HAL gains for 4th day in a row; closes at a record high

HAL (Hindustan Aeronautics Limited) stock soared to a new 52-week high on Wednesday, November 16, extending its advances for a fourth straight day.

The stock has increased by more than 10% in the past four trading sessions. During intraday trade on November 16, it reached a high of Rs 2,709. The stock's worth this year has more than doubled! This occurred after the company acquired a Letter of Intent (LoI) from the Indian Coast Guard (ICG) for 9 additional Advanced Light Helicopters (ALH) Mk-III.

https://twitter.com/HALHQBLR/status/1592453194957090816

The state-owned aerospace and defense company's stock has risen above the previous record high of Rs. 2,639 set on September 12, 2022. 3.23 million shares were traded on the NSE and BSE together up to 1:31 p.m., more than doubling the counter's previous trading volume.

The company's earnings increased by 44.15 per cent in the September quarter, from Rs 847 crore in the corresponding quarter last year to Rs 1,221 crore. A 90 percent increase in the company's other income was the cause of the profitability growth. But the quarter's revenue had decreased 7 per cent year over year.

Hindustan Aeronautics Ltd. (HAL), an aerospace and defense business owned by the Indian government, is based in Bengaluru, Karnataka, India. The business is run through a network of production sites, as well as research and design hubs throughout India.

HAL produces and manufactures helicopters, avionics and communication equipments indigenously

The business creates, produces, manufactures, and provides helicopters, avionics, and communications equipment for both the military and civil industries. Additionally, it offers support, maintenance, and repair services for airplanes.

The final of the 16 ALH Mk-IIIs was delivered to ICG on Tuesday, November 15, according to a statement from HAL. A contract for the supply of 16 ALHs to ICG by HAL and a value of approximately Rs 5,126 crore was signed in March 2017.

HAL developed, built, and designed the ALH Mk III on its own. According to the company's press statement, it has so far built more than 330 ALHs, a multipurpose helicopter with more than 3.74 lakh flying hours. 

ICG has merely signed a LoI, therefore according to ICICI Securities, HAL should receive this contract for nine additional ALHs within the next six months. HAL would be able to produce 60 helicopters annually, which may include ALH, Light Combat Helicopters (LCH), or Light Utility Helicopters (LUH), once the new Tumkur (Karnataka) plant is slated to be operational in Q3FY23.

ICG has signed a LoI (Letter of Intent), and within the next six months, HAL ought to acquire this contract for nine more ALHs

The brokerage stated in a note that HAL has an order book of Rs 83,858 crore as of September 2022 (3.2x TTM revenues) and an order pipeline of Rs 50,000 crore for the next one to one and a half years, which would include this order and other helicopter orders like 25 ALHs for the Army and six LUHs for the IAF and Army.

HAL reported an income of more than Rs 24,000 crore, a record-breaking amount! The firm also disclosed a 20 rupee dividend per share. In the interim, HAL's stock will become ex-date for an interim dividend of Rs 20 on Friday, November 18. The record date for the payment of the first interim dividend has been set by the firm as Monday, November 21.

India's scores in the ICAO's air safety oversight audit will improve substantially as the international watchdog's just-concluded validation mission was highly successful as per the initial reports, regulator DGCA said on Wednesday, November 16.

ICAO is the International Civil Aviation Organisation. Under its Universal Safety Oversight Audit Programme (USOAP) Continuous Monitoring Approach, an ICAO Coordinated Validation Mission (ICVM) was undertaken from November 9 to 16.

ALSO READ - ICAO will carry out a safety audit of India's aviation sector

The International Civil Aviation Organization is a specialised agency of the United Nations that coordinates the principles and techniques of international air navigation and fosters the planning and development of international air transport to ensure safe and orderly growth.

In a release on Wednesday, November 16 the Directorate General of Civil Aviation (DGCA) said the audit was conducted in the areas of legislation, organisation, personal licensing, operations, airworthiness and aerodromes.

"As per the initial reports, the mission was highly successful. India has done extremely well and our scores will see a substantial improvement putting us in the company of nations with the best safety standards and oversight systems," the release said.

While the formal communication from ICAO will be received in due course of time, it is to be noted that this is India's best performance to date, the regulator said.

India is one of the fastest-growing civil aviation markets globally and the sector is slowly recovering after being hit by the coronavirus pandemic.

USOAP monitors eight audit areas. They are Primary Aviation Legislation and Civil Aviation Regulations, Civil Aviation Organization, Personnel Licensing and Training, Aircraft Operations and Airworthiness of Aircraft. Other areas are Aircraft Accident and Incident Investigation, Air Navigation Services, and Aerodromes and Ground Aids.

