Long before, DISINVESTMENT Council Recommended Strategeic Sell OFF for AIR INDIA. Aviation Industry OVERALL is Inflicted with sickness. But AIR INDIA is singled out for CLOSURE. Now, latest development indicate that AIR INDIA is predestined to be SOLD Out! We have been persistently WARNING workers as well as TRADE UNIONS. But they NEVER Paid attention and DIVERTED themselves in SUICIDAL Indulgement! We have been writing and speaking on DISINVESTMENT and PRIVATATION for long but Failed to Mobilse either Workers orTrade Unions!After managing to survive the blow dealt to its fragile financial health by the recent 10-day pilots' strike, national carrier Air India is again finding itself in a tight spot.Govt eases eligibility criteria for appointment of CMDs for PSU banks!
Indian Holocaust My Father`s Life and Time - SIX HUNDRED FORTY NINE
Palash Biswas
http://indianholocaustmyfatherslifeandtime.blogspot.com/
http://basantipurtimes.blogspot.com/
Fuel suppliers and airport operators threatened to halt operations of India's national carrier Air India on Friday if the cash-strapped airline did not clear their dues totalling over Rs 2600 crores.Air India's mounting woes have taken a new twist, as it has not only defaulted on staff salaries, but is also struggling to pay for fuel and airport usage charges. How long will the national carrier continue to bear the heavy losses?
Long before, DISINVESTMENT Council Recommended Strategeic Sell OFF for AIR INDIA. Aviation Industry OVERALL is Inflicted with sickness. But AIR INDIA is singled out for CLOSURE. Now, latest development indicate that AIR INDIA is predestined to be SOLD Out! We have been persistently WARNING workers as well as TRADE UNIONS. But they NEVER Paid attention and DIVERTED themselves in SUICIDAL Indulgement! We have been writing and speaking on DISINVESTMENT and PRIVATATION for long but Failed to Mobilse either Workers orTrade Unions!After managing to survive the blow dealt to its fragile financial health by the recent 10-day pilots' strike, national carrier Air India is again finding itself in a tight spot.
Meanwhile, Govt eases eligibility criteria for appointment of CMDs for PSU banks!
Faced with a twin attack from oil PSUs and operators of Delhi and Hyderabad airports asking it to clear their dues, Air India on Saturday drew up plans to combine 13 flights spread over a few sectors till the start of the lean season from mid-June. Faced with a twin attack from oil PSUs and operators of Delhi and Hyderabad airports asking it to clear their dues, Air India on Saturday drew up plans to combine 13 flights spread over a few sectors till the start of the lean season from mid-June.
Cash-strapped Air India was forced to ground 20 flights on Friday after oil companies refused to supply jet fuel for non-payment of dues. The aviation ministry said they were trying to resolve the issue. Former Civil Aviation Minister Shahnawaz Hussain today blamed the government for the "sorry state of affairs" in the civil aviation sector, saying its policies were allowing private carriers to make profits out of a crisis like the Air India pilots' strike. "Wrong policies of the government have led to a situation where private airlines are making profits out of a crisis situation.Despite its many teething problems, civil aviation minister Vayalar Ravi believes that all is not lost for Air India. A turnaround plan and unified efforts from employees will lift the airline out of its abyss, he tells Binoy Prabhakar. Excerpts. Since the time you assumed charge, what are your observations about Air India? Air India needs reforms and a sound turnaround plan.
Frustrated by the practice of doling out untimely salaries by Air India (AI), six senior commanders and co-pilots of the national carrier have resigned. What may be alarming for the airline is that 50 more resignations are in the offing. However, the authorities do not seem to be in a mood to retain them.
After fighting with the airline for pay parity, these pilots of erstwhile Indian — which merged with the AI — have decided to call it quits one by one. "In the past few months our salaries have not been regular and we are tired of waiting and even fighting for it every month," said a senior commander. "If this situation continues, 50 more pilots are likely to resign." DNA reports.
Out of the 850 pilots from the erstwhile Indian, 160 are executive pilots.
Since the past one year, AI has been struggling to pay salaries to its 30,000 employees, including all 1,600 pilots. "For the past two months, we have got only our basic salary which is just 30% of our pay packet. The rest is in the form of performance linked incentives which is based on the number of flying hours we log in," said a pilot.
In this year's budget the airline got Rs1,200 crore cash infusion from the Centre. Yet, the management is dilly dallying in paying our money. It seems like a deliberate plot to instigate mass exodus of employees," said another disgruntled pilot.
When contacted, Kamaljeet Rattan, spokesperson for AI, said, "If they leave, we will recruit more pilots from the open market."
The ministry says oil-marketing companies have flouted a cabinet secretariat directive by denying jet fuel to the national carrier at a pre-decided price.
"We are trying to resolve the issue and it has been happening almost every week, despite a directive by the cabinet secretariat to the fuel companies to supply ATF to Air India until May 31 in accordance with an agreement reached in April," a senior aviation ministry official said.
The Government today said it is closely watching the turnaround plan of national carrier Air India, which is saddled with a heavy debt of up to Rs 40,000 crore.
" Air India is passing through a difficult phase as a result of global recession and high cost of operation. Equity support of Rs 2,000 crore has been injected in 2010 & 2011. Turn-around plan of Air India is being closely monitored," the UPA Government said in its 'Report to the People'.
The airline is faced with a debt of about Rs 40,000 crore, of which Rs 18,000 crore is working capital loans taken from a consortium of banks, while the balance Rs 22,000 crore worth of loans is towards payment of new aircraft ordered.
In the latest Budget, the government has announced it would infuse Rs 1,200 crore in the next financial year. Till now, the government has injected Rs 1,200 crore and Rs 800 crore in two tranches in 2009-10, raising the national carrier's equity base to Rs 2,145 crore.
