Call Sign Confusion

You can always go around.

Helicopter Somatogravic Illusions

Pathankot gets Operationalized as the 21st airport under UDAN – RCS

Pathankot: The maiden flight from Delhi to Pathankot was inaugurated at a function at Terminal 3, IGI Airport, New Delhi by Sh. Suresh Prabhu, Minister of Commerce & Industry and Civil Aviation in the presence of Sh. Vijay Sampla, Minister of State for Social Justice and Empowerment, here today. With this, Pathankot now gets operationalized as the 21st Airport under UDAN (Ude Desh ka Aam Naagrik) – RCS (Regional Connectivity Scheme). Airports Authority of India (AAI) is the implementing agency of UDAN.

Alliance Air, a wholly owned subsidiary of Air India, commenced operations on the Delhi-Pathankot route today with ATR aircraft. The flight from Delhi to Pathankot will operate on Mondays, Tuesdays and Thursdays, departing Delhi at 0955 Hrs. and arriving at Pathankot at 1130 Hrs. On its return from Pathankot, the flight will depart at 1150 Hrs. and arrive at Delhi at 1335 Hrs. With the introduction of this flight the travel time between the two cities will reduce significantly.

This will be the 19th route operated by Alliance Air under UDAN. The Scheme was launched on 27th April 2017 by the Hon’ble Prime Minister when the first UDAN flight, operated by Alliance Air, was flagged off on the Shimla – Delhi route.

Alliance Air has been a front-runner in regional connectivity and presently operates a network of 49 stations. Alliance Air continues to focus on new routes to connect regional destinations. The airline has been awarded 18 new routes under UDAN-II, which are being launched progressively this year bringing new destinations on India’s air map.

Through its codeshare with Air India, Alliance Air not only provides regional connectivity within the country but also offers seamless connectivity to regional passengers on Air India’s network in India and abroad.

India Begins Hunt For 110 Fighter Jets in World’s Biggest Procurement

New Delhi: The Union Ministry of Defence on Friday issued an initial Request For Information (RFI) to global aviation companies to make fighter jets in India.

The RFI has set the ball rolling for a multi-billion dollar ‘Make in India’ project to produce 110 single or twin-engine fighter jets for the Indian Air Force with foreign collaboration.

This will be followed by request for proposal (RPF) or a formal tender. After that there will be evaluations, technical trials and commercial negotiations.

Th deal could be worth over USD 15 billion, making it one of the biggest such procurement in recent years globally.

This comes after the MoD cancelled their two-year old plan to produce 114 single-engine fighter jets with foreign collaboration at an estimated cost of Rs 1.15 lakh crore.

In 2007, tenders for the 126 Medium Multi-Role Combat Aircraft (MMRCA) were floated. After an intensive trial process, the Eurofighter Typhoon and Dassault Rafale were selected in 2012.

Price negotiations followed, but the deal couldn’t be completed and was scrapped. In April 2015, the Government announced a move to buy 36 Rafale fighter jets in an off-the-shelf condition from French major Dassault.

IAF is grappling with a severe shortage of fighter planes, now down to 31 squadrons against its strength of 42 squadrons, required to deal with both China and Pakistan. Furthermore, some of squadrons are made up of aircraft which will be retired soon, thereby depleting the strength of the IAF further. A squadron is made up of 16-18 planes.

The RFI clearly says that fighter jets need to be manufactured in India. It will be under ‘Make in India’ to get global manufactures to have a production line in the country to be open to the possibility for future expansions. To speed up matters, the MoD will be looking at new additions made by global players since the MMRCA trials. The planes tested then were Lockheed Martin F-16IN, Boeing’s F/A-18IN, Eurofighter Typhoon, Dassault Rafale, Saab Gripen and MiG-35.

VRS, ESOPs on the cards for Air India employees: Jayant Sinha

MoS (civil aviation) Jayant Sinha said the disinvestment is designed to ensure integrity and confidentiality at every stage of the Air India sale

New Delhi: The government will take a host of steps to protect the interests of Air India employees after the sale of a 76% stake in the national carrier, the details of which are being worked out in talks with staff unions, minister of state for civil aviation Jayant Sinha said in an interview.

The minister also said that the disinvestment, expected to be consummated by September, is designed to ensure integrity and confidentiality at every stage of the Air India sale.

The employee protection plans under consideration include a voluntary retirement scheme (VRS), an employee stock option (ESOP) scheme, a government-funded scheme to meet the medical expenses of retired employees and settlement of past dues from the merger of Air India and Indian Airlines.

