India to get 50 new airports in 3 years, says Ashok Gajapati Raju
India, the fastest growing aviation market, is set to get 50 new airports in the next three years as part of a plan to boost regional connectivity, and of these, at least 10 will become operational over the next one year, said civil aviation minister Ashok Gajapati Raju, in an interaction with reporters in Mumbai in Tuesday. “We are trying to convert the wish list into a work list,” he said. Maharashtra is going to be the first state to sign an agreement, said Raju. He is expected to sign the agreement later on Tuesday. Other states are also on board, the minister added. As part of the plan, existing air strips in certain regions of Maharashtra including Solapur, Jalgaon, Akola, Nanded and Shirdi will be developed into low-frill airports at an average cost of Rs.100 crore, said the minister. The regional connectivity model will be based on the viability gap funding (VGF) for a period of three years, under which 80% of the cost will be borne by the state government and the rest by the government of India. The new civil aviation policy cleared by the Indian cabinet on 15 June aims to take flying to the masses. The civil aviation ministry had announced a complex regional connectivity policy that seeks to connect unconnected towns with the help of VGF. This will be done by capping fares at about Rs.2,500 for those routes and helping airlines with funding to ply them. The funds will be generated by charging a cess on other domestic flights. In order to ensure that the airlines operating on regional routes are economically viable, “the government has worked out a scheme which will have lot of hair cut all around,” the minister said. On whether any airline has come forward for the plan, he said most of them are in talks with the government. “A magazine referred to me as a flightless bird. Don’t want to be flightless bird forever,” he said. Mike Condon Womens Jersey
Govt willing to handhold airlines in trouble: Minister
The government is willing to “handhold” the Bengaluru-based Air Pegasus to restart operations, but will not interfere in the financial troubles that the airline is facing. This is the message that Ashok Gajapathi Raju, Union Civil Aviation Minister, conveyed to Shyson Thomas, Managing Director, Pegasus, whom he met at the Ministry of Civil Aviation here on Wednesday. “We need to have airlines flying, not on the ground. We want airlines to survive, (but) we cannot take the liabilities and generate other problems. We have asked him to interact with the Secretary (Civil Aviation). Then we will see how we can be of help,” the Minister told BusinessLine soon after his meeting with Thomas. The Bengaluru-based airline suspended operations two weeks back after the leasing companies decided to take backthe aircraft given to Air Pegasus for non-payment of lease charges. SpiceJet situation Comparing the situation that Air Pegasus is facing with the woes of SpiceJet, the Minister pointed out that both the airlines suffered from the problem that their books were in a bad shape. “When your books are bad the Government can help you up to a particular level. Beyond that we can’t. “He will have to get his act going. He does not have very big financial liabilities,” the Minister added talking about Air Pegasus.. Talk to lessors Drawing parallels with the SpiceJet situation, Raju added that even when SpiceJet had this problem it had to talk to the lessors with the Ministry stepping in only after SpiceJet had cleared its current dues and allowed it to clear its past dues in instalments. “Their finances they have to look after. “But in whatever way we can handhold we will try and hand hold,” the Minister added. Speaking with newspersons Thomas accepted that the airline had fallen behind in clearing its dues but claimed that things would soon settle down. “We have suggested a solution where we pay some part of the amount which is outstanding immediately and the remaining amount is paid in instalments. “The lessors have not accepted it yet. “We still expect to see the airline back in the sky in about a week,” he added. Malcom Brown Womens Jersey
100 planes by 2023, finally, GoAir spreads its wings to take on rivals
Airlines typically spirit people from one city to another and after forging links between them, fly to another and another. Adding routes, with much ado, is what they do. Low-cost carrier GoAir is the antithesis of this defining characteristic of airlines. It has long been the fuddy-duddy of Indian skies, cautious to a fault in embracing expansion. Be it fleet size, number of flights or number of routes, the 10-year-old has been awfully timid compared with competitors (see Slow, Very Slow). Both IndiGo and SpiceJet, which started around the time GoAir first took off, have far more planes — 111 and 42, fly to more routes — 40 and 39 — than GoAir. The airline’s market share was 8.4% in July compared with 39.8% and 11.7% of IndiGo and SpiceJet. New airlines in India like Vistara and AirAsia India have lobbied hard to launch international flights, bound by the infamous 5/20 rule that which prevented them from flying international routes until they are five years old and have at least 20 planes (the new aviation policy has relaxed this rule a