Further, the Congress-led UPA said, two mega projects are being undertaken at Chennai and Kolkata airports, whose work involves complete modernisation and development of these airports.
"With the completion of Phase-I work of IGI Airport at Delhi, a new integrated Terminal-3 became operational in July, 2010, with a capacity of handling 34 million passengers per annum, covering both international and domestic passengers. This achievement has created a new benchmark for airport infrastructure being developed in the country," it added.
The airline might have to ground more flights, both long-haul international and domestic, over the weekend, if the issue drags on, the official added.
Oil marketing firms Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum had put the carrier on cash-and-carry sales model in December. They stopped fuel supply to the airline after sending it a notice to clear dues. This comes in the backdrop of a rise in the price of aviation turbine fuel (ATF).
The oil firms had sought a payment plan from Air India for its over Rs 2,400-crore fuel bill, and had asked the carrier to make upfront payment for future purchases.
According to ministry officials, the cabinet secretariat had directed the petroleum ministry last month to give fuel worth Rs 18.5 crore to the ailing carrier for 16 crore until May-end. "As per that, there is no reason why the oil companies should do this. All big private carriers also owe money to these companies. Why is only AI a target?" the official said.
Air India uses 130 kilolitre of jet fuel each day. On Friday, it was given 13-14 kilolitre less. The national carrier has a debt of Rs 40,000 crore and accumulated losses of Rs 13,000 crore.
Indian Holocaust My Father`s Life and Time - SIX HUNDRED FORTY NINE
Palash Biswas
http://indianholocaustmyfatherslifeandtime.blogspot.com/
http://basantipurtimes.blogspot.com/
Fuel suppliers and airport operators threatened to halt operations of India's national carrier Air India on Friday if the cash-strapped airline did not clear their dues totalling over Rs 2600 crores.Air India's mounting woes have taken a new twist, as it has not only defaulted on staff salaries, but is also struggling to pay for fuel and airport usage charges. How long will the national carrier continue to bear the heavy losses?
Long before, DISINVESTMENT Council Recommended Strategeic Sell OFF for AIR INDIA. Aviation Industry OVERALL is Inflicted with sickness. But AIR INDIA is singled out for CLOSURE. Now, latest development indicate that AIR INDIA is predestined to be SOLD Out! We have been persistently WARNING workers as well as TRADE UNIONS. But they NEVER Paid attention and DIVERTED themselves in SUICIDAL Indulgement! We have been writing and speaking on DISINVESTMENT and PRIVATATION for long but Failed to Mobilse either Workers orTrade Unions!After managing to survive the blow dealt to its fragile financial health by the recent 10-day pilots' strike, national carrier Air India is again finding itself in a tight spot.
Meanwhile, Govt eases eligibility criteria for appointment of CMDs for PSU banks!
Faced with a twin attack from oil PSUs and operators of Delhi and Hyderabad airports asking it to clear their dues, Air India on Saturday drew up plans to combine 13 flights spread over a few sectors till the start of the lean season from mid-June. Faced with a twin attack from oil PSUs and operators of Delhi and Hyderabad airports asking it to clear their dues, Air India on Saturday drew up plans to combine 13 flights spread over a few sectors till the start of the lean season from mid-June.
Cash-strapped Air India was forced to ground 20 flights on Friday after oil companies refused to supply jet fuel for non-payment of dues. The aviation ministry said they were trying to resolve the issue. Former Civil Aviation Minister Shahnawaz Hussain today blamed the government for the "sorry state of affairs" in the civil aviation sector, saying its policies were allowing private carriers to make profits out of a crisis like the Air India pilots' strike. "Wrong policies of the government have led to a situation where private airlines are making profits out of a crisis situation.Despite its many teething problems, civil aviation minister Vayalar Ravi believes that all is not lost for Air India. A turnaround plan and unified efforts from employees will lift the airline out of its abyss, he tells Binoy Prabhakar. Excerpts. Since the time you assumed charge, what are your observations about Air India? Air India needs reforms and a sound turnaround plan.
Frustrated by the practice of doling out untimely salaries by Air India (AI), six senior commanders and co-pilots of the national carrier have resigned. What may be alarming for the airline is that 50 more resignations are in the offing. However, the authorities do not seem to be in a mood to retain them.
After fighting with the airline for pay parity, these pilots of erstwhile Indian — which merged with the AI — have decided to call it quits one by one. "In the past few months our salaries have not been regular and we are tired of waiting and even fighting for it every month," said a senior commander. "If this situation continues, 50 more pilots are likely to resign." DNA reports.
Out of the 850 pilots from the erstwhile Indian, 160 are executive pilots.
Since the past one year, AI has been struggling to pay salaries to its 30,000 employees, including all 1,600 pilots. "For the past two months, we have got only our basic salary which is just 30% of our pay packet. The rest is in the form of performance linked incentives which is based on the number of flying hours we log in," said a pilot.
In this year's budget the airline got Rs1,200 crore cash infusion from the Centre. Yet, the management is dilly dallying in paying our money. It seems like a deliberate plot to instigate mass exodus of employees," said another disgruntled pilot.
When contacted, Kamaljeet Rattan, spokesperson for AI, said, "If they leave, we will recruit more pilots from the open market."
The ministry says oil-marketing companies have flouted a cabinet secretariat directive by denying jet fuel to the national carrier at a pre-decided price.
"We are trying to resolve the issue and it has been happening almost every week, despite a directive by the cabinet secretariat to the fuel companies to supply ATF to Air India until May 31 in accordance with an agreement reached in April," a senior aviation ministry official said.
The Government today said it is closely watching the turnaround plan of national carrier Air India, which is saddled with a heavy debt of up to Rs 40,000 crore.
