Air India Express likely to cut down services to Gulf

TRICHY: Air India Express' flights to the Gulf countries from Trichy are likely to be fewer in winter, and Abu Dhabi, a sought-after destination, is most likely be taken off the route map in October.

At present, the carrier operates two services a week: Chennai-Trichy-Abu Dhabi and Abu Dhabi-Trichy-Chennai on Thursdays and Saturdays. Though the revised proposal is yet to get the nod from the office of the Director General of Civil Aviation (DGCA), it is most likely to be implemented from the third week of October, said an official with Air India Express, who refused to be identified.

In November last, the Air India Express had announced the cancellation of nine flights (to Kuala Lumpur and Chennai) between November 7 and November 13 due to what it called "crew constraints and inevitable reasons". This time, the Air India Express has attributed the cancellation to "operational difficulties", the source said. Prior to the Air India pilots strike, the carrier was operating daily flights to Dubai, and three services every week to Abu Dhabi.

"This is shocking news for travel agents and air travelers who have benefited from these services," says V Subbu, chairman, IAAI (IATA Agents Association of India), Trichy regional committee. Subbu has since written to Air India authorities pleading against cancelling flights out of Trichy. According to him, passengers who work in the oil fields in West Asia fly this sector frequently, and it was considered a potential sector for Air India Express for elite passengers from across Tamil Nadu. Moreover, the cancellation of the Abu Dhabi sector would mean that Trichy will lose a connection to Chennai, a much-needed route for medical tourism and the leisure industry.

In May this year, the automation system of Air Traffic Services (ATS) was inaugurated at the Trichy airport for handling a greater volume of aircraft movement. "We cannot afford to lose Abu Dhabi," said an Air India Express official without wanting to be quoted. However, the solace is that the thrice-a-week flight to Dubai would be restored to a daily service in the winter schedule, he clarified.

The neglect of Trichy is complete now that the national carrier had already ceded Kuala Lumpur and Colombo sectors to Air Asia and Sri Lankan airlines respectively, added Subbu. The airline does not fly to Colombo and Kuala Lumpur due to "increasing fuel costs and non-availability of aircraft". "It is true we lost out to Air Asia in the Kuala Lumpur sector, and we do not want to operate to Colombo directly from Trichy," the Air India official told TOI.

Trichy airport, which until the pilots strike last year handled 34 services daily, reduced services to 24 services in December. Now, the services have shrunk to 20 a day, said terminal manager Kumaraswamy.

Though close to international destinations like Colombo and Kuala Lumpur, Air India Express does not fly to these places from Trichy. The only international destinations for Trichy are at present Singapore and Dubai. Out of these two, Air India Express might soon cede Singapore to Tiger Airways, said the source.

http://articles.timesofindia.indiatimes.com/2012-09-09/madurai/33712945_1_air-india-express-trichy-airport-v-subbu

Govt pushes for reforms, angers allies over 51% FDI

Ending months of perceived policy paralysis, the UPA government Friday finally bit the bullet and pushed ahead with the boldest reforms yet by allowing 51% foreign investment in multi-brand retail - and opening the aviation sector - triggering expected outrage among some of its allies as well as the opposition.

The government clarified that states which did not favour 51 percent FDI in multi-brand retail - which opens up India's estimated $450 billion retail market to foreign supermarkets like Walmart and Carrefour - were free to not implement the policy.

This effectively means that states ruled by Congress governments can implement the decision while states ruled by non-Congress parties or the central government's allies will not have to implement it

The move comes at a time when the government's reputation has been battered by a host of alleged scams and Prime Minister Manmohan Singh's reputation as a reformer has taken a dent, with a leading US daily portraying him as "a tragic figure" and Time magazine describing him as "an underachiever".

Manmohan Singh was the prime mover behind this audacious but politically fraught decision.

Informed sources said he reportedly pushed for the decision at the meeting of the cabinet committee on economic affairs (CCEA), saying the UPA government needs to "bite the bullet".

"We have to bite the bullet. If we  have to go down, let us go down fighting," the prime minister was quoted by the sources as having said there.

