On Devas investors' plea, Canadian court orders seizure of Air India and AAI dues to IATA

A Canadian court has ordered the International Air Transport Association (IATA) to seize funds collected on behalf of Air India and the Airport Authority of India (AAI).

Separate orders were issued on November 24 and December 21 in response to shareholder petitions filed by Devas Multimedia Private Limited to enforce arbitration awards against the Indian government.

The order resulted in the seizure of approximately $6.8 million belonging to the Airport Authority of India. The exact amount owed to Air India that has been delayed as a result of the order is unknown.

The news comes just weeks before the Tata group's successful bid for the national airline in 2021. In its shareholder agreement with the government, the company was granted indemnity from previous legal claims.

Three Devas shareholders who won a $111 million arbitration award against the government petitioned the Superior Court of Quebec for enforcement, and garnishment orders were issued based on their requests.

“We will pursue the Indian government in courts worldwide to ensure the debts owed to Devas are satisfied. Our action in Canada has resulted in millions of dollars garnished by Devas shareholders, and represents the first fruits of a globally-focused effort to be paid.Devas shareholders have been clear from the start: Despite state-sponsored investigations intended to intimidate and scare-off the victims of India’s unlawful acts, we will continue to pursue the Indian government’s assets to satisfy the awards, while remaining open to an amicable settlement."Matthew D McGill, Partner, Gibson, Dunn & Crutcher and Lead Counsel for Several Shareholders

“On the intervention of Air India’s counsel, the commercial division of the Quebec Superior Court accepted to designate a judge on an urgent basis to hear the applications of quashing and seizures brought by Air India, AAI and IATA. The hearing will take place on January 4, a day on which court would normally be closed due to the holidays,” a senior government official said.

IATA assists airlines and air navigation service providers in collecting monies due from ticket sales and route navigation charges. Its billing and settlement plan (BSP) mechanism act as a payment gateway for travel agents around the world. Remittances for ticket sales are made to an airline through the BSP. Similarly, it collects route navigation charges from foreign airlines operating in India and for flights overflying the country and passes them to the Airport Authority of India.

Airport navigational services (route navigation, terminal navigational, and landing charges) brought in INR 3592 crore in FY 19-20, accounting for nearly 28% of AAI's revenue.

In response to the order, Air India removed all of its ticket inventory from global distribution systems on December 22. (GDS). When it comes to issuing tickets, travel agents use GDS platforms like Amadeus or Travelport. The platforms are connected to the IATA BSP, which keeps track of all sales made through this mechanism.

GDS platforms account for more than half of Air India's sales, so the sudden lack of availability of its tickets caused concern among travel agents.

Air India re-listed its ticket inventory on GDS platforms last Wednesday, but only allows ticket issuance with approved credit cards. Agents also received text messages that any ticket issued against cash will be cancelled by Air India.

Payments through credit cards are paid to the airline by a bank or credit card company. Though IATA keeps a record of credit card sales it is not involved in the collection and remittance process. Other than credit cards, agents have the option to do a bank transfer to IATA for ticket sales. These are known as cash sales and agents get up to seven days to make payments to IATA under this process.

(With Inputs from Business Standard)

Air India, which will soon be taken over by the Tata Group, reported a net loss of INR 5,422.6 crore during the first half of the financial year 2021-22 as against a loss of INR 3,779.26 crore in the year-ago period.

The airline's total revenue grew to INR 5,524.23 crore during April-September 2021 from INR 4,578.49 crore during the year-ago period, as per an exchange filing.

Total expenses stood at INR 10,946.83 crore during the period under review as compared with INR 8,357.75 crore during April-September 2020.

The airline held its annual general meeting on December 30, 2021, under the chairmanship of its CMD Rajiv Bansal. Its board of directors approved the unaudited financial results for the half-year ended September 30, 2021. Air India had reported a net loss of INR 7,017.42 crore during the financial year 2020-21.

