TATA and SIA to bid for AI

blooc350 · Sun Nov 29, 2020 5:00 pm

Tata Sons is currently in discussions with Singapore Airlines (SIA) regarding a proposed bid for Air India. The group is looking to waive a non-compete clause and partner with the carrier through their existing venture Vistara.

Would the Indian government allow a foreign investor like SQ to monopolize the Indian Aviation industry?

https://simpleflying.com/tata-group-singapore-airlines-air-india/?utm_source=dlvr.it&utm_medium=facebook

MIflyer12 · Sun Nov 29, 2020 5:07 pm

What competition does AI face in domestic and international markets?

Breathe · Sun Nov 29, 2020 6:44 pm

The only was for AI to ever truly turnaround is to get the Government of India out of the running of the company.

Folding Vistara and AI's fleets could work well. Both have the same fleet commonality that would complement each other. They both use A320neos with CFM and 787 with GE engines. The Vistara 737s are on lease until 2023 and could be integrated with Air India Express or exit the fleet completely in a few years.

Having SQ management running the show could super-charge Air India in the 21st century. Obviously there's little they can do with the infrastructure side of things in India and would no doubt still have to deal with a lot of Government bureaucracy.

If a deal were to happen, it would mark a "return home" of Air India to Tata & Sons which was originally founded as Tata Airlines.

x1234 · Sun Nov 29, 2020 6:52 pm

The problem with Indian aviation is that airfares are too cheap and barely cover the cost of fuel. TATA/SQ in charge will finally raise airfares to an international level and profitability.

Antaras · Sun Nov 29, 2020 7:34 pm

So, the new AI×UK could work well in the premium market, while AirAsia would be the LCC subsidiary.

Nice

DIJKKIJK · Sun Nov 29, 2020 7:55 pm

The combined airline will run under the brand name Air India. That is one of the conditions for the sale.
Time for Subramaniam Swamy to come out crying and wring his knickers in a twist.

Antaras · Sun Nov 29, 2020 8:02 pm

DIJKKIJK wrote:
The combined airline will run under the brand name Air India. That is one of the conditions for the sale.
Time for Subramaniam Swamy to come out crying and wring his knickers in a twist.

Yeah. It is time for Air India to come back to the Tata family.

usdcaguy · Sun Nov 29, 2020 8:05 pm

x1234 wrote:
The problem with Indian aviation is that airfares are too cheap and barely cover the cost of fuel. TATA/SQ in charge will finally raise airfares to an international level and profitability.

That's not so easy. If you raise fares, you will likely see a drop in demand for the service and see a shift in market share to other carriers, unless they raise fares with you. In India, the presence of several low-cost carriers seems to preclude this.

FCOTSTW · Sun Nov 29, 2020 9:47 pm

I hope the JV will be successful in acquiring AI.

AI remembers me if AZ, where generations of "managers" have "managed" these airlines by taking decisions without fundament, just to establish their "footprints". the latest example of such an incomprehensible strategy is the launching of the BLS SFO flight in January 2022. Both companies suffer from strong nepotism, overstaffing, and strong ties to political parties.

Hopefully a change of management will help minimizing this mindset.

OzarkD9S · Sun Nov 29, 2020 10:50 pm

blooc350 wrote:

Would the Indian government allow a foreign investor like SQ to monopolize the Indian Aviation industry?

A combined Air India/Vistara would not be a monopoly. Would the GoI demand some DEL/BOM slots be carved out of the combo for other Indian carriers? I'm hardly an expert on Indian politics but IndiGo and Spice Jet most likely have some friends in high places that would certainly insist on a redistribution of at least some token slots to allow for real competition. India is certainly a country that could support two intercontinental home carriers IMO.

jbs2886 · Sun Nov 29, 2020 11:02 pm

OzarkD9S wrote:
blooc350 wrote:

Would the Indian government allow a foreign investor like SQ to monopolize the Indian Aviation industry?

A combined Air India/Vistara would not be a monopoly. Would the GoI demand some DEL/BOM slots be carved out of the combo for other Indian carriers? I'm hardly an expert on Indian politics but IndiGo and Spice Jet most likely have some friends in high places that would certainly insist on a redistribution of at least some token slots to allow for real competition. India is certainly a country that could support two intercontinental home carriers IMO.

