Air India receives approval to appeal a seizure ruling in Canada in the Devas Recovery Suit

Air India has won a nod of an appeals court in Quebec to challenge a Canadian court order that allowed foreign investors in Bengaluru-headquartered Devas Multimedia to seize its funds to recover compensation for a failed 2005 satellite deal with Antrix Corporation, a commercial arm of ISRO.

In a February 11 ruling, Judge Christine Baudouin agreed with Air India that the court should take a closer look at the claim brought by three Mauritius investors and the German major Deutsche Telekom to identify the airline as an alternative to the Government of India to facilitate recovery of compensations awarded by international tribunals over the failed satellite deal.

Air India receives approval to appeal a seizure ruling in Canada in the Devas Recovery Suit

"Without expressing any opinion on the merits or the chances of success in the appeal, I am satisfied that the present matter should be submitted to the court," Judge Baudouin wrote in brief order. She set a hearing in the case for May 13.

Earlier this month, a US federal court for the southern district of New York stayed proceedings to identify Air India as an alter ego of India and to find its assets in the US to facilitate recovery of compensation awarded by international tribunals.

ALSO READ - On Devas investors’ plea, Canadian court orders seizure of Air India and AAI dues to IATA

The shareholders - CC/Devas (Mauritius) Ltd, Devas Employees Mauritius Pvt Ltd and Telecom Devas Mauritius Ltd - have been targeting government assets abroad to recover a total of USD 1.3 billion compensation they won in three different arbitrations initiated over the nixed deal to deliver communications services throughout India.

US federal court for the southern district of New York stayed proceedings to identify Air India as an alter ego of India

They have got an attachment order from a French court for the Indian government's properties in upmarket Paris.

On January 8, 2022, they got a ruling from a Superior Court in the Quebec region of Canada to seize 50 per cent of Air India's funds being held by the International Air Transport Authority, a Montreal-based trade association for the world's airlines that facilitates payment of air navigation charges billed to airlines and countries.

ALSO READ - Air India attempts to settle USD 1.2 billion lawsuits in the US, referencing a new owner

The same judgment was also cited in the New York court by the Mauritius investors to seek seizures of the carrier's assets in the US to recover compensation over the failed 2005 deal.

Air India has sought dismissal of the demand by Devas' foreign investors saying it is no longer a state-owned firm after its takeover by the Tata group on January 27, 2022.

"According to Air India Ltd... the matter raises a new issue of law, namely: whether the assets of a state-owned company with a distinct legal identity and no involvement in the original claim between the Plaintiffs (Devas shareholders) and the Republic of India, can be validly seized ex parte before judgment in hands of another third party (IATA), to pay the debt of the State itself," Judge Baudouin wrote in the order.

Separately, Deutsche Telekom filed a petition in the US District of Columbia court in April 2021 against the Government of India, seeking confirmation of compensation of over USD 135 million (including interest) awarded by a Permanent Court of Arbitration in Geneva in 2020 over the annulment of a Devas-Antrix satellite deal in 2011.

This was separate from the three Mauritius investors' efforts in January 2021 to get confirmation of a USD 111 million compensation award made by the United Nations Commission on International Trade Law.

The Mauritius investors held a 37% stake in Devas and Deutsche Telekom held a 20% stake (in 2011) when the Indian government decided to annul the Devas-Antrix deal.

Another plea was moved before the US court for the southern district of New York to identify Air India as an alter ego of the Government of India and identify its assets to recover the compensations.

Air India has sought dismissal of the demand by Devas' foreign investors saying it is no longer a state-owned firm after its takeover by the Tata group on January 27, 2022.

Devas' investors have also separately filed pleas in the US court for the western district of Washington to identify assets of the Antrix Corp in the US to recover compensation of USD 1.2 billion awarded to Devas Multimedia as a whole by the International Chamber of Commerce over the cancellation of the failed satellite deal.

The government had in February 2011 annulled a deal to lease two communication satellites for 12 years for INR 167 crore to Devas Multimedia citing alleged irregularities in allocation of spectrum and the requirement of the S-band spectrum for security purposes of the country.

A UK judge ordered planemaker Airbus to delay any practical impact of a decision to revoke a USD 6 billion jet order from Qatar Airways for several weeks, as two of aviation's most powerful players wage an escalating court battle.

The move effectively prevents the planemaker from allocating valuable early delivery slots for the in-demand A321neo plane to other airlines, pending an early April hearing at which Qatar Airways plans to seek an injunction reinstating the contract.