The government also approved FDI in aviation and gave its nod for disinvestment in four PSUs, part of a package of reformist measures, along with the steep hike in diesel prices announced Thursday, which are widely seen as aimed at shoring up the faltering economy and the international standing of India that has taken a severe beating in recent months.

Soon after the decisions were made known, the prime minister appealed to the people to support the government's steps that were "taken in national interest."

"I urge all segments of public opinion to support the steps we have taken in national interest," the PMO's Twitter handle quoted him as saying. "I believe that these steps will help  strengthen our growth process and generate employment in these difficult times."

The decision could potentially be a game-changer for India's retail market, which is dominated by neighbourhood stores.

While industry bodies welcomed the  move, ally Trinamool Congress joined the angry chorus of the Bharatiya Janata Party (BJP) and the Left to denounce the move, which the government insisted  would not hurt India's national interests.

BJP and Communist leaders called the  decision a "betrayal" of the people's interests.

"This is a complete betrayal, also of  parliament," BJP MP Balbir Punj said. Communist Party of India's D. Raja said a corruption-tainted regime was trying to salvage its image.

West Bengal Chief Minister and Trinamool Congress Mamata Banerjee was furious and said she would not stand for it.

According to Trinamool MP Kunal Ghosh, the party's parliamentary board will meet Tuesday to take a final decision, which could even lead to withdrawal of support from the government. "All options are open. We are ready  to take any kind of strong decision," he said.

DMK president M.Karunanidhi also said his party has opposed FDI in retail as it would result in competition for small traders. 

The BJP, whose opposition to the coal block allocations paralyzed parliament's monsoon session, vowed to unleash nationwide protests against the FDI unveiling.

Attacking the central government's decisions allowing overseas investments in multi-brand retail and raising diesel price by Rs. 5 a litre, the CPI-M too said it, along with other secular parties, will launch a nationwide stir against the measures.

As criticism mounted, Commerce Minister Anand Sharma defended the sweeping policy changes, viewed as a major  step to spur economic reforms.

"It is not a sudden decision," Sharma told the media, explaining the decisions taken Friday.

The cabinet also decided that overseas retailers setting up a single brand store in India must source at least 30 percent of their goods from Indian companies, preferably from micro, small  and medium enterprises (MSMEs). Earlier it was mandatory for the overseas firms to source 30 percent of the goods from MSMEs.

The minister said the decision was first taken last November but subsequently held back following opposition mainly from the Left, BJP and the Trinamool.

But it was "never rolled back", Sharma clarified.

He said since then the government had held intense discussions with various stakeholders with a view to creating broad consensus. He said among those who were spoken to were farmers associations, civil society groups, regional chambers of commerce and industry as well as state governments.

"I had personally written to every chief minister of the country, spoken to almost all of them. There are states  which reacted to the proposal very well, some expressed opposition. The response has been a mixed one."

According to the government, the move comes with some conditions for the investors.

Sharma said multi-brand FDI was expected to generate a large number of jobs in rural India besides giving remunerative prices to farmers for their products.

Govt allows foreign airlines to buy stakes in local carriers

INDIA-AVIATION-FDI:Govt allows foreign airlines to buy stakes in local carriers

India allowed foreign airlines to buy stakes of up to 49 percent in local carriers in a long-awaited policy move, providing a potential lifeline to the country's debt-laden airlines by opening up a fresh source of funding.

Friday's decision, coming on the back of a controversial diesel price hike on Thursday, is likely to intensify conflict within the ruling Congress party coalition, with its own allies previously blocking such a move.

"This is a very positive step," said Amber Dubey, head of aviation at KPMG India, a consultancy. "I don't expect a flurry immediately... but there will be interest. A lot of people have been watching."

Newly affluent Indians, with increasing disposable incomes, have already started treating flying as a mode of transport rather than a luxury, providing a massive local market.

However, any global carrier eyeing a stake in an Indian carrier must weigh up the benefits of a market with high long-term growth potential but one that has been squeezed by high costs and fierce price competition.

Praful Patel, India's heavy industries minister, told reporters that foreign carriers would be allowed to take a stake of up to 49 percent in local airlines. Previously investment by foreign airlines was not allowed.

The 49 percent limit includes both foreign direct investment and foreign institutional investment, according to a government document seen by Reuters.

