yowza From Canada, joined Jul 2005, 4863 posts, RR: 15
Reply 5, posted (1 year 10 months 1 week 5 days 20 hours ago) and read 5591 times:
I don't really see how this changes anything. At the end of the the day, the decision-making ownership percentage remains outside the control of foreign investors/carriers so why take the risk? Let's not forget that the Indian government has been less than sane, predictable, and consistent in terms of transport (and in particular aviation) policy. This is not even mentioning that they own AI... a huge potential for fireworks. It just seems really risky to sink large sums of investment into any Indian carrier. Now if the politicians have opened this door with a view to allowing large amounts of money into the country without raising suspicion to then be distributed under the table then we might see a big change.
desiguy2447 From United States of America, joined May 2005, 96 posts, RR: 0
Reply 6, posted (1 year 10 months 1 week 5 days 19 hours ago) and read 5519 times:
Finally some long awaited reforms were passed. Kingfisher will now stay a float. Expect BA or a gulf carrier to buy up 49% of Kingfisher to gain an Indian Domestic network. Kingfisher needs good management once it is in the hands of another carrier things will turn around.
yowza, this is a very big deal in India and is part of an all or nothing 'big bang' reform by the GOI. It is possible that it may lead to the downfall of the current government if the Left has its way. While the waters are muddied by now, the market has huge potential for growth and you can buy a good chunk of an Indian carrier at fire sale prices today.
I really have to salute the PM for this bold move, and I am also thrilled about international brands entering (and competing) in the retail market.
babybus From , joined Dec 1969, posts, RR:
Reply 9, posted (1 year 10 months 1 week 5 days 18 hours ago) and read 5340 times:
Quoting yowza (Reply 5): At the end of the the day, the decision-making ownership percentage remains outside the control of foreign investors/carriers so why take the risk? Let's not forget that the Indian government has been less than sane, predictable, and consistent in terms of transport (and in particular aviation) policy. This is not even mentioning that they own AI... a huge potential for fireworks. It just seems really risky to sink large sums of investment into any Indian carrier.
When I read the story on BBC that never crossed my mind, but you are right.
I thought the Indian economy was on the up, or has that story changed now?
comorin From United States of America, joined May 2005, 4895 posts, RR: 16
Reply 11, posted (1 year 10 months 1 week 5 days 18 hours ago) and read 5270 times:
Quoting babybus (Reply 9): thought the Indian economy was on the up, or has that story changed now?
The 'India Story' is in deep doo-doo right now, my Indian friends tell me. Rampant corruption and mismanagement is killing the golden goose. It's still doing better than most countries however, and the economic potential is humungous. Ignore India at your peril, they say. Single Indian companies have market caps larger than the entire listed value of companies in either Pakistani, Bangladeshi or Srilankan exchanges.
Apart from corruption, other major growth barriers include lack of infrastructure investment in power and transportation, shortage of skilled workers, and the overhang of a majority of very, very poor people.
LHRFlyer From United Kingdom, joined Apr 2010, 811 posts, RR: 1
Reply 14, posted (1 year 10 months 1 week 5 days 17 hours ago) and read 5176 times:
In the short-medium term I don't foresee any activity by IAG but I wonder whether in the long term IAG might seek to set up a BA franchise in India with IAG holding a minority stake. I believe this was something BA was looking at a few years ago, with the use of an intermediary to circumvent ownership restrictions.
aeroblogger From India, joined Dec 2011, 1363 posts, RR: 0
Reply 17, posted (1 year 10 months 1 week 5 days 15 hours ago) and read 4932 times:
Quoting yowza (Reply 5): Now if the politicians have opened this door with a view to allowing large amounts of money into the country without raising suspicion to then be distributed under the table then we might see a big change.
There's no need to open this door - it is already open. Black money is the money which has been invested in Indian carriers for almost two decades.. This is the reason why airlines like 9W have so much political clout.
Quoting desiguy2447 (Reply 6): Finally some long awaited reforms were passed. Kingfisher will now stay a float. Expect BA or a gulf carrier to buy up 49% of Kingfisher to gain an Indian Domestic network. Kingfisher needs good management once it is in the hands of another carrier things will turn around.
Kingfisher has too much debt. It would be easier for a gulf carrier/IAG to start a fresh carrier than to try to turn Kingfisher around. Also, due to the waiting period for FDI, it really seems unlikely that Kingfisher will be able to continue flailing for more months now...
tayaramecanici From United Kingdom, joined Sep 2006, 222 posts, RR: 0
Reply 18, posted (1 year 10 months 1 week 5 days 9 hours ago) and read 4738 times:
KFA's usp lays in its Intl rights. Their orders for the A380 are still valid. A BA or EK can change the game on the basis of these 2 factors.
