GMR Infra takes Rs 1,450-cr hit on Air India, TN dues

Increase in airport rate at DIAL pushes revenues 90% sustained growth expected to recoup losses of Rs 1,700 crore, says CFO

GMR Infrastructure, whose net loss shot up threefold to Rs 180 crore in the second quarter (July-September), said it had pending receivables of Rs 2,000 crore. Of this, the bulk was from just two entities — Air India and Tamil Nadu government — which owed the firm Rs 1,450 crore.

“Air India owes us Rs 650 crore, including at our airports at Delhi and Hyderabad, while Tamil Nadu owes us Rs 800 crore. The total outstanding for our airport sector is Rs 890 crore, while the power sector has an outstanding of Rs 880 crore. So, when you take into account the receivables of Rs 2,000 crore and the inherent need to provide working capital, we are at a loss,” said A Subba Rao, group chief financial officer, adding the company was in talks with the respective authorities to get the dues cleared.

While revenues at the Delhi International Airport Ltd (DIAL) grew a healthy 36 per cent at Rs 1,469 crore, the losses have been reduced substantially to Rs 28 crore for the second quarter from Rs 210 crore. “The increase in airport rate at DIAL is having a good impact and has pushed revenues 90 per cent. With sustained growth, we should be recouping our losses of Rs 1,700 crore over time,” said Rao.

While the company posted an 18 per cent growth in revenues at Rs 2,399 crore, the fact that it is sitting on idle assets in the power sector due to non-availability of gas in the east-coast is taking a huge toll on the firm’s profitability.

“Higher revenues from the operation of airports during the quarter, aided by the revised rate and UDF (user development fees) at DIAL resulted in significant improvement in turnover which, however, was adversely affected by the lower PLF (plant load factor) in power plants due to non-availability of gas from the KG basin,” said G M Rao, group chairman.

The company, with other players hit by this factor, has been discussing with the relevant authorities to do a pooling mechanism with the help of imported gas and locally available gas to fuel the projects. “The cost of the gas from this mechanism will double to $8.4 per mmBtu (million metric British thermal unit). Based on this, we may have to rework the PPAs (power purchase agreements) as well and we are looking at hiking it by around 55 per cent, if things sail through,” said a senior official of GMR Group.

GMR Infrastructure currently has generating capacities of around 880 MW, most of which is gas-based. “During the next two quarters, we should commission around 1,600 Mw based on thermal fuel, which should offset the losses in the gas-based projects until the KG-basis issue is sorted out,” the official added.

The company said it would take key steps by the end of this financial year to deleverage its balance sheet, under a debt of Rs 35,000 crore, with a gearing of 3.2 times.

http://business-standard.com/india/news/gmr-infra-takes-rs-1450-cr-hitair-india-tn-dues/492746/

Government open to tweaking FDI aviation policy:

NEW DELHI: India is open to further reforms to lure overseas investors into its airlines, a government source said, after a dearth of interest following changes to investment rules left Kingfisher and others still short of much-needed funds.

The aviation ministry will meet local carriers soon to ask what changes were needed in the policy, added the source, with direct knowledge of policy developments. 

India changed its Foreign Direct Investment (FDI) policy in September to allow foreign carriers to buy stakes of up to 49 percent in domestic airlines, a move seen as a potential boon especially for debt-laden Kingfisher Airlines LtdBSE -2.63 %. 

All three listed Indian carriers - Jet AirwaysBSE 0.71 %and SpiceJetBSE 1.81 % as well as Kingfisher - are said by some analysts to be on the lookout for investment from a foreign carrier, providing a new source of funding for the industry. 

The fiercely competitive Indian aviation industry lost a combined $2 billion last year. All but unlisted IndiGo lost money, hurt by high state taxes on jet fuel, expensive airports and regulatory uncertainty. 

But since FDI rules were changed, no carrier has publicly expressed an interest in buying a stake in Kingfisher or any other airline in India, one of the fastest growing markets in the world. 

"We are also surprised why there is no activity. It's a fact that no foreign airline has approached us yet," the source told reporters speaking on condition of anonymity. 

"We will ask these (local) airlines why FDI failed to pick up. What are the issues they are facing, if they are talking to someone," the source added. 

India's high tax on aviation fuel was the biggest issue discouraging foreign carriers wanting to invest in Indian airlines, the source said. State taxes make jet fuel in India about 50 percent costlier than the global average. 

