Kingfisher Airlines Q4 loss trebles to Rs 1,150 cr

Kingfisher lost Rs 1,150 cr in the quarter to end-March, vs a loss of Rs 360 cr a year ago

Reuters / Mumbai May 31, 2012, 11:16 IST

Kingfisher Airlines' fourth-quarter net loss more than trebled as huge cuts in the number of flights compounded the woes of a cash-strapped carrier facing high fuel prices and intense competition for low fares.
The high-profile airline, which is owned by flamboyant liquor baron Vijay Mallya, lost Rs 1,150 crore in the quarter to end-March, compared with a loss of Rs 360 crore a year earlier.

Kingfisher, which was India's No. 2 airline until a year ago, has been the biggest victim of turbulence in India's aviation industry, where six main carriers face a total debt load of $20 billion and $2 billion in annual losses.

It is now the smallest carrier in India by market share. Shares in the airline have plummeted more than 80% since the beginning of 2011, shrinking the airline's market value to just under $100 million.

Kingfisher shares slumped as much as 6.3% in early trading on Thursday to a record low of Rs 10.35.

The carrier blamed losses on high fuel prices, a weak rupee and an "unprecedented, tough operating environment," but said it would return to normal services within 12 months.

"The company has a focused fleet re-induction plan and hopes to be back to full-scale operations in the next 12 months backed by a recapitalization plan that the company is actively pursuing and confident of achieving," it said in a statement on Thursday.

National carrier Air India has been forced to cut most of its international routes due to industrial action by its pilots, handing Jet Airways an opportunity to increase aggressively its market share in international routes.

Low-fare and mostly domestic carriers such as IndiGo - the only airline making money in India - and SpiceJet have also gained market share recently as Kingfisher and Air India have suffered.

SpiceJet said on Wednesday that its net loss for the January-March quarter had widened more than four-fold, but it expected lower costs once the company starts importing jet fuel directly.

Fund constraints

Kingfisher needs at least $500 million immediately to keep flying, according to the Centre for Asia Pacific Aviation, but there has been no sign of funding in the near term.

The company said its net loss for the year to end-March was Rs 2,330 crore, more than double its loss in the previous fiscal year.

India's plans to allow foreign airlines to invest up to 49% in local carriers - for which Kingfisher has lobbied hard - has not yet taken off, adding to its funding crisis.

Mallya has repeatedly insisted that several domestic and international investors are interested in his company, and for months the names of many foreign airlines and local tycoons have been reported as prospective White Knights, but so far there has been much talk and no money.

If Kingfisher fails to turn the airline around, its banks - which have $1.3 billion in loans outstanding - would be left to pick over the carcass in a country that does not have a formal bankruptcy process.

Loans are secured in part by a combination of guarantees by the airline's parent, the UB group, as well as Kingfisher shares, Mallya's personal guarantees, its Mumbai real estate assets and the Kingfisher brand itself, bankers said.

European planemaker Airbus, which has accommodated Kingfisher by pushing its aircraft deliveries back in the queue, would lose outstanding orders for 92 planes with a combined list price of $12 billion. It would also see Kingfisher's fleet enter the second-hand market.

http://business-standard.com/india/news/kingfisher-airlines-q4-loss-more-than-trebles/166355/on

Air India to turn to expat pilots sacked by Jet Airways

NEW DELHI: Air India will turn to expat pilots sacked recently by Jet Airways to beef up its dwindling numbers in a last-ditch attempt to normalise operations devastated by a 24-day strike by pilots.

"Air India seeks to operate a small international schedule from now on with the help of 200 pilots, for which it is looking to hire 50-60 expats sacked by Jet Airways recently," a senior official in the civil aviation ministry told ET.

The stricken national carrier is attempting to restore some semblance of normalcy to its crippled international operations, and improve financial performance to meet the milestones set by the government as a condition for the 30,000-crore bailout package. Money will be released only if the airline meets certain performance targets, such as dropping unprofitable routes.

The strike has cost the debt-laden airline more than Rs 330 crore in revenues and is worsening an already difficult financial situation. Air India's losses stand at Rs 20,000 crore and it has a debt of over Rs 43,000 crore.

Jet Airways, India's largest airline by market share, has decided to terminate the services of 72 expats after the near-collapse of Kingfisher Airlines forced several pilots of the Vijay Mallya-promoted carrier to seek jobs elsewhere.

Jet, which reported a doubling of losses in the fourth quarter ended March 2012, is looking to cut costs by hiring locals. Salaries of expat pilots are higher than those of their Indian counterparts.

Air India, whose operations have been affected by the 24-day strike by the 400-strong Indian Pilots' Guild (IPG), is operating a curtailed international schedule with nearly 120 executive/management pilots. The airline has sacked 101 of the 400 agitating pilots, who are demanding exclusive rights to fly Boeing 787 Dreamliner aircraft. The airline has not taken delivery of the aircraft so far.

However, after the terminations, the pilots have piped down.

Striking Pilots will Become Redundant

The striking Air India pilots have agreed to resume work if their colleagues are either taken back immediately or an assurance is given to this effect. The government, however, has rejected this demand saying the pilots should join without any preconditions.