" Air India is passing through a difficult phase as a result of global recession and high cost of operation. Equity support of Rs 2,000 crore has been injected in 2010 & 2011. Turn-around plan of Air India is being closely monitored," the UPA Government said in its 'Report to the People'.
The airline is faced with a debt of about Rs 40,000 crore, of which Rs 18,000 crore is working capital loans taken from a consortium of banks, while the balance Rs 22,000 crore worth of loans is towards payment of new aircraft ordered.
In the latest Budget, the government has announced it would infuse Rs 1,200 crore in the next financial year. Till now, the government has injected Rs 1,200 crore and Rs 800 crore in two tranches in 2009-10, raising the national carrier's equity base to Rs 2,145 crore.
Further, the Congress-led UPA said, two mega projects are being undertaken at Chennai and Kolkata airports, whose work involves complete modernisation and development of these airports.
"With the completion of Phase-I work of IGI Airport at Delhi, a new integrated Terminal-3 became operational in July, 2010, with a capacity of handling 34 million passengers per annum, covering both international and domestic passengers. This achievement has created a new benchmark for airport infrastructure being developed in the country," it added.
The airline might have to ground more flights, both long-haul international and domestic, over the weekend, if the issue drags on, the official added.
Oil marketing firms Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum had put the carrier on cash-and-carry sales model in December. They stopped fuel supply to the airline after sending it a notice to clear dues. This comes in the backdrop of a rise in the price of aviation turbine fuel (ATF).
The oil firms had sought a payment plan from Air India for its over Rs 2,400-crore fuel bill, and had asked the carrier to make upfront payment for future purchases.
According to ministry officials, the cabinet secretariat had directed the petroleum ministry last month to give fuel worth Rs 18.5 crore to the ailing carrier for 16 crore until May-end. "As per that, there is no reason why the oil companies should do this. All big private carriers also owe money to these companies. Why is only AI a target?" the official said.
Air India uses 130 kilolitre of jet fuel each day. On Friday, it was given 13-14 kilolitre less. The national carrier has a debt of Rs 40,000 crore and accumulated losses of Rs 13,000 crore.
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OIL likely to come out with FPO in current fiscal
Economic Times - 12 hours agoNEW DELHI: State-run Oil India is on the government's radar fordisinvestment in the current fiscal and discussions are currently on to work out the ...OIL likely to come out with FPO in current fiscal - Business Standard
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Scooters India divestment okayed
Times of India - Subodh Ghildiyal - 19 May 2011
NEW DELHI: The Union Cabinet on Thursday gave an uncontested green signal to the disinvestment of Scooters India (SIL) but found itself saddled with ...Scooters India's disinvestment approved; stock jumps 5 per cent - Economic Times
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BHEL, SAIL divestment to help govt raise Rs 8000 crore
Times of India - 5 days agoLast year, the government had managed to raise Rs 22145 crore fromdisinvestment, with over Rs 15199 core raised from the Coal India initial public offer ...BHEL okays stake sale plan to raise Rs 4500 cr - Business Standard
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RBI eases norms for Indian companies
Livemint - Dinesh Unnikrishnan - Anup Roy - 1 day ago
Partially modifying the existing norm, RBI allowed listed Indian companies todisinvest in overseas joint ventures or wholly-owned subsidiaries under the ...RBI liberalises regulations relating to overseas direct investmen - India Infoline.com
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Lohia Auto to bid for Scooters India
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Road shows for SAIL FPO delayed
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India Govt to divest stake in major public sector firms this year
Commodity Online - 10 May 2011... Several India government-owned companies are coming up for disinvestment ... Steel Authority of India Ltd and ONGC Ltd. The disinvestment process for ...PFC issue subscribed 3.58 times on Day 3 - Business Standard
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Govt may dilute norms for i-banks
Livemint - Anirudh Laskar - 2 days ago
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Disinvestment proposal for Scooters India lying in cabinet
Livemint - 10 May 2011Located near Lucknow, Scooters India Ltd (SIL) is an integrated ... sick PSUs like ScootersIndia and Nepa Ltd, through disinvestment or joint venture. ...Cabinet to decide on Scooters India's disinvestment - Moneycontrol.com
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Disinvestment hope floats, again
Business Standard - Santosh Tiwari - 9 May 2011
While India's politicians have had a love-hate, see-saw relationship with the idea of privatisation, disinvestment has continued as a favourite revenue ...
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Air India struggles to pay up dues to oil firms, GMR-led airports
The Hindu - Vinay Kumar - 22 hours ago
At a time when State-owned Air India is struggling to recover from the losses incurred during the recent 10-day pilots' strike, the ailing national carrier ...Air India crashes into more trouble, GMR cuts operations - Moneycontrol.com
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Air India to launch more flights to non-metro cities
Moneycontrol.com - 14 hours agoPublished on Sun, May 29, 2011 at 10:13 | Source : PTI With many non-metro cities demanding air connectivity, Air India is gearing itself to cash in on the ...Air India to combine 13 flights to tackle fresh financial crisis - Economic Times
AI limits operations to tide over fuel woes - MSN India
Pranab steps in as oil firms put AI on notice over dues - Indian Express
Times of India - IBNLive.com
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Air India, ONGC enter semis of Obaidullah Khan Gold Cup
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Air India shifts focus to tier-2, tier-3 cities
TravelBizMonitor - 14 hours agoBy TBM Staff | Mumbai Shifting its focus to tier-two cities, Air India on May 24, 2011 connected Kanpur to Delhi as well as Kolkata. ...Air India Delhi-Guwahati flight Passengers harassed - Milli Gazette
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Bird-hit grounds Mumbai-bound flight
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Four Air India employees at Ahmedabad airport under scanner
Daily News & Analysis - Ritesh Shah - 1 day ago
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Boeing offers Air India $500 million for dreamliner delay
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News archive results for AIR India
Jan 24, 1966 Jan 2, 1978 Jun 24, 1985
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Airlines face turbulence as aviation turbine fuel prices rise
Cuckoo Paul, TNN, Oct 17, 2002, 06.04am IST
MUMBAI: Rising fuel prices may lead to turbulence in the skies for the airline industry as fixed costs zoom in tandem with aviation turbine fuel (ATF) prices. During October, the price of ATF has jumped by over 10 per cent compared to last month.
