Etihad delegation to meet Sharma over Jet stake sale

Jet is likely to sell 24% of its equity to the major Gulf carrier

A delegation of Abu Dhabi-based carrier Etihad Airways, which is expected to buy stake in Jet Airways, will meet Commerce and Industry Minister Anand Sharma this week.

"They are meeting me on January 31," Sharma told reporters here on the sidelines of CII's annual Global Partnership Summit.

The proposed meeting comes in the backdrop of Jet Airways stating earlier this month that it was in talks with Eithad regarding a potential investment by it in the Naresh Goyal-owned carrier.

The issue is also understood to have come up during the bilateral meeting Sharma had with UAE Foreign Trade Minister Sheikha Lubna Bint Khalid Al Qasimi here.

Jet is likely to sell 24% of its equity to the major Gulf carrier, unconfirmed reports said, indicating that crucial issues relating to the stake sale have been sorted out between the two airlines.

Recently, Jet Airways informed the Bombay Stock Exchange that Jet and Etihad were in discussion regarding a potential investment by the latter in the former.

In a filing to the BSE on January 3, Jet said, "Discussions have commenced recently pursuant to the liberalised FDI Policy which permitted foreign investment in the shares of an Indian airline.

"The discussions are in progress, but no terms have been firmed up at present. Various structures are being explored by the legal and commercial teams and care being taken to ensure that all the Indian regulatory requirements are fully complied with".

If it goes through, this could be the first investment by a foreign carrier in an Indian airline following the liberalisation of the FDI policy in aviation to allow foreign airlines pick up stake in Indian carriers.

Both airlines are learnt to have appointed global consultants as they want the investments to be on a sound footing, given the high operating costs in India.

Etihad has in the past two years picked up stake in several international carriers like Virgin Australia, airberlin, Air Seychelles and Aer Lingus.

When Etihad was set up in 2003, it had sought the help of the Naresh Goyal-owned carrier to set up its systems and Jet had provided assistance with its specialists in various fields of aviation operations.

Unconfirmed reports had then said Goyal had also invested some money in the Gulf carrier.

A major reason for Goyal proposing to dilute part of his shareholding in Jet from 80% has been a recent order of the Foreign Investment Promotion Board (FIPB) to bring it down to the regulatory levels.

Jet and Etihad already have a code-sharing agreement. "This deal will be profitable to both. Jet can gain larger market share, while Etihad will get a major exposure in India and also strengthen its position in West Asia," an aviation analyst said.

http://www.business-standard.com/india/news/etihad-delegation-to-meet-sharma-over-jet-stake-sale/204174/on

Boeing risks $5 billion in revenue on 787 Dreamliner investigation outcome

DALLAS: As government regulators investigate Boeing's 787 Dreamliner and company engineers search for solutions, investors and analysts are grappling with the bottom-line question: How much will the plane's grounding cost? The answer depends on what probes in the US and Japan uncover, with scenarios ranging from a quick resolution if a few defective parts have to be swapped out to a drawn-out inquiry that requires a fundamental redesign. 

The worst case scenario: The Dreamliner's problems run so deep that CEO Jim McNerney has to write off about $5 billion in anticipated revenue, said Howard Rubel, a Jefferies & Co analyst. 

The costs are likely to be much less, in the hundreds of millions of dollars, say investors and analysts, including New York-based Rubel. That would let Boeing, which reports 2012 earnings on January 30, reap the rewards of what he estimates was a $25 billion investment in the plane, clearing the way for a profit surge and more money for investors. 

"As far as dividend growth, cash flow and share buybacks, I think that's still intact," said Gary Bradshaw, afund manager at Hodges Capital Management in Dallas, who added to his Boeing stake after a fire broke out on a Dreamliner on January 7. 

US investigators are still searching for what caused the fire in the batteries on a Japan Airlines 787 in Boston and a fault that forced an All Nippon Airways plane to make an emergency landing in Japan on January 16. The jet debuted commercially in 2011, and 50 have been delivered so far. 

FAA probe 

The grounding will most likely cost Boeing $550 million, Rubel wrote in a report with a range of potential expenses, from $125 million to reimburse carriers that lease replacement jets to the $5 billion write-off. 

Doug Harned, a Sanford Bernstein & Co analyst in New York, estimated Boeing's expense at less than $350 million. With probes still under way by the US Federal Aviation Administration and the National Transportation Safety Board, McNerney will face questions on this week's earnings call that he won't be able to answer. 