"AI has already got in touch with some of the available pilots and if the IPG members do not rejoin, they will become redundant as Air India is working on a plan to fly only on profitable international routes. So our requirement for pilots is going to come down," the official said.

Flying on profitable routes is one of the milestones for Air India and the civil aviation ministry recently set up an oversight committee to decide the routes that would be shut and those that would continue. The airline's losses have been blamed on high costs and a large concentration of unprofitable routes.

Air India's decision puts further pressure on the striking pilots, whose numbers had started thinning due to strong government pressure. Some pilots have returned to work and there is a feeling of inevitability among those still on strike.

There is a shortage of commanders in India and domestic airlines heavily depend on expatriates to fulfill their needs. But a few members of the IPG, who did not wish to be identified, agreed there would be no place for them if 400 pilots were to start looking for jobs. About 500 expat pilots are employed by various domestic airlines, but their services are likely to be terminated by December 2013.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/air-india-to-turn-to-expat-pilots-sacked-by-jet-airways/articleshow/13694617.cms

Kingfisher Airlines Q4 loss trebles to Rs 1,150 cr

Kingfisher lost Rs 1,150 cr in the quarter to end-March, vs a loss of Rs 360 cr a year ago

Kingfisher Airlines' fourth-quarter net loss more than trebled as huge cuts in the number of flights compounded the woes of a cash-strapped carrier facing high fuel prices and intense competition for low fares.
The high-profile airline, which is owned by flamboyant liquor baron Vijay Mallya, lost Rs 1,150 crore in the quarter to end-March, compared with a loss of Rs 360 crore a year earlier.

Kingfisher, which was India's No. 2 airline until a year ago, has been the biggest victim of turbulence in India's aviation industry, where six main carriers face a total debt load of $20 billion and $2 billion in annual losses.

It is now the smallest carrier in India by market share. Shares in the airline have plummeted more than 80% since the beginning of 2011, shrinking the airline's market value to just under $100 million.

Kingfisher shares slumped as much as 6.3% in early trading on Thursday to a record low of Rs 10.35.

The carrier blamed losses on high fuel prices, a weak rupee and an "unprecedented, tough operating environment," but said it would return to normal services within 12 months.

"The company has a focused fleet re-induction plan and hopes to be back to full-scale operations in the next 12 months backed by a recapitalization plan that the company is actively pursuing and confident of achieving," it said in a statement on Thursday.

National carrier Air India has been forced to cut most of its international routes due to industrial action by its pilots, handing Jet Airways an opportunity to increase aggressively its market share in international routes.

Low-fare and mostly domestic carriers such as IndiGo - the only airline making money in India - and SpiceJet have also gained market share recently as Kingfisher and Air India have suffered.

SpiceJet said on Wednesday that its net loss for the January-March quarter had widened more than four-fold, but it expected lower costs once the company starts importing jet fuel directly.

Fund constraints

Kingfisher needs at least $500 million immediately to keep flying, according to the Centre for Asia Pacific Aviation, but there has been no sign of funding in the near term.

The company said its net loss for the year to end-March was Rs 2,330 crore, more than double its loss in the previous fiscal year.

India's plans to allow foreign airlines to invest up to 49% in local carriers - for which Kingfisher has lobbied hard - has not yet taken off, adding to its funding crisis.

Mallya has repeatedly insisted that several domestic and international investors are interested in his company, and for months the names of many foreign airlines and local tycoons have been reported as prospective White Knights, but so far there has been much talk and no money.

If Kingfisher fails to turn the airline around, its banks - which have $1.3 billion in loans outstanding - would be left to pick over the carcass in a country that does not have a formal bankruptcy process.

Loans are secured in part by a combination of guarantees by the airline's parent, the UB group, as well as Kingfisher shares, Mallya's personal guarantees, its Mumbai real estate assets and the Kingfisher brand itself, bankers said.

European planemaker Airbus, which has accommodated Kingfisher by pushing its aircraft deliveries back in the queue, would lose outstanding orders for 92 planes with a combined list price of $12 billion. It would also see Kingfisher's fleet enter the second-hand market.

http://business-standard.com/india/news/kingfisher-airlines-q4-loss-trebles-to-rs-1150-cr/166355/on

Kingfisher Airlines Q4 loss more than trebles

The company has a focused fleet re-induction plan and hopes to be back to full-scale operations in the next 12 months backed by a recapitalization plan

Mumbai: The net loss of cash-strapped Kingfisher Airlines Ltd more than trippled for the quarter ended 31 March 2012 owing to stubborn jet fuel cost and rupee depreciation

Vijay Mallya-promoted carrier, that scaled down its operations due to cash crunch, posted a net loss of Rs. 1152.52 crore for the March quarter compared to Rs. 355.54 crore the corresponding quarter of the previous year.

The sales for the reporting quarter declined to Rs. 741.12 crore from Rs. 1626.14 crore for 31 March 2011, mainly due to trimming operations.

Kingfisher Airlines had introduced a temporary “holding plan’’ wherein the carrier will fly only little over 100 flights a day instead of 350 plus flights a year ago.

