Tata-owned Air India and Vistara have asked for permission from their creditors to merge the two airlines. On Thursday, September 21, The Economic Times (ET) reported that creditors will vote on the proposal on September 23. Sources told ET that after getting approval from creditors, Air India and Vistara will move for permission from the Registrar of Companies and aviation regulator DGCA. The merger plan has already been given the nod by the National Company Law Tribunal (NCLT) and the Competition Commission of India (CCI).
Tata Sons and Singapore Airlines (SIA) filed a merger application with the CCI in April, stating that the amalgamation of Vistara with Air India would not change the competitive landscape or cause any appreciable adverse effect on competition in India. They had expressed hope to conclude the merger by March 2024.
According to the consolidation plan, Air India and Vistara will combine to form a single full-service entity, whereas Air India Express and AirAsia India will merge to form a low-cost airline, which will be a subsidiary of Air India. Singapore Airlines (SIA), which has a 49% stake in Vistara will hold a 25.1% stake in the firm. SIA will invest USD 267 million in Air India. Air India is wholly owned by Tata Sons, whereas Vistara is a 51:49 joint venture between Tata Sons and SIA.
As per the proposal, Air India will issue 3,702,338,129 fully paid-up equity shares to SIA at a face value of INR 4 each, priced at INR 5.56 per share. The notice states that permissions will be sought from both secured and unsecured creditors. In most cases, banks are secured creditors, whereas vendors and lessors are called unsecured creditors.
Merger Preparations in Full Swing
The Tatas are keen to conclude the merger by March 2024 to unlock synergies, as stated by executives. Vistara has initiated aptitude tests for its staff and launched a culture survey to identify individuals suitable for key roles within the merged entity. This process includes the Hogan Test, designed by a US-based firm, to assess the normal personality characteristics necessary for job fit, particularly in leadership roles. Additionally, a unified salary structure and seniority lists have been established for pilots across all Tata Group airlines.
For SIA, which partnered with Tata in 2014 to establish Vistara, the merger represents a significant opportunity in the Indian market, currently ranked as the world's third-largest. Through the merged entity, SIA gains a foothold in both the low-cost and full-service segments, aligning with its multi-hub strategy. This merger positions SIA to tap into a market substantially larger than its home market, potentially ensuring its long-term viability. Importantly, after accounting for the capital injection, the total investment will not exceed 20% of the SIA Group's market capitalisation.
As of August 1, Air India had 74 Airbus and 53 Boeing planes in its fleet, according to aviation analytics firm Cirium. In February, Air India placed an order for 470 planes, with 250 from European plane maker Airbus and 220 from Boeing. This order represents the world's second-largest single-tranche aircraft purchase. The order with Boeing includes 190 B737Max, 20 B787s, and 10 B777s aircraft. The Airbus firm order comprises 210 A320 family aircraft and 40 A350 planes. A350, B777, and B787 are wide-body aircraft with larger fuel tanks, allowing them to cover long distances, such as India-North America routes.
As per the latest available Vistara has 5500+ employees including 2500 pilots and cabin crews. In the previous fiscal alone, the airline hired over 2,100 employees in the reporting fiscal. The airline currently has a fleet of 60 aircraft, including 46 Airbus A320neo, 10 Airbus A321neo and 4 Boeing 787-9 Dreamliner aircraft and has flown more than 42 million customers since starting operations. Earlier this year, the Tata-owned Air India, which recently announced a massive order of 470 aircraft with Boeing and Airbus, now plans to hire over 4,200 cabin crew trainees and 900 pilots this year.
(With Inputs from The Economic Times)
Boeing Explores Additional P-8I Aircraft Order to Enhance Indian Navy's Maritime Capabilities
Boeing, the renowned American defense and aerospace firm, is currently in discussions with the Indian Navy regarding the possibility of procuring six additional P-8I maritime surveillance aircraft. This development comes as a testament to the successful performance of the 12 P-8I planes already in the Indian Navy's fleet, which have accumulated over 40,000 hours of flight time since their induction a decade ago.
The Indian Navy's existing fleet of 12 P-8I aircraft, strategically stationed in Arakkonam, Tamil Nadu, and Goa, was acquired through two separate deals with the United States, amounting to over $3 billion. These aircraft were procured to bolster the Navy's capabilities in anti-submarine and anti-surface warfare, as well as to fulfill crucial intelligence, surveillance, and reconnaissance (ISR) roles in the vast maritime domain.
P-8I: A Military Derivative of Commercial Excellence
The P-8I is a military adaptation of Boeing's 737-800 commercial aircraft, renowned for its reliability and versatility. This derivative has proven itself as a formidable asset for the Indian Navy, delivering unmatched surveillance and reconnaissance capabilities in the Indian Ocean and beyond.
