Sale-bound Air India subsidiary gets nod for foreign flights
The Civil Aviation Ministry has approved Alliance Air plan to launch foreign operations by starting flights to Sri Lanka even as the airline's parent Air India remains on top of the government's disinvestment agenda.
 
The move has triggered speculation among Air India employees that government may continue in airline business by not selling Alliance Air. This runs counter to the government's often repeated argument that "government has no business to be in airline business."
 
"The move suggests government would not sell Alliance Air and continue in airline business. Alliance Air could be an "Indian Airlines" in the making. We are unable to understand then why Air India is being sold," said an executive.
 
"Perhaps, it wants to keep an airline to serve political interests. Anyways, so many flights have been started after General Elections on recommendations of legislators," he added.
 
The permission for inaugural overseas flight has come even as Alliance Air's financial health remains precarious. The carrier reported a net loss of Rs 263.76 crore in 2017-18 as against the net loss of Rs 286.70 crore in the previous financial year.
 
The airline mostly connects tier-II and tier-III towns which are considered important for social and political reasons than commercial. Making most of the regional connectivity scheme launched by the government, it has bagged rights to operate various Udan flights.
 
As per Air India official website, Alliance Air operates air services to 52 destinations with a fleet of 18 ATR 72-600 (70/72 Seater) and 1 ATR 42-320 (48 Seater) aircraft. It has 800 flight departures per week and 114 flight departures per day.
 
Official sources told IANS that government has allowed Alliance Air to operate 7 flights a week from Chennai to Palaly and Batticaloa in Sri Lanka with its ATR 72-600 airplanes.
 
The government has decided to sell Air India lock, stock and barrel and a ministerial panel headed by Home Minister Amit Shah is set to finalise the terms of bidding it out. The express of interest (EoI) could be invited by the end of October.
 
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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    Vehicles sales plummet for the 11th month in a row
    Despite a 135 basis point rate cut since February and a number of measures announced by the central government including the corporate tax cut, vehicle sales plummeted for the 11th straight month.
     
    Society of Automobile Sales (SIAM) data released on Friday showed that commercial vehicle sales -- a proxy for the commercial health of the economy -- steeply fell by of 39 per cent to 58,419 units.
     
    Signs that the customers are still away from showrooms was visible in passenger vehicles sales data which witnessed a decline of 23.69 per cent to 223,317 units this September.
     
    Passenger cars sales witnessed a decline of 33.4 per cent to 131,281 units. In August, its sales were down 41 per cent.
     
    Overall domestic automobile sales fell 22.41 per cent in September 2019.ATwo wheeler sales - often tracked to analyse the rural markets health - was also down 22.09 per cent.
     
    Several auto markers are forced to announce production cuts and slash workforce inorder to cut losses.
     
    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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    Telcos paid Rs11,838 crore as IUC in 2018, Vodafone leads with Rs4,214 crore payout
    The telecom operators paid a total of Rs 11,838 crore as IUC or interconnect user charges in 2018, led by Vodafone which paid Rs 4,214 crore followed by Airtel at Rs 3,411 crore and Jio at Rs 2,809 crore, a new report by market research firm techARC said on Friday.
     
    BSNL/MTNL paid Rs 1,405 crore as IUC charges, said the techINSIGHT report which is based on TRAI's annual report published in September this year.
     
    With Reliance Jio announcing 6 paise per minute charge for voice calls to rival networks, Vodafone Idea termed the announcement "an action of undue haste" and Airtel termed the Mukesh Ambani-owned company's move a forced tactics to reduce interconnection charges.
     
    The IUC charges are paid for off-net calls to the operator on whose network a call terminates.
     
    In 2018, Vodafone-Idea, Airtel and Jio paid 35 per cent, 29 per cent and 24 per cent of the total amount of Rs 11,838 crore, respectively.
     
    "While Jio has invested in an all-IP network to support offering free voice calls --the disruption it entered with -- incumbents are still not pure IP networks," said Faisal Kawoosa, Founder & Chief Analyst, techARC.
     
    "VoLTE enablement is still an ongoing process for other operators, thus would require IUC to offset the infrastructure cost they bear on terminating a call," he added.
     
    The average outgoing MoUs (minutes of usage) per annum were 312 minutes in 2018, out of which 84.01 per cent of the usage terminates on another wireless network.
     
    Currently, an operator pays a little over Rs 100 per annum per subscriber as IUC to other operators, which is a little over Rs 8 per month.
     
    Also, the subscriber number range for the three main operators isn't too wide that would make one operator benefit more than the other, the findings showed.
     
    On account of taking a hit of Rs 13,500 crore due to network connection charges, or interconnet usage charges (IUC), Reliance Jio on Wednesday said it would charge customers 6 paise per minute for voice calls made to rival networks till IUC charges were eliminated.
     
    It's the first time that Jio users will pay for voice calls, free since September 2016.
     
    According to Kawoosa, there has to be a different mechanism to be worked out regarding IUC where nobody loses money and there is harmony among operators.
     
    "One possible way could be allowing operators to charge a flat monthly fee per subscriber that they can offset the IUC against. Instead of settling interconnect charges, they would be deducting at source," said Faisal.
     
    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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