• 1
  • 3
  • 4
  • 5
  • 6
  • 7
  • 15
 
hohd
Posts: 624
Joined: Sat May 17, 2008 1:03 am

Re: Air India Privatization by June-decision

Mon Apr 09, 2018 2:29 pm

Indigo has pulled out of the bidding. Says it is only interested in international ops and AI express. And GOI wants bidders to bid on all, not pieces. This narrows it down to Vistara group and Jet group and some other airline groups. Spicejet already declared it is too small.
 
devmapper
Posts: 162
Joined: Mon Apr 03, 2017 10:15 pm

Re: Air India Privatization by June-decision

Mon Apr 09, 2018 3:32 pm

globetrotter94 wrote:
Personally, I would be interested to see if TK is one of the "West Asian carriers" interested. Star Alliance member, hugely successful rise in last decade, also half-government-owned (so might have some experience dealing with the conflicts of interest that have plagued AI), and hungry for the Indian market that it is otherwise restricted to.

Turkey hasn't been friendly with India since the current government came into power. I'd be very surprised if TK was allowed to buy AI.
lightsaber wrote:
It boggles my mind that a huge opportunity to make tens of millions in profit and provide tens of thousands of jobs was handed over on a silver platter to all the regional competing hubs... Whomever buys AI needs to fix this. HYD? A 30% tax on fuel adds 10% to the cost of long haul, so it will be tough from rent seeking cities.

I thought that aviation fuel for international flights was not taxable by the state governments.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 15225
Joined: Wed Jan 19, 2005 10:55 pm

Re: Air India Privatization by June-decision

Tue Apr 10, 2018 4:00 am

devmapper wrote:
It boggles my mind that a huge opportunity to make tens of millions in profit and provide tens of thousands of jobs was handed over on a silver platter to all the regional competing hubs... Whomever buys AI needs to fix this. HYD? A 30% tax on fuel adds 10% to the cost of long haul, so it will be tough from rent seeking cities.

I thought that aviation fuel for international flights was not taxable by the state governments.[/quote]
Please provide a link. I simply find sources noting a jet fuel tax.
Fuel entering Mubai is taxed. So as far as I can tell, all jet fuel is taxed without exception:
http://www.business-standard.com/articl ... 072_1.html

IATA has warned on the tax impact.
2015:
https://www.asianaviation.com/articles/ ... n-fuel-tax

Now, for 'regional connectivity' Delhi has cut the tax, but only for that scheme, all others at 25%:
https://www.moneycontrol.com/news/busin ... 57379.html

So for now, excluding Hyderabad, all international flights pay high taxes.

This is part of why Indian airlines have trouble competing. Too much traffic is sustained by connections. Oh well, not my problem.

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
User avatar
binayak
Posts: 550
Joined: Sat Nov 25, 2017 2:00 pm

Re: Air India Privatization by June-decision

Tue Apr 10, 2018 8:45 am

Jet airways has also withdrawn its decision of investing in AI. one more player out.
The best preparation for tomorrow is doing your best today
 
User avatar
unrave
Posts: 871
Joined: Tue Jan 06, 2015 6:37 am

Re: Air India Privatization by June-decision

Tue Apr 10, 2018 9:15 am

The deal has been tailor made for the TATAs
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 15225
Joined: Wed Jan 19, 2005 10:55 pm

Re: Air India Privatization by June-decision

Tue Apr 10, 2018 11:59 am

binayak wrote:
Jet airways has also withdrawn its decision of investing in AI. one more player out.



Hmmm... Found a link:
https://www.ft.com/content/96dc3212-3c6 ... 972418fec4

Withdrawing before anyone submits a bid cannot be generating urgency.

He also remained evasive when asked if there has been any formal request from any national or international bidder for the Maharaja and rejected suggestion about extending the deadline of the expression of interest (EOI).

Read more at:
//economictimes.indiatimes.com/articleshow/63685125.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

:scratchchin:

The mystery grows.
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
User avatar
globetrotter94
Posts: 421
Joined: Mon Oct 31, 2016 5:05 am

Re: Air India Privatization by June-decision

Tue Apr 10, 2018 3:38 pm

devmapper wrote:
globetrotter94 wrote:
Personally, I would be interested to see if TK is one of the "West Asian carriers" interested. Star Alliance member, hugely successful rise in last decade, also half-government-owned (so might have some experience dealing with the conflicts of interest that have plagued AI), and hungry for the Indian market that it is otherwise restricted to.

Turkey hasn't been friendly with India since the current government came into power. I'd be very surprised if TK was allowed to buy AI.