Prices have been firming up for the past six months, moving up by close to 30 per cent in the April to October period this year.
The increase in ATF prices is likely to be another nail in the coffin for airlines which have been battling recessionary trends to fill planes. Passenger load factors are down and domestic airlines have begun discounting through advance purchase schemes and other promotions to attract passengers.
Cheaper aviation turbine fuel hopes crash at North Block
Nirbhay Kumar, TNN, Feb 25, 2008, 04.43am IST
NEW DELHI: The Budget is unlikely to lift the spirits of the aviation industry. The finance ministry has decided against according declared good status to aviation turbine fuel (ATF), or jet fuel, in the Budget. The move would have reduced sales tax on jet fuel to a uniform 4% across the country.
Sales tax on the fuel varies in each state and in certain cases, it is as high as 24%. Domestic carriers are incurring losses due to high fuel bills, which constitute about 40% of airlines' total operating cost.
In a recent communication to the civil aviation ministry, a finance ministry official said jet fuel could not be added to the list of declared goods without building a consensus among state governments. It said the empowered committee of state finance ministers has said states would strongly object to any such move of the Centre.
The IGI airport was adjudged the fourth best in the world in the 15-25 million passengers per annum category, the report added.
Also, it said that Pawan Hans has introduced sea plane operations in Andaman and Nicobar Islands, as a pilot project to connect Port Blair and Havelock and other islands in North Andaman.
Besides, in 2010, Civil aviation India participated in the Assembly Session of the International Civil Aviation Organisation ( ICAO )), and was successfully re-elected to its Council, the report said.
Privatise Air India, says top Lufthansa official
SAN FRANCISCO: A top global airline official has suggested privatisation of Air India saying government involvement in running airline business does not help.
Maintaining that "a lot of time" has already been lost, Lufthansa CEO Carsten Spohr said there was a lot of government involvement in India which "does not always help" as airline business needs quick decisions.
Referring to the privatisation experience of the premier German carrier, he said Lufthansa was partly privatised in 1992 and fully five years later.
"Our stocks were put on the market through public stock exchange and we don't have a single shareholding. The employees' unions are also our shareholders", Spohr told a team of visiting Indian journalists here.
"Coming from German history of government involvement in Lufthansa a few decades ago, we know it doesn't always help to make an airline more flexible and cash rich", he said.
Maintaining that Air India should remain a national carrier but not owned by the government, he said, "it does help to have a national attribute to the carrier. We call ourselves Lufthansa German Airlines but we are fully privatised. We can change our name tomorrow. But we don't do it. Because we believe that 'German' is something which helps Lufthansa.
"So is it the strength of an airline to be Indian? Yes. But should it be owned necessarily by government? I think the example has been proved round the world, probably its more of an advantage to have that beneficiary not to be owned by the government. But it's a question every government and every airline has to answer. In Germany , we have found an answer".
Lufthansa has been Air India's mentor, helping and guiding it complete all formalities for joining the Star Alliance, which has given July 31 as the deadline for the Indian carrier to join the global airline grouping.
About its India plans, Spohr said Lufthansa was pushing hard to launch its superjumbo A-380 flights soon from Delhi where it wants develop a hub in cooperation with Indian carriers. The German carrier has already applied to the Indian government for allowing it to operate the superjumbo.
Lufthansa is also mulling a new connection from Delhi to Dusseldorf in Germany, but details are yet to be finalised.
Spohr said "we would have put Delhi as one of the destinations when we received our seventh A-380, but could not do so. With the eighth aircraft being delivered later this year, we hope to fly it to Delhi where the new Terminal-3 is waiting to receive the superjumbo".
As soon as India gives it permission, Lufthansa could pull out one of the A-380s from the existing sectors and start operations to Delhi, the CEO said, adding that Air India "will have access to this aircraft as we have a codeshare agreement".
At a time when State-owned Air India is struggling to recover from the losses incurred during the recent 10-day pilots' strike, the ailing national carrier finds itself grappling with demands of the public sector oil marketing companies as well as GMR-led airports in Delhi and Hyderabad to clear their dues.VINAY KUMAR reports for The HINDU.
GMR Airports has refused to allow Air India to operate smoothly, until it clears the long unpaid dues. Air India owes " about Rs 255 crore for both the Hyderabad and Delhi Airports," says the GMR's CFO, Sidharth Kapur. Speaking exclusively to CNBC-TV18.
The Delhi and Hyderabad airports have put loss-making carriers Kingfisher Airlines and state-run Air India on "cash-and-carry" mode from June 1, which means the two firms would have to pay oustanding dues to the airports to continue operating flights.
The Delhi and Hyderabad airports took the step "after continued deliberations with these airline companies failed to yield payments of outstanding dues from these airlines", GMR Group, operator of the two airports, said.
Air India owes the two airports around 2.8 billion rupees ($62 million) while Kingfisher has outstanding payments worth about 880 million rupees, a GMR spokesman said.
Hurt mainly by high cost of aviation turbine fuel, both carriers have been posting losses.
In a bid to face the fresh financial crisis, the ailing national carrier sent a letter to the Civil Aviation Ministry urging the government to clear an estimated Rs 1,150 crore worth of dues on account of VVIP movements and evacuation flights including those to Libya.
