Jet Airways in negotiation with Boeing and Airbus for a $12 billion order

Radhika Bansal

02 Dec 2021

Jet Airways is in talks with plane makers Boeing Co and Airbus SE for an order worth $12 billion, BloombergQuint reported on Thursday, December 2 citing Bloomberg News.

The airline's new owners, UAE-based businessman Murari Lal Jalan and UK investment firm Kalrock Capital, told Bloomberg News that Jet could buy at least 100 narrowbody aircraft, BloombergQuint said on Twitter.

The group is set to invest about $200 million through equity and debt in Jet over the next six months, BloombergQuint said.

The Jalan-Kalrock consortium's resolution plan for Jet was approved by India's bankruptcy court in June, with the airline poised for takeoff by the first quarter of 2022 as it gears up to resume domestic operations.

The debt-laden airline, once India's biggest private carrier, stopped flying in April 2019 after running out of cash, leaving thousands without jobs. Shares of the airline jumped as much as 3.7% to INR 85 on Thursday, December 2 and were trading 2.4% higher at 0740 GMT.

The news on Jet comes a month after billionaire investor Rakesh Jhunjhunwala-backed low-cost Indian carrier Akasa Air placed a $9 billion order for 72 Boeing 737 MAX jets.

In an interview, Dubai-based businessman Jalan had earlier said the airline would start in July 2021. Later its court-appointed resolution professional reportedly said it would start flying by December 2021. Shortly by the third or fourth quarter of 2022, the airlines will also resume international short-haul flights.

They plan to increase their fleet of planes to 50 in three years and raise that to 100 in five years.

Jet Airways is now left with a fleet of 11 planes, including Boeing 737s and 777s, as well as Airbus A330 jets. But those aircraft are mostly old and need to be sold and replaced with newer, more fuel-efficient ones, Jalan said. A deal for the most popular model of Boeing 737 Max jets could cost more than $12 billion, although discounts are common in large orders. 

The potential revival of Jet Airways, which forced creditors to take a 95% haircut, will be the first for any airline under India’s bankruptcy laws and will intensify competition in one of the world’s most cut-throat aviation markets. Founded by ticketing agent-turned-entrepreneur Naresh Goyal after India ended a state monopoly on aviation in the early 1990s, Jet Airways became popular among fliers as an attractive alternative to Air India Ltd., offering full-service flights to cities including London and Singapore, before a bunch of low-cost airlines ushered in cheap fares for no-frills services. 

(With Inputs from Reuters and BloombergQuint)

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Airline, Tourism, Hospitality stocks rise after battering from Omicron concern

Radhika Bansal

01 Dec 2021

After a week of battering, tourism and hospitality stocks unlocked a recovery on November 30, shrugging off concerns over the Omicron variant of the coronavirus that triggered worries about the global economy.

Stocks such as Lemon Tree Hotels, EIH Associated, The Byke Hospitality, Indian Hotels and Chalet Hotels jumped between 4 and 8% in the trade, with market participants seeing the correction triggered by worried over the new strain as overdone.

Even airline and travel stocks such as InterGlobe, the IndiGo operator, SpiceJet and Thomas Cook saw leisurely trade. At 11 AM, they were trading 2-6% higher on the National Stock Exchange.

"Reopening stocks that include travel and hotel stocks typically react well to news that negates the threat of pandemic returning. Going by current news flow, it seems that the Omicron fears have been overblown, as of now, and hence as a relief reaction these stocks have bounced up well in trading on November 30,” said Deepak Jasani, Head of Retail, HDFC Securities.

The sharp rebound came amid a broad-based recovery on Dalal Street. At 11.05 AM, the Nifty 50 was up 0.7% at 17,169.45 points, off the day’s high of 17,324.65 points. The Sensex was also up 0.6% at 57,592.78 points, off the day’s high of 58,183.77 points.

On November 26, airline and hotel stocks had fallen 3-6% after the World Health Organization flagged the Omicron as a “variant of concern” because of its several mutations.

(Image Courtesy - InvestorPlace)

Market participants feared another lockdown across the world would hit travel stocks the hardest, as it did during the first wave of the pandemic.

Most of these companies have still not recovered from the losses during the lockdowns in both the first and second waves of COVID-19 in the country.

The threat to these sectors remains. Maharashtra Tourism and Environment Minister Aditya Thackeray on November 29, said around 1,000 travellers from South Africa had landed in Mumbai since November 10.