Agree, I read the OP and this was my initial thought. Vistara + AI is hardly a monopoly when it would be the 3rd largest carrier (maybe 2nd at best). Moreover, SQ would be a minority shareholder and SQ's experience could provide significant benefits to creating a true quality FSC for India.

dtw2hyd · Mon Nov 30, 2020 12:27 am

India is an LCC market, FSCs have no place. Indians want EK/SQ level service at Indigo/SpiceJet fares. People still dream about Kingfisher service. For the same reason they love EK/SQ, some other sovereign entity is subsidizing my travel attitude.

SQ is TATAs partner in Vistata, How is it doing? Even without any legacy costs, it is a failed model. Add legacy costs it will be a definite failure.

The best option to maximize revenue is À la carte, but even in 21st century no booking engine has this capability. An airline can try to create several classes, still cannot match what passengers want and result in waste or subpar service.

Better to shut down AI, and absorb assets and hire workforce as needed.

If I were Temasek, I would ask TCS shares as collateral, the airline may fail, but Temasek will own one of the largest IT services company.

On a side note, Government of India will still own an airline called Air India (Regional), it will buy narrow bodies and wide bodies, in few years it will be burden on Indian Tax payers.

jbs2886 · Mon Nov 30, 2020 1:10 am

dtw2hyd wrote:
India is an LCC market, FSCs have no place. Indians want EK/SQ level service at Indigo/SpiceJet fares. People still dream about Kingfisher service. For the same reason they love EK/SQ, some other sovereign entity is subsidizing my travel attitude.

SQ is TATAs partner in Vistata, How is it doing? Even without any legacy costs, it is a failed model. Add legacy costs it will be a definite failure.

The best option to maximize revenue is À la carte, but even in 21st century no booking engine has this capability. An airline can try to create several classes, still cannot match what passengers want and result in waste or subpar service.

Better to shut down AI, and absorb assets and hire workforce as needed.

If I were Temasek, I would ask TCS shares as collateral, the airline may fail, but Temasek will own one of the largest IT services company.

On a side note, Government of India will still own an airline called Air India (Regional), it will buy narrow bodies and wide bodies, in few years it will be burden on Indian Tax payers.

You certainly know much more about the Indian aviation market, per your posts over the years. And while I think generally true, the LCC market doesn't appear to translate to long-haul (at least yet). I don't see Indigo working on India-US flights, for example. There is a lot of India point-of-sale traffic connecting on the ME3 and others that a FSC can capture. So, I think a FSC is needed and can be successful, it just has to be managed *very well* (unfortunately every attempt at that hasn't been successful)-recognizing the strength of LCC domestically and regionally and not trying to compete with that.

Per your side note, is Alliance Air (or whatever it is called now) not part of the sale? If not, that certainly provides uncertainty that the FSC could be managed successfully as the government will likely retain influence (or impacted other than just the market) of Air India

BawliBooch · Mon Nov 30, 2020 5:53 am

x1234 wrote:
The problem with Indian aviation is that airfares are too cheap and barely cover the cost of fuel. TATA/SQ in charge will finally raise airfares to an international level and profitability.

If only it were that simple!

Indigo is the big spoiler at the moment. Their whole business strategy is to dump capacity wholesale to force competitors out and gain pricing power. AI/SQ could charge a premium for FSC service, but the Indian market does not pay for premium service. Jet/ Indian Airlines and even Kingfisher with all their short skirts, bells and whistles were priced within a 200-300 rupees band with the LCC's. Given this dynamic, I dont see how AI/SQ could charge a premium and remain competitive.

What might work for AI? Find a balance between ruthlessly cutting costs while maintaining some level of service. Full Service Carrier with LCC cost structure - something Jet tried to do somewhat successfully (initially) in the early 2000's. But I doubt they will be able to do it with the Govt retaining even 1% of ownership.

Here is what I think will happen. AI (minus Express and Alliance Air) will be sold off for a princely sum to the Tata-SQ consortium which would merge Vistara into that structure - similar fleet of A32S and 787 + 77W.