The two sides have been clashing for months about surface flaws on A350s, some of which have been grounded by Qatar over safety concerns as its airline sues Airbus for USD 600 million. Airbus acknowledges quality problems but accuses the airline of mislabelling them as a safety issue to secure compensation.

The two sides have been clashing for months about surface flaws on A350s

ALSO READ - Qatar airways sue Airbus for USD 618mn over A350 paint issue

The row widened in January when Airbus revoked a deal with Qatar for 50 A321neos, saying its refusal to take disputed A350s had triggered a clause linking the two plane deals. In a Friday, February 18 hearing, Qatar Airways condemned the decision.

ALSO READ - Airbus responds to Qatar Airways’s A350 dispute by cancelling A321 Order

"They took the risk and knew it would be absolutely incendiary. We have paid USD 330 million for this (A321neo) contract so far and they knew it was a hand grenade being thrown into our bunker," Qatar Airways lawyer Philip Shepherd said.

The technical hearing gave glimpses of what looks set to be a highly charged court battle in aviation, with a hearing on Qatar's request for an injunction set for the week of April 4, and a court date on the main A350 dispute set for April 26.

UK court orders Airbus to halt the cancellation of Qatar Airways' A321neo

Pending the first of those hearings, a UK judge rejected an Airbus request for more time to prepare and ordered the company not to do anything in the meantime that may scupper its ability to fulfil the A321neo deal if Qatar wins that part of the case.

Its lawyer Rosalind Phelps said the cancelled planes had been removed from its industrial plans and warned of damage to its supply chain if its hands were tied too severely.

The first plane is due for delivery in February 2023, with planes due to be delivered at a rate of six a year. Planemakers usually order parts up to a year ahead.

Airbus Chief Executive Guillaume Faury said on Thursday, February 17 it had been forced to cancel the A321neo order to "exercise our rights". On Friday, February 18 he reiterated on BFM TV that Airbus was ready for an amicable solution, adding "it takes time". Sources close to both sides say there are no signs so far of any truce.

Airbus says that they had been forced to cancel the A321neo order to "exercise our rights".

ALSO READ - Airbus cancels more A350 orders of Qatar Airways

Airbus is meanwhile preparing counter-claims in the A350 case. It has cancelled two out of 23 A350s still on order for Qatar but has agreed not to look for alternative buyers for now.

In January 2021, a Qatar Airways A350-900, registered as A7-ALL, was ferried to Ireland to be repainted in a special livery to celebrate the 2022 FIFA World Cup, which will be held in Qatar in October 2022. However, irregularities were found on the aircraft surface after it was stripped of its original paint.

In August 2021, the Qatar Civil Aviation Authority (QCAA) grounded 13 of Qatar Airways Airbus A350 aircraft over similar issues. Currently, the number of parked jets stands at 24, Planespotters.net data shows.

Qatar Airways released video footage showing defects in questions and claiming they weren't superficial

While Airbus largely refrains from commenting on the dispute in public, the manufacturer has previously accused its customer of misrepresenting the problem as a safety issue. Some versions in the media indicate that the airline might have sought the A350 groundings due to its interest to keep the planes idle given the COVID-19 impact on passenger demand. However, the latter claim is not confirmed.

In January 2022, Qatar Airways released video footage showing the defects in questions and claiming they were not superficial. “[...] one of the defects causes the aircraft’s lightning protection system to be exposed and damaged, another defect leaves the underlying composite structure exposed to moisture and ultraviolet light, and other defects include cracking in the composite and damage around a high percentage of rivets on the aircraft fuselage,” the airline wrote in a statement accompanying the video.

Singapore will from February 22 relax entry and testing requirements for vaccinated travel lane (VTL) passengers but those departing from India will still have to furnish a negative PCR or professionally administered ART test within two days of flight departure.

According to Singapore Airlines (SIA), fully vaccinated passengers travelling to Singapore from February 22 on VTL flights from Chennai, Delhi and Mumbai will have their travel history requirement reduced from 14 to 7 days.

To be eligible for VTL flights, travellers must not have any travel history (including transit) outside of VTL countries/regions, or outside of countries/regions listed as Category I (Macao, Mainland China, and Taiwan) by Singapore’s ministry of health in the past seven days, SIA said.

According to Singapore Airlines fully vaccinated passengers travelling to Singapore from February 22.

“If the traveller has been in Singapore within those last seven days, his/her stay in Singapore can be counted towards fulfilling this seven-day travel history requirement,” the statement said.

The second change will be that the long-term pass holders will no longer have to apply for a vaccinated travel pass (VTP) to travel to Singapore on a VTL flight. However, a VTP is still required for short-term visitors and work permit holders. The on-arrival testing requirements in Singapore will also be relaxed.