On November 27, the Prime Minister highlighted the need for monitoring all international arrivals, their testing as per guidelines, with a specific focus on countries identified as “at-risk”.

"From the March 2020 lows, these stocks have risen quite well in anticipation of normalcy returning to the space. Hence, fresh positions need to be taken very selectively and only on dips," Jasani said.

Ventura Securities' Head of Research Vinit Bolinjkar expects downward pressure to continue due to a combination of factors like inflation, low earnings upgrades and high FII selling.

However, he is upbeat on airline stocks for the long term. "Video-conferencing can hamper the initial passenger numbers but post that, we expect the growth trajectory to return due to low passenger penetration in India and a growing number of domestic airports," Bolinjkar said.

"Given the uncertainty, there could be some near term challenges to the travel and leisure segment. Thereby, they could see volatility depending upon the news flow for the new COVID variant," said Arun Agarwal, Deputy Vice President - Fundamental Research, Kotak Securities. He is positive about Interglobe Aviation for the long term.

Jasani said the aviation sector may see heightened competition due to Air India privatisation and the entry of new players. "Even otherwise, the sector is known for bringing poor returns for investors due to its Capex intensity, seasonality, high fuel costs and dependence on normal times," he said.

(With Inputs from MoneyControl)

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Dubai government talks on potential stock market listing of Emirates

Radhika Bansal

01 Dec 2021

The Dubai government is considering an Initial Public Offering (IPO) of Emirates airline, the flagship carrier's President Tim Clark said on Monday, November 29 as authorities work to boost activity on the local stock market.

The emirate's government is planning to list 10 state-backed companies on its stock exchange and set up a 2 billion dirham ($545 million) market maker fund to encourage trading activity.

"Yes, there have been talks about it. Yes, there has been, perhaps a little bit more flesh on the whole subject than there has been in the past," Clark said in an interview for the upcoming Reuters Next conference when asked if a listing was a possibility.

Tim Clark, President, Emirates

"I'm waiting for instructions as to how this is going to affect the Emirates Group. What the government of Dubai decides to do...is up to them, I would basically do as I am bid."

Emirates Chairman Sheikh Ahmed bin Saeed Al-Maktoum said earlier this month that it was possible to list the carrier or its subsidiaries.

Governments have pumped billions of dollars into airlines during the coronavirus pandemic and state-owned Emirates has received around $3.8 billion in equity injections from Dubai, including $2 billion disclosed last year.

(Image Courtesy - Al Jazeera)

The airline posted a loss of 5.8 billion dirhams ($1.6 billion) for the April-September period, down from a 12.6 billion dirham loss for the same period last year.

However, Clark said he does not expect further government support over the next year so long as the new variant of the coronavirus does not cause too much disruption.

"We are restoring our cash position at pace. So it is unlikely, notwithstanding the Omicron variant and its effects... if it's not as bad as people think it may be, then we see no further recourse to the owner putting equity into the business.

(Image Courtesy - Arabian Business)

Clark said that although Emirates would still suffer a loss this year, it would be considerably smaller than in the preceding 12 months. For 2022, he expected the airline to break even or make a profit.

"I am very pleased to say we have returned to profitability already, over the last six, seven weeks, we've been profitable," he said.

Clark has previously said he aims to fully restore the carrier’s route network by the middle of 2022.

(With Inputs from Reuters)

Cover Image - Al Arabiya

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The 737 MAX fiasco | what was wrong, what was corrected and why is it safe now

Prashant-prabhakar

03 Dec 2021

It took two fatal crashes- a Lion Air flight in Indonesia in October 2018 and an Ethiopian Airlines flight in March 2019 –killing a total of 346 people, for the US House of Representatives to come to question the conduct of Boeing and the FAA.

A brief timeline of the 737MAX fiasco | Vietnam Investment Review

The very system designed to pull an aircraft out of an impending stall is what ironically caused the crashes as well.MCAS, Maneuvering Characteristics Augmentation System, was designed to push the plane down in case the nose rose too high. Apparently, data from one AoA (Angle of Attack) is what was processed to decide the course of action. Unfortunately, faulty readings from the sensor would ultimately lead to the 2 fateful crashes.

The 737 base aircraft design

The Boeing 737 has maintained its base design for over 53 years since its inception. The model has also maintained a good safety record, if not the best.

