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lightsaber
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Re: Air India Privatization, by June-decision?

Tue May 29, 2018 1:54 pm

Is there any new information?
Must we accept this is a failed sale?

vadodara wrote:
Obviously, I am not in the know. However, it appears, that there is too much 'fuzzy' accounting that would be buyers feel the bidding for AI for its available slots may not be worth the trouble.

The employees, unless a flying knight show's up, might be the ultimate loosers.


What would be the final decision? Air India requires billions of USD subsidy to get by and that is money better spent on hospitals, roads, or airport infrastructure.

As long as Air India is a government business, there will be many snouts in the trough.

When does it end? When is Air India held accountable?

I personally think

dtw2hyd wrote:
About comparing CASK of AI(FSC) with 6E(ULCC).

Are there any cases in the industry?
Emirates vs Fly Dubai
Singapore vs Scoot/Tiger
Malaysian vs Air Asia

Even FSCs with LCC level economy cabin service like
British Airways vs easyjet
US3 vs WN/B6/F9

There is no credibility in this argument.

Air India's CASK is below RASK. That is the discussion. The comparison with 6E is that:
1. Their CASK is far lower
2. Their RASK is far above CASK.

Sorry, but AI is doomed until RASK is higher than CASK. I've argued for years their operating expenses do not fully reflect actual operating expenses. CASK bears all.

And CASK is compared for FlyDubai and Emirates. High premium destinations get EK, low premium FlyDubai and very low premium all economy FlyDubai. Every market has specialized demands. If CASK is below RASK, then what customers are willing to pay is not the level of service being provided.

Low CASK allows growth. At this time, the fastest growing airlines out do the competition for CASK. Like it or not ULCC is the global growth trend as airlines have been proven an elastic market (more people fly as costs go down).

Does not Air India Express compete with Indigo? It would certainly be acceptable to break apart Air India Express' CASK from the other CASK... but oh, now why doesn't Air India report quarterly numbers?

In general, business only hide information if it is bad. When it is good they announce it. How much as Air India's CASK gone up with the rise in oil prices? How much has their RASK gone down (general trend in India is down 5% due to heightened competition).

I am saddened how re-audits of prior operating profits show they were in fact large operating losses! The entire reason AI doesn't report quarterly numbers is that the real rot would be exposed.
https://in.finance.yahoo.com/news/air-i ... 03891.html


Lightsaber
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dtw2hyd
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Re: Air India Privatization, by June-Failed sale? What next?

Tue May 29, 2018 8:35 pm

@lightsaber

It is extremely easy to sell AI if both organization and debt is structured properly. It appears GoI tailor made this transaction for a particular suitor who had cold feet.

You cannot have thousands of ground handling, sales and ticketing employees on airline payroll when there are two dedicated ground handling entities.

I think it should have been structures as

AI mainline -
Assets
- 123 planes (27x787s, 16x777s(no VVIP crap),70x32x,10x320NEOs on order)
- 4000 employees (2500-CC, 1200-FC, 300-Network/Ops/Revenue)
- No real estate of any kind.
Debt
- Av lease obligations
- Rest of the av finance payments
- Part of crew training expenses.

AI Express-
Assets
- 23 x 737s
- 1000 staff (96 employees)
Debt
- Av Lease obligations

AI ground handling - Every employee who is not an active crew member.
AI-SATS - If ground handling buyer interested in 49% give it away, otherwise keep it.

AI Engineering - Not for sale
AI Regional - Not for sale
 
vadodara
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Re: Air India Privatization, by June-decision?

Tue May 29, 2018 9:29 pm

lightsaber wrote:
Is there any new information?
Must we accept this is a failed sale?

vadodara wrote:
Obviously, I am not in the know. However, it appears, that there is too much 'fuzzy' accounting that would be buyers feel the bidding for AI for its available slots may not be worth the trouble.

The employees, unless a flying knight show's up, might be the ultimate loosers.


What would be the final decision? Air India requires billions of USD subsidy to get by and that is money better spent on hospitals, roads, or airport infrastructure.

As long as Air India is a government business, there will be many snouts in the trough.

When does it end? When is Air India held accountable?

I personally think

Lightsaber


Under the new bankruptcy law, lot of the stressed assets in the Steel sector went under the hammer. The banks are expected to eventually recover about $20bb of their bad loans. This may get extended to other sectors such as power and so forth.

If the privatization fails, the banks can take Air India under this route. But this is govt. and an election year. Quiet possible nothing happens for a year. If Modi govt gets reelected, Air India goes thru the same route. Who knows, more bidders show-up then.
 
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lightsaber
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Re: Air India Privatization, by June-decision?

Tue May 29, 2018 9:46 pm

vadodara wrote:
lightsaber wrote:
Is there any new information?
Must we accept this is a failed sale?

vadodara wrote:
Obviously, I am not in the know. However, it appears, that there is too much 'fuzzy' accounting that would be buyers feel the bidding for AI for its available slots may not be worth the trouble.

