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unrave
Posts: 2575
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 12:57 pm

edealinfo wrote:
"Vistara said the existing Airbus A320 planes in its fleet are not suited to fly nonstop to Singapore and hence, Boeing 737 aircraft is being used for operation."

How can this be true? Could someone please explain why Vistara's A320 and A320NEO technically cannot do DEL or BOM to Singapore? Or, is the issue not a technical one, but rather a marketing/sales issue?

https://www.business-standard.com/artic ... 286_1.html


The MTOW is low. When IndiGo launched DEL/BOM - SIN back in 2011 they did so with a fleet of 4 specially configured A320 with additional fuel tanks to get the TOW up
Denial of racism is as egregious as racism itself
 
avier
Posts: 866
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 3:04 pm

GoAir to launch new flights :
Hyderabad- BLR X2 /IXC/PAT starting August 15
 
anshabhi
Posts: 2099
Joined: Thu Oct 20, 2016 10:40 am

Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 3:33 pm

sibibom wrote:
Indigo's drama is an ego issue between the two promoters, the only end I see is one of them exiting. I think Qatar Airways is going to get an early Christmas miracle, they might get into Indian aviation with Indigo/


It would be stupid to miss on billions of $$$$ just because of ego.

In some great news, SpiceJet has taken action against officers named in DGCA show cause notice. This at least shows some seriousness from management on safety.

https://m.timesofindia.com/business/ind ... 206613.cms
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 3:35 pm

unrave wrote:
edealinfo wrote:
"Vistara said the existing Airbus A320 planes in its fleet are not suited to fly nonstop to Singapore and hence, Boeing 737 aircraft is being used for operation."

How can this be true? Could someone please explain why Vistara's A320 and A320NEO technically cannot do DEL or BOM to Singapore? Or, is the issue not a technical one, but rather a marketing/sales issue?

https://www.business-standard.com/artic ... 286_1.html


The MTOW is low. When IndiGo launched DEL/BOM - SIN back in 2011 they did so with a fleet of 4 specially configured A320 with additional fuel tanks to get the TOW up


Thanks and this makes sense. What doesn’t make sense is why Vistara is not using the 2 brand new A320 that is expected in July and August for which it could have obtained a version with the required MTOW for international travel. Heck, it could have designed the interior of these 2 aircraft for max publicity and to milk the publicity to its advantage. Now, it is nothing more than an announcement for international operations, and that’s that.
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 3:39 pm

anshabhi wrote:

In some great news, SpiceJet has taken action against officers named in DGCA show cause notice. This at least shows some seriousness from management on safety.

https://m.timesofindia.com/business/ind ... 206613.cms


Spicejet seems to have a good sense of damage control and must have been schooled on it by experts in this business. Actions like these may help put matters to rest. The next thing they need to do is pay good compensation to the person that died servicing their aircraft
 
anshabhi
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 3:46 pm

edealinfo wrote:
The next thing they need to do is pay good compensation to the person that died servicing their aircraft

https://mobile.twitter.com/aneeshp/stat ... 1608439808
 
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unrave
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 4:11 pm

edealinfo wrote:

Thanks and this makes sense. What doesn’t make sense is why Vistara is not using the 2 brand new A320 that is expected in July and August for which it could have obtained a version with the required MTOW for international travel. Heck, it could have designed the interior of these 2 aircraft for max publicity and to milk the publicity to its advantage. Now, it is nothing more than an announcement for international operations, and that’s that.

They're saving that for the A321neo
Denial of racism is as egregious as racism itself
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 4:30 pm

anshabhi wrote:
edealinfo wrote:
The next thing they need to do is pay good compensation to the person that died servicing their aircraft

https://mobile.twitter.com/aneeshp/stat ... 1608439808


Holy Kow ....or to be more religiously sensitive, Holly Connolly! The guys handling Spicejet damage control.....are good, really good. A bit slow....they should have move fast but better later than never.
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 4:38 pm

unrave wrote:
edealinfo wrote:

Thanks and this makes sense. What doesn’t make sense is why Vistara is not using the 2 brand new A320 that is expected in July and August for which it could have obtained a version with the required MTOW for international travel. Heck, it could have designed the interior of these 2 aircraft for max publicity and to milk the publicity to its advantage. Now, it is nothing more than an announcement for international operations, and that’s that.

They're saving that for the A321neo


Well, they will have to wait a long time for that:

The 6 A321 neo to be delivered from first quarter of 2020 through 2021
 
CaliguyNYC
Posts: 1067
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 7:45 pm

Just changed my mom’s flight to the end of July. She is flying AF BOM-CDG. Looks like the Joon planes are gone from BOM and AF is flying a A332 with brand new seats in all cabins. While J class is still 2-2-2 across they are true lie flat with new IFE system and large TVs. Business, Prem Econ and Y all look great. So seems AF is committed to India post Jet. Looking forward to them putting their new A350 on the route in feb that they have already announced (that will have J in a 1-2-1 config).
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 7:54 pm

CaliguyNYC wrote:
Just changed my mom’s flight to the end of July. She is flying AF BOM-CDG. Looks like the Joon planes are gone from BOM and AF is flying a A332 with brand new seats in all cabins. While J class is still 2-2-2 across they are true lie flat with new IFE system and large TVs. Business, Prem Econ and Y all look great. So seems AF is committed to India post Jet. Looking forward to them putting their new A350 on the route in feb that they have already announced (that will have J in a 1-2-1 config).


Air France is retiring the "Joon" brand across its fleet....permanently. It is good to know that the AF product is improving.

Has Delta/AF/KLM/Virgin decided with a carrier they wish to partner in India? Who is currently their default interline partner?
 
CaliguyNYC
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Re: Indian Aviation Thread - July 2019

Sat Jul 13, 2019 8:07 pm

edealinfo wrote:
CaliguyNYC wrote:
Just changed my mom’s flight to the end of July. She is flying AF BOM-CDG. Looks like the Joon planes are gone from BOM and AF is flying a A332 with brand new seats in all cabins. While J class is still 2-2-2 across they are true lie flat with new IFE system and large TVs. Business, Prem Econ and Y all look great. So seems AF is committed to India post Jet. Looking forward to them putting their new A350 on the route in feb that they have already announced (that will have J in a 1-2-1 config).


Air France is retiring the "Joon" brand across its fleet....permanently. It is good to know that the AF product is improving.

Has Delta/AF/KLM/Virgin decided with a carrier they wish to partner in India? Who is currently their default interline partner?


