ATF prices to be reduced soon as government plans to bring it under GST

The government is likely to propose a formula to bring aviation turbine fuel (ATF) under the ambit of Goods and Services Tax (GST), CNBC TV18 reported on February 21.

The likely government proposal will be to allow 18% GST in addition to VAT or excise rate, adding that the formula would be introduced only if it's acceptable to all the states. The VAT or excise rate, under the formula, could vary from state to state, the report claimed.

"Globally also, in many countries such a formula of GST rate plus VAT/excise has been used in the case of ATF," a senior government official told CNBC TV18.

Government expected to suggest a strategy to bring ATF under GST

The proposal is expected to be tabled before the states and union territories at the next GST Council meeting, the news channel noted.

The Central Board of Indirect Taxes and Customs (CBIC) has "evaluated" the model for ATF's inclusion under GST, the government official claimed, adding, "The GST Council will be appraised with this global best practice model for them to take a final call."

Also, as per the norms, any rate proposal is made to the council after GST Council nominated fitment committee assesses the proposal in totality and then makes its recommendations to the GST Council.

It is then upon the GST Council, where state Finance Ministers and Union Finance Minister deliberate on the proposal.

It is then upon the GST Council, where state Finance Ministers and Union Finance Minister deliberate on the proposal and make a decision whether to accept or reject the proposal or to tweak the proposal and then accept it to be introduced.

The report comes days after ATF prices soared to record high levels across the country. The rates were increased by 5.2% on February 16 in line with a rise in international oil prices.

This is the fourth hike in jet fuel or ATF prices in less than two months following a spike in global oil prices but petrol and diesel prices remained unchanged for a record 103rd day in a row, coinciding with electioneering to elect new governments in states like Uttar Pradesh and Punjab.

ATF price was hiked by INR 4,481.63 per kilolitre or 5.2% to INR 90,519.79 per kl

ATF price was hiked by INR 4,481.63 per kilolitre or 5.2% to INR 90,519.79 per kl in the national capital, according to a price notification of state-owned fuel retailers. This is the highest ever price touched by ATF.

The rate is higher than INR 71,028.26 per kl reached in August 2008 when international crude oil prices touched USD 147 per barrel. Brent crude oil on Tuesday, February 22 was trading at USD 93.87 per barrel.

This is the highest ever price touched by ATF. The price increase will put pressure on the already strained balance sheets of airlines that are yet to resume full operations due to pandemic-related restrictions.

Jalan Kalrock Consortium, the new proposed promoters of Jet Airways, has appointed Vipula Gunatilleka as the Chief Financial Officer for the revival of the airline, the consortium said on Tuesday, February 22.

Gunatilleka, who was the CEO of SriLankan Airlines until January 2022, will take charge as Jet Airways CFO from March 1, 2022.

“Vipula is an aviation expert and regarded as a turnaround specialist in the industry. He has been shortlisted after a rigorous process run by our Executive Team over the last several months. I am certain Vipula will be an asset to the organization and will provide the necessary vision to revive the operations of Jet Airways as per the plans of the Consortium.” Ankit Jalan, Member of Monitoring Committee, Jet Airways (Jalan-Kalrock Consortium)

Gunatilleka said he looks forward to contributing his knowledge of the last 30 years in Jet Airways’ resurgence in its new avatar.

He added that having spent sufficient time in leadership roles in the aviation industry, including as CEO of SriLankan Airlines, he is aware of the responsibility on the shoulders of the leadership team and is confident that Jet Airways will soon “regain its lost glory.”

“I am very excited to join the company and I look forward to contributing my knowledge of the last 30 years in Jet Airways’ resurgence in its new avatar. We will capitalise on the strong brand value which Jet Airways has in the market and use it to rebuild the lost ground.We will capitalize on the strong brand value which Jet Airways has in the market and use it to rebuild the lost ground."Vipula Gunatilleka, CFO, Jet Airways

Gunatilleka was headhunted by the Board in 2018 to re-structure SriLankan Airlines and in less than two years after assuming the duties as the CEO, the airline recorded positive EBITDA/Cash Flow for the Fiscal Year 2019/20 notwithstanding the devastating effects of the terror attacks in April 2019 in Sri Lanka followed by the global pandemic in early 2020,” according to the statement.

Who is Vipula Gunatilleka?

Mr Gunatilleka qualified as a Chartered Accountant in the year 1987 after which he did his MBA from the University of Colombo, Sri Lanka. He is also a qualified Chartered Management Accountant (FCMA) from UK and Certified Public Accountant (FCPA) from Australia.

