Government intends to collect INR 3000 crore from Air India subsidiaries

According to two people with knowledge of the situation, the government intends to collect over INR 3,000 crore in FY24 by selling engineering and ground handling businesses that were once divisions of Air India Ltd, reports Mint.

"We anticipate that AI Engineering Services Ltd. and AI Airport Services Ltd. will go through the divestiture process in 2023–2024. We are optimistic about a successful deal since we have heard that there is a strong appetite for these two companies," one of the two individuals mentioned above said under the condition of anonymity.

The Economic Affairs Commission cabinet gave "in-principle" permission to the sale of Air India and its five subsidiaries in June 2017. The regional airline Alliance Air, the five subsidiaries AI Airport Services (AIASL), Air India Engineering Services Ltd (AIESL), Air India Express, and Hotel Corp. of India Ltd.

Government intends to collect INR 3000 crore from Air India subsidiaries

In the published report, it is mentioned that the most profitable of these were AI engineering services and AI airport services. The largest business in India's Maintenance, Repair, and Overhaul (MRO) industry, which handled about 450 aircraft in FY22, is AI Engineering Services. Included in the net profit for the year was other comprehensive income, which came to INR 844 million. At 105 airports in India, AI Airport Services offers ground handling services and had a net profit of 15.4 million in FY22.

The government sold 100% of Air India and Air India Express to the Tata Group in January 2022, but not the other four businesses. The government established a special purpose corporation called Air India Assets Holding Ltd. in February 2019 to house Air India's four subsidiaries, non-core assets, photographs, and artefacts, as well as other non-operating assets and liabilities (renamed AI Asset Holdings Ltd upon disinvestment).

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"There are 7-8 potential bidders who have already expressed interest in the AIASL ground control handle, in addition to at least 3-4 candidates for AIESL. The AIASL's winning bidder will probably also get grandfathering privileges. Roadmaps for both of these businesses are finished, said the additional source previously cited.

According to officials, the government anticipates making INR 1,800-1,900 crore from the sale of Air India's engineering division and INR 700-800 crore from the sale of manual ground handling equipment.

With the consolidation and cost restructuring in Indian aviation, the government will begin the process of selling Alliance Air, but it is likely to happen only in 2024, according to another official.

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Alliance Air is also lightweight and is anticipated to attract attention. Roadshows are about halfway finished. Hence, it probably isn't the best time to sell it, though it is also being prepared, he said.

An industry insider who spoke on the condition of anonymity estimated Alliance Air's value at INR 250 million. The Tata Group is among the top competitors in terms of engineering since it will improve synergy with the company's fleet of narrow-body and wide-body aircraft, he noted.

The omission of AI engineering services from the sale of Air India was a disappointing surprise, according to Air India CEO and COO Campbell Wilson, who also stated last week that they had to start developing their capabilities right away.

“Negative surprises… the fact that on the first day of privatization, Air India’s engineering capabilities disappeared and the government retained them,” he said, adding that the airline has access to AIESL for some engineering services until the end of next year as part of the transaction.

As part of the sale of Air India, the government assumed the airline’s debt of approx INR 45,000 crore and all non-core assets (about 111 properties), including office buildings and residential colonies, valued at INR 14,718 million, according to the official statement of 2021.

According to the government’s plan, the proceeds of the divestment will go to AI Asset Holdings. These will be used to offset Air India’s unsecured working capital loan liability and also to service interest payments on non-convertible debentures issued as part of Air India’s various debt restructurings in the past.

So far, most of the properties with clear records have been sold in four rounds of e-auctions, and several big-ticket properties are in the process of being cashed in, including Mumbai’s iconic Nariman Point building, Delhi’s Vasant Vihar Colony spread over 30 acres and a large plot of 14,326 sqft in Baba Kharak Singh Marg, Delhi. Maharashtra is all set to become the new owner of the iconic Air India building at Mumbai’s Nariman Point, following a new offer from the state government of INR 1,600 crore for the purchase of the property.

