Air India clears 80% of its jet fuel debts

The outlook for Indian Oil’s (IOC) aviation business is positive with growth in flights, the upcoming launch of new airlines in 2022 and recovery of jet fuel dues from Air India.

“Airline operators have cleared all dues pending with IOC and are now within agreed terms,” the country’s largest fuel retailer said in a statement. “Air India has also paid around 80% of its pending dues to oil marketing companies. IOC has received INR 2,281 crore from Air India. The balance settlement is under process for which modalities have been initiated because of the handing over process of Air India.”

Air India has been making daily payments for its fuel uplift but its past dues had been pending for years. In 2019, oil marketing companies had briefly snapped supplies to the airline at six airports. They had restored fuel supply after the airline agreed to pay INR 100 crore every month to clear the backlog.

Air India cleared 80% of its fuel dues earlier this month upon receiving fund infusion from the government, it is learnt.

IOC said current aviation turbine fuel (ATF) volume has reached 80% of the pre-Covid time. “With increasing air traffic, an increasing fleet in India, the opening of new airports and anticipated entry of upcoming operator Akasa and the revival of Jet Airways, the outlook for aviation business seems to be positive and optimistic,” it said.

According to IOC, recovery of ATF volumes between April to November was 57% of pre-Covid level and is expected to reach pre-Covid levels once international airlines resume normal operations.

Scheduled international passenger flights have been suspended till January 31 because of the global spread of the Omicron variant of Covid-19. While the civil aviation ministry had given its nod to resume scheduled flights from December 15, the decision was put on hold following a review by Prime Minister Narendra Modi.

Scheduled international flights have been suspended since March 23, 2020, when the lockdown was imposed to rein in the spread of the contagion. While initially only repatriation flights were permitted, India began signing air transport bubble agreements from July 2020 with various countries to resume international flights.

On Sunday, December 26, 611 international flights were operated to and from India, which is around 50% of the approved flights in the winter schedule of 2019.

Karnataka government has cut VAT on ATF to 18% and the revised rate will come into effect from January 1.

Earlier, Tripura Cabinet has decided to reduce the share of Value-Added Tax (VAT) levied on Aviation Turbine Fuel from 16% to 1% expecting better air traffic at Maharaja Bir Bikram Airport Agartala soon after it gets the international airport status.

The Madhya Pradesh government has also decided to reduce the Value Added Tax (VAT) on aviation turbine fuel (ATF) to 4% at Bhopal and Indore airports, a move it hopes will bring down airfares.

(With Inputs from Business Standard)

BOC Aviation Limited has delivered the last of eight Airbus A320NEO aircraft to InterGlobe Aviation Ltd (IndiGo) under a purchase-and-leaseback agreement signed earlier this year.

The aircraft is powered by CFM Leap engines, according to a statement.

"The delivery of these eight aircraft reflects the strong cooperation that we have established with IndiGo, India's largest passenger airline.We look forward to building on our relationships with major airline partners such as IndiGo, as we continue to support our airline customers in financing their aircraft deliveries."Steven Townend, Deputy Managing Director and Chief Financial Officer, Singapore-based BOC Aviation

The A320neo (new engine option) is one of many upgrades introduced by Airbus to help maintain its A320 product line's position as the world's most advanced and fuel-efficient single-aisle aircraft family. The baseline A320neo jetliner has a choice of two new-generation engines (the PurePower PW1100G-JM from Pratt and Whitney and the LEAP-1A from CFM International) and features large, fuel-saving wingtip devices known as Sharklets.  

BOC Aviation Limited is an aviation leasing unit headquartered in Singapore, with regional offices in London, UK, Dublin, Ireland, Tianjin, China and New York, USA. The company was wholly owned by the Bank of China.

The BOC Aviation portfolio is one of the youngest in the leasing business with an average owned aircraft age of under four years. The fleet is primarily based on the popular Airbus A320 family and Boeing Next-Generation 737 series as well as the Embraer 190/195 family. It also includes select widebody types, such as the Airbus A330 and Boeing 777.

Besides direct orders with manufacturers, BOC Aviation also grows its fleet via purchase and leasebacks with airlines. They offer a wide range of lease management and aircraft finance services, both directly and through its indirect parent company Bank of China.