It also wanted the government to take an expeditious decision on releasing Rs 1,200 crore worth of equity infusion, the provision for which has been made in the 2011-12 budget. This would enable the national carrier to face the crisis which has started adversely hitting its operations, sources said.
Three oil PSUs, Indian Oil Corporation , Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation , decided to slash supply of about 500 kilolitres of jet fuel per day to the airline, sources said.
To meet this situation, Air India has decided to fill the tanks of its aircraft from Dubai, London, Paris, Frankfurt and Bangkok where the prices are much cheaper than in India.
According to latest figures, Air India owes a total of Rs 2,250 crore to the three oil PSUs. The airline's daily fuel bill was Rs 13.5 crore in December when the oil firms stopped the credit line. It has now risen to Rs 18.5 crore due to the global crude price hike, from $70 to $120 a barrel.
To meet the fuel restrictions, the airline decided to curtail 13 of its services by combining flights on certain sectors, including Delhi-Mumbai and Chhattisgarh, they said.
During the lean season from June 15 till September, number of flights would in any case be curtailed due to low traffic and, therefore, there would be less fuel uplift.
Air India, which cancelled six flights yesterday, did not cancel any flight today, they said.
The oil PSUs and airline have reached an understanding that ATF supply would not be curtailed at all airports but at select major metros to give the airline the leeway to combine flights and adjust its loads and daily flight schedules.
On top of this crisis, the GMR-led Delhi International Airport Limited (DIAL) and GMR Hyderabad International Airport Limited (GHIAL) have also stopped their credit line and asked the national carrier to pay the landing, parking and navigation charges upfront or face restrictions on these services from June one.
Air India owes Rs 217.08 crore to DIAL and Rs 35.89 crore to GHIAL on account of these airport charges.
DIAL and GHIAL have also placed similar restrictions on Kingfisher Airlines which owes Rs 67.98 crore and Rs 21.98 crore respectively to DIAL and GHIAL.
The airport operators said Air India and Kingfisher would be allowed to operate their flights "only on cash and carry basis" from midnight of June one and had "significant amount of dues".
Kingfisher posted a net loss of 10.27 billion rupees for the year ending March.
Air India, which witnessed a pilots' strike recently, has not yet disclosed its latest annual results. It posted a net loss of 55.5 billion rupees in 2009/10.
In a bid to face the fresh financial crisis, the ailing national carrier sent a letter to the Civil Aviation Ministry urging the government to clear an estimated Rs 1,150 crore worth of dues on account of VVIP movements and evacuation flights including those to Libya.
It also wanted the government to take an expeditious decision on releasing Rs 1,200 crore worth of equity infusion, the provision for which has been made in the 2011-12 budget. This would enable the national carrier to face the crisis which has started adversely hitting its operations, sources said.
Three oil PSUs, Indian Oil Corporation , Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation , decided to slash supply of about 500 kilolitres of jet fuel per day to the airline, sources said.
To meet this situation, Air India has decided to fill the tanks of its aircraft from Dubai, London, Paris, Frankfurt and Bangkok where the prices are much cheaper than in India.
According to latest figures, Air India owes a total of Rs 2,250 crore to the three oil PSUs. The airline's daily fuel bill was Rs 13.5 crore in December when the oil firms stopped the credit line. It has now risen to Rs 18.5 crore due to the global crude price hike, from $70 to $120 a barrel.
To meet the fuel restrictions, the airline decided to curtail 13 of its services by combining flights on certain sectors, including Delhi-Mumbai and Chhattisgarh, they said.
During the lean season from June 15 till September, number of flights would in any case be curtailed due to low traffic and, therefore, there would be less fuel uplift.
Air India, which cancelled six flights yesterday, did not cancel any flight today, they said.
The oil PSUs and airline have reached an understanding that ATF supply would not be curtailed at all airports but at select major metros to give the airline the leeway to combine flights and adjust its loads and daily flight schedules.
On top of this crisis, the GMR-led Delhi International Airport Limited (DIAL) and GMR Hyderabad International Airport Limited (GHIAL) have also stopped their credit line and asked the national carrier to pay the landing, parking and navigation charges upfront or face restrictions on these services from June one.
Air India owes Rs 217.08 crore to DIAL and Rs 35.89 crore to GHIAL on account of these airport charges.
DIAL and GHIAL have also placed similar restrictions on Kingfisher Airlines which owes Rs 67.98 crore and Rs 21.98 crore respectively to DIAL and GHIAL.
The airport operators said Air India and Kingfisher would be allowed to operate their flights "only on cash and carry basis" from midnight of June one and had "significant amount of dues".
The year 2001 was only the second year in the history of modern civil aviation in which international traffic declined but at 5.7 per cent of total traffic, the fall was uniquely large. The fall combined with a negligible drop in capacity, a moderate decline in yield, but a relatively large increase in unit cost, produced the largest loss, in aviation history, according to the International Air Transport Association (IATA). The airlines collectively lost, after interest, almost as much as they had made in profits over the previous four years, mainly due to post September 11. While the total revenue of 273 member airlines was $144 billion, the loss was $12 billion. Last year, IATA member airlines paid $7.8 billion in airport landing and related charges and $7.4 US dollars in air navigation charges for their scheduled international operations, an increase of 300 million US dollars and 400 million US dollars respectively, compared with the year 2000. On the outlook, IATA expects total international traffic growth at an average of 3.5 per cent between 2001 and 2005, including the effect of record 2.1 per cent fall in passengers numbers in 2001. Growth at that level would result in 637 million international passengers carried in 2005, IATA said. The highest average growth percentage is expected on routes within the far east and the lowest on trans-pacific routes.