AIX and CD would be hived off into a new debt free but Govt Owned carrier - Indian Airlines 2.0 - serving domestic, SAARC and Middle East countries with all economy 737 and ATR aircraft. Someone working with the airline can confirm but there were reports pre Covid, that from Feb 2021, AIX 737s were to be reconfigured with a small 8 seat business cabin and blue leather seat interiors. If such a memo does exist, it could be proof that this Project Second Force to create a new state owned domestic carrier is very much the plan.

Personally, i think the idea is stupid! I just think the Govt should either 1) sell Air India off to the highest bidder and get out of the airline business (not devaluing airline and selling it off in pieces) or 2) Recapitalise airline and run it like a Navaratna PSU.

But anyone who thinks the Govt of India to going to exit the Civil Aviation section by selling off Air India is living in a fools paradise! It just will not happen!

Blerg · Mon Nov 30, 2020 6:03 am

But why? What exactly would they gain from this? Vistara has a domestic market, they have a brand, they already exist and if I am not tripping they recently announced BOM-LON flights. So what added benefit would AI bring? It's not like they have a good brand.

TheFlyingDisk · Mon Nov 30, 2020 6:34 am

Blerg wrote:
But why? What exactly would they gain from this? Vistara has a domestic market, they have a brand, they already exist and if I am not tripping they recently announced BOM-LON flights. So what added benefit would AI bring? It's not like they have a good brand.

I bet you that the average traveler would have heard of Air India (and not know that it's not a good airline) but not know a thing about Vistara.

That's the benefit AI brings. That well known brand.

BawliBooch · Mon Nov 30, 2020 6:35 am

Blerg wrote:
But why? What exactly would they gain from this? Vistara has a domestic market, they have a brand, they already exist and if I am not tripping they recently announced BOM-LON flights. So what added benefit would AI bring? It's not like they have a good brand.

What will Tata-SQ gain from this?

1. Brand.
You wont believe this if your perception about Air India is based on ANET, but AI still has greater brand recall value than possibly any other airline in the Indian market! The past decade, there has been a systematic attempt to devalue both the Airline and its brand but it has still managed to survive nonetheless. For many Indians (outside of ANET), AI remains the default airline of choice for travel simply because of the comfort factor. Not talking about service here because that is just as crappy as everyone else here. But comfort from the traditional, homely vibe that AI still exudes as compared to the short blue skirts and rude FA's which can be quite intimidating to many Indians who are not net savvy and new to air travel. Air Sahara tried the traditional service with sari-clad FA's approach for the same reason till they were bought out by Jet Airways.

Speaking for my people - they will not be happy till Air India launches daily flights to Amritsar/Ludhiana/*insert pind of origin* because getting on an AI aircraft is like getting home. Many of us have switched almost completely to Air Canada/Air France for our VFR travel back home. But for a significant section of the travelling public even today, AI is the default choice.

Vistara in comparison arrived with great fanfare but has not really managed to carve a niche for itself. Their recent shift to BoB for example has severely dented their FSC branding. It is nowhere in the reckoning.

2. Infrastructure & Reach - The state owned airline still has the best and most extensive infrastructure across the country and the region. Both in the terms of ground handling and engineering infrastructure, Air India is second to none.

3. Scale - Right now Vistara is only present in a few markets with few frequencies on each. They havent really been able to scale up like their competition. This is where AI can help.

Despite the ruthless hammering down on AI on forums like these, Air India remains a good value for any investor. Infact, with a little funding and autonomy of ops, even the state owned AI would be much more competitive. Which is why i think the Govt should not sell the airline at distress sale prices but look for a good value - ideally through an 40% IPO and strategic sale of the remaining stake to Tata-SQ.

kane8907 · Mon Nov 30, 2020 6:51 am

India Airliner ticket is very cheap and even a meal on the plane needs extra pay(usually very limited options). Hoping TATA's new project will improve that.

anshabhi · Mon Nov 30, 2020 7:06 am

blooc350 wrote:
Would the Indian government allow a foreign investor like SQ to monopolize the Indian Aviation industry?

