1. Will take time for Air India turnaround: Vayalar Ravi
THIRUVANANTHAPURAM: New civil aviation minister Vayalar Ravi Sunday said it will not be an easy task to swing around Air India in a short period.
Speaking to the media here on his first visit to the Kerala capital after taking over the aviation portfolio, Ravi said he has been busy in the past few days holding discussions with the objective of bringing back "the lost glory" of the national carrier.
"There is no doubt that there are issues because things have not fallen in place as they should have following the merger of Air India and Indian Airlines. I have decided that before I start to do anything, I will have discussions with all stakeholders, ranging from the various unions besides the cabin crew, pilots guild, the finance sections and others," said Ravi.
"I do not wish to give a time frame to you with regard to putting back Air India to the place it should be because if I say so then you, the media will be after me once the period gets over. Please give me a little time because there are a good number of issues that have to be sorted out," he added.
Ravi was, however, non-committal if there was going to be a Voluntary Retirement Scheme programme for its employees.
"One of the biggest problem is the shortage of aircraft that Air India is facing, and among the other issues that have to be looked into is the routing aspect and the fare structures in comparison with other private airlines," added Ravi.
He, however, ruled out a revamp of the present open air policy of the government.
"The private sector plays a crucial role and we are not one that will discourage them. Employee motivation is one area that will be given a lot of importance," said Ravi, adding that he is well aware of the various issues because on numerous occasions in the past he himself has taken them up with the civil aviation officials.
He also said that he will definitely take up the issue of levying airport user fee at the new airports in the country.
The National Aviation Company of India -- the parent company of the Air India brand -- suffered losses to the tune of Rs.5,551 crore in 2009-10, in addition to the loss of Rs.7,189 crore in the previous year.
Earlier, the government had infused equity worth Rs.800 crore in February 2010 and another dose of Rs.1,200 crore last month to tide over the crisis and finance the fleet acquisition plan of 111 aircraft ordered from Boeing and Airbus in 2006.
The aviation portfolio was previously held by Praful Patel, as a minister of state with independent charge, since the first United Progressive Alliance (UPA) government in May 2004. Patel has been given charge of heavy industries.
2.Patel may soon have to declare Air India sick company
NEW DELHI: As India's civil aviation minister, Praful Patel had staunchly fought against any move to declare Air India a sick company. But as the new minister for heavy industries and public enterprises, Patel may have to declare the national carrier a sick company.
Patel's ministry has notified a new criterion to identify state-run firms that are terminally sick. Air India may fall in this category if the new norms are applied to the debt-ridden carrier.
The new norms, notified by the department of public enterprises a day after Patel took charge, say a financially troubled state-run firm would be considered a 'turnaround ' case only if it had reported profits in three preceding financial years. Also, the profits should be without any grants from the government or a loan waiver from a financial institution.
But Air India reported losses in the past two fiscals, although it has succeeded in cutting these losses. The carrier posted a loss of Rs 7,189 crore in 2008-09 and Rs 5,551 crore in 2009-10. The carrier had a debt of around Rs 40,000 crore against an equity base of Rs 1,000 crore. The troubled carrier also got an equity infusion of Rs 1,200 crore in December 2010, as without this lifeline it would not have been able to pay wages beyond March 2011.
Air India, if declared sick, would be referred to the Board for Restructuring of Public Sector Enterprise, which falls under the department of public enterprises. The civil aviation ministry had in the past firmly resisted any move to bring the loss-making airline to the board, arguing that the company was not sick. An airline official said a company should be at least five years old to come under the purview of the board. "But the merged entity Nacil (National Aviation Company of India Ltd), which is Air India Ltd now, is only three-and-a-half years old since it was incorporated in 2007. This is what we even told the Cabinet.
3.New international flying rights to boost local carriers
India’s airlines are likely to increase their share of the market of passengers flying abroad, with the aviation ministry granting them fresh flying rights to a number of overseas destinations.
The new flying rights, which were on hold for up to eight months, were awarded last fortnight by the ministry, with the largest chunk going to Jet Airways India Ltd, said two people familiar with the development, who did not want to be identified.
Until 2005, Indian airlines controlled 25-30% of overseas-bound traffic, which has increased to 40% now. These rights can help Indian carriers raise their share of the international traffic from India to 50% over the next two years, said experts.
“There will be resumption of expansion this year. Except GoAir, every carrier will have some international operation,” said Kapil Kaul, chief executive officer, South Asia, for the aviation consulting firm Centre for Asia Pacific Aviation (Capa). “The real thrust would be felt by fiscal of 2012-13.”
