Air India may hit air pocket again from Nov 1

Air India’s operations could be disrupted again from November 1 with a section of employees threatening action over non-payment of productivity-linked incentive (PLI) dues. This could gather momentum with the erstwhile Indian Airlines workforce now contemplating following suit.

Incentive issue

The spokesperson for the Indian Commercial Pilots Association (ICPA), Capt R.S. Otall, said on Wednesday, “If our PLI dues are not paid by November 1, we will take any action from the book.”

He added that these were pending since August this year. The ICPA represents 1,000 former Indian Airlines pilots.

Late last month, executive pilots of Air India went on a five-day strike on the same issue. The airline then had to roll back its decision of 50 per cent cut in PLI. This was to have translated into savings of Rs 20 crore a month had it been enforced on 7,000 of the total 31,500 employees.

Grappling with loss

Air India is still grappling with losses of Rs 7,200 crore accumulated in the last two years. The current fiscal could see it slip deeper into the red with losses of Rs 5,000 crore.

As a result, it is looking at ways and means of cutting costs and reducing wage overheads. The Centre has made it clear that any financial aid would have to be preceded by cost-control.

The Minister of Civil Aviation, Mr Praful Patel, had said this month that Air India was not only looking at reducing costs by Rs 3,000 crore but also increasing revenue by Rs 2,000 crore.

Pre-delivery payments

Sources have said that the airline is expected to get Rs 3,000 crore from the Centre towards pre-delivery payments for a part of the 111 aircraft ordered. In all, it needs Rs 9,000 crore over the next three years.

Last week, the Group of Ministers headed by the Finance Minister, Mr Pranab Mukherjee, said Air India needed to evolve a concrete plan on savings.

Source: The Hindu Business Line

Paramount Airways in talks to buy Star Aviation

Wants to expand within the country and outside, while Star Aviation, yet to begin operations, has three aircraft ready. Chennai-based Paramount Airlines has sent feelers to a south-based regional carrier, Star Aviation, for a possible acquisition of the airline. Star Aviation got an operating license in 2007, but has yet to start any flights. “We are looking at acquisitions to expand and we are talking with Chennai-based Star Aviation,” said a senior executive of Paramount Airways. Star Aviation Pvt Ltd, part of a Dubai-headquartered conglomerate, the ETA Star group, could not be spoken to for comments.

Paramount is the only airline in India to offer full business class service at prices comparable to the normal economy class fares of other airlines. It flies to 16 destinations in the country. The airline, which started operations in October 2005, operates five planes — two Embraer 170 and three Embraer 175. Established by the Madurai-based textile company, the Paramount Group, it has ordered 10 A321-200 aircraft for short-haul international routes to be launched next year, when it completes the mandatory five year pre-requisite to fly abroad.

The source added that acquisition made sense for the airline, as Star Aviation has a fleet of three Embraer aircraft, which will add to Paramount’s existing strength. There were reports that Paramount was buying GoAir, which has eight aircraft and 5.8 per cent market share, in a cash and equity deal, paying Rs 100-150 crore in cash and a stake of 7-8 per cent in the Paramount Group to the Wadias, who own GoAir. But GoAir has denied all such reports of talks.

Source: Business Standard

Air travel picks up again, cheers bleeding airlines

Indications from latest air travel bookings suggest that airlines saddled with losses totalling Rs 10,000 crore in 2008-09 and desperately short of funds could be looking at a revival.

The first fortnight of October witnessed a 35 per cent jump in online air ticket bookings compared with the same period last year and experts believe the uptick may extend to two or three quarters ahead. It was 28 per cent in the previous fortnight. "Growth would be sustainable this time. We are quiet upbeat about the future," said Ankur Bhatia, managing director, Amadeus India, the platform that handles more than 60 percent online air reservations in India.

Increased demand could help capacity utilisation in Jet Airways and Kingfisher Airlines, Bhatia said.

A rebound in business confidence, a revival in the stock market and a rise in industrial growth are among factors spurring increased air travel, in addition to festival season travel. Civil Aviation Minister Praful Patel told reporters in Mumbai last week that sentiments had improved to suggest recovery, but added that the pace may be slower than during the earlier rebound.

Source: Hindustan Times