AI + UK will be less than half of 6E

avier · Mon Nov 30, 2020 7:46 am

The biggest spoiler in the AI privatisation and sale process are the various AI employee unions. They are the ones making it hard for the govt to quit the airline. They will never adjust to the working conditions of the private sector, when they're so accustomed to the lenient and sendentary sarkari job.
To put into perspective; 6E with a fleet of 250+ planes has about 150 staff in HR+Finance. AI with about 125 planes has 1500 employees in those same two departments. This was mentioned by AI pilots union recently when salary cuts were proposed to them due to the pandemic.

AI former and current employees are more worried about the life-time benefits they get from the airline (medical aid, free passage post retirement etc).
Cost-cutting and right-sizing would almost be impossible with such a workforce. Add to that a more restricted FDTL for crew (as mandated by AI unions) vs what the rest of the industry follows.

Hence, the govt. will stay in the aviation sector through AI Regional, to give the unions some hope.

migair54 · Mon Nov 30, 2020 10:45 am

I don't know why anyone will even think about getting into AI, it's a lost case, the only advantage I can see for TATA+SQ is getting everything they can for VISTARA and then let AI die or give it back to the government of India after they got everything they wanted, slots, routes, customers, offices, contractors.... It somehow reminds me of Alitalia.

They'll have to do thousands of job cuts, route adjustments, and nothing will be easy, it will be battle after battle, it will take years, and that time will be with big losses.

They have Vistara, they are just building a name and a reputation, why do they need Air India??
42 planes and 37 more in order, including B787.

anshabhi · Mon Nov 30, 2020 12:16 pm

migair54 wrote:
They have Vistara, they are just building a name and a reputation, why do they need Air India??
42 planes and 37 more in order, including B787.

Exactly if by god's grace TATA and SQ purchase AI then it will be one of the most positive things for GoI ever. A perennial black hole will be off their shoulders

ltbewr · Mon Nov 30, 2020 12:25 pm

The JV had better budget the equivalent of many millions of US$ in bribes to politicians will have to be paid to get this deal through. Even if goes through, no way will workers allow the JV to fire anyone and many won't accept higher fares.

dtw2hyd · Mon Nov 30, 2020 1:08 pm

migair54 wrote:
...
They have Vistara, they are just building a name and a reputation, why do they need Air India??
42 planes and 37 more in order, including B787.

So what is stopping Vistara to grow? IMHO, Money.
Close to five years, couldn't build a domestic hub, present network is courtesy Jet's demise. Can Vistara build a BLR hub. 100% certain it cannot.

If TATA Temasek cannot fund Vistara, how will they fund AI.

Government is giving away AI for free. Bulk of (GHA) workforce, all the debt and AI(Regional) will be with taxpayers.

Fleet
18 paid off 777s, no monthly payments
39 A319s/A321s are paid off. no monthly payments

21 788s (including 12 low quality early builds) are on SLB. Early builds are not a burden.
6 788s are on some lease.

3x319s on short term lease
10 x new A320CEO on dry lease/PBTH
27x LEAP A320NEOs on dry lease/PBTH (Courtesy AI Engineering, they didn't pick GTF)

Workforce
Last permanent hire was in 2012.
Most of the high salaried legacy employees retired.
AIATSL(GHA) is not part of the sale. I have to verify.
All the debt is moved to SPV and/or AI(R). Retirement benefits stay with taxpayers.

Present government is looking for a worthy friend who deserves this freebie and can pay leases and salaries for a few months, then sell or close.
Throw buzz words like bloated workforce, debt, burden on taxpayers, Indians will be happy to giveaway AI.

Sokes · Mon Nov 30, 2020 2:02 pm

BawliBooch wrote:
For many Indians (outside of ANET), AI remains the default airline of choice for travel simply because of the comfort factor.

Maybe AI should take over Singapore Airlines?

Sokes · Mon Nov 30, 2020 2:08 pm

dtw2hyd wrote:
Workforce
Last permanent hire was in 2012.
Most of the high salaried legacy employees retired.
AIATSL(GHA) is not part of the sale. I have to verify.
All the debt is moved to SPV and/or AI(R). Retirement benefits stay with taxpayers.

Same policy is done in banking. If the private sector expands little every year while public sector stays the same or grows less, ten years get the job done without ideological discussions.

Or as Gandhi said:
Reform always comes at a snail's pace.

I'm just surprised about 2012. You have some further info or a link?