The employees, unless a flying knight show's up, might be the ultimate loosers.


What would be the final decision? Air India requires billions of USD subsidy to get by and that is money better spent on hospitals, roads, or airport infrastructure.

As long as Air India is a government business, there will be many snouts in the trough.

When does it end? When is Air India held accountable?

I personally think

Lightsaber


Under the new bankruptcy law, lot of the stressed assets in the Steel sector went under the hammer. The banks are expected to eventually recover about $20bb of their bad loans. This may get extended to other sectors such as power and so forth.

If the privatization fails, the banks can take Air India under this route. But this is govt. and an election year. Quiet possible nothing happens for a year. If Modi govt gets reelected, Air India goes thru the same route. Who knows, more bidders show-up then.

With an election, I agree nothing for a year.
How much will this cost the GoI?

Indigo and 9W had poor quarters:
http://www.thehindu.com/business/indigo ... 752808.ece

Indigo RASK down 3.5% due to competition, CASK up 7% due to oil and currency fluctuations. How did AI do? What is there CASK with a less efficient fleet when fuel rose 11.6%? I doubt AI escaped the RASK drop every Indian airline has been reporting.

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.
 
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Captain77W
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Re: Air India Privatization, by June-Failed sale? What next?

Tue May 29, 2018 9:52 pm

Both AI and PK are in the same boat aren’t they?
 
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Slash787
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Re: Air India Privatization, by June-Failed sale? What next?

Tue May 29, 2018 11:08 pm

Captain77W wrote:
Both AI and PK are in the same boat aren’t they?


I guess Alitalia also.
 
dtw2hyd
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Re: Air India Privatization, by June-decision?

Wed May 30, 2018 12:08 am

vadodara wrote:
...

Under the new bankruptcy law, lot of the stressed assets in the Steel sector went under the hammer. The banks are expected to eventually recover about $20bb of their bad loans. This may get extended to other sectors such as power and so forth.

If the privatization fails, the banks can take Air India under this route.


Banks can recover assets from defaulters, they have to sell those to get rupees. There are probably $200 Billion bad debts held by Indian banks.

Should Air India stop paying Indian Banks now. That will immediately save $600 Million.

Actually AI should start using crypto currency, sell tickets in crypto and pay everyone else except India PSU banks in crypto. Cut off GoI and its blood sucking banks.

Oh, wait. Modi banned crypto in India.
 
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lightsaber
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Re: Air India Privatization, by June-Failed sale? What next?

Wed May 30, 2018 12:57 am

Slash787 wrote:
Captain77W wrote:
Both AI and PK are in the same boat aren’t they?


I guess Alitalia also.

Add SAA too.

All the airlines that can receive subsidies are managed for them. :(
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.
 
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kitplane01
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Re: Air India Privatization, by June-Failed sale? What next?

Wed May 30, 2018 7:06 am

Air India divides their fleet into three types: Owned/Leased (88 aircraft), Sale and Leaseback (24 aircraft) , and Dry Lease (44 aircraft).

Anyone know what "Owned/Leased" means?

BTW, in March 2017 Air India valued it's fleet net of depreciation at about $2 billion. Total. http://www.airindia.in/writereaddata/Po ... 6-2017.pdf
 
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unrave
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Re: Air India Privatization, by June-Failed sale? What next?

Wed May 30, 2018 11:37 am

Aviation secretary has announced that AI has not received any bids so far and that the deadline will not be extended beyond tomorrow. We can safely assume that AI will continue to leech off taxpayer money for the foreseeable future.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
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lightsaber
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Re: Air India Privatization, by June-Failed sale? What next?

Wed May 30, 2018 1:24 pm

I'd love to know the business case side of the no bids. That is a loud statement. Since other Indian airlines avoid operating loans, I suspect that was a huge issue in combination with the bloated workforce.


kitplane01 wrote:
Air India divides their fleet into three types: Owned/Leased (88 aircraft), Sale and Leaseback (24 aircraft) , and Dry Lease (44 aircraft).

Anyone know what "Owned/Leased" means?

BTW, in March 2017 Air India valued it's fleet net of depreciation at about $2 billion. Total. http://www.airindia.in/writereaddata/Po ... 6-2017.pdf

Owned/leased sounds like a capital lease.

Basically, an operating lease ends the lease with the aircraft owned by the financial institution. A capital lease ends the lease with the airline owning the aircraft.

The question is does AI value its aircraft fairly or are the under depreciated?

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.
 
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Spiderguy252
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Re: Air India Privatization, by June-Failed sale? What next?

Wed May 30, 2018 1:33 pm

As the former aviation minister said, it is hard to find a bakra for Air India.
Vahroone
 
dtw2hyd
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Re: Air India Privatization, by June-Failed sale? What next?