“From February 22, VTL travellers need not take an on-arrival Polymerase Chain Reaction (PCR) test at Changi Airport. Instead, they will be required to take a supervised self-swab Antigen Rapid Test (ART) at any test centre located across Singapore within 24 hours of arrival,” it said.

The on-arrival testing requirements in Singapore will also be relaxed.

A testing notice with a web link to book tests would be issued to travellers upon their entry into Singapore. If the above ART is negative, no further ART/PCR tests are required throughout one’s stay in Singapore.

The changes to Singapore’s VTL entry and testing requirements follow the government’s announcement last month exempting VTL travellers from all testing requirements if they had recently recovered from Covid-19 (within 7 to 90 days of their last infection before departure to Singapore) and can provide appropriate documentary proof of their recovery.

Singapore Airlines operates 52 flights to Singapore from eight cities in India, which includes daily, quarantine-free VTL services from Chennai, Delhi, and Mumbai.

Singapore to relax Covid-19 restrictions for vaccinated travellers.

It operates non-VTL services from Ahmedabad, Bengaluru, Hyderabad, Kolkata, and Kochi, and customers travelling on these flights will need to adhere to the entry rules. Scoot, SIA’s low-cost subsidiary, operates non-VTL services from Amritsar, Hyderabad, and Tiruchirappalli.

The reopening announcement is timely for the carrier as in its January operating statistics report, SIA observed a slight decline in passenger demand in January 2022 compared to a month ago.

It attributed this to the suspension of new ticket sales for VTL flights between December 22 to January 20 because of the emergence of Omicron. Since then, ticket sales have resumed and the VTL quota has been increased.

SIA's passenger network covered 13 Indian cities including Mumbai, Delhi, Hyderabad, Bengaluru and Kolkata at the end of January 2022.

Despite this, the SIA Group (including low-cost carrier Scoot) reported a 126% increase in capacity (measured in available seat-kilometres) compared with a year ago and a 2.8% month-on-month growth, reaching 46% of pre-COVID capacity.

However, passenger traffic (revenue passenger kilometres) fell 11.7% compared to the previous month, and its passenger load factor for January 2022 declined 6.5% points to 40%. There was however a 28.7% point year-on-year increase.

As of the end of January 2022, SIA's passenger network covered 86 destinations counting Singapore and about 13 Indian cities including Mumbai, Delhi, Hyderabad, Bengaluru and Kolkata.

Agartala will be connected with Dhaka and Chittagong cities of Bangladesh through flights, Tripura Chief Minister Biplab Kumar Deb said on Saturday, February 19.

Services along the Agartala-Dhaka and Agartala-Chittagong international routes are expected to begin within the next six months, and the Ministry of Civil Aviation (MoCA) will soon float tenders inviting expression of interest from private airlines wishing to operate along the routes, a senior official said.

"Finally, MBB Airport in Agartala is now set to have an international flight service with Dhaka & Chittagong. My heartfelt thanks to Hon'ble PM Shri @narendramodi Ji & Civil Aviation Minister Shri @JM_Scindia Ji for this initiative to fulfil the dream of the people of Tripura," Deb tweeted.

Biplab Kumar Deb, Chief Minister, Tripura

"The proposed international flight service with Bangladesh will surely boost Tripura tourism & take the state to a new height in terms of air connectivity. It will also benefit the people of Bangladesh in various ways and strengthen relations between two countries," he said in another Twitter post.

The MoCA has included the proposed international routes under the UDAN scheme, Sanjoy Mishra, Officer on Special Duty (OSD) to the chief minister said.

"The MoCA will now float tenders inviting expression of interest from private airlines who wish to run their services along the two international routes," he said.

The MoCA has included the proposed international routes under the UDAN scheme.

The international flight services from Maharaja Bir Bikram (MBB) Airport are expected to begin within the next six months as the MoCA has already identified the two routes, he said.

MBB Airport Director Rajiv Kapoor said that the chief minister has taken up with Union Civil Aviation Minister Jyotiraditya Scindia the commencement of international flights from the airport at the earliest.

"Right now, I cannot say when the international flight services will kick-start from the airport but we are ready for it. "The new terminal building, which was virtually inaugurated by Prime Minister Narendra Modi on January 4, has all facilities, from customs to immigration and separate zones for arrival and departure, for handling international passengers," he said. 

The new terminal building of Maharaja Bir Bikram Airport in Agartala was inaugrated in Jaunuary 4.

