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If sources are to be believed, the Indian government is likely to introduce a new policy for short-distance flights. As per the reports, short-distance flights would be charged at a fixed price of Rs 2,500 per hour and while doing so, excise duty on jet fuel and service tax on tickets for the regional flights would be taken off of the fare. Another charge that may be waived off is the passenger services fee (PSF), which is Rs 149 per ticket, and is used to fund the cost of providing security at airports. 
 
Finance ministry has lend its support to the proposal and the policy would most likely be announced in the upcoming budget. The news has come from the mouth of a senior civil aviation ministry official, on the condition of anonymity. 
 
"The finance ministry has given its consent for the waiver of central excise duty of about 8% on fuel and service tax of about 4.94% on flights under the regional connectivity plan," said the official. 
 
To be eligible for the scheme, states will have to offer value added tax on jet fuel at 1%. 
 
After PM Narendra Modi approved the idea, the ministry set up a committee, and the cabinet secretary was the head of the committe. The members of the said committee met twice and reached on a consensus to execute the plan. 
 
However, not everything is as hunky-dory as it may sound. Take the example of a flight between Delhi and Mumbai. With the standard rate applied, the ticket would cost Rs 5000 flat, but at present, it can cost lesser, even with all the taxes and duties applied. 
 
Nonetheless, experts from the industry say that there will be a strong demand for flights at this standard fare. 
 
<a href="http://www.bnnaviation.com/images/slide-4.jpg">Image source</a>

Soon, Rs 2500/hr flights. No fuel charges or
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Troubles mount for Indian airlines, even in good times

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Indian airlines have decided not to entertain demands of <a href="http://www.businessinsider.in/searchresult.cms?query=Members+of+the+Parliament+%28MP%29&amp;sortorder=effectivedate">Members of the Parliament (MP)</a>. They have decided not to roll out quota of seats on flights, air travel facilities and assistance at airports to board and deboard a plane. 
 A meeting was called by the <keyword id="237456" type="ORGANIZATION" weightage="20" keywordseo="joint-committee">Joint Committee</keyword> on salaries and allowance of MP at the behest the aviation ministry to discuss "issues" related to these perks, rejected all these demands. The meeting was attended by the senior executives of <a href="http://www.businessinsider.in/searchresult.cms?query=IndiGo&amp;sortorder=effectivedate">IndiGo</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=Air+India&amp;sortorder=effectivedate">Air India</a>, JAirways, <a href="http://www.businessinsider.in/searchresult.cms?query=SpiceJet&amp;sortorder=effectivedate">SpiceJet</a> and GoAir. 
 
A senior executive said that the decisions on the perks should be decided by the airlines. 
 
"We are private enterprises. We already pay taxes and should not be burdened with these additional costs," he told ET. 
 
Earlier this week, airlines said no to the three main demands of the MPs that usually were: - to allocate a quota of seats on airlines, meet and assist services at the airports and an end to "the disparity between minimum maximum fare buckets on low-cost airlines". 
 
However, one of the many MPs attending the meeting agreed that fares should be fair. "If one has to travel to, say, Mumbai tomorrow, one will have to pay a few thousand more than what one will for a flight a few days later. This (surge pricing) should stop," the MP said. 
 
Other things were also brought to light in the meeting. Certain suggestions like preference to MPs while allotting front row seats (which have more leg room), an end to the practice of travel agents charging fares higher than airline websites and providing them wheelchairs and carts to commute from the entrance of the airport terminal to the vehicle that takes them to the tarmac were made. 
 The panel is lead by MP <keyword id="43254" type="PERSON" weightage="20" keywordseo="Yogi-Adityanath">Yogi Adityanath</keyword> and has nine other <keyword id="6355187" type="ORGANIZATION" weightage="20" keywordseo="Lok-Sabha">Lok Sabha</keyword> MPs and three Rajya Sabha MPs as members. This year, they also recommended that their salaries along with the perks should be doubled. MPs now get a salary, including allowances, of Rs 1.4 lakh a month, according to PRS Legislative Research, a body that tracks the functioning of <keyword id="6354721" type="ORGANIZATION" weightage="20" keywordseo="parliament">parliament</keyword>. The salary of MPs is tax free and comes with additional benefits like free petrol, free telephone calls and free housing. MPs, their companions, or spouses, also get free air tickets when they go on official trips. 
(image:indiatimes)