little). GoAir, in contrast, was in no hurry to exploit the opportunity even when it met one of the conditions (age) five years ago. By its own admission, or rather that of Jeh Wadia, managing director, GoAir, the airline is a tortoise. In successive interviews to ET last June and July, Wadia and its new CEO Wolfgang Prock-Schauer stressed that the airline would continue to focus on domestic operations. Wadia also termed ambitions of overseas flights as “more glamour than anything else”. Even when the airline placed its first major order of 72 Airbus Neo 320s in June 2011, there was little to indicate that a change in strategy was at hand. Aircraft deliveries face delays and are stacked over years. Indeed, GoAir took first delivery of the first aircraft from the jumbo order only this June. But barely two months later, the airline took the industry by surprise by ordering 72 more Neos, doubling its total order to 144 planes. The new aircraft order was also aimed to build up the international presence, according to Prock-Schauer. “The character of an aircraft is to spread its wings and fly. It should not be bound to one market.” Prock-Schauer now counts international expansion at the top of his to-do list, he revealed in a recent interview. “We are in a (domestic) market which is growing at a rate of 20%… even 10% will be good enough. We are really confident about absorbing this aircraft number.” Surprise Aggression GoAir now accounts for a third of Airbus’ total order book to India; the remaining belongs to IndiGo. It now has 20 planes and is scheduled to reach the 100 mark by 2023 by inducting one plane every month for 10 years. Like IndiGo, Prock-Schauer acknowledges that placing big orders is smart since it leads to incentives and of course benefits on sale and leaseback transactions. GoAir’s sudden aggression has surprised many aviation analysts, given its deeprooted cautious manner of doing business. Some industry experts say it may be a sign of insecurity with the advent of aggressive new competitors and the government’s relaxation of rules which will help them. In 2012, the government relaxed foreign investment norms in aviation allowing foreign carriers to buy 49% stake in Indian peers. Earlier this year, it allowed Indian carriers to fly overseas if they have 20 planes. Immediately after the 5/20 rule was relaxed, Vistara CEO Phee Teik Yeoh spoke of ambitious plans to mount flights not only to neighbouring regions but also to the US and the UK. Prock-Schauer denies GoAir has been influenced by these factors, although he did say the decision to place the second order was taken in just two months. The pressures of the domestic market could have forced the change of strategy. No doubt, India still leads other nations with a 23% growth rate in domestic traffic, but airlines have been feeling the pinch of overcapacity, especially in the metro cities such as Delhi and Mumbai, according to Prock-Schauer. “These metro routes (which account for over 70% of overall traffic) are getting a bit difficult for all of us.If you add up Mumbai-Delhi you will probably have 62 frequencies among all of us. So it is very difficult in the lean season.” The government has been talking of regional connectivity and developing 150 new airports, but Prock-Schauer says that as far as Go Air is concerned there would be very little demand beyond 40 key airports. “After the top 40, demand goes down like this,” he says, with a sharp downward slant of his hand. There could not be a better airline executive than Prock-Schauer to lead GoAir’s sudden desire for aggression and overseas push. He is an aviation veteran of 35 years. The Austrian is also a scale-up expert. In his first job with Austrian Airlines, he oversaw its expansion from 20 planes to 100. During his six year-plus stint at Jet Airways, he presided over its fleet expansion from 40 planes to more than a hundred, its first international flights to Colombo and later to London, its public listing and acquisition of Air Sahara. “That (international expansion) is something I have done several times,” he says. On the list of GoAir’s foreign destinations are unusual choices such as Iran, Azerbaijan, Uzbekistan, Kazakhstan, China, Vietnam, Saudi Arabia and Doha and even Europe. Last week, the airline received the aviation ministry’s approval to fly to some of these destinations. “We purposely chose countries which have huge demand, like China or countries like Kazakhstan and Vietnam that are underserved. Vietnam can be the new Thailand,” he says. The short distances also augur well. “Some of these countries are so close to India. Almaty (Kazakhstan) is less than a three hour flight away from India. Even Baku (Azerbaijan) isn’t that far,” says Prock-Schauer. The USP of GoAir’s network will be the east-west connectivity, according to him. The airline will develop
Maharashtra to develop 10 airports as part of Central scheme
The Maharashtra cabinet today decided to develop 10 airports as part of the Centre’s regional connectivity scheme, and a Memorandum of Understanding will be signed between the state, Civil Aviation Ministry and the Airports Authority of India tomorrow. The cabinet decided to develop airports at Shirdi, Amravati, Gondia, Nashik, Jalgaon, Nanded, Solapur, Kolhapur, Ratnagiri and Sindhudurg in the first phase, an official from the General Administration Department said. Under the national policy on civil aviation, the Centre will provide funds and also assist the state governments in developing essential infrastructure for the airports. The Centre will bear 80 per cent of Viability Gap Funding (VGF). According to the official, the state government will reduce the Local Body Tax (LBT) on air fuel from the existing 10 per cent to 1 per cent for a period of 10 years. The MoU draft states that the state government will provide essential land free of cost. These airports will be provided with roads, rail, Metro and waterway connectivity. The state government will also provide electricity, water and necessary facilities at concessional rates, the MoU says. Davon House Jersey
Don’t want to fly over Pakistan, airlines write to Modi government for help
Indian carriers are increasingly seeking the government’s nod to fly to the Gulf from western India (mainly Ahmedabad) over the Arabian Sea to avoid the circuitous route over Pakistan. Security fears due to deteriorating India-Pakistan ties as well as economic factors are driving the requests. Air India, Jet Airways, IndiGo and SpiceJet operate flights to Gulf over Pakistan. “In the past few days, India has asked some non-scheduled aircraft flying from Pakistan to return and Pakistan may also retaliate. This is one fear that is behind the demand and the other is pure and simple cost factors,” said an airline official. SpiceJet has sought direct access for its flights from Ahmedabad to the Gulf under the “flexi-use of airspace”, which allows commercial aircraft to use the airspace reserved for air force and the navy. TOI has accessed a presentation made by SpiceJet to both defence and civil aviation ministries in this regard. “With this not only airlines save fuel and route navigation flight charges (RNFC), our country can generate more RNFC. This will also enable reduction in carbon emissions which is part of global environmental saving,” SpiceJet said in the presentation. The budget airline would save rupees one lakh if it is allowed direct oceanic route instead of flying over Pakistan for its Ahmedabad-Dubai flight. Preston Brown Womens Jersey
Mangaluru airport is now on Twitter
Passengers travelling from or to Mangaluru International Airport can now give their feedback to the airport authorities online. Mangaluru International Airport has opened an account — @aaimlrairport – on Twitter for its users in this regard. JT Radhakrishna, Director of Mangaluru International Airport, Airports Authority of India, told Business Line that the airport opened a Twitter account on Monday to help people using the airport. “It will help in the improvement of the airport for better passenger requirements and customer satisfaction,” he said. Mangaluru airport handled 16.75 lakh passengers in 2015-16 as against 13.07 lakh in 2014-15. The airport handles direct flights from Mangaluru to various destinations in Gulf countries and to some domestic locations. It may be mentioned here that Jayant Sinha, Union Minister of State for Civil Aviation, who assumed charge at the ministry in July this year, has been re-tweeting a lot of complaints addressed to him to the airlines concerned for solutions. Darren Fells Jersey
Boeing, Tatas put Nagpur on global aviation map: Devendra Fadnavis
Maharashtra Chief Minister Devendra Fadnavis today said Nagpur is on the global map because of aviation company Boeing and the Tata Group. “It is a proud moment for all of us that some key parts for a Boeing aircraft are manufactured in the city,” Fadnavis said, adding with the help of Tata Group, MIHAN has put the country on the global aviation map. The chief minister dispatched the 5000th ‘beam’ from TAL Manufacturing Solutions to Boeing at a function at MIHAN here. TAL is a Tata Group entity. “City-based based TAL is manufacturing major parts for Boeing aircraft and Airbus also. It shows that Nagpur and Vidarbha region has talent along with the best human resources,” Fadnavis said. “When I was at Boeing’s headquarters in US, I was told that this part (beam) came from Nagpur. It was a proud moment for me. TAL would be the brand ambassador of the country in the aerospace sector,” he said. He also announced that Nagpur will become a cargo logistic hub shortly and all the related processes will be completed by this month end. “I received the letter from multinational company for the formation of FAB unit at Nagpur, which will be first of its kind in India,” he added. Union Shipping Minister Nitin Gadkari said TAL shows the talent of this region. “There is huge employment scope in this region. TAL in association with Boeing kept their promise, which they gave us in the formation of this unit related to employment generation,” Gadkari said. State Minister Chandrashekhar Bawankule, mayor Praveen Datke, Lok Sabha MP Krupal Tumane and senior officials of Boeing India, TAL and Tata Motors were present on the occasion. Harry Giles Womens Jersey
Air India in talks to recast Rs 10,000 crore debt