“Kingfisher Airlines in now continuing on it’s previously stated “Holding Plan” with a limited fleet and simultaneously progressing on it’s aircraft reconfiguration plan to contain losses in this very tough operating environment for the Indian aviation industry,’’ the airline said in a media statement.

The company has a focused fleet re-induction plan and hopes to be back to full-scale operations in the next 12 months backed by a recapitalization plan that the company is actively pursuing and confident of achieving, it said.

The jet fuel cost for the airline for the reporting quarter declined to Rs. 545.12 crore compared to Rs. 668.42 crore for the March quarter of 2011.

The employees cost for reporting quarter came down to Rs. 136.96 crore from Rs. 172.05 crore and aircraft lease rental cost declined to Rs. 100.11 crore from Rs. 247.43 crore.

The decline in costs were largely because of “holding plan’’.

“The Indian aviation industry is confronted with an unprecedented, tough operating environment - intensified by consistently high fuel prices and the depreciating Indian rupee,’’ the airline said.

Fuel prices have increased by over 40% over last year compounded by the weakened rupee. The industry’s demand growth in the domestic market at 13% in FY12 over last year has been overshadowed by a 17% growth in industry capacity leading to a pressure on the yields and the load factor for the industry, the airline said.

Kingfisher Airlines never made a profit since its inception.

“There was an incremental one-time loss of Rs. 743 crore due to early redelivery of the aircraft and Rs. 338 crore due to restructuring costs,’’ the airline statement said.

The airline, which is eyeing foreign direct investment from international airlines, also blamed the adverse publicity for its poor performance.

“Rationalization of capacity in the last two quarters of FY12 and continued adverse publicity led to a disproportionate loss of revenue,’’ it said.

According to the financial statement, the airline has a total liability, including short and long term, of Rs. 14162.42 crore as of 31 March 2012.

The airline also made a net loss of Rs. 2328 crore in the last financial year against Rs. 1027.39 crore for the year 2010-11.

http://www.livemint.com/2012/05/31084657/Kingfisher-Airlines-Q4-loss-mo.html

Kingfisher Airlines net loss trebles in Q4 on high fuel costs, falling rupee

Bangalore, May 31:

Kingfisher Airlines net losses have trebled during the fourth quarter of last fiscal because of higher fuel costs and a falling rupee.

Net losses increased to Rs 1,151.52 crore, while income from services more than halved to Rs 741.27 crore, the airline's press statement said.

Notably, the fourth quarter losses contributed to almost 50 per cent of the company's total losses for 2011-2012. For the entire year, the company's losses more than doubled to Rs 2,328 crore (Rs 1,027.4 crore). The company's performance was impacted primarily due to additional fuel cost and additional cost due to depreciation of the Rupee and lower revenue generation due to reduction of operational capacity in an attempt to contain losses, the statement said.

During the fourth quarter of 2011-12, the company's fuel expenses came down by 18 per cent to Rs 545.12 crore because of reduction in operations. For the full year, fuel expenses grew nearly 30 per cent to Rs 2,945.89 crore.

In the filing with the Bombay Stock Exchange, the auditors have noted that the company has “incurred substantial losses and its net-worth has been eroded”. Aviation analysts and auditing experts pointed out that though the auditors were being conservative in their reporting, the company has sought to differ with them in a bid to help their balance sheet. For instance, the company said in the BSE filing, “Deferred Tax Asset is recognised on account of unabsorbed depreciation and business losses for the year ended March 31, 2012, aggregating to Rs 1,118.08 crore. The management is of the opinion that there is a virtual certainty supported by convincing evidence against which such deferred tax will be realised, notwithstanding that the auditors have opined to the contrary”.

Kingfisher Airlines stock price closed at an all-time low of Rs 10. 50, down nearly five per cent on Thursday.

http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3477792.ece

Passenger revenues nosedive on capacity rationalisation

Bangalore, May 31:

Rationalising of capacity led to drop in passenger revenues for troubled Kingfisher Airlines during 2011-12.

The airline announced its plans to rationalise its operations during the last fiscal in order to contain mounting losses. On the domestic sector, Kingfisher recorded an operating revenue drop of 14 per cent alongside five per cent reduction in capacity.

On its international routes, the company saw five per cent dip in operating revenues amidst six per cent reduction in capacity.

Towards the end of the fiscal, Kingfisher Airlines had to cancel its international operations as IATA suspended it from BSP platform. A press statement from the company said that the airline, while continuing its “previously-stated ‘holding plan' with a limited fleet”, is also progressing on its aircraft reconfiguration plans to contain losses. However, the company has a “focused fleet re-induction plan and hopes to be back to full-scale operations in the next 12 months”.

Lease rentals

Kingfisher Airlines believes that this would be possible with its recapitalisation plans and is confident of achieving it, added the release.

A reduced capacity has also brought down the company's aircraft lease rentals to about Rs 100 crore (Rs 247.43 crore) during the fourth quarter, while it came down to Rs 868.45 crore (Rs 984 crore) for the full year.

The company said in its filing to the BSE cited a clause in its agreement with lessors that the company is to pay lease rentals only in the event of breach of certain contractual obligations in future.