Ailing Kingfisher Airlines, which was India's No. 2 local carrier a year ago but has since grounded most of its fleet, has lobbied hard for this move in hopes that it can attract a foreign airline investor, although none has publicly expressed interest.

Budget carrier SpiceJet, the fourth-largest of India's six main airlines, said on Thursday it was in initial talks with several Gulf carriers and was waiting for the government to ease rules before it takes a final call.

With global airlines buffeted by the European debt crisis and high fuel costs, cash-rich and fast-growing Gulf carriers such as Dubai's Emirates, Qatar Airways and Abu Dhabi's Etihad are seen as the most likely buyers of stakes in Indian carriers, analysts say.

Boeing Coraised its forecast for the Indian plane market on Tuesday, saying the South Asian country would need 1,450 new aircraft worth $175 billion by 2031.

http://business-standard.com/india/news/govt-allows-foreign-airlines-to-buy-stakes-in-local-carriers/186903/on

Lakhs to have say in Air Kerala

Air Kerala, the dream project of the state, would emerge with the participation of  one million people at an estimated capital of Rs 200 crore.

While  delivering the presidential address at the special NRK session as part of  ‘Emerging Kerala’ on Friday, Chief Minister Oommen Chandy made it clear that Air India’s antipathy to the expatriates in the Gulf sector has forced the state to launch its own airline.

“We have raised many issues on Non-Resident Keralites and succeeded in most cases. But we were defeated in the case of Air India. Though we have raised the problems faced by the Gulf Malayalis on several occasions, they didn’t listen to our pleas,” he said.

The Chief Minister,  who is also the chairman of Air Kerala, announced that the company would provide concessional tickets to those NRKs who were unable to fly to their homeland for a period of over five years.

All the speakers in the NRK session welcomed the airline initiative and congratulated the government on the endeavour.

Earlier in the day, giving wings to the aviation project, the first of its kind in the country, the first meeting of the board of directors chaired by the CM decided to give shares to the public at a minimum value of `10,000 each as against `2 lakh earlier.

The fleet of Air Kerala will comprise  five aircraft.

The state govt, Cochin International Airport Limited and PSUs in the state would jointly invest 26 per cent of this amount while the rest would come from public participation.

 

http://newindianexpress.com/states/kerala/article606961.ece

Air Kerala plans domestic services

The Air Kerala proposal gained further momentum at Emerging Kerala 2012 as NRK top guns agreed on a concerted effort to start the budget airline, with intra-state services and services to Bengaluru and Chennai.

A board meeting of the company here on Friday decided to meet its Rs 200-crore capital through contributions of a minimum Rs 10,000 from small investors in the Gulf.

Besides, to meet the Centre’s stipulation that any airline seeking to fly international should have domestic services, a few services would be started initially.

The proposal received special applause at a special session with leading NRK businessmen Ravi Pillai, M.A. Yusuffali and C.K. Menon, who all offered contributions from more than 50,000 people in the Gulf.

Mr Yusaffali also wanted the state government to consider an NRK infrastructure bond assuring investors fair returns. This could be put to good use by the government which had little money for infrastructure investment.

He also mooted an NRK bank and that the government should take up with the Reserve Bank, which had a fairly relaxed policy now.

Mr Mohammed Ali of the Galfar Group proposed that the share of NRK in the infrastructure company of the government, Inkel, be either bought out by the government or privatized. He also suggested reviving the idea of a luxury shipping service to the Gulf.

Mr Oommen Chandy assured NRKs that their demands would be considered and an update of proposals that came up at Emerging Kerala would be put out.

http://www.deccanchronicle.com/channels/cities/kochi/air-kerala-plans-domestic-services-039

Aviation sector opened up

The Cabinet Committee on Economic Affairs, on Friday, approved 49 per cent foreign direct investment (FDI) in the aviation sector, allowing foreign carriers to pick up stake in domestic airlines. This is likely to pave way for the much-needed equity infusion into domestic carriers, including loss- making Kingfisher Airlines, which are passing through turbulent times as majority of them are crying for funds to support their operations. “Though FDI of up to 49 per cent, 75 per cent and 100 per cent was there in the aviation sector, foreign airlines were not allowed,’’ Civil Aviation Minister Ajit Singh told reporters after the Cabinet meeting.

