AI unions want to meet Ajit Singh, warn of stir

Air India staff unions have sought a meeting with Civil Aviation Minister Ajit Singh on their objections to the separation of engineering and ground handling departments into separate companies. 

Last week, the Cabinet cleared this decision, which aims to reduce the ailing government carrier?s wage bill and also create two new profit centres. However, eight employee unions are resisting the move and are against taking transfer to the new entities ? AI Air Transport Services Ltd and AI Engineering Services Ltd. 

Representatives of the eight unions met here on Monday to discuss the implications. ?We may resort to industrial action. It is a question of 19,000 employees and we will not take things lying down,?' said a member of one union. They are to meet again on Thursday. He added the minister was yet to meet all the unions, three months after he took charge. 

AI expects the engineering company to service its fleet and get other business, generating profit of Rs 2,000 crore after five years. 

The management expects the engineering company?s wage costs to reduce over the next four years, following the retirement of existing staff. 

The unions, however, say the hiving-off decision is not a viable idea and are prepared to explain why they think so. 

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Fresh squeeze on air travel agents' margins

After the International Air Transport Association (IATA) burdened travel agents by shrinking their payment schedule from fortnightly to weekly, Indian carriers are adding to their woes. Two of the largest airlines, Jet Airways and Air India, have decided to stop absorbing the surcharge on payments by agents made through credit cards. 

Both, by not absorbing the surcharge, aim to save Rs 30 crore each annually. Ironically, Kingfisher Airlines, in a huge financial crisis, has not issued any such order. 

?We decided to absorb that charge earlier because that ensured immediate money to us. Now, we have decided not to absorb it and have asked the agents to make that payment, as they also get a 50-day period to make their credit card payments,? said a senior AI official, who did not want to be identified. Likewise, Jet has decided not to absorb the two per cent surcharge from May 1. 

Agents make payments to airlines by cheque or credit card. In the latter transaction, money reaches the airline immediately but the clearance of cheques normally takes three to four days. 

Recently, IATA told travel agents they?d have to remit ticket sale proceeds to airlines every week, in place of the current fortnightly span. It has slated the change to take effect from June 1, even as agents are demanding a deferment in implementation. The proposed change would substantially change the way airline ticketing business is done in India. 

IATA?s billing settlement plan (BSP) is a payment gateway for travel agents. Twice a month, agents are required to remit to airlines the proceeds from ticket sales. For instance, if a ticket is sold by an agent between the 1st and 15th of a month, the agent deposits the amount to the airline on the 25th or the 30th of that month. According to the new plan, for all sales between the 1st and 7th, an agent will have to make payment to the airline on the 15th and so on. Low-cost airlines such as IndiGo, GoAir and SpiceJet are not members of the BSP. 

Agents say they will find a way out by talking to the banks. ?Our payments to airlines are huge and any bank would like to waive the charge for us. We are talking to the airlines and also asking them to talk to banks or allow us to talk to them. We expect a solution on this soon,? said Ajay Prakash, president, Travel Agents Federation of India, which represents half the country?s agents. 

He said airlines were ready to absorb the surcharge for tickets booked on their websites ?but not for us?. ?The credit payment is only 10 per cent of their total revenue. 

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Air India to induct Dreamliner next month

Mumbai, April 16: 

Air India will induct the first of the 27 Boeing 787 Dreamliners next month. 

The Dreamliner will be inducted in the second or the third week, sources in Air India said. Around 30 pilots will be trained for flying the new plane in Singapore. 

The national carrier is expected to get, at least, three of these planes this year. The Dreamliner will have Delhi and Mumbai as its operational bases. Its flying schedule has been proposed on the assumption that it would fly 4,500 hours per annum implying daily utilisation of 12-13 hours. 

The aircraft, meant for long-haul flights, is light-weight and made of composite materials such as carbon fibre and is reported to be fuel-efficient, which would help Air India cut its operational costs significantly. 

Raising funds 

Meanwhile, the national carrier has invited merchant bankers to raise working capital loans up to up to $1 billion from overseas markets. 

The move follows the Government allowing the aviation industry borrow up to $1 billion annually through the external commercial borrowing (ECB) route. 

The Government approved the much-awaited financial restructuring plan (FRP) that involves Rs 30,000-crore equity infusion over the next eight-year period and a debt recast (CDR) of Rs 21,200 crore. 

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Outstandings: Kingfisher in talks with GMR on payment schedule

Hyderabad, April 16: 

The ailing Kingfisher is in talks with GMR Group on payment schedule for outstanding dues. The airline had agreed upon a schedule earlier but could not follow it. 

?They have been facing a bad patch. They were not able to meet that schedule. But they did clear part of their dues in EMIs. It has reduced the number of flights and operating on cash-and-carry these days. They are paying about Rs 25 lakh a day,? Mr P.S. Nair, Chief Executive Officer (Corporate) of Airport Sector in GMR Group, told Business Line. 

The outstanding dues from airlines (mainly from Kingfisher and Air India) are put at Rs 300 crore. Of this, Kingfisher's share is about Rs 50-60 crore. 

?It is not current payables but outstanding dues which is a cause of worry,? he said. Airlines, generally, get a month's time to pay from the date of bill generation. ?That is a general norm,? he said. 

GMR was upbeat about the reported Rs 30,000 crore plan to revive the fortunes of Air India. Mr Nair was hopeful that Air India would payback its dues to GMR when huge funds were infused. 

Delhi airport bleeding 

Mr Nair said that the Delhi airport is bleeding with its efforts to increase airport fee not getting through. 

?Since 2001, there was only one hike in 2009. That too was a pittance. It should at least cover increase in inflation. What we have been asking for is not something out of the box. We have prepared proposals according to the Concession Agreement we signed,? he said. 

The airport operator has asked for a fee of Rs 770. ?The process is on,? he added. 

Male Airport 

Mr Nair said the company was confident of completing the first terminal in 2014 at Male according to schedule. 

The political situation had not impacted the project timeline there. ?There is no decline in passenger traffic (after political events),? he said. 

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