Chicago-based Boeing is due to give its 2013 financial forecast and delivery plans. "We are working this issue tirelessly," Chaz Bickers, a spokesman, said of the 787. "At the same time, we are keeping our other teams keenly focused on their own program performance and customer commitments." 

Sales estimate 

Earnings per share may rise more than 50% to $7.69 by 2015 from $5 in 2012, the average estimate of four analysts surveyed by Bloomberg. Analysts project that Boeing garnered $81.7 billion in sales last year, which may grow to $87.9 billion in 2013. 

The planemaker has said it plans to double 787 output to 10 a month this year as it pares a backlog of about 800 unfilled orders. That's one piece of the company's 60% production boost in the four years through 2014 to meet demand from airlines for more fuelefficient planes. 

http://economictimes.indiatimes.com/news/international-business/boeing-risks-5-billion-in-revenue-on-787-dreamliner-investigation-outcome/articleshow/18232453.cms

GoAir to break even in FY 13: CEO

The company is hopeful of spreading its wings for intnl operations in the next fiscal

After slipping into losses in the last fiscal, low cost carrier Go Airlines (India) or GoAir, is confident to break even in the current financial year. According to chief executive officer of the airline Giorgio De Roni, the company is expecting to clock in a growth of 40% in its topline in FY13. GoAir had a topline of around Rs 1,600 crore in the previous fiscal.

The Wadia Group-owned airline made a net loss of R133.72 crore compared with a net profit of R60.05 crore in 2010-11, according to the company's annual report. The carrier plunged into a loss due to increasing fuel prices, a weak rupee and intense competition which lowered average fares across airlines.

“We had marginal loss in the last fiscal but the first and third quarter of this fiscal have been profitable. So we are confident that we will break even in FY 13,” Roni said. He was in the city to make an announcement on the carrier's three new flying destinations from Kolkata to Ahmedabad, Bagdogra and Guwahati which would start from February 4. Currently, it has daily flights to Delhi and Port Blair from Kolkata. Roni pointed out that by March 2014, it will add three new destinations, but those locations are yet to be finalized.

The company is hopeful of spreading its wings for international operations in the next financial year but currently it is waiting for the nod from the ministry of aviation. This move would help to increase its domestic connectivity   

Roni said, “The government of India has stipulated domestic carriers can go abroad only if they have at least 20 aircrafts. Currently, we have 13 and a fresh one would arrive on Friday. Another seven would be delivered by July 2014. In September, we had applied to the government for a waiver of this norm so that we can start services on international routes. We are confident of securing the relaxation sometime next fiscal.”

He pointed out that cost of fuel is almost 25% cheaper in international operations compared to domestic operations. Currently, it is planning to have flights for Gulf region and Middle East but once the government approval is in place it may start operations in South East Asia, Sri Lanka, Nepal.

“We have also placed orders for additional 72 aircrafts and the delivery of that would start from 2016,” he added.

On queries of possible foreign direct investment in the airline, Roni said, “We are not looking for cash injection at the moment.”

Going forward, according to the CEO, it would continue to give a thrust on the eastern region and hopes to take the region's contribution to 15% of the revenue by FY 15, from the existing 10%.

http://business-standard.com/india/news/goair-to-break-even-in-fy-13-ceo/204244/on

Settle 300 crore dues to fly again: AAI to KFA

The Airports Authority of India (AAI) has sought the clearance of dues of around `300 crore from Kingfisher Airlines (KFA) in order to be able to take to the skies again. KFA is reeling under losses, debts and dues totaling over $2.5 billion.

Mallya wrote to his employees earlier chalking out a revival of operations in a ‘phased manner’.

“We will not go by the empty promises of the Kingfisher Airlines management. We want our dues to be paid (before the airline is allowed to take off again),” agencies quoted senior AAI officials as saying.

KFA engineers had earlier stated that they would file a winding up petition while there were reports that ex-employees had filed a case seeking compensation from the airline.

DGCA and the civil aviation minister, Ajit Singh have maintained that the management should come up with a comprehensive and workable plan for them to consider their revival. The SOP of KFA expired on December 31, 2012.  Even the lenders consortium, headed by public sector lender, State Bank of India, has refused to provide fresh funds unless the company can bring in a minimum of Rs 2,000 crore to the table.

http://newindianexpress.com/business/article1440423.ece

Air India puts Dreamliner planes up for sale, leaseback

New Delhi: Air India has put all its newly- acquired Boeing 787-8 Dreamliner planes for sale and leaseback and invited bids from prospective lessors by February first week, even as all of these aircraft remained grounded across the world. 

