Wadia Group to infuse Rs. 510 crores in Go First for its working capital needs

Wadia Group will invest Rs 510 crore in Go First through its Mauritius-based company Baymanco Investments to meet its "working capital requirements".

Go First is about to get another influx of capital, this time from its owners, the Wadia Group, an Indian conglomerate. In the past 15 months, the company received government loans and additional capital injections to maintain operations during COVID and other worldwide issues.

Go First is about to get another influx of capital, this time from its owners, the Wadia Group

According to a report by Business Standard, Go First plans to “raise funds by way of 0.01 per cent Compulsory Convertible Preference Shares (CCPS) of the company of face value of Rs 10 each, aggregating to Rs 510 crore on a preferential basis through private placement, through two separate issuances and allotments.”

Additionally, according to company documents analysed by Business Standard, Baymanco Investments will receive these CCPS within a year. Five years following the allocation, the CCPS will be converted into equity shares.

It was also indicated in the paperwork that the funds obtained in this way would be put “towards working capital requirements and general corporate purposes”.

Go First obtained a loan of 4 billion (about $49 million) last month through the Emergency Credit Line Guarantee Scheme of the Indian government (ECLGS). In accordance with this unique programme that was announced during the COVID outbreak, the government agreed to raise the credit limit for the aviation industry in October.

In order to maintain operations throughout the pandemic and travel restrictions, sources previously stated that the airline received close to a $28 billion ($342 million) capital infusion from its shareholders in the last 15 months.

Go First received close to a $28 billion ($342 million) financial infusion from its stockholders in the previous 15 months to maintain operations throughout the pandemic and travel restrictions.

According to its regulatory filings, Go First reported a net loss of almost $218 million during the fiscal year 2022. This was a net loss of about $105 million, which was more than twice as much as the previous year.

The airline has cited further COVID waves and its grounded fleet as the main causes of its financial losses. However, during the same time period, Go First's revenue increased by 92.64%, from $263 million to $506 million. It added that its load factor significantly increased, reaching over 80% in March 2022, as the number of diseases decreased and travellers resumed their travels.

Flight cancellations and delays have increased recently, which has also had an impact on Go First.

Due to a shortage of engines and replacement parts caused by problems with the worldwide supply chain, several of its aircraft are grounded. However, things are progressively getting better as engine manufacturer Pratt & Whitney plans to start supplying about 20–25 engines per month in December and finally finish up the backlog of its engine deliveries to Indian airlines in the next three months.

In December, Pratt & Whitney aims to begin supplying 20 to 25 engines each month, and over the next three months, it will complete the backlog of engine deliveries to Indian carriers.

Also read: Go First grounds over a fifth of its fleet due to delayed deliveries of engines by Pratt & Whitney

Also read: Go First losses double in FY22, blames Covid-19, Pratt & Whitney

The Indian aviation industry is anticipating its strongest month since before the outbreak in December. As travellers get ready for the holidays, traffic has nearly reached the 400,000 level for the whole month. 

Goa will be hoping the capacity move will ease some of the burdens from GOI and ensure smooth operations through the winter break when it launches its second airport. Go First has used the opportunity to serve 42 weekly flights from Goa's New Airport.

Manohar Parrikar International Airport, Goa to begin operations from January 5, 2023

“As we expand our network in leisure destinations, Goa is an extremely important destination for us. We are pleased to fortify our presence and this new addition will further reflect our unflinching commitment to providing customers with a promising flying experience.”

–Kaushik Khona, CEO, Go First

With more capital in its pocket, Go First’s expansion plans look promising now.

(With inputs from Business Standard)

Ajay Singh will be reappointed as a Director of SpiceJet on Monday, December 26, with the support of the airline's shareholders.

Singh resigned from his position as director on August 27, 2010, having been initially appointed on November 4, 2004. After that, on May 21, 2015, he was chosen to serve as the organization's managing director. Singh currently serves as the airline's Chairman and Managing Director. 