Current norms

Current FDI norms allow foreign investors, not related to airline business, to directly or indirectly own an equity stake of up to 49 per cent in an Indian carrier. Allowing foreign airlines to pick up stakes in Indian carriers has been a long-pending demand of the aviation sector.

The Indian aviation industry and the domestic carriers are suffering losses because of high taxes on jet fuel, high airport fees, costlier loans, poor infrastructure, and cut-throat competition. Except IndiGo, all airlines have posted losses in the financial year ending March 31.

Cash-strapped Kingfisher Airlines, which is burdened with a debt of over Rs.7,000 crore, and is operating with a bare minimum fleet, has been the most vocal supporter of allowing FDI in the sector.

The opening of the sector to foreign airlines may, however, bring good news for passengers who would benefit from more competitive fares, better product and services and better international connectivity.

Foreign carriers such as British Airways and Virgin Atlantic Airways have expressed interest in investing in Indian carriers.

However, Lufthansa Airlines said it had no plans to make further investments in Indian carriers.

http://www.thehindu.com/todays-paper/tp-business/article3899244.ece

Will open up opportunities for airlines, say experts

The aviation industry, on Friday, welcomed the government’s decision to allow foreign airlines to pick-up up to 49 per cent in Indian carriers.

“The decision is good and is in the interest of the common man. With more competition, fares will come down. Some airlines are lobbying against this because they do not want competition,” said Captain GR Gopinath, founder, Air Deccan, and Chairman, Deccan Aviation.

Addressing concerns

“Now the government must address the concerns of foreign airlines regarding taxation issues so that they come. Rather than existing airlines getting benefited by this decision, new airlines without any legacy issues can start operation with investment from foreign airlines. India has not seen the birth of an airline in last eight years,” said Captain Gopinath.

A little too late

Kingfisher Airlines Chairman Vijay Mallya had lobbied for allowing FDI from foreign airlines but the decision came too late to accrue any tangible benefit for his troubled airline.

“We are pleased. This will open up wide range of opportunities. Kingfisher will now be able to re-engage with prospective airline investors in a more meaningful manner and more towards recapitalization,” the airline said in a statement.

“The decision is good and for SpiceJet and Go Air, it will be a game changer,” said Jitender Bhargava, former executive director, Air India.

Jet Airways said, “We welcome any policy initiated by the government.”

Earlier, aviation stocks gained substantially during the day on the back of this move. Kingfisher gained 8 per cent, SpiceJet, 4.39 per cent and Jet Airways 2 per cent on the BSE. Some foreign airlines that are willing to invest are British Airways, Emirates and Etihad Airways.

“It was a long awaited move. This would help carriers induct fresh equity that can be used to pay off debts. It would also stimulate the incubation of new airlines,” said Ankur Bhatia, ED, Bird Group.

“More than funds inflow, the move will help in bringing best practices to the Indian aviation sector and improve the safety and legal compliance aspects as well as corporate governance standards,” said Ramesh Vaidyanathan, Partner, Advaya Legal

http://www.thehindu.com/todays-paper/tp-business/article3899240.ece

Garbage on ground, impact in ‘mid-air’

Dumps near airport a bird-hit threat to flights

Illegal meat and fish stalls and five garbage dumps in the vicinity of Thiruvananthapuram international airport are posing a safety hazard to the aircraft landing and taking off from there.

Six bird strikes occurred at the airport last year. Till July this year, three bird strikes were reported, forcing the Airports Authority of India (AAI) to be on the guard against these threats to flight safety.

The Airfield Environment Management Committee (AEMC) with the Secretary, Transport, as the chairman, and the Airport Director as convener, has found that open meat and fish stalls at Sulaiman Street, Ponnara Bridge Road, All Saints College area, Sanghumughom beach, Muttathara, and Kochuveli station road are safety hazards for aircraft as they increase avian activity.

With the city Corporation yet to find a permanent solution to the garbage crisis, the open garbage dump at Bangladesh colony playground, Ponnara bridge, behind Bhima Masjid, Vallakadavu, and Cheriyathura are fertile grounds for birds.

