Sunday, August 30, 2015

Carlyle looks to sell Landmark Aviation for $1.7 billion


Private equity firm Carlyle Group LP has been exploring a sale of aircraft leasing and maintenance company Landmark Aviation for as much as $1.7 billion, including debt, people familiar with the matter said on Friday.
The business jet market is slowly recovering from a downturn sparked by the global financial crisis, helping valuations for companies offering services to that industry.
Carlyle initially looked at cashing out of Landmark via a stock market listing, but in the past few months has broadened out that process to include a possible outright sale.
Two of the sources said that Landmark Aviation's earnings before interest, taxes, depreciation and amortization (EBITDA) were around $170 million over a trailing 12-month period.
The sources asked not to be identified because the deliberations are not public.
Carlyle declined to comment. Representatives for Landmark Aviation did not immediately respond to a request for comment.
Houston, Texas-based Landmark Aviation provides engine maintenance, repair and overhaul, and nose-to-tail services that include airframe, interior refurbishments, paint and charter management for private aircraft.
A peer of Landmark Aviation, Scottsdale, Arizona-based aircraft maintenance services company StandardAero, was sold by Dubai Aerospace Enterprise Ltd to buyout firm Veritas Capital Fund Management LLC in July for $2.1 billion.
In 2007, Carlyle had sold Landmark Aviation to state-owned Dubai Aerospace, which simultaneously purchased StandardAero in a joint transaction valued at $1.8 billion.
Dubai Aerospace sold Landmark Aviation to private equity firms GTCR LLC and Platform Partners a year later. Carlyle then purchased Landmark Aviation in 2012.
Separately, Carlyle announced the acquistion of cyber security firm Novetta Solutions on Thursday. Carlyle purchased McLean, Virginia-based Novetta from Arlington Capital Partners for $555 million, according to a source familiar with the deal.
Carlyle and Novetta declined to comment, Arlington Capital did not immediately respond to a request for comment. (Reporting by Mike Stone in New York; Editing by Carmel Crimmins and Lisa Shumaker)

Thursday, August 27, 2015

Modi’s concern over predatory airfares, likely cess on tickets


Prime Minister Narendra Modi has expressed serious concern over the predatory pricing by the domestic airlines, an issue that will be addressed shortly by the civil aviation ministry, which is also mulling a two per cent cess on tickets in its new aviation policy.
Civil Aviation Minister Ashok Gajapathi Raju said the new civil aviation policy, which is in the advanced stage of finalisation, would provide a long-term road map for the sector’s growth.
After his address at an industry event, Minister of State for Civil Aviation Mahesh Sharma said the issue of predatory pricing was a concern of a majority of Parliamentarians and the prime minister.
“The Prime Minister has shown his concern over the predatory pricing issue and it needs to be addressed,” he said.
The issue had come up during a presentation by the Civil Aviation Ministry to the Prime Minister on draft aviation policy on Tuesday, he said.
Mr. Sharma said the airlines need to reduce fares and not hike them particularly when it comes to emergency travel like in medical emergency, adding that there could be three approaches to prevent predatory pricing ways.
“We will take the airlines into confidence and tell them that the practice (of predatory pricing) is giving a bad name to the industry,” he said.
A mechanism can also be there through the Directorate General of Civil Aviation (DGCA) or through national carrier Air India to deal with the issue, he added.
Meanwhile, sources said the Civil Aviation ministry is looking at a levy of two per cent cess on air fares which will be part of the new aviation policy.
Under the new policy, the government is looking at enhancing air connectivity to regional and remote areas such as the North East, apart from other measures to boost the domestic aviation sector.