The re-appointment of Singh as a director who is eligible to retire through rotation was approved by the shareholders with the necessary majority, the carrier claimed in a regulatory filing.

The re-appointment of Ajay Singh as a Director was approved by the shareholders with the necessary majority

The shareholders approved the acceptance of the audited financial accounts for the fiscal year ending March 31, 2022, at the annual general meeting as well.

Due to the negative effects of high fuel prices and rupee devaluation, the low-cost carrier, which is dealing with numerous challenges, posted a net loss of 789 crore rupees in the June quarter.

The airline's shares increased by about 7% on Monday, December 26, closing at 37.85 on the BSE. On December 23, SpiceJet stated that, subject to adhering to statutory procedures and receiving the necessary permissions, it continues to investigate various options for the settlement of its unpaid debts with its creditors in order to normalise its responsibilities.

According to the conditions of the financial facilities it had accessed from them, the company had said in a regulatory statement that the transfer of the cargo business venture was ongoing while it awaited final lender clearance.

The transfer of the cargo business venture, along with its associated assets and liabilities, to the company's subsidiary SpiceXpress and Logistics Pvt Ltd, had already received approval from the company's shareholders.

Also read: SpiceXpress spin-off is now approved by the creditors of SpiceJet

With the introduction of SpiceXpress & the transfer of business under this process will help SpiceJet significantly strengthen its balance sheet and wipe out the negative net worth of its business.

At the beginning of December, the airline concluded a number of settlements with the majority of the major partners, including manufacturers and lessors, according to Ajay Singh's statement in the airline's annual report for the 2021–22 fiscal year. 

Also read: SpiceJet aims to pay off aircraft lessors’ outstanding debts by converting them into investors

“The sky-high fuel prices, depreciating rupee, erratic passenger demand and disrupted supply chains have deferred growth plans and expanded losses.”

“Our logistics business has been valued at ?25,557.7 million and the transfer of business under this process will help us significantly strengthen our balance sheet and wipe out the negative net worth of our business.”

“We expect to see improvement in operations and restructuring benefits will be visible starting Q3 FY2023.”

–Ajay Singh, To Be Director, SpiceJet

Improvement in operations and restructuring benefits will be visible for SpiceJet starting Q3 FY2023 -Ajay Singh

The Spicejet is also negotiating with investment bankers to raise up to USD 200 million in order to realise its future plans and the expansion of the Emergency Credit Line Guarantee Scheme (ECLGS) to 1,500 crores will significantly contribute to the sector's much-needed stability. 

Also read: SpiceJet anticipates improved operational results and restructuring advantages in the December quarter; the ICAO audit confirms SpiceJet’s credentials as a safe airline

It has also finished a series of settlements with a majority of its main partners including manufacturers and lessors paving the basis for its seamless growth and expansion. The additional monies will allow SpiceJet to normalise its obligations, unground its fleet, and induct new planes into the fleet.

Ajay Singh, who will become the new director of SpiceJet might bring out all the necessary changes to make the airline flourish. 

(With inputs from TOI)

India's airline fleet outperforms the rest of the world's airline fleet in terms of taking practical and long-lasting efforts towards decarbonization.

The majority of the commercial airline aircraft in use today are older-generation fuel guzzlers, according to data published by the European aerospace giant Airbus, with only 20% of the world's current, in-service airline fleet consisting of the most recent generation of aircraft.

According to TOI, the current generation of fuel-efficient aircraft make up 59% of the airline fleet in India.

The amount of fuel used by airlines directly reflects the carbon dioxide emissions of the industry.

About 70% of the exhaust is made up of CO2, which is also the main source of aviation emissions. Therefore, an aircraft's carbon emissions decrease as fuel efficiency increases.

The primary component of aviation emissions, CO2, makes up about 70% of the exhaust. As fuel economy improves, an aircraft's carbon emissions do too.

“Replacement of older generation aircraft is one of the most straightforward ways to decarbonise the sector and in this aspect India is well ahead of the curve.”