The illegal stalls and garbage dumps were noticed during an inspection carried out by the AEMC, which is responsible for identifying places which attract birds and for implementing remedial measures. Its observations were presented at a recent meeting.

Over the years, the AAI had been urging the city Corporation to check illegal dumping of garbage in the three-km buffer zone and to close down illegal fish and meat stalls within a 10-km radius of the airport. But, the pleas remained unheeded. New fish stalls are mushrooming in places such as Eenchakkal and the illegal dumping of garbage continues along the NH bypass corridor.

‘Bird-scarers’

As part of an SPO (standard operating procedure) worked out to deal with the problem, the AAI has deployed ‘bird-scarers’ equipped with crackers along the perimeter wall of the airport to scare away birds from the runway when the aircraft land and take off. Spraying of insecticides, installing pigeon-proof hangars for the terminal buildings, proper collection and disposal of garbage, and regular inspection of the operational area are some of the other steps taken by the AAI inside the airport to keep birds at bay.

Airport Director V.N. Chandran told The Hinduthat an 800-sq.m. market shelter had been mooted as part of the AAI’s Corporate Social Responsibility (CSR) initiative. The Corporation has given approval for the work in 21 cents near the gates of AAI property and CISF barracks at Perunelli junction near Muttathara.

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·  Illegal meat and fish stalls near airport attract birds

·  Three bird-hits were reported in airport till July this year

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/article3899807.ece

LDF plans stir against Aranmula airport project

To counter Central clearance legally

The Left Democratic Front (LDF) has alleged that the United Democratic Front government is trying to impose the controversial private airport project on the hapless villagers of Aranmula by including it in the Emerging Kerala meet.

Addressing a press conference here on Friday, LDF Aranmula Assembly committee convener T.K.G. Nair and president A.K. Muraleedhara Kurup asked the government to abandon the project in the larger interests of the people for protecting the paddy fields, wetlands and the glory of the heritage village of Aranmula.

They said that a natural stream across the Aranmula puncha (paddy fields), besides a vast expanse of the paddy fields, had been illegally converted in the name of the airport project.

The Legislative Committee on Environment had visited Aranmula in February following opposition to the project from the villagers and socio-environmental organisations.

Disastrous impacts

The committee and several experts had reported that conversion of the paddy fields and wetlands would cause disastrous impacts on the environment and hence the project should be shelved, Prof. Nair said.

LDF convener VaikomViswan would inaugurate a march to the Aranmula puncha on Sunday demanding restoration of the natural stream that was converted in the name of the airport project, he said.

The march would begin from Aranmula Iykara junction at 10.30 a.m.

K.P. Rajendran, former Revenue Minister; Mathew T. Thomas, former Transport Minister, and A.A. Aziz, Revolutionary Socialist Party State secretary, would address the march.

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·  Says LDF had given only conditional clearance

·  LDF to take out march to Aranmula puncha tomorrow

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/article3899802.ece

Dreamliner to land in Bangalore

New winged beauties are calling on the Bangalore International Airport. After having received the longest civilian aircraft, the Boeing 747-8, that was operated by Lufthansa to Bangalore from Frankfurt on Wednesday, it is the time for the BIA to receive another latest offering from the Boeing stable.

The most-talked civilian aircraft in the Indian aviation circles in the recent times, the Boeing 787 Dreamliner, which joined the Air India fleet recently, will touch down at the BIA for the first time on September 19.

The brand new 256-seater Dreamliner in vibrant red and orange Air India colours will fly into the BIA from New Delhi at 7.10 p.m. Air India will take the honour as the first airline to land and take-off this most modern aircraft from Garden City, a release said.

Incidentally, Air India was the first airline to land and take off from the new green field airport (BIA) at Devanhalli in 2008.

The release said that the arrival of Dreamliner aircraft into Bangalore will give a fillip to the burgeoning domestic aviation sector in India, amid the auspicious Ganesh Chaturthi being celebrated across the country on September 19.

This aircraft is the first of the 27 Dreamliners that Air India plans to induct into its fleet, it added.

On the aircraft, the release said, the cabin has less noise, the air is cleaner due to the inclusion of high-efficiency particulate air filter, and windows are 60 per cent larger.