India is talking to states to cut taxes on jet fuel, the source added. 

"(The) crux is that you need to bring growth to the sector ... We have to create the environment to attract investments."

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/Government-open-to-tweaking-FDI-aviation-policy-Report/articleshow/17231087.cms

Asia a 'relatively bright' aviation market despite slowdown, says study

NEW DELHI: Asia remains a "relatively bright" aviation market despite the recent slowdown, with a fast-expanding middle class providing the launch pad for further growth, a study by an airlines' body said on Thursday.

While China continues to be the largest engine for growth in Asia, other parts of the region were also seeing significant increases in demand for travel with a fast-expanding middle class providing a "brighter outlook" for Asian carriers, the latest study by theAssociation of Asia Pacific Airlines (AAPA) has said.

The outlook for the Asian market "remains relatively bright" for 2013 despite a recent slowdown in traffic growth, challenging conditions in the cargo sector, stubbornly high oil prices and continued economic weakness in Europe, it said.

While it is unlikely that the peak of 2010 would be reached anytime soon, Asia remains a dynamic and generally profitable high growth market that outperforms all other regions, AAPA Director General AndrewBSE -0.72 % Herdman said.

Observing that some Southeast Asian markets like Indonesia were "booming" as income levels rise makingair travel more affordable, he said this was "leading not only to more budget passengers in the regional market but more long-haul passengers, helping offset the weaker demand in Europe".

Of the world's middle class population of 2.1 billion, about 750 million are from Asia, with Herdman saying Asian middle class was expected to grow by 500% over the next 20 years to 3.4 billion.

He said that innovative strategies, which have seen the Asian industry at the forefront of new global partnerships and multi-brand strategies, have also helped Asian full service carriers survive the slump.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/asia-a-relatively-bright-aviation-market-despite-slowdown-says-study/articleshow/17235858.cms

Indian carriers beat foreign rivals in seat utilization

NEW DELHI: Indian airlines are set to witness over 42% utilisation of seats allowed for overseas destinations, government data shows, surpassing for the first time in eight years the capacity used by foreign carriers flying into the country.

According to data provided by the civil aviation ministry, the current winter season will see Indian carriersutilising 42.56% of the quota of seats allowed under bilateral traffic rights, or 377,724 seats per week, compared with about 20% utilisation in the year-ago season.

On the other hand, foreign airlines flying into India are expected to clock 39.78% this season, compared with over 40% utilisation a year ago.

Although domestic carriers were granted permission to fly to overseas destinations in 2004, they were, until now, unable to match the capacity utilisation of foreign airlines flying into India largely due to policy constraints.

According to officials, the improvement in capacity utilisation follows the civil aviation ministry's move to give in advance traffic rights up to three seasons to all airlines.

"Indian carriers will be able to utilise over 50% of their quota by the winter of 2013 if we go by the clearances for foreign destinations the minister ( Ajit Singh) gave a few days ago," a senior ministry official told ET, adding that the move will benefit domestic carriers and flyers alike.

Under bilateral traffic rights, the number of weekly flights or seats a country's airlines are allowed to operate in another nation is fixed through a bilateral agreement.

Experts say that with low-cost carriers starting international operations in the last one year, the situation is no longer tilted towards Air India and Jet AirwaysBSE 1.00 %, which had sizeable international operations.

"The addition of two low-cost carriers (IndiGo and SpiceJet) flying abroad over the last year seems to have revved up the utilisation of bilateral entitlements," said Kapil Arora, Partner (Infrastructure) at Ernst & Young. "In contrast, we must also take note of the fact that a few foreign carriers have also reduced flights to India due to high airport charges," he added.

An executive of a low-cost carriers said Indian carriers were caught in the dual yoke of a five-year mandatory domestic experience required for flying abroad and the Right of First Refusal (RoFR) with Air India, a situation that allowed foreign carriers to sweep away traffic.

"Only over the last year have the two budget carriers completed this artificial restriction and we could do international operations. Also, there is relief with Air India losing their RoFR, else we wouldn't have got even those permissions that we have," the executive, who did not want to be named, said.

