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

THE HINDU,05AUG2015

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.

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

THE HINDU,04AUG2015

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.

Air India to raise $300 million via ECB

THE HINDU,22JUL2015

Air India will get a sovereign guarantee from the Government in the next few days for the $300 million funds it plans to raise through External Commercial Borrowing route, according to a senior government official.

While government guarantee for Air India loans is not new, this would be the first time Air India would be raising funds through the ECB route.

The funds, which would give Air India about Rs.1,800 crore would be utilised by the state owned carrier for carrying out maintenance work on its aircraft and ensure that more aircraft can be used in its fleet to operate flights and also for working capital needs, said a official from Ministry of Civil Aviation.

Air India currently has a fleet of 62 narrow body aircraft from the Airbus A-320 family, but only 59 are operational due to lack of spares, according to the official.

The airline is also working with Airbus to extend life of 17 narrow body planes, which have hit an average age of 17.5 years.

The Union budget in 2012-13 allowed airlines to raise funds from international markets to make it easier for domestic firms to operate in the Indian market.

The proposal which was valid till March 2013 was subsequently extended till March 2016.

Under the plan, the ECB ceiling for the entire civil aviation sector would be $1 billion and the maximum permissible ECB that can be utilised by an individual airline company will be $300 million.

Two private sector airlines Jet Airways and GoAir have used the facility, raising a total of $350 million, with Jet Airways accounting for majority of it, according to the official.

With Air India fund raise, the total under ECB route under the window goes to $650 million. Air India has a debt burden of around Rs.40,000 crore.

TruJet takes wing, promises affordable fare

THE HINDU,17JULY2015

The budget airline has chalked out an investment budget of Rs.500 crore for next five years

TruJet, country’s newest budget airline, has taken to the skies with a promise to offer affordable fare comprising in-flight food on its route network that will focus mostly Tier-2 cities in south India. It is also planning to offer transport services to/from airport to make its air travel attractive.

The maiden flight of the Hyderabad-based regional carrier took off from Hyderabad to Tirupati on Sunday.

TruJet, owned by Turbo Megha Airways Pvt Ltd., has offered a basic fare of Rs.1499 for Chennai-Rajahmundry route till July 25. It offers discounts for senior citizens (above 60 years) and students. It will also add Aurangabad, the nearest airport to the religious centre Shirdi, to its network from July 26. The airfare may also include transport services for its passengers from Aurangabad airport to Shirdi.

TruJet also plans to launch Chennai-Tuticorin and Chennai-Salem operations in the next couple of months.

Turbo Megha Airways has been promoted by Vankayalapati Umesh (who has 22 per cent stake), Telugu actor Ram Sharan (26 per cent) and their group of friends. The airline will be operating 72-seater ATR aircraft. It has taken two such flights on lease, and will add one more by next month. Also, two more aircraft are expected in January 2016.

Mr.Umesh, who claims civil aviation career spanning 25 years, pointed out that his experience in ground handling operations for other airlines as also in managing cost would come in handy to run the new airline efficiently.

Air India to sell assets worth nearly Rs 250 crore

THE HINDU,17JUL2015

Debt-laden Air India plans to sell properties and land parcels worth nearly Rs 250 crore spread across three cities.

To monetise these assets of Air India, the Civil Aviation Ministry would soon be moving a Cabinet note.

A senior Ministry official on Friday said the assets to be sold comprise four flats in Mumbai besides land parcels in Chennai and Coimbatore.

While the flats in Mumbai are estimated to be worth more than Rs 90 crore, the land parcel in Chennai is valued at over Rs 120 crore. The sale of Coimbatore land parcel is expected to fetch anywhere between Rs 20-30 crore, the official said.

According to the official, the Cabinet note is being finalised and would be ready soon.

Air India, whose debt burden is about Rs 40,000 crore, is surviving on a bailout package approved in 2012.

The erstwhile UPA dispensation had approved Air India’s turnaround plan, with a committed public funding of Rs 30, 231 crore, staggered over a period of nine years, with some specific riders.

Meanwhile, the Ministry is making efforts to secure about Rs 2,400 crore for the national carrier through supplementary budgetary allocations and recovery of dues worth Rs 600 crore related to use of its aircraft for VVIP travel.

Out of the total, around Rs 1,800 crore is being sought to meet the funding shortfall faced by the cash-starved national carrier.

Efforts are being made to secure funds for Air India as the supplementary demands of ministries would be considered during the upcoming Monsoon Session of Parliament beginning July 21.

Ministry is pitching for additional funds for Air India, which was allocated Rs 2,500 crore in the Union Budget 2015-16. The amount was well short of nearly Rs 4,300 crore sought by the Ministry for the national carrier. The Ministry wants to make up for the shortfall of Rs 1,800 crore through supplementary demand for grants.

Hike in flight cancellation charges under DGCA lens

THE HINDU,05JUL2015

Aviation regulator Directorate-General of Civil Aviation (DGCA) is looking into the steep hike in ticket cancellation charges by airlines even as the flyers lobby, Air Passengers Association of India (APAI), said it would approach the Competition Commission of India (CCI) on the issue, alleging cartelisation.

IndiGo, Jet Airways and SpiceJet have unilaterally revised upward their ticket cancellation fee in the recent past.

“We are looking into the hike in ticket cancellation charges by the airlines,” DGCA sources said.

“Cancellation charges, in any case, should not be more than the ticket prices and so the airlines should keep these charges within those limits,” they said.

“Earlier, airlines would hike or lower their fares in tandem. Now they are doing the same in the matter of cancellation. This is also a cartelisation. I am writing to the CCI to investigate these airlines shortly,” APAI president Sudhakar Reddy said.

Airbus keen to participate in ‘Make in India’

THE HINDU,30JUN2015

Airbus had earlier announced that it would increase its Indian outsourcing to USD 2 billion.

European major Airbus on Monday expressed its keen interest in participating in ‘Make in India’ programme in the area of defence and space.

Bernhard Gerwert, CEO of Airbus Defence and Space, who called on Prime Minister Narendra Modi on Monday, told the latter that Airbus was keenly interested in becoming a partner in the ‘Make in India’ initiative, through a cluster approach with regional partners, according to a PMO statement.

The Prime Minister welcomed the interest shown by Airbus in India, it added.

Airbus Defence and Space is a division of Airbus Group responsible for defence and aerospace products and services.

During the meeting, Mr. Modi discussed with Mr. Gerwert various projects in India, in the aerospace, defence and civil aviation sectors.

Mr. Gerwert recalled the Prime Minister’s visit to the Airbus manufacturing facility in Toulouse in France in April and said it had generated “positive atmosphere and interest.”

During that visit, Airbus had announced that it would increase its Indian outsourcing to USD 2 billion.

Airbus Group CEO Tom Enders, who had received the Indian leader in Toulouse, had said: “India already takes a centre-stage role in our international activities and we want to even increase its contribution to our products.”

In India, Airbus Group already operates two engineering centres — one focused on civil aviation and the other one defence — besides, a research and technology (R&T) centre which together employ over 400 highly qualified people.