I admit it is not likely to happen. TK hasn't even shown any sign of interest yet, for one thing. But just saying that I think it might be a good match based on the 2 airlines' strengths and needs. I would think a AI-TK alliance would seriously challenge the MEB3.
6E, 9W, AF, AI, B6, BA, BI, CA, DN, IC, JL, KL, KU, NH, QR, SQ, TG, TK*, UA, VS
 
sibibom
Posts: 115
Joined: Fri Aug 12, 2016 7:04 am

Re: Air India Privatization by June-decision

Tue Apr 10, 2018 6:14 pm

Jet Airways opts out of Air India stake sale process

source : https://www.livemint.com/Companies/po2Z ... ocess.html

Now even getting a fair enough price seems difficult.
 
User avatar
Slash787
Posts: 699
Joined: Sat Jul 23, 2016 9:37 pm

Re: Air India Privatization by June-decision

Tue Apr 10, 2018 7:42 pm

Buying the whole company is just I don't know what to say, the other airlines are mostly interested in AI's slots and newer aircrafts, I have a feeling that maybe even Tata would back out.
 
dtw2hyd
Posts: 6064
Joined: Wed Jan 09, 2013 12:11 pm

Re: Air India Privatization by June-decision

Tue Apr 10, 2018 11:55 pm

It is not sold as one company, five units are excluded
1) AIESL (Engineering)
2) AIATSL (Ground Handling)
3) AI(Regional),
4) Hotels Corporation,
5) Pawan Hans(Helicopter ops)

Just 3 units are included
AI (International + Domestic)
AI Express (International LCC)
AI-SATS (Ground Handling JV at 6 airports)

But, some of the major hurdles with the document
1) Close deal in 3 months
2) Keep it as a separate entity (Cannot merge with 6E or 9W)
3) 24% GoI partnership (Sticky fingers in the cookie jar)
4) IPO in 3 years
5) Keep employees for one year (Why would buyer keep contract employees for one year?)
6) ?? Debt/Ops related to VVIP planes and future VVIP transportation (without getting paid on time)

Above all main rub is that GoI prepared this document without talking any suitors. Typical for current Indian administration.
 
User avatar
BawliBooch
Posts: 1205
Joined: Mon Nov 28, 2016 4:24 am

Re: Air India Privatization by June-decision

Wed Apr 11, 2018 1:17 am

dtw2hyd wrote:
It is not sold as one company, five units are excluded
1) AIESL (Engineering)
2) AIATSL (Ground Handling)
3) AI(Regional),
4) Hotels Corporation,
5) Pawan Hans(Helicopter ops)

Just 3 units are included
AI (International + Domestic)
AI Express (International LCC)
AI-SATS (Ground Handling JV at 6 airports)

But, some of the major hurdles with the document
1) Close deal in 3 months
2) Keep it as a separate entity (Cannot merge with 6E or 9W)
3) 24% GoI partnership (Sticky fingers in the cookie jar)
4) IPO in 3 years
5) Keep employees for one year (Why would buyer keep contract employees for one year?)
6) ?? Debt/Ops related to VVIP planes and future VVIP transportation (without getting paid on time)

Above all main rub is that GoI prepared this document without talking any suitors. Typical for current Indian administration.


Still think this AI privatization will happen with 12 months to go? ;)
Mr.Kapoor's favorite poodle! on twitter @Banwaarilal
 
anshabhi
Posts: 1526
Joined: Thu Oct 20, 2016 10:40 am

Re: Air India Privatization by June-decision

Wed Apr 11, 2018 9:49 am

I got some real work to do now. Bye!
 
User avatar
atcsundevil
Moderator
Posts: 2769
Joined: Sat Mar 20, 2010 12:22 pm

Re: Air India Privatization by June-decision

Wed Apr 11, 2018 10:07 am

Please stay on topic. Political discussions can occur in this Non Aviation Thread:

viewtopic.php?f=11&t=1391039&p=20311699#p20311699

✈️ atcsundevil
 
dtw2hyd
Posts: 6064
Joined: Wed Jan 09, 2013 12:11 pm

Re: Air India Privatization by June-decision

Wed Apr 11, 2018 10:13 am

Few changes to RFI should sweeten the deal

Of the three units included, the bidder may pick any combination.
AI (International + Domestic)
AI Express (International LCC)
AI-SATS (Ground Handling JV at 6 airports)

Rewrite some of the clauses
1) Close deal in 3 months - Change to ASAP
2) Keep it as a separate entity - Keep the AI brand name
3) 24% GoI partnership - 100% will be offered, with GoI taking over 52% of debt
4) IPO in 3 years - IPO potential should be studied at the earliest
5) Keep employees for one year - All deputized employees will be off AI payroll on close. Contract employees can be fired in 30 days from close, mandatory retirement for anyone has less than 5 years service left.
6) Debt/Ops related to VVIP planes and future VVIP transportation - GoI will pay off $580M debt and IAF will assume VVIP ops.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 15225
Joined: Wed Jan 19, 2005 10:55 pm

Re: Air India Privatization by June-decision

Wed Apr 11, 2018 10:58 pm

anshabhi wrote:

Well.. that makes a failed 1st attempt to sell Air India.