Most or all of KFA's debt are held by govt owned banks and this is one of the reasons KFA has survived till date, the GOI is not soooo stupid as to write this amount off. If the banks can be convinced on accepting IOUs, they will prefer a fewer paisa in the rupee rather NO Rupee, over 5yrs the gestation period for a new airline to start flying Intl the banks might recover all their dues, at least they can hope to.
The KFA brand equity is still strong in India simply because there is no other brand existing in it space. The average Indian carpet bagger is a half literate ( even if a graduate because he has got his cert by graft) street smart trader, for him travelling on a original KFA first class out of India is a big buzz. My money is back on KFA............I might be wrong.
The 800lb gorilla in Indian aviation is KERALA. If they manage to get to fly Intl with their new start-up airline, this can cause problems for all the existing players, not to mention KFA. Personally i hope the GOI does away with the 5yr / 20 ac rule, aviation needs to be unfettered.
If the FDI in retail and Aviation stays for good (1YR) we will see a boom in Freight operators, due to India's poor Infrastructure most of the perishables and just in time electronic are likely to travel by air.
India is extremely important for global aviation, it is inevitable that a global airline or maybe more will emerge from this country in the near future. The likes of BA, LH, EK and SQ depend on India for more than 10% of their revenue. Indians make up for the most upwardly mobile immigrant class in the world after the BRITISH. There more people of Indian origin in USA, EU and rest of the world in positions of power, be it in politics, finance or industry among the immigrant population. This catchment makes up the largest traveller in the world today - a fact stated by Bob ayling of BA in 1997 , with greater economic growth we will see larger numbers of tourist too originating from this country.
''You are as good as your nearest competitor'' Bob Crandall.
aviasian From Singapore, joined Jan 2001, 1486 posts, RR: 15
Reply 20, posted (1 year 10 months 1 week 5 days 7 hours ago) and read 4593 times:
Capital injection from a foreign carrier counts for nothing ... if the airline's management maintains stranglehold on the right to make faulty decisions ... if the airline continues to be inefficiently operated ... if the corruption continues ... if service falls behind the standard that India has the vast potential to deliver ... if governments continues to tax the industry to death ...
What's to say that a future government cannot or will not reverse the decision of this government and foreign carriers will have to pull out ...
sweair From Sweden, joined Nov 2011, 1811 posts, RR: 0
Reply 23, posted (1 year 10 months 1 week 5 days ago) and read 4304 times:
I don't know if I am that impressed with the Indian culture after the AI drama, I guess I was just clueless about India or not interested before. I know some outsourced IT projects have failed bad in India before, Intel had a bad snag on a new CPU that the Israelis salvaged later.
Maybe its wise to learn culture before doing business in a new country? Many companies in the western world seem to think outsourcing is a dance to up your profits, I think many have learned a hard lesson?
tayaramecanici From United Kingdom, joined Sep 2006, 222 posts, RR: 0
Reply 24, posted (1 year 10 months 1 week 4 days 23 hours ago) and read 4215 times:
Quoting sweair (Reply 23): I don't know if I am that impressed with the Indian culture after the AI drama, I guess I was just clueless about India or not interested before. I know some outsourced IT projects have failed bad in India before, Intel had a bad snag on a new CPU that the Israelis salvaged later.
You raise a very good point, though we are digressing from the core discussion, it does have an impact on getting to ''know the devil''.
Why is it that Indians are very successful outside of India (JLR, Arcellor Mittal etc) and make up the largest non-caucasian race among the progressive communities in the west. The answer lies in understanding the civilisation, when the Vikings were having a orgy in europe with primitive weapons, the Indus valley civilisation was into farming and arts. Over the years this country has been colonised, first by the Ottoman Turks and then the British. these invaders have left behind their legacy which the country is grappling with since Independence, 65yrs back. When you compare this with the likes of USA a 300yr old or UK a 400yr old democracy, it is not doing badly for a country of 1.2billion. In these 65yrs, India had to fight 3 wars with Pakistan and 1 with China, the US has its knickers in a twist fighting a proxy war with Pak. Add to this the cold war years when India had to depend on USSR for arms support which came at a cost. Large sections of our society were influenced by the communist, India is the only democratic country with a sizeable communist party.