–Airbus Spokesperson

Airbus recently wrapped up a two-day annual summit where it presented a number of initiatives to lessen the impact of aviation on the environment. The primary initiative among them is the development of a new hydrogen-powered fuel cell engine to power its zero-emission commercial aircraft, which is expected to enter service in 2035.

Also read: With net-zero emissions at the top of the agenda, cleaner fuels and efficiency just might not cut it

The percentage of fuel-efficient aircraft is expected to increase substantially over the next few decades thanks to fleet modernisation, a short-term solution to reduce carbon emissions in the aviation industry.

According to the most recent prediction from Airbus Global Services, new-generation passenger aircraft will make up 95% of the fleet that is in operation by 2041 (2022-2041).

The proportion of fuel-efficient aircraft in airline fleets in India is anticipated to increase significantly during the next several years.

Also read: All Indian airports to be carbon neutral in near future – Jyotiraditya Scindia

Air India, a recently privatised carrier, is anticipated to shortly announce a sizable order for most-up-to-date aircraft. The carrier is apparently in the advanced stages of negotiating a significant fleet renewal and growth. However, the majority of the green fleet is currently run by IndiGo, the largest airline in India with a 56% market share.

Air India is anticipated to shortly announce a sizable order for most-up-to-date aircraft

“Currently, 80% of our fleet is comprised of latest-generation aircraft.”

–IndiGo Spokesperson

Which is the latest-generation aircraft? The most well-liked single-aisle, narrow-body aircraft, which primarily flies domestic routes.

Aircraft from the A320neo series and the Boeing 737 MAX, which entered service in 2016–2017, are considered to be of the new generation. Then there are the new generation wide-bodies like the A350, B777X, B787, etc., which are more fuel-efficient than earlier generation aircraft like the A300, A310, B747, etc.

“The A320neos are typically 15-20% more fuel-efficient than the older generation A320 and A321ceos.”

–IndiGo Spokesperson

The A320neos are typically 15-20% more fuel-efficient than the older generation A320 and A321ceos

By 2050, the global aviation sector hopes to be carbon-neutral or net-zero. Narendra Modi, the prime minister of India, has pledged to achieve net-carbon zero by 2070 for the country, which is still a developing market. One of the milestones is the greater usage of sustainable aviation fuel, which is a fuel made from a range of sustainable feedstocks including used cooking oil, agricultural waste, green hydrogen, and so forth.

Also read: ICAO signs MoU with International Solar Alliance, an initiative proposed by PM Modi to keep CO2 emissions in check

(With inputs from TOI)

Passengers in India who find themselves in the frustrating predicament of being downgraded from one cabin to another might soon receive fair compensation.

The airline industry's regulatory body, the Directorate General of Civil Aviation (DGCA), has declared that it will establish standards to provide compensation to a passenger whose flying ticket has been involuntarily downgraded from one cabin to another by an airline. The decision was made as complaints about airlines unintentionally downgrading tickets sent to passengers grew. 

According to the DGCA, rules will be established to pay compensation to a passenger whose flight ticket was involuntarily demoted from one cabin to another by an airline.

The Economic Times reports that the action follows multiple passenger complaints that airlines were forcing them to travel economy class even though they had tickets for a premium seat. It's important to note that the only two Indian airlines that provide premium cabins are Air India and Vistara.

Air India now only offers business class seats, although Vistara also offers premium economy (except for the newly acquired 777, which features premium economy).

DGCA is seeking to amend the law so that in the event of an airline denial of boarding, an unscheduled flight cancellation, or an unjustified downgrade, the rights of the passengers come first. A passenger may request a complete refund from the airline after the rules have been set.

A passenger may request a complete refund if there has been an unscheduled flight cancellation, or an unjustified downgrade: DGCA

“The amendment will allow the passenger, who is downgraded involuntarily from his booked class of ticket, to receive the full value of the ticket including taxes as a refund from the airline and the airline will carry the passenger free of cost in the next available class.”