Time for the GoI to dramatically alter the terms.

Or just accept they are stuck with Air India. What happens then? The whole point was to end the government subsidies.


Well... Time to alter the thread title!

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 15225
Joined: Wed Jan 19, 2005 10:55 pm

Re: Air India Privatization by June

Wed Apr 11, 2018 11:09 pm

Of course the unions are protesting:
https://economictimes.indiatimes.com/in ... 715435.cms

"The so-claimed probable buyers are using arm twisting tactics so as to put pressure on the government to succumb to change the terms and conditions best suited to them and the Air India is sold for a song," the Joint Forum of Air India Unions/Guilds/Association said in the statement.

:rotfl: unless someone commits to buying, they won't buy.

No one can strongarm someone into buying.

Emirates won't bid:
http://www.zeebiz.com/companies/news-ai ... rier-42401

So it has come to pass, there are no bidders.

Man, early in this thread people were speculating about a bidding war. Now... all no-bids.

I guess the GoI is stuck with AI. Can they really afford to keep them?

The first post in the thread was prophetic:
Spiderguy252 wrote:
Believe it when you see it.

It was right to be skeptical... No bidders. :(

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
User avatar
BawliBooch
Posts: 1205
Joined: Mon Nov 28, 2016 4:24 am

Re: Air India Privatization by June

Wed Apr 11, 2018 11:49 pm

lightsaber wrote:
I guess the GoI is stuck with AI. Can they really afford to keep them?


As i have been saying right from the beginning on this topic, the sale will never happen.

Reform first, sell stake later - that is the right approach to take.

Air India has what it takes to be a successful airline. Give them autonomy to operate and manage their own finances. Pay back the 1000's of crores owed in dues for services rendered to the Govt which will help reduce their crippling debt burden and the interest payouts. These 2 steps will alone help AI to improve their margins. As we have discussed before, they are operationally profitable. Its the debt servicing that pushes them in the red.
Mr.Kapoor's favorite poodle! on twitter @Banwaarilal
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 15225
Joined: Wed Jan 19, 2005 10:55 pm

Re: Air India Privatization by June

Thu Apr 12, 2018 12:03 am

BawliBooch wrote:
lightsaber wrote:
I guess the GoI is stuck with AI. Can they really afford to keep them?


As i have been saying right from the beginning on this topic, the sale will never happen.

Reform first, sell stake later - that is the right approach to take.

Air India has what it takes to be a successful airline. Give them autonomy to operate and manage their own finances. Pay back the 1000's of crores owed in dues for services rendered to the Govt which will help reduce their crippling debt burden and the interest payouts. These 2 steps will alone help AI to improve their margins. As we have discussed before, they are operationally profitable. Its the debt servicing that pushes them in the red.

We've discussed before, but it was shown when all expenses were accounted such as normal aircraft debt, they were not profitable.


For the last decade, the GoI has failed to reform AI.

It doesn't matter, no one wants to bid under the current terms.

What matters is how the sale progresses.
1. Less unknown liability?
2. Fewer control restrictions?
3. Less debt?
4. Further broken apart? Could ground services and domestic be split off?

It is really bad to try to sell a depreciating asset and fail. It shows the sales assumption were just poor.

Earlier I was criticized for calling the terms to sell Air India poor.

I'm sure there would have been a bidder if they were within a billion USD.

Could AI be sold for assets (not as a going concern)?

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
User avatar
BawliBooch
Posts: 1205
Joined: Mon Nov 28, 2016 4:24 am

Re: Air India Privatization by June

Thu Apr 12, 2018 12:06 am

lightsaber wrote:

Could AI be sold for assets (not as a going concern)?

Lightsaber


It can theoretically. But it wont because of a zillion reasons. I could discuss the reasons but for that the post would have to be in Non-Av forum. :lol:
Mr.Kapoor's favorite poodle! on twitter @Banwaarilal
 
dtw2hyd
Posts: 6064
Joined: Wed Jan 09, 2013 12:11 pm

Re: Air India Privatization, by June-decision?

Thu Apr 12, 2018 12:30 am

Two clauses really rub the buyer wrong way.
1) Buyer will lose iconic AI building on closing.
2) Will lose Mumbai and Delhi hangar and office spaces in two years.

Also, two big ticket items completely left out of the document
1) When buyer will lose control of employee housing in Delhi and Mumbai.
2) Who will take retirement obligations
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 15225
Joined: Wed Jan 19, 2005 10:55 pm

Re: Air India Privatization, by June-decision?

