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Indian Govt considering relief package for airlines

 
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iah87
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PostPosted: Sat Mar 21, 2020 2:36 am    Post subject: Indian Govt considering relief package for airlines Reply with quote

https://www.livemint.com/news/india/fm-nirmala-sitharaman-takes-stock-of-economic-fallout-of-coronavirus-outbreak-11584714434435.html


Government is considering a relief package for airlines to help tide over a squeeze in cash flows and severe business disruptions caused by Covid-19


After meeting Sitharaman, Civil Aviation Minister Hardeep Puri said the government will address the layoffs by private airlines at an appropriate time
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iah87
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PostPosted: Tue Apr 07, 2020 10:51 pm    Post subject: Reply with quote

Opinion regarding which airline is in serious trouble of going under. My view if all or most get some kind of government assistance most of them will survive, but long term future will be cloudy.

SpiceJet: Rumored to be in trouble due to precarious cash situation. However GOI will bail them out and HDFC has bought some stock of this airline. Still vulnerable, due to excess capacity in domestic sector.

GoAir: No rumors, but generally not doing well. Without assistance will be in trouble. The only airline in India now based in BOM and its BOM slots may come in useful to get additional loans or a possible merger. Merger with another airline is the best hope.

Air Asia India: This is a controversial airline. It has questionable ties to its parent, even though Indian law states that, it has to be independent and controlling entity has to be based in India Parent has some bribery cases in India and also parent being based in Malaysia is a problem as India-Malaysia ties are not that good. May not get assistance due to various issues. Tata probably wants to get out and concentrate only on Vistara. Actually no big loss to Indian aviation if it goes down.

Vistara: Caught between LCCs and full service, it has its work cut out. Should get some assistance, and with Tata's backing may escape this time.

Indigo: Strongest airline in India, but still will qualify for bailout if given to all airlines. However it may need to stop or slow down its aircraft purchases at least in the near term so that domestic travel recovers.

TruJet: Will probably get some assistance, and also relies on UDAN so will be ok. Probably the only regional airline in good shape.

Air India: Who knows. This time though AI will gets is usual share of GOI funds, but so will other airlines, and they will demand it if only AI gets it. Prospects of sale is dim for this year, may be next year will be better for a sale.
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The_Goat
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PostPosted: Wed Apr 22, 2020 12:35 pm    Post subject: Reply with quote

IMHO the likes of IndiGo and SpiceJet should not get a naya paisa.
It is thanks to their overcapacity and undercutting in the name of 'low cost' that the India civil aviation sector is in such a shoddy mess.

The GoI should also stop IndiGo from taking any new aircraft deliveries.

Once they get a level playing field in place then they can lift restrictions and the market can decide who survives in the long run.
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I don't know which is the more pampered bunch : AI's widebodies (the aunties) or Jet's widebodies (the planes).
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Caliguy
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PostPosted: Wed Apr 22, 2020 4:45 pm    Post subject: Reply with quote

The_Goat wrote:
IMHO the likes of IndiGo and SpiceJet should not get a naya paisa.
It is thanks to their overcapacity and undercutting in the name of 'low cost' that the India civil aviation sector is in such a shoddy mess.

The GoI should also stop IndiGo from taking any new aircraft deliveries.

Once they get a level playing field in place then they can lift restrictions and the market can decide who survives in the long run.


I would rather see min fares rather than do not expand. But that said, I do feel there should be some rules put in if airlines take money to stop the ridiculous predatory pricing, capacity dumping etc.
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iah87
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PostPosted: Thu Apr 23, 2020 7:54 pm    Post subject: Reply with quote

I dont know if India has any specific rules on monopolies, but they should have one in case a business controls more than 50% of the market.

And this would apply to Indigo which is currently around 45%, but at the rate they are ordering new aircraft and flooding the market they will soon cross 50% once the air traffic resumes.

One of the reasons why Jet Airways went under is because of predatory domestic sector pricing and capacity dumping in the domestic market.
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5Patel
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PostPosted: Fri Apr 24, 2020 12:28 am    Post subject: Reply with quote

iah87 wrote:
I dont know if India has any specific rules on monopolies, but they should have one in case a business controls more than 50% of the market.