“The company has sought extension of time to meet a part of its obligations which were to be fulfilled by March 31, 2012, which it is hopeful of receiving. No provision is considered necessary as the Company is confident of meeting the relevant obligations,” it added.

Use fees

The use fees (hourly and cyclical utilisation charge) paid in respect of these leased assets have also been treated as maintenance reserves.

“The company is taking steps to formalise this understanding with the relevant lessors. In terms of the company's accounting policy, these use fees are initially included under loans and advances, and are expensed out to the profit and loss account of the time of incurrence of major maintenance expenditure/termination of agreements,” it observed.

http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3477791.ece

Foreign airlines tentatively interested in SpiceJet: CEO

Till FDI is approved we cannot take it forward. The interest is from Gulf and South-East Asia which will make the most sense. — Mr Neil Mills, CEO of SpiceJet

A day after SpiceJet reported a loss of Rs 249 crore for the quarter ended March31, 2012, the airline's Chief Executive Officer, Mr Neil Mills, spoke to Business Line on a host of issues including what impacted the financials of the airline

Excerpts from the interview:

What has been the single largest contributor to an almost five-fold increase in losses?

There is obviously the on going fuel cost. But the proportion of fuel cost in this quarter is actually lower as compared to the last quarter. However, it is still 55 per cent of revenue even though that is better than the 64 per cent for the full year.

The depreciation in the Rupee must have hit you badly.

Unfortunately, a lot of our costs are dollar denominated and the revenue is Rupee denominated. So there is a natural imbalance. The weakening of the Rupee has had an impact on our operating costs. However, since the quarter ended about two months ago revenue has certainly improved from where it was.

How much has the revenue increased?

About 10 per cent.

Has this been because of increase in fares?

Fares have had to be increased in order to offset some of the increase in operating costs, particularly on fuel. But this increase in fares has been supply and demand driven. Unless oil and Rupee significantly strengthen, we will have no choice but for this to continue. What we have been doing is to stabilise the fares at the current level. That is where they are today (and not where they were at the end of March) and are at least holding at that level going forward.

How long is forward?

That depends on how long fuel prices remain where they are.

Will importing fuel directly as you plan make a difference to fare levels?

Ultimately it will but not a huge proportion. We will have to see how successful the import of fuel will be although we think it will be very successful. We are planning the first physical import of fuel in the beginning of July.

What percentage of the ATF uplift will be imported?

That really depends on how successful the first import is. Let us see what we are going to save. We are confident that it will become a large proportion of our total fuel.

Where are you going to import it from and who are your importers?

We have not finalised that contract at this stage. It will take a few weeks. Getting storage in India has been the biggest challenge. But we have pretty much got it sorted out now.

Will imported fuel be available at all stations?

First, we will do it at a few target stations and then roll it through the network.

A full year net loss of Rs 605 crore. How does it look going forward?

A: It looks positive, that is why we continue to grow within India. We certainly believe in the long term growth story.

Are you looking to return some foreign pilots?

No, that is not us. We are not looking at doing anything drastic. We will do things in an orderly and controlled way.

What does controlled way mean?

We have renegotiated a couple of our contracts for about Rs 20 crore of our current costs. It is a one-off cost where we are trying to get a better cost base going forward. We have also signed a long term engine agreement.

Is there investor interest in the airline?

We have been talking to a lot of potential investors. SpiceJet has a lot of interest from third party investors who are mostly international.

Have any airlines shown an interest in SpiceJet?

They have shown a speculative interest. But till FDI is approved we cannot take it forward. The interest is from Gulf and South-East Asia which will make the most sense.

Are you looking to add to your fleet during the year?

We added another aircraft last night. We will finalise how many we intend to take in during the year in a couple of weeks. Six to seven aircraft will probably be added this year.

Any date for starting new international destinations for which the Government has given permission?

A: As soon as we get permission from foreign countries. It took 15 months to receive permission from India so we need to give foreign countries a little bit of time to do their bit.

Will you look to add more city pairs within the country?

We are continuously growing. We have grown by 10 new airports in the last 12months.

The Budget opened the ECB window. Will you tap into that?

ECB is something that we will look at but it is not particularly attractive at this point in time. How can you borrow in dollars with the Rupee being as volatile as it is?

What has been the impact of Delhi airport raising its charges?

A: We will try and pass as much as possible to the customer but it will make us relook at how many aircraft we base in Delhi. Currently, there are 11 machines in Delhi. We have not taken a decision on where we will base the aircraft.

http://www.thehindubusinessline.com/companies/article3477143.ece

SpiceJet Q4 loss widens

India's second-largest low-cost carrier, SpiceJet, widened its loss to Rs 249 crore for the quarter ended March 31, from Rs 59 crore in the year-ago period, owing to depreciating rupee and high fuel prices.

The carrier, after two consecutive years of profit, ended 2011-12 with a loss of Rs 605 crore, against a net profit of Rs 101 crore in 2010-11 and about Rs 62 crore in 2009-10.

The annual loss worsened the net worth of the airline to Rs -153 crore in 2011-12 from Rs 321 crore in 2010-11, according to BS Research Bureau.