Earlier Civil Aviation Secretary Rajiv Bansal mentioned that the preparation process for the privatisation of India’s largest maintenance, repair, and overhaul (MRO) player Air India Engineering Services Ltd (AIESL) is at an advanced stage and the Department of Investment and Public Asset Management (DIPAM) may invite expressions of interest (EoI) from bidders “very soon”.

According to Bansal, investor roadshows saw a good response and the proposal has already received the nod of a government panel. The final approval from the Alternative Mechanism for Disinvestment, a top ministerial panel, is awaited and could come in as early as a few weeks, following which the expressions of interest will be invited, he said at the CAPA India Aviation Summit.

(With Inputs from Mint)

Russian flag carrier Aeroflot has increased the frequency of its flight services on the Delhi-Moscow route to seven times a week against four weekly services earlier, from March 26, a statement said on Monday, March 27.

In addition, the airline has also started operating a Boeing 777 jet along with Airbus A330 to cater to passenger traffic between the two capital cities, Delmos Aviation, which handles cargo operations for Aeroflot in India, said in the statement.

India and Russia "in principle" agreed to revise their bilateral air services agreement earlier this month, allowing Russian carriers to operate up to 64 flights per week from 52 to India. Russian carriers are allowed to operate these flights to six Indian cities -- Delhi, Mumbai, Goa, Kolkata, Amritsar and Ahmedabad.

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Aeroflot boosts flight frequency on the Delhi-Moscow route

Aeroflot has commenced daily flight services on the Delhi-Moscow route from March 26. The airline will operate both Boeing 777 and Airbus A330 with a total seating capacity of 410 and 293, respectively, in three class configurations - business, premium economy and economy, as per the statement.

In the just-concluded winter season, the airline operated only four weekly flights on the route, it noted. According to the statement, regular flight services are crucial not only in terms of passenger movement but also from the cargo service point of view.

"This increase in frequency was long overdue as the number of passengers has increased in good measure," said Naveen Rao, Director of Delmos Aviation.

"These daily flights will give a boost to tourism as well as the cargo supply chain. Due to increasing trade between the two countries, the Moscow-Delhi route is one of the long-established and high-demand routes…In addition, the cargo supply chain will be more effective," said Oleg Korolev, head of cargo at Aeroflot.

There is a high demand for the shipments of pharmaceuticals, DG (dangerous goods) and machine tools, among others. "With a cargo capacity of approximately 25 tonnes per flight, we are open to accepting all special commodities, including DG shipments," according to Anish Khatri, GM for Delmos Aviation - GSSA Cargo Aeroflot Airlines.

ALSO READ - Air India suspends Delhi-Moscow flight over flight insurance concerns

Air India can, however, continue to overfly Russian airspace under the renewed insurance contracts. Due to this clause, the last Delhi-Moscow-Delhi flight was operated on March 31, 2022, and the plan to introduce Mumbai-Moscow was shelved for now.

Aeroflot, which also had a twice-weekly to Delhi, had early last year temporarily stopped all international flights last month due to concerns that its planes may be seized by lessors.

Due to western sanctions on Russia following the Ukraine war, no Indian carrier is flying to the country and Air India stopped due to insurance issues. Russian carrier Aeroflot will operate a daily flight between Delhi and Moscow this summer, up from four times weekly in winter. It operates thrice weekly between Moscow and Goa.

India is among the few key markets that Aeroflot currently flies to. Air India's North American flights still overfly Russia -- taking the shortest routes to and from the west.

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Cover Image - Leukhin Fedor

Etihad Airways resumed flight services between Kolkata and Abu Dhabi on Sunday, March 26 after three years. The airlines will operate two flights a day, four days a week -- Tuesday, Thursday, Friday and Sunday -- from Kolkata to Abu Dhabi, the Netaji Subhas Chandra Bose International (NSCBI) Airport said in the statement.