BPCL sues Kingfisher Airlines
Dev Chatterjee, ET Now, Jun 25, 2009, 10.42am IST
Oil refiner, Bharat Petroleum Corporation Ltd has sued Vijay Mallya promoted Kingfisher Airlines in the Bombay High Court to get back its dues worth Rs 300 crore. The oil company filed an arbitration petition in the Bombay High Court last week after all its attempts to get KFA to repay its dues failed, a source in the oil company said. The oil company has also asked KFA to lift fuel only after it pays cash at the time of delivery and withdrawn the credit facility, the source said.
When contacted, a Kingfisher Airlines spokesperson denied any legal battle is on with BPCL. "We are in compliance with the credit arrangements with the OMCs from whom we lift fuel as agreed from time to time," the spokesperson said. But sources in the oil refining company say the oil company had to hire law firm Udwadia and Udeshi to make the airline cough up its dues. The petition was filed on June 19th, court documents show.
Last year, the government had given 6-months to airlines to pay up their dues in time. While other airlines managed to repay part of their dues to BPCL, Kingfisher failed to repay its dues in time. Apart from BPCL, Indian Oil has also asked Kingfisher to pay for its fuel on cash and carry basis. Indian Oil had also encashed Kingfisher's bank guarantee of Rs 50 crore after the latter's cheque had bounced.
ET reported on June 22 that Airports Authority of India (AAI) has decided to disallow credit to the airline and put the airline on cash-and-carry mode (no credit, needs to pay in cash immediately for using airport facilities after the airline's current dues with AAI exceeded its bank guarantee of Rs 100 crore by Rs 53 crore. AAI has decided to put an airline for the first time on cash-and-carry.
http://articles.economictimes.indiatimes.com/2009-06-25/news/28385851_1_kingfisher-airlines-indian-oil-kfa
Now, Kingfisher Airlines to delay salaries
Mithun Roy, ET Bureau, Jul 30, 2009, 12.21am IST
MUMBAI: Kingfisher Airlines has warned its 6,000 employees of a delay in salary payment. In an email, its executive vice-president Hitesh Patel has asked its employees to be prepared for delayed salaries and embarrassing dealings with unpaid vendors in the coming days. Mr Patel said the company was in a tight situation regarding finances and it had trimmed its fleet to 69 from 89 to cut costs.
"Along with all other airlines, we are in a tight situation regarding finances. You can expect to be in embarrassing situations with our vendors; your salaries may be delayed, but never beyond the seventh (day of the month). Please remember, even as you read this mail, the chairman is out there, fighting a lonely and difficult battle to manage funds so that the salaries can be paid on time," the mail read.
Kingfisher Airlines chairman Vijay Mallya this evening clarified in a statement that a delay in salary payment till seventh day was "as per law". He said the move was aimed at aligning salary remittance dates to revenue collection dates. "If we pay salaries before the legally due date what's the problem?" he asked.
Kingfisher Airlines' outstanding to oil marketing companies namely Indian Oil, Hindustan Petroleum and Bharat Petroleum stood at Rs 950 crore on May 31. It has a total debt of Rs 8,000 crore.
The company's quarterly loss widened, hit by falling passenger demand due to the global slowdown. Its net loss in April-June increased to Rs 240 crore from Rs 158 crore a year ago.
The airline also said it plans to raise Rs 500 crore through a rights issue, a follow on public offering or a placement of depository receipts.
http://articles.economictimes.indiatimes.com/2009-07-30/news/28394807_1_salaries-kingfisher-airlines-delay
"The issue relating to the oil companies has been sorted out with the intervention of the government," airline officials said here on Saturday. "Air India has assured the oil companies that all their arrears will be cleared. The issue with Delhi and Hyderabad airports on account of airport handling charges and aeronautical charges is also being resolved.''
After completing the process of integration of passenger ticketing systems in the post-merger scenario, Air India is also working to complete other formalities over the next month in order to join the global "Star Alliance'' network. Air India, after its merger with Indian Airlines, now has a single code "AI'' for its flights, providing seamless connections on its network by having an integrated passenger booking system for all its flights, be it international or domestic. "Air India should be able to join Star Alliance by July-end. This itself is expected to boost our revenues roughly by nine to 15 per cent,'' airline officials said.
Though there is a demand in many quarters that the Union government should stop putting money in Air India as the cash-strapped carrier was destined to make losses, Civil Aviation Minister Vayalar Ravi has ruled out that possibility, asserting that the national carrier would not be allowed to wither away. "The government has no intention of closing down Air India or privatising it,'' the Minister had stated during the period of pilots' strike.
After a review of Air India's financial health by the brass of the Civil Aviation Ministry this week, it was pointed out that its bill of Rs.450 crore in VVIP expenses and on evacuation operations from 2006 onwards was pending with the government: Rs.344 crore dues from the Prime Minister's Office, the External Affairs Ministry and the Defence Ministry and Rs.106 crore for carrying out evacuation operations.
During 2010-11 alone, the Maharaja dedicated Boeing 747-400 fleet of five aircraft for VVIP operations and the total bill, including the cost of maintenance, came to about Rs.1,200 crore. Sources in the Civil Aviation Ministry indicated that a compensation of Rs.800 crore on account of VVIP operations would be cleared. The national carrier also has Rs.157 crore as dues pending with private carriers Jet Airways and Kingfisher for various services.
A detailed cash flow analysis, relating to the 2010-11 daily average, shows that Air India earns Rs.22 crore from its domestic operations daily and another Rs.14 crore from its operations on the international sector, taking the total to Rs.36 crore.
However, daily average expenses during 2010-11 show that the national carrier has to pay Rs.18 crore daily for its fuel bills in India and Rs.5 crore for fuel bills abroad. Besides, the airline has to shell out Rs.9 crore daily on account of pay and allowances and Rs.12 crore for other expenses. The interest on working capital comes to Rs.6 crore, while interest on aircraft loans comes to Rs.3 crore daily. Foreign station expenses hover around Rs 3 crore and another Rs.5 crore is meant for aircraft principal repayments. The analysis indicates that the current net shortfall per day comes to about Rs. 26 crore. On an average, Air India's loss during 2010-11 has been to the tune of Rs.5,800 crore and the accumulated losses run into much more.