The airline saw a 46 per cent increase in revenue to Rs 1,113 crore in the fourth quarter of 2011-12, compared to Rs 760 crore in the year-ago period.

Though the airline carried less passengers in the fourth quarter, it saw an 18 per cent increase in revenue.

Load factor was at 74 per cent, compared with 81 per cent in the year-ago period.

http://wap.business-standard.com/storypage.php?id=5&autono=475878

GMR Infra posts Rs 366 cr loss in Q4 Losses narrowed by 64% compared to Jan-Mar 2011

GMR Infrastructure today reported a consolidated net loss of Rs 366.16 crore for the January- March quarter of the last fiscal, hit by losses incurred by its subsidiary DIAL, which is the operator of Delhi Airport.
However, the losses have narrowed down by about 64% in the fourth quarter as compared to loss of Rs 1,006.74 crore of the January-March period of FY'11

"Delay in tariff revisions on Delhi Airport has led to DIAL reporting a loss of Rs 573 crore in 2011-12. It was an exceptional situation," GMR's group Chief Financial Officer A Subbarao told PTI.

Stating that Airport Economic Regulatory Authority (AERA) has notified the revision in tariff rates, including User Development Fees, for Delhi Airport from May 15, he said that "overall situation will be much more different post revision. All of this (DIAL making losses) would be history."

According to the AERA order, the tariff revision amounts to 346% increase in airport charges for two years.

"With that (revision of tariffs), we are looking to overcome some of the losses. It will begin from the current quarter but full impact will be visible from July-September quarter onwards," he said.

GMR's net sales during the fourth quarter were also down 2.58% to Rs 2,099.28 crore, largely due to non-recognition of Rs 100 crore from National Aviation Company of India (NACIL) in the airport division and drop in power sector revenue due to gas shortage.

"We don't know how long we will have to wait for gas. It's a kind of force majeure situation. Our units were running at 45% plant load factor (PLF)," he said.

For the full year 2011-12, the infrastructure major
reported a net loss of Rs 603.34 crore vis-a-vis a net loss of Rs 929.64 crore of FY'11 due to losses by airports business and drop in revenues from the power business.

However, its net sales were up 31% to Rs 8,473.03 crore in the last fiscal largely due to 139% revenue growth in EPC (engineering, procurement and construction) segment and significant growth in airports business.

Talking about the power business, Subbarao said that GMR will be adding 1,650 MW generation capacity in the current fiscal.

Besides, commissioning of 687 MW power project at Rajahmandry in Andhra Pradesh would depend on availability of gas, he said, adding that 93% of work has been completed.

By next quarter, the company would also begin work on six laning of 555-km long Rs 7,700 crore Kishangarh-Ahmedabad project. The company has recently secured loans worth Rs 5,400 crore for the project by IDBI-led consortium.

GMR shares were down 6.51% in the late afternoon trade at Rs 19.40 apiece on the BSE.

http://business-standard.com/india/news/gmr-infra-posts-rs-366-cr-loss-in-q4/166295/on

Kingfisher Airlines Q4 loss more than trebles at Rs 1150 crore

MUMBAI: Kingfisher Airlines' net loss more than trebled in the quarter to end-March from a year earlier, battered by high fuel prices and a weakened rupee, but the ailing Icarrier pledged a return to full-scale operations in the next 12 months.

Debt-laden Kingfisher, controlled by liquor baron Vijay Mallya, has slashed its flight network down to the bare bones as it seeks cash to continue operations and repay around $1.3 billion of loans.

"The company has a focused fleet re-induction plan and hopes to be back to full-scale operations in the next 12 months backed by a recapitalization plan that the company is actively pursuing and confident of achieving," Kingfisher said in a statement on Thursday.

Kingfisher lost Rs 1150 crore ($90.1 million) in the fiscal fourth quarter, 74.8 per cent more than a loss of Rs 360 crore a year previously. Revenue fell 54 per cent to Rs 740 crore.

Kingfisher has pared its schedule to 120 flights per day from 370 per day in September and has ditched its international operations in an attempt to bring losses under control.

The airline has become a byword for country's brutal airline industry, where carriers struggle with high taxes on jet fuel, a harsh regulatory environment and cut-throat competition that keeps fares low.

The carrier blamed losses on high fuel prices, a weak rupee and an "unprecedented, tough operating environment," but said it would return to normal services within 12 months.

"The company has a focused fleet re-induction plan and hopes to be back to full-scale operations in the next 12 months backed by a recapitalization plan that the company is actively pursuing and confident of achieving," it said in a statement on Thursday.

National carrier Air India has been forced to cut most of its international routes due to industrial action by its pilots, handing Jet Airways - the country's top carrier - an opportunity to increase aggressively its market share in international routes.

Low-fare and mostly domestic carriers such as Indigo - the only airline making money in India - and Spicejet have also gained market share recently as Kingfisher and Air India have suffered.

Spicejet said on Wednesday that its net loss for the January-March quarter had widened more than four-fold, but it expected lower costs once the company starts importing jet fuel directly.

FUND CONSTRAINTS

Kingfisher needs at least $500 million immediately to keep flying, according to the Centre for Asia Pacific Aviation, but there has been no sign of funding in the near term.