Air India is negotiating with lenders to convert Rs 10,000 crore of its debt into equity, a move that will substantially reduce the national carrier’s interest burden but give the banks a major say in its functioning. Air India chairman Ashwani Lohani has already met a few bank heads to discuss the matter and will meet some more in the coming days, said a senior official at the state-run airline who is involved in the talks with the 19-member consortium of lenders. The talks are being held under the Reserve Bank of India’s Scheme for Sustainable Structuring of Stressed Assets, or S4A, which gives struggling companies another chance at recovery. Under this programme, unsustainable loans — the portion of the debt that can’t be serviced through existing cash flow — can be converted into equity with the banks holding the stake. “About Rs 20,000 crore of our loans have been found to be sustainable (which can be serviced through its cash flow) and about Rs 10,000 crore is (proposed) to be converted into equity,” said the official, speaking on the condition of anonymity. “SBI Caps is negotiating for us with the consortium of 19 banks.” The national carrier pays Rs 4,000 crore of interest a year. “Once these loans are converted into equity, our annual interest payment outlay will reduce by Rs 1,000 crore,” he said. A lower interest outgo will boost the airline’s efforts to turn a profit. It is, in fact, set to post its first operating profit — that won’t include interest payment — since the 2007 merger of the erstwhile Indian Airlines with Air India, helped mainly by lower fuel prices than any improvement in operational parameters. Air India’s audited results for fiscal 2015-16 are likely to be released next month, when it is expected to report a Rs 100 crore operating profit. In his Independence Day speech last week, Prime Minister Narendra Modi said the airline has succeeded in registering an operating profit last year. . An aviation industry expert said the government is oversimplifying the problems of Air India by focussing on the financial bit and not its operational issues, which actually require direction. “This would mean transferring the loss of one company to another … It does not materially solve the airline’s problem because the problem lies elsewhere, which is in giving a strategic direction to the airline’s operational issues,” said Jitendra Bhargava, a former executive director at Air India. “The government did give the airline a bailout package of Rs 30,231crore but that has not been able to solve the problem.” he S4A scheme allows for restructuring large ticket loans where the project or company is up and running. Under this scheme, lenders are required to separate the sustainable loan, or where timely repayment is possible, from the unsustainable portion. The bank would convert the unsustainable debt into equity or equityrelated instruments. This would lower the debt burden of the borrower, while the bank, as a shareholder, would gain from the improved valuation a turnaround at the company would bring. ArDarius Stewart Jersey
Bhogapuram airport unviable, says Air Travellers Association
Air Travellers Association (India) president D Varada Reddy, in a release on Friday, said that three qualified bidders for the Bhogapuram International Airport Limited (BIAL) – GVK, GMR and Airports Authority of India- categorically stated that the Bhogapuram airport was not viable unless the passenger loads touched 2.5 million per annum. A total of eight bidders participated in the bid for the development of infrastructure and greenfield international airport. Of the total, three bidders were qualified. The AAI could not also participate for the non-viability factor. ATA(I) has repeatedly been stating that Bhogapuram Greenfield Airport is neither feasible nor viable and the statements of the bidders reiterate ATA(I)’s belief, Varada Reddy said. Justin Smoak Jersey
Ramp to airport not to be demolished
The government has decided not to demolish the 430-metre ramp that was constructed by the State without nod from the NHAI to provide connectivity from the NH 66 Kazhakuttam-Karode bypass to the terminal II of the international airport. The decision is based on a report submitted by the Chennai-based transport planner N.S. Sreenivasan, who was roped in to offer suggestions to provide hassle-free connectivity to the airport from the bypass, which is being widened. His expertise was sought as the NHAI and the AAI failed to arrive at a consensus on the design for connectivity. A 8.5-metre wide flyover has been proposed by Dr. Sreenivasan along the Enchakkal-Chakka corridor for the movement of the vehicles along the bypass. Vehicles coming to the airport via the carriageway will turn from beneath the flyover to enter the ramp that will be suitably modified. The exit will be through the other ramp to the carriageway. There will be service roads. The report was presented by Dr. Sreenivasan at a high-level meeting chaired by Chief Secretary S. M. Vijayanand on Friday. While the Airport Director, George G. Tharakan favoured the proposal, the NHAI Project Director R. Venkatkrishnan pointed out that it cannot be made part of the existing EPC contract as over Rs. 150 crore would be needed for the flyover. Moreover, it was pointed out that the design of the flyover would need the clearance of the Ministry of Road Transport and Highways (MoRTH) and additional funds would have to be managed. Adarius Glanton Womens Jersey