Wed May 30, 2018 1:55 pm

Spiderguy252 wrote:
As the former aviation minister said, it is hard to find a bakra for Air India.


That's why he was never in-charge of AI divestment, Jaitley who has vast expertise in selling snake oil was tasked to do this.

But it was a high rope balancing act between corporate quid-pro-quo, not giving away family jewellery, losing a vote bank and losing support of core fringe groups.

The only reason current administration would blackout from this sale is loss of vote bank. 11,000 employee family/friend votes probably both in Mumbai and Delhi is too much to risk.
 
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Re: Air India Privatization, by June-Failed sale? What next?

Wed May 30, 2018 2:27 pm

I don't think vote banks had anything to do with it. 11,000 employees divided between BOM and DEL are a pimple on the as* of an elephant when it comes to local elections. Slums are the urban vote banks (since you can control them and apparently make them appear even in posh neighborhoods).

This is really a shame. Would have been good to have TATAs or anyone take the base assets of AI and expand it. If the deal was giving away the family jewels, there would have been more bids. They really should have sweetened the deal. Remember the govt could have really offered anything. Now we will have AI continue to distort Indian aviation while taking up prime / limited real estate in congested airports like BOM & DEL. What is Modi's plan B - at least move it out of the aviation ministry and let it be it's own company (just owned by the govt). Like AF (I can't believe I just said that).
 
dtw2hyd
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Re: Air India Privatization, by June-Failed sale? What next?

Wed May 30, 2018 2:56 pm

Like I said Jaitley tried to play a zero sum game. Is $5.1B debt palatable to interested buyers, probably not.

1) Corporate quid-pro-quo - Tailor made transaction structure
2) Not giving away family jewels - Real-estate off the table including HQ, staff accommodation and even maintenance hangars. GoI took $3B debt and kept $3B worth of real estate assets. This was a major shocker to many. Kept AI(Regional), so GoI still has an airline. Kept AIESL as part of national security infrastructure.
3) Vote bank - In Karnataka BJP was just 8000 votes short of winning majority. 11000 families and friends is too risky.
4) Fringe groups - I believe RSS met BJP yesterday to discuss AI privatization.

In their cunning minds, even with AI privatization, GoI would have skin in the Indian aviation game.
 
vadodara
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Re: Air India Privatization, by June-Failed sale? What next?

Wed May 30, 2018 9:04 pm

The banks are going thru house-cleaning. Many a chrony has found their enterprise on the chopping block. Some may argue that these were Congress cronies. Either way, the law is in effect and this is happening under its power.

Air India was not even a corporation, after nationalization, but an extension of the Ministry. Who knows what all has cooked under this. Lets give some time and see what happens.

Air India would not be the only Govt owned entity that is a problem; just a very visible and expensive one.
 
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kitplane01
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 7:44 am

lightsaber wrote:
I'd love to know the business case side of the no bids. That is a loud statement. Since other Indian airlines avoid operating loans, I suspect that was a huge issue in combination with the bloated workforce.


kitplane01 wrote:
Air India divides their fleet into three types: Owned/Leased (88 aircraft), Sale and Leaseback (24 aircraft) , and Dry Lease (44 aircraft).

Anyone know what "Owned/Leased" means?

BTW, in March 2017 Air India valued it's fleet net of depreciation at about $2 billion. Total. http://www.airindia.in/writereaddata/Po ... 6-2017.pdf

Owned/leased sounds like a capital lease.

Basically, an operating lease ends the lease with the aircraft owned by the financial institution. A capital lease ends the lease with the airline owning the aircraft.

The question is does AI value its aircraft fairly or are the under depreciated?

Lightsaber



They are depreciated on a straight line basis over 25 years to a 5% residual value.

My guess is that under depreciates newer planes ... but not my field of expertise.
 
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scbriml
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 8:25 am

If AI was a horse, it would have been taken out the back and shot a long time ago.

It's a joke of an airline, so it's hardly surprising that nobody wants it.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
dtw2hyd
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 10:57 am

I know folks here don't believe failing banking system is at the core of this issue, but Indian public sector banks(PSB) lost $12B during 2017-18 while a banks everywhere else in the world doing extremely well.

The issue is two fold
1) Private airlines cannot expand faster without some kind of financial engineering.
2) Indian PSBs won't allow AI debt structuring because they cannot afford more revenue loss.

https://timesofindia.indiatimes.com/bus ... 382265.cms
 
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lightsaber
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 11:54 am

Well, looks like Modi's entire divestment drive is now at risk:
http://www.businessinsider.com/r-air-in ... ive-2018-5

Selling the state carrier is key to Modi's plans to divest assets and help keep the fiscal deficit at 3.3 percent of GDP, a goal already under pressure from giveaways to farmers and other welfare benefits ahead of a national election in 2019.

Out of curiosity, what happens to the GoI bond ratings if the 3.3% maximum deficit target is missed? This has implications far beyond aviation...