The Maharaja Bir Bikram (MBB) Airport in Agartala became ready to operate international flights after Prime Minister Narendra Modi inaugurated the new integrated terminal building on January 4.

According to the officials of the Airport Authority of India, the MBB airport, located 20 km north of Agartala, is the second busiest airport in the northeast after the Guwahati airport in terms of handling of aircraft and passengers. The Guwahati and Manipur airports were earlier declared international airports.

Built at a cost of INR 500 crore and with a built-up area of 30,000 sq mt, the new integrated terminal building at the MBB airport has been designed to handle 1,500 passengers, including 200 international passengers, during peak hours and it is equipped with all modern amenities.

The Airport Authority of India (AAI) has begun the construction of the Maryada Purshottam Shri Ram Airport in Ayodhya. The construction bids have been finalised, and Vishal Infrastructure, based in Bengaluru, which won the bid for the runway building, has begun work under the supervision of the AAI.

The AAI appointed project in charge, Rajeev Kulshreshtha and three other officials have taken charge. Ayodhya airport director, Lalji and two assistant general managers of the AAI have already been appointed.

According to AAI officials, the project's first phase will be completed in around one-and-half to two years, for which INR 150 crore have been allocated. In the project's first phase, a 2,250-metre runway for ATR-72 aircraft has to be constructed.

AAI has begun the construction of Ayodhya airport

Prime Minister Narendra Modi was to lay the foundation stone of the project. Still, due to the imposition of the model code of conduct for the Uttar Pradesh Assembly polls on January 8, the ceremony could not be held.

According to officials, the Ayodhya airport will be constructed in three phases, for which around 550 acres of land will be required. Out of this, the existing airstrip and terminal in Ayodhya already account for 182 acres.

After the Centre sanctioned INR 250 crore for the construction of the Ayodhya airport, the Uttar Pradesh government has approved INR 321 crore to purchase the additional land.

In 2008, the Ayodhya Airport was handed over by the government of Uttar Pradesh to the Airports Authority of India (AAI) to be developed as a full-fledged airport.

A total amount of INR 1,001.77 crore has been approved to purchase 555.66 acres of additional land for the construction of the airport. A budgetary provision of INR 101 crore has been proposed for the development work at the airport.

In November 2018, Chief Minister Yogi Adityanath had announced the development of the airstrip in Ayodhya for large aircraft such as A320 and B737 and the construction of a suitable runway and terminal building.

The airport project had been fast-tracked by the state government, and the Ram Manohar Lohia Awadh University also approved a proposal to hand over its 23 acres of land in October 2021.

A total amount of INR 1,001.77 crore has been approved to purchase 555.66 acres of additional land for the construction of the airport.

Around 30 buildings on this land, including the Vice-Chancellor's official residence, will also be handed over to the Union Ministry of Civil Aviation for the airport construction.

The Ayodhya airport is among several projects of the Centre and the state government that have been approved for the temple town. Ayodhya Airport is the fifth international airport in Uttar Pradesh (after Lucknow, Varanasi, KushiNagar and Noida).

In 2008, the Ayodhya Airport was handed over by the government of Uttar Pradesh to the Airports Authority of India (AAI) to be developed as a full-fledged airport along with three others (Meerut, Moradabad and Saifai) by the approval of the Uttar Pradesh cabinet. The government of Uttar Pradesh is providing extra land free of cost for further expansion and for the construction of a terminal.

Wadia group-owned Go First plans to hit the public markets by the end of June or early July.

The airline which had got approval from market regulator Sebi for its IPO in 2021 had held back its IPO first due to the emergence of Omicron and then to avoid a clash with the mega IPO of Life Insurance Corporation (LIC).

Sources said that the management of Go First is preparing to restart the roadshows and investor presentations. “Given the feedback from bankers, we are ready for an IPO,” a person aware of the airline’s plans said, adding that the company will not reduce the issue size.

Go First plans to launch the IPO by July after months of deliberation; mulls inducting more aircraft

ALSO READ - Go First files for IPO at INR 3,600 crore valuation

The airline plans to garner up to INR 3,600 crore through the sale of shares, according to the Draft Red Herring Prospectus (DRHP) plans to utilise a primary portion towards prepayment or scheduled repayment of all or a portion of certain outstanding borrowings, vendors, and aircraft lessors.

Industry sources said that buoyancy in domestic traffic has encouraged the merchant bankers of the company to relook at the IPO. This is despite heightened challenges of record-high fuel prices and a weaker rupee against the dollar which can hit the valuations of an airline IPO.