In November 2017, ICAO carried out the Universal Safety Oversight Audit Programme for India and another team of the watchdog came in February 2018. The audit result showed that the country's score declined to 57.44% from 65.82% earlier, placing India below Pakistan, Nepal and many other countries.

However subsequently the civil aviation ministry and DGCA took steps following which the score improved to 74%. A better score in the ICAO audit will mean a robust aviation safety ecosystem in India and also helps airlines in their international expansion plans.

In November 2018, an ICAO team visited India and assessed the action taken on issues related to three areas that were audited by the watchdog in November 2015. Those pertained to Aerodromes and Ground Aids, Air Navigation Services (ANS) and Aircraft Accident and Incident Investigation.

During the November 2017 visit, the ICAO team assessed five areas -- Personnel Licensing and Training, Aircraft Operations, Airworthiness of Aircraft, Primary Aviation Legislation and Civil Aviation Regulations, and Civil Aviation Organisation.

Through USOAP, ICAO monitors the fulfilment of the safety oversight obligations by its member states. USOAP CMA is a strategy that uses a risk-based approach for measuring and monitoring the safety oversight capabilities and improving the safety performance of states and global aviation continuously.

ICAO also carries out ICVM to ascertain whether previously identified safety deficiencies have been resolved satisfactorily by assessing the status of corrective action plans or mitigating measures taken by member states to address findings.

Civil aviation in India has recovered swiftly this year, as the threat posed by coronavirus has declined. In October, the daily number of domestic air passengers touched 4 lakh, which is close to the pre-COVID level.

The timing of this audit is also critical, with India witnessing several air incidents and passenger complaints this year. The DGCA has been keeping quite busy all through 2022, performing clean-up drives, issuing warnings, and performing regular and sporadic checks on aircraft of multiple airlines.

In September, it announced a two-month special audit of all Indian airlines to check everything, from the availability of trained, experienced, and authorized staff to the maintenance record-keeping of all aircraft.

The MoCA announced on Wednesday, November 16 that mask use is no longer required for air travel and that there will be no penalties for it.

It is still recommended that passengers wear masks and facial coverings. The Ministry of Health & Family Welfare was consulted during a review of the regulation requiring the use of masks or face covers during air travel.

On November 16, the MoCA declared that wearing a mask when flying is no longer necessary

Until recently, wearing a mask or facial cover while flying was required. The ministry stated in a statement to the scheduled airlines that the most recent decision was made in accordance with the government's policy of a phased approach to COVID-19 management response.

The decision to not make masking mandatory was taken “in line with the government of India’s policy of graded approach of Covid-19 management”

“In-flight announcements henceforth may only mention that in view of the threat posed by Covid-19, all passengers should preferably use mask/face covers. Any specific reference to fine/penal action need not be announced as part of the inflight announcements.”

–An Office Memorandum issued by the Ministry following a review of the Covid guidelines it had issued in May 2022.

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A senior ministry official said the decision is applicable to all airlines. According to a representative of the airline industry, the ministry's decision is effective immediately, and carriers will inform the crew of this.

Many state governments had made masking optional over six months prior as a result of a decline in Covid cases. Early in June, the state of Maharashtra modified its Covid regulations to make masks optional.

However, the DGCA had emphasised that masks were required and had urged airports and airlines to strictly enforce compliance. Additionally, according to the DGCA letter, passengers who refuse to put on their masks should get off the plane before takeoff, and anyone still on board who disobeys would be classified as an "unruly passenger."

With the declining rate of Covid-19 cases, the civil aviation ministry has removed mask requirements for airlines as the COVID-19 situation in Delhi, Mumbai, and other Indian cities improve. Passengers do not need any face masks for air travel now.

According to experts, the virus has become endemic, which means it is here to stay. The number of infections in India, however, has decreased as a result of hybrid immunity. Despite the positive trend in case numbers, the virus will persist.

Consequently, as a precaution, passengers are advised to cover their faces. Long Covid is a problem that affects many people, and experts stress that it would be a mistake to forgo prudence.

As a precaution, passengers are still advised to wear their masks and face covers

Also read: Delhi HC asks DGCA to review mask norms in flights

According to the most recently available official data, the number of COVID-19 cases that were still actively being treated in the nation made up just 0.02% of all infections, and the recovery rate rose to 98.79%. 4,41,28,580 persons have recovered from the illness, and the case fatality rate has been noted at 1.19%.

On November 15, Delhi reported 14 additional cases. Kolkata recorded only nine new cases whereas Mumbai reported 27 on the same day.

Hindustan Aeronautics Limited (HAL) handed over the last of the 16 Advanced Light Helicopters ALH MK-III, Maritime role to the Indian Coast Guard on Tuesday, November 15. The chopper was handed over to DG, Coast Guard, V.S. Pathania, in the presence of senior officials from the Indian Coast Guard and HAL.

