India's Civil Aviation Minister Ajit Singh directed (16-Oct-2012) the Airports Authority of India (AAI) to infuse more equity in Mumbai International Airport Ltd (MIAL) and Delhi International Airport Ltd (DIAL) with the objective of abolishing the Airport Development Fee (ADF) at the airports from Jan-2013 and reducing the cost of air travel in the country. This follows a recent decision not to levy the ADF at Chennai and Kolkata airports. The Ministry noted, "Presently Rs. 200/ per domestic passenger and Rs. 1300/ per international passenger are being charged as ADF at Delhi Airport and Rs. 100/ per domestic passenger and Rs. 600/ per international passenger are being charged as ADF at Mumbai Airport. The expected financing gap in case of Mumbai International Airport Ltd. (MIAL) will be approximately Rs. 4200 Crore while in case of Delhi International Airport Ltd. (DIAL), it will be approximately Rs. 1175 Crore if the ADF is abolished with effect from 1st January 2013". Mr Singh added he has "asked AAI to infuse additional equity of approximately Rs. 288 Crore in case of Mumbai International Airport Ltd. (MIAL) against its 26% share in equity of MIAL. The balance in financing gap will have to be met by the Airport Operator/ Promoter (MIAL) through infusion of their share of equity". For Delhi, Mr Singh "asked the AAI to contribute equity share of approximately Rs. 102 Crore. It is noteworthy that when ADF was levied at Mumbai and Delhi Airports, AAI had taken the plea that it is not in a position to contribute more equity in view of its critical financial condition". As per the directions of Mr Singh the proposal regarding equity infusion by AAI will be soon submitted to AERA. [more - original PR]
Indian air travel costs to be reduced with abolition of ADF at Mumbai and Delhi airports
You may also be interested in the following articles...
After the White Paper. Time for the US major airlines and Gulf carriers to kiss and make up
Although US global network airlines American and Delta have recently revived rhetoric in the Big 3 versus the Gulf 3 imbroglio that remained a mainstay in industry discourse throughout 2015, the efforts by American, Delta and United to stymie growth by Emirates, Etihad and Qatar can be deemed anything but a success. More than anything their march against the Gulf airlines has raised serious questions about the future of liberalisation in the global airline industry, and, arguably, damaged the US’ stature as the global leader in trumpeting open skies pacts.
By-products of the Big 3’s subsidy claims include a splintering among US airlines as jetBlue, Hawaiian and others united to form a fierce opposition in the subsidy argument, claiming that the efforts by the Big 3 would jeopardise the more than 100 open skies agreements that the US has forged worldwide. Those Big 3 airlines responded with the counterargument that the immunised joint ventures created by American, Delta and United with their alliance partners had resulted in higher fares and less consumer choice, and they requested the US government to review the passenger benefits of those tie-ups. As the two opposing sides squared off, Delta chose to leave the major US airline lobbying group 'Airlines For America'; almost consequently, the application by Norwegian Air Shuttle to launch low cost trans-Atlantic flights endured a years-long limbo, a delay driven in parallel with the Gulf debate.
The US government is making no promises over when it will render a decision to hold talks with the UAE and Qatar on their specific open skies policies, and the upcoming presidential election adds a huge element of uncertainty to the process. But a recent decision to grant Norwegian approval for its new service suggests that the government may avoid slipping into an outdated protectionist mindset.
Air Canada Part 1: low cost rouge is a pillar of growth; but further expansion might be constrained
During the past year Air Canada has found itself defending its double-digit capacity growth, stressing that 90% of its capacity in 2015, 2016 and 2017 is being deployed to its international network – an entity the company believes is far from reaching maturity. Recently the airline has outlined plans to introduce a raft of new long haul flights to Europe and Asia operated by Air Canada mainline and its low cost arm – Air Canada rouge.
Air Canada stresses the pillars of its international expansion – Boeing 787 widebodies and the establishment of its low cost subsidiary rouge – enable the company to enter international markets it once considered unviable due to higher costs. During the summer of 2018 rouge will nearly reach its 50 aircraft cap, and Air Canada needs to start determining if there are further opportunities to grow its low cost unit. Those evaluations will partially dictate Air Canada’s overall growth levels beyond 2018.
In the short term Air Canada is not seeing any broad changes in consumer behaviour, reflected in its solid booking curves. Weaker markets in Western Canada, hit by the downturn in the oil sector, are stabilising as capacity cuts have resulted in a rational supply-demand scenario.
This is Part 1 in a two part series on Air Canada. The second instalment will focus on the airline’s costs and balance sheet management.