This is especially true, as Air India Express, SpiceJetBSE 1.53 % and IndiGo have been competing so aggressively for the profitable Gulf routes that only 1,200-odd seats to the UAE (from India) remain and Indian airlines are hungering for more.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/indian-carriers-beat-foreign-rivals-in-seat-utilisation/articleshow/17236681.cms

Coimbatore Airport to get more facilities

Measures part of a move to modernise the airport

Installation of Flight Information Digital System (FIDS) boards, Interactive Voice Response System (IVRS) and SMS facility for passengers are in the final stages at the Coimbatore Airport and are likely to be inaugurated within the next seven to 10 days, says Airport Director K. Peter Abraham.

Talking to The Hindu , Mr. Abraham says that the facilities under FIDS include provision of information through LCD display boards and video walls and the total project cost is around Rs. 1 crore. The measures are part of the exercise taken up to modernise the airport.

A total of 74 digital boards will be installed to keep the people informed on the departure and arrival status of flights. Two of the boards will be outside the airport for the visitors, while the rest will be in front of the various airlines counters and arrival and departure halls.

The digital flight information system will be functional based on the inputs fed by the airlines.

These boards will replace the 15-year-old conventional flight information board.

This comes at a time when the airport was accorded the International Airport status. “The boards are likely to be in place and functional within the next 10 days,” he adds.

In addition, passengers or their relatives/friends wanting to see them off or coming to the airport to receive them can get to know the flight status by dialling 2573100/ 2574100 to access the IVRS. For accessing flight status related information, passengers can also send in a text message i.e., SMS to 94422-64287/ 94422-64297 with the flight code.

These facilities relieved the people from problems related to constantly busy telephone lines, call waiting etc.

The facilities are expected to provide information on flight status on a real time basis.

Growth

Some of the facilities are already on trial to fine-tune them before formally launching them in a couple of days, Mr. Abraham says.

Coimbatore Airport has continuously been on a growth trajectory with close to 10 per cent year on year increase in passenger traffic and revenue.

As on date there are a minimum of 20 landings and take offs with an average of 3,500 to 4,000 passengers using the airport every day, of which 10 to 12 per cent of them are international passengers travelling to Sharjah or Singapore, the two international destinations for which Coimbatore Airport has flight connectivity.

Besides the two international destinations, Coimbatore has domestic flight connectivity with Chennai, Bangalore, Mumbai, Delhi, Kozhikode, Hyderabad.

http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/coimbatore-airport-to-get-more-facilities/article4100755.ece

Airport intruder remanded

The Airport Police remanded Amir Taha, who attempted to take a picture of Union Minister P. Chidambaram, when he was on his way to board a flight to New Delhi at the Chennai airport on Tuesday.

Police said that this was second incident in which the 35-year-old man created problem at the Chennai airport. A case has been registered by the airport police on charges of creating disturbance to a public servant.

In a statement issued here on Thursday, the Union Minister P. Chidambaram said: “I was surprised and disappointed to learn that a person who reportedly attempted to take some pictures of me was detained by the police at the Chennai airport on November 13.” He did not know why the police had detained the person concerned. He asked his office to get in touch with the Tamil Nadu police and request them to release the person immediately, he added in his statement.

http://www.thehindu.com/todays-paper/tp-national/airport-intruder-remanded/article4100427.ece

Slowing economy, capacity cutbacks hit domestic air traffic in September

Chennai, Nov 15:  

Indian domestic air traffic in September plummeted 9.9 per cent compared with a year ago. This was the worst performance for any market, reflecting the slowing economy and capacity reductions that have suppressed domestic air travel.

The September capacity fell 5.9 per cent, decreasing the load factor 2.9 percentage points to 64.9 per cent, the lowest of any market, says International Air Transport Association (IATA), which represents some 240 airlines comprising 84 per cent of global air traffic. IATA drew a parallel between China’s domestic travel growth due to that country’s growing economy, and the drop in India’s traffic due to slowing economic conditions.

China factor

Among domestic markets, the IATA report said that air travel in China grew strongly, expanding 11.4 per cent in September compared to the same month last year.

Although China’s economy may not yet have emerged from its slowdown, these domestic air travel results are consistent with recent data on industrial production and consumer spending and incomes, all of which show improvement and point toward an acceleration in economic growth.

There was an improvement in the level of global air travel in September compared to August, which is a standout in the trend over previous months.

Global air travel levels have been mostly flat, held down by business confidence and slowing world trade growth. Because the business environment remains weak, that improvement in air travel is erratic rather than the start of a stronger trend.

