The year 2010 was each a year that saw a silver lining in addition to dark clouds within the aviation industry. Except Air India, which continues to face difficult times, other airlines started a steady march on the recovery right after the slowdown many years of 2008 and 2009.
What ought to be a huge relief on the Indian aviation authorities could be the fact how the US did not downgrade the Indian safety regulator, Directorate General of Civil Aviation, to sub-Saharan Africa levels. The final nod for the second airport in Mumbai right after a delay of three many years and the opening of new T3 terminal in New Delhi were a large plus for travellers.
But just as very good news was flowing in thick and fast right after 2 many years of gloom, the worst fears of aviation came real with India witnessing 1 of its worst ever air crashes on May possibly 22. Air India Express's flight 812 crashed at Mangalore airport, killing 158 from the 166 men and women on board.
The crash, coming amid fears which started within the troubled 2008-09 that some crises-ridden airlines may perhaps not have even adequate income to maintain their fleet airworthy, led to intense financial surveillance from the carriers. The scrutiny once more revealed that except Air India, most other critical airlines' fortunes were showing changes—thanks to a double-digit growth in domestic air travel.
This is borne by the fact that 2009 saw 445.1 lakh men and women flying inside India. But the January-November 2010 period itself saw that figure getting left behind with 468 lakh men and women flying in India. Considering about 50 lakh men and women fly in December, 2010 may perhaps witness a 16% rise more than 2009. "This growth is likely to be even more pronounced, next year, from the economy searching up. So the large upside for the year 2011 is that most airlines, barring —of course—Air India, could come to be profitable again. But simultaneously the large worry is rising oil prices with crude touching $90 a barrel. This may perhaps force fare hikes and affect air travel growth," mentioned a senior ministry official.
That worry apart, financially airlines are searching to fly to the black. Financially-strained Kingfisher got approval to restructure its mounting debts. The country's second largest low-cost carrier (LCC), SpiceJet, was finally bought more than by a south-based group with deep pockets, signalling the end of income crunch, and it, subsequently, also began overseas flights. Similarly, the largest LCC, IndiGo, is all set to launch an IPO and start international flights next year. In fact, the aviation market came a full circle this year. The sacking of 450-odd Jet Airways cabin crew staffers had signalled the beginning from the global meltdown-induced crisis for Indian airlines in 2008. This year, Jet contacted all its sacked staffers and about half of them have joined back within the past few months.
Showing posts with label Indian airline. Show all posts
Showing posts with label Indian airline. Show all posts
Wednesday, December 22, 2010
Tuesday, October 5, 2010
IndiGo’s big IPO may lead to re-rating of airline stocks
Mumbai: India’s leading low-fare carrier IndiGo, run by InterGlobe Aviation Pvt. Ltd, is planning to raise $500 million (Rs2,215 crore) through its initial public offering (IPO), the highest ever for an Indian airline, and this may lead to a re-rating of airline stocks, said sector analysts.
Shares of Jet Airways (India) Ltd, Kingfisher Airlines Ltd and SpiceJet Ltd are traded on Indian exchanges.
The IPO is scheduled for the last quarter of the current fiscal ending March 2011, said two persons close to the development. One of them is an airline executive and the other is an investment banker.
IndiGo has hired five investment bankers, including JM Financial Ltd, Credit Suisse Group AG, Citigroup Inc., UBS AG and Morgan Stanley for the proposed IPO.
Ahead of the IPO, IndiGo is looking at an equity placement that could result in dilution of promoters’ stake of as much as 25%. Last week, the company conducted investor roadshows in Hong Kong and Singapore for the equity placement.
“The exact details of the proposed IPO are yet to be finalized but IndiGo is planning to raise 10 times its earnings,” said one of the persons mentioned earlier. He added that the low-fare airline, which held a 16.4% market share in August through 188 flights across 22 destinations, will raise more than the Rs1,899 crore that rival and full-service airline operator Jet Airways raised five years ago.