Thu Apr 12, 2018 1:01 am

Looks like the bid might be sweetened with a further 3,500 crore reduction in debt.

http://www.financialexpress.com/infrast ... 0074/lite/

It is better to save the sale now than later.

My opinion:. The sale is just too big with too much risk. I cannot see any of the potential bidders able to take on so many employees.

At least there is recognition the terms will change.

In my opinion, as soon as Indigo announces a widebody order, the value of AI drops.

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
User avatar
unrave
Posts: 871
Joined: Tue Jan 06, 2015 6:37 am

Re: Air India Privatization, by June-decision?

Thu Apr 12, 2018 6:58 am

CAPA's take on the recent developments
https://www.capaindia.com/air-india-privatisation

Kapil Kaul has been a strong votary for the privatisation AI.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 15225
Joined: Wed Jan 19, 2005 10:55 pm

Re: Air India Privatization, by June-decision?

Thu Apr 12, 2018 3:21 pm

[url][/url]
unrave wrote:
CAPA's take on the recent developments
https://www.capaindia.com/air-india-privatisation

Kapil Kaul has been a strong votary for the privatisation AI.

Interesting read, on particular the October 2017 recommendations.

Air India is an opportunity and a risk. That link neglected to mention all of the other potential bidders who have publicly stated "no bid.".

At this time I expect Indigo to be in serious negotiations for widebodies. Once they sign a contract, 6E cannot risk bidding on Air India as they would be financially over extended.

The turn over timelines must be shorter.
Do not fix the debt handed over, that should be part of the bid.
Remove the non-airline (ground handling) from the bid.
Remove the government equity.

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
User avatar
unrave
Posts: 871
Joined: Tue Jan 06, 2015 6:37 am

Re: Air India Privatization, by June-decision?

Thu Apr 12, 2018 5:00 pm

Government says it may change terms of Air India sale if response is poor
https://www.livemint.com/Companies/mpGJ ... f-res.html
India: World's fastest growing major economy. World's fastest growing aviation market.
 
vadodara
Posts: 600
Joined: Mon Feb 20, 2017 7:45 pm

Re: Air India Privatization, by June-decision?

Thu Apr 12, 2018 7:01 pm

Seems like more buyers coming out of the wood work!

Not surprised to say the least. All of these, viz. IAG, LH, SQ and EY need to get hold of some feed to protect their turf. Their turf is shrinking fast under the LCC onslaught!

http://www.business-standard.com/article/companies/how-air-india-disinvestment-is-unfolding-four-foreign-carriers-may-bid-118041201356_1.html
 
User avatar
unrave
Posts: 871
Joined: Tue Jan 06, 2015 6:37 am

Re: Air India Privatization, by June-decision?

Fri Apr 13, 2018 3:16 am

Etihad may bid for AI in partnership with Anil Ambani
http://www.business-standard.com/articl ... 466_1.html

This will not go well at all.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
sibibom
Posts: 115
Joined: Fri Aug 12, 2016 7:04 am

Re: Air India Privatization, by June-decision?

Fri Apr 13, 2018 3:50 am

unrave wrote:
Etihad may bid for AI in partnership with Anil Ambani
http://www.business-standard.com/articl ... 466_1.html

This will not go well at all.


Aren't both of them broke?

I expect Adani to come on board and be the dark horse now
 
User avatar
kitplane01
Posts: 917
Joined: Thu Jun 16, 2016 5:58 am

Re: Air India Privatization, by June-decision?

Fri Apr 13, 2018 4:07 am

lightsaber wrote:
Looks like the bid might be sweetened with a further 3,500 crore reduction in debt.

http://www.financialexpress.com/infrast ... 0074/lite/

It is better to save the sale now than later.

My opinion:. The sale is just too big with too much risk. I cannot see any of the potential bidders able to take on so many employees.

At least there is recognition the terms will change.

In my opinion, as soon as Indigo announces a widebody order, the value of AI drops.

Lightsaber


I totally respect the many things you have written on this forum, but here I think you're wrong.

You seem to think that the government of India (1) wants to sell AI and (2) will eventually sell AI.

But a more realistic alternative seems like a better guess. (1) The government will never sell AI and (2) the government is doing the things is's doing (like making impossible conditions) because of poor decision making. Maybe the problem is differing pressure groups, or a government that prioritizes other goals, or just someone somewhere is incompetent. But all I see is soap opera, and it's been this way for a long long time.
 
vadodara
Posts: 600
Joined: Mon Feb 20, 2017 7:45 pm

Re: Air India Privatization, by June-decision?