BOC Aviation is a leading global aircraft operating leasing company with a fleet of 553 aircraft owned, managed and on order. Its owned and managed fleet was leased to 87 airlines worldwide in 39 countries and regions as of December 31, 2020.

Tata Group's takeover of loss-making national carrier Air India is most likely delayed by a month till January as the completion of procedures is taking longer than expected, an official said on Monday, December 27.

In October, the government accepted the highest bid made by a Tata Sons company for 100% equity shares of Air India and Air India Express along with its 50% stake in ground-handling company AISATS -- the first privatisation in 20 years.

At that time, the government had stated that it wanted to complete the transactions, which included Tatas paying INR 2,700 crore in cash, by December end. As per the conditions in SPA, all formalities of handover would have to be completed within 8 weeks, but this date can be mutually extended by the buyer and seller and is being done in this case.

However, some regulatory approvals are yet to come in for the handover, and certain formalities are yet to be completed, the official, who wished not to be named, told PTI. "The process would be completed by January," he said without giving a specific date.

On October 25, the government had signed the share purchase agreement with Tata Sons for the sale of national carrier Air India for INR 18,000 crore. Tata's would pay INR 2,700 crore cash and takeover INR 15,300 crore of the airline's debt. The cash component would come once the handover process is completed, another official explained.

Tatas beat the INR 15,100-crore offer by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of INR 12,906 crore set by the government for the sale of its 100% stake in the loss-making carrier.

As of August 31, Air India had a total debt of INR 61,562 crore. 75% of this debt or INR 46,262 crore will be transferred to a special purpose vehicle AIAHL before handing over the loss-making airline to Tata Group.

A meeting will be held to review the progress of Air India’s disinvestment after which clarity may come about handing over Air India to Tata and the long stop date. The meeting will be attended by officials from the Department of Investment and Public Asset Management (DIPAM) and the Ministry of Civil Aviation (MoCA). After clarity on the long stop date, the financial statements will be prepared in agreement with Tata on that date.

The handover of Air India to Tata Sons also requires approvals from global competition regulators before closing the transaction, the daily mentioned citing the official. On December 20, India’s competition regulator, the Competition Commission of India approved the deal.

Tatas will not get to retain non-core assets, such as the Vasant Vihar Housing colony of Air India, Air India Building at Nariman Point, Mumbai, and Air India Building in New Delhi. Of the 141 Air India aircraft that Tatas will get, 42 are leased planes, while the remaining 99 are owned.

While this will be the first privatisation since 2003-04, Air India will be the third airline brand in the Tatas' stable - it holds a majority interest in AirAsia India and Vistara, a joint venture with Singapore Airlines Ltd.

Tata's acquisition of Air India will give it access to a fleet of 117 wide-body and narrow-body aircraft, and Air India Express Ltd another 24 narrow-body aircraft besides control of 4,400 domestic and 1,800 international landing, and parking slots at domestic airports.

Air India started suffering losses every year since its merger with Indian Airlines in 2007-08. A Turnaround Plan (TAP) and a Financial Restructuring Plan (FRP) were approved for Air India by the previous UPA regime in 2012.

However, the TAP did not work out, and Air India continued to reel under losses, with the government giving INR 20 crore per day to keep the airline afloat. Over the last decade, more than INR 1.10 lakh crore was infused by way of cash support and loan guarantees in the loss-making airline to keep it afloat.

All new airplanes, as a part of their safety testing, have to demonstrate that all passengers can be evacuated within 90 seconds in the event of an emergency. Non-compliance to this will result in the non-approval of the safety certification by the aviation authorities. Question is, where does the 90 seconds limit come from? Is it just any random number that came to one's mind or simply chosen as a rule of thumb? Or does it have experimental studies to back it up? Let's see.

Wheelchair Travel

The mandatory certification for any new airliner includes a live evacuation test, the parameters of which are listed below:

Volunteers, together with the crew, are taken aboard who have no prior knowledge of the aircraft with regards to its type and model.The volunteers, in good physical condition, have to be at least 40% women and 35% of the passengers older than 50.With only the emergency lighting in place, half of the emergency exits will be closed while the other half will be accessible.Passengers carrying infants are simulated using a dollBlankets and pillows are strewn at random in the aisles while the entire test is performed in the dark

An important point to be noted here is that the test is conducted with keeping the average weight of a person in mind-  150 pounds or 75 kilos- which is basically the aviation standard.