The company said its net loss for the year to end-March was 23.3 billion rupees, more than double its loss in the previous fiscal year. That compared with the 15.4 billion rupees loss forecast by two analysts, according to Thomson Reuters I/B/E/S.

India's plans to allow foreign airlines to invest up to 49 percent in local carriers - for which Kingfisher has lobbied hard - has not yet taken off, adding to its funding crisis.

Mallya has repeatedly insisted that several domestic and international investors are interested in his company, and for months the names of many foreign airlines and local tycoons have been reported as prospective White Knights, but so far there has been much talk and no money.

If Kingfisher fails to turn the airline around, its banks - which have $1.3 billion in loans outstanding - would be left to pick over the carcass in a country that does not have a formal bankruptcy process.

Loans are secured in part by a combination of guarantees by the airline's parent, the UB group, as well as Kingfisher shares, Mallya's personal guarantees, its Mumbai real estate assets and the Kingfisher brand itself, bankers said.

European planemaker Airbus, which has accommodated Kingfisher by pushing its aircraft deliveries back in the queue, would lose outstanding orders for 92 planes with a combined list price of $12 billion. It would also see Kingfisher's fleet enter the second-hand market.

http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/kingfisher-airlines-q4-loss-more-than-trebles-at-rs-1150-crore/articleshow/13682603.cms

HAL to make multirole aircraft with Russian firm

BANGALORE: Hindustan Aeronautics Ltd (HAL) will manufacture a Multi-role Transport Aircraft (MTA) with a Russian partner primarily for the Indian and Russian air forces, the state-run defence behemoth said Tuesday.

"The twin-engine aircraft in 15-20 tonne class will be designed, co-developed and manufactured for cargo/troop transportation; para-drop/air drop of supplies, including low altitude parachute extraction system," HAL chairman R.K. Tyagi said in a statement here.

As per current estimates, the initial requirement will be 205 aircraft - 100 for Russia, 45 for India to replace its vintage Soviet era AN-32 aircraft and the remaining 60 to be sold to third countries.

In its transport fleet, the IAF has about 100 AN-32, including some overhauled and upgraded versions.

To execute the $600-million defence project, the $2.6-billion HAL entered into a contract here Monday with United Aircraft Corporation (UAC) of Russia and the 50:50 joint venture they have set up - Multirole Transport Aircraft Ltd.

Capable of short landings and takeoffs, the aircraft will have capacity to ferry about 80 troops, infantry fighting vehicles, artillery pieces and ammunition and can be deployed for battlefield medical evacuation.

With a glass cockpit for electronic instrument displays, fly by wire controls and full authority digital engine control, the aircraft will have 800kmph cruise speed and a range of 2,500km without refuelling.

HAL will design and develop the MTA at its aircraft research and development (ARDC) centre in this tech hub, while its transport aircraft division at Kanpur in Uttar Pradesh will manufacture prototypes and commence serial production after the certification process.

"Our objective is to achieve self-reliance in design, development and production of a MTA and manage the programme with international collaboration and global suppliers," Tyagi said.

The first test flight of the prototype will be in five years (2017) and regular production two years later (2019).

HAL will also share the development cost of systems and manufacture of components, sub-assemblies and composite structure.

The tripartite contract was based on the inter-government pact signed in September 2010 by the Indian and Russian governments for joint design, development and production of the aircraft on cost sharing basis by the joint venture partners.

The joint venture will also work with Russia's aerospace major Rosoboronexport to co-develop the aircraft.

"We will showcase our expertise in designing the aircraft and its systems, manufacturing and flight testing in collaboration with our Russian partners in Moscow and India," Tyagi said.

The Kanpur facility had manufactured transport aircraft such as Avros HS-748 and Dornier Do-228 in the past for the services.

In all, the company manufactured 89 Avros from 1964 to 1984 and 116 Dorniers from 1984 to March 2012.

Two Dorniers were exported to Mauritius, while one export order to Seychelles is under execution

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/hal-to-make-multirole-aircraft-with-russian-firm/articleshow/13647004.cms

Air India & Kingfisher Airlines crisis: Emirates grabs 20% share of outbound traffic

NEW DELHI/MUMBAI: Emirates, the flagship carrier of Dubai, appears to be playing the role of India's national carrier as domestic players grapple with various crises.

The airline, which operates 185 flights per week, more than any other foreign carrier, has garnered a 20% share of the total outbound traffic over the past year, according to industry sources, edging out competitors in usurping the void created by the curtailed overseas operations of Air India, the actual national carrier, and debt-laden Kingfisher Airlines.

Emirates is well ahead of peers such as Singapore Airlines (86 flights), British Airways (48) and German carrier Lufthansa, all gateway carriers.

A gateway carrier picks up traffic from other countries and routes it through their hub, which is Dubai in case of Emirates. Dubai is a major destination in its own right and is ideally positioned for Indians wanting to catch flights to other parts of the world.

An industry official expressed concern at what he describes as Emirates' ability "to get what they want" from the Indian government.