Airline officials point out that the carrier has no control over 85 per cent of the cost incurred on operations. The major component is the cost of aviation turbine fuel that alone accounts for nearly 45 per cent. Other essential expenses on airport and aeronautical charges, ground handling and maintenance make up the rest.
Air India has already received an equity infusion of Rs.2,000 crore in two instalments from the government. It is likely to get another tranche of Rs.1,200 crore next month. It has already received in-principle approval to this effect from the Planning Commission.
A note for the Union Cabinet is also being prepared for creating specialised business units by separating its engineering MRO (maintenance-repair-overhaul) wing and ground handling facilities. The separate business units, on the lines of Air India Express, will remain subsidiaries of Air India, but try to earn for themselves and be self-sufficient. "Air India will transfer nearly 20,000 employees to these two business units on deputation. All employees will get protection for their salaries in MRO and ground handling units,'' airline officials said.
They said Air India would then have about 20,000 employees on its rolls which will include pilots, cabin crew and managerial and other staff. Air India runs up a wage bill of Rs. 3,500 crore annually and, since November-December last year, has not been able to register any operating profit. "But we hope to show operating profit in September-October this year,'' officials said.
"All steps are being taken in accordance with the turnaround plan which has been approved by the government. If everything goes well, Air India may be in black by 2015,'' airline officials said.
But for this to happen, aviation experts say, Air India will need to shed flab, be a lean and mean carrier, go for financial restructuring, take informed business decisions, get professional managers and say "no'' to political interference. They cited the example of "Garuda,'' Indonesia's flag carrier, which was beset with mounting losses and an unreliable and ageing fleet, but has managed to turn around profitably.
This time round, State-run oil marketing companies — the Indian Oil Corporation, the Bharat Petroleum Corporation Ltd. and the Hindustan Petroleum Corporation — have put the ailing carrier on notice to get its daily fuel on cash-and-carry sales model.
Battling huge financial losses and mounting dues to the oil marketing companies, Air India will be left with no choice but to slash its daily flights if the cash-and-carry sales model comes into operation. Sources in Air India confirmed on Thursday night that the oil marketing companies have conveyed to it that the airline would be sold its daily requirement of aviation turbine fuel (ATF) on the basis of cash which it is able to pay the oil companies. Air India operates nearly 320 flights on domestic and international sectors daily.
"Air India pays about Rs. 22 crore daily to oil marketing companies. It came down substantially to about Rs. 9 crore during the pilots' strike. After the strike was over, the carrier is able to shell out about Rs. 18 crore daily to oil marketing companies," the sources said.
However, Air India spokesperson said the airline had already approached the Civil Aviation Ministry and expressed the hope that the matter would be resolved amicably with the intervention of the government.
Govt eases eligibility criteria for appointment of CMDs for PSU banks
Facing shortage of experienced hand, the government has relaxed the criteria for selection of Chairman and Managing Director (CMD) of public sector banks , a decision that would make several executive directors eligible for elevation as CMD.
Under the new criteria, a bank executive director (ED) with a minimum experience of 6 months would also be eligible to become CMDs.
Earlier, an ED had to serve a minimum of one year to become eligible for the bank's top post.
The government has eased the experience clause to 6 months from earlier requirement of at least 12 months, official sources said.
The notification in this regard was issued earlier this month, sources said.
This would enable the government to overcome the dearth of experienced hand for elevation to the position of bank's chief.
The government has already initiated the process for empanelment of CMDs for the current fiscal. There would be 8 vacancies during the fiscal.
The first vacancy would come up on May 31 when the Central Bank India Chairman and Managing Director S Sridhar is scheduled to retire.
It is expected that the list of about 8 new CMDs would be out soon who would subsequently starting taking charge as and when the incumbent of the particular bank retires during the course of the year.
On similar lines, the government had announced names of 8 CMDs in September last year.
Pay cash or no fuel, says oil companies to Air India
With Air India defaulting on payment of jet fuel bills, state-run oil firms have restricted supplies of fuel to the extent of the national air carrier's ability to make payment in cash, but supplies have not been stopped.
At no airport have supplies to Air India been stopped, officials at the three oil marketing companies said. "Air India is being supplied aviation turbine fuel (ATF) to the extent it is able to pay," an official said.
Air India was put on cash-and-carry from December, but the airline continued to get fuel for more than its daily purchase capacity. However, oil companies are now supplying fuel on a strict sale only if cash is paid basis.
Oil companies last week sent a notice for stopping aviation turbine fuel (ATF) supplies to Air India at some airports like Calicut and Jaipur, officials said here.
Air India owes Indian Oil Corp (IOC) about Rs 1,900 crore. IOC meets 63 per cent of Air India's jet fuel needs. The national carrier has run up an outstanding bill of over Rs 300 crore with Bharat Petroleum Corp Ltd ( BPCL )), while its dues to Hindustan Petroleum Corp Ltd ( HPCL )) are relatively small.
Officials said during peak demand, Air India buys jet fuel worth Rs 18.5 crore per day from the three state oil firms, but it pays only Rs 13.5 crore. Its current requirement is worth about Rs 16 crore.
"Oil companies already incur huge losses on selling diesel, domestic LPG and kerosene way below their production cost and to expect them to sell ATF at subsidised rates is not acceptable," an official said.
To tide over its cash woes, Air India has sought discounts similar to the ones given to private airlines.
Oil companies give a Rs 1,600-1,800 per kilolitre discount to private airlines on promise of assured payment. After adding finance charges for a 90-day credit period, the discount comes to Rs 3,600 per kl.