How it all started..

Early research on post-crash fires led to the conclusion that the best way of reducing fatalities from such accidents was in the speedy evacuation of crew and passengers. Notable crash-tests include the crash-test of a Douglas DC7 transport plane by the FAA in April 1964, followed by a similar test on a Lockheed L1649 in the same year.

Crash-test of Douglas DC7

The entire fiasco was simulated using high-speed cameras inside the aircraft and around the crash site to record the effects of the impacts on the planes and the dummy pilots and passengers. The wrecked fuselage of the Lockheed was later used in evacuation tests to examine post-crash survivability.

Additionally, the FAA also conducted a "fireball" and "flash over" test, the intense evaluation of which pointed that a structurally sound cabin engulfed in flames remained habitable for around two minutes- known as the " flashover point". The FAA finally deemed this flashover point to be the appropriate time for evacuation and hence the time limit was set to 2 minutes. Also, ropes were to be used to speed up evacuation although later it proved to be counter-intuitive and were replaced completely.

Representative | International Academy of Travel

Further analysis and several crash tests later, the FAA further brought the limit down to 90 seconds, which is the official mandate now.

In 1967, the FAA initiated research to develop safety fuels to reduce post-crash fires and other requirements that addressed improved interior lighting, evacuation slides deployable in 10 seconds or less, improved exit distribution and excess exits, self-extinguishing interior materials, and protection of fuel and electric lines. These changes were coupled with a reduction of the required time for evacuation from 2 minutes to 90 seconds.DOT/FAA/AR-95/84

Airline manufacturers are required to simulate the full-scale emergency evacuation demonstration as close to reality as possible with the plane's maximum occupancy.

A full-scale emergency evacuation demonstration simulates an aborted takeoff. The operator must show that the aircraft, emergency equipment, and emergency procedures allow the evacuation of the aircraft at full seating capacity, including crewmembers, in 90 seconds or less.FAA Chapter 77 Section 1.7

So technically, the 90-second rule comes from a fire safety aspect, as humans are not expected to survive in those conditions for longer than that. The aircraft is only tested on whether it can evacuate on an aborted take-off (not specifying that a simulated fire must be the cause of this aborted take-off).

https://www.youtube.com/watch?v=XIaovi1JWyY

The Airbus A380 evacuation drill wherein a record 873 participants were able to leave the aircraft and reach the ground within the 90 seconds prescribed, with half of the 16 doors in operation

Did you know? First responders like ARFF (Aircraft Rescue & Fire Fighting) units have a 3-minute limit for the first vehicle to respond to such an emergency.

SOURCE(s)

COVER: Youtube

Dues of four major domestic airlines - IndiGo, SpiceJet, Go First and AirAsia India -- to the Airports Authority of India (AAI) more than doubled between January 2020 and October 2021, according to internal AAI documents.

Air India, however, continues to be the domestic carrier with the highest amount of dues to the AAI. As per the documents, Air India's dues to the AAI have increased from INR 2,183.71 crore as of January 1, 2020, to INR 2,362.36 crore as of October 31, 2021.

An airline has to pay various charges like air navigation, landing, parking etc to the AAI to use facilities at any of its more than 100 airports. Both Air India and the AAI work under the Civil Aviation Ministry.

The government had on October 8 announced that the Tata Group has won the bid to acquire Air India. The Centre is expected to hand over Air India to the Tatas in the first half of 2022.

India has six major domestic carriers, IndiGo, SpiceJet, GoAir, AirAsia India, Air India and Vistara, which owed the AAI a total of INR 2,306.59 crore as of January 1, 2020, the AAI documents -- which have been accessed by PTI -- noted.

The dues of these six major domestic carriers taken together increased by 14.29% to INR 2,636.34 crore by October 31, 2021, the documents added.

Vistara and IndiGo have clarified that all their dues have been cleared, while SpiceJet said its dues are well within credit limits.