BawliBooch · Mon Nov 30, 2020 2:30 pm

dtw2hyd wrote:
migair54 wrote:
...
Present government is looking for a worthy friend who deserves this freebie and can pay leases and salaries for a few months, then sell or close.
Throw buzz words like bloated workforce, debt, burden on taxpayers, Indians will be happy to giveaway AI.

THIS. Well said @dtwhyd!

If this was about Govt exiting Civil Aviation and getting the best deal for taxpayers, AI would have been sold to strategic investor like Tata-SQ lock stock and barrel. But clearly that hasnt happened and is not happening. Instead, for a decade now there is a concerted attempt to devalue the AI brand, force it into a coffin corner and then sell off its assets piecemeal to cronies!

I will be very surprised if the Tata-SQ deal thingie actually happens. I actually asked a few friends if there is anything new on this, and the report is that there is no development on this after Feb-2020. A off-hand comment from a junior minister about "Tata-SQ might be interested" does not mean the same as "Tata-SQ to bid for AI"! So not sure what the basis of this whole thread is! All indications are to the contrary.

What remains to be seen is which crony actually gets Air India - SpiceJet or Indigo. My bet is on the former! Tata-SQ are the most deserving and should get it. But given the dynamics, i just dont see that happening.

Sokes wrote:
Maybe AI should take over Singapore Airlines?

LAWD'A'MERCY! :lol:

SQ is one of the best airlines out there and one of my favorites! AI is a ratty third world carrier!

Dont even think it pal!

hohd · Mon Nov 30, 2020 3:33 pm

India is LCC paradise and even the nearer international routes are now mainly LCC. Vistara/SQ or AI cannot change that. AI actually has decent brand value for many of the routes. Tata will have its work cut out if it takes over AI. Expect it lose money for quite a few years before it can become profitable and till then Tata would need patience.. And then we also have Jet Airways 2.0, although I don't think it will take off.

Antarius · Mon Nov 30, 2020 10:48 pm

BawliBooch wrote:
Instead, for a decade now there is a concerted attempt to devalue the AI brand, force it into a coffin corner and then sell off its assets piecemeal to cronies!

If you zoom into the data that far, then sure, one can see that conclusion. But if you zoom out and look at the last 50 years, you'll see that its exactly the same across each decade. There is no master stroke plan to sneakily devalue AI. it's just a bloated, mismanaged company that exists as a "make work" entity.

I have no idea why Tata and SQ want in on this mess.

SCFlyer · Mon Nov 30, 2020 11:32 pm

I wonder if the Singapore government had internally approved SQ (through government parent Temasek) to use the SG taxpayer funded "bail out" money to bid for AI?

CaliguyNYC · Mon Nov 30, 2020 11:45 pm

avier wrote:
The biggest spoiler in the AI privatisation and sale process are the various AI employee unions. They are the ones making it hard for the govt to quit the airline. They will never adjust to the working conditions of the private sector, when they're so accustomed to the lenient and sendentary sarkari job.
To put into perspective; 6E with a fleet of 250+ planes has about 150 staff in HR+Finance. AI with about 125 planes has 1500 employees in those same two departments. This was mentioned by AI pilots union recently when salary cuts were proposed to them due to the pandemic.

AI former and current employees are more worried about the life-time benefits they get from the airline (medical aid, free passage post retirement etc).
Cost-cutting and right-sizing would almost be impossible with such a workforce. Add to that a more restricted FDTL for crew (as mandated by AI unions) vs what the rest of the industry follows.

Hence, the govt. will stay in the aviation sector through AI Regional, to give the unions some hope.

In any privatization, employee cuts and pension liability would be dealt with. It is just carved out. Even none govt business rarely transfer pension liability when sold. The problem with the AI sale is that too many powerful people do not want it. I’m sure Tatas would have no problem crafting a reasonable sale. I actually think AI+Vistara is a great outcome. Gives the needed critical mass to allow one FSC to survive in India. Indian aviation needs to move beyond a zero sum game situation where each carrier thinks it has to kill all other carriers to survive. Finally I think SQ are great partners for Tatas and AI. SIN is really not a convenient connecting point for India (other than SE Asia and OZ). So SQ has a lot of incentive to build a strong AI/UK to dominate India. EY and the ME3 just want to leach off of Indian traffic and were too myopic to really develop an indian airline

dtw2hyd · Tue Dec 01, 2020 12:09 am

CaliguyNYC wrote:
EY and the ME3 just want to leach off of Indian traffic and were too myopic to really develop an indian airline

Why do you think SQ will be different. They exhibited the same attitude towards Vistara.