Friday, August 21, 2015

'Turnaround man’ Ashwani Lohani to head Air India


Ashwani Lohani, an engineer-turned-bureaucrat, was on Thursday appointed Chairman and Managing Director of the struggling state-run carrier Air India.
Mr. Lohani holds four engineering degrees, has authored two books (one on steam engines and the other on management) and is credited with the turnaround of the Madhya Pradesh Tourism Development Corporation and the India Tourism Development Corporation.
Mr. Lohani, who is the first Railway Service Officer to be made the Chairman and Managing Director of Air India, will succeed Rohit Nandan, a 1982-batch UP-cadre IAS officer.
His LinkedIn profile describes him as “a highly decorated officer who is also known as Mr. Turnaround.” He is at present working as Managing Director of MPTDC in Bhopal and was instrumental in promoting the “Hindustan Ka Dil Dekho” campaign in 2006. He is also credited with the turnaround of the ITDC post-disinvestment in 2001-02.
“When Mr. Lohani came to MP Tourism, it was in a very bad shape. In fact, tenders had been put out to sell the properties, but Mr. Lohani turned everything around. He is a very positive man, very approachable and cooperative. Every employee, no matter what the designation is, has direct access to him. He motivates people to work hard,” Suheil Qadir, general manager of MPTDC, told The Hindu.
Another government official, who has worked with Mr. Lohani in the past, said, “He is an honest professional and does not bow to political will. Looking at his considerable experience with public sector undertakings in the past, he could help turn around Air India.”
The task ahead
The job is cut out for Mr. Lohani as his appointment comes at a time when the government is trying to pull out the ailing Air India from its financial mess and put it on the road to profitability. The airline is at present surviving on a Rs.30,000-crore bailout package approved in April 2012 under a Turnaround Plan/Financial Restructuring Plan.
Air India reported a net loss of Rs.5,547.47 crore in 2014-15 on the back of total revenues of Rs.19,781 crore. While the loss was wider than in the previous fiscal, the airline managed to trim it from the 2012-13 figure of Rs.7,559.74 crore.
AI sitting on debts
The national carrier’s financial performance during 2014-15 fell well short of its internal estimates, which had pegged the net loss at Rs.4,346 crore and revenues around Rs.21,290 crore.
Besides, the carrier is sitting on a debt pile of Rs.50,000 crore and its combined losses stand at a whopping Rs.30,000 crore.
Mr. Lohani keeps an updated LinkedIn profile, tweets frequently and also has his own blog. A section on his LinkedIn profile states: “I can handle sick companies and turn them around. I can write well and can deliver highly effective motivational lectures to students and corporates.”

Monday, August 17, 2015

More aircraft will lead to lower fares: IndiGo President


IndiGo placed record 250 aircraft orders with Airbus, keeping in mind the growth potential in India in the next decade or so. And, more aircraft will lead to lower fares, a top official said. “India is a very under-penetrated market. Around 8.4 billion people travel through trains and less than one per cent of them fly. This indicates a huge opportunity in the coming years and a telecom-like revolution is definitely possible,” IndiGo’s President Aditya Ghosh told The Hindu in a telephonic interview. He pointed out that a Delhi-Bengaluru return ticket, which cost Rs.20,000 ten years ago, has now come down to Rs.12,000, despite an increase in fuel, wage cost and inflation.
“This is because the supply of aircraft has increased to 400 from 100. If we, as an industry, can increase the number to 1,000-1,600 aircraft and look at the benefits, we can accrue in terms of reduction in fares,” Mr. Ghosh said. He also said the aviation growth was linked to the GDP growth. “If you look at it from a 10-year perspective — let us say 2004 to 2013 — passenger numbers grew at 1.8 times the GDP growth. We have clearly noticed that there is a correlation between GDP growth and rise in passenger numbers. We are gearing up for the future growth story.”
Mr. Ghosh also said that the delivery of new aircraft would start from 2018, and some of it would be replacements.

Wednesday, August 12, 2015

AI increases check-in baggage limit to 25 kg


Air India on Tuesday increased the free check-in baggage limit to 25 kg for economy passengers travelling in the domestic sector, becoming the first in India to do so.
“This offer is valid from Aug 12, 2015, to Feb 7, 2016, across all fare levels of economy class. Passengers who have booked before August 12, 2015, will also get the benefit of the increased allowance. Additionally, infants will now get a free baggage allowance of 10 kg,” said a release from the airline.
The Directorate General of Civil Aviation mandates that all airlines in the country provide at least minimum 15 kg check-in baggage free. Check-in baggage above 15 kg can be charged on opt-in basis as part of the unbundling of services.
Passengers travelling on Alliance Air flights and connecting to Air India flights and vice versa will also be eligible for this offer.

Friday, August 7, 2015

Domestic airlines plan 14 per cent more flights in winter 2015-16


Globally, airlines follow a winter and summer schedule. The winter timetable runs from the last Sunday in October to the last Sunday in March of the following year, and the summer schedule extends for the rest of the year.