I would have been better to allow a reduced debt bid. Instead, the GoI now owns all the debt and, as we discussed earlier, the expected future losses.
Since RASK has dropped (competition, required in any fast growing market) and CASK increased (oil), how much will AI's losses grow?

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
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 1:25 pm

AI 2017-18 revenue up by 11% to $3.4 Billion.

http://www.thehindu.com/business/Indust ... 513547.ece
 
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scbriml
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 1:31 pm

dtw2hyd wrote:
AI 2017-18 revenue up by 11% to $3.4 Billion.

http://www.thehindu.com/business/Indust ... 513547.ece


Yeah, it's all coming up roses.

Oh wait...

During the same period, the airline’s net loss widened to Rs.5,765.16 crore. In 2015-16, Air India had an operating profit of Rs.105 crore while net loss stood at Rs.3,836.77 crore.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
vadodara
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 1:38 pm

lightsaber wrote:
Out of curiosity, what happens to the GoI bond ratings if the 3.3% maximum deficit target is missed? This has implications far beyond aviation...

Lightsaber


AI is but a very small piece in this puzzle. AI is not the only govt owned company that is completely screwed up. In fact, except for some prime assets, only about 10% of air travelling Indian's 'touch' it as a business.

The bigger issues, such as money laundering/shell companies, GST and so forth matter to the economy a great deal. Measure the progress there. The growth rate came to 7.7% during the most recent quarter. This is post-GST and driven largely by construction boom as well as improvement in logistics.

The bank's cleaning-up their balance sheets has just kicked in. Wait a quarter or 2 and those numbers will show-up. This can only kick-up the growth rate to 8-10% range.

With the aviation growing upward of 25%, govt. is better focused on expansion of airports.
 
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lightsaber
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 1:56 pm

I agree India must invest in airports. But there is only so much cash. Cash burned by AI is cash that cannot be spent improving infrastructure.

The blank check was supposed to have a cap. That obviously won't happen. When does it end? Aviation should be a revenue source for the GoI.

scbriml wrote:
dtw2hyd wrote:
AI 2017-18 revenue up by 11% to $3.4 Billion.

http://www.thehindu.com/business/Indust ... 513547.ece


Yeah, it's all coming up roses.

Oh wait...

During the same period, the airline’s net loss widened to Rs.5,765.16 crore. In 2015-16, Air India had an operating profit of Rs.105 crore while net loss stood at Rs.3,836.77 crore.

Wait, loss is 886M USD give or take exchange rate fluctuations before the rise in oil and before the drop in RASK...

This implies the estimates by CAPA discussed earlier in this thread were optimistic.

As I posted earlier in the thread, audits of past Air India numbers showed losses were greater than made public (e.g., prior operating profits were in fact a loss).

Huh... My math says the GoI is subsidizing AI 2,135,244 rupees per job per year or $32,800 for that last year. Well, that is for India to decide unless AI flies internationally... Oh... Bilateral issue.

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
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 2:07 pm

scbriml wrote:
dtw2hyd wrote:
AI 2017-18 revenue up by 11% to $3.4 Billion.

http://www.thehindu.com/business/Indust ... 513547.ece


Yeah, it's all coming up roses.

Oh wait...

During the same period, the airline’s net loss widened to Rs.5,765.16 crore. In 2015-16, Air India had an operating profit of Rs.105 crore while net loss stood at Rs.3,836.77 crore.


You need special skills to understand Indian media. The "same period" here implies is FY2016-17, not related to revenue of FY2017-18. It should read as

In February, the civil aviation ministry said Air India has been “consistently improving” its overall performance and more than doubled its operating profit to Rs.298.03 crore in 2016-17.During the same period, the airline’s net loss widened to Rs.5,765.16 crore.

In 2015-16, Air India had an operating profit of Rs.105 crore while net loss stood at Rs.3,836.77 crore.
 
dtw2hyd
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 2:11 pm

lightsaber wrote:
Huh... My math says the GoI is subsidizing AI 2,135,244 rupees per job per year or $32,800 for that last year.
Lightsaber


And how did you come up with this number?
 
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lightsaber
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 2:23 pm

dtw2hyd wrote:
lightsaber wrote:
Huh... My math says the GoI is subsidizing AI 2,135,244 rupees per job per year or $32,800 for that last year.
Lightsaber


And how did you come up with this number?

I took the losses from your link and divided by 27,000 employees. Air India hasn't made a profit since I can recall. Every loss is made good, so it ends up being a subsidy.

I realized after I posted that if I was subsidized as well as an AI employee, I could retire tomorrow.


When does the access to government funds end?
https://www.financialexpress.com/india- ... ia/930350/

The above link notes 70% of the money the GoI spends on Government owned industry goes to AI. A billion dollars a year would pay for a lot of airports.
.$38,400 a year per job is excessive when competitors make money (pay taxes net to GoI).