Antaras · Tue Dec 01, 2020 12:15 am

If the Indians prefer the LCC, I wonder if the "hybrid" concept (Westjet, Premia and Bamboo) would work in India?

CaliguyNYC · Tue Dec 01, 2020 12:56 am

dtw2hyd wrote:
CaliguyNYC wrote:
EY and the ME3 just want to leach off of Indian traffic and were too myopic to really develop an indian airline

Why do you think SQ will be different. They exhibited the same attitude towards Vistara.

Really? I don’t feel they are SIN hub focused with Vistara. Also SQ is a super premium airline. There is room in Asia for both SQ and a less premium AI/UK. I feel like they, and Tatas, are just super conservative. Plus I do believe their long term goal has always been AI.

blooc350 · Tue Dec 01, 2020 5:55 am

Sokes wrote:
Maybe AI should take over Singapore Airlines?

Maybe when hell freezes over. On a global scale, SQ has a more powerful brand and reputation than AI. Can’t even begin to compare the two......lol

jfk777 · Tue Dec 01, 2020 9:33 am

Why would Singapore Airlines want this situation ? Fine invest in an airline in India, why Air India and all their legacy issues ? Air India is in the same situation Alitalia and AR are in, maybe not to the same degree but close enough.

SCFlyer · Tue Dec 01, 2020 11:20 am

dtw2hyd wrote:
CaliguyNYC wrote:
EY and the ME3 just want to leach off of Indian traffic and were too myopic to really develop an indian airline

Why do you think SQ will be different. They exhibited the same attitude towards Vistara.

The same could be argued for EY and SQ's failed investments elsewhere in Europe and Australia.

dtw2hyd · Tue Dec 01, 2020 1:06 pm

blooc350 wrote:
Maybe when hell freezes over. On a global scale, SQ has a more powerful brand and reputation than AI. Can’t even begin to compare the two......lol

Maybe you should check SQ history, it was set up with AI's help/consultation.

5o% profits of the most profitable Indian GHA (AI-SATS) go to Singapore every year, while the losses of underperforming GHA AIATSL are booked on Indian taxpayers. Perfect example of wrong way to privatize. This led to the slogan "Privatize profits and nationalize losses".

CaliguyNYC wrote:
Really? I don’t feel they are SIN hub focused with Vistara. Also SQ is a super premium airline. There is room in Asia for both SQ and a less premium AI/UK. I feel like they, and Tatas, are just super conservative. Plus I do believe their long term goal has always been AI.

5/20 was the initial reason UK didn't become SIN regional feeder on day one like 9W. They were struggling to quality for 0/20 because TATA/SQ didn't invest enough to get 20 A320s quickly. By the time all these regulation hurdles cleared COVID showed up. Superconservative is a nice way of saying cash strapped/debt ridden enterprise.

SQ or EY or any other airline, they want a Indian feeder, they don't want a thriving Indian carrier at the cost of their own.

SCFlyer wrote:
dtw2hyd wrote:
CaliguyNYC wrote:
EY and the ME3 just want to leach off of Indian traffic and were too myopic to really develop an indian airline

Why do you think SQ will be different. They exhibited the same attitude towards Vistara.

The same could be argued for EY and SQ's failed investments elsewhere in Europe and Australia.

That was the point I am trying to make. Every country want to promote/save their own airlines. Indians want to kill their own airlines so foreigners will come and setup subsidized FSCs. Utopian mindset.

Just to clarify my earlier statement, Indians definitely want full service, but at/below LCC fares. They want somebody to subsidize the gap. Whether it is KF through unorthodox methods or some foreign sovereign carriers like ME3 or SQ, doesn't matter to them.

