International flights to remain suspended till July 15
The Directorate General of Civil Aviation (DGCA) issued a circular on Friday extending the suspension on scheduled commercial international flight operations to and from India till July 15.
 
The restriction, however, will not be applied on all-cargo flights and other flights specially approved services by the DGCA.
 
"The competent authority has decided that scheduled international commercial passenger service to/from India shall remain suspended till 2359 hrs IST of 15th July 2020," it said.
 
On June 20, Union Civil Aviation Minister Hardeep Singh Puri said that re-commencement of international flight services will depend on factors like 'border acceptance' norms in the arriving country and the traffic demand.
 
That time, he hinted at the prospects of bilateral bubble arrangements, which will allow some international operations between countries.
 
At present, healthy demand for evacuation flights have been witnessed in the North America-India sector.
 
Passenger air services were suspended on March 25 due to the nationwide lockdown to check the spread of Covid-19, although domestic air services has resumed in a phased manner.
 
Subsequently, domestic flight services resumed from May 25. At present, airlines are only allowed to deploy 33 per cent of their total capacity.
 
Earlier in the day, Puri tweeted that in one month since recommencement of calibrated domestic civil aviation operations in the country "our skies & airports have been busy".
 
Around 18,92,581 passengers have flown so far on 21,316 flights across the country, he said.
 
Last week, Puri had said that to ease domestic mobility and accelerate passenger traffic growth, the Centre will allow flights to more destinations.
 
Nevertheless, these new flights and frequencies are likely to be within the 33 per cent capacity cap, he had said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COVID-19 Pandemic to Shave Off Over a Third of Apparel Retailers’ Revenues: Report
    Revenues of the Rs1.7 lakh crore organised apparel retail sector is set to plummet 30-35% this fiscal because of temporary store closures, restricted mobility and low-income visibility for consumers during the coronavirus (COVID-19) pandemic, says ratings agency CRISIL.
     
    In an analysis, CRISIL says, "While operating profitability is expected to be impacted by about 200 basis points (bps), the absolute fall in operating profits will be much sharper, necessitating additional funding, mainly debt, by firms to make up for cash flow shortfalls. This will affect credit metrics."
     
    The analysis, based on a sample of 60 CRISIL-rated apparel retailers, representing a third of sector’s revenues, considers staggered easing of the lockdown, and majority of stores reopening in June, though demand is expected to recover to pre-lockdown levels only during the October-December festive season. Pent up demand, as well as the behaviour of consumers post lifting of lockdown, will have a bearing on the pace of recovery.
     
    Among the apparel segments, CRISIL says, sales of the departmental store format (one-third of revenues of sample set) will be hit harder, with about 40% decline in revenue, as half of these departmental stores are mainly located in malls and Tier 1 cities.
     
    For value fashion retailers (two-third of revenues of sample set), the impact will be lower at around 30%, as these have higher presence in Tier 2 and 3 cities, with over half of the stores located in these geographies. A higher proportion of standalone stores and expected benefit from down-trading with income levels decline will also benefit this segment.
     
    According to the ratings agency, apparel retailers are also likely to see higher contribution from online channels this fiscal, driven by changing buying pattern of consumers amid the pandemic.
     
    Gautam Shahi, director of CRISIL Ratings says, “To increase footfalls, retailers may have to offer discounts while also incurring higher costs to ensure adherence to social distancing. On the other hand, we also expect retailers to convert a portion of fixed lease rentals to variable, in addition to pruning employee cost, and other discretionary spends. Considering these aspects, operating profitability will moderate by up to 200 bps this fiscal, from about 7-8% in fiscal 2020.”
     
    The ratings agency feels, converting lease rentals from fixed to variable is critical, as the margin impact will be severe otherwise. Lease rentals and employee costs typically constitute 20% of the overall revenues of the apparel retailers and large proportion of these costs is fixed in nature.
     
    With cash flows being crunched, it says, retailers are seen availing additional debt to make up for the near-term shortfall in cash accruals vis-à-vis fixed obligations.
     
    According to Ankit Hakhu, director at CRISIL Ratings over the past two fiscals, the debt protection metrics of apparel retailers remained healthy supported by strong operating performance and prudent capital expenditure. 
     
    However, he says, "weakened business levels and lower profitability, will lead to moderation in debt metrics; for instance, the interest coverage ratio, which stood at over five times in past two fiscals is expected to weaken to just over three times this fiscal.”
     
    Apparel retailers with omni-channel presence, balanced mix of brands and private labels, and sufficient liquidity, and those with access to support from strong parents or groups, will be placed better to counter the challenging business environment. The extent of pandemic and ability to manage rental costs will be monitorables, the ratings agency concludes.
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    Govt discussing with RBI on one-time loan rejig for stressed cos
    Union Finance Minister Nirmala Sitharaman on Thursday said the government is discussing with the Reserve Bank of India (RBI) for loan restructuring of companies which are stressed owing to the Covid-19 pandemic.
     
    Speaking at a webinar organised by the Chennai International Centre (CIC), Sitharaman said that discussions are on with the RBI on the matter of one-time restructuring of loans.
     
    She also said that discussions are on with the RBI and the banks as to why the interest rate reductions are not passed on to the customers.
     
    According to her, the reasons for banks not fully passing on the benefit of interest rate reductions are not convincing.
     
    Sitharaman said the government will also consider providing an emergency line of credit to individual owners of businesses while a decision on the suggestion to offer collateral free credit based on pending Goods and Services Tax (GST) bills will be deliberated upon.
     
    Presently the Rs 3 lakh emergency line of credit is being offered to Micro, Small and Medium Enterprises (MSMEs).
     
    She also urged the Indian industries to introspect on how businesses are run and on how the ‘Aatmanirbhar Bharat' mission could be realised to its full potential.
     
    Pointing out the active pharmaceutical ingredients (APIs) for example, Sitharaman said that India is a big market and they should be manufactured in the country without depending on one or two countries.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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