–DGCA Statement

However, there will be stakeholder consultation on the idea. The final regulation will then be published and put into effect after that.

“In order to cater to such situations, DGCA is in the process of amending its Civil Aviation Requirement (CAR) Section-3, Series M Part IV. Facilities to be provided to passengers by airlines due to denied boarding, cancellation of flights and delays in flights.”

–DGCA Statement

The most recent action was taken months after the DGCA warned Indian carriers not to sell tickets for seats that weren't fit for usage during flights. It aimed to put an end to the practice of letting airlines off the hook for poor aircraft maintenance by not taking passenger comfort and safety into account.

DGCA warned Indian carriers not to sell tickets for seats that weren't fit for usage during flights

According to DGCA regulations, airlines are not allowed to sell passenger seats that do not match standards since all materials, including the aeroplane seat, must adhere to approved design criteria.

The authorities' statement further stated that the installation of any component that does not adhere to the authorised design specifications deteriorates the standards of airworthiness.

Even though there have been a number of similar events in the past, the one that started this uproar earlier this year was an Air India flight from New Delhi (DEL) to London (LHR) that experienced a lengthy delay and disruption with seat assignments because certain seats weren't "working."

Prior to the Tata Group's acquisition of Air India, the airline had issues with cracked seats and shoddy interiors. The new owners are doing everything they can to repair the planes so they can compete with some of the greatest in the world.

(With inputs from ET)

The projected "contactless" digital, greenfield Noida International Airport (NIA), scheduled for completion in 2024, would combine Swiss and Indian aesthetics.

Sources from the planned Noida International Airport provided information on the design and feel of the facility.

Also read: Jewar-the next happening hub

Beginning on October 1, 2022, the concession period of the NIA will last for 40 years. As a digital greenfield airport, NIA will facilitate smooth traffic flows, a pleasurable travel experience, and specialised and effective infrastructure for its logistics partners.

YIAPL is developing the airport using a Public Private Partnership (PPP) model

By 2024, the airport's initial phase, which includes one runway and one terminal, is anticipated to be finished. The airport will improve accessibility to and from the Western UP, Noida, and Delhi NCR.

In close collaboration with the governments of India and Uttar Pradesh, Yamuna International Airport Private Limited (YIAPL), a 100% subsidiary of Zurich Airport International AG, is developing the airport using a Public Private Partnership (PPP) model.

The Noida International Airport is being constructed by Yamuna International Airport Private Limited Company (YIAPL). For the next 40 years, YIAPL will plan, construct, and manage the Noida International Airport. It has been running airports for 75 years. Ten airports have been built by it in Europe, Latin America, and India.

Also read: Jewar Airport has the potential to make Noida what Delhi Airport made Gurgaon

First renders of the inside view of the upcoming Jewar airport

“The design of the airport is by Nordic, Grimshaw, Haptic, and STUP, which best fits the defined project objectives: merging Swiss efficiency and Indian hospitality, creating a modern and seamless passenger experience, setting new benchmarks in sustainability for airport terminal buildings in India, envisioning green spaces inside and around the building, offering a concept for a future airport city, and providing flexible expansion options to serve 30 million passengers per year in the future.”

–Christoph Schnellmann, Chief Executive Officer, Noida International Airport

The airport will have a 12 million passenger capacity in the first phase, and once that capacity has increased by 80%, construction in the next 4 phases will begin. Work on the first phase will be finished by 2024. Phase 4 will see connections for up to 70 million passengers at the airport.

Construction on Terminal 1 will start in the first phase and continue in later phases.

According to Christoph Schnellmann, CEO of the Airport, and COO Kiran, who updated the media on the groundwork progress of the under-construction airport, the upcoming international airport in Noida's Jewar design will reflect Uttar Pradesh's tradition and give a feeling of Banaras ghat upon entrance.

The Noida International Airport's front appearance has also been made public. With sculptures scattered throughout, it will replicate the appearance of the Banaras Ghat at first glance.