India must improve their corruption index and unfortunately for AI, they are the most visible pig at the trough.

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
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 3:06 pm

lightsaber wrote:
I took the losses from your link and divided by 27,000 employees. Air India hasn't made a profit since I can recall. Every loss is made good, so it ends up being a subsidy.

I realized after I posted that if I was subsidized as well as an AI employee, I could retire tomorrow.


When does the access to government funds end?
https://www.financialexpress.com/india- ... ia/930350/

The above link notes 70% of the money the GoI spends on Government owned industry goes to AI. A billion dollars a year would pay for a lot of airports.
.$38,400 a year per job is excessive when competitors make money (pay taxes net to GoI).

India must improve their corruption index and unfortunately for AI, they are the most visible pig at the trough.

Lightsaber


Loss is not subsidy. AI never received $1B/year equity support. Total equity support $3.93 Billion (INR 26,000 crores).

2011-12 - 1200 cr
2012-13 - 4000 cr
2013-14 - 5000 cr
2014-15 - 5500 cr (highest AI ever received in a year)
2015-16 - 2500 cr
2016-17 - 1800 cr
2017-18 - 650 cr
 
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lightsaber
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 3:20 pm

dtw2hyd wrote:
lightsaber wrote:
I took the losses from your link and divided by 27,000 employees. Air India hasn't made a profit since I can recall. Every loss is made good, so it ends up being a subsidy.

I realized after I posted that if I was subsidized as well as an AI employee, I could retire tomorrow.


When does the access to government funds end?
https://www.financialexpress.com/india- ... ia/930350/

The above link notes 70% of the money the GoI spends on Government owned industry goes to AI. A billion dollars a year would pay for a lot of airports.
.$38,400 a year per job is excessive when competitors make money (pay taxes net to GoI).

India must improve their corruption index and unfortunately for AI, they are the most visible pig at the trough.

Lightsaber


Loss is not subsidy. AI never received $1B/year equity support. Total equity support $3.93 Billion (INR 26,000 crores).

2011-12 - 1200 cr
2012-13 - 4000 cr
2013-14 - 5000 cr
2014-15 - 5500 cr (highest AI ever received in a year)
2015-16 - 2500 cr
2016-17 - 1800 cr
2017-18 - 650 cr

Guarantees of loans is definitively a subsidy.
Withholding of international flight rights is an indirect subsidy.

The question is what next. I've given up hope of the reduction in corruption.

The details are irrelevant. The only way AI was going to be reformed was Privatization.

It violates bilaterals to have a subsidized competitor and that includes loan guarantees.

How quickly could AI be wound down! All audits have shown loses greater than published.

As long as all losses are covered, they are a subsidy. It is time to stop pretending. Unless AI goes to quarterly reporting that is audited, we all know this will continue. Since that won't happen timely, how to wind down AI?

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.
 
vadodara
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 3:29 pm

lightsaber wrote:
Guarantees of loans is definitively a subsidy.
Withholding of international flight rights is an indirect subsidy.
....
As long as all losses are covered, they are a subsidy. It is time to stop pretending. Unless AI goes to quarterly reporting that is audited, we all know this will continue. Since that won't happen timely, how to wind down AI?

Lightsaber


In addition, denying cities access to air services and forcing those citizens to use other cities is the biggest damage Air India has done to India's economy.
 
dtw2hyd
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 3:29 pm

lightsaber wrote:
...
As long as all losses are covered, they are a subsidy. It is time to stop pretending. Unless AI goes to quarterly reporting that is audited, we all know this will continue. Since that won't happen timely, how to wind down AI?

Lightsaber


You are describing Emirates airline not Air India. Dubai Airports, dnata, Emirates Flight catering, oil companies, Banks and everyone helping airline hide actual costs through arm length transactions.

AI shows losse and expects equity infusion by owners. Keep in mind Delta lost twice in US federal courts on same issue.

Equity infusion is not subsidy.
 
dtw2hyd
Posts: 6064
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 4:23 pm

lightsaber wrote:
The details are irrelevant.

Even if you don't trust AI books, equity infusion AKA subsidy numbers are from India's federal budget allocation. AI cannot manipulate what GoI allocated.

lightsaber wrote:
Guarantees of loans is definitively a subsidy.

GoI guarantees lease payment + lease-end condition penlaties to the maximum of $5 Million per B787.
21 x 5 = $105 Million total sovereign guarantee.

lightsaber wrote:
Withholding of international flight rights is an indirect subsidy.


Is there any evidence private carriers didn't get international flight rights.
If you are talking about ME3, Jet Airways is the one complained about Emirates going over BASA limits to DGCA.
 
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scbriml
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 4:46 pm

dtw2hyd wrote:
You are describing Emirates airline not Air India. Dubai Airports, dnata, Emirates Flight catering, oil companies, Banks and everyone helping airline hide actual costs through arm length transactions.