Flyers within India will have more options, with the domestic airlines planning to operate 13,951 weekly flights during winter schedule, which starts from last Sunday of October, a 14 per cent increase from the flights operated during winter schedule of 2014-15.
Most of the airlines have increased the number of flights, while some of the new comers will operate flights in the winter season for the first time. Two more airports Kadapa and Durgapur have been added to the operational airports, from which airlines plan to run regular flights during the winter schedule 2015-16.
Globally, airlines follow a winter and summer schedule. The winter timetable runs from the last Sunday in October to the last Sunday in March of the following year, and the summer schedule extends for the rest of the year.
As per the plan submitted by airlines with the regulator Directorate General of Civil Aviation, industry leader IndiGo wants to operate 4,359 weekly flights in the current winter season, up from 17 per cent last year. Jet Airways has increased the number of flights it wants to operate by 32.4 per cent to 3,307 weekly flights.
SpiceJet plans
SpiceJet and Go Air will operate fewer flights in the winter season as per their schedule submitted with the DGCA. SpiceJet plans to operate 1,855 flights a week this winter, 17 per cent less than the 2,277 it operated last winter, while Go Air flight plan would marginally reduce to 950 weekly flights.
New comer Vistara, which will operate for the first time in the winter season, has plans to run 347 flights, while another new comer Air Pegasus has plans for 126 weekly flights.
State run Air India plans to operate 1,705 weekly flights (1,676 weekly flights previously) while its subsidiary Alliance Air plans 270 weekly flights (against 210 weekly flights previously).
“These are initial proposal submitted by the airlines. We have called for the meeting on August 18 with all airlines, Airport Authority of India, Delhi Indira Gandhi International Airport, then would the exact number of flights would be finalised,” a DGCA official said. In the meeting, DGCA would look into the preparedness of domestic airlines to operate the flights, and also whether the crew is trained to fly under low visibility conditions.

The regulator will also look into the aspect of whether the alternate airports are equipped to allow planes to land safely in low visibility conditions, before giving its final nod. Every airline has to mention the alternate airport they will land in-case the original destination where they are to land is suddenly affected by bad weather and low visibility which makes landing and take off impossible.

Wednesday, August 5, 2015

Air India inducts 534 cabin crew till May 1: Mahesh Sharma


Air India has selected a total of 534 candidates to induct them into the airline as part of its plan to hire 800 additional cabin staff, Minister of State for Civil Aviation Mahesh Sharma said in Rajya Sabha today.
The selection process of the 534 candidates for the cabin crew positions has been undertaken through two recruitment exercise, Sharma said in reply to a question in the Upper House.
Replying to another question, the Minister said the carrier had till May 1 this year removed a total of 272 cabin crew by terminating their services , voluntary retirement and resignation for indiscipline.
In reply to another question, he said that the airline continuously monitor the market developments and conducts various route studies to plan operations to new destinations keeping in view the availability of resources and commercial viability of the operations.
He also said Air India, which currently operates flight services to Newark, New York and Chicago in the United States, has not finalised any new destination in that country.

Tuesday, August 4, 2015

SEBI seeks fresh clarifications on IndiGo’s Rs 2,500 crore IPO


Capital market regulator SEBI has sought fresh clarifications from budget carrier IndiGo on its proposed Rs 2,500-crore initial public offer (IPO).
Without disclosing the details of clarifications sought, the Securities and Exchange Board of India (SEBI) has said its awaiting response from lead manager for the proposed public offer.
According to the latest weekly update on the processing status of draft offer documents filed with SEBI, the market regulator has said clarifications are awaited on IndiGo’s IPO as of July 31, 2015.
The next update will be uploaded on SEBI’s website on August 10.
The market watchdog said it might issue observations on draft offer document within 30 days after receiving a satisfactory reply from the lead merchant banker regarding the clarification or additional information sought from it.
SEBI had earlier this month also sought clarification from InterGlobe Aviation, which runs the country’s biggest airline by market share under IndiGo brand.
The regulator received last communication from the merchant banker on July 29. Indigo had filed its draft offer document with SEBI on June 30, 2015.
As per the draft papers, the company has offered to issue fresh shares worth Rs 1,272 crore. An equivalent amount can be raised through sale of up to 3.01 crore shares by its existing shareholders.
Citigroup, JPMorgan India, Morgan Stanley, Barclays, UBS Securities India and Kotak Mahindra Capital Company are managers for the share sale.
IndiGo is one of the two profit-making domestic airlines.
The only other profitable airline is GoAir.
The already-listed airlines in the country include Jet Airways and SpiceJet while trading in long-grounded Kingfisher Airlines has been suspended for a long time due to penal reasons.
Last month, Sydney-based aviation think-tank Centre for Asia Pacific Aviation (CAPA) had said IndiGo is estimated to have recorded a profit of US 150-175 million dollars in 2014-15.
The low-cost model using a single type of narrow-body planes is one of the contributing factors for IndiGo’s profitability.
IndiGo was founded in 2006 by travel entrepreneur Rahul Bhatia and US Airways former chief executive Rakesh Gangwal.