"We are proud to be associated with HAL and happy to issue a Letter of Intent (LoI) for nine more helicopters. Despite Covid-19, HAL delivered all the helicopters in the shortest time with seamless production activities and this allows us to strengthen India's maritime security."

V.S. Pathania, DG, Coast Guard

ALSO READ - ICG Chief undertakes the first flight in a home-grown LUH

HAL also received a Letter of Intent (LoI) from the maritime organisation for nine more ALH Mk-III helicopters.

The Indian Coast Guard has acquired ALH Mk-III helicopters for diversified roles, which include maritime surveillance, search and rescue, medical evacuation, logistics support to ships and interdiction.  These choppers have been deployed at Porbandar, Bhubaneshwar, Kochi and Chennai.

https://twitter.com/IndiaCoastGuard/status/1592563290458140672

S. Anbuvelan, CEO (Of helicopter Complex), HAL, pointed out the significant challenges in the execution of the contract that included integration of new systems sourced from foreign OEMs, conducting flight trials for certifications and overcoming disruptions in the supply chain due to lockdowns.

"A unique feature of the contract has been the performance-based logistics (PBL) - the one-stop solution for the maintenance of these helicopters by HAL.

This will serve as a benchmark for all our future contracts and boost our resolve to work with private partners to speed up the work in the interest of all our customers and strengthen Make-in-India activities in the defence eco-system."

C.B. Ananthakrishnan, CMD, Hindustan Aeronautics Limited (HAL)

The Coast Guard will also be setting up a committee comprising all stakeholders, including Hindustan Aeronautics Limited (HAL), that will define the qualitative requirements of a maritime single-engine helicopter for replacing its Chetak fleet, it said in a statement. It is evaluating the capabilities of the indigenous Light Utility Helicopter (LUH) in meeting the maritime challenges and serving as a Chetak replacement.

https://twitter.com/HALHQBLR/status/1592453194957090816

The Indian Coast Guard signed a contract for INR 5126 crore with HAL for the supply of 16 ALH Mk III in March 2017. ALH Mk-III is indigenously designed, developed and produced by HAL. So far, the company has produced more than 330 ALHs, a versatile helicopter that has logged more than 3.74 lakh flying hours.

ALSO READ - Indian Coast Guard commissions Made in India ALH Dhruv Mark III Helicopters

An ALH Mk-III chopper comes equipped with surveillance radar, an electro-optic pod, medical intensive care unit, a high-intensity searchlight, an infrared suppressor, a heavy machine gun, glass cockpit and is powered by two shakti helicopter engines. The helicopter is indigenously designed, developed and produced by HAL.

The Indian Coast Guard signed a contract for INR 5126 crore with HAL for the supply of 16 ALH Mk III in March 2017. (Image Courtesy – Shrey Chopra)

HAL has an order book of INR 83,858 crore as of September 2022 (3.2x TTM revenues) with an order pipeline of INR 50,000 crore for the next 1-1.5 years, which would include this order and other helicopter orders like 25 ALHs for the Army and six LUH each for the IAF & Army, the brokerage said in a note.

HAL stocks rally 7%

Shares of Hindustan Aeronautics jumped 7% to hit an all-time high of INR 2,697.70 on the BSE in Wednesday, November 17’s intra-day trade amid heavy volumes after the company received a letter of intent (LoI) for nine more advanced light helicopters (ALH) Mk-III from the Indian Coast Guard (ICG).

The stock of the state-owned aerospace & defence company has surpassed its previous high of INR 2,639 touched on September 12, 2022. The trading volumes on the counter jumped four-fold with a combined 3.23 million shares changing hands on the NSE and BSE, till 01:31 pm.

The signing of the Open Skies agreement by India and Canada will increase the number of flights between them, after years of being stuck to 35 weekly flights.

Airlines in Canada and India will now have almost limitless rights as a result of the new Open Skies agreement. India and Canada first discussed an Open Skies Agreement in May 2022, when Indian Civil Aviation Minister Jyotiraditya Scindia met his Canadian counterpart, Omar Alghabra, on a visit to Canada. In essence, "Open Skies" refers to a situation where there are no restrictions on the number of travellers who can fly between the two nations or the number of aircraft departures that can be made between them.

Canadian airlines would be able to fly freely to Delhi, Mumbai, Hyderabad, Bangalore, Chennai, and Kolkata under the agreement, which Canadian Prime Minister Justin Trudeau announced at the current G20 summit.

India and Canada sign Open Skies Agreement

Indian airlines can currently travel to Toronto, Montreal, Vancouver, and Edmonton, as well as two other locations that the Indian government can select. Through code-share services, other cities in both nations can be indirectly served.