Aditya Ghosh, president of IndiGo, did not return calls made to his mobile phone nor did he reply to text messages.
“The IPO is expected to leverage the success story of IndiGo,” said Kapil Kaul, India chief of Sydney-based aviation consultancy Centre for Asia Pacific Aviation, adding that the airline’s valuation would set the benchmark for industry stocks.
“This could be significantly higher than low-fare airline stock and even higher than full-service carriers such as Jet Airways,” he added.
A successful and large IPO by IndiGo could put pressure on other stocks of airline companies such as Jet Airways and Kingfisher Airlines that are also competing to raise funds from the market.
On Monday, airline stocks took a beating, with all three listed airlines losing value even as the Bombay Stock Exchange’s benchmark index, the Sensex, rose 0.15% to close at 20,475.73 points.
SpiceJet slipped 3.25% to close at `74.40, Jet Airways—India’s largest carrier by traffic—fell 1.26% to `806.15, and Kingfisher fell 1.75% to `73.05.
Since January, Jet Airways has risen 45.74%, SpiceJet 31.1% and Kingfisher 15.59%.
Read more: http://www.livemint.com/2010/10/04234454/IndiGo8217s-big-IPO-may-lea.html
Shares of Jet Airways (India) Ltd, Kingfisher Airlines Ltd and SpiceJet Ltd are traded on Indian exchanges.
The IPO is scheduled for the last quarter of the current fiscal ending March 2011, said two persons close to the development. One of them is an airline executive and the other is an investment banker.
IndiGo has hired five investment bankers, including JM Financial Ltd, Credit Suisse Group AG, Citigroup Inc., UBS AG and Morgan Stanley for the proposed IPO.
Ahead of the IPO, IndiGo is looking at an equity placement that could result in dilution of promoters’ stake of as much as 25%. Last week, the company conducted investor roadshows in Hong Kong and Singapore for the equity placement.
“The exact details of the proposed IPO are yet to be finalized but IndiGo is planning to raise 10 times its earnings,” said one of the persons mentioned earlier. He added that the low-fare airline, which held a 16.4% market share in August through 188 flights across 22 destinations, will raise more than the Rs1,899 crore that rival and full-service airline operator Jet Airways raised five years ago.
Aditya Ghosh, president of IndiGo, did not return calls made to his mobile phone nor did he reply to text messages.
“The IPO is expected to leverage the success story of IndiGo,” said Kapil Kaul, India chief of Sydney-based aviation consultancy Centre for Asia Pacific Aviation, adding that the airline’s valuation would set the benchmark for industry stocks.
“This could be significantly higher than low-fare airline stock and even higher than full-service carriers such as Jet Airways,” he added.
A successful and large IPO by IndiGo could put pressure on other stocks of airline companies such as Jet Airways and Kingfisher Airlines that are also competing to raise funds from the market.
On Monday, airline stocks took a beating, with all three listed airlines losing value even as the Bombay Stock Exchange’s benchmark index, the Sensex, rose 0.15% to close at 20,475.73 points.
SpiceJet slipped 3.25% to close at `74.40, Jet Airways—India’s largest carrier by traffic—fell 1.26% to `806.15, and Kingfisher fell 1.75% to `73.05.
Since January, Jet Airways has risen 45.74%, SpiceJet 31.1% and Kingfisher 15.59%.
Read more: http://www.livemint.com/2010/10/04234454/IndiGo8217s-big-IPO-may-lea.html
Wednesday, September 15, 2010
Air India to seek Cabinet nod for strategic business units
In its bid to speed up a turnaround, Air India would seek the approval of the Union Cabinet to operationalise its six Strategic Business Units (SBUs) when the government considers an equity infusion of Rs 1,200 crore into the ailing carrier.