Fri Apr 13, 2018 2:32 pm

The misconceptions of what Air India "should be" are not necessarily confined to the govt.

For instance, success of carriers like IndiGo and SpiceJet should be an eye opener to the posters here about where the market is heading. Yet you will find the sundry AI and Jet Airways flag bearers beating the drum.

British Air, due to its nr monopoly at LHR, might be the best protected carrier. Yet it seems to be the most pragmatic in its view about LCC and non-hub traffic. It (IAG) has successfully turned Iberia around, added Vueling out of BCN, has not opposed growth of LCC at Gatwick and has put a bid for Norwegian.
 
dtw2hyd
Posts: 6064
Joined: Wed Jan 09, 2013 12:11 pm

Re: Air India Privatization, by June-decision?

Fri Apr 13, 2018 2:59 pm

An Indian LCC dominating international long haul is an a.net myth, will remain a myth unless EU/US gives visa waiver status to Indians.

Indians who can travel to EU and US are not backpackers, they very well can afford full-service carriers and premium cabins. This is where even most western carriers fail to understand Indian mindset thinking how a non-English speaking granny travelling in J.

India being visa on arrival country for most of the world, can 6E attract foreign backpackers. Probably not.

So 6E can buy 50xA330NEOs, they will be empty with their current award-winning 6E inflight service. And PW is going to do 6hr NEO engine swaps at a remote station if that's what 6E's expectation.
 
vadodara
Posts: 600
Joined: Mon Feb 20, 2017 7:45 pm

Re: Air India Privatization, by June-decision?

Fri Apr 13, 2018 3:10 pm

So 6E can buy 50xA330NEOs, they will be empty with their current award-winning 6E inflight service. And PW is going to do 6hr NEO engine swaps at a remote station if that's what 6E's expectation.


And it may. But we will never find out if it has to compete with govt. subsidized Air India.
 
CaliguyNYC
Posts: 410
Joined: Tue Sep 27, 2016 7:27 pm

Re: Air India Privatization, by June-decision?

Fri Apr 13, 2018 4:38 pm

vadodara wrote:
The misconceptions of what Air India "should be" are not necessarily confined to the govt.

For instance, success of carriers like IndiGo and SpiceJet should be an eye opener to the posters here about where the market is heading. Yet you will find the sundry AI and Jet Airways flag bearers beating the drum.

British Air, due to its nr monopoly at LHR, might be the best protected carrier. Yet it seems to be the most pragmatic in its view about LCC and non-hub traffic. It (IAG) has successfully turned Iberia around, added Vueling out of BCN, has not opposed growth of LCC at Gatwick and has put a bid for Norwegian.


I disagree. India has room for LCCs and FSC. What AI has is a working hub at DEL. There is nothing even close in India. AI investment in this hub and its route network would give Vistara or Jet a big advantage to leap ahead (assuming the financial terms are right). The fact that AI routes like SFO-DEL can operate with good load factor shows that a subset of Indian pax are now valuing convenience in a way they might not have before. For many India pax and US based VFR pax, connecting in the ME or even EU are scenarios they want to move away from. But hey every single country values this. Why people think the majority of Indians were dead set to depart at 4am and then connect 3 hours latter in the Middle East is beyond me. As incomes continue to rise, more and more Indians will pay the premium for good service, FF programs and nonstops (and/or better flight timings).
 
vadodara
Posts: 600
Joined: Mon Feb 20, 2017 7:45 pm

Re: Air India Privatization, by June-decision?

Fri Apr 13, 2018 6:57 pm

I disagree. India has room for LCCs and FSC.


Did I suggest that specifically? My limited point was that the growth, or unserved market, seem to be outside the metros.

What AI has is a working hub at DEL. There is nothing even close in India. AI investment in this hub and its route network would give Vistara or Jet a big advantage to leap ahead (assuming the financial terms are right). The fact that AI routes like SFO-DEL can operate with good load factor shows that a subset of Indian pax are now valuing convenience in a way they might not have before. For many India pax and US based VFR pax, connecting in the ME or even EU are scenarios they want to move away from. But hey every single country values this. Why people think the majority of Indians were dead set to depart at 4am and then connect 3 hours latter in the Middle East is beyond me. As incomes continue to rise, more and more Indians will pay the premium for good service, FF programs and nonstops (and/or better flight timings).


Sure! People do value convenience. And so do frequent flier miles.

For airlines to run, it takes massive amounts of investment in both airport and aircraft. DEL is likely to be an exception to the rule. I doubt any airport in India is getting 3-4 parallel runways anytime soon. May happen in next 10 yrs or so.
 
User avatar
unrave
Posts: 871
Joined: Tue Jan 06, 2015 6:37 am

Re: Air India Privatization, by June-decision?