Under the second batch of FY22 'Supplementary Demands for Grants', the Centre sought Parliament's permission for Rs 62,057 crore, which would be given to the Ministry of Civil Aviation for equity infusion in Air India Assets Holding Ltd for repayment of past dues and liabilities.

In October, the government had announced that the Tata Group had emerged as the highest bidder for divestment of its 100% equity stake in Air India and Air India Express along with its 50% stake in ground-handling company AISATS. Talace Private Limited -- a wholly-owned subsidiary of Tata Sons -- had won the bid to acquire the airline, which had a total debt of INR 61,562 crore as of August 31. 

Air India has been making daily payments for its fuel uplift but its past dues had been pending for years. In 2019, oil marketing companies had briefly snapped supplies to the airline at six airports. They had restored fuel supply after the airline agreed to pay INR 100 crore every month to clear the backlog.

Air India cleared 80% of its fuel dues earlier this month upon receiving fund infusion from the government, it is learnt.

On October 25, the government signed the share purchase agreement with Tata Sons for the sale of Air India for INR 18,000 crore. The Tata Group would pay INR 2,700 crore cash and takeover INR 15,300 crore of the airline's debt.

However, according to reports, the Tata Group's takeover of the airline is likely to be delayed by a month till January.

The Ministry of Civil Aviation on Saturday, January 1 issued a draft National Air Sports Policy (NASP) to leverage India's potential for air sports, given its large geographical expanse, diverse topography and fair weather conditions.

The draft NASP 2022 covers sports such as aerobatics, aeromodelling, ballooning, drones, gliding, hang gliding, paragliding and skydiving.

An Air Sports Federation of India (ASFI) will be established as the apex governing body, according to the draft NASP. Associations for each air sport will handle day-to-day activities.

Aeromodelling

For instance, the Paragliding Association of India will manage sports within its ambit. The air sports associations shall be accountable to ASFI with respect to the regulatory oversight and for providing safe, affordable, accessible, enjoyable and sustainable conduct of their respective air sport, the draft policy stated.

ASFI will represent India at Federation Aronautique Internationale (FAI) and other global platforms related to air sports, it noted. The FAI, headquartered in Lausanne, Switzerland, is the world governing body for air sports. All competitions in India will be conducted as per the guidelines laid down by the FAI, the draft NASP noted.

According to the ministry, the new initiative will facilitate greater participation and success of Indians in global air sporting events. Schools, colleges and universities will be encouraged to include air sports in their curriculum, it noted.

Domestic design, development and manufacturing of air sports equipment will be promoted in line with the Atmanirbhar Bharat Abhiyaan, it mentioned. Inability to enforce safety standards by an air sports association might lead to penal action by the ASFI against such association, including financial penalties, suspension or dismissal, it noted.

All persons and entities providing air sports services will be required to register as members of the respective air sports associations, it stated. Key equipment used for air sports shall be registered with the respective air sports association, till such equipment is decommissioned, damaged beyond repair or lost, it noted.

Long term funding for the development of air sports in India should come from corporate investors, sponsors, membership fees, events and media rights, it mentioned. ASFI may seek financial support from the Government of India for the promotion of air sports, especially in the initial years, it noted.

During peak winters, the level of air sports reduces in Europe and North America, and the air sports aficionados migrate to milder climates, it said. ASFI and the air sports associations will work towards developing a hassle-free process to enable their movement to India, it noted.

This will enable Indian air sports enthusiasts to learn from the experience of the visiting professionals, get exposed to global best practices and create opportunities to host global competitions in India, the draft mentioned.

The Union government in association with the Aviation Ministry which plants to promote the country's air sports sector by making it affordable, accessible, enjoyable, and sustainable has drafted the draft National Air Sports Policy as a step towards the direction and based on the inputs received from policymakers, air sports practitioners and the public at large.