Enhanced Maritime Capabilities
According to Dan Gillian, Vice President of Mobility, Surveillance, and Bombers at Boeing Defense, Space, and Security, the addition of more P-8I aircraft to the Indian Navy's fleet will significantly enhance its maritime capabilities. These aircraft are equipped with cutting-edge technology, making them well-suited for monitoring and responding to threats in the maritime environment.
Economic Impact and Aatmanirbhar Bharat Strategy
Boeing's commitment to India's Aatmanirbhar Bharat (self-reliant India) vision is evident in its contributions to the country's aerospace and defense sector. The company has already generated a substantial economic impact of $1.7 billion in support of the Navy's current P-8I fleet. With the potential order for additional aircraft, Boeing anticipates increasing its investments by another $1.5 billion. This move not only strengthens India's aerospace and defense industry but also aligns with the global trend of indigenization.
Salil Gupte's Perspective
Salil Gupte, President of Boeing India, emphasized Boeing's commitment to advancing India's self-reliance vision. He stated that as they respond to the Indian Navy's demand for more P-8I aircraft, Boeing is actively exploring opportunities to enhance engineering, manufacturing, and sustainment capabilities within India, benefiting both the Indian and global aerospace and defense customers.
Boeing's exploration of a follow-on order for six P-8I maritime surveillance aircraft reflects the success of their existing fleet and the company's commitment to bolstering India's maritime security. This potential procurement not only enhances the Indian Navy's capabilities but also contributes significantly to the Aatmanirbhar Bharat vision by fostering indigenization and economic growth in India's aerospace and defense sector. With Boeing's steadfast dedication, India is poised to strengthen its maritime presence and security in the years to come.
With Inputs from Hindustan Times
In a significant development for the aerospace industry, Boeing India has unveiled plans to construct a sprawling 43-acre facility in Devanahalli, near Kempegowda International Airport. This announcement marks a pivotal moment in Boeing's journey in India, as this facility is slated to be the aerospace giant's largest location outside of the United States, with a substantial investment of Rs 1600 crore.
Aiming High: Boeing's Investment Goals
Boeing India's ambitious vision doesn't stop at infrastructure development. The company has set a compelling annual objective of Rs 10,000 crore, signifying its commitment to ramping up sourcing from India, a significant jump from the current Rs 8000 crore. This financial commitment underscores Boeing's confidence in the Indian aerospace ecosystem and its commitment to fostering growth and innovation in the region.
A Year of Strategic Moves
Boeing's expansion plans in India have been making headlines throughout the year. In a strategic move earlier this year, Boeing announced a substantial $100 million investment in infrastructure and pilot training programs in India. This move came hot on the heels of Air India's game-changing order of over 200 Boeing aircraft, including 20 787 Dreamliners, 10 777Xs, and a whopping 190 737 MAX narrowbody aircraft. These initiatives reaffirm Boeing's long-standing commitment to the Indian aviation sector.
The Rise of Devanahalli
Devanahalli, located north of Bengaluru, is fast emerging as the city's epicenter, and Boeing's decision to establish a significant presence here is no coincidence. The strategic location of Devanahalli, in close proximity to the Kempegowda International Airport, has played a pivotal role in its ascent. Furthermore, the upcoming Blue metro line (KR Pura – Yelahanka – KIA), approved in April 2021, has added to the allure of this area. These developments have triggered a surge in employment opportunities, driving the demand for housing in the region and providing an ideal backdrop for Boeing's ambitious expansion plans.
A Global Presence in India
Boeing's operations in India have been steadily growing, and the company boasts a strong presence across the country. While the newly announced Devanahalli facility is set to become a key hub, Boeing India's headquarters are based in Delhi. Additionally, the company has field service offices in Mumbai, Hindan, Rajali, and New Delhi. Furthermore, Boeing's commitment to nurturing talent and innovation is evident in its rapidly expanding Boeing India Engineering & Technology Center (BIETC) in Bengaluru and Chennai, which has been at the forefront of cutting-edge aerospace research and development.
Boeing's bold expansion plans in India, with its groundbreaking facility in Devanahalli, underscore its commitment to fostering growth, innovation, and collaboration within the Indian aerospace sector. As the aerospace industry continues to evolve, Boeing's presence and investments in India are poised to play a pivotal role in shaping the future of aviation not only in the country but on a global scale. With the company's ambitious financial objectives and strategic initiatives, Boeing is truly soaring to new heights in the Indian aerospace landscape.
With Inputs from Money Control
FAA Alerts Aviation Industry to Counterfeit Parts in GE Model CF6 Jet Engines
In a recent development that has sent shockwaves through the aviation industry, the Federal Aviation Administration (FAA) issued an alert on Thursday, September 21, 2023, warning aircraft owners and operators about the potential presence of unapproved components in General Electric (GE) model CF6 jet engines. The FAA's advisory followed revelations that UK-based AOG Technics had allegedly sold bushings for GE Model CF6 engines without obtaining the necessary FAA approvals.