India's largest carrier IndiGo owed INR 80.69 crore as in October 2021, as against INR 33.21 crore in January 2021, they mentioned. Asked about this, an IndiGo spokesperson told PTI: "As per our records, all outstanding to the AAI as of October 31, 2021, has been duly paid within the due date."

SpiceJet's dues with the AAI increased from INR 69.93 crore in January 2020 to INR 146.75 crore as of October 2021, the AAI documents noted.

"The total dues (of the airline) to AAI as of October 31, 2021, stood at INR 122.69 crore. SpiceJet has provided a bank guarantee of over INR 150 crore, and all outstanding are well within the credit limits.SpiceJet is making a daily payment of INR 1.10 crore as per the payment plan agreed with AAI.The airline industry has been one of the worst-hit sectors due to the ongoing pandemic which led to the accumulation of charges, while our revenues were down to negligible limits. Unlike in other countries, no relief or any waivers were offered by the government or the airport operator on their charges during the pandemic."In fact, on the contrary, SpiceJet has huge claims of over INR 170 crore against AAI about the wrongful levy of landing charges for Q400 aircraft, damages for accident and loss of aircraft at Jabalpur airport, and damages for the accident at Surat airport."Spokesperson, SpiceJet

Go First, which was previously known as GoAir, saw its dues to the AAI increase from INR 15.62 crore in January 2020 to INR 39.06 crore in October 2021, the AAI documents showed.

AirAsia India's dues to the AAI increased from INR 1.47 crore in January 2020 to INR 3.58 crore in October 2021, the documents noted. Go First and AirAsia India did not respond to PTI's queries regarding the matter of the dues.

Vistara's dues to the AAI increased from INR 2.65 crore in January 2020 to INR 3.9 crore in October 2021, according to the documents. A Vistara spokesperson told PTI that the increase in dues is purely on account of an increase in operations, with a growth in fleet size and number of passengers carried. When asked how Vistara plans to clear the dues to the AAI, the spokesperson added: "No dues are outstanding with the AAI, Vistara is current with all airport dues."

The Indian Council for Cultural Relations (ICCR) has submitted a memorandum to the Civil Aviation Minister of India Jyotiraditya Scindia to make it mandatory for every Indian carrier to play Indian music to promote Indian music.

"Indian Council for Cultural Relations (ICCR) joins the fraternity of musicians, singers and artistes associated with India traditional music, in demanding that playing Indian classical or light vocal and instrumental music in aircraft being operated in India and also at various airports be made mandatory for all India based airlines.Music played by most airlines across the globe is quintessential of the country to which the airline belongs. For example, it is most likely that we shall come across Jazz in an American airline or Mozart in an Austrian Airline and Arab music in an Airline from the Middle East. However, it is extremely unfortunate and even ironic that most airways in India however -both private and Government-owned as well as both Domestic and International, seldom, if at all play Indian music. Our music mirrors our rich heritage and culture and it is one of the many things every Indian has a reason to be truly proud of."Vinay Sahashtrabuddhe, President, Indian Council for Cultural Relations (ICCR)

ICCR called Aviation Minister Jyotiraditya Scindia to its program and submitted a memorandum to him and said that if this happens in Indian Airlines, Indian music will get a lot of strength.

"I come from the music city of Gwalior, which has been the city of Tansen and has also been an old house of music, Indian ancient music has a history of many years and people have a lot of curiosity in ancient music too," Scindia said. The minister also suggested having music festivals like literature festivals to promote music.

India has an ancient tradition of music and that the country in a way is an incubator in the field of music for the world, he said, adding that in the race for modernisation, the ancient tradition might not have got the required encouragement.

ICCR President Vinay Sahasrabuddhe is happy after the Aviation Minister's positive words to introduce Indian music on flights.

Apart from this, ICCR assured the ministry and the airline company that if copyright issues arise, the government will talk to the person concerned in this regard.

Indian Council for Cultural Relations (ICCR) joins the fraternity of musicians, singers and artists associated with Indian traditional music, in demanding that playing Indian classical or light vocal and instrumental music in aircraft being operated in India and also at various airports be made mandatory for all India based airlines. Fraternity from the Music industry Anu Mallik, Kaushal Inamdar, Pandit Sanjeev Abhyankar, Manjusha Patil - Kulkarni was present in the meeting.