Ha, ha, ha. Even in a thread about AI you can't stop yourself, can you?
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
dtw2hyd
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Re: Air India Privatization, by June-Failed sale? What next?

Thu May 31, 2018 5:28 pm

scbriml wrote:
...
Ha, ha, ha. Even in a thread about AI you can't stop yourself, can you?


Not until US Government or a US Court clears their books.
 
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lightsaber
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Re: Air India Privatization, by June-Failed sale. What next?

Thu May 31, 2018 7:04 pm

Failed sale all over mainstream media.
http://money.cnn.com/2018/05/31/investi ... index.html

Everyone is quoting CAPA's $2 billion loss estimate, an estimate made in a healthier environment. I believe AI will lose even more. In particular with reinvigorated Indigo, SpiceJet and GoAir. Although Jet is in trouble too...

Lightsaber

Late edit:. I don't understand the comments on EK. They are profitable and have audited results. I would like quarterly data though. The reality is that EK pax to/from India has been capped long enough that they are no longer the boggyman. DXB is pretty maxed out anyway. EK won't grow significantly for a while.

And EK subsidizes Dubai, not the other way around.

AI will have to blame someone else for their RASK/CASK imbalance.

This does make me wonder how much the new IST will impact AI. At first glance, not too much. Has anyone seen an analysis on estimated impact on Indian airlines?
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
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Re: Air India Privatization, by June-Failed sale. What next?

Thu May 31, 2018 8:09 pm

lightsaber wrote:
They are profitable and have audited results.
And EK subsidizes Dubai, not the other way around.


That is your opinion and you are entitled to it. But even US Government didn't buy that theory.
 
vadodara
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Re: Air India Privatization, by June-Failed sale. What next?

Thu May 31, 2018 8:36 pm

lightsaber wrote:
Late edit:. I don't understand the comments on EK. They are profitable and have audited results. I would like quarterly data though. The reality is that EK pax to/from India has been capped long enough that they are no longer the boggyman. DXB is pretty maxed out anyway. EK won't grow significantly for a while.

And EK subsidizes Dubai, not the other way around.

AI will have to blame someone else for their RASK/CASK imbalance.


It is EK's turn. In the past, things and people like Modi, Jaitley and so forth have also been blamed.

Obviously, most Indian's prefer not to fly AI is hardly the issue here.
 
dtw2hyd
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Re: Air India Privatization, by June-Failed sale. What next?

Thu May 31, 2018 9:29 pm

vadodara wrote:
.. In the past, things and people like Modi, Jaitley and so forth have also been blamed.


What stopped the duo from giving it away? It will cost same $8B to sell or shutdown it down. Did they get a call from Steve Bannon of India?
 
CaliguyNYC
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Re: Air India Privatization, by June-Failed sale. What next?

Thu May 31, 2018 11:54 pm

lightsaber wrote:
Failed sale all over mainstream media.
http://money.cnn.com/2018/05/31/investi ... index.html

Everyone is quoting CAPA's $2 billion loss estimate, an estimate made in a healthier environment. I believe AI will lose even more. In particular with reinvigorated Indigo, SpiceJet and GoAir. Although Jet is in trouble too...

Lightsaber

Late edit:. I don't understand the comments on EK. They are profitable and have audited results. I would like quarterly data though. The reality is that EK pax to/from India has been capped long enough that they are no longer the boggyman. DXB is pretty maxed out anyway. EK won't grow significantly for a while.

And EK subsidizes Dubai, not the other way around.

AI will have to blame someone else for their RASK/CASK imbalance.

This does make me wonder how much the new IST will impact AI. At first glance, not too much. Has anyone seen an analysis on estimated impact on Indian airlines?


Given that Turkish airlines are capped at 2 flights (1XBOM & 1XDEL), I dont think there will be any affect on Indian airlines with the new IST. Add to that Turky’s close ties to Pak and I doubt they will get more flights to India. What ever we might say about the ME3, the Gulf countries employ a ton of indians, trade a ton with india and mostly take India’s side on internalltional issues. So the bilateral flight grants actually had some mutual benefit. with TK there is very little to no Indian upside
 
vadodara
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Re: Air India Privatization, by June-Failed sale. What next?

Fri Jun 01, 2018 2:26 am

dtw2hyd wrote:
vadodara wrote:
.. In the past, things and people like Modi, Jaitley and so forth have also been blamed.


What stopped the duo from giving it away? It will cost same $8B to sell or shutdown it down. Did they get a call from Steve Bannon of India?


They thought you were in charge of the road-show.
 
vadodara
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Re: Air India Privatization, by June-Failed sale. What next?

Fri Jun 01, 2018 3:07 am

dtw2hyd wrote:
vadodara wrote:
.. In the past, things and people like Modi, Jaitley and so forth have also been blamed.