The aircraft is configured to accommodate 256 seats, including 18 full flat business class seats and 238 economy class seats.

http://www.thehindu.com/todays-paper/tp-national/tp-karnataka/article3899432.ece

Flight delayed

The Sri Lankan Airlines flight to Colombo from here was delayed for over six hours at Tiruchi Airport owing to a technical snag. According to sources, the flight (no. UL 132) scheduled to depart at 9.20 a.m., was detained after a fuel leak was detected. The problem was set right by an engineer and spares flown in from Colombo . The flight with 141 passengers departed at 4.45 p.m.

http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/article3900022.ece

Commercial flight operation soon

Civil aviation security officials visit airport

The much awaited launch of commercial flight operation from Puducherry airport, which is expected to boost tourism and other sectors, is all set to start soon.

As a prelude to the launch, a team of top officials from the Bureau of Civil Aviation Security (BCAS) visited the Puducherry airport on Thursday to put in place an effective security apparatus. It included physical barriers and structures, installation of requisite equipment, manpower requirements, the agency to be deployed for security and others. They held a lengthy discussion with the Puducherry airport authorities.

 Though the airport, controlled by the Airports Authority of India (AAI), is classified as functioning airport, it is still now used only for operating charted flights. Besides the operation and handling of choppers, the airport is mainly used for movements of high profile VVIPs. Considering the immense potential for commercial operation, the Union Territory and the AAI had entered into a Memorandum of Understanding in 2007 for expansion of the airport in two phases. It was aimed at extending the runway up to 5,000 feet. Construction of passenger terminal, upgrading Air Traffic Control system, providing passenger amenities, night landing facilities, security friendly initiatives formed part of the plan. 

A senior official of the Airport Authority of India told The Hinduthat more than 90 per cent of the planned works had already been completed. The runway had been extended to 5,000 feet.  “Hectic activities are on at the airport. Operation of commercial flights may become a reality within 3 months. All necessary works have been speeded up ,” the official said. 

 It was learnt that the Ministry of Civil Aviation had already given provisional clearance to operate flights from Puducherry airport. 

Many airlines had completed study on economic viability of operating flight service from Puducherry to other destinations. Some of them had given green signal considering the domestic and international tourists to Puducherry .

 Of them, sources added that Spicejet had almost finalised the plan to include Puducherry in its service coverage. It was initially expected to operate between Puducherry and Bangalore. The small aircraft with the seating capacity of 60 to 70 passengers was said to be fit for the route and the facilities available at Puducherry airport.

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·  Over 90 % of works completed

·  Ministry of Civil Aviation has given provisional clearance to operate flights

http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/article3899781.ece

Air Kerala on a strong ground

To take off on getting exemptions from the Union government

A meeting of the Board of Directors of Air Kerala here on Friday decided to launch the proposed airline with an initial capital of Rs. 200 crore as soon the Union government grants it exemption from a couple of norms to start international operations.

The State government, Cochin International Airport Ltd. and public sector undertakings will together hold 26 per cent of the shares of the company. The public will hold the rest, with non-resident Keralites expected to take a major share. The Board has set Rs. 10,000 as the minimum investment to be a shareholder, Chief Minister Oommen Chandy told presspersons after the meeting held on the sidelines of the Emerging Kerala summit.

He said Ernst & Young, consultants, had been asked to submit an updated feasibility report for the airline as the initial report was drafted some six years ago.

Mr. Chandy said Prime Minister Manmohan Singh was in favour of granting exemption to Air Kerala from the norms stipulating that an airline should have a fleet of 20 aircraft and five years’ experience in domestic operations before it can fly to international destinations.

V.J. Kurian, Managing Director of Air Kerala, said that the feasibility report was likely to be obtained within three-and-a-half months.

“We look at almost two lakh people participating in the airline venture initially. We would like to make it the largest shareholding company in the world, ultimately growing to 10 million people. This unique model means that the shareholders will be passengers also,” Mr. Kurian said.

Yousuf Ali, member of the Director Board, said there was already an offer to invest Rs. 100 crore in the proposed airline.