Fri Apr 13, 2018 7:01 pm

dtw2hyd wrote:
An Indian LCC dominating international long haul is an a.net myth, will remain a myth unless EU/US gives visa waiver status to Indians.

Indians who can travel to EU and US are not backpackers, they very well can afford full-service carriers and premium cabins. This is where even most western carriers fail to understand Indian mindset thinking how a non-English speaking granny travelling in J.

India being visa on arrival country for most of the world, can 6E attract foreign backpackers. Probably not.

So 6E can buy 50xA330NEOs, they will be empty with their current award-winning 6E inflight service. And PW is going to do 6hr NEO engine swaps at a remote station if that's what 6E's expectation.


The Chinese passport is only marginally more powerful than the Indian passport, and in most western countries they face the same restrictions as us, but that hasn't stopped Chinese travellers visiting in large numbers or Chinese carriers from opening new routes.

The fact is outbound travel from India is set to exponentially increase in the next 10-15 years, and someone has to capture this traffic. Air India is Air India, Jet can't seem to figure out how to use a 10 widebody order, Air Asia India will focus on south east asia and Indian regulations don't allow an Air Asia India X. That leaves only IndiGo and Vistara who could possibly set up long haul ops from India.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
devmapper
Posts: 162
Joined: Mon Apr 03, 2017 10:15 pm

Re: Air India Privatization, by June-decision?

Sat Apr 14, 2018 4:26 am

So, here's a genuine question, what is the difference between Indian travellers and Chinese travellers that the Chinese predominantly focus on FSCs while flying internationally? Is it different demographics, or attitudes?
On a different note, what no one here is taking into account is the international LH/ULH flights (8 hours to 16 hours) isn't a very natural space for LCCs. Especially Indians (speaking as an Indian passport holder myself) have a sense of entitlement, and most of us would probably expect (as unrealistic as it might be) to be served at least one complimentary meal (in addition to any buy-on-board options for snacking) in exchange for buying an $800 round trip ticket to London. It is not so much of a problem on flights up 5-6 hours long, since we'd typically gorge ourselves at the airport (or more likely packed lunch/dinner) before boarding. Anything beyond that and people are going to get hungry and as a consequence, angry. That attitude is what is likely to be a problem for 6E and SG on international flights above 6 hours long. Which is why I think 6E would have a harder time on routes outside Eastern Europe, Middle East, South East and Northern Asian markets. I don't think 6E flights to Australia would work, let alone North America.
Before anyone from India calls for my head for disrespecting Indians, please calm down and consider this, you personally might not harbor such attitudes, but there is at least one person in your family who does. I know my family has.
My apologies if I have offended anyone, and for taking a discussion in Civil Aviation towards a Non-Av direction.
 
User avatar
kitplane01
Posts: 917
Joined: Thu Jun 16, 2016 5:58 am

Re: Air India Privatization, by June-decision?

Sat Apr 14, 2018 4:31 am

devmapper wrote:
So, here's a genuine question, what is the difference between Indian travellers and Chinese travellers


China has a gdp per capita of about $8000. India is under $2000. (Wikipedia).

China is closer to the US than India.

I assume that the result is MANY more Chinese than Indians coming to the US. But I don’t have actual stats. Does anyone?
 
User avatar
unrave
Posts: 871
Joined: Tue Jan 06, 2015 6:37 am

Re: Air India Privatization, by June-decision?

Sat Apr 14, 2018 6:00 pm

devmapper wrote:
So, here's a genuine question, what is the difference between Indian travellers and Chinese travellers that the Chinese predominantly focus on FSCs while flying internationally? Is it different demographics, or attitudes?


My theory is that Chinese overseas travellers are drawn from not just the elites but also from lower sections in the society. 15 years back domestic air travel in India was affordable to none except the richest of the rich, but thanks to the LCC revolution combined with economic growth affordability of air travel has moved several rungs lower on the societal ladder. Outbound international travel is on the cusp of a similar breakout and the new travellers are likely to be far less discerning.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
devmapper
Posts: 162
Joined: Mon Apr 03, 2017 10:15 pm

Re: Air India Privatization, by June-decision?

Sun Apr 15, 2018 5:43 pm

unrave wrote:
devmapper wrote:
So, here's a genuine question, what is the difference between Indian travellers and Chinese travellers that the Chinese predominantly focus on FSCs while flying internationally? Is it different demographics, or attitudes?


My theory is that Chinese overseas travellers are drawn from not just the elites but also from lower sections in the society. 15 years back domestic air travel in India was affordable to none except the richest of the rich, but thanks to the LCC revolution combined with economic growth affordability of air travel has moved several rungs lower on the societal ladder. Outbound international travel is on the cusp of a similar breakout and the new travellers are likely to be far less discerning.