Air India and other Dreamliner operators across the world have grounded their entire fleet of 50 B-787s delivered so far following a directive from the US Federal Aviation Authority after a fire risk reportedly caused by a battery problem.

In spite of this, the national carrier has gone ahead with its plan of sale and leaseback, which has already been approved by the government as part of its turnaround and financial restructuring plans.

Sale-leaseback is an arrangement in which an owner sells an asset to a leasing firm and, at the same time, leases it (as a lessee) on a long-term basis to retain exclusive possession and use. This frees capital tied up in a fixed asset, while the lender obtains a guaranteed lease.

The airline can also claim tax deductions as the asset was no longer owned but leased, which would help it in streamlining its operations and cut costs.

Air India has invited quotations from lessors on or before February 5 on a Request for Proposal (RFP) which said it "would sell the aircraft to the lessor and immediately leaseback them under an operating lease for a period of 12 years, with an option to extend."

Though the Indian flag carrier has received six Dreamliners between September and December last and is expected to get one this month, it announced in the RFP the sale and leaseback of seven of them. However, delivery of the seventh plane could be deferred due to the prevailing problem.

Air India plans to sell all its 27 Dreamliner aircraft to a lessor and lease them back to operate by paying monthly rentals, a common fund-raising practice among airlines. 

http://zeenews.india.com/business/news/companies/air-india-puts-dreamliner-planes-for-sale-leaseback_69001.html

Delhi airport registers record flight movement in an hour

Indira Gandhi International Airport in the Capital has handled a record 73 number of flight movements in the country in an hour on a particular day.

“We are delighted to inform you that the Air Traffic Control at Delhi airport handled a total of 73 aircraft movements in one hour on Thursday last, January 24. It is the record number of air traffic movements ever made at any airport in India, thanks to efforts by the ATC team,” said I. Prabhakara Rao, CEO of Delhi International Airport Limited (DIAL) which operates the airport.

The record was set between 2 p.m. and 3 p.m. on January 24.

“For half-an-hour, two runways were in use and for the other half-an-hour, all three runways were in use. It is certainly a testimony to the combined efforts of ATC, DIAL and the airlines,” Mr. Rao said.

The previous high ATM was recorded in December 2012 when 62 flight movements were recorded.

Delhi is the busiest airport handling over 800 flight movements per day.

Mumbai airport, which is the second busiest, has a record of handling around 35 flights in an hour, official sources said. - PTI

http://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/delhi-airport-registers-record-flight-movement-in-an-hour/article4355814.ece

Airport Express may run faster

Current speed is 50 kmph; may be increased soon after inspection of line

The speed of trains on the Delhi Airport Metro Express corridor may be increased in a day or two after inspections by the Delhi Metro Rail Corporation. “A DMRC team has been inspecting the corridor for the past two days,” said a senior DMRC official, adding that the exterior of the corridor was inspected on Monday and found to be satisfactory.

The underground portion of the Airport Line was expected to be inspected on Monday night after the end of services for the day, said sources. “If found to be satisfactory, the speed may be increased as early as Tuesday or the day after.”

Ten days ago, the Airport Line received the mandatory green signal from the Commissioner of Metro Rail Safety and operations resumed on January 22 with trains operating at a speed of 50 kmph. The DMRC had, however, applied to run trains at a speed of 80 kmph.

The Airport Metro corridor was shut down in July last year after the private concessionaire Reliance-Infra detected “technical faults” on “civil structures”.

http://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/airport-express-may-run-faster/article4355809.ece

A long nightmare for Air India as Dreamliner probe may take time

With the U.S. National Transportation Safety Board (NTSB) giving enough hints that investigations into the grounding of B-787 Dreamliners could take some time, Air India’s dream of a turnaround with this latest state-of-the-art Boeing fleet could turn into a nightmare with all its six Dreamliners likely to remain grounded for weeks or even months.

A transcript of the briefing by the NTSB, available with The Hindu , indicates that fire erupted in the Boeing 787 Dreamliner in Boston earlier this month due to thermal runway and short-circuiting in the lithium-ion battery. “Here are findings to date. Fire was present. There are signs of thermal runaway and of short-circuiting,” theNTSB chairman Deborah Hersman told reporters in Washington. All 50 Dreamliners operating around the world, including the six owned by Air India, were grounded after the Boston incident. Thermal runaway is an uncontrolled chemical reaction between electrolyte and electrode that occurs at high temperatures and is uncontrollable, she said.