"Even if this discount is stretched to Rs 5,000 per kl, the Rs 18.5 crore per day fuel bill will not become Rs 13.5 crore. After including some more concessions, the fuel bill at best will come down to Rs 17 crore a day, a far cry from the Rs 13.5 crore paying capacity of Air India," he said.
Officials said Air India was discussing only the payments for future ATF purchases and there was no word on how the state carrier will clear the past outstanding.
"Air India talks of getting the same discounts as private airlines, but does it know that ATF purchases by airlines such as Jet Airways and Kingfisher Airlines are covered by a bank guarantee in case of default?", an official asked.
Both Jet Airways and Kingfisher have brought down their outstanding dues to manageable levels and have provided bank guarantees to cover against any default.
27 MAY, 2011, 05.27AM IST, ANINDYA UPADHYAY,ET BUREAU
Boeing offers Air India $500 million for Dreamliner delay
NEW DELHI: US aircraft maker Boeing has offered to pay $500 million to Air India as compensation for the delay in deliveries of new-age B-787 Dreamliner aircraft. The package is more than three times what Boeing was willing to pay earlier, but the civil aviation ministry says it is still inadequate.
"It appears now that Boeing intends to offer half-a-billion dollars as compensation to Air India," a senior civil aviation ministry official told ET. "But this is too less and we are trying to ensure better compensation." Boeing India President Dinesh Keskar refused to give details.
" Air India is our valued customer and we will not discuss the issue of compensation in media," he said. Air India had ordered 27 Dreamliner jets in 2006, which were to be delivered by September 2008. But Boeing says it can hand over the first of these planes only in the quarter beginning July.
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Dreamliner is a 250-seater aircraft made of composite materials and is considered very fuel-efficient. The multi-version aircraft has a list price between $140 million and $200 million. Air India says the delay in handing over the jets has caused the airline both opportunity and operational losses amounting to over $1 billion. The official quoted above said the compensation Boeing plans to offer includes $145 million in liquidated damages, which are part of the contract and should not be included in the compensation value.
Liquidated damages on account of delay are usually 0.5% of the total contract value and they are to be paid on a weekly or monthly basis for a specified time as mentioned in the contract.
"Air India is not only eligible for liquidated damages, but also for the loss in revenue it suffered because its expansion plans were impacted due to the long delay," the official said. Air India says it had planned to fly new routes to Australia and Africa, besides expanding services to the US with the B-787s.
In January 2009, the airline had sought $710 million from Boeing as compensation for the delays in deliveries of B-787s. The carrier raised this figure to $840 million in August last year. The airline argues the compensation is on the grounds of loss of opportunities, business & market share, inability to use more fuel-efficient aircraft, leasing of jets at high cost, and additional interest burden on pre-delivery payments it made for the planes.
Air India, which has a fleet size of 133 aircraft, is under a colossal debt of Rs 40,000 crore and accumulated losses of Rs 13,000 crore. The airline had placed a $15-billion order for 111 aircraft in 2006. Of this, 68 aircraft were to be purchased from Boeing and the remaining from Airbus . Of the Boeing order, 50 aircraft were for Air India's own fleet and 18 for its low-cost subsidiary Air India Express , which flies on short-haul international routes.
Apart from the 27 B-787 s, the other aircraft include a mix of B-777 s and B-737s. In India, Boeing also has an order from Jet Airways for 10 Dreamliners. Boeing's order book for the B-787 worldwide currently stands at nearly 900 aircraft.
http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/boeing-offers-air-india-500-million-for-dreamliner-delay/articleshow/8596503.cms
Problems mount for Air India but sale not seen as solution
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On a wing and a prayer ... passengers have abandoned the airline because of its reputation for poor customer service and late flights. Photo: Bloomberg
WHEN Bob Haygooni paid a midflight visit to a cockpit at his new employer, Air India, he was shocked. The pilots, he said, had completely covered the windows with newspaper to keep out the sun.
''All you had in the cockpit was this yellowish glow, as the light permeated the newspaper,'' Mr Haygooni recalled, saying it was a visibility hazard he had never seen in 30 years of flying.
However, ''this was a normal thing at Air India'', said Mr Haygooni, a former United Airlines pilot who flew for the Indian
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airline for 16 months. In April last year he was so concerned with the way the Indian government was running the state-owned airline that he quit.
Interviews with more than a dozen experienced pilots employed in the past three years by Air India to work new international routes describe an airline with problems. But theirs are not the only complaints.
Passengers have abandoned Air India in droves, shunning the airline because of its reputation for poor customer service and late flights.
Formerly India's monopoly carrier, Air India has been surpassed by three commercial Indian airlines - Jet Airways, Kingfisher and IndiGo - among those that have sprung up since India deregulated the domestic industry nearly two decades ago. Air India now has less than 15 per cent of India's domestic air travel market.
As a result, it lost more than $US1 billion ($950 million) in taxpayer money in last financial year. And now there is a growing public clamour for the government to get out of the airline business.
While few government airlines in the developing world have stellar reputations, the Sydney research group Centre for Asia Pacific Aviation singled out Air India as an example of government mismanagement.
The centre's executive chairman, Peter Harbison, said: ''There
are other state-owned airlines in other emerging-market countries that have similar problems, but
I can't think of one as bad as Air India.''
Spokesmen for Air India defend the airline as safe and say it is working to correct its problems.
And India's new Civil Aviation Minister, Vayalar Ravi, vowed on Wednesday not to close or sell the airline. ''There is no question of Air India being shut or privatised,'' Mr Ravi said.
Vested interests who ''want to exploit the people for their own profit'' were behind suggestions that India's government give the airline up, he said. The airline had been mismanaged in the past but it does ''not make any compromises with maintenance and security''.
The New York Times
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