What stopped the duo from giving it away? It will cost same $8B to sell or shutdown it down. Did they get a call from Steve Bannon of India?


Air India unions claim 'victory' on govt's failure to attract bids

MUMBAI: Air India employee unions today claimed "victory" as the government failed to attract bidders for the loss-making airline's strategic disinvestment.

"No bids for Air India, victory for joint forum in our endeavour to save the airline," a joint forum of various Air India unions said in a statement as the last date for submission of bids ended this evening.

The joint forum, which is a platform of various Air India unions, associations and guilds, has been opposing the movto privatise the national carrier on the grounds of massive 'job losses'.

[url]economictimes.indiatimes.com/articleshow/64404457.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst[/url]
 
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Spiderguy252
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Re: Air India Privatization, by June-Failed sale. What next?

Fri Jun 01, 2018 6:45 am

lightsaber wrote:
This does make me wonder how much the new IST will impact AI. At first glance, not too much. Has anyone seen an analysis on estimated impact on Indian airlines?


Istanbul? As long as TK are restricted to daily frequencies on DEL and BOM and nowhere and nothing else, there won't be any difference.
Vahroone
 
dtw2hyd
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Re: Air India Privatization, by June-Failed sale. What next?

Fri Jun 01, 2018 11:41 am

Spiderguy252 wrote:
...
Istanbul? As long as TK are restricted to daily frequencies on DEL and BOM and nowhere and nothing else, there won't be any difference.


IST may qualify for India open skies(>5000km@DEL rule), but I sincerely doubt Indians would go through IST with its reputation.
 
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Phosphorus
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Re: Air India Privatization, by June-Failed sale. What next?

Fri Jun 01, 2018 12:18 pm

dtw2hyd wrote:
Spiderguy252 wrote:
...
Istanbul? As long as TK are restricted to daily frequencies on DEL and BOM and nowhere and nothing else, there won't be any difference.


IST may qualify for India open skies(>5000km@DEL rule), but I sincerely doubt Indians would go through IST with its reputation.


It's implied that the discussion is about the upcoming "new IST". The new IST isn't operational yet, so no reputation to discuss, yet.
AN4 A40 L4T TU3 TU5 IL6 ILW I93 F50 F70 100 146 ARJ AT7 DH4 L10 CRJ ERJ E90 DC-9 MD-8X YK4 YK2 SF3 S20 319 320 321 332 333 343 346 722 732 733 734 735 73G 738 739 744 74M 757 767 777
Ceterum autem censeo, Moscovia esse delendam
 
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globetrotter94
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Re: Air India Privatization, by June-Failed sale. What next?

Fri Jun 01, 2018 1:09 pm

dtw2hyd wrote:
Spiderguy252 wrote:
...
Istanbul? As long as TK are restricted to daily frequencies on DEL and BOM and nowhere and nothing else, there won't be any difference.


IST may qualify for India open skies(>5000km@DEL rule), but I sincerely doubt Indians would go through IST with its reputation.


IST is not >5000km from DEL. Falls short at ~4,5000km.

Regarding the 2nd part of your comment:
Right, which is why TK flights from DEL and BOM are always fully booked (speaking from experience). Plus, if those routes were being shunned, I'm sure that TK would be continuously expressing to fly to at least 6 other cities in India (3 of which are untouched by any other European carrier) as they have been doing over the past several years (sarcasm).
6E, 9W, AF, AI, B6, BA, BI, CA, DN, IC, JL, KL, KU, NH, QR, SQ, TG, TK*, UA, VS
 
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lightsaber
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Re: Air India Privatization, by June-Failed sale. What next?

Fri Jun 01, 2018 2:47 pm

"We were expecting more participation than this." is my favorite quote yet on the AI attempted sale:
http://fortune.com/2018/06/01/air-india ... i-no-bids/

But eventually what happens from here on with regards to Air India will finally be decided by four of Modi’s trusted ministers - Arun Jaitley, Suresh Prabhu, Nitin Gadkari and Piyush Goyal. The quartet forms a group called Air India Specific Alternate Mechanism (AISAM), which will take a call on the future of the disinvestment process.
But eventually what happens from here on with regards to Air India will finally be decided by four of Modi’s trusted ministers - Arun Jaitley, Suresh Prabhu, Nitin Gadkari and Piyush Goyal. The quartet forms a group called Air India Specific Alternate Mechanism (AISAM), which will take a call on the future of the disinvestment process.

Interesting we now know who decides AI's fate...

WSJ yesterday (I only have the dead tree, no link) noted that $4.4 billion USD has been pulled out of India in 2018. Does anyone know what is going on? I thought the reforms were to do the opposite? This will definitely effect the GoI's ability to keep subsidizing AI.

Phosphorus wrote:
dtw2hyd wrote:
Spiderguy252 wrote:
...
Istanbul? As long as TK are restricted to daily frequencies on DEL and BOM and nowhere and nothing else, there won't be any difference.