"Emirates has always enjoyed government confidence better than other carriers. They have always been able to get what they want from India, in spite of the fact that Dubai is no more witnessing a huge surge in manpower requirement from India. In this case, I think a no-objection certificate could have been obtained from Indian industry as a whole and someone should say we can't overlook Indian carriers before taking such decisions," said Jitendar Bhargav, a former executive director of Air India.

Orhan Abbas, vice-president-India & Nepal, Emirates, said, "India is our largest market in terms of operations on our global network and contributes significantly to the overall revenues of the airline. The country has a large population of global citizens and frequent travellers. It is difficult to say what our market share is, but we are the largest international carrier serving India." "Our company has registered a 50% rise in bookings for Emirates over the past three months, which is by far the largest jump for any airline during this period," Pratik Mazumder, marketing head of online travel portal yatra.com, said.

According to another travel portal, Via.com, Emirates had a market share of 15% in 2010.

Expanded Rapidly in Last 6 Years

National carrier Air India had a near-14% share then, which has now shrunk to a miniscule slice due to the pilots' strike that has jeopardised its international operations.

Though it started flying to India way back in 1985, Emirates has expanded rapidly in the last six years, adding over a 100 flights per week since 2006, when bilateral agreements with various countries, including the Gulf region, were liberalised.

While Emirates operates 56 weekly flights from Dubai to six US destinations, Indian carriers pale in comparison. Air India, whose long-haul flights have been truncated due to an agitation by 400 of its pilots, plans to scrap one of its two flights to the US as it is proving unprofitable, in addition to the one to Toronto from Delhi. Essentially, Emirates picks up passengers from India and flies them to different parts of the world from Dubai.

"Forty per cent of all international traffic from India is Middle-East bound. With the shutdown of Air India's international operations, especially as it had a monopoly on the US routes, as well as the pullout by American Airlines, Gulf carriers will be the undoubted beneficiaries," travel technology conglomerate Bird Group ED Ankur Bhatia said.

Even a recent policy change allowing all domestic airlines to consume allocated bilateral rights (the right to fly to a foreign destination) until they exhaust them, may not have much impact as Indian carriers do not have enough wherewithal, in terms of the number of aircraft or the funds to buy them, to do so.

In comparison, Emirates has already exhausted its 55,000 seats per week quota to India and also availed of a 2% relaxation allowed under its air service agreement (ASA) with India, which gives it 1,100 additional seats this summer season and the flexibility to add 4-6 more flights.

Industry insiders say the relaxation will give Emirates more scope to add flights on its low-cost arm FlyDubai as there are some Indian destinations where Emirates has used up flying rights.

Global aviation consultancy firm Centre for Asia-Pacific Aviation (CAPA) has said in its 2012-13 aviation outlook that its carriers such as Emirates, Qatar Airways and Turkish Airlines, which have the most aggressive expansion plans, are pushing for additional bilaterals as their current entitlements are exhausted.

"Government's 2% is not going to make any significant impact, but might allow Emirates the flexibility to introduce A380 on their Delhi service. This comes as a surprise. The government's continuing ad-hoc approach to policymaking, especially relating to bilaterals, gives no one clarity on what is India's bilateral position," said Kapil Kaul, CEO-India, CAPA.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/air-india-kingfisher-airlines-crisis-emirates-grabs-20-share-of-outbound-traffic/articleshow/13678892.cms?curpg=2

HC rules against advanced training

NEW DELHI: The Delhi High Court on Wednesday declined to hear the appeal filed by the striking Air India pilots, challenging the Single Bench order, which had stayed the training of pilots till the implementation of Justice Dharmadhikari panel recommendations.

A Bench comprising Chief Justice A K Sikri and Justice Rajiv Sahai Endlaw made it clear that the striking pilots had no right to get training on the advanced Boeing-777. “Let them call off the strike. We will then hear the matter,” the Division Bench said. The court also made it clear that the on-going training of the Air-India pilots would not be disturbed.

“As long as the Air-India pilots are on strike, the court is not inclined to hear the matter. They cannot go on strike as well as get training simultaneously,” the order stated. The Bench, while posting the matter for hearing in July, made it clear that the pilots could file an application for hearing the matter if they called off their strike.

And counsel for Air India, Lalit Bhasin informed the court that staying the training programme would result in a huge financial loss to the national carrier and the advance flight would be grounded as well.

According to Air India, some 200 commanders, chief pilots and 200 first officer co-pilots need to undergo training on the Boeing-777, but presently only 64 commanders and 62 co-pilots were being provided the requisite training.

This prompted the Bench to ask whether the Air India pilots were on strike and getting trained at the same time.

http://expressbuzz.com/nation/HC-rules-against-advanced-training/397013.html

Multi-modal transport system planned at airport

Work expected to commence tomorrow

Following discussions spread over several months, authorities have finalised a plan for a multi-modal transport system at the Chennai airport that will combine different forms of public transport systems, including metro rail and bus services.

The work is expected to commence on Friday, according to an Airports Authority of India official, and will be completed in 14 months.

From the ground level up to the roof of the platform, the metro station will come up at a height of 25 metres. Passengers from the metro station can reach the airport terminals comfortably through covered walkalators.