On international markets, it said European airlines continue to experience growth in air travel, increasing 5.4 per cent in September compared to a year ago.

This is despite recessionary conditions in several countries in the Euro Zone. West Asia continues to be the fastest growing region, expanding by a strong 13.3 per cent in September on a year ago.

North American airlines, which have been keeping capacity tight, saw demand increase 2.1 per cent in September year-on-year.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/slowing-economy-capacity-cutbacks-hit-domestic-air-traffic-in-september/article4099279.ece

Maldivian connects Chennai, Mumbai with Male

Male (Maldivies), Nov 15:  

Maldivian Airlines, owned by Island Aviation Services Ltd of Maldives, has expanded its flight network by connecting Chennai, Mumbai and Dhaka with Male, the capital city of the island nation.

“India is our focus market, as it has a great potential,” said Bandhu Ibrahim Saleem, Chairman of the company. The airlines launched its Male-Chennai service on Thursday . From Chennai, the aircraft will go to Dhaka and from there back to Chennai and Male. In the evening, it will fly from Male to Thiruvananthapuram and back. Tomorrow (Nov 16), the same aircraft ( its first A320 aircraft) will fly the Male-Mumbai-Male route.

Delhi Next

According to Abdul Haris, Managing Director of Island Aviation Services Ltd, on every Tuesday, Thursday and Saturday it will fly between Male-Chenai-Dhaka-Chennai-Male; and on every Wednesday, Friday and Sunday, it will fly between Mumbai and Male. Besides, every day there will be a flight between Male and Thiruvananthapuram. “Our next destination will be Delhi. We plan to commence the operation by early next year,” he said.

So far, the airline has been operating two flights a day between Male and Thiruvananthapuram, apart from several flights in the domestic routes.

Speaking to a group of journalists from India, who were in Maldives on the company's invitation, Haris said that last year over 30,000 Indians visited the island nation. With the new routes, he said the Maldivian government hopes to get at least one lakh visitors a year. Besides Maldivian Airlines, a few other airlines, including Air India and Sri Lankan Airlines, connect various Indian cities with Maldives.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/maldivian-connects-chennai-mumbai-with-male/article4099277.ece

Cool air heads into south as ‘low’ languishes in Bay

Thiruvananthapuram, Nov. 15:  

The India Meteorological Department (IMD) has extended the window for possible intensification of the low-pressure area in the Bay of Bengal.

This should normally be taken to mean lesser confidence in the expected outcome but some of the enabling conditions still hold.

SEA TEMPERATURE

One is the elevated sea-surface temperatures off the Myanmar-Bangladesh coast where the ‘low’ is expected to drive itself into.

Global forecasts do not suggest the system going to hit this coast, but would instead head back into North-central Bay.

The huge distance that separates mainland with the system in the east of Bay would bring dry, continental air flows from northwest into rest of the country. This phase would see most parts, except hills and plains of northwest, go without any significant rain event.

COOL WEATHER

Minimum temperatures were below normal by 4-6 deg Celsius over many parts of Andhra Pradesh, north Karnataka and north Tamil Nadu during the last 24 hours.

The cool north-westerlies fanned into southern peninsula in the absence of forceful easterly to north-easterly winds from the Bay of Bengal.

The lowest minimum of 7.8 deg Celsius was recorded at Amritsar in Punjab.

The dry spell might get broken around mid-week next week as the wayward low-pressure area reverts back to Central Bay of Bengal, off the Andhra Pradesh coast.

Meanwhile on Thursday, satellite imagery showed rain-bearing clouds rising over North Andaman Sea and Southeast and East-central Bay of Bengal.

RAIN FOR ANDAMANS

A weather warning said that heavy rainfall would occur at one or two places over Andaman and Nicobar Islands during next two days.

Outlook valid until Sunday said that rain or thundershowers would break out over Andaman and Nicobar Islands at many places thereafter.

Extended outlook valid for next seven days said that thundershowers may occur at one or two places over the east coast (by when the ‘low’ returns).

A weather-maker (fog, rain) western disturbance from across the border had dropped anchor over north Pakistan en-route to north-west India.

http://www.thehindubusinessline.com/todays-paper/tp-agri-biz-and-commodity/cool-air-heads-into-south-as-low-languishes-in-bay/article4099201.ece