Yup but still nice that they prioritized BOM to get a refreshed A332 given how few have been remodeled.
I have seen AF offer connections on AI (shows up on the AF website with AI codes - so just an interline arrangement not code share). I don’t think they have a partner just yet and no rumors of whom they are looking at.
 
avier
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 9:58 am

avier wrote:
GoAir to launch new flights :
Hyderabad- BLR X2 /IXC/PAT starting August 15

GoAir new flight launches in August, with two new rotations including above:
Hyderabad- Bengaluru x2/ Chandigarh/ Patna
Hyderabad - Kochi x2/ Chennai/ Jaipur
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 11:51 am

avier wrote:
avier wrote:
GoAir to launch new flights :
Hyderabad- BLR X2 /IXC/PAT starting August 15

GoAir new flight launches in August, with two new rotations including above:
Hyderabad- Bengaluru x2/ Chandigarh/ Patna
Hyderabad - Kochi x2/ Chennai/ Jaipur


You would think that they would have used more of Chennai routes, since it is the other airport like BOM and DEL that is slot constrained and a new Channai airport ain't going to be ready for at least another 6 - 7 years. When they were so smart with BOM slots, why are they shying off Chennai. This just doesn't make sense.
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 12:27 pm

edealinfo wrote:
avier wrote:
avier wrote:
GoAir to launch new flights :
Hyderabad- BLR X2 /IXC/PAT starting August 15

GoAir new flight launches in August, with two new rotations including above:
Hyderabad- Bengaluru x2/ Chandigarh/ Patna
Hyderabad - Kochi x2/ Chennai/ Jaipur


You would think that they would have used more of Chennai routes, since it is the other airport like BOM and DEL that is slot constrained and a new Channai airport ain't going to be ready for at least another 6 - 7 years. When they were so smart with BOM slots, why are they shying off Chennai. This just doesn't make sense.


Oopsie, this is GoAir not SpiceJet so it could explain why they are not smartly focused on "slot constrained airports" as spricejet is.
 
avier
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 12:31 pm

edealinfo wrote:
You would think that they would have used more of Chennai routes, since it is the other airport like BOM and DEL that is slot constrained and a new Channai airport ain't going to be ready for at least another 6 - 7 years. When they were so smart with BOM slots, why are they shying off Chennai. This just doesn't make sense.

I believe you've partly answered yourself. Since slots aren't available at other bigger airports, they won't add many more flights from MAA. They don't even serve DEL-MAA. I'm sure they would want to.
Jet had 8-10 daily flights from MAA-DEL/BOM each.
They will add flights to cities they already serve in their network, which is limited. So from Chennai, other lucrative routes are to the smaller towns in Tamil Nadu, which GoAir has no operations to any of apart from MAA in whole TN. Pune is slot exhausted too I believe. They can try MAA-JAI/NAG/GAU. But remember Chennai doesn't have water, so expanding their crew base there would be an issue.
 
BrooklyBOMgal
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 1:47 pm

Surprising no one posted this till now considering the number of AI bashers here
Trying to travel in cockpit of a full flight lands tipsy Air India pilot in trouble - Times of India https://timesofindia.indiatimes.com/bus ... 209422.cms
 
Sokes
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 2:04 pm

unrave wrote:
Related party transactions happen all the time and that is not an issue per se.


You have a partnership with a friend and he keeps making contracts with another firm he owns. Not an issue for you?


unrave wrote:
... The problem arises when RPTs are not done at arm's length. While I agree with Gangwal's demand that IndiGo should ideally call an open tender, the share of RPTs in this case is too small at only 0.5% of the airline's revenues.


Do you have a source for this claim?
Why can't the world be a little bit more autistic?
 
Sokes
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 2:18 pm

edealinfo wrote:
It appears that the Government has reallocated all of Jet's Mumbai and New Delhi slots as a new list of available slots (see below) has been released, and DEL and BOM are not on it.
...
https://economictimes.indiatimes.com/in ... 174389.cms



From your above link:
"...the central government decided to temporarily allocate the slots as well as international flying rights of Jet Airways to other airlines who could start new flights immediately and fill the supply gap. ..."
Anybody has some information how these slots were TEMPORARILY reallocated?
Will the long term slot allocations be auctioned?
Why can't the world be a little bit more autistic?
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 2:50 pm

Sokes wrote:
From your above link:
"...the central government decided to temporarily allocate the slots as well as international flying rights of Jet Airways to other airlines who could start new flights immediately and fill the supply gap. ..."
Anybody has some information how these slots were TEMPORARILY reallocated?
Will the long term slot allocations be auctioned?


Temporary allocation of Slots rule:

Domestic
Basically first come first served basis but moderated superficially to ensure all airlines received some slots. Spicejet was the big winner here and other private airlines weren’t that hurt that badly since they got a share in the quota that would otherwise have gone to Air India. Vistara got a decent share relative to its size but Indigo didn’t get a share relative to its size ( but given its near monopoly status) has little reason to complain, which they did anyway.

International;
Air India got 50 percent of the slots. The remaining 50 percent was allocated based on a bidding system that factored route preference and aircraft availability to actually operate the route.

“TEMPORARY” = means permanent in reality since Jet is unlikely to revive quickly and operate all the prime slots it lost. The Government is unlikely to reallocate what was given temporarily since the eventual notification of a “permanent” slot is to be made favoring those who operate the route on a temporary basis.

Bottom line: Spicejet is the big winner in the slot allocation since it took over 40 ex-Jet aircraft and was unmatched relatively in the “first come first served” game.
 
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unrave
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 3:23 pm

Sokes wrote:
You have a partnership with a friend and he keeps making contracts with another firm he owns. Not an issue for you?

No, as long as the contracts do not unduly favour the other firm. Taj airline Catering, where Tatas have 50% stake provides food for all Vistara flights. A clear case of RPT. SIA doesn't seem to be bothered?

Do you have a source for this claim?

It is there in the initial rebuttal letter penned by Bhatia.
Denial of racism is as egregious as racism itself
 
avier
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 3:34 pm

unrave wrote:
Taj airline Catering, where Tatas have 50% stake provides food for all Vistara flights. A clear case of RPT. SIA doesn't seem to be bothered?

Definitely not, since Taj catering is co-owned by SATS (hence TajSats) which is a Singapore based company and controls 80% of the ground handling and catering at Singapore Changi Airport, which is SQ home base. So yes, SIA already majorly deals with them.
Also SQ for their own operations in India use TajSats catering, so why would they have an issue with Vistara using the same.
 
Sokes
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 3:44 pm

edealinfo wrote:
Sokes wrote:
From your above link:
"...the central government decided to temporarily allocate the slots as well as international flying rights of Jet Airways to other airlines who could start new flights immediately and fill the supply gap. ..."
Anybody has some information how these slots were TEMPORARILY reallocated?
Will the long term slot allocations be auctioned?


Temporary allocation of Slots rule:

Domestic
Basically first come first served basis but moderated superficially to ensure all airlines received some slots. Spicejet was the big winner here and other private airlines weren’t that hurt that badly since they got a share in the quota that would otherwise have gone to Air India. Vistara got a decent share relative to its size but Indigo didn’t get a share relative to its size ( but given its near monopoly status) has little reason to complain, which they did anyway.



If true it sounds a bit like the coal block allocations. You have a source?
Speaking of monopolies: If a certain city pair has three flights/ day and direction of which two are from Indigo, one can argue that Indigo shouldn't be allowed to bid. But a bidding there must be. If a city pair has lot of flights/ day I see no reason why Indigo shouldn't be allowed to bid for slots.

edealinfo wrote:
International;
Air India got 50 percent of the slots.


As the government wants to sell Air India and nobody wants to have it it's good they got valuable slots.

edealinfo wrote:
The remaining 50 percent was allocated based on a bidding system that factored route preference and aircraft availability to actually operate the route.

What's that supposed to mean? If I don't have an aircraft for the route, I'm not going to bid for it.
Does the government assume somebody without the right plane may bid by mistake?

edealinfo wrote:
“TEMPORARY” = means permanent in reality since Jet is unlikely to revive quickly and operate all the prime slots it lost. The Government is unlikely to reallocate what was given temporarily since the eventual notification of a “permanent” slot is to be made favoring those who operate the route on a temporary basis.

Bottom line: Spicejet is the big winner in the slot allocation since it took over 40 ex-Jet aircraft and was unmatched relatively in the “first come first served” game.



Again if true it sounds like the coal block allocations.
Unless you have a source I delay judgement if temporary means permanent. The government had to act fast according to what was possible. That doesn't mean they can't auction later.
Why can't the world be a little bit more autistic?
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 4:22 pm

@sokes

1. Please Go through this thread and the threads of prior months to get the links to the news stories on the slot allocation process.

2. To your legitimate question on “what’s that supposed to mean”?

An airline could bid on a domestic route only IF it proved it had aircraft in the pipeline to operate the route. I think this is a fair requirement. Second, one airline got to pick which route it wanted as a first choice after which the second airline got to pick its preference for the remaining available slots, and then the process continued. Again, a fair process.
The complaint of this process is that Spircejet was the only airline that could bring in aircraft in a very short period of time which inherently made a fair process rather unfair.

3. In the news links that I referenced in #1, you will find a reference that those that temporarily operate the route will get first preference to operate it permanently (only assuming Jet can’t operate it which is the most likely case). The Government will go through the charade of acting like the slots are temporary when everyone can predict what the end outcome would be.
 
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unrave
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 4:35 pm

avier wrote:
unrave wrote:
Taj airline Catering, where Tatas have 50% stake provides food for all Vistara flights. A clear case of RPT. SIA doesn't seem to be bothered?

Definitely not, since Taj catering is co-owned by SATS (hence TajSats) which is a Singapore based company and controls 80% of the ground handling and catering at Singapore Changi Airport, which is SQ home base. So yes, SIA already majorly deals with them.
Also SQ for their own operations in India use TajSats catering, so why would they have an issue with Vistara using the same.

SATS is not equal to SIA. But if that doesn't meet the requirements how about the fact that Vistara using Indian Hotels Company for crew accommodation.
Denial of racism is as egregious as racism itself
 
avier
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 4:54 pm

unrave wrote:
SATS is not equal to SIA. But if that doesn't meet the requirements how about the fact that Vistara using Indian Hotels Company for crew accommodation.

Can you suggest anything better than Taj group hotels in India for crew accommodation ? Considering they are ideally located close to airports and have nation wide presence. Some foreign airlines use them too in India. And they are revered in the country for their hospitality.
Compared to what, Novotel of Interglobe group?
Don't just blindly pit against other companies without reasoning.
 
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unrave
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 6:19 pm

avier wrote:
unrave wrote:
SATS is not equal to SIA. But if that doesn't meet the requirements how about the fact that Vistara using Indian Hotels Company for crew accommodation.

Can you suggest anything better than Taj group hotels in India for crew accommodation ? Considering they are ideally located close to airports and have nation wide presence. Some foreign airlines use them too in India. And they are revered in the country for their hospitality.
Compared to what, Novotel of Interglobe group?
Don't just blindly pit against other companies without reasoning.

I don't know what you're getting it. Vistara having a crew contract with IHC for crew accommodation is a text book case of a related party transaction. You can find 100s of instances of related party transactions between the Tata group companies alone. RPTs are not illegal, they are perfectly legitimate provided they're undertaken at arm's length.
Don't just blindly pit against other companies without reasoning.

Perhaps you should spend some time in understanding what the issue is before making these silly comments.
Denial of racism is as egregious as racism itself
 
Sokes
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 6:57 pm

edealinfo wrote:
@sokes

1. Please Go through this thread and the threads of prior months to get the links to the news stories on the slot allocation process.

2. To your legitimate question on “what’s that supposed to mean”?

An airline could bid on a domestic route only IF it proved it had aircraft in the pipeline to operate the route. I think this is a fair requirement. Second, one airline got to pick which route it wanted as a first choice after which the second airline got to pick its preference for the remaining available slots, and then the process continued. Again, a fair process.
The complaint of this process is that Spircejet was the only airline that could bring in aircraft in a very short period of time which inherently made a fair process rather unfair.

3. In the news links that I referenced in #1, you will find a reference that those that temporarily operate the route will get first preference to operate it permanently (only assuming Jet can’t operate it which is the most likely case). The Government will go through the charade of acting like the slots are temporary when everyone can predict what the end outcome would be.


Good answer. From what you tell it was a fair process.
When I read in the newspaper about the airline giving business to companies of the main promoter I used the search function and ended here. I admit I didn't read the +200 earlier posts. Also your explanation is too good to make the effort to read all those posts.
At any rate it's not like wealthy countries always auction their slots. Aviation is nearly never a functioning market.
My mistake to argue that way.
Why can't the world be a little bit more autistic?
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 7:03 pm

Sokes wrote:
edealinfo wrote:
@sokes

1. Please Go through this thread and the threads of prior months to get the links to the news stories on the slot allocation process.

2. To your legitimate question on “what’s that supposed to mean”?

An airline could bid on a domestic route only IF it proved it had aircraft in the pipeline to operate the route. I think this is a fair requirement. Second, one airline got to pick which route it wanted as a first choice after which the second airline got to pick its preference for the remaining available slots, and then the process continued. Again, a fair process.
The complaint of this process is that Spircejet was the only airline that could bring in aircraft in a very short period of time which inherently made a fair process rather unfair.

3. In the news links that I referenced in #1, you will find a reference that those that temporarily operate the route will get first preference to operate it permanently (only assuming Jet can’t operate it which is the most likely case). The Government will go through the charade of acting like the slots are temporary when everyone can predict what the end outcome would be.


Good answer. From what you tell it was a fair process.
When I read in the newspaper about the airline giving business to companies of the main promoter I used the search function and ended here. I admit I didn't read the +200 earlier posts. Also your explanation is too good to make the effort to read all those posts.
At any rate it's not like wealthy countries always auction their slots. Aviation is nearly never a functioning market.
My mistake to argue that way.


Put it this way... even though the system ended up being preferential to SpiceJet, no one would be able to legally prove that the Government did anything maliciously.
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 9:16 pm

Malindo Air to start 3X weekly from Varanasi to Kuala Lumpur
https://www.google.com/amp/www.newindia ... 003647.amp
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 11:28 pm

I understand that Singapore and Malaysia have already exhausted all their bilateral rights flying into India's major metros. However, has Thailand also exhausted their bilateral to the major Indian metros?
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 11:40 pm

For those hoping about the bankruptcy process for Jet, if the process of Essar Steel is any indication, it will be a long time before things will actually settle down.

Check the wisdom of the NCLAT judge that placed operational creditors on par with secured creditors (in essence the recovery % of secured and unsecured creditors will be identical). Go figure and welcome to India's bankruptcy process! If I have been critical of India's system, it is decisions such as these that leave me totally dumbfounded.

https://www.livemint.com/companies/news ... 72245.html


"On 5 July, while approving ArcelorMittal’s ₹42,000-crore bid for Essar Steel, Justice S.J. Mukhopadhaya of NCLAT directed a higher payout to Essar Steel’s operational creditors, treating them on par with secured lenders."

“But now you’re effectively saying it doesn’t matter if you’re secured, you’re going to be treated the same as an unsecured creditor. That just means borrowing rates for everybody will go up in the future because your banks and lenders can’t rely on protecting their losses,"

“Obviously, Essar Steel judgement is not only impairing value for secured lenders but has allowed claims of operational creditors that were above what the resolution professional had admitted," he said. “Now, secured lenders are on the same footing as unsecured creditors, operational creditors and even contingent liabilities."
 
edealinfo
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Re: Indian Aviation Thread - July 2019

Sun Jul 14, 2019 11:57 pm

Madhya Pradesh: First international flight from Indore airport on Monday

Indore - Dubai on Air India with politicians and publicity-hungry Ashwani Lohani to flag off the inaugural.

Lohani plays the same politician hobnobbing game as does Spicejet Chairman, Ajay Singh.

https://www.livemint.com/news/india/mad ... 61608.html
 
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lightsaber
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Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 4:30 am

edealinfo wrote:
“Obviously, Essar Steel judgement is not only impairing value for secured lenders but has allowed claims of operational creditors that were above what the resolution professional had admitted," he said. “Now, secured lenders are on the same footing as unsecured creditors, operational creditors and even contingent liabilities."

OMG. That is a financial disaster.

Lenders for all industries expect some certainty. This will impact airlines.

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
avier
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Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 4:53 am

Jet Airways audit shows diversion of funds, fraudulent billing.
"excess billing and fuel expenses"..
..malpractices, mismanagement through siphoning off funds… preferential and related party transactions, prejudicial to public interest.."


https://m.economictimes.com/industry/tr ... 220878.cms

In regards to another airline, RTP's (related party transactions ) are not a big issue apparently, as per a very learned user on this thread.
 
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unrave
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Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 5:23 am

avier wrote:
In regards to another airline, RTP's (related party transactions ) are not a big issue apparently, as per a very learned user on this thread.


Yes sir, RTPs are a part and parcel of business. They become a problem when they are large, material and are prejudicial to the interests of minority shareholders. RTPs are governed by specific regulations. In India they were revised when Companies Act 2013 was passed, moreover something called SEBI Clause 49 also manages RPTs for listed companies.
Here's something to learn more about them in Indian context: https://cleartax.in/s/related-party-transactions.

It pays to have an open mind to learn about something that you clearly seem to have no idea of.
Denial of racism is as egregious as racism itself
 
avier
Posts: 866
Joined: Tue Aug 07, 2018 12:38 pm

Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 6:50 am

unrave wrote:
Yes sir, RTPs are a part and parcel of business. They become a problem when they are large, material and are prejudicial to the interests of minority shareholders. RTPs are governed by specific regulations. In India they were revised when Companies Act 2013 was passed, moreover something called SEBI Clause 49 also manages RPTs for listed companies.

So how was another listed company (9W) not governed by these same rules regarding RPT's, and so much oversight having taken place?
So much confidence on your side regarding 6E's RPT dealings being fair here, when one of their promoter has written a letter to SEBI & the PM highlighting that as one of the issues.

unrave wrote:
Here's something to learn more about them in Indian context: https://cleartax.in/s/related-party-transactions.
It pays to have an open mind to learn about something that you clearly seem to have no idea of.

There are a lot of written rules in this country and you can keep directing me to such sites, but that's not the point, what matters is how much it is actually enforced and looked into in this country.
 
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unrave
Posts: 2575
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Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 7:19 am

avier wrote:
unrave wrote:
Yes sir, RTPs are a part and parcel of business. They become a problem when they are large, material and are prejudicial to the interests of minority shareholders. RTPs are governed by specific regulations. In India they were revised when Companies Act 2013 was passed, moreover something called SEBI Clause 49 also manages RPTs for listed companies.

So how was another listed company (9W) not governed by these same rules regarding RPT's, and so much oversight having taken place?
So much confidence on your side regarding 6E's RPT dealings being fair here, when one of their promoter has written a letter to SEBI & the PM highlighting that as one of the issues.

unrave wrote:
Here's something to learn more about them in Indian context: https://cleartax.in/s/related-party-transactions.
It pays to have an open mind to learn about something that you clearly seem to have no idea of.

There are a lot of written rules in this country and you can keep directing me to such sites, but that's not the point, what matters is how much it is actually enforced and looked into in this country.


Your reasoning amounts to "One airline has committed fraud therefore all airlines are fraudulent".
It is MY OPINION that the RPTs in IndiGo don't seem to be fraudulent prima facie. I am not going to investigate the claims. Let the appropriate institutions do their job.

So far you seem to have made no effort to understand the issue, so I can't help you. Do not engage with me on this issue.
Denial of racism is as egregious as racism itself
 
devmapper
Posts: 219
Joined: Mon Apr 03, 2017 10:15 pm

Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 7:24 am

lightsaber wrote:
edealinfo wrote:
“Obviously, Essar Steel judgement is not only impairing value for secured lenders but has allowed claims of operational creditors that were above what the resolution professional had admitted," he said. “Now, secured lenders are on the same footing as unsecured creditors, operational creditors and even contingent liabilities."

OMG. That is a financial disaster.

Lenders for all industries expect some certainty. This will impact airlines.

Lightsaber


Stepping away from aviation for a moment, I think this is going to significantly downgrade India's economy struggling with high debt loads. While we can argue about the complexities of financial instruments, a tiered approach to debt recovery is absolutely crucial to a well functioning economy. I hope the higher courts overturn the verdict.
 
avier
Posts: 866
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Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 7:45 am

unrave wrote:
Your reasoning amounts to "One airline has committed fraud therefore all airlines are fraudulent".
It is MY OPINION that the RPTs in IndiGo don't seem to be fraudulent prima facie. I am not going to investigate the claims. Let the appropriate institutions do their job.
So far you seem to have made no effort to understand the issue, so I can't help you. Do not engage with me on this issue.

Well, you yourself spoke of it as being a part and parcel of business being governed by solid rules put in place to ensure misdoings wouldn't happen, handing me out links to educate me on the rules . And when I highlight how it has been misused, you start questioning about what I have understood or not. Personal attacks when you don't have a justifiable answer. Atleast glad you stated it as your opinion now, and not something obvious and factual.
 
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unrave
Posts: 2575
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Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 7:55 am

avier wrote:
unrave wrote:
Your reasoning amounts to "One airline has committed fraud therefore all airlines are fraudulent".
It is MY OPINION that the RPTs in IndiGo don't seem to be fraudulent prima facie. I am not going to investigate the claims. Let the appropriate institutions do their job.
So far you seem to have made no effort to understand the issue, so I can't help you. Do not engage with me on this issue.

Well, you yourself spoke of it as being a part and parcel of business being governed by solid rules put in place to ensure misdoings wouldn't happen, handing me out links to educate me on the rules . And when I highlight how it has been misused, you start questioning about what I have understood or not. Personal attacks when you don't have a justifiable answer. Atleast glad you stated it as your opinion now, and not something obvious and factual.


I am sorry you can't identify an opinion without it being explicitly spelt out. I will keep this in mind when I respond to you in future.
Now if you go back to read my comments you will realise that I never claimed they are "governed by solid rules put in place to ensure misdoings wouldn't happen". You seem to think that the very existence of RPTs point to something sinister. Let me reiterate: no, RPTs are common, you'll find them everywhere if you look.


Edited to expand the points.
Last edited by unrave on Mon Jul 15, 2019 8:12 am, edited 2 times in total.
Denial of racism is as egregious as racism itself
 
User avatar
unrave
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Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 7:57 am

devmapper wrote:
lightsaber wrote:
edealinfo wrote:
“Obviously, Essar Steel judgement is not only impairing value for secured lenders but has allowed claims of operational creditors that were above what the resolution professional had admitted," he said. “Now, secured lenders are on the same footing as unsecured creditors, operational creditors and even contingent liabilities."

OMG. That is a financial disaster.

Lenders for all industries expect some certainty. This will impact airlines.

Lightsaber


Stepping away from aviation for a moment, I think this is going to significantly downgrade India's economy struggling with high debt loads. While we can argue about the complexities of financial instruments, a tiered approach to debt recovery is absolutely crucial to a well functioning economy. I hope the higher courts overturn the verdict.


NCLAT passes such weirdo judgments from time to time. I fully expect the Supreme Court to strike down the law. Corporate disputes, including the IBC cases flow from the NCLT to the NCLAT and ultimately to the Supreme Court.
Denial of racism is as egregious as racism itself
 
ameya
Posts: 22
Joined: Wed Apr 25, 2007 8:46 pm

Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 8:16 am

On Time i̶s̶ was a wonderful thing. IndiGo’s famed punctuality mantra has gone for a toss since last July

As the feud between the promoters of IndiGo became public, the airline’s CEO wrote to the employees to continue focusing on on-time, courteous and hassle-free experience. Since inception, the airline has touted its on-time performance as one of the pillars of its marketing and operational strategy. So much so that in 2009, the airline came up with a TVC focused on being “on time”. The TVC, in which the airline tried to portray that it runs like a well-oiled machine, got plenty of traction. “On-time is a wonderful thing” was the central message of that commercial.

Well, things have changed since then. IndiGo is no longer the airline it was. It is a massive airline now, India’s largest, with a large number of planes, departures and destinations. It has cornered nearly 59 percent of India’s airline industry’s market share.
 
srkSJC
Posts: 27
Joined: Sun Jun 23, 2019 5:48 am

Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 9:17 am

unrave wrote:
avier wrote:
unrave wrote:
Your reasoning amounts to "One airline has committed fraud therefore all airlines are fraudulent".
It is MY OPINION that the RPTs in IndiGo don't seem to be fraudulent prima facie. I am not going to investigate the claims. Let the appropriate institutions do their job.
So far you seem to have made no effort to understand the issue, so I can't help you. Do not engage with me on this issue.

Well, you yourself spoke of it as being a part and parcel of business being governed by solid rules put in place to ensure misdoings wouldn't happen, handing me out links to educate me on the rules . And when I highlight how it has been misused, you start questioning about what I have understood or not. Personal attacks when you don't have a justifiable answer. Atleast glad you stated it as your opinion now, and not something obvious and factual.


I am sorry you can't identify an opinion without it being explicitly spelt out. I will keep this in mind when I respond to you in future.
Now if you go back to read my comments you will realise that I never claimed they are "governed by solid rules put in place to ensure misdoings wouldn't happen". You seem to think that the very existence of RPTs point to something sinister. Let me reiterate: no, RPTs are common, you'll find them everywhere if you look.


Edited to expand the points.


Unrave - I cannot help but laugh at the comments and sublime snide remarks thrown at you. Let me give my inside view on how these things work out so that the lesser brethren can understand the whole issue in a somewhat holistic way.. ( No pun intended to anyone and much less to three or four people trying to question you- so kindly do not take offence at my choice of words but the message has to be delivered hence, .......)