The country’s international traffic has traditionally been dominated by overseas carriers. National flag carrier Air India was the only local airline flying out of the country until about a decade ago. This began changing in the middle of the last decade, with Jet Airways expanding to South Asia and beyond.
Naresh Goyal-controlled Jet Airways has been cleared to start new services to Europe, including flights to Rome and Amsterdam from Mumbai. India’s largest airline by passengers carried has also been allocated additional rights for flight on Mumbai-Kuala Lumpur, Bangalore-Bangkok, Delhi-Bangkok, Mumbai-Abu Dhabi, Mumbai-Dubai, Mumbai-Male and Thiruvananthapuram-Sharjah routes.
The 116-aircraft airline had also sought rights to fly to Paris, a route currently served by Air India and Air France, but that has been kept in abeyance.
It has, however, been allowed to enter into agreements with European rail companies that would allow it to sell connecting train routes on its air tickets, said one of the two officials mentioned above.
Mint first reported on 20 December about this agreement, which can help connect Jet Airways passengers from its European hub of Brussels to Paris via train
SpiceJet Ltd, with 25 aircraft, will now be able to fly to Colombo from Mumbai and add flights on the Chennai-Colombo route, while Kingfisher Airlines Ltd can reach the Sri Lankan capital from Mumbai and Trichy.
IndiGo, run by InterGlobe General Aviation Pvt. Ltd, has been cleared to operate daily flights to Bangkok, Singapore and Dubai from New Delhi and Mumbai, as well as to Muscat from Mumbai—all considered high-traffic routes.
In November, Jet Airways’ chief commercial officer Sudheer Raghavan told Mint the airline will expand Europe in mid-2011.
“I think our next expansion will come around second half of 2011 by way of new cities, though we will continue other minor increases,” Raghavan said. “You see in Europe as a region, there are a handful of hubs—Frankfurt, Amsterdam, Paris, Zurich, Vienna in continental Europe—if you want to be a network player. We cannot close our network development to these hubs. That’s where the markets sit, we go where the market sits.”
The airlines have also lined up fleet expansion plans.
Four long-haul Boeing 777 aircraft, which Jet leased out to Turkish Airlines during the 2008-09 economic downturn, will return to the airline between July and October.
SpiceJet, which started international services last year to Kathmandu and Colombo, plans to add eight Boeing 737 and eight Bombardier Q400s this year. The airline plans to add flights on international routes it is already serving, rather than launch new routes.
“I would rather put more flights from various parts out of India to Colombo and Kathmandu,” SpiceJet chief executive officer Neil Mills said early last week.
IndiGo will start low-cost flights from August, adding 14 A320s this year to the 34 it has.
Kaul of Capa said he expects Jet to open new routes in Europe, SpiceJet to maintain its operations in South Asia, Air India to expand its network and IndiGo and Kingfisher to focus on closer international routes in West Asia and South East Asia, which can be serviced through Airbus A320 aircraft.
This year, Air India is also expected to join the Star Alliance of global airlines, nominated by Lufthansa, while Kingfisher will join OneWorld, nominated by British Airways.
Air India also pulled out from Frankfurt as its European hub, shifting focus to terminal 3 of Delhi’s Indira Gandhi International Airport and connecting its long-haul flights non-stop with Boeing 777 and Airbus A330.
Vikram Krishnan of US-based consulting firm Oliver Wyman said European carriers such as Lufthansa and British Airways, which have traditionally dominated the Indian market, are more concerned about West Asian carriers’ expansion plans than those of Indian carriers.
4. Koenigsegg coming to India!
Swedish super sports car maker Koenigsegg Automotive AB has joined hands with Rahul Bhatia-promoted InterGlobe Enterprises to launch a range of high-end, high-performance models in India.
READ THE KOENIGSEGG AGERA REVIEW IN OUR JANUARY 2011 ANNIVERSARY ISSUE!
Swedish super sports car maker Koenigsegg Automotive AB has joined hands with Rahul Bhatia-promoted InterGlobe Enterprises to launch a range of high-end, high-performance models in India.
Koenigsegg, known for its big engines, unfamiliar designs and styling under its own brand, will launch the Agera, which carries a sticker price of Rs 9.6-10 crore, next month in Hyderabad.
The supercar maker’s ride into India will be managed by Delhi-based InterGlobe Enterprise, which also promotes low-cost carrier IndiGo under the InterGlobe Aviation banner. An announcement to this effect is expected next month, said industry sources.
A spokesperson for InterGlobe declined to comment on the development when contacted via email.
Koenigsegg will be among the last few globally renowned automotive brands to make an official entry into India. Rivals such as Bentley, Bugati and Lamborghini (all owned by Volkswagen), Porsche and Rolls Royce have already launched sales in India.
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