It makes sense to allow foreign airlines to invest in Indian ones

The Economic Times : 27 Oct, 2011, 07.52AM IST, ET Bureau

The government's reported plans to allow foreign airlines to invest in local airlines are wholly welcome . The cash-strapped domestic aviation industry should have access to risk capital that has knowledge of the vagaries of the airline business. The policy on foreign investment in aviation is restrictive now. No foreign airline can pick up equity - directly or indirectly - in a domestic carrier, except in cargo airlines. Financial investors such as private equity funds and non-airline companies that have no connection with a foreign carrier are allowed to invest in a local airline.

Making expertise in a business a disqualification makes for little sense. Private domestic carriers needs capital, more important, informed capital that understands the dynamics of the airline business. Fears in the past of a foreign takeover of the Indian skies look entirely misplaced now. Also, differences among private domestic carriers over allowing foreign airlines have narrowed down after the financial crisis that hurt their profitability, already hit by surging fuel costs and fierce competition. Opening up the sector would help capital inflows and technology collaborations .

Foreign carriers could also be more patient with losses. For them, growth prospects are promising in India with domestic passenger traffic growing by 15% each year. Lifting the ban is in order. However, a cap of 24% or less will keep foreign carriers away. The government should be open to taking the FDI limit in domestic aviation beyond the current 49%. The estimated losses of domestic private carriers stood at . 3,500 crore in the first half of this fiscal year.

The government's plan, if implemented, will help carriers such as Kingfisher Airlines that desperately needs capital to repay debt, besides SpiceJet and Jet Airways. Budget airline Indigo is the only one to make profits among the big carriers. State-owned Air India has the highest losses and is seeking massive capital infusion. As we have argued earlier, the government must come up with a timebound sale plan for Air India. A potential suitor could well be a local airline partnering with a foreign airline, with cash and expertise to spare.

Air India to cut Dreamliner order by half

The Economic Times : Binoy Prabhakar, ET Bureau Oct 26, 2011, 04.33am IST

New Delhi: The Air India board has recommended that the ailing state-run carrier purchase only 12 Boeing 787 Dreamliner planes compared with the original order of 27 aircraft placed in 2005, said a senior civil aviation ministry official familiar with the matter.

The board has proposed to the aviation ministry that the planes must be bought in phases over three years, said the official who didn't want to be named. The first plane is due for delivery in December.
A group of ministers led by finance minister Pranab Mukherjee will meet on Thursday to decide on the aircraft purchase order from US aircraft maker Boeing Co. The group is also expected to decide on additional equity infusion into Air India and approve a plan to turn around the carrier. Civil aviation minister Vayalar Ravi had told reporters in September that the airline, long reeling under losses, was incapable of buying all the 27 aircraft worth nearly 20,000 crore.

DGCA asks foreign airlines not to charge for second bag

Hindustan Times : Press Trust Of India New Delhi, October 25, 2011

Aviation regulator DGCA has asked foreign airlines, particularly those from the US and Europe, not to impose hefty charges on passengers for checking in a second bag and revert to the earlier practice of allowing two bags within a weight limit for free.

The matter has been taken up by the Directorate General of Civil Aviation (DGCA) with the foreign carriers which have been imposing very high fee on the second checked-in bag.

"Passengers face a terrible time when they reach the airport and find that they have to pay as high as $300 (almost Rs 14,000) extra for additional check-in baggages.

"We have written to the Airline Operators Committee (AOC) asking foreign airlines to stop this practice. The matter is being taken up under the existing air service agreements India has with other countries (whose airlines have started levying the fee)," DGCA chief E K Bharat Bhushan told PTI here.

The foreign carriers have been asked to revert to the earlier practice of allowing two bags within a weight limit for free and respond to the letter within a week.

American carriers had last year started charging hefty amounts from passengers for checking in an additional bag, which was soon adopted by some European airlines as well.

Indian carriers do not charge anything for two checked-in baggages with a limit of 23 kg for economy class passengers.

A return trip with two check-in bags hence costs double the amount, which is close to price of the ticket itself.

While foreign airlines say this charge for an additional checked-in baggage was imposed during the 2008 economic crisis, official sources said there was no reason why it should continue three years later.

In another passenger-friendly move, DGCA has issued a circular asking all domestic carriers, including the no-frill ones, to provide drinking water to all passengers on flight, Bhushan said.

The move came in the wake of complaints that some Indian carriers were charging money for a bottle of water

Panalpina upgrades to latest gen B747-8F

PAYLOAD ASIA 16 September 2011

Panalpina and Atlas Air have signed a new multi-year aircraft, crew, maintenance and insurance (ACMI) contract for two Boeing 747-8F. The aircraft will enter service in the first half of 2012 and operate in Panalpina’s unique own controlled air freight network, replacing the two current Boeing 747-400F. Compared to the 747-400F, the industry’s newest freighter has 16 per cent additional cargo volume but is expected to have the lowest carbon dioxide emissions in its class. With the new aircraft, Panalpina said it is optimally set up to meet industry specific requirements and the increasing demand for large-freighter capacity, especially in the Healthcare, Hi-Tech, Automotive and Oil and Gas industries.

Reliance Industries buys majority stake in Deccan 360

April 16, 2010

Reliance Industries and Deccan 360 announced today that RIL would buy majority stake into Deccan 360. Though the exact details are not yet known, it is believed that Reliance brings in an investment of upto USD 30 million into the company. This should not only give a boost to the company's expansion plans but also establish it as a long term player in the industry. This deal has the potential to completely change the market scenario.

VSS Enterprise's first 'captive carry' flight!

VSS Enterprise completes her first captive carry...

Virgin Galactic announced today that VSS Enterprise has completed her inaugural captive carry flight from Mojave Air and Spaceport.

This very first captive carry was a huge success and both the mothership and spaceship looked absolutely stunning against the blue back drop of the Mojave skies.

Commenting on the historic flight, Burt Rutan said: “This is a momentous day for the Scaled and Virgin Teams. The captive carry flight signifies the start of what we believe will be extremely exciting and successful spaceship flight test program.”

Sir Richard Branson, Founder of Virgin Galactic added: “Seeing the finished spaceship in December was a major day for us but watching VSS Enterprise fly for the first time really brings home what beautiful, ground-breaking vehicles Burt and his team have developed for us. It comes as no surprise that the flight went so well; the Scaled team is uniquely qualified to bring this important and incredible dream to reality. Today was another major step along that road and a testament to US engineering and innovation.”

The VSS Enterprise test flight programme will continue though 2010 and 2011, progressing from captive carry to independent glide and then powered flight, prior to the start of commercial operations.

Tragic Crash at Hyderabad Air Show

An Air Show by the Sagar Pawan aerobatic team of the Indian Navy had a tragic end when one of the aircraft, a Kiran MK-II, could not recover from the dive and crashed in a nearby three floor building. Both the pilots died in the crash. The exact reasons of the crash are still being investigated. The aircraft actually crashed into a cell phone tower on the top of the building and turned into the fireball. One of the pilots ejected but the parachute did not deploy probably due to the low height.