What that means is that it wasn't the design of the aircraft which was inherently dangerous, but the way Boeing implemented the rather sloppy design, making it outright dangerous.

The Luxury Travel Expert

The inadequate analysis of the design of the system and its safety would overwhelm even the most experienced of flight crews. Post-crash simulator sessions by Boeing had demonstrated pilots being taken aback despite knowing what to expect.

So, what actually went wrong?

An unstable aircraft will almost always execute an uncommanded pitch/roll/yaw, which generally has to be countered using a quick and large push on the controls.

The additional pull in pounds-force to get the nose to a higher pitch Angle of Attack (AoA) was not linear close to stall AoA(s) in the case of 737MAX.

Considering the special simulator training that would otherwise have to be imparted to train the pilots in a 737 NG and 737 MAX, Boeing chose to fix it with a minor change to the flight control system.

The Speed Trim System, already installed on a 737 was modified to give a linear force feel for the last part of the AoA range before a stall. This would have worked well had it been thought through and perfectly implemented. But it was not to be and the results were obvious to be seen.

Why is 737 MAX thought to be safe now?

The flight control system has been fixed, MCAS would take inputs from two AoAs now as opposed to just one earlier.Although a single sensor trigger system is rarely practised by OEMs, it is a design used by Boeing on the two AoA sensor models namely- 747, 757, 767, and 737.

FierceElctronics

The updated MCAS introduces convincing new logic(s) around the AoA sensors. Additionally, it also limits the authority of MCAS with pilots now with the ability to manually over-ride MCAS at their discretion.

All amendments made have been strictly scrutinised like never before done on FCS parts ever. Hence chances of this part of the aircraft leading to a crash, considering the base design of the 737 is safe, are practically nil.

The following would be addressed before the aircraft actually enters commercial service:

software updates to address theoretical horizontal stabilizer issue would be loaded on all airplanes before entry into servicemodifications to some wiring to meet regulators’ requirementsall stored airplanes would undergo FOD (foreign object debris) testingupdated software to address remote possibility of autopilot disengagement

China was among the first countries to ground the 737 MAX in 2019 following the two fatal crashes. The Civil Aviation Administration of China (CAAC) has now released an Airworthiness Directive (on December 2, 2021) which advises airlines what revisions they need to make before they can resume operations with the MAX.

COVER: CNBC

All credits to the respective source(s)

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Resumption of International flights postponed indefinitely by DGCA

Radhika Bansal

01 Dec 2021

Amid emerging risks from the new Omicron variant of COVID-19, the government on December 1 said it will postpone the resumption of scheduled commercial international flight services.

The Directorate General of Civil Aviation (DGCA) said the government would take a call on a new date to resume scheduled international flights in "due course".

The situation is being "watched closely because of the emergence of new COVID variant", the aviation sector regulatory body said.

The DGCA, however, clarified that flights operating under the air bubble agreements "will continue".

https://twitter.com/DGCAIndia/status/1465969745287528458

The decision comes days after Prime Minister Narendra Modi asked officials to review the plans to ease international travel restrictions in light of the "emerging new evidence".

Modi was on Saturday briefed about the new 'Omicron' variant of the coronavirus, and the global trends on coronavirus cases and officials highlighted that countries across the world have experienced multiple Covid-19 surges since the onset of the pandemic, a Prime Minister's Office (PMO) statement had said.

"Scheduled international flights were going to restart from December 15 as per our earlier notification, now the government has decided to revert to the earlier regime of flights operating under air bubble agreements," an official from the DGCA told Moneycontrol. 

The frequency of flights under air-bubble agreements will be a product of demand from those destinations, the official said. He added that most domestic and international airlines have not received a large number of bookings for flights beyond December 15, and hence the government's decision is not expected to disrupt the travel plans of many individuals.

The DGCA will coordinate with both domestic and international airlines for bookings beyond December 15, and customers will be provided with the option to refund or reschedule tickets, another official at DGCA said.

The decision to postpone the resumption of scheduled international air services comes five days after the Ministry of Civil Aviation had announced that such flights would resume from December 15, after a gap of about 20 months.

(Image Courtesy – Scroll)

The World Health Organization (WHO), on November 26, had classified Omicron as a "variant of concern". Since then, several countries have either partially shut their borders or delayed their plans to resume regular international flights.