There obviously has been a dramatic change in domestic and medium-haul air travel in India since deregulation, but I think there is an upper limit to how long people will tolerate typical LCC policies on longer-haul international flights. I am not very familiar with the DU operating model, but D7 does not have too many long-haul flights (predominantly flights to Australia and Honolulu) to convince me that international long-haul LCC is a viable operating model for airlines from India.
 
User avatar
binayak
Posts: 550
Joined: Sat Nov 25, 2017 2:00 pm

Re: Air India Privatization, by June-decision?

Mon Apr 16, 2018 4:26 pm

Well I would like to give my views on long haul LCC in India :
1. India is not a small country like singapore/ Iceland / Norway to have LCCs operating only long haul flights . Traffic needs to be centralized through a hub. Now hubs are expensive to maintain and it would lower the turn around time of the aircraft thereby violating the basic principles of LCCs.
2. In India airport charges are higher and other charges, costs show that the cost structure of our LCCs are higher than the foreign ones like Scoot air, etc. So don't expect as cheap fares as Scoot. In fact SG in an earlier article had claimed they'll provide DEL London fares at about 30K INR. BA,9W many times offer discounted fares at 35K INR. So even LCCs will have a tough time attracting customers.
The best preparation for tomorrow is doing your best today
 
vadodara
Posts: 600
Joined: Mon Feb 20, 2017 7:45 pm

Re: Air India Privatization, by June-decision?

Mon Apr 16, 2018 5:07 pm

binayak wrote:
Well I would like to give my views on long haul LCC in India :
1. India is not a small country like singapore/ Iceland / Norway to have LCCs operating only long haul flights . Traffic needs to be centralized through a hub. Now hubs are expensive to maintain and it would lower the turn around time of the aircraft thereby violating the basic principles of LCCs.


View point of an airline that controls slots; not borne by data. Even less supportable because neither of the 'hub' airlines have ability to pay for the expansion.

At anyrate, for the hub to work, one needs spokes. Perhaps that may happen at DEL especially with Udaan where towns in UP/Bihar/MP/Punjab and so forth get direct connectivity to DEL and that open's up 1-stop flights.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 15225
Joined: Wed Jan 19, 2005 10:55 pm

Re: Air India Privatization, by June-decision?

Wed May 02, 2018 11:07 pm

If at first you don't succeed, move the goal posts.

https://mobile.reuters.com%2farticle%2f ... SKBN1I23AD

Bid deadline moved to May 31st. No bidders as of yet.

So, what is the recovery plan? I would be less cynical if we had at least a mystery bidder. But every plausible bidder has said no: Tata, Indigo, Jet, Singapore...

So what next?

Personally, all the restrictions make the sale non-viable. Does AI just receive government funding forever? Is reform hopeless in India? At least the EU is going after loans to Alitalia's as the disguised subsidy they are.

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
dtw2hyd
Posts: 6064
Joined: Wed Jan 09, 2013 12:11 pm

Re: Air India Privatization, by June-decision?

Thu May 03, 2018 1:00 am

The process is still politically motivated with enough wiggle room to prove GoI didn't giveaway family silver. Jaitley did his magic by keeping all real estate, AI(R) and AIESL. Combined worth more than debt GoI keeping. GoI always considered Engineering as National Security Interest entity, by keeping a small airline GoI can ramp up later and real estate worth few $Billons once buyer vacates these properties.

Honestly, GoI should have offered
Assets
1) Aviation assets
2) Anyone with pilot/cabin crew license
3) Flight ops/route planning/revenue management personnel
4) Slots

Debt
1) Av related debt
2) Crew training cost

Makes it very simple for interested buyers.

Everything else except AIESL should go to AIATSL the ground handling entity.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 15225
Joined: Wed Jan 19, 2005 10:55 pm

Re: Air India Privatization, by June-decision?

Thu May 03, 2018 12:38 pm

dtw2hyd wrote:
The process is still politically motivated with enough wiggle room to prove GoI didn't giveaway family silver. Jaitley did his magic by keeping all real estate, AI(R) and AIESL. Combined worth more than debt GoI keeping. GoI always considered Engineering as National Security Interest entity, by keeping a small airline GoI can ramp up later and real estate worth few $Billons once buyer vacates these properties.

Honestly, GoI should have offered
Assets
1) Aviation assets
2) Anyone with pilot/cabin crew license
3) Flight ops/route planning/revenue management personnel
4) Slots

Debt
1) Av related debt
2) Crew training cost

Makes it very simple for interested buyers.

Everything else except AIESL should go to AIATSL the ground handling entity.

Why discussing how AI should be facinating to us enthusiasts, we have a failed auction.

That means during the next auction, only the bidders set the terms.