Mr Gunatilleka first joined Sri Lankan Airlines as its CFO in 2001

Mr Gunatilleka is known for his astute knowledge in aircraft financing, strategic planning, cost-efficient business modelling and openness to adopting hybrid models to keep business costs low and efficiency high.

Born in Kandy, a city in central Sri Lanka, Mr Gunatilleka moved to the west coast to obtain a Master of Business Administration from the University of Colombo, before becoming a chartered accountant. His career has spanned several locations – among them Singapore, Australia, Angola and Sri Lanka.

While at General Electric, he was trained in Six Sigma, a rigorous technique that aims to deliver near-perfect products and services.

Mr Gunatilleka first joined Sri Lankan Airlines as its CFO in 2001, when it was part of the Emirates Group and was establishing its feet in the Indo-Pacific Sub-Continent.

He will take charge as Jet Airways CFO from March 1, 2022.

Before joining SriLankan Airlines, Gunatilleka was the CFO and board member of TAAG Angola Airlines from November 2015 to July 2018 under Emirates Management. He played a pivotal role in the turnaround of the loss-making national carrier of Angola.

Jet Airways 2.0

Jet Airways underwent the corporate insolvency resolution process under the Indian Insolvency and Bankruptcy Code from 20 June 2019 until 22 June 2021 and as per orders of the National Company Law Tribunal (NCLT).

The resolution plan for the airline was submitted by the Jalan Kalrock Consortium was approved. As per the approved plan, the Jalan Kalrock Consortium will be the new promoters of the airline.

Jet Airways plans to resume operations in the first quarter of 2022 after being grounded for 3 years

Jet Airways has been hiring for different roles as the airline gears up for resuming operations under its new owners. The launch date has been postponed multiple times due to several issues including getting its slots at major airports back.

Jet Airways plans to resume operations in the first quarter of 2022 after being grounded for nearly three years. It is planning to add over 50 aircraft to its fleet over the next three years and more than 100 for more than five years.

The next head of the U.S. Federal Aviation Administration (FAA) will face challenges overseeing Boeing and a series of reforms mandated by Congress in the wake of two fatal 737 MAX crashes.

The job opened late Wednesday, February 16 when the FAA announced administrator Steve Dickson, 64, would resign effective March 31, about halfway through his five-year term. Among those mentioned by congressional and industry officials as potential replacements are former pilots C. B. "Sully" Sullenberger and Lee Moak.

Sullenberger, the current U.S. representative on the Council of the International Civil Aviation Organization (ICAO), rose to fame in 2009 when he safely landed an Airbus A320 on New York's Hudson River after hitting a flock of geese - known as the "Miracle on the Hudson" flight.

Mr Steve Dickson his safety team "knows that I have their back."

Moak, a former president of the Air Line Pilots Association, is currently a member of the U.S. Postal Board of Governors.

Dickson headed the FAA as it oversaw a comprehensive review of the then-grounded Boeing 737 MAX. He took a hard line, warning in late 2019 that Boeing was pursuing "a return-to-service schedule that is not realistic."

Dickson even piloted the plane in September 2020 for a test flight before approving its return that included extensive training and software updates.

The best-selling, single-aisle airplane was grounded for 20 months after two crashes killed 346 people in the space of five months, returning to service in late 2020.

The FAA is still scrutinizing several issues involving Boeing airplanes and said it would not allow Boeing to self-certify 787 Dreamliners.

Congress approved sweeping legislation in December that year, boosting the FAA's oversight of aircraft manufacturers, requiring disclosure of critical safety information and providing new whistleblower protections.

Senate Commerce Committee chair Maria Cantwell said in a statement on Thursday "there is much work still to do to maintain America’s leadership in aviation- implementing congressionally-mandated safety reforms, training a workforce skilled in advanced technology, and furthering aerospace research and development."

The incoming administration will also face the headache of the deployment of 5G wireless on the C-Band spectrum, an issue that saw major international airlines scramble to cancel or rejig U.S flights last month amid warnings the network could interfere with sensitive aviation electronics like radio altimeters.

The FAA recently conducted test flights with active 5G, carrying AT&T and Verizon engineers onboard.

Telecommunications companies AT&T and Verizon agreed to keep 5G towers off last month's network rollout, postponing their deployment until early July, and to take "additional steps to minimize energy coming from 5G base stations – both nationwide and to an even greater degree around public airports and heliports."

The FAA recently conducted test flights with active 5G, carrying AT&T and Verizon engineers onboard, and the agency is "still doing the analytics right now," Dickson said. "It's really unprecedented for us to be working with an industry that we don't regulate... That is part of what needed to happen."