“Now that the disinvestment process has kicked off, we have started formal negotiations with various worker unions including multiple pilot unions, cabin crew unions and engineers’ union. In consultation, we will determine the right level of protection and who should bear the cost. It is possible some employee protection cost may be provided by the government,” the minister said, adding that one example is the medical expense of retired employees.

The period of protection for employees from the date of consummation of the transaction as well as the terms of VRS will be given in the request for proposal (RFP).

“There are two parts to a VRS. One, how long the employee will be protected after the transaction closes legally. We are still a year away for the transaction to close. The second issue is the terms of the VRS. Those are some of the things we are looking at right now.” said Sinha.

Employees will be offered ESOPs from the government’s residual stake of 24%.

“The principle is that every employee should feel she has a significant material stake in the company’s future prospects,” the minister said.

The government will also settle the back wages of employees specified by a panel, amounting to Rs1,298 crore, prior to the transaction. The minister said that Air India’s head count of about 11,000 permanent employees is within industry standards. About 37.6% of employees will be retiring in the next five years, Sinha said, adding that it would not be correct to say that employee cost of Air India is in any way out of line with industry benchmarks.

Policymakers have taken special care to ensure that the divestment process is above criticism. “There is sufficient oversight at every stage by different committees so that both the integrity and confidentiality of the process is fully protected at all times,” said Sinha. Although an independent valuer will give a reserve price for the Air India stake on sale, it will be kept confidential from everyone till the bids are open, as is the standard practice.

“Reserve prices are never made public before bids are open. It is illogical to do so,” a former secretary to the government, who has headed the disinvestment department, said on condition of anonymity.

Sinha clarified that only interest-bearing debt of Rs24,576 crore will remain with the companies after the stake sale. This was decided based on the sustainability of the enterprise going forward, what is backed up by collateral and what is fair for the successful bidder to hold.

Sinha also said that any non-aviation company meeting the eligibility criteria could also bid for the company. “Air India has the expertise to run an airline as it does today. What we need is an investor with the necessary management and financing expertise,” he added.

Industry watchers said disinvestment is likely to make the national carrier more competitive. “Privatization is likely to improve operational efficiency of Air India, thereby helping it compete more effectively and help build sustainable profitability,” said Kinjal Shah, vice-president of corporate ratings at credit rating agency Icra Ltd.

The government is also on a massive infrastructure expansion programme in line with the growth in air travel. “Today people are taking 250 million trips a year. We are planning for a billion trips a year over the next 15-20 years and various experts have indicated that the investments needed for it would be about Rs3-4 trillion,” said Sinha.

Civil Aviation Minister lauds AAI for its achievements

Civil Aviation Minister Jayant Sinha has congratulated the Airports Authority of India (AAI) for its achievements in fiscal 2017-18.

Addressing AAI staff and their families during the 23th Annual Day celebrations of the AAI, Sinha said India is witnessing unprecedented growth in the aviation sector and requires skills to ensure a bright future.

He also felicitated Ahmedabad, Kolkata, Lucknow, Chennai, Pune and Indore airports for making their mark in the Airport Council International-Airport Service Quality Awards-2017.

The minister also felicitated the Dehradun, Udaipur, and Raipur Airports for making its mark in the CSI awards.

Sinha said, “What you have accomplished in the last one year, is nothing short of remarkable, it has been a fantastic year for the Airports Authority of India and you deserve a tremendous round of applause for the fantastic year. One of the very important things we did in the budget this year, and which I have been working with your leaders in the Airports Authority of India, is ‘How do we equip ourselves and prepare ourselves?’ and ‘How do we make sure not to accommodate 200 million passenger trips, but one billion passenger trips, that is the target we have to set for ourselves over the next 15 to 20 years.”

The Chairman of Airports Authority of India, Guruprasad Mohapatra spoke about AAI’s achievements in the last financial year.

He said, “We have not only excelled on the infrastructure front by dedicating several buildings at Gorakhpur, Belagavi, Hubli, Jammu etc to the nation, operationalising the central Air Traffic flow management to balance the demand and supply of the air and on the airports, cars isle system in Kolkata to reduce the difficulties faced by the travelling public due to fog and bad weather conditions, but came out with flying colours for providing customer satisfaction to the travelling public. I am elated to share that our continuous efforts towards improving passenger conveniences like the ambience at airports, clean toilets, local outlets at airports and providing sanitary pad dispensing machines, and many more such initiatives, have not only transformed the airports, but has changed the public perception. These efforts have placed us among some of the best airports across the world.”

The evening was marked by dazzling performances by the famed Zenith Dance Group. They thrilled the audience with an acrobatic and energetic dance performance on the Ganesh Vandanam.

The event then soon took a lighter note as famous comedian, Rajeev Nigam, tickled the funny bone of the audience with his standup comedy.

Finally, Bollywood singer Benny Dayal took centre stage with his soulful voice and got the audience on their feet with his energetic dance numbers.

Air India sale: Not just Tatas, foreign airlines should also be allowed to bid for the ailing aviation company

New Delhi: Air India’s disinvestment could become something of a farce if the government decides to restrict it to Indian buyers alone. There has been a view within some sections of the government that equity stake in the airline should be bought only by Indian entities and that foreign investors/airlines should be kept out. If that happens, then the sale process could be stymied.

A source close to development said that apart from Air India’s former owners, the Tatas, some Gulf Airlines only seem to be interested in acquiring a stake. “If the foreign airlines/investors are kept out, then it will become almost like a closed sale, with only the Tatas as potential bidders,” this person said, adding at least one successful private domestic airline which many believed would also like to put in a bid has already said in “aviation circles” that it was not keen. And industrialist Anand Mahindra, who is a former independent director on Air India’s board, has also brushed off any talk of investing in the national carrier. As the list of possible suitors for Air India narrows, perhaps the government needs to expand its view on foreign investors.

Remember, India lifted restrictions on foreign airlines acquiring equity in Indian carriers in 2012 when it allowed up to 49 percent equity by foreign airlines. This prompted the Tatas to partner two entities and consequentially launch two separate airlines – Vistara with Singapore Airlines and AirAsia India with AirAsia BhD – from scratch in India. Also, Etihad Airways picked up 24 percent stake in Jet Airways. The restrictions were eased further last year and as of today, a foreign airline can pick up 100 percent in an Indian carrier, in association with a foreign investor.  Qatar Airways has been circling India for a possible airline venture for sometime now.

Representational image. Reuters

Coming to the possible Tata bid, are the Tatas really interested in once again becoming the owners of Air India? Tata Sons has maintained that it would not offer any comments on such “speculation” but has refrained from denying reports that the group was approached by the government last month for any interest in the disinvestment process of the national carrier. The person quoted above said since the government is still not clear on various aspects of the sale, there is no proposal from the Tatas as of now. “They would need numbers, facts and an assessment of liabilities and assets. The government is yet to make up its mind on how much equity to divest, what to do about profitable subsidiaries and how to deal with the debt. No proposal will come till these vital issues are decided”.  Remember, the ministry of civil aviation wants the government to drop plans of a sale and instead revive Air India!

The person quoted above also wondered if the Tatas were to actually buy Air India and turn it around, what stops the government from again nationalising it? This script is not new, nor is the fear of arbitrary government decisions. In 1953, a profitable Air India was nationalised because an airline was equated with national prestige and the government of the time did not want profits to continue flowing to private parties. Though J R D Tata was continued as the AI chairman even after nationalisation, he was abruptly removed in 1977. What if there is a repeat of this, if the Tatas were to turn the ailing Air India profitable in some years?

Meanwhile, in its meeting yesterday, the Union Cabinet decided to constitute a Group of Ministers (GOM) to decide the modalities of disinvestment in Air India. Announcing this, Finance Minister Arun Jaitley said that he will head this GoM, which will comprise Civil Aviation Minister A Gajapathi Raju besides some other ministers. It is obvious from this statement that though Jaitley had announced the government’s intent to disinvest Air India some months back and then followed it up with an informal proposal to Tata Sons to pick up stake in the airline, the entire disinvestment process is moving slowly.

The three options on the table before the GoM are a 100 percent sell-off, a 74 percent stake sale or a 51 percent stake sale. This means in any scenario, the government will cease to be a majority owner of the airline. Another official close to developments had said earlier that it is possible to break up the airline into two distinct parts. One is the airline itself with aircraft and related assets. The second part comprises Air India’s subsidiaries and the real estate. This official had said that the sensible way to get maximum value in this disinvestment process would be to sell off just the airline to a prospective buyer. The government could then simultaneously dispose off the subsidiaries and real estate for a total consideration of close to Rs 20,000-21,000 crore.

This official had said that the sale of standalone Air India can happen only if any prospective buyer agrees to bear about Rs 20,000 crore of aircraft loans and another Rs 6,000-7,000 crore of working capital loans. “The current market value of aircraft is higher than the loans. And of the Rs 30,000 crore total working capital loans, the bidder may be asked to take on only Rs 6,000-7,000 crore. In return, the buyer gets a fleet of 43 owned aircraft, valuable domestic and international slots (for which buyers are usually willing to pay a premium), parking bays etc,” this person said.