It amazes me how few here talk return on investment. How few here realize that debt against an asset often exceeds it's value as there is goidwill as a collateral.

Let each bid and take the group of bids that is highest. For example 6E has a far more efficient domestic operation than air India. 6E has no desire to be in ground handling, so let them bid as they wish.

Someone else will bid on ground handling.

For the domestic operations... I'm not so sure. They should keep the Air India brand to ensure a sale.

But any bidder will insist on using their training, route planning, and support groups. While none of us wants people redundant, the reality is that if AI was such a jewel, it wouldn't need privatization.

Let the bidders decide the value. With a fair auction, AI can continue.

But for now, AI, SAA, and AZ are a triplet of government money destruction. How will India stop that?
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
CaliguyNYC
Posts: 410
Joined: Tue Sep 27, 2016 7:27 pm

Re: Air India Privatization, by June-decision?

Thu May 03, 2018 1:30 pm

Look doesn't surprise me that they are going to have to keep sweetening the deal. Just look at the posts on anet where people said the GOI would "give away" AI. Now they can say we had to give certain concessions to get the deal done because there were no buyers. Also calls out fake bidders. Still think a big issue is that AI needs to be run separately (although now there are allowing some cost synergies). Anyway, I still think AI will be privatized. And everyone, other than a few AI & ME3 employees / govt ministers, will be better for it.
 
dtw2hyd
Posts: 6064
Joined: Wed Jan 09, 2013 12:11 pm

Re: Air India Privatization, by June-decision?

Thu May 03, 2018 1:35 pm

lightsaber wrote:
...
Someone else will bid on ground handling....


Two possibilities
1) The pre-screened buyer wanted ground handling. There were six interested parties to buy ground handling (AIATSL), absolutely no reason to combine with AI.
2) There are too many sales and ticketing staff within AI. Rather than GoI moving them to AIATSL or AISATS, probably wanted buyer to their dirty deed.

6E has 17,000 (11,000 employees and ~6000 contractors). It is not a lean operation by any measure.
 
User avatar
unrave
Posts: 871
Joined: Tue Jan 06, 2015 6:37 am

Re: Air India Privatization, by June-decision?

Thu May 03, 2018 2:32 pm

6E has the lowest Cask among all Indian carriers. Hence efficient. Reminder that AI rask is lower than its cask
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 15225
Joined: Wed Jan 19, 2005 10:55 pm

Re: Air India Privatization, by June-decision?

Thu May 03, 2018 2:55 pm

unrave wrote:
6E has the lowest Cask among all Indian carriers. Hence efficient. Reminder that AI rask is lower than its cask

That needs to be remembered. Everything I've seen on Indian aviation predicts a declining RASK. On one hand that stimulates travel, on the other it means brutal cost control. Not Air India's forte'.

Unfortunately, Air India domestic ops need a brutal reorganization that might be too muc to get down to a CASK with a reasonable ROI


Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
dtw2hyd
Posts: 6064
Joined: Wed Jan 09, 2013 12:11 pm

Re: Air India Privatization, by June-decision?

Thu May 03, 2018 2:59 pm

Compare apples to apples.

AIX an LCC which serves complimentary food.

Total staff: 1279
Permanent 96
Contract 1,033
Seconded 68
Agency 82

Fleet Size 23
Number of Departures 26,006
ASKM(Mn) 11,574
RPKM(Mn) 8,786
Daily Aircraft Utilization on Total Fleet (Hours) 12.2
RASK (INR) 2.9
CASK (INR) 2.6
CASK – Ex Fuel (INR) 1.9
Yield (INR) 3.7
 
User avatar
unrave
Posts: 871
Joined: Tue Jan 06, 2015 6:37 am

Re: Air India Privatization, by June-decision?

Thu May 03, 2018 4:39 pm

The discussion is about efficiency of AI - the fact is AI remained operationally unprofitable even in FY16 and FY17 - two of the best years of Indian aviation in about a decade.

And AIX operates a mere 23 aircraft with hardly any flights to super expensive DEL and BOM. Hardly apples to apples
India: World's fastest growing major economy. World's fastest growing aviation market.
 
dtw2hyd
Posts: 6064
Joined: Wed Jan 09, 2013 12:11 pm

Re: Air India Privatization, by June-decision?

Thu May 03, 2018 7:10 pm

It is about AI privatization and AI Express is one of the entities offered.

AI Express is an international LCC+ carrier which serves hot meal, not a predominantly domestic ULCC which serves tap water. If an LCC need to learn how to keep cost down they should learn from AIX.

Plane to staff ratio
AIX 1:55
Other ULCC 1:106
  • 1
  • 3
  • 4
  • 5
  • 6
  • 7
  • 15

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos