Archive for the ‘Government Policies’ Category

Cabinet gives green signal to AI-IA merger

March 2, 2007

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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Private air travel becomes dearer

March 2, 2007

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

March 2, 2007

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

March 2, 2007

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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Decks cleared for Air India-Indian merger

February 25, 2007

With the empowered group of ministers (eGOM) approving the merger of Air India and Indian on Wednesday, the stage is set for creation of a mega airline company, ready to take on global giants like Singapore Airline and Emirates. With a fleet size of 112 aircraft and an extensive domestic as well as international network, the merged entity is also expected to step up competition for leading Indian carriers like Jet Airways.

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HAL, Nalco among PSUs cleared for Navratna list

February 21, 2007

A high-level government panel has admitted seven more public sector firms, including Hindustan Aeronautics Ltd (HAL) and National Aluminium Company (Nalco), into the coveted Navratna club, taking its membership to 16.

While nine companies were in the fray, the Apex Committee headed by Cabinet Secretary B K Chaturvedi cleared seven names last week, official sources told PTI. Now, only the respective ministers have to sign the necessary documents, they said.

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FIIs may be out of aviation FDI cap

February 21, 2007

In a move that paves the way for greater foreign investment in domestic airline companies, RBI has said foreign institutional investors (FIIs) can pick up stake in these airlines beyond the sectoral FDI cap of 49% through secondary market purchases. The apex bank’s view is that the sectoral cap of 49% is not stipulated as a composite limit. While FII investment is distinct from FDI in the foreign investment policy, secondary market purchase was a grey area that has now become clear.

RBI is of the opinion that investment through GDRs should be within the overall FDI limit. Secondary market purchases by NRIs and erstwhile overseas corporate bodies (OCBs) will also be within the 49% FDI limit. Such investments will be on a par with secondary market purchases by foreign banks, companies and nationals.

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Pvt cos may get nod to develop airports

February 18, 2007

In an attempt to attract private investment and to overcome problems of land acquisition, the Centre may allow private companies to develop airports with no equity participation from the government.

The civil aviation ministry has suggested that private entrepreneurs, who possess the required amount of land, be allowed to build greenfield airports in the country. Asking the finance ministry and the Planning Commission to ‘revisit’ the policy on airports, civil aviation minister Praful Patel said land acquisition for special economic zones was facing major hurdles at present.

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Private firms now eye non-metro airports revamp

February 15, 2007

With the civil aviation ministry expected to invite bids for modernisation of 35 non-metro airports in the country soon, a host of private companies, including Larsen & Toubro (L&T) Pratibha Industries, GMR Infrastructure and GVK Industries, have expressed their keenness to enter the fray. GMR Infrastructure and GVK Industries had earlier bagged the mandate to modernise the metro airports of Delhi and Mumbai, respectively.

Says an L&T official, “We are certain to take up the development projects at the non-metro airports in the near future. We will invest in developing primary infrastructure like the runways, parking bays, cargo terminals and other technical facilities.” L&T had recently won the non-aeronautical, Rs 5,400 crore contract for Delhi airport modernisation against international competitive bidding.

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Navratna status for HAL & BEL

February 15, 2007

Two bluechip defence public sector undertakings—Bangalore based Hindustan Aeronautics Limited (HAL) and radar giant Bharat Electronics Limited (BEL)—are being given the coveted nav ratnas status.

This was announced here today by K P Singh, secretary defence production, who said that the Cabinet Committee on Economic Affairs (CCEA) had already cleared the proposal.

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