Hence what you see happening in India today are remnants of this history, the country is evolving and very fast. The Israelis, Yanks, Brits, Scandanavians all of them have boosted their economy on the back of massive state investment, the IT sector in India is completely indigenius and independent of state investment. And on that count it is extremely competitive and profitable for the ROI. There is massive corruption in this country at the moment but the good thing is that it is being challenged and all sections of civil society are kicking in to check it. The west did not evolve overnight, The scandinavians did not create a Egalitarian society once they put their horn hats and clubs down, it took time. Fortunately in the case of India due to technology, media and a growing literate society this change will be rather sooner. The present AI drama is evidence of how the old guard is slowing losing its powers, previously they would have stopped any more addition of aircrafts by others, till AI did not get their new toys.
The implementation of these policies are evidence of acceptance on the way forward. Personally i do not believe the country needed FDI in aviation. The country needs more entrepreneur friendly aviation policies i.e Lower fuel prices and doing away with the Intl flts rule. Support services in MRO, Airports will follow growth. If the retail sector takes off in India, there is potential for small and medium sized air freight operators, this will encourage many youngsters to take up aviation creating a greater pool of manpower, as it happens in EU or US.
There will be a few hick-ups on the way but the writing is on the wall for all the political parties the country needs growth and its these policies which will deliver it. I think congress would rather go into elections with the credit for being progressive, though the charges of corruption won't wash off soon, the other parties will split the anti-congress vote to the glee of congress, if elections are held this year.
''You are as good as your nearest competitor'' Bob Crandall.
: And that might just impact the ROI analysis... IT has a debt so out of proportion with its value that I just do not see an end game. If this had happ
: Uhm - you do realise that Indians are caucasian? There is a reason why the languages of India & Europe are called 'Indo-European' - its because t
: You are right. Mughals were direct descendents of the Turks (not Ottomans) and the Mongols. The first Mughal emperor Babur was Mongol from his mother
: The full release from the Govt of India is here. The important thing to realise is that FDI is not under the automatic route. If has to be approved b
: To be honest I don´t see why any foreign airline would invest in an Indian airline. The domestic market is highly competitive and not really profitab
: When you have 49% control, how can you get a majority vote ? This is same type of deal that many countries given in their aviation section, and in my
: I cannot imagine any international company biting on this in india. The potential liabilities are endless. Union Carbide once went in on a 49% partner
: Here I was thinking that the USA was the only civilized nation who did not allow foreign ownership of greater than 50% of their domestic carriers Maj
: There must be well over 200 American, Canadian and West European companies operating in India under various restrictions depending on the specific in
: Simple. You get a sympathetic Indian citizen to hold another 1.01% to get 50.1% control, or even more. Till 1991, foreign companies were not allowed
: I really don't think a minority investor will actually be at the mercy of the majority owners. For one thing, they only have to be screwed once to pul
: That's correct. It's also 25% in Canada. In Brazil it's 20%. The Brazilian government proposed to increase it to 49% a couple of years ago but I don'
: Very few nations (civilized or not) allow foreign ownership greater than 50% for any of their carriers, not even those civilized EU nations
: Chile has no foreign ownership restrictions on both domestic and international airlines. Australia and New Zealand have no restrictions on domestic c
: Yes, but that is only true if you are based in an EU country. If you are not based in the EU (lets say you are a certain carrier based in I don't kno
: North Indians are of Aryan origin, this term is considered a taboo after the 3rd R. Ottoman turks planted their seeds into the rest, Chengiz took the
: Investing in Indian airlines would be a huge gamble. The only way it wouldn't would be the government of India making it very clear that investors ha
: In the case of 9W all their foreign investment is routed via the Channel Islands (so non traceable) and in the name of Mr. Naresh Goyal. But you are
: You might be right, but the potential crippling affect would come if the Ministry limits how much access it will give to investor airlines. And the a
: Interesting tidbit for 9W: Jet Airways (India) Ltd. (JETIN), the nation’s biggest, fell 2.2 percent. The carrier isn’t eligible to win overseas fu
: Not anything new... As I've said many times, the private airlines of India are funded almost completely by black money, which, in the case of 9W, is r
: It comes from the indian mindset of promoting ''Daridra Narayan'', at every moment in the last couple of hundred years of India's history its the und
: Rohit, I would not go so drastic, but yes, it is safe to say there is a lot of cash involved, and there are high possibilities that part of it may no
: Until this can be proven, it is really just speculation. What is clear however, is that none of this, if even true, can compare with the billions in d
: Spoke too sun buddy. Shes thrown the spanner yet again. But i guess she will get the boot this time. UPA may be able to push the reforms with Karuna,
: Spoke too soon buddy. Shes thrown the spanner yet again. But i guess she will get the boot this time. UPA may be able to push the reforms with Karuna
: Sovereign guarantees are similar to bond insurance in that the sovereign nation picks up the cost of insurance, and exposes it own balance sheet to d