In any related party transaction there are many aspects involved. The very first is the relative ease by which a requestor company can take the benefit of a service from a party which is within its domain of operations ( in this case domain of operations means group of companies working under a common corporate identity but varied commercial interests). So for example a shipping company ( shipping liner) company like Mitsui OSK lines also owns a telcom service provider say for example SK Telecom ( NOTE : SK group is actually South Korean and is not owned by Mitsui&Co.). So for all varied needs of Mistsui OSK lines SK telecom is the best bet since it is within their own group. Best rates and other benefits cannot be obviously undermined or less emphasized upon. And a Shipping Line has a continuous and extensive need for telecommunications services all the time.

Second is the issue of Taxation, specifically Income Tax Act. All related party transactions whether or not they are carried out by listed entities or unlisted entities need to have a distinct Transfer Pricing audit ( in this case of Indigo Airlines it should be Domestic Transfer Pricing Audit assuming that overseas operations are not covered in this 'expose' letter of RG group{I have not read the letter but followed what Anish Majumdar of Business Standard and Aditi Phadnees of Hindu Business Line have reported}). In any Transfer Pricing Audit ( THIS IS actually separate from the Statutory Audit under Companies Act 2013[As amended till date]) the auditor will look into multiple aspect of the fairness of the related party transaction and the extent of the involvement of parties. There are multiple thresholds when this will attract the provisions of the regulating statutory provisions - each of them being exclusive of each other ( meaning SEBI rules will undertake a different inquiry from what Income Tax Act will inquire into). As far as Income Tax Act is concerned there are some set percentage limits under which there would not be legally permissible Domestic Transfer pricing transactions. What this entails is that if legally permissible Domestic Transfer pricing is not allowed then TDS has to be deducted and all such transactions need to be probed for arms length pricing compliance{ important factors to note here- rules governing TDS applicability, legally permissible domestic transfer pricing is dependent upon many rules, amendments and rulings of ITAT[Income TAX Appellate Tribunal], High Courts and Supreme Court}.

Thirdly, the Companies Act 2013 lays down elaborate guidelines as to how to carry out a related party transactions, how to classify it, how to report it and then how to ensure that proper compliance is being undertaken at all times. The Key Managerial Personnel or KMP which consists of Chief Executive officer, Chief Financial officer, Company Secretary, Chief Legal officer ,Audit COmmittee are all equally responsible for adhering to these norms. In fact they have to collectively sign off on all these compliance every quarter or every year (this is dependent upon the turnover of the company as to when the filings are done). In addition to this, the staututory auditor and the internal auditor ( now they are to be rotated under new MCA rules, and have to be different firms) also verify and cross check all such related party transactions EVERY QUARTER and submit their findings to the Audit Committee and then later to Board of Directors as the case may be. If the findings are adverse and the Audit Committee and/or the Board is unable to satisfy the findings or the queries raised, the statutory Auditor or the internal auditor are mandated by Law to qualify such findings {these auditor qualifications remain a public record when the annual balance sheet is uploaded to MCA21 portal}. These findings are then subject to external scrutiny or corrections as the case may be. The Board of Directors are also required to answer to the auditor qualifications in the Directors Statement of the Audited Balance Sheet, with specific reference to the P/L account. These qualifications once so done cannot be removed even if the Board or the Senior Management disagrees[though the responses will be recorded].

Finally coming to the SEBI Rules, there are some very elaborate arrangements that the market regulator has laid down when it talks about related party transactions. Some of these are the value of these agreements in relation to the overall turnover, nature of the transactions, effect of the transactions, period and manner of payment, frequency of the payments, equity structure of the parties involved in the related party transactions. One thing which is very common to both MCA and SEBI ( THIS IS ALSO IN THEIR RESPECTIVE STATUTES - Companies Act 2013 and SEBI Act - is that when the Board takes a decision on the RPT[related party transactions] it is to be seen - Who in the respective Boards of the two companies entering into RPT have equity ownership in excess of 15% in either or each of these parties , when the RPT proposal is being discussed or being taken into consideration. Any one having a direct or 'presumed influence' need to recuse themselves from such deliberations. So taking my example, when Director A who is on the board of SK Telecom having an equity ownership of 16% in Mitsuit & Co will recuse himself when the RPT is being discussed and put to vote in Mitsui&Co. Similar would be the case for Director B having equity ownership in SK Telcom{note that it is assumed that in both these instances Director A and Director B will have board positions in Mitsui&Co and SK Telecom}.

NOTE- the respective thresholds of equity ownership, or having board position or having management presence or not is subject to multiple layers of exclusions and restrictions applicable for a variety of reason. Several amendments have been carried which have excluded or included many companies from complying with these rules but the essence is explained above.

This rule of having the necessity of calling for mandatory bids when RPT are discussed is actually not engraved in stone. There is certain degree of latitude which the management can use to sustain effective business operations. While some of the points raised in rebuttal from IGE group is very true that since it is a very restricted number as compared to the total percentage of Gross Revenue(or Total Revenue if we are using exact balance sheet terms) so it does not amount to any transgression of law much less an intentional one. One way companies try to engage in this to seek bids from competitors for financial year 1 and then match it with the RPT bid. Usually the RPT bid is always lower (for variety of reasons which i cannot explain here for sake of brevity). After financial year 1, for financial year 2 , only a cursory email sent to the previously participating competitors can elicit their bid numbers{without running again a bid} and then they can simply match or refuse the price quoted by RPT party. This way the compliance is both achieved and effective commercial operations are not hampered.

Apart from these points, there are many other interwoven critical issues of law and corporate complainces which involve, regulate and administer the RPT, management participation of financial records, business ethics, corporate governance and reasonable shareholder scrutiny in the affairs of the administration of a company. While we can criticise or take sides in this debate or debacle(depending upon the side of the fence we mind booking our seats on) , all the above points in addition to the many unknown issues need to be examined.

DISCLAIMER: I have drafted many RPT and cost sharing agreements between group companies of past employer. I was also signing authority on the compliance confirmation to both internal auditor and statutory auditor for about 6 years. I was also Management representative in these meetings with internal audit and statutory audit {this included final statement approval of the Board in response to Auditor observations, and Auditor qualifications}.
 
srkSJC
Posts: 27
Joined: Sun Jun 23, 2019 5:48 am

Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 9:28 am

lightsaber wrote:
edealinfo wrote:
“Obviously, Essar Steel judgement is not only impairing value for secured lenders but has allowed claims of operational creditors that were above what the resolution professional had admitted," he said. “Now, secured lenders are on the same footing as unsecured creditors, operational creditors and even contingent liabilities."

OMG. That is a financial disaster.

Lenders for all industries expect some certainty. This will impact airlines.