But why should the government write off the remaining debt on Air India’s books? This person said the government may not need to write off any large amount, if the airline is broken up and subsidiaries sold separately. Air India has five subsidiaries: Air India Charters Ltd, Air India Transport Services Ltd (ground handling subsidiary), Air India EngineerinG Services Ltd (MRO subsidiary), Hotel Corporation of India and Alliance Air.

Air India sale: Jet Airways-led consortium to bid for debt-ridden national carrier

Air India sale: Jet Airways-led consortium to bid for debt-ridden national carrier

After the country’s largest budget airline IndiGo expressed interest to buy Air India’s international operations last year, a consortium led by full-service carrier Jet Airways along with European airliner Air France-KLM and US-based Delta Airlines has expressed interest in the disinvestment of national carrier Air India, according to a report.

Going ahead with the strategic disinvestment of debt-laden Air India, the government is expected to soon invite Expression of Interest (EoI) from the bidders. Last year, Turkey’s Celebi Aviation Holding and Delhi-based Bird Group had shown interest in buying state-owned Air India’s ground handling operations.

As per reports, the government is planning to split the airline into four entities – core airline business (Air India and Air India Express), regional arm (Alliance Air), ground handling and engineering operations. Each entity will be sold separately with at least 51 per cent stake on offer. The disinvestment process is likely to be completed by the end of 2018. Air India’s debt stands at Rs 51,890 crore.

Jet Airways’ possible bid for Air India by way of a consortium comes at a time when CEO Vinay Dube, without naming any manufacturer, said Jet hopes to order 75 narrow-bodied aircraft by March 31 in addition to 75 Boeing 737 MAX that the airline had ordered in 2015. The Naresh Goyal-led airline enhanced cooperation agreement with the Air France-KLM Group less than four months ago.

Interestingly, Jet Airways CEO Vinay Dube had a decade-long career at Delta Air Lines before joining the Indian carrier last year. Immediately before coming to Jet Airways, he was Senior Vice President (Asia Pacific) at the American airline. Air France-KLM and its partners Delta and Alitalia operate the largest Trans-Atlantic joint venture with over 270 daily flights.

Though Air India is saddled with huge debt, acquiring the airline can help boost the acquirer in terms of foot print, bilteral flying rights, parking slots, etc.

Last year in June, the Union Cabinet had approved privatisation of the debt-laden national carrier, which is kept afloat on taxpayers’ money. On January 10, in an attempt to fast-track Air India’s divestment process, the Cabinet allowed foreign airlines to invest upto 49 per cent in Air India.

A group headed by Finance Minister Arun Jaitley with Rothschild and Ernst & Young as consultants has been appointed to chalk out the strategy for Air India’s stake sale. The airline has six subsidiaries, out of which three are making losses, with assets worth about $4.6 billion. The government has pumped $3.6 billion since 2012 to bail out the airline.

Indian airlines to add new jets in booming aviation market

Hyderabad: Indian airlines Jet Airways (India) Ltd, SpiceJet Ltd and AirAsia India are planning to add new jets to their fleets as they look to expand in the world’s fastest-growing aviation market, the carriers said on Thursday, March 8 2018.

Domestic Indian passenger traffic increased by 17.9% in January from a year earlier, marking the 41st consecutive month of double-digit growth, the International Air Transport Association said in a monthly update released on Thursday.

Civil aviation secretary Rajiv Nayan Choubey said as long as oil prices remained below $80 per barrel, he expected the Indian aviation market to grow at a compound annual growth rate of 15% for the next 20 years or so.

“We are committed to ensure that new airports are built, better air space management services are provided, so that there is no congestion in the skies,” Choubey said at the Wings India airshow.

Indian airlines are scrambling to add more jets to meet demand for more domestic and international flights, making it one of the most targeted sales markets for jet manufacturers Airbus SE and Boeing Co.

“The growth of the domestic Indian (aviation) market is the highest in the world,” said Dinesh Keskar senior vice president of sales (Asia Pacific and India) at Boeing. “Every segment of traffic in and out of India is going to grow for the next 20 years.”

Boeing said in July it expected 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.

Jet Airways hopes to close a deal to buy another 75 narrow-body jets by the end of March, its CEO Vinay Dube told reporters on the sidelines of the airshow. The airline last year finalized a deal to buy a separate 75 Boeing 737 MAX aircraft and said it was in “serious talks” for 75 more.

Dube said it would finalize the deal with one of the plane manufacturers, alluding to Boeing or Airbus.

AirAsia India is looking to expand its fleet to 60 jets from the current 14 over the next five years, a spokeswoman said. The airline’s parent, AirAsia Bhd, said in January it was considering an IPO of the Indian arm.

Indian low-cost carrier SpiceJet said in July it had signed a provisional deal to buy 40 Boeing 737 MAX 10 jets.