Ms. Hersman refused to give a deadline for by when the investigations would be wrapped up. However, the NTSB said the order to ground the Dreamliners had come from U.S. Federal Aviation Administration (FAA) and any final word on the aircraft taking to the skies again would have to come from them only.

In a related statement, Boeing welcomed the progress being made in the investigation.

The regulatory and investigative agencies in the U.S. and Japan have dedicated substantial resources to these investigations, and we appreciate their effort and leadership, it said in a statement.

“Boeing continues to assist the NTSB and the other government agencies in the U.S. and Japan responsible for investigating two recent 787 incidents.”

On the other hand, the bad news continues for Air India whose top management was hoping that this drama would end within days. However, with the investigators still probing various angles and the probe nowhere near completion, the national carrier is likely to face a tough road ahead. Officials in the Aviation Ministry and Air India said that with all six Dreamliners being grounded and Airbus 777s being used in various routes, their fuel bill went up between Rs. 30 to Rs. 50 lakh per day. Besides, it has also upset its utilisation schedules and marred the launch of new services to Dubai and Australia.

Though the cash-strapped carrier is talking about compensation for the commercial losses, the prolonged grounding of the Dreamliners is likely to push it into the red.

Air India is the only company to have ordered B787 along with Jet Airways. Apart from the six aircrafts already received, it was to receive two more by March this year besides another six until March 2014.

As per the original delivery plan, the airline would have had a total of 14 Dreamliners in its fleet by March next year, a major factor in its turnaround plans.

Such has been the impact of grounding of Dreamliners that Air India has been forced to combine the Mumbai-Singapore and Chennai-Singapore flights in an Airbus 330. The Mumbai passengers to Singapore will now have to stop at Chennai, which many do not like.

Air India has also had to cancel its five-times-a-week service between Delhi and Tokyo. But it has continued to serve the two overseas destinations through B 777 LRs on Paris and Frankfurt routes.

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·  Final word on aircraft resuming flight will come from U.S. Federal Aviation Administration

·  Fire believed to have erupted in Dreamliner due to short-circuiting on thermal runway

http://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/a-long-nightmare-for-air-india-as-dreamliner-probe-may-take-time/article4355553.ece

Air Arabia keen to fly to Madurai

Air Arabia has expressed its intention to operate its flights between Madurai and Sharjah, Virudhunagar MP and Chairman of Madurai Airport Advisory Committee, B. Manicka Tagore, said.

After attending a meeting with Air Arabia's Director (Network and Strategy), Tony Whitby, Mr. Tagore said though the airline was ready to operate its services, the commencement of services would be delayed as Madurai airport was not included in the list of airports in the bilateral air services agreement.

“The Union Civil Aviation Ministry has taken a re-look at the bilateral air services agreement policy. It may take some more time for getting approval from the Ministry. However, I will take up the issue with Union Civil Aviation Minister Ajith Singh, and also with Union Finance Minister P. Chidambaram,” Mr. Tagore said.

Airport Director K. Sangaiah Pandian expressed happiness over the readiness of Air Arabia to fly from Madurai. “This shows that the attempts made to project Madurai as a popular international terminal is going in the right direction,” he said. Air Arabia was ready to fly an A320 flight daily that could carry around 165 passengers, he added.

Senior president of the Tamil Nadu Chamber of Commerce and Industry, S. Rethinavelu, who participated in the meeting along with B. S. G. Mustafa and G. Vasudevan of Travel Club, was confident that there would be good patronage for a direct flight from Madurai to Dubai and Sharjah. Chamber president N. Jegatheesan, appealed to the Union Civil Aviation Minister for immediate inclusion of Madurai airport in the two-way bilateral airport treaty with the UAE. As an interim arrangement, Mr. Jegatheesan said the Civil Aviation Ministry could permit Air Arabia to operate its service on temporary seat rights allotment by allotting 2,532 seats per week.

http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/air-arabia-keen-to-fly-to-madurai/article4355874.ece

GoAir to introduce more flights from Kolkata

Kolkata, Jan. 28:  

Wadia Group-promoted GoAir plans to introduce more flights Kolkata. The airline is expecting the eastern region’s share in its total revenue to move up from 10 per cent to 15 per cent in two years.