AOG Technics' Alleged Unapproved Sales
On Wednesday, September 20, 2023, CFM International, a prominent jet engine manufacturer, made a troubling announcement. They raised concerns that AOG Technics, a UK-based supplier, may have distributed thousands of engine components accompanied by fraudulent paperwork. The heart of the issue centers on the CF6 engines, specifically the CFM-built CF6 engines, and the suspected use of counterfeit documentation for engine parts.
Scope of the Problem
The FAA alert primarily targets CF56 engines, particularly those manufactured by CFM International, though there are indications that a smaller set of CF6 engine parts may also have fraudulent documentation. As of Monday, approximately 96 engines are under suspicion of containing parts with forged documentation, according to CFM International. This issue has implications for a variety of aircraft, most notably the Boeing 767 freighters and the KC-767 tanker used by Italy and Japan, both of which heavily rely on the CF6 engines for propulsion.
Fraudulent FAA Applications
In submissions to London's High Court, Matthew Reeve, a legal representative for CFM International and its co-owners General Electric and Safran, revealed that the joint venture had uncovered two instances of fraudulent FAA applications concerning "hundreds" of CF6 parts. These findings underscore the need for a thorough investigation into the extent of the problem and the potential risks posed by these unapproved components.
Impact on the Aviation Industry
The CF6 engine plays a vital role in powering cargo planes, particularly the Boeing 767 freighters, which form the backbone of global cargo transportation. Additionally, the KC-767 tanker, operated by Italy and Japan, relies on these engines for its operations. The discovery of counterfeit parts raises concerns about the safety and reliability of these aircraft, which are integral to the global logistics network.
FAA's Directive and Industry Response
In response to the alert, the FAA has advised aircraft owners and operators to conduct thorough inspections of their planes or inventories to identify any unapproved CF6 bushings. If such components are discovered, they should be removed and quarantined to prevent their further use.
General Electric, a major player in the aviation industry, has expressed its support for the FAA's actions and confirmed its collaboration with the FAA and other aviation regulators in investigating the allegations against AOG Technics. The company is actively working with its customers to assess the authenticity of documentation for parts sourced from AOG Technics.
The aviation industry now faces a critical challenge as it grapples with the potential presence of unapproved components in GE Model CF6 jet engines. The FAA's alert serves as a stark reminder of the importance of strict quality control and oversight in aircraft manufacturing and maintenance. As investigations continue and aircraft owners conduct inspections, the aviation community remains on high alert, prioritizing safety and reliability in the face of this unsettling revelation. The outcome of these investigations will undoubtedly have lasting implications for the industry and the passengers and cargo it serves.
With Inputs from Reuters
Boeing Granted Exemption for 737 MAX 7 Certification Despite Stall-Management System Non-Compliance
In a recent development, Boeing has been granted an exemption by the Federal Aviation Administration (FAA) that allows the certification of the 737 MAX 7, even though its stall-management system does not fully meet certain certification requirements. This decision has raised questions about aviation safety and the process of certifying commercial aircraft.
On September 19, the FAA authorized an exemption related to lightning and radiation rules for the 737 MAX 7. However, it stipulated that in-service MAX 7s would need an updated "stall management yaw damper" (SMYD) by March 1, 2027. The SMYD is a critical hardware and software system that contributes crucial data to the aircraft's stall warning system.
Boeing intends to develop a certification-compliant SMYD as part of its certification work on the 737 MAX10, and to roll those updates into other variants, documents say. Boeing’s latest schedule calls for it to achieve the MAX 7’s certification this year, followed by the MAX 10’s next year.
Boeing defended its request for the exemption, stating that it sought approval from the FAA to certify the MAX 7 with an updated SMYD based on the unit's "well-established safety record." The company also mentioned that it had made minor software updates to the SMYD to align it with the MAX 7's shorter fuselage.
Gary Hamatani, Boeing's 737 MAX development chief project engineer, addressed the SMYD issue in a letter to the FAA in June. He noted that Boeing had made specific software updates to the SMYD, including those related to stall warning, stall identification schedules, yaw damper filter and schedule coefficients, and gain schedules. However, it was only later that the company discovered the system's non-compliance with certification rules pertaining to lightning and radiation exposure.
During its investigation, Boeing informed the FAA that SMYD failures resulting from lightning or radiation exposure could potentially cause "rudder oscillation." This condition is considered a "catastrophic failure" by the FAA because it could lead to a "hard-over condition" that exceeds structural limit loads.