Dickson said on Thursday, February 17 Boeing has made significant changes in recent years and with the FAA the airplane manufacturer "really improved the discipline within their engineering organization and I am confident in our oversight of their product." He also said his safety team "knows that I have their back."

Dickson headed the FAA as it oversaw a comprehensive review of the then-grounded Boeing 737 MAX.

The FAA is still scrutinizing several issues involving Boeing airplanes and on Tuesday, February 15 said it would not allow Boeing to self-certify 787 Dreamliners.

ALSO READ - FAA to evaluate new Boeing 787 Dreamliners, says Boeing can’t self-certify

Boeing agreed to a deferred prosecution agreement with the Justice Department in January 2021 including USD 2.5 billion in fines and compensation stemming from the 737 MAX crashes.

House Transportation Committee chair Peter DeFazio said President Joe Biden "must now nominate a new leader committed to the highest standards of aviation safety" and "hold Boeing accountable for the tragic consequences of their decision to put profits over people when rolling out the 737 MAX."

(With Inputs from Reuters)

The government of India has issued a memorandum regarding the travel provisions of the government employees, which states that they can book their tickets through private airlines.

Earlier, the government staff were allowed to travel only by Air India. They were allowed to travel in other airlines only when Air India flights were not operating on the routes concerned.

“It is clarified that the air travel on government account, both domestic (including LTC) and international travel, can be made by private airlines,” according to the memorandum issued.

Earlier, the government staff were allowed to travel only by Air India.

The Department of Expenditure of the Ministry of Finance, which issued the memorandum, has also stated some government employee regulations connected to the leave travel concession facility.

Under the newly published guideline, a government official can travel to any place in India irrespective of the distance from one’s headquarters, once in four calendar years.

However, the government officials have to continue depending on three authorized agencies for their air ticket bookings as before. These agencies include Indian Railway Catering and Tourism Corporation (IRCTC), Balmer Lawrie and Ashok Travels.

Government employees can now book flights on private airlines following Air India disinvestment

Balmer Lawrie is a company coming under the purview of the petroleum ministry, focused on providing logistics support and a host of other businesses. Ashoka Travels and Tours Ltd is a subsidiary of India Tourism Development Corporation (ITDC).

The third entity, IRCTC, operates a travel portal and provides ticket booking and catering for Indian Railways. The memorandum was circulated among all ministries and departments.

Before Air India’s privatization, the central government ended the monopoly of Air India over flying millions of government employees. Post privatization of Air India to Tata Group’s Talace Private Limited, the central government did not continue the association with Air India in this regard.

Air India, too, had stopped offering credits to government agencies, as there was a massive default due to non-payment of dues.

Air India, too, had stopped offering credits to government agencies, as there was a massive default due to non-payment of dues. In November 2021, a response to an RTI query revealed that the government’s total due to Air India stood at INR 300 crores for both VVIP flights and other travels by the officials.

Considering the bifurcation, INR 34 crore dues were for VVIP travel, and the remaining INR 269 crore was for the tickets of the officials.

The Ministry of Home Affairs (MHA) will "scrupulously" carry out a thorough background check of newly appointed CEO and MD of Air India, Ilker Ayci, a Turkish national, official sources said on Sunday, February 20.

The Tata Group, which acquired Air India from the government, had recently announced Ayci's appointment as the CEO and MD of the loss-making airlines.

MHA to conduct a thorough background check on the newly appointed CEO of Air India

The Home Ministry "scrupulously" carries out a thorough background check of all foreign nationals when they are appointed in the key positions of any Indian company, the sources said. It will be the same process for the newly appointed CEO and MD too, they said.

However, the MHA has not yet received any communication on Ayci from either the Tata group or the Civil Aviation Ministry, the nodal ministry. Once communication is received, the whole process of security clearance will begin, the sources said.

Since Ayci is a Turkish national, the MHA is expected to take help from the external intelligence agency, R&AW, for his background check.

He had served Turkish Airlines as its chairman from 2015 to 2022 and was credited with turning the airline around.

Ayc? was an advisor of Turkish President Recep Tayyip Erdo?an when the latter was mayor of Istanbul, from 1994 to 1998. He had served Turkish Airlines as its chairman from 2015 to 2022 and was credited with turning the airline around.

Ayci has degrees in political science and public administration from Bilkent University. He has also done masters in international relations from Marmara University in Istanbul.

The Tata Group took complete control of Air India from the government, nearly 69 years after it was taken from the conglomerate. The government had last October 8 sold Air India to Talace Private – a subsidiary of the Tata Group's holding company – for INR 18,000 crore following a competitive bidding process.

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.