CaliguyNYC · Tue Dec 01, 2020 2:16 pm

dtw2hyd wrote:
blooc350 wrote:

CaliguyNYC wrote:
Really? I don’t feel they are SIN hub focused with Vistara. Also SQ is a super premium airline. There is room in Asia for both SQ and a less premium AI/UK. I feel like they, and Tatas, are just super conservative. Plus I do believe their long term goal has always been AI.

5/20 was the initial reason UK didn't become SIN regional feeder on day one like 9W. They were struggling to quality for 0/20 because TATA/SQ didn't invest enough to get 20 A320s quickly. By the time all these regulation hurdles cleared COVID showed up. Superconservative is a nice way of saying cash strapped/debt ridden enterprise.

SQ or EY or any other airline, they want a Indian feeder, they don't want a thriving Indian carrier at the cost of their own.

SCFlyer wrote:

So all sounds good written down, but you have to ask to what end can SQ control Indian traffic. I think SQ is well aware very few people will fly DEL-SIN-SFO or DEL-SIN-LHR/CDG?JFK/YYZ same goes for all of India except the South India to maybe the west coast of NA. Nonstops India/US are also here to stay. OZ is one market where SQ works. SEA is easily flown with narrow bodies so nonstops will exist. SQ has also seen all the traffic that the ME3 have taken. Sure there was a time when people (including my family) did hellish 2 stop connections through SIN, but those days are over. That is what they are after with a strong Indian airline. Look at US/EU JVs they offer a good mix of nonstop and one stop options. I many times fly one way nonstop and then fly back with a stop (so I get a late EU departure). Same would go with SQ/AI/UK.

migair54 · Tue Dec 01, 2020 3:32 pm

dtw2hyd wrote:
migair54 wrote:
...
They have Vistara, they are just building a name and a reputation, why do they need Air India??
42 planes and 37 more in order, including B787.

So what is stopping Vistara to grow? IMHO, Money.
Close to five years, couldn't build a domestic hub, present network is courtesy Jet's demise. Can Vistara build a BLR hub. 100% certain it cannot.

If TATA Temasek cannot fund Vistara, how will they fund AI.

Government is giving away AI for free. Bulk of (GHA) workforce, all the debt and AI(Regional) will be with taxpayers.

Fleet
18 paid off 777s, no monthly payments
39 A319s/A321s are paid off. no monthly payments

21 788s (including 12 low quality early builds) are on SLB. Early builds are not a burden.
6 788s are on some lease.

3x319s on short term lease
10 x new A320CEO on dry lease/PBTH
27x LEAP A320NEOs on dry lease/PBTH (Courtesy AI Engineering, they didn't pick GTF)

Workforce
Last permanent hire was in 2012.
Most of the high salaried legacy employees retired.
AIATSL(GHA) is not part of the sale. I have to verify.
All the debt is moved to SPV and/or AI(R). Retirement benefits stay with taxpayers.

Present government is looking for a worthy friend who deserves this freebie and can pay leases and salaries for a few months, then sell or close.
Throw buzz words like bloated workforce, debt, burden on taxpayers, Indians will be happy to giveaway AI.

The situation is too good to be true, how is it possible they are not making any money?? not even break even??

Right now as someone already mentioned SIA is not in the situation to get into financially complicated businesses because they just got a huge bail from the government, so I highly doubt anyone will even think about Air India right now, actually I don't see any airline in the world trying anything like this, most airlines are in survival mode.

What about Indigo?? they could use some of the new planes, get ride of the old ones, routes, slots, traffic rights and shrink Air India to mostly long haul widebody and keep Indigo with Short haul LCC traffic and most domestic traffic except trunk routes, with WB planes, with decent yields connecting traffic and cargo.
The airline will stay Indian, Indigo is expanding rapidly so they can transfer assets and staff, avoiding layoff.

dtw2hyd · Tue Dec 01, 2020 3:42 pm

CaliguyNYC wrote:
So all sounds good written down, but you have to ask to what end can SQ control Indian traffic..

Shutting down any and all Indian international carriers will be the first step, and pick pieces by building feeder network to their hubs.

What is Indian aviation ranking in the world by passenger numbers today? In top 5. 80+ years into commercial aviation, it is a shame India don't have one successful intentional carrier. Still discussing which country will set up the next utopian airline.