IST may qualify for India open skies(>5000km@DEL rule), but I sincerely doubt Indians would go through IST with its reputation.


It's implied that the discussion is about the upcoming "new IST". The new IST isn't operational yet, so no reputation to discuss, yet.

The new IST is supposedly opening in October (I'm a skeptic for big project opening times, in general). It will effect distribution of passengers from many areas to other areas that might have flown via AI. How much? Probably not too much. But many airlines use international to international connections to boost flight profitability. This closes one avenue of possible recovery for Air India.

So what now? I cannot imagine the GoI wants to keep burning a billion USD+ per year...

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.
 
CaliguyNYC
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Re: Air India Privatization, by June-Failed sale. What next?

Fri Jun 01, 2018 3:05 pm

globetrotter94 wrote:
dtw2hyd wrote:
Spiderguy252 wrote:
...
Istanbul? As long as TK are restricted to daily frequencies on DEL and BOM and nowhere and nothing else, there won't be any difference.


IST may qualify for India open skies(>5000km@DEL rule), but I sincerely doubt Indians would go through IST with its reputation.


IST is not >5000km from DEL. Falls short at ~4,5000km.

Regarding the 2nd part of your comment:
Right, which is why TK flights from DEL and BOM are always fully booked (speaking from experience). Plus, if those routes were being shunned, I'm sure that TK would be continuously expressing to fly to at least 6 other cities in India (3 of which are untouched by any other European carrier) as they have been doing over the past several years (sarcasm).


Agreed. Turkish airlines doesn't have a bad reputation with Indians (although I'm not the biggest fan of their flight departure times x India). I think TK's issue is that most Indians don't really think of them as an airline they should fly, same on the US end (while TK might be full, they are usually a super cheap option even with earning UA FF points). The issue is the Indian govt has a bad impression of Turkey's govt based on Turkey supporting Pakistan on issues like terrorism in India etc. This is one thing both the Congress and BJP agree on. So unlikely TK will get more seats anytime soon. Should politics play a role in aviation bilaterals - absolutely. That said, I am glad there are two daily flights between IST-India. Surprised they don't fly IST-HYD instead of IST-BOM (I know why, $$$, but alluding to rhetoric of the historical links).
 
NZ321
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Re: Air India Privatization by June

Fri Jun 01, 2018 3:14 pm

BawliBooch wrote:
Should Air India be sold off in a hurry? Of course not! But can Air India be sold off next year? Sure there is a way!

The most practical way is to split off the Air India assets - give Ajay Singh(SpiceJet) the International operations along with the slots. Give the Bhatia-Gangwal's AI's engine workshops & Training Establishments. Split off Air India Express and rename it "INDIAN AIRLINES" which will be the state-owned airline. The reborn 'Indian Airlines' can expand domestically with their fleet of 737-800's on a fresh note and allow the Govt to retain a key instrument of state policy. Cronies rewarded. Reformer image refurbished. Govt remains in Aviation business. WIN, WIN & WIN!

If Jaitley was the one driving it, this most sensible option would have been the approach. But unfortunately it will be a sound & light show with a big announcement, a spectacle on national television and a PR campaign to whitewash the disaster - much like what we saw with Demonetisation & GST.


I like your thinking. Fully agree. Split Air India up and offer it on the plate piece by piece and then the banks are happy. Re-igniting Indian Airlines is an interesting idea.
Plane mad!
 
dtw2hyd
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Re: Air India Privatization, by June-Failed sale. What next?

Fri Jun 01, 2018 3:26 pm

lightsaber wrote:
I cannot imagine the GoI wants to keep burning a billion USD+ per year...

Lightsaber


That is a false statement, unless you have evidence to support it. Had GoI given just ONE Billion USD in 2009 per CAG recommendation, GoI wouldn't have wasted $3.3B AI wouldn't have accrued $8.1B debt.

2011-12 - 1200 cr
2012-13 - 4000 cr
2013-14 - 5000 cr
2014-15 - 5500 cr (highest AI ever received in a year)
2015-16 - 2500 cr
2016-17 - 1800 cr
2017-18 - 650 cr
 
dtw2hyd
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Re: Air India Privatization, by June-Failed sale. What next?

Fri Jun 01, 2018 3:46 pm

globetrotter94 wrote:
...
Regarding the 2nd part of your comment:
Right, which is why TK flights from DEL and BOM are always fully booked (speaking from experience). Plus, if those routes were being shunned, I'm sure that TK would be continuously expressing to fly to at least 6 other cities in India (3 of which are untouched by any other European carrier) as they have been doing over the past several years (sarcasm).



How can I put it delicately, Indians wouldn't go through a <four letter acronym> hub which is not worth mentioning on an av forum. Erdoğan should have thought about that.

WOW is in play now, so EU legacies are not the only game in town.
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