According to Giorgio De Roni, Chief Executive Officer, GoAir, the company plans to introduce daily flights to three new destinations — Ahmedabad, Guwahati and Bagdogra — from Kolkata on February 4.

“We also have plans to add three more destinations from Kolkata by March, 2014. We met the Regional Director of Airports Authority of India this morning to discuss these destinations,” De Roni told the media here on Monday. He, however, did not divulge the names of the three other destinations. The airline, at present, operates daily flights to Delhi and Port Blair from Kolkata.

“The eastern region contributes roughly 10 per cent of our total operations now and it is likely to become 15 per cent by FY15. I foresee a significant growth in demand in the region,” he added.

According to De Roni, GoAir operates 110 daily flights across 22 destinations and plans to increase it to 170 flights by the end of next fiscal. “We will add eight Airbus 320 aircraft by July 2014,” he said.

Asked about bringing in a foreign investor, De Roni said the main objective of calling a foreign partner would be to increase the operational expertise. “We are evaluating the opportunities. We are not looking at cash injection, but looking forward to increasing our efficiency and expertise,” he said.

The carrier earned a revenue Rs 1,600 crore in the last fiscal and posted nearly 40 per cent growth. “We hope to maintain this growth in the next fiscal,” De Roni said.

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The company will introduce daily flights to Ahmedabad, Guwahati and Bagdogra from Feb 4.

http://www.thehindubusinessline.com/todays-paper/tp-others/tp-states/goair-to-introduce-more-flights-from-kolkata/article4354909.ece

Vice-President to open modernised Chennai airport on Jan 31

New Delhi, Jan 28:  

Vice-President Hamid Ansari and Tamil Nadu Chief Minister J. Jayalalithaa will inaugurate the modernised Chennai airport on January 31.

The Chennai airport modernisation is being undertaken by the Airports Authority of India.

second airport

This will be the second airport after Kolkata that AAI has modernised and opened in the last few days.

passengers

After modernisation, the Chennai airport will have a handling capacity of 10 million domestic and four million international passengers.

Its overall handling capacity after completion will be 23 million, including the exiting capacity.

The Centre, in April 2007, decided to upgrade the Chennai airport to international standards.

The AAI had developed the master plan and design of the terminal through global architectural design competition.

An inter-Ministerial group had approved these plans, which focused on enhancing the runway capacity, apron capacity and the capacity of terminal buildings.

The project consists of construction of a new domestic terminal building, extension of the existing Anna international terminal and the secondary runway across the Adyar River.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/vicepresident-to-open-modernised-chennai-airport-on-jan-31/article4354839.ece

Etihad Airways team to meet Anand Sharma on Jan 31

Agra, Jan. 28:  

A business delegation from UAE’s Etihad Airways will meet Commerce and Industry Minister Anand Sharma this week amidst talks of a possible deal with Jet Airways.

“A delegation from Etihad is coming to meet me on January 31,” Sharma told mediapersons on the sidelines of the CII Summit in Agra on Monday.

While the Minister did not elaborate on the agenda for the meeting, DIPP officials said that the changes in India’s FDI policy in aviation and Etihad’s prospects in India would be discussed.

Abu Dhabi’s Etihad Airways is expected to announce a deal to buy a 24 per cent stake in Jet Airways soon. In fact, shares of Jet Airways traded higher on Monday on hopes of an early deal.

If the deal happens, this will be the first instance of a foreign airline acquiring a stake in an Indian carrier after the FDI policy on civil aviation was liberalised recently allowing foreign carriers to pick up stake.

Earlier this month, Jet Airways informed the Bombay Stock Exchange that it was in discussion with Etihad on a potential investment.

“Discussions have commenced recently pursuant to the liberalised FDI policy which permitted foreign investment in the shares of an Indian airline.

“The discussions are in progress, but no terms have been firmed up at present. Various structures are being explored by the legal and commercial teams and care being taken to ensure that all the Indian regulatory requirements are fully complied with,” Jet said in its submission to the BSE.

Jet and Etihad are not new to each other. In fact, when Etihad was set up in 2003, it had sought Jet’s help in setting up its systems. The two already have a code-sharing agreement.

http://www.thehindubusinessline.com/todays-paper/tp-economy/etihad-airways-team-to-meet-anand-sharma-on-jan-31/article4354814.ece