Breathe · Tue Dec 01, 2020 3:50 pm

migair54 wrote:
The situation is too good to be true, how is it possible they are not making any money?? not even break even??

One word: politicians

dtw2hyd · Tue Dec 01, 2020 5:28 pm

migair54 wrote:
The situation is too good to be true, how is it possible they are not making any money?? not even break even??

There is another thread giving all details of fleet and workforce. Buyer won't get any debt.

Don't expect anyone to scoop up the airline with literally no liabilities, this is invitation only club. Only deserving friends can bid.

blooc350 · Tue Dec 01, 2020 9:16 pm

dtw2hyd wrote:
blooc350 wrote:
Maybe when hell freezes over. On a global scale, SQ has a more powerful brand and reputation than AI. Can’t even begin to compare the two......lol

Maybe you should check SQ history, it was set up with AI's help/consultation.

I’m not talking about the “past”. I’m referring to the two airlines current global position in 2020.

Antarius · Tue Dec 01, 2020 9:25 pm

blooc350 wrote:
[quote="dtw2hyd”] Maybe you should check SQ history, it was set up with AI's help/consultation.[/quote]
Please provide me with the source, would be happy to read up on that [/quote][/quote]

Check out the book 'Empires of the sky' by Anthony Sampson.

dtw2hyd · Tue Dec 01, 2020 10:20 pm

blooc350 wrote:
dtw2hyd wrote:
blooc350 wrote:
Maybe when hell freezes over. On a global scale, SQ has a more powerful brand and reputation than AI. Can’t even begin to compare the two......lol

Maybe you should check SQ history, it was set up with AI's help/consultation.

I’m not talking about the “past”. I’m referring to the two airlines current global position in 2020.

Present day brand image is directly proportional to PR spending, nothing to do with health or performance of the airline.

Iconic FAs are not going help if pilots don't know when to and which engine to shutdown in case of engine failure, or when to evacuate in case of fire.

Yes, you cannot compare a single airport airline with airline that operates(not outsourced) 60 airports in home country.

BawliBooch · Wed Dec 02, 2020 5:13 am

dtw2hyd wrote:

5o% profits of the most profitable Indian GHA (AI-SATS) go to Singapore every year, while the losses of underperforming GHA AIATSL are booked on Indian taxpayers. Perfect example of wrong way to privatize. This led to the slogan "Privatize profits and nationalize losses".
:
:
:
Just to clarify my earlier statement, Indians definitely want full service, but at/below LCC fares. They want somebody to subsidize the gap. Whether it is KF through unorthodox methods or some foreign sovereign carriers like ME3 or SQ, doesn't matter to them.

THIS.

BTW: Anyone have information on how Air India financed the purchase of 2 777-300ER's for use as dedicated VVIP transports? Last i saw they were looking for expensive WC loans to pay Boeing for these aircraft and the retrofit. Has the govt repaid the airline for this expense? They havent even paid Air India for the emergency flights conducted during the last Chennai Floods or those Military Charter flights with 3xxx numbers for years! Instead of releasing the money they owe the airline, Govt's across the years have preferred to release money in small tranches calling it aid and make it look like they are doing a favor each time!

I for one hope that the Govt finally divests Air India. The Govt will no longer have a "ghar ki murgi" they can depend on for their social service/national interest flights for free! The Govt will thenceforth have to pay market rates. Which is a good thing in the end!

If Tata/SQ consortium does get Air India, and i REALLY hope they do, they should make sure the bills owed to the airline are fully paid up. Including the WC loans taken for the VVIP 77W's.

dtw2hyd · Wed Dec 02, 2020 11:39 am

BawliBooch wrote:
BTW: Anyone have information on how Air India financed the purchase of 2 777-300ER's for use as dedicated VVIP transports?

$400 Million loan from Abu Dhabi for the planes($200M each) and $180 Million loan from NSSF (National Small Savings Funds) for the refit.

BawliBooch wrote:
If Tata/SQ consortium does get Air India, and i REALLY hope they do, they should make sure the bills owed to the airline are fully paid up. Including the WC loans taken for the VVIP 77W's.

Don't underestimate the ability of Indian Civil Servants. These two will be with state owned AI(Regional), not part of the sale.

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