NIA's entrance will resemble the appearance of the Banaras Ghat at first glance

“The airport’s design is inspired by India and will include various elements synonymous with the region’s architecture. The terminal forecourt will feature flights of steps like the famous ghats of Varanasi and Haridwar, welcoming and bringing together people. Delivering the look and feel of a haveli, a courtyard will allow fresh air and sunlight into the terminal building. Inspired by the important rivers of the region, a white, translucent, wavy roof will give the effect of a flowing river. The passenger terminal will feature intricate ornamental lattice screens, inspired by Indian architecture. Noida International Airport will showcase a grand entry to the state of Uttar Pradesh.”

–Christoph Schnellmann, Chief Executive Officer, Noida International Airport

The airport will be the most digitally friendly in India and would take into account the tradition of UP in its architecture. 

(With inputs from Business Today)

The Federal Aviation Administration (FAA) has issued an Airworthiness Directive (AD) to address two unsafe conditions on all Boeing 747 models. The new directive supersedes a previous notice that did not include the Boeing 747-8 and Boeing 747-8F. 

The AD, which is a final rulemaking, was published on December 22, 2022. The Notice of Proposed Rulemaking (NPRM) was issued in September 2022, when operators of the aircraft and other interested parties had an opportunity to submit responses. The Air Line Pilots Association, International (ALPA) was the only organization to put forward their proposals, agreeing with the authority on the change without additional suggestions. 

Previously, the AD affected all Boeing 747s except for the latest iteration of the type.

The FAA’s newest rulemaking addressed the unsafe conditions of two parts on the aircraft, namely the lower trailing edge panels of the left wing and a broken fuse pin of the landing gear beam end fitting. 

Prompted by damage discovered on both, the agency will now require operators to conduct additional inspections to identify cracked fuse pins, as it determined that ‘additional airplanes are subject to the unsafe condition’. The directive’s text also indicated that the NPRM, which has now resulted in a final rulemaking, ‘was further prompted by the need for new ultrasonic testing (UT) inspections for cracking of the fuse pin, and the determination that additional airplanes are subject to the unsafe condition’. 

According to the agency’s estimates, the directive will affect 207 aircraft that are registered in the United States (US). Furthermore, six potential actions need to be completed for the relevant aircraft to be airworthy. The FAA determined that the total cost for all US-based operators to replace the fuse pin would be $3.9 million, while the magnetic particle inspection can cost up to $844,560 per inspection cycle, as well as collective costs of $175,950 to complete surface inspections. All three of these aforementioned actions were retained from the preceding AD. The cost per aircraft is $19,060, $4,080, and $850 respectively, per replacement or inspection cycle, including parts and labor expenses. 

Three additional actions were introduced by the latest directive and airlines can choose which one they take to ensure the airworthiness of their 747s. A CRSE fuse pin replacement is estimated to cost $12,917 per cycle (total US operator cost of $2.6 million), steel alloy fuse replacement is priced at $13,603 per cycle (total US operator cost of $2.8 million), and surface HFEC and UT inspections can amount to $935 per inspection cycle (total US operator cost of $193,545). 

 Boeing’s final 747 rolled out of the company’s cavernous factory north of Seattle Tuesday night as airlines’ push for more fuel-efficient planes ends the more than half-century production run of the jumbo jet.

The 1,574th — and last — 747 will later be flown by a Boeing test pilot, painted and handed over to cargo and charter carrier Atlas Air Worldwide Holdings early next year.

“It’s a very surreal time, obviously,” said Kim Smith, vice president and general manager of Boeing’s 747 and 767s programs out of the assembly plant here. “For the first time in well over 50 years we will not have a 747 in this facility.”

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The lone 747, covered in a green protective coating, had been sitting inside the company’s massive assembly plant in Everett — the largest building in the world by volume, according to Boeing. The building was constructed specifically for the jumbo jet’s start of production in 1967.

