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

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

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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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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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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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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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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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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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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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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The UPA government increased its defence budget by 11.6 per cent largely because the previous year’s allocation of Rs 89,000 crore could not be spent in time.

Defence spending went up to Rs 96,000 crore from the previous year’s budgeted allocation of Rs 89,000 crore. However, documents reveal that what was actually spent was just Rs 86,000 crore. Therefore, in real terms, the increase in the current budget is 11.6 per cent or Rs 10,000 crore.
A sum of Rs 41,000 crore has been allocated for capital expenditure against last year’s budgeted figure of Rs 37,500 crore. This indicates that the Ministry of Defence had spent some, not all, of the capital outlay, as the revised estimates put the expenditure last year at Rs 34,500 crore.

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Jet Airways had last year submitted a bank guarantee of Rs 500 crore for a share-purchase agreement (SPA) to acquire Air Sahara, but the deal went sour. The companies had earlier approached an Arbitration Tribunal (AT) in London to resolve the matter related to the failed takeover deal, but the issue of bank guarantee was not included.

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The Air Corporation Employees Union (ACEU), representing 13,000 employees across the country, has served a strike notice to the Indian management and the Chief Labour Commissioner to this effect, ACEU General Secretary Arun Kumar said.

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“The airline has managed to bag a 25 per cent reduction in the insurance pay out while there has been an increase in the cover being provided. The cover will be to the tune of about Rs 1,800 crore,” an official said without divulging exact details of what the airline payout would be.

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The just-concluded TROPEX (Theatre-level Readiness Operational Exercises) 2007, the navy’s largest annual exercise, commenced on Jan 30 and saw the participation of all the force’s major combatants, as also significant elements from the Indian Army, the Indian Air Force, and the Indian Coast Guard.

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For one, the two companies are highlighting new innovations in their aircraft to woo customers. Dinesh Keskar, senior vice-president of sales, Boeing, said, “We will be launching 747-Intercontinental, an aircraft which guarantees fuel efficiency. Our customers, especially Indian operators from whom we expect more orders, will be benefited.” He added that the aircraft, equipped with modern technology, can land even at airports devoid of modern infrastructure, as is the case with many airports in India. Airbus’ innovation pertains to lower training period and transition time. Aircraft from the A320 family are designed in such a way that a pilot transitioning from an A320 family aircraft to the larger A330 and A340 needs only eight working days for cross-crew qualification (CCQ) instead of the 25 working days for a full type rating training course. “The annual savings in training and from the reduced transition time can be up to $500,000 for each new Airbus aircraft to be added to the fleet,” Sanjay Kumar, a senior analyst with Airbus, said.

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Rather than announcing an across-the-board cut in passenger fares, Prasad has brought in a dynamic pricing model, offering fare cuts according to peak and off-peak seasons. According to the proposal, there will be a 3% reduction in AC first-class fares for the peak season. For the non-peak season, it will be a 6% cut. For AC 2-tier, the peak and non-peak season reduction will be of 2% and 4%, respectively. AC 3-tier (new coaches) saw the maximum cut in fares with peak and non-peak season reductions of 4% and 8%, respectively.

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Industry analysts point out that PE investments in travel portals touched Rs 180 crore in 2006 against Rs 90 crore in 2005. Meanwhile, individual investments have also doubled to Rs 300 crore from Rs 150 crore in the past one year.

“But that is not all. In the next two years, the online travel portals will invite a PE investment of Rs 200 crore. Today, the online travel market is pegged at Rs 4,000 crore and by 2008, it is estimated to be a Rs 10,000 crore market,” they said.

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For Satyam, the MoU will enable it to deepen its presence in the domain while Northrop will benefit from the Hyderabad-based company’s strength in providing engineering, development and consulting support as an offshoring partner.

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Others in the fray included DFS Group, the Nuance Group AG-Shoppers’ Stop joint venture, the Alpha Airports-Future Group consortium and the Dufry-Interglobe combine. Last month, the Alpha Airports-Future Group joint venture was awarded the duty free contract for the Delhi International airport for Rs 500 crore.

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Talking to visiting reporters here after the launch of Paramount’s fourth flight in the Chennai-Madurai sector last evening, company’s Managing Director M Thiagarajan said the airline would try to provide maximum number of services across the cities in the Western region.

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In an interview to PTI, ISRO Chairman G Madhavan Nair acknowledged that with the booming IT sector absorbing young engineers with fat pay packets, other fields are facing the brunt.

“At one time, we used to get top-most people from various institutions. But today that situation does not exist. Even after going through all India tests, we are not able to get the numbers we want,” Nair said.

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“We are look to build upon our experience in China by developing an Aviation Cooperation Programme (ACP) in India,” said Marion Blakey, the Administrator of the US Federal Aviation Administration.

“The US-India ACP could start very shortly now that the long-awaited agreement has been approved by the India Cabinet and is ready for signature. We are counting on a long term relationship with India to grow their aviation system,” Blakey told the Royal Aeronautical Society.

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Domestic airlines may soon be able to hedge their risk of jet fuel prices. The government is considering a proposal to allow Indian carriers to hedge the price risk of aviation turbine fuel (ATF) purchased from oil marketing companies in the country.

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