The Civil Aviation Ministry, in a note to the Cabinet, is likely to seek approval for operationalising the SBUs relating to low cost airline, cargo, Maintenance, Repair and Overhaul (MRO), grounding handling, engineering and related business so as to enhance the airline's revenues.
The Cabinet Committee on Economic Affairs may take up the issue later this month when it also considers infusion of Rs 1,200 crore as equity, sources said. The government had in February infused Rs 800 crore as equity into the carrier.
The government is looking at equity induction in a phased manner based on the performance parameters of Air India, they said.
In 2007, when the erstwhile Air India and Indian Airlines were merged into the National Aviation Company of India Ltd (NACIL), it was decided that the six SBUs would act as separate profit centres.
The NACIL, which wants to review all agreements with its 14 unions, is also likely to seek government's nod to start re-negotiations with the unions, two of which were de-recognised following a flash strike three days after the May 22 plane crash in Mangalore.
At present, there are 10 wage agreements signed between these unions and the management. The employees' unions say that the airline wage bill was 18 per cent of the total turnover as against a global average of about 22 per cent of total turnover for most international carriers.
Source: Economic Times
The Civil Aviation Ministry, in a note to the Cabinet, is likely to seek approval for operationalising the SBUs relating to low cost airline, cargo, Maintenance, Repair and Overhaul (MRO), grounding handling, engineering and related business so as to enhance the airline's revenues.
The Cabinet Committee on Economic Affairs may take up the issue later this month when it also considers infusion of Rs 1,200 crore as equity, sources said. The government had in February infused Rs 800 crore as equity into the carrier.
The government is looking at equity induction in a phased manner based on the performance parameters of Air India, they said.
In 2007, when the erstwhile Air India and Indian Airlines were merged into the National Aviation Company of India Ltd (NACIL), it was decided that the six SBUs would act as separate profit centres.
The NACIL, which wants to review all agreements with its 14 unions, is also likely to seek government's nod to start re-negotiations with the unions, two of which were de-recognised following a flash strike three days after the May 22 plane crash in Mangalore.
At present, there are 10 wage agreements signed between these unions and the management. The employees' unions say that the airline wage bill was 18 per cent of the total turnover as against a global average of about 22 per cent of total turnover for most international carriers.
Source: Economic Times
Wednesday, September 8, 2010
Bank of India loans to airlines under Rs 40 billion
State-run Bank of India's loan exposure to air carriers does not exceed Rs 40 billion, Executive Director M. Narendra told reporters on Wednesday.
The bank's FY11 credit growth so far was 21 percent, Narendra said on the sidelines of a FICCI conference.
Last week, the central bank had announced that it would allow banks to restructure their loan to the cash-strapped aviaton sector.
The Indian airline industry has been facing mounting debts due to the global downturn. However, the industry of late has been showing some signs of recovery.
State Bank of India Chairman OP Bhatt had also said that the bank's exposure to the aviation sector stood at Rs 3,000 - 4,000 crore and added that SBI was in talks with the Reserve Bank of India (RBI) to restructure its loans to airline companies.
(with inputs from agencies)
Source: http://www.moneycontrol.com/news/business/bankindia-loans-to-airlines-under-rs-40-bn_483491.html
The bank's FY11 credit growth so far was 21 percent, Narendra said on the sidelines of a FICCI conference.
Last week, the central bank had announced that it would allow banks to restructure their loan to the cash-strapped aviaton sector.
The Indian airline industry has been facing mounting debts due to the global downturn. However, the industry of late has been showing some signs of recovery.
State Bank of India Chairman OP Bhatt had also said that the bank's exposure to the aviation sector stood at Rs 3,000 - 4,000 crore and added that SBI was in talks with the Reserve Bank of India (RBI) to restructure its loans to airline companies.
(with inputs from agencies)
Source: http://www.moneycontrol.com/news/business/bankindia-loans-to-airlines-under-rs-40-bn_483491.html
Subscribe to:
Posts (Atom)