The first flight will depart Kolkata at 4.15 AM and reach Abu Dhabi at 7.55 AM local time. The second one will leave Kolkata at 9.05 PM and reach its destination at 12.45 AM local time. From Abu Dhabi, there will be one direct flight to Kolkata four days a week. It will depart Abu Dhabi at 9 PM local time and reach Kolkata at 3.20 AM.

Etihad Airways will operate an Airbus A320 aircraft on the route, offering eight seats in business class and 150 in economy class, it said.

Ethihad resumes direct flights between Kolkata and Abu Dhabi

On the inaugural day, 152 passengers travelled from Abu Dhabi to Kolkata, while 126 passengers travelled from Kolkata to Abu Dhabi, it added.

“Our return to Kolkata will come at the same time as we go double daily to New York, providing better access between India and the United States via Abu Dhabi, where our guests can take advantage of our US preclearance facility for a seamless arrival into the States.”

Martin Drew, Senior Vice President of Global Sales and Cargo, Etihad

With the recommencement of services to Kolkata, Etihad will now fly to 14 destinations across the region -- India, Pakistan, Bangladesh, Sri Lanka and Maldives, the airlines earlier said.

Last week, low-cost carrier Air Arabia launched its services between Kolkata and Abu Dhabi, flying three days a week. It is also operating an Airbus A320.

Etihad had stopped its services between Kolkata and Abu Dhabi following the COVID-19 outbreak.Kolkata has direct flights to two other west Asian destinations: Dubai and Doha.

The resumption of Etihad’s flight services between Kolkata and Abu Dhabi is expected to provide passengers with more options for travel between India and the Middle East.

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A major tragedy was averted on Friday, March 24 when an Air India and a Nepal Airlines aircraft came close to collision mid-air but the warning systems alerted the pilots whose timely action prevented the disaster, authorities said on Sunday, March 25.

The Civil Aviation Authority of Nepal (CAAN) has suspended two employees of the air traffic controller department for "carelessness", according to CAAN spokesperson Jagannath Niroula.

On Friday morning, a Nepal Airlines plane coming to Kathmandu from Kuala Lumpur, Malaysia and an Air India plane coming to Kathmandu from New Delhi almost collided. The Air India aircraft was descending from 19,000 ft while the Nepal Airlines aircraft was flying at an altitude of 15,000 ft at the same location, Niroula said.

Air India and Nepal Airlines aircraft came close to collision in mid-air; authorities order probe

After it was shown on the radar that the two aircraft were in proximity, the Nepal Airlines aircraft descended to 7,000 ft, the spokesperson said.

A senior DGCA official on Sunday, March 25 said details are being obtained from the Nepal authorities on the airprox incident.

Air India has submitted a report about the incident to the Directorate General of Civil Aviation (DGCA). Nepal authorities do not have jurisdiction over Indian pilots. Pending further details, the crew of Air India involved in the incident was being off-rostered, the official added.

https://twitter.com/hello_CAANepal/status/1639868485361864705

The Civil Aviation Authority of Nepal (CAAN) has written a letter to DGCA to investigate the matter. Nepal's watchdog has also asked the Indian regulator to take necessary action against the guilty and inform it, according to CAAN spokesperson Jagannath Niroula.

In connection with the incident, CAAN has suspended three employees of the air traffic controller department for "carelessness" during duty hours. The Civil Aviation Authority has formed a three-member probe committee to investigate the matter.

On the same day also, the airport authorities in Kathmandu had sought explanations from the Air India pilots who they admitted their mistake and apologised.

The "traffic alert and collision avoidance system" (TCAS) made mandatory for all aircraft after the Charkhi Dadri crash of 1996 has since then saved thousands of lives in several air prox cases. On November 12, 1996, the outskirts of Delhi witnessed the worst-ever mid-air collision when a Saudi Arabian Boeing 747, which had taken off from IGI, collided with a Kazakhstan Airlines Ilyushin-76 that was flying into the capital, at Charkhi Dadri, killing all 349 people on board the two planes.

This collision avoidance system issues two types of advisories to pilots: first, a traffic advisory (TA) to give a warning to the crew of two planes that they are headed in the same direction and in second stage resolution advisory (RA) that asks the crew to take evasive action to avoid mid-air collisions.