ALSO READ - Go First’s IPO will take place on December 8, with proceeds going towards debt reduction

The airline had delayed its IPO plans in August 2021 after the Securities and Exchange Board of India called the promoters, the Wadias, for a pending inquiry. In December 2021, GoFirst further delayed the offering due to the outbreak of the Omicron wave and then the Russia-Ukraine war that started in February.

In December 2021, GoFirst further delayed the offering due to the outbreak of the Omicron wave and then the Russia-Ukraine war that started in February.

“You can never bet on a peak market or all things going right for an IPO. Merchant bankers were waiting for IPOs of LIC and Delhivery. Bankers are quite eager and optimistic. “We are all prepared and we would be open for the listing as soon as possible,” the person said.

As part of its listing preparation, the airline has resumed its capacity expansion plans and plans to add new aircraft starting in August. It plans to add 10 new Airbus A320 Neos by the end of March 2023.

Go First is flying more as the demand in the domestic sector has improved significantly due to the fall in the number of COVID cases. The airline is operating around 300 flights daily as compared to 288 flights in 2019.

“The buoyancy of traffic has definitely picked up. May has been better than April in terms of booking and advance booking has also become stronger. The top line and occupancy look encouraging. We still expect around 10-15% increase in demand,” a senior executive of the airline said.

Out of 56 aircraft, the aircraft is using around 45 with nine A320Neo still parked.

However, the airline is yet to return all of its current fleets. Out of 56 aircraft, the aircraft is using around 45 with nine A320Neo still parked. “We have 10 more aircraft to be deployed. All aircraft are expected to be operating by the end of June,” the executive said.

Go First is looking to pitch to investors that with the backing of a strong promoter group, the airline can emerge as a No 2 in the Indian domestic market but with a cost structure which is lesser than market leader IndiGo.

The financial distress of SpiceJet has hampered its fleet induction plans allowing Go First to climb to the second spot with a market share of 9.8% in March- slightly higher than 9.5% of SpiceJet.

“If we don’t aggregate the four Tata group airlines which are functioning as separate entities as of now, the airline has been second in the pecking order with a consistent market share of around 10%. Even in May, till date average market share of Go First has been little less than 12%,” a senior executive of the airline said.

The airline has consciously decided not to spread its network thin but increase its strength where it operates.

The increase in market share of Go First, the executive said is also a factor in the increase in utilisation, deployment of aircraft and selection of network. Currently, the fleet utilisation is at around 13.2 hours and the airline intends to increase it further.

The airline has consciously decided not to spread its network thin but increase its strength where it operates. Almost with a similar market share the airline operates to 29 destinations as compared to 72 destinations of SpiceJet. “We try to remain at a meaningful scale where we are present and give more options to customers rather than spreading thin and wide,” the executive said.

Aircraft fleet of Go First

Low-cost Indian air carrier GoFIRST earlier called GoAir is mulling inducting more A321 Neo aircraft into its fleet. The airline is also looking at converting its entire fleet to A321 Neos.

The airline currently has 52 A320 Neos and 6 A320 Ceos in its fleet. The airline may induct around 3-4 A321 Neos every year with total aircraft delivery of 10 aircraft per year until the financial year 2024 and another 72 aircraft will be delivered between the financial year 2024 and financial year 2027.

The airline is also looking at converting its entire fleet to A321 Neos.

The A321 Neo aircraft are known to have a longer range, can seat 25% more passengers and are 20% more fuel-efficient than the A320 Neos.

According to data from ch-aviation.com, there are currently 58 aircraft in Go First's fleet. This figure consists entirely of Airbus narrowbodies, whose average age clocks in at an impressive 6 years old.

This is slightly dragged down by the six A320ceos that remain in the fleet, which are being replaced by newer A320neos as they arrive. The 52 A230neos have an average age of just 3.4 years old.

Go First configures each of its aircraft types slightly differently when it comes to onboard seating. Of course, being an ultra-low-cost carrier, what remains consistent is the idea of an all-economy layout. However, the older A320s have slightly fewer seats, namely 180.

The newer A320neos have an extra row of seats onboard.

Meanwhile, the newer A320neos have an extra row of seats onboard. This brings their total capacity to 186 passengers.

Bottomline

India’s aviation sector has been recovering as people resume leisure and official travel after over two years of pandemic-related restrictions. However, the price of aviation fuel, the biggest cost component for airlines, has risen sharply, and competition is set to intensify as two additional carriers take to the skies.

Like other airlines, GoFirst is betting on rising demand for leisure travel during the summer vacation to combat rising fuel prices, people aware of the matter said. The carrier expects the government to lift fare caps and include aviation turbine fuel in the goods and services tax regime to help the aviation sector.