Companies & Sectors
US court supports Exim Bank loan for Air India, seeks more details

The decision comes following the appeal by the Delta Airlines and the Airline Pilots Association of a lower court decision in July 2012 that determined that the Exim Bank improperly approved financing for purchases of certain Boeing aircraft by Air India

 

A US court has rejected a plea by the Delta Airlines to vacate the US Export-Import Bank’s support for the sale of 30 Boeing wide-body jets to Air India.

At the same time, the US Court of Appeals in Washington DC asked the Exim Bank to further explain its financing decision for the Air India transactions.

However, it chose to leave undisturbed the bank’s financing of the Air India transaction and did not question the bank’s flexibility in carrying out its statutory mandate.

The decision comes following the appeal by the Delta Airlines and the Airline Pilots Association of a lower court decision in July 2012 that determined that the Exim Bank improperly approved financing for purchases of certain Boeing aircraft by Air India.

In its lawsuit, Delta Airlines had alleged that Exim failed to consider the economic impact of its loan guarantees for the purchase of wide-bodied Boeing aircraft by Air India.

It alleged that Exim Bank’s decision to provide a loan guarantee of $3.4 billion to Air India, to help it buy 30 aircraft from Boeing, would badly affect several US airlines, especially the Atlantic-based carrier, Delta.

"I am gratified by the court’s recognition that these transactions should not be impeded by litigation. The bank maintains significant flexibility in complying with its statutory mandates and its effort to support American jobs.” said Fred P Hochberg, chairman and president of Exim Bank.

“This represents a victory for tens of thousands of American aerospace workers,” he said.
 

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Nasscom concerned about US immigration bill

The Bill being pushed by the Obama administration gives the domestic IT professionals in the US a 60-day period to find a new job after they lose the existing one, among several other sweeping reforms

 

Software services industry body Nasscom today raised concerns over proposed discriminatory restrictions in the draft US Immigration Bill.

“Surely, we have got huge concerns on the restrictions that are being proposed in the Senate Bill. There is discrimination because it is based on visa dependent companies versus non-visa dependent companies.” Nasscom president Som Mittal told reporters.

He said “it puts restrictions on our ability to service our customers and prevents our ability to have a level-playing competition in the US”.

Mittal said the restrictions would have a major impact on US corporations served by Indian IT companies, because of which the first impact would be on the US economy and customers there. “So, it is the US corporations who are actually batting for us,” Mittal added.

Officially called the Border Security, Economic Opportunity and Immigration Modernisation Act, 2013, the Bill being pushed by the Obama administration gives the domestic IT professionals in the US a 60-day period to find a new job after they lose the existing one, among several other sweeping reforms.

Out of the $108-billion software exports from the country, as much as $46 billion comes from the US alone for most of the domestic IT companies. These companies will also have to shell out more fees to get H-1B visas, if the draft legislation is cleared by the Congress and is signed into law by Obama.

To a query on whether the Indian government and IT companies were lobbying on the issue with the US government, he said, “Whether it is our customers (in the US) or whether it is our own government or Nasscom, we are all ensuring that we provide these perspectives to the decision makers there“.

“Our Ambassador (Nirupama Rao) is actively working (on this issue). Government of India at the senior levels have written to their counterparts in US. I don’t think any country wants discriminatory bills to come in. They do not want this to become a trade issue”, he said.

Mittal said Indians working in the US for several IT companies have contributed more than $15 billion in taxes and social security in the last five years.

“So we are creating jobs there as well. We have to ensure during the negotiations (before passing the bill), negative provisions do not come. Our hope is on the process of legislation in the US. That’s the way democracy works“.
 

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Domestic air traffic sees marginal increase in Jan-May 2013

Passengers carried by domestic airlines between January and May this year stood at 259.98 lakh, compared with 258.08 lakh in the same period last year, registering a growth of 0.74%

 

Domestic air passenger traffic marginally grew by less than a percentage point in the first five months of this year to almost 260 lakh, which was two lakh more than the same period last year, official data showed on Tuesday.

No-frill airline IndiGo continued to dominate the domestic aviation market by cornering 29.5% of its share in May, followed by Jet Airways and its subsidiary JetLite with 22.5%, the air traffic figures showed.

While SpiceJet was in the third place with 19.8% market share, Air India (Domestic) followed closely with 19.1% and GoAir with 9%.

The traffic carried by all Indian carriers in May was 57.10 lakh as against 54.48 lakh in the same month last year.

Passengers carried by domestic airlines between January and May this year stood at 259.98 lakh, compared with 258.08 lakh in the same period last year, registering a growth of 0.74%.

IndiGo also recorded the highest passenger load factor (PLF) of 89.6%, with GoAir in the second place with 85.8%. PLF is a measure of how much of an airline's passenger carrying capacity or number of seats is being used.

Full service carrier Air India was in the third position with 82%, much ahead of its prime competitor Jet Airways which registered 75.1%. SpiceJet was in the fourth position with 80.9% load factor.

Meanwhile, airlines’ body IATA came out with its global air traffic analysis for April, saying the number of passengers flying internationally in business or first class was 3.8% higher this April compared to a year ago.

The economy class passenger numbers rose just by 0.9% in April, which was a “sharp fall” from the 7.4% growth in the previous month.

Markets of emerging regions like South Asia “continue to be the primary source of growth in international premium travel. Long-haul passengers connecting through Middle Eastern hubs help support strong growth on markets like Europe-Middle East, which was up 11.2% in April,” the IATA analysis said.
 

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