India is Canada’s 4th largest international air transport market. Even though the market is still not completely open, the judgement is a big step forwards for two nations that have historically safeguarded their air rights. 

India and Canada have strong ties, and a sizable diaspora makes travel for business, pleasure, and VFR (seeing friends and family) viable. Last year, Air Canada launched a brand-new route between Delhi and Montreal, and there is currently space for many more flights. All interested parties will welcome more direct flights. 

Also read: Air Canada to start Non-Stop flights between Delhi and Montreal

Air Canada introduced a brand-new route between Delhi and Montreal last year

According to anna.aero, in 2019, the final year before COVID caused traffic disruptions, little over 1.5 million people travelled by air from India to Canada. Even while Toronto-Delhi saw the highest North American traffic, the majority of passengers chose to connect only once, which prolonged the long transatlantic flight.

Although the frequency varies, Air India currently offers service between Delhi-Toronto and Vancouver. Currently, Air Canada serves flights from Delhi-Montreal and Toronto, Mumbai-Toronto (with a stopover at London Heathrow), and more destinations.

Air India currently offers service between Delhi-Toronto and Delhi-Vancouver, with varied frequencies

For Air Canada, air rights are one of the two issues. Some of Ukraine's longest routes, like Delhi-Vancouver, are currently impractical due to overflight regulations, which also place a cap on the development of new routes.

The high average fare of analysis discovered that Bangalore-Toronto may be the new destination when the time is perfect. Other possible destinations include flights to Hyderabad and Ahmedabad, which both have high passenger volumes, as well as connections to Calgary, which are doubtful given the absence of an AC base.

Additionally, Amritsar, an important origin and destination for the Indian diaspora that travels to Canada, might be serviced by Indian airlines like Air India.

Air India may offer service to Amritsar, a key point of origin and destination for the Indian diaspora that travels to Canada

Overall, this is a wise decision that should encourage further connectivity between the two nations. While Air Canada waits for the Ukrainian airspace to once again be open to it so that more flights may be launched from its end, it should specifically benefit Air India for the time being.

The US Department of Transportation (DoT) ordered Air India to pay a fine of $1.4M and $121.5M in refunds to passengers whose flights were cancelled due to COVID-19.

The US DoT has mandated that Air India pay a $1.4 million fine and $121.5 million in compensation to passengers whose flights were cancelled due to COVID-19

According to the US Department of Transportation, Air India is one of the six airlines that have agreed to repay a total of more than $600 million. 

Officials said that the "refund on request" policy of Air India violates a Transportation Department directive that mandates carriers repay tickets in the event of a legally required flight cancellation or adjustment.

There have been cases where Air India has agreed to pay the penalty and has been told to pay the refund before Tatas purchased the national carrier.

Following a thorough investigation, it was discovered that Air India handled more than half of the 1,900 refund requests for aircraft that the carrier had cancelled or materially altered in the previous 100 days that had been made to the Transportation Department.

The agency was unable to determine how long it took Air India to react to refund requests made directly by customers who complained and asked for reimbursements. India claimed to have a return policy but didn't give refunds right away. 

Frontier was required to pay a fine of $2.2 million and was given a refund of $222 million. The refund and fine for Avianca will total $76.6 million; the refund and fine for TAP Portugal and EI AI will total $126.5 million and $61.9 million, respectively.

Avianca is supposed to pay fines and refunds of USD 76.6 million in total

The Transportation Department said that it is slapping civil penalties against these six airlines totalling more than $7.25 million in retaliation for their egregious return of late deliveries and the more than $600 million in refunds that the carriers have already paid.

According to a news release, the Department of Airline Consumer Interests of the Ministry reportedly imposed $8.1 m in civil penalties in 2022, the most amount ever issued in a single year. The Transportation Department claims it is unlawful to give these clients vouchers in place of refunds.

Passengers who ask for refunds once a flight is a cancelled need to get their cash right away. When that doesn't happen, US Transportation claims, we'll hold airlines accountable for accommodating American tourists and recouping customer payments.

Pete Buttigieg at DoT said that there were continuing regulatory actions, investigations, and possible fine announcements.

“When Americans purchase a ticket on an aircraft, we want to get to our destination on time, reliably, and affordably, and our duty at DOT is to hold carriers accountable for these expectations.”

–Pete Buttigieg, Transportation Commissioner, DoT

The person went on to say that there were continuing regulatory actions, investigations, and possible fine announcements.

Along with the more than $600 million in compensation that the flights have already paid, the DoT declared that it is imposing civil penalties totalling more than $7.25 million on these six carriers for their egregious refund delivery delays.

The Office of Aviation Consumer Rights of the Government reportedly fined USD 8.1 billion in civil fines in 2022, the highest amount ever issued in a single year!