Lightsaber


This is a one off matter. In this case the Supreme Court actually left NCLT and the NCLAT ( on different points of law and fact) to arrive at a conclusion. What was happening is that both Standard Chartered Bank and the erstwhile promoter group led by Prashant Ruia were incessantly fighting to ensure that their bid of Rs 54, 000.00 bid was accepted by the CoC and the Arcelor Mittal bid be disqualified on many grounds. Prior to that the Numetal and Arcelor Mittal had a almost vicious legal battle for over a year and half over their eligibility to bid or not bid. This ruling is done just to please all the parties and ensure that the case comes to an definitive end as the statutory limit to resolve is long overdue (over 370 days if i am not mistaken). I am sure the Supreme Court will over rule ( not completely but size it up in a manner[dependent upon which bench the appeal lands up]) or else pass a ruling that this case is not to be considered as precedential which takes care of everyones worry on the reclassification of secured and unsecured creditors.
 
Sokes
Posts: 156
Joined: Sat Mar 09, 2019 4:48 pm

Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 12:13 pm

srkSJC wrote:
Unrave - I cannot help but laugh at the comments and sublime snide remarks thrown at you. Let me give my inside view on how these things work out so that the lesser brethren can understand the whole issue in a somewhat holistic way.. ( No pun intended to anyone and much less to three or four people trying to question you- so kindly do not take offence at my choice of words but the message has to be delivered hence, .......)

In any related party transaction there are many aspects involved. The very first is the relative ease by which a requestor company can take the benefit of a service from a party which is within its domain of operations ...

Laughing is healthy, so good choice.
What I learned about a fruit market in Goa: The sellers have the telephone number of the guys from the real wholesale market in Belgaum. They phone Belgaum and the Belgaum wholesellers send the fruits.
Suppose all these dealers would be in a group: where is the advantage?


srkSJC wrote:
In any related party transaction there are many aspects involved. The very first is the relative ease by which a requestor company can take the benefit of a service from a party which is within its domain of operations ( in this case domain of operations means group of companies working under a common corporate identity but varied commercial interests). So for example a shipping company ( shipping liner) company like Mitsui OSK lines also owns a telcom service provider say for example SK Telecom ( NOTE : SK group is actually South Korean and is not owned by Mitsui&Co.). So for all varied needs of Mistsui OSK lines SK telecom is the best bet since it is within their own group.


How does this relate to Indigo? The disputed transactions are with companies from one promoter, not from the group.

Obviously you have more knowledge of law than most of us "lesser brethren". What we get upset about is a conflict of interest.
I don't care what the law says. I wouldn't like to make business with somebody who is utterly blind for conflict of interests.
Why can't the world be a little bit more autistic?
 
avier
Posts: 866
Joined: Tue Aug 07, 2018 12:38 pm

Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 12:15 pm

No fuel supply to AI from tomorrow over non-payments apparently. Airports likely to cutoff AI's fuel supply are Patna, Pune, Chandigarh, Cochin, Visakhapatnam & Ranchi. No budget allocations made to poor AI this year.
 
Sokes
Posts: 156
Joined: Sat Mar 09, 2019 4:48 pm

Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 12:49 pm

lightsaber wrote:
edealinfo wrote:
“Obviously, Essar Steel judgement is not only impairing value for secured lenders but has allowed claims of operational creditors that were above what the resolution professional had admitted," he said. “Now, secured lenders are on the same footing as unsecured creditors, operational creditors and even contingent liabilities."

OMG. That is a financial disaster.

Lenders for all industries expect some certainty. This will impact airlines.

Lightsaber


I chip in with some assumptions.
I believe the governments first aim was not to recover the money, but to achieve a culture change. If you don't pay your bills, you loose your company.
To speed up the process it was (as far as I remember) decided to deal with financial creditors only.
The courts disagree.

Who is supposed to go in depth in the books of a company, operational or financial creditors?
Suppose a company delivers packaging material as an operational creditor. Should it and hundreds of other operational creditors study the financials of maybe hundreds of customers each?
I think it should be the responsibility of the financial creditors to make sure they lend only to sound companies. I therefore suggest operational creditors get preference. To prevent money being extracted shortly before bankruptcy one can limit this to transaction volumes which have had to be common between the parties since at least two years.
Why can't the world be a little bit more autistic?
 
edealinfo
Posts: 1483
Joined: Mon Jan 21, 2019 7:11 pm

Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 12:56 pm

avier wrote:
No fuel supply to AI from tomorrow over non-payments apparently. Airports likely to cutoff AI's fuel supply are Patna, Pune, Chandigarh, Cochin, Visakhapatnam & Ranchi. No budget allocations made to poor AI this year.


Will the Moody Government bail out Air India OR let things play out so people can see why Sir India needs to be sold or shut down?

Lohani must be calling in favors from all the politicians that he has hobnobbed with to ensure Sir India is back on its feet.
 
edealinfo
Posts: 1483
Joined: Mon Jan 21, 2019 7:11 pm

Re: Indian Aviation Thread - July 2019

Mon Jul 15, 2019 1:10 pm

srkSJC wrote:
unrave wrote:
avier wrote:
Well, you yourself spoke of it as being a part and parcel of business being governed by solid rules put in place to ensure misdoings wouldn't happen, handing me out links to educate me on the rules . And when I highlight how it has been misused, you start questioning about what I have understood or not. Personal attacks when you don't have a justifiable answer. Atleast glad you stated it as your opinion now, and not something obvious and factual.


I am sorry you can't identify an opinion without it being explicitly spelt out. I will keep this in mind when I respond to you in future.
Now if you go back to read my comments you will realise that I never claimed they are "governed by solid rules put in place to ensure misdoings wouldn't happen". You seem to think that the very existence of RPTs point to something sinister. Let me reiterate: no, RPTs are common, you'll find them everywhere if you look.


Edited to expand the points.


Unrave - I cannot help but laugh at the comments and sublime snide remarks thrown at you. Let me give my inside view on how these things work out so that the lesser brethren can understand the whole issue in a somewhat holistic way.. ( No pun intended to anyone and much less to three or four people trying to question you- so kindly do not take offence at my choice of words but the message has to be delivered hence, .......)

In any related party transaction there are many aspects involved. The very first is the relative ease by which a requestor company can take the benefit of a service from a party which is within its domain of operations ( in this case domain of operations means group of companies working under a common corporate identity but varied commercial interests). So for example a shipping company ( shipping liner) company like Mitsui OSK lines also owns a telcom service provider say for example SK Telecom ( NOTE : SK group is actually South Korean and is not owned by Mitsui&Co.). So for all varied needs of Mistsui OSK lines SK telecom is the best bet since it is within their own group. Best rates and other benefits cannot be obviously undermined or less emphasized upon. And a Shipping Line has a continuous and extensive need for telecommunications services all the time.