The Indian government subsequently announced that passengers arriving from "at-risk" countries would be required to undergo seven-day quarantine. Their samples would be collected for RT-PCR tests at the airports, and they would also be tested on the eighth day after their arrival.

The list of "at-risk" countries includes European nations, the UK, South Africa, Brazil, Botswana, China, Mauritius, New Zealand, Zimbabwe, Singapore, Hong Kong and Israel.

Apart from the Centre, the Maharashtra government has also released a stringent set of guidelines, mandating seven-day institutional quarantine for travellers arriving in the state from the above-mentioned countries.

(Image Courtesy - India Ahead)

As per the guidelines issued by the State Disaster Management Authority on November 30, such passengers would also have to undergo RT-PCR tests on the second, fourth and seventh day of their arrival.

If a passenger is found to be positive, he or she will be shifted to a hospital. In case the result is negative, the passenger will have to be home-quarantined for seven days.

Passengers from other than "at-risk" countries will have to undergo a compulsory RT-PCR test at the airport. Even if found negative, they will be home-quarantined for 14 days. If found positive, the patient will be shifted to a hospital, the guidelines said.

International airports across the country have made preparations to implement the stricter COVID-19 guidelines, to be effective from midnight, for international passengers amid rising concerns of infections caused by the new COVID-19 variant Omicron.

While India has not reported Omicron cases so far, the Union government has advised states and Union Territories to ramp up testing for early identification of any cases, undertake effective surveillance of international passengers and strictly monitor hotspots.

The new COVID-19 variant B.1.1.529, first detected in South Africa this week, was designated as a Variant of Concern by the World Health Organization on November 26.

Research is still underway to determine if omicron causes the same level of illness as older versions of the virus if it can evade protection from vaccines and previous infections and if it will be able to outcompete the existing strains as the pathogen continues to circulate throughout the world.

Uncertainty about the new variant has triggered global alarm, with border closures casting a shadow over a nascent economic recovery from the two-year-old pandemic.

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Multiple Aperture Infrared (MAIR) set to take-over current missile warning systems

Prashant-prabhakar

01 Dec 2021

MAIR, an acronym for Multiple Aperture Infrared, is a next-gen Missile Warning System, developed by Leonardo, a company based in Italy, with a global presence.       

First flight of Missile Warning Sensor System being carried out by Leonardo | Aviation International News

The system design and architecture are reportedly based on the company's previous experience of PIRATE and SkyWard airborne infra-red search and track (IRST) and the Silent Acquisition & Surveillance System (SASS) naval IRST.

Design specifications

Touted to be more dependable than the current generation of systems in place, MAIR  is an open system based on optical heads (weighing 2kg each) fitted with infrared sensors- something which the company claims, offers enhanced benefits when compared to the current ultraviolet sensors-based systems.

How does it compare with the current systems in place?

MilitaryLeak

Technically, it is based on the principle of early recognition and thereby early threat neutralisation.Additionally, MAIR can follow a threat throughout the entire trajectory, thus ensuring effective counter-measures.

Furthermore, it is also beset with countermeasure features such as flares and compatible with active countermeasures such as DIRCM (Directed Infra-Red Countermeasure), by Leonardo or another manufacturer. The optical heads operate and track threats autonomously, primarily ground to air missiles.

An aircraft is typically protected with installation of five optical heads, four of which are located on the sides of the platform and one on the underbelly, offering 360-degree coverage at the zenith and 270 degrees in elevation. A sixth one can be added on top to ensure complete protection

The system comes inbuilt with "Hostile Fire Indication capacity"- meaning the crew can now track the origin of light fire-arm shots as well.

Owing to its significant low false rates of alarm makes it that much more reliable than the previous generation of systems. It is also touted to perform well in extremely "noisy" scenarios, filtering out the clutter.

The 15kg highly compact central processing unit, assists MAIR in projecting a video ‘sphere’ using ‘picture in the picture’ techniques, which is streamed directly to the pilot’s helmet, cockpit display or even the head-up display.

Multiple Aperture IR System | Leonardo Company

This technology isn't just limited to detecting surface to air but air to air missiles as well. As a matter of fact, this innovative concept could well represent a major shift from the traditional use of ultraviolet/infra-red systems to being a true first gen-next technology, used in the most complex missions, regardless of the threat profile.

MAIR is ready to roll for mass production with industrial orders all ready along the pipeline.

SOURCE: Leonardocompany

COVER: Wikimedia

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