A connecting glass tube will be provided to enable the passengers to reach the domestic or international terminal. Passengers from the terminals can also reach the metro station using the tube.

The overall design has been made in harmony with the architectural features of the domestic terminal building without disturbing the aesthetics of the upcoming terminal buildings, which are being modernised.

Gurpreet S. Shah of the Creative Group, a New Delhi-based architectural firm, which has prepared the design, says: “It was a great challenge to accommodate the metro station within the constrained city side of the existing airport. The challenge was overcome by centralising the position of the station.”

Chennai Metro Rail has entrusted the AAI with the station work within the airport premises, for which an initial payment of Rs.25 crore has been deposited with the authority. The total cost of the work is estimated at Rs.48 crore, says the AAI official.

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·  It will combine different forms of public transport systems, including metro rail

·  A connecting glass tube will be provided to enable passengers to reach the terminal

http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/article3475044.ece

Airport concessionaire made a fortune out of land acquired at Rs. 4 per square yard from Delhi farmers

Farmers, whose land was acquired at a meagre Rs. 4 per square yard in South West Delhi way back in 1955 in the name of undertaking planned development, have now seized upon the opportunity raised by the report of the Comptroller and Auditor General of India — on the loss caused to the exchequer by leasing away of some of this very land by Indira Gandhi International Airport concessionaire Delhi International Airports Limited to commercial enterprises — to demand higher compensation.

For the farmers of Mahipalpur, Nangal Dewat and Rangpuri villages near the airport, many of who have over the last nearly 57 years been fighting legal battles for enhanced compensation, the report was a godsend.

“I was pursuing the land acquisition case and the airport privatisation issue for getting higher compensation for the farmers through the Supreme Court. But when this CAG report came out, I decided to share the documents which had been procured by me from the Ministry of Civil Aviation and the Delhi government,” said Colonel (retd.) Devender Sehrawat, who had filed applications under the Right to Information Act on these issues.

Col. Sehrawat, who is also secretary of the Delhi Gramin Samaj and co-convener of the Kissan Mahasangh, a federation of farmers' organisations, said the CAG draft report had also noted that the government exchequer had incurred a loss of Rs.24,000 crore due to manipulation in the original agreement and undue benefit worth Rs.1,63,557 were granted to the Delhi International Airports Limited through transfer of land.

Thus, he said, as per the CAG, the loss was around Rs. 34 crore per acre — as 4799 acres of land was transferred to the concessionaire — and this worked out to a rate of nearly Rs.70,000 per square yard. However, Col. Sehrawat said the farmers had only been paid a fraction of this for their land.

With 13 hotel projects envisioned on the airport land, the Kissan Mahasangh is now viewing the land transfer deal as a bonanza for the concessionaire and has urged the Civil Aviation Ministry to adequately compensate the farmers for their land and initiate resettlement and rehabilitation measures.

Col. Sehrawat, who had gathered the information to seek higher compensation for the farmers through the Supreme Court, decided to come out with the information in hand following the CAG report.

As per the information accessed by him — and copies of which are withThe Hindu— under the Operation, Management Development Agreement (OMDA) between DIAL and the Airports Authority of India, the concessionaire was allotted 4,799 acres on Rs.100 annual lease rent for 60 years.

Even for commercial use, 190 acres were allowed to DIAL at a price of Rs.31 lakh while in the original contract, out of the total of 4,799 acres, only 240 acres or 5 per cent was earmarked for commercial use.

The transfer of land to the airport concessionaire took place after the matter of land use was considered by the Empowered Group of Ministers (EGoM) in June 2005.

The EGoM had then directed the Civil Aviation Ministry to take the opinion of the Attorney-General on “use of airport land and limit on commercial use of land at airport complex by the JVC [joint venture company]” and legality of permitting the proposed concessionaire to develop the airport for commercial uses unrelated to the airport under the provisions of the Airports Authority of India Act, 1994.

Giving his opinion on the issue on June 17, 2005, the then Attorney-General Milon K. Banerji, had said: “It would not be lawfully permissible for the AAI to grant a lease to any person in respect of any airport property for the purposes of commercial activities listed in Schedule 19 of the draft OMDA like building of golf courses, business parks, hi-tech parks, commercial offices, leisure facilities, commercial arcades, sports complexes, shopping complexes and convention centres etc. unconnected with the scope of airport development and management, including provision of passenger facilities and amenities.”

He had further noted that “if it was considered necessary to permit lease of land to the concessionaire for undertaking commercial activities that go beyond the provision of passenger facilities at the airport, then it must be done only after an amendment was made to the AAI Act, 1994.”

The EGoM had accordingly decided in its meeting held on June 22, 2005, that all commercial activities unrelated to the airport included in Schedule 19 of the draft OMDA be omitted from the final bid document. Thereafter two major Indian real estate firms — DLF Limited and Hiranandani Properties — who had initially shown considerable interest in the proposed airport modernisation projects withdrew from the bidding process.

But the decision on the transfer of land for commercial activities was later reversed by the Civil Aviation Ministry to the advantage of the concessionaire.

http://www.thehindu.com/todays-paper/tp-national/article3474960.ece