Second is the issue of Taxation, specifically Income Tax Act. All related party transactions whether or not they are carried out by listed entities or unlisted entities need to have a distinct Transfer Pricing audit ( in this case of Indigo Airlines it should be Domestic Transfer Pricing Audit assuming that overseas operations are not covered in this 'expose' letter of RG group{I have not read the letter but followed what Anish Majumdar of Business Standard and Aditi Phadnees of Hindu Business Line have reported}). In any Transfer Pricing Audit ( THIS IS actually separate from the Statutory Audit under Companies Act 2013[As amended till date]) the auditor will look into multiple aspect of the fairness of the related party transaction and the extent of the involvement of parties. There are multiple thresholds when this will attract the provisions of the regulating statutory provisions - each of them being exclusive of each other ( meaning SEBI rules will undertake a different inquiry from what Income Tax Act will inquire into). As far as Income Tax Act is concerned there are some set percentage limits under which there would not be legally permissible Domestic Transfer pricing transactions. What this entails is that if legally permissible Domestic Transfer pricing is not allowed then TDS has to be deducted and all such transactions need to be probed for arms length pricing compliance{ important factors to note here- rules governing TDS applicability, legally permissible domestic transfer pricing is dependent upon many rules, amendments and rulings of ITAT[Income TAX Appellate Tribunal], High Courts and Supreme Court}.

Thirdly, the Companies Act 2013 lays down elaborate guidelines as to how to carry out a related party transactions, how to classify it, how to report it and then how to ensure that proper compliance is being undertaken at all times. The Key Managerial Personnel or KMP which consists of Chief Executive officer, Chief Financial officer, Company Secretary, Chief Legal officer ,Audit COmmittee are all equally responsible for adhering to these norms. In fact they have to collectively sign off on all these compliance every quarter or every year (this is dependent upon the turnover of the company as to when the filings are done). In addition to this, the staututory auditor and the internal auditor ( now they are to be rotated under new MCA rules, and have to be different firms) also verify and cross check all such related party transactions EVERY QUARTER and submit their findings to the Audit Committee and then later to Board of Directors as the case may be. If the findings are adverse and the Audit Committee and/or the Board is unable to satisfy the findings or the queries raised, the statutory Auditor or the internal auditor are mandated by Law to qualify such findings {these auditor qualifications remain a public record when the annual balance sheet is uploaded to MCA21 portal}. These findings are then subject to external scrutiny or corrections as the case may be. The Board of Directors are also required to answer to the auditor qualifications in the Directors Statement of the Audited Balance Sheet, with specific reference to the P/L account. These qualifications once so done cannot be removed even if the Board or the Senior Management disagrees[though the responses will be recorded].

Finally coming to the SEBI Rules, there are some very elaborate arrangements that the market regulator has laid down when it talks about related party transactions. Some of these are the value of these agreements in relation to the overall turnover, nature of the transactions, effect of the transactions, period and manner of payment, frequency of the payments, equity structure of the parties involved in the related party transactions. One thing which is very common to both MCA and SEBI ( THIS IS ALSO IN THEIR RESPECTIVE STATUTES - Companies Act 2013 and SEBI Act - is that when the Board takes a decision on the RPT[related party transactions] it is to be seen - Who in the respective Boards of the two companies entering into RPT have equity ownership in excess of 15% in either or each of these parties , when the RPT proposal is being discussed or being taken into consideration. Any one having a direct or 'presumed influence' need to recuse themselves from such deliberations. So taking my example, when Director A who is on the board of SK Telecom having an equity ownership of 16% in Mitsuit & Co will recuse himself when the RPT is being discussed and put to vote in Mitsui&Co. Similar would be the case for Director B having equity ownership in SK Telcom{note that it is assumed that in both these instances Director A and Director B will have board positions in Mitsui&Co and SK Telecom}.

NOTE- the respective thresholds of equity ownership, or having board position or having management presence or not is subject to multiple layers of exclusions and restrictions applicable for a variety of reason. Several amendments have been carried which have excluded or included many companies from complying with these rules but the essence is explained above.

This rule of having the necessity of calling for mandatory bids when RPT are discussed is actually not engraved in stone. There is certain degree of latitude which the management can use to sustain effective business operations. While some of the points raised in rebuttal from IGE group is very true that since it is a very restricted number as compared to the total percentage of Gross Revenue(or Total Revenue if we are using exact balance sheet terms) so it does not amount to any transgression of law much less an intentional one. One way companies try to engage in this to seek bids from competitors for financial year 1 and then match it with the RPT bid. Usually the RPT bid is always lower (for variety of reasons which i cannot explain here for sake of brevity). After financial year 1, for financial year 2 , only a cursory email sent to the previously participating competitors can elicit their bid numbers{without running again a bid} and then they can simply match or refuse the price quoted by RPT party. This way the compliance is both achieved and effective commercial operations are not hampered.

Apart from these points, there are many other interwoven critical issues of law and corporate complainces which involve, regulate and administer the RPT, management participation of financial records, business ethics, corporate governance and reasonable shareholder scrutiny in the affairs of the administration of a company. While we can criticise or take sides in this debate or debacle(depending upon the side of the fence we mind booking our seats on) , all the above points in addition to the many unknown issues need to be examined.

DISCLAIMER: I have drafted many RPT and cost sharing agreements between group companies of past employer. I was also signing authority on the compliance confirmation to both internal auditor and statutory auditor for about 6 years. I was also Management representative in these meetings with internal audit and statutory audit {this included final statement approval of the Board in response to Auditor observations, and Auditor qualifications}.


All your rules and regulations, while on paper are BS in reality. See the latest ruling on the Essar case. The judge made his own rule of treating operational creditors the same as secured creditors. apologists for the judge will claim it is “one off” . sure (rolling my eyes. Time and again we have seen legal decisions in India not grounded in law, but what the judge personally deems as best in his assessment of what’s good and bad.

You must have learned in the 11th Standard that a secured creditor holds a higher standing than an unsecured creditor. probably even a law is not required because it is common sense. but now we will have a case that is pursed all the way to the Supreme Court wasting everyone’s time and money so it can rule when something on paper is supposed to mean what it says or not, and whether common sense applies.

And guess what, the judge who made the nonsensical decision will not be removed from his position so the process will repeat itself .

If you are a lawyer or other professional who spent years in college studying rules and regulations, you should know by now that it was all an utter waste and you would have had a much better chance with judges if you studied psychology (in dealing with them).
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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