And this would apply to Indigo which is currently around 45%, but at the rate they are ordering new aircraft and flooding the market they will soon cross 50% once the air traffic resumes.

One of the reasons why Jet Airways went under is because of predatory domestic sector pricing and capacity dumping in the domestic market.


Jet went under because of so many other reasons. I never understand how a late entrant like Indigo could build hundreds of crores of cash reserves with predatory pricing and capacity dumping while others are losing money. It's not that Indigo's promoters were multi-billionaires when they started.

Indigo's (and Air Deccan's) business formula was much more suitable to Indian demand and the market supported it. Jet and Kingfisher wanted to go the opposite way and they perished. Vistara would join them sooner or later...
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iah87
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PostPosted: Fri Apr 24, 2020 8:35 pm    Post subject: Reply with quote

5Patel wrote:


Jet went under because of so many other reasons. I never understand how a late entrant like Indigo could build hundreds of crores of cash reserves with predatory pricing and capacity dumping while others are losing money. It's not that Indigo's promoters were multi-billionaires when they started.

Indigo's (and Air Deccan's) business formula was much more suitable to Indian demand and the market supported it. Jet and Kingfisher wanted to go the opposite way and they perished. Vistara would join them sooner or later...


Yes Jet had other issues which caused them to go out of business, but domestic capacity and price pressures were one of them.

Also I hope Vistara makes it, it is the only full service carrier apart from AI and the way Vistara is limping along, may be your prediction could come true.

Best thing for Tatas is to either exit Air Asia India and concentrate on Vistara only or create an alliance with the two airlines to take advantage of the low cost carrier. Mergers would not be a good idea as past mergers with lower cost airlines did not work out for Kingfisher and Jet Airways.
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The_Goat
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PostPosted: Fri Apr 24, 2020 10:55 pm    Post subject: Reply with quote

iah87 wrote:
5Patel wrote:


Jet went under because of so many other reasons. I never understand how a late entrant like Indigo could build hundreds of crores of cash reserves with predatory pricing and capacity dumping while others are losing money. It's not that Indigo's promoters were multi-billionaires when they started.

Indigo's (and Air Deccan's) business formula was much more suitable to Indian demand and the market supported it. Jet and Kingfisher wanted to go the opposite way and they perished. Vistara would join them sooner or later...


Best thing for Tatas is to either exit Air Asia India and concentrate on Vistara only or create an alliance with the two airlines to take advantage of the low cost carrier. Mergers would not be a good idea as past mergers with lower cost airlines did not work out for Kingfisher and Jet Airways.


The best thing for Tata would be to get a debt restructuring on Air India and acquire it from the government. They can then merge it with Vistara and operate under the Air India brand. Wishful thinking perhaps, but this is the thing they should aim for.

In fact they were planning on doing something similar when Jet Airways was looking for buyers. Things broke down when the Tatas insisted on NG not being associated with the airline in any way post takeover, and NG wasn't willing to accept.

A merger between a low-cost and full service carrier is the worst decision any airline manger can make. KF and Jet did that, and the rest is history.
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I don't know which is the more pampered bunch : AI's widebodies (the aunties) or Jet's widebodies (the planes).
-Jasepl
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iah87
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PostPosted: Fri May 01, 2020 7:50 pm    Post subject: Reply with quote

https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/covid-19-ficci-seeks-bailout-package-for-aviation-industry/articleshow/75218879.cms

While there are lots of rumblings that GoI will give grants/loans to airlines, nothing has been announced yet. The longer government waits, more uncertainity in the industry. GoAir may not make it. Spice Jet has cash crunch.

If AI gets any money, then all airlines should get it at least this time.
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iah87
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PostPosted: Wed May 20, 2020 9:19 pm    Post subject: Reply with quote

Finally some good news for domestic air travel. However the govt has not announced any loan package for airlines (except AI as usual), not even a low interest loan. And AI is the only airline ferrying stranded passengers abroad.

https://www.yahoo.com/news/india-domestic-air-travel-resume-may-25-virus-003542229.html
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