Inside, Boeing crews have spent the last few days swinging the landing gears, fine-tuning cargo handling systems and finishing the interiors before the final 63-feet-tall and 250-foot-long aircraft leaves the building. Tails with customer logos that have bought the 747 line part of one of the doors.

The end of 747 production doesn’t mean the planes will disappear entirely from the skies, since the new ones could fly for decades. However, they’ve become rare in commercial fleets. United and Delta said goodbye to theirs years before the Covid pandemic, while Qantas and British Airways landed their 747s for good in 2020 during a worldwide travel slump.

“It was a great plane. It served us brilliantly,” British Airways CEO Sean Doyle said on the sidelines of an event at John F. Kennedy International Airport with partner American Airlines last week. “There’s a lot of nostalgia and love for it but when we look to the future it’s about modern aircraft, more efficiency, more sustainable solutions as well.”

The hump-backed 747 is one of the most recognizable jetliners and helped make international travel more accessible in the years after its first commercial flight in January 1970. Its four powerful engines were efficient for their time. The planes could carry hundreds of passengers at a time for long-haul flights.

The enormous jets also made it easier to fly air cargo around the world, helping companies cater to more demanding consumer tastes for everything from electronics to cheese.

The plane’s end comes as Boeing is working to regain its footing after a series of crises, including the aftermath of two deadly crashes of its bestselling 737 Max narrow-body planes that killed a total of 346 people.

The pandemic travel slump has given way to a boom in orders for new planes, but production problems have delayed deliveries of Boeing’s wide-body 787 Dreamliners. The company doesn’t expect its 777X, the largest new jet, to be ready for customers until early 2025. It also still has to deliver two 747s to serve as Air Force One, but those have been beset by delays and cost overruns as well.

Boeing shares are down about 8% this year through Monday’s close, compared with a roughly 16% drop in the broader market. Despite a recent loss, Boeing’s stock has surged about 53% so far this quarter. United’s plan to buy dozens of Dreamliners, possibly by the end of the year, has helped lift shares.

Boeing’s last 747 aircraft, #1574, at its factory in Everett, Washington.

Leslie Josephs | CNBC

Boeing CEO Dave Calhoun last month said that “there will be a moment in time where we’ll pull the rabbit out of the hat and introduce a new airplane sometime in the middle of the next decade,” saying that technology needs to offer more fuel savings.

The end of 747 production was “inevitable but it would be a little more palatable if they were making something new,” said Richard Aboulafia, managing director at consulting firm AeroDynamic Advisory.

Boeing 747?s share of the world’s passenger and freighter widebody fleets

For all of its milestones airlines have long clamored for more fuel-efficient planes. Boeing’s own twin-aisle and twin-engine 777s and 787 Dreamliners have taken the spotlight along with competitors from main rival Airbus.

Airlines have largely shunned four-engine jets to make way for two-engine aircraft.

“The biggest enemy of Boeing quads was Boeing twins,” said Aboulafia.

Airbus, too, has ended production of its Airbus A380 after a 14-year run, handing over the last of the world’s largest passenger plane a year ago. Such jumbo jets are intended to funnel passengers through hub airports, but travelers often seek shorter routes with nonstop flights.

In 1990, there were 542 Boeing 747s that made up 28% of the world’s passenger wide-body fleet, according AeroDynamic Advisory, citing Centre for Aviation data. With 109 Boeing 747 planes, the jets accounted for just 2% of the world’s wide-body passenger fleet this year, according to CAPA.

The jet’s domination of the air cargo market has also waned, even as air freight emerged as a bright spot during the pandemic. The 747 comprises 21% of the world’s wide-body cargo fleet, down from 71% in 1990, according to CAPA. Airbus has begun marketing a freighter version of its wide-body competitor the A350 and Boeing is selling a freighter version of the 777X, as airlines prepare for stricter emissions standards.

Engineers, mechanics and others who worked on the 747 will move on to other plane programs as the manufacturer tries to ramp up output, Smith said.

“Those programs are very eager and kind of knocking down our door to get this level of top talent to come join their team,” she said.