India Insight

The comma that let a Malaysian airline sneak in

(Any opinions expressed here are those of the author and not necessarily of Thomson Reuters)

AirAsia CEO Tony Fernandes has big plans for his budget airline. This week, the government approved the Malaysian carrier’s proposal to set up a new airline in India with the Tata group – and it happened thanks to a comma.

The Economic Times reported on Thursday, that the punctuation mark saved the joint venture, with India’s foreign investment regulator interpreting a 2012 ministry press note to mean foreign investments were also allowed for newly created airlines.

“The government of India has reviewed the position in this regard and decided to permit foreign airlines also to invest, in the capital of Indian companies, operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital,” the Department of Industrial Policy and Promotion said in its press note on Sept. 20 last year.

Had there been no comma after “companies”, things would have been clear. It would have meant foreign airlines could only invest in existing carriers. The newspaper reports that the ambiguous comma allowed finance ministry officials to argue in favour of the 800 million rupee ($15 million) joint venture, even though officials in the aviation ministry questioned it.

India, Pakistan find common cause in shoddy national carriers

The two are nuclear-armed, arch rivals often threatening the stability of South Asia and with little common ground, but the sorry state of their national carriers puts India and Pakistan on the same pedestal.

India may be an emerging superpower and Pakistan seemingly always on the brink of a disaster, but the national carriers of the arch-rivals face similar woes.

Both carriers — Air India (AI) and Pakistan International Airlines (PIA) –- are struggling to stay afloat, battered by financial woes and mismanagement.

India’s indignation over (un)diplomatic conventions

Forget WikiLeaks, according to India’s Foreign Minister the greatest threat to Indo-U.S. relations are the hands of airport security guards on New Delhi’s diplomatic elite.
A Transportation Security Agency (TSA) worker runs her hands over the head of a traveler during a patdown search at Denver International Airport, November 24, 2010.  REUTERS/Rick Wilking
On Dec 4, Indian Ambassador to the U.S. Meera Shankar was pulled from the interminable airport security queue at Jackson-Evers International Airport in Mississippi and subjected to a full body pat-down by security officials, despite reportedly stressing her diplomatic credentials.

India’s three biggest English newspapers gave the story front-page treatment on Friday, jostling for column inches alongside the continued investigations into a $39 billion telecoms scam and India’s crucial role in the ongoing climate change talks in Cancun.

The U.S. Department of Homeland Security’s view, that the incident was “appropriate under the circumstances“, fuelled a sense of injustice in New Delhi.

The Jet strike: Where does the buck stop?

The distraught foreign national and her wheelchair-bound mother on TV is a compelling argument against the Jet Airways pilots’ strike which has dragged on for four days.

The stand-off between the pilots and the airline management over the sacking of four pilots has forced the airline to cancel hundreds of flights, affecting at least 14,000 passengers since Tuesday.

The public inconvenience caused by such strikes is so pressing that the cause of the strike almost always seems petty.

India’s unfriendly skies

- Saritha Rai writes for the GlobalPost, where this article first appeared. -Not long ago, passengers of India’s airlines were spoiled with choices. One promised to treat them like a maharajah. Its passengers were greeted curbside by friendly staff who eagerly took their bags. Once aboard, glamorous female flight attendants waited on the passengers.Another offered meal choices from a list so long that it ran off the page, even on flights that lasted less than two hours. A third had fares so low that thousands of train passengers found it cheaper and faster to fly.”I always felt like royalty when I traveled, it was all so unreal and fantastic,” said Janaki Murali, a frequent flyer who works with one of India’s largest outsourcing firms based in Bangalore.Alas, it was also too good to last.Last week, a grouping of 10 private carriers –  including popular upstarts Kingfisher Airlines and Jet Airways –  threatened to stop operations for a day on Aug. 18 to draw attention to their sorry financial plight. A strike, they reasoned, would be a dramatic way to get the attention of the government.And with reason. Private airlines have been a key part of India’s economic boom: they ferry more than half of the country’s passengers.But the carriers are hurting, due to a combination of slower economic growth and government policies. State taxes make jet fuel 60 percent more expensive, one of the highest tax structures in the world. (The government uses the funds to subsidize the cost of others fuels such as kerosene and diesel for poorer Indians.)Private carriers have long lobbied the government to reduce these aviation fuel taxes, as well as high airport charges, so far to no avail.Vijay Mallya, the flamboyant owner of Kingfisher Airlines — which is named after Mallya’s beer brand — said India’s airlines were being “taxed to death.”For now, the crisis has been averted. A public outcry and a tough-talking government forced the private airlines to back off from their strike plan. The Federation of Indian Airlines (FIA) said that the boycott was canceled “in view of the agitated public sentiment” and the government’s call for a dialogue.But some of the private airlines’ woes have been their own doing. During the aviation boom of the last few years, private airlines have proliferated.Many airlines, including Kingfisher and Jet Airways, have built up excess capacities, even as cut-throat competition and falling demand for air travel have eaten away their profits. The FIA said India’s airlines lost $2 billion during the last financial year.But even as private airlines demanded the government ease some of their financial burden, Delhi is considering handing a $3 billion bailout package to the national carrier, Air India.The bloated state-owned airline is a loss-maker crumpling under its own debt. Air India has 147 aircraft but about 47,000 employees – making it the most profligate employee to aircraft ratio in the world.Meanwhile, private airlines are also pushing the government to ease the current rules that ban foreign carriers from buying a stake in domestic airlines.For many, foreign investment appears the only hope for raising funds, a challenge at a time when the biggest global airlines are themselves cash-strapped.Clearly, the days of big orders for planes, new routes and lavish marketing budgets are over. Right now, India’s airlines are just fighting for survival.For passengers like Janaki Murali, who had quickly gotten used to the premium service and an abundance of flight choices, that is a hard landing indeed.More from Global Post:The Ugly IndianThe Mormons in IndiaCan you outsource God?

Uneasy numbers stacked against Air India


State-run Air India, which enjoyed a monopoly in the country till the deregulation of the aviation sector in 1991, is besieged by ballooning debt and a litany of woes, pushing it to the brink of collapse.

Unless, of course, the central government steps in to bail out the national flag carrier.

Air India is now seeking a 39.81 billion rupees package from the state, though the airline has been asked to come out with a plan of action to make its existence viable.

Tears, threats, triumph in Jet Airways layoff drama

jet.jpgI was on a Jet Airways flight from Delhi to Mumbai on Wednesday, the day the airline said it may lay off a further 1,100 employees in addition to the 800 it had retrenched.

Outside the Delhi airport, TV news channel vans had lined up; inside, Jet staff at the counter tried not to meet the sympathetic eyes of passengers. Aboard the aircraft, which had telltale empty seats, newspapers folded into seat pockets had headlines of the layoffs.

I wondered if any of the efficient stewards and stewardesses had been tempted to rip off the covers, or if they were just relieved they were not on probation.

Travel Agents protest with sweets and smile

rtr1sgpx.jpgTaking a cue from a popular 2006 Bollywood film, where the hero follows the path of non-violence to protest against injustice,  hundreds of travel agents in India sent sweets to airline offices on Monday to protest against a cut in their commission.

Come October, and most airlines in India will stop paying commissions to travel agents, citing rising operational costs.

This will effectively seal the fate of hundreds of agents who will have to close shop for good.

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