 planes a year. The annual additional burden will thus be about Rs 4,000 crore. Besides, there will an additional annual impact of Rs 2,000 crore on lease rentals, the letter said. Yet another impact will be on stock transfer. “If a plane is grounded in Chennai and I have to fly in spares from Bengaluru, that will be taxed,” said the executive cited earlier. The total burden will be Rs 1,800 crore. Airlines are also worried about compliance requirements and massive additions to paperwork. “Since airlines operate across the country, we will now have to file multiple tax returns in each state. Also, for each transfer of stock we have to file a different invoice, something we don’t do now. This is extremely cumbersome and will increase paperwork by 100 times,” the executive said.
KQ gets big lift from increased India flights deal
National carrier Kenya Airways has received a big boost from the signing of an agreement that gives it the right to introduce seven more weekly flights to India, one of Kenya’s strongest trade partners. A communiqué from India’s Ministry of Civil Aviation indicates that the two countries recently signed a memorandum of understanding (MoU) allowing carriers from both countries to get into more codeshare agreements. India is one of Kenya’s biggest trade partners with imports from the Asian country valued at Sh253 billion last year. “As per the mandate given India’s Ministry of Civil Aviation, a MoU was signed, whereby seven additional frequencies were allowed to both sides,” the communiqué stated. “Hyderabad (the capital of the southern Indian state of Telangan) was allowed as an additional point of call on request by Kenyan side. Domestic codeshare was agreed to from any four points by both sides.” Kenya also agreed to grant one additional intermediate and beyond point with full 5th freedom rights in Africa to India, the statement further stated. Julio Jones Authentic Jersey
Govt to double operational airports to 150
The central government yesterday said that it is trying to double the number of operational airports in the country from 75 to 150, under the ambitious regional connectivity scheme (RCS). According to Minister of State for Civil Aviation Jayant Sinha (pictured), under RCS christened as UDAN (Ude Desh ka Aam Naagrik), the central government is working to expand the aviation map of India from 75 to 150 airports. The minister elaborated that recently Kanpur and Bhatinda airports became operational under the scheme. Sinha was addressing the 89th Annual General Meeting of Federation of Indian Chambers of Commerce and Inustry (Ficci). Pat Elflein Jersey
Centre keen to recast Air India debt: Raju
The Centre is exploring the idea of restructuring the debt of state-owned Air India, and is willing to talk to those who are interested in picking up a stake in the airline. “There is an idea circulating that Air India will do better if its debt is restructured,” Union Civil Aviation Minister Ashok Gajapathi Raju told BusinessLine. However, he also stressed the need to evolve a consensus on the matter within his own Ministry. “Once you convince yourself, it is easier to convince the others.” Air India, which has been posting losses for years now, has a debt of around ?46,000 crore. Raju made it clear that Air India cannot expect support from the government all the time. “I am not someone who will indulge in ‘Air India-bashing’, but neither am I going to commit the taxpayers’ money for eternity.” He said the Centre was willing to help the airline “pull up its socks as they have done India proud on several occasions”. The airline needs to survive and a strategy to that end will be put in place. Brice Butler Womens Jersey