But the government, he said, is particular about having public participation

http://www.thehindu.com/todays-paper/article3899694.ece

Foreign airlines allowed to pick up 49% stake in domestic carriers

New Delhi, Sep 14: 

After a gap of close to 16 years, foreign airlines will again be allowed to invest in domestic airlines.

On Friday afternoon, the Cabinet Committee on Economic Affairs approved a proposal allowing foreign airlines to acquire a stake of up to 49 per cent in domestic airlines. For the moment, Air India is being kept out of the list of airlines which could become a potential target for acquisition by international airlines.

The proposal of a foreign airline will have to be cleared by the Foreign Investment Promotion Board (FIPB) before the investment can go through. FIPB has representatives from Ministries of Home, External Affairs and Civil Aviation and is being seen as a way to ensure the safety and security of the Indian skies.

Till 1996, foreign airlines were allowed to invest in India, which saw Kuwait Airways and Gulf Air acquire a stake in Jet Airways. This also saw a tie-up between the Modi Group and Lufthansa to float an airline called ModiLuft.

When the policy was reversed, Jet Airways acquired the stake of the foreign airlines. It also saw the dreams of the Tatas re-entering the aviation sector with Singapore Air being shattered.

Welcoming the latest move, KPMG’s Head-Aviation, Amber Dubey, said that allowing 49 per cent stake to foreign airlines will create access to capital, global connectivity, technology and best practices. “This could lead to establishment of new airlines in India and perhaps, change in ownership structure of certain Indian carriers. All this augurs well for Indian passengers. Increased competition would lead to better offerings, greater efficiency, cheaper airfares and more power to the passenger”, he said.

Industry watchers feel that the reversal in FDI norms is likely to see foreign airlines looking to set up small airlines here rather than acquire existing airlines. ``At the moment, Spicejet and Go Air seem to be the most probable candidates that could see some interest from foreign airlines. This is because both are promoted by those who are not hardcore airline people. With unrealistic valuation and mounting losses most existing airlines are unlikely to be a choice for foreign airline,” a senior airline executive said.

http://www.thehindubusinessline.com/industry-and-economy/logistics/article3897139.ece

Protest over clearance to Aranmula airport project

Kochi, Sept. 14: 

The Union Ministry of Environment and Forests’ clearance for reclaiming paddy fields for the proposed Aranmula airport project has evoked sharp criticism from leaders of both ruling UDF and the Opposition LDF.

Environmental activists, political parties crossing party lines and religious organisations are against the airport project. “The permission granted by the Mo EF is suicidal and blatant violation of the heritage laws,” Kummanam Rajasekharan, general secretary of the Hindu Aikya Vedi, said.

‘No proper studies’

Activists said that the Assembly Committee on Environment had in its observation said that the Industries department had not conducted any geographical and environment impact assessment or held any discussions with allied departments before granting in-principle clearance to the airport project.

The chairman and a member of the committee said it was improper to go ahead with the project before conducting such studies. The committee said implementation of the project would destroy huge extent of paddy fields, drinking water resources, and the ecosystem.

They said conversion of vast stretches of paddy fields for the proposed project would lead to irrevocable environmental problems. Depletion of the groundwater table and pollution of wells has been reported from certain residential plots in the immediate vicinity of the already converted paddy fields, they said.

And yet, the MofEF has granted permission to fill vast stretches of paddy fields stating that there was no paddy cultivation for the past 10 years.

“No more reclamation of paddy fields in Aranmula would be allowed,” K. Haridas, Aranmula Heritage Village Action Council President said. “There is appears to be some lobby bent upon destroying the Heritage Village and its natural beauty by making a concrete jungle in the name of airport,” he alleged.

Controversy overAhluwalia’s remarks

The Deputy Chairman of the Planning Commission Montek Singh Ahluwalia's statements that Kerala should not worry about food security and since the State has shortage of land it should think of high-value projects rather than going for paddy cultivation has added fuel to the fire. Responding to this, veteran Congress leader V.M. Sudheeran alleged that the statement of Ahluwalia would only strengthen the hands of the land mafia.

Leader of the Opposition in the State Assembly V S Achuthanandan alleged that there was some conspiracy behind the statement of the Deputy Chairman of the Planning Commission, which emanated at time when the Emerging Kerala summit was under way here.