Skydiving

The policy is said to be an evolving document and will be modified from time to time. Also, an Air Sports Federation of India (ASFI) will be established which will act as an apex governing body.

Apart from the policy, to make air sports affordable for the public, it will also look forward to requesting the GST Council for considering rationalising the GST rate over air sports to 5% or less. Speaking on the funding for the development of air sports, it is likely to come from corporate investors, membership fees, sponsors, events, and media rights. 

The Indian Navy, under its Multi-Role Carrier Borne Fighter (MRCBF) program, is now looking to update its maritime prowess by ordering  26 carrier-borne fighters as opposed to the 57 earlier. The reduced number of orders would ensure a speedy evaluation of the entire process, especially at a time when  India’s indigenous Twin Engine Deck-Based Fighter (TEDBF) is expected to take off by 2026 to be inducted by 2032.

The usual process for any aircraft acquisition requires a Request For Information (RFI) to be issued to the manufacturers. This is done to collect data from manufacturers, based on which, an application is forwarded to the defence ministry’s Defence Acquisition Council (DAC) for the Acceptance Of Necessity (AON).

Although, not the standard in the Defence Acquisition Procedure (DAP), this time around, a choice will be made between the two fighters at the stage of the Acceptance Of Necessity, leading to a Government-to-Government contract, sans the intermediate tender evaluation by various foreign manufacturers.

CATOBAR | Representative | DefenseXP

The proposed MRCBF aircraft are required to have the ability to be launched by catapults from aircraft carriers. Additionally, the Navy also has plans for an indigenous CATOBAR- Catapult Assisted Take-off But Arrested Recovery.

Apparently, The Russian MiG-29K/KUB, which is part of a fleet of 45 similar Russian fighters, have been problematic ever since their induction into service in 2009. The Indian Navy had originally acquired these 45 MiG-29K/KUB platforms between 2004 and 2010 for $2.29 billion as part of the air arms of Vikramaditya and INS Vikrant, the under-construction carrier, scheduled for commissioning around 2022 – principally because of their commonality with the Indian Air Force’s 60-odd MiG-29 fighters, inducted into service from 1985.

Russian MiG-29K/KUB | The Economic Times

Additionally, the MiG-29K/KUB fleet continued to face severe maintenance problems, as a large number needed repair after each deck landing that damaged many of the fighters onboard components. There were also complaints from the Indian Navy regarding Russia’s inability to incorporate all agreed-upon features onto the MiG-29Ks.

The Indian Navy’s 45 Russian fighters – 16 earmarked for Vikramaditya and 29 for Vikrant – which were delivered to the Indian Navy between 2009 and 2017 had failed in adequately meeting the navy’s operational requirements, as they were reportedly unable to deliver their weapons payload to their stated range with a full fuel load.Military Sources

With the fifth-generation U.S. F-35C out of cards, the French Dassault Rafale M and the U.S. Boeing F/A-18 Super Hornet is the only catapult-launch capable option available to the Indian Navy.

Boeing F/A-18 Super Hornet | Flickr

Reportedly, the Indian Navy requires 18 single-seat and 08 two-seat fighters- the F/A-18 Super Hornet has both variants and is carrier-operable, while, the Rafale M on the other hand comes in a single-seat variant only.

The final call of selection between the two aircraft rests on the Navy as the selection of Rafale would leave the navy with only 18 carrier-borne fighters out of this fleet of 26 aircraft as Rafale would be inoperable with India’s aircraft carriers.

The F/A-18 comes in two variants. It comes in the ‘E’ model, which is the single-seat version. It comes in the ‘F’ version, which is a two-seat aircraft. In either case, they’re fully carrier-capable. They can operate from U.S. Navy carriers seamlessly — one or the other. That’s not the case with our competitor. The competitor in this case has a naval variant called the ‘M’ and it is a single-seat aircraft. Any two-seat aircraft offered by our competitor would not be able to operate from the carrier. That’s a very stark difference to be considered by decision-makers in India. When you think of — let’s say 28 aircraft — if six-to-eight of those can’t operate from the carrier, consider the difference in value in this case versus where they can all operate from the carrierThom Breckenridge, Boeing’s vice president for international business development for its bombers and fighters line, at the Dubai air show.