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Israel's national carrier EL AL on Thursday announced the resumption of its non-stop flight services from Delhi and Mumbai, after a hiatus of three years, starting late October.

The airline will operate four non-stop weekly flights from Mumbai to Israel on the Boeing 737 with economy and business class, and two non-stop weekly flights to Delhi on either the Boeing 787 or Boeing 777.

The sale of the tickets for these flights will commence from next month, the Israel Tourism Ministry said in a statement.

The overfly agreement with Saudi Arabia and Oman for Israeli airlines was recently finalised, allowing for a shorter flight duration of 5.5 hours for Mumbai and 6.5 hours for Delhi, the statement said.

"We anticipate there will be high demand for these flights due to vast business activity between the two countries, as well as constant growth in Indian tourism to Israel," Shlomi Zafrani, EL AL VP of Commerce and International Affairs, said.

Air India is scheduled to increase the frequencies of its existing three daily flights per week to five daily flights per week from March 26, as per the statement.

In addition, the now Tata Group-owned airline will be starting to operate direct flights on the sectors from Mumbai and Bengaluru by June and October, respectively, with competitive prices, it added.

Akasa Air plans to hire nearly 1,000 people and take the total staff strength to more than 3,000 by the end of March 2024 as the airline continues to expand its fleet as well as routes, according to its chief Vinay Dube. The airline, which took to the skies a little over seven months ago, also plans to start international operations by the end of this year, and the possible overseas destinations are still in the process of being finalised. In an interview with PTI, Dube, the founder and CEO of Akasa Air, said the airline will place a "three-digit aircraft order" by the end of this year. It has placed an order for 72 Boeing 737 Max aircraft, and 19 of them are already in its fleet. The 20th aircraft will be inducted in April, following which it will also be eligible to fly overseas. In the next financial year, the carrier aims to add another 9 planes to its fleet, taking the total size to 28. Currently, it operates 110 flights every day. "We have more than 2,000 employees today, and by the end of the next fiscal, we will be probably around 3,000 plus employees… (out of them, there are) around 1,100 pilots and flight attendants," Dube said in the interview earlier this week in the national capital. According to him, hiring is always done in advance. "We may not have the aircraft today, but we will have to hire for the aircraft that will be there three months down the road. People have to come, and they have to be trained. So, you always hire in advance for the number of aircraft you have deliveries for," he noted. On whether hiring people is a challenge post the coronavirus pandemic, Dube said the airline is fortunate to be able to attract good talent. "We just need to continue to be employee-focused. I think we will continue to be able to attract good talent." The delivery of all 72 Boeing aircraft on order is expected to be completed by early 2027. Without elaborating on the expected "three-digit aircraft order", Dube said, "we have to wait and see". "We are already flying 110 flights a day and we will be 150 flights per day by the end of the summer season. It will be continued growth but not growth for the sake of growth. "We have no market share targets, not chasing any position in aviation, and we have got a target to make customers happy, target to make our employees happy. That is what we are doing and we can do that, that is sustainable if we have got a very strong cost structure. So, those are the three pillars we are focusing on," he said. About planned international operations, Dube said there is nothing to share for now as the airline is yet to decide on the possible destinations. "We are working with the ministry on the routes and traffic rights that are available… we may want to fly to X cities, and there may be traffic rights available for that country, but in that particular airport, you may not have slots. All these permutations and combinations are being worked on right now. "Therefore, I can't even tell you whether it is going to be east or west, and I can't even narrow it down because we are looking at both," he said. Akasa Air, which describes itself as the country's newest and most dependable airline, started operations on August 7, 2022. "I am extremely happy," Dube said about the achievement of the airline, which currently operates 110 daily flights to 17 domestic destinations. In February, Akasa Air flew 3.61 lakh passengers, and its domestic market share stood at 3 per cent, while On-Time Performance (OTP) was 87 per cent, as per the latest official data.