He warned that the attempt to reclaim the paddy fields in Aranmula for the proposed airport would not be allowed at any cost.

http://www.thehindubusinessline.com/industry-and-economy/logistics/article3897157.ece?ref=wl_industry-and-economy

Kerala decides to float own airline

First such venture in India to tackle Middle East passengers

Kochi: The Kerala government yesterday decided to go ahead with its plan of launching an airline floated by the state, the first such venture in India. The director board of the proposed Air Kerala airline met here, chaired by chief minister Oommen Chandy, who is also chairman of the airline board in his capacity as chief minister.

The announcement could not have come at a better time as hundreds of passengers to Gulf countries were left stranded in the state as the national carrier Air India decided to abruptly cancel six of its weekly flights to the Gulf sector. Reports indicate that the decision was taken to make those aircraft available for Haj flights to operate from Uttar Pradesh.

Briefing the details of the board meeting of the airline company, Chandy said Kerala would ask the federal government to waive two key conditions that are coming in the way of approval for Air Kerala, namely the need to have operated domestic services for five years, and a fleet of 20 aircraft. “When Air India Express began operations they had only two aircraft and we will request that the condition of having 20 aircraft be waived for us , too,” Chandy said.

Stating that the airline venture will be a people’s project, Chandy said people could invest with a minimum amount of Rs10,000 (Dh664) in shares, as against the minimum investment of Rs2,00,000 proposed earlier. The chief minister said a lower minimum investment level was kept in order to enable ordinary non-resident Keralites also to participate in the venture. Air Kerala is being established as a subsidiary of the Cochin International Airport Ltd, which was India’s first joint-sector airport project.

The first phase of the airline venture will involve an outlay of Rs 2 billion, and aircraft are expected to be leased for the project. The state government will have an equity of 26 per cent in the venture, and the remaining will be shared by individuals and institutions. The airline plans to begin operations with five aircraft, and the focus of its operations will be the Gulf sector.

Meanwhile, air travel industry expert K.V. Muraleedharan criticised Air India’s decision to pull out six weekly flights from Kerala till October 12. The move has put scores of passengers who had booked tickets months in advance in a quandary. He said chief minister Chandy also had to take responsibility for the situation, and that as an emergency measure, some larger-capacity aircraft available with the national carrier should be used to transport passengers who have been stranded in Kerala

http://gulfnews.com/news/world/india/kerala-decides-to-float-own-airline-1.1075107

Aviation stocks soar ahead of FDI announcement

Govt relaxes norms for investment after market hours

Mumbai, Sept. 14:  

Airline stocks gained significantly on Friday, on expectation of a favourable decision on FDI in aviation.

Later in the day, the Government relaxed norms for foreign direct investment in the aviation sector, allowing international airlines to buy up to 49 per cent stake in local carriers.

Positive move

While SpiceJet went up 4.39 per cent, Kingfisher Airlines gained 7.88 per cent and Jet Airways surged 1.97 per cent on the BSE. Trading volumes have also seen significant increase.

Aviation analysts told Business Linethat the move will attract money for the bleeding Indian aviation sector and will help expand the global presence of Indian airline companies. The sector has been ailing due to high fuel prices. Most local carriers are cash-starved and are in need of fresh capital.

“The move will be most positive for SpiceJet as its debt levels are low. The company is already in talks with foreign players,” said Sharan Lillaney, an analyst with a stock-broking firm, who tracks the aviation company.

Cartelisation possibility

Apart from SpiceJet, Go Air, which is on a slow and steady growth path, may also gain from the move, he added.

Analysts, however, feel that Jet Airways and IndiGo may not gain much from this as they are already close to 49 per cent of foreign ownership. Both the airlines had expressed reservations in the past that allowing global players will lead to cartelisation and takeover of Indian carriers.

Burdened with a debt of over Rs 8,500 crore, Kingfisher Airlines’ has been pitching for FDI in aviation. “Considering its current debt position, it will be challenging for Kingfisher to attract foreign players,” said Nikhil Vora of IDFC.

SpiceJet had said in the recent past it was open to selling a stake to a foreign carrier if it gets the right deal.

http://www.thehindubusinessline.com/todays-paper/tp-markets/article3898325.ece