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Dear Valued Readers,

As part of our efforts to overhaul the indianaerodef platform, we will continue to capture latest news and views about the Indian A&D industry but at a new address from now on – http://news.indianaerodef.com

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Thanks & Cheers

IndianAeroDef Team

IndianAeroDef News…………….

Dear Valued Readers,

Brief: There will be a delay in posts for a few days because we are coming up with something better;) (hopefully)

Detail:

We have been working on overhauling the entire indianaerodef platform to bring in a host of features that we believe would be of great interest to you. In a short while we would be launching services like Jobs Center, Independent news and analysis services, Advisory, Government Documentary, Online forums, blogs etc all catering to the Indian A&D industry. Also we will continue to capture the latest news and views about the Indian A&D industry whenever and wherever it happens daily.

Apologies for the delay.

Cheers

IndianAeroDef Team

Cabinet gives green signal to AI-IA merger

The Union Cabinet has given the final nod on the mega-merger of the two national carriers, Air India and Indian. The merger would turn the new entity into a large airline, with a combined fleet of about 120 aircraft and a staff strength of 30,000, capable of taking global competition head-on. The public sector character of the merged airline would continue.

By 2010-11, when all the new aircraft ordered by the two carriers are inducted into the fleet, the merged entity’s employee-aircraft ratio would come down to about 200:1, comparable with any major global airline. While Air India has ordered 68 Boeing planes, Indian has finalised the acquisition of 43 Airbus aircraft.

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Public sector competition coming for low-cost airlines

Private sector low-cost domestic and international airlines could soon face competition from the newly merged Air India and Indian.

The Government is considering a proposal to create a low-cost airline arm of the proposed merged entity to operate regular flights not only within the country but also to international destinations.

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Private air travel becomes dearer

Budget 2007 has hit private users of helicopters and airplanes with the Finance Minister, Mr P. Chidambaram, announcing three per cent import duty on all purchases of private air travel, plus countervailing duty (CVD) and additional Customs duty.

Clients include corporates though it is unclear whether the provision will cover non-schedule operators offering private air travel services, said Mr S.J.S. Saighal, Chairman of Global Vectra Helicorp.

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No exemption on aircraft lease tax from April 1

The Government has decided not to extend the exemption on withholding tax given to airlines for lease rental payments and aircraft engine leasing to the next fiscal.

The domestic aviation industry, however, is still hopeful that it would be able to convince the Finance Minister, Mr P. Chidambaram, on the need to continue with the exemption.

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Cut in ATF prices dashes dreams of aviation firms

Major airline operators are not happy with the finance minister’s announcement to cut sales tax on aviation turbine fuel for only smaller aircraft with minimum takeoff mass of less than 40,000 kilograms operated by the scheduled airlines. The airline industry had earlier hoped that aviation fuel altogether should be given a declared goods status, which would attract a uniform 4% sales tax across India.

Major beneficiaries of the tax cut would be Air Sahara and Paramount Airways. Air Sahara has seven bombardier CRJ aircraft which fits the criteria, while Paramount Airways fleet includes one Brazilian Embraer aircraft. Also, corporate houses like Reliance and the Singhanias who own business jets would also be benefited from the announcement.

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`Wage revision of airline staff`

Taking the merger process of state-owned airlines a step ahead, Union Civil Aviation Praful Patel has made a successful pitch with one of the largest employees union of Indian Airlines by assuring them that the Government would implement the long standing demand of wage revision, pending since 1997.

At a meeting held in Mumbai today, Patel reiterated that the pending wage revision of Indian Airlines employees would be resolved prior to the merger.

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Tatas plan defence venture with Israeli firm

The Tata group is in talks with Israel`s Rafael Armament Development Authority to form a joint venture to compete for the supply of defence systems to the Indian Army

The two sides raised the issue during the sixth biennial Aero India exhibition held in Bangalore recently, said reports in the Israeli media.

A Tata group spokesperson told Business Standard that the group was in talks with several companies after the opening up of the defence sector. “We will announce any decision in this sector at an appropriate time,” he said.

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Ignored by FM, aviation pins hopes on tourism

Disappointed at being left out in the Union Budget, the domestic aviation industry is pinning hopes on deriving benefits from growth in tourism in the country.

Vasudevan Thulasidas, chairman, Federation of Indian Airlines (FIA), said the thrust on investment in the tourism and tourism infrastructure sectors would fetch good dividends to the aviation industry.

“The Budget has allocated Rs 520 crore for development of tourism infrastructure. This, coupled with the tax holiday for two-, three-, and four-star hotels, will drive growth in the tourism industry. Aviation and airlines will benefit from growth in tourism,” the chairman and managing director of Air-India said.

The captains of the industry is grumbling that the aviation industry has failed to catch the attention of the Finance Minister and the Budget. Echoing the general mood, G R Gopinath, managing director, Air Deccan, said,”The initiatives in the tourism sector are a welcome step. But the government could have subsidised the jet fuel for aircraft such as Airbus 320 and Boeing 737 which are connecting more regional locations, thus more passengers.”

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