At present, India has only one aircraft carrier -- INS Vikramaditya which is a Russian origin platform. Indigenously built aircraft carrier (IAC) INS Vikrant is expected to be fully operational by 2022 while the Navy is also firm on its push for a third aircraft carrier. Apparently, the proposed third aircraft carrier would be capable of operating a combination of manned & unmanned systems.

INS Vikramaditya | Naval Technology

SOURCE(s)

COVER: USNI News

Halting a declining trend of last month, jet fuel or ATF price has been hiked by 2.75% on firming international oil prices.

Aviation turbine fuel (ATF) price has been hiked by INR 2,039.63 per kilolitre, or 2.75%, to INR 76,062.04 per kl in the national capital, according to a price notification of state-owned fuel retailers.

The increase in rates comes on the back of two rounds of price cuts seen in December that reflected a drop in international oil prices during the second half of November and mid-December. Thereafter, international rates have firmed up, leading to the hike in ATF prices.

ATF price had peaked to INR 80,835.04 per kl in mid-November before it was cut on December 1 and 15 by a total of INR 6,812.25 per kl or 8.4%.

Jet fuel prices are revised on the 1st and 16th of every month based on the average price of the international benchmark in the preceding fortnight.

Jet fuel makes up 30-40% of the cost of running an airline in India and any increase will hurt the profit margins of airlines.

Refiners have been raising jet fuel prices as global crude oil prices firmed up on improved demand. ATF prices are revised every fortnight.

ATF prices in March 2021, April 2021, May 2021, June 2021, July 2021 and August 2021 prices were higher by 3.0%, 59.8%, 103.4%, 86.3%, 59.7%, 55.3%, respectively, from the year earlier.

With rising ATF prices, analysts estimate Indian airlines to remain largely loss-making during the coming quarters.

A SpiceJet passenger flight took off from Gujarat's Rajkot without the mandatory clearance from the Air Traffic Controller (ATC) on December 30, following which aviation regulator DGCA has ordered a probe, officials said on Sunday, January 2.

"A SpiceJet Q400 (VT-SUQ) operating Rajkot-Delhi as SJ-3703 on December 30, 2021, took off from Rajkot without ATC clearance. The pilots have been off-rostered (taken off flying duty) pending investigation," said people in the know. A senior DGCA official said “strict action” will be taken against those found responsible for the lapse based on the outcome of the probe.

(Image Courtesy - Aiel - Flickr)

The pilots of the Rajkot-Delhi flight have been off-rostered pending an inquiry by the Directorate General of Civil Aviation (DGCA), a SpiceJet spokesperson said.

The Rajkot-Delhi flight took off at around 9:30 AM on December 30 and landed at the Delhi airport at 11:15 AM, the officials said.

An aircraft has to take multiple permissions from ATC before taking off from an airport. It needs to take permission to push back from the aircraft stand. Then, it has to take permission before starting the engines. Then, it has to take permission to stand in the lineup, and then final permission is given for take-off.

The pilots did not take requisite clearance from the ATC before taking off from the Rajkot airport on December 30, the officials noted. The DGCA is probing the incident to find out the reasons, they said.

Several runway incursions have happened due to the confusion between which of the two nods — line up or take off — have been given to the crew of an aircraft. For instance, about two years back the DGCA had suspended the flying licence of a captain of an Indian carrier whose domestic flight was preparing to depart from Mumbai when it mistakenly entered the active runway without clearance.

The investigation had revealed that ATC had instructed the pilots to hold at the holding point of the runway. While the co-pilot had read back ATC instructions correctly and briefed the same to pilot-in-command, the latter had breached the holding point of the runway.