However, the FAA, in its approval dated September 19, stated that it concurred with Boeing's assessment that the risk of SMYD failure due to lightning or radiation was minimal. The agency deemed the scenario "not a practical possibility" and thus allowed the exemption for certification to proceed.
Implications and Concerns
This decision by the FAA has raised concerns within the aviation industry and among the public. Critics argue that granting an exemption for a critical system like the SMYD, even with a minimal perceived risk, sets a precedent that could compromise safety standards. The importance of ensuring aircraft are fully compliant with certification requirements cannot be overstated, as it directly impacts passenger safety.
Boeing's commitment to addressing the SMYD non-compliance through the development of a certification-compliant system for the 737 MAX 10 is seen as a positive step. However, questions linger about why these issues were not identified earlier in the certification process and whether other potential safety risks have been overlooked.
The FAA's decision to grant an exemption for the certification of the 737 MAX 7, despite the non-compliance of its stall-management system, has sparked a debate about aviation safety standards. While Boeing has committed to rectifying the issue, the incident highlights the need for rigorous scrutiny and adherence to safety regulations in the aircraft certification process. As Boeing continues its efforts to achieve certification for the MAX 7 and MAX 10, the aviation industry will be closely monitoring developments to ensure passenger safety remains paramount.
With Inputs from FlightGlobal
Akasa Air to Start International Operations by 2023 End; Gets DGCA Approval
21 Sep 2023
21 Sep 2023
Little over a year after commencing operations, Akasa Air has received approval from the civil aviation ministry to start international flights and is looking to fly to destinations in South Asia, Southeast Asia and the Middle East. The airline, which is currently grappling with pilot shortage issues, has a fleet of 20 aircraft and plans to start flying to overseas destinations by year-end. Akasa Air Founder and CEO Vinay Dube on Wednesday said the ministry has designated the airline as an international scheduled operator.
“The Ministry of Civil Aviation has recognised the strength of Akasa Air’s operations and we have been designated as an International Scheduled Operator. This new designation will allow us to fly internationally, enabling us to take one step closer to our dream of launching international operations before the end of this year. We are now working with all relevant authorities on our request for traffic rights and will soon be able to announce the international destination we will fly to. We are targeting destinations within the range of a 737 MAX from India in South Asia, Southeast Asia and the Middle East. We are also on track to announce a 3-digit aircraft order by the end of this year to serve the growing travel demand. We have always prioritised reliability and customer satisfaction through detailed planning and an experienced team, allowing us to become one of the fastest-growing airlines in civil aviation history.”
However, the airline awaits the allocation of traffic rights by the government and subsequent approval from the relevant countries. These traffic rights are typically granted bilaterally by governments to airlines of their respective nations.
"Akasa Air (M/S SNV Aviation Pvt ltd.) had sought approval for designation as a scheduled international carrier and subsequently requested to allocate traffic rights. The proposal was examined in consultation with DGCA. It has been decided, with the approval of competent authority, to allow Akasa Air (M/s SNV Aviation Pvt ltd.) to mount international operations subject to their continued compliance with the AIC 10 of 2022 dated 19.04.22," read the letter issued by S.P.R Tripathi, Under Secretary at the Ministry of Civil Aviation.
"Further, as per DGCA, Akasa Air can apply for international scheduled air transport services. However, it is also informed that based on the traffic rights to be allocated to Akasa Air( M/s SNV Aviation Pvt Ltd.) by this ministry, the scrutiny of country-specific preparedness will be carried out by DGCA as per CAR Section-3, Part-II before permitting Akasa Air (M/s SNV Aviation Pvt ltd.) to operate scheduled international operations," the letter added.
This development comes despite the airline taking 43 of its former pilots to the Bombay High Court and seeking almost INR 22 crore for quitting the company without serving their contractual notice periods ranging from six to 12 months. The pilots’ resignations had resulted in mass flight cancellations in the past three months. Despite its ominous submissions of a “crisis” at the Delhi High Court in a petition seeking a direction to the Directorate General of Civil Aviation to act against its former pilots, Mr. Dube sought to assuage employee concerns in an email about the airline’s ability to expand. The email said, “We have enough pilots at various phases of their training to fly over 30 aircraft.”
The CEO justified the legal action against the pilots due to operational losses and customer inconvenience. The email said, “The most employee-centric thing we can do is to remain fiercely protective of your future and the promise we have made to our customers.”
Akasa Air started domestic operations on 7 August 2022, with its inaugural flight from Mumbai to Ahmedabad. Currently, it commands a 4.2% share of India’s aviation market. The airline has a fleet of 20 aircraft and is seeking to expand to 76 planes, including 23 Boeing 737-8s and 53 Boeing 737-8-200s. It recently placed an order for four Boeing 737-8 Max aircraft at the Paris Air Show.