Indian airlines are in no mood to give perks to MPs

New Delhi, Indian airlines are projected to record a consolidated loss of USD 1.6 to 1.8 billion in the next financial year, aviation consultancy CAPA India said on Monday. The full service carriers are expected to incur a loss of USD 1.1 to 1.2 billion. According to CAPA India, Indian airlines are estimated to have a net induction of 132 planes next fiscal and will take the total fleet of all carriers to around 816 aircraft. While announcing its outlook for 2023-24, CAPA India also said that more than 100 planes of various Indian carriers are on the ground due to supply chain and non-supply chain issues. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/adani-enterprises-rvnl-reliance-industries-among-stocks-to-watch/articleshow/98792050.cms">Sensex, Nifty50 plummet over 1% dragged down by metal, IT and auto stocks</a> <a href="https://www.businessinsider.in/tech/news/google-i/o-2023-pixel-7a-pixel-fold-pixel-tablet-android-14-and-everything-we-expect-to-see/articleshow/98798666.cms">Google I/O 2023 – Pixel 7a, Pixel Fold, Pixel Tablet, Android 14, and everything we expect to see</a> <a href="https://www.businessinsider.in/tech/mobile/news/oneplus-nord-ce-3-mobile-phone-leaks-ahead-of-launch/articleshow/98597456.cms">OnePlus Nord CE 3 leaks ahead of launch – specs, expected launch date and more</a>

Indian carriers to report $1.6-1.8 billion consolidated loss in FY24 says industry body CAPA

The Indian <keyword id="31907" type="COMPANY" weightage="100" keywordseo="Aviation">aviation</keyword> sector has been buzzing with activity over the last few months. First, the AirAsia debut (in partnership with Tata Group) and announcements stirred the low-cost airlines. Next, the Tata and the Singapore Airlines (SIA) tied up to launch a full-service airline called Vistaar. Jet, which runs the full-service airline Jet Airways as well as the low-cost carrier Jet Konnect, has announced to shut down its low carrier and focus only on full-service airline. But the question is: Is full service the way to go in the Indian airline industry? Are Indian consumers ready to pay that extra premium? 
 
Rough skies 
India’s aviation sector has been going through rough skies. The last few years had the biggest names bleeding in the airline space in India. According to the Centre for Asia Pacific Aviation (CAPA) India Aviation Outlook report, the last seven years have been quite challenging for the Indian airline sector with its cumulative total loss (in these seven years) about $10.6 billion. In the FY 2013-2014, the combined loss of the industry stood at approximately $1.7 billion and the situation seems to stay the same with expected combined loss of the industry to be at Rs $1.3-1.4 billion, in FY 2014-2015. 
 
Rougher for <keyword id="2484870" type="UNKNOWN" weightage="100" keywordseo="Full-service-airlines">full-service airlines</keyword> It seems that the turbulent times in the aviation sector have affected the full-service carriers more. <keyword id="6360137" type="CITY" weightage="60" keywordseo="kingfisher">Kingfisher</keyword> Airlines’ fall is the first that comes to one’s mind. Jet Airways, too, has been in big trouble with its biggest ever loss net loss in the last few years climbing up to be at Rs 3667.65 crore (FY 2013-2014). The company accrued net loss of Rs 485.5 crore in FY 2012-2013 and Rs 1236.1 crore in FY 2011-2012. Another full-service airline, Air India, posted an annual net loss of Rs 5000 crore in the FY 2013-2014. 
 
And the year was challenging for the low cost airlines SpiceJet too, as it accrued its highest ever annual net loss of Rs 1003 crore this fiscal (FY 2013-2014). This is five times more than its annual net loss of Rs 191 crore in FY 2012-2013. 
 
The only two airlines that have posted profits over the last couple of years are low cost carrier GoAir and Indigo. GoAir has posted approximately Rs 100 crore profit in both financial years. Indigo Airlines posted whopping profits of Rs 787 crore in FY 2012-2013, its current fiscal profits are not available yet experts claim that it had stayed profitable this year too. Clearly, so far, the low cost carriers look to be in a better position over the full service ones. 
 
Not many takers for full-service carriers 
The numbers of various airlines over the last few years indicate that there are not too many takers for full-service carriers, certainly not enough to be profitable. According to the CAPA report, in 2014, so far about 6.1 crore flew domestically. Out of this, only one-third, i.e., 2.2 crore took the full-service carriers Air India and Jet Airways (Kingfisher is grounded for two years). The low-cost carriers flew about 3.9 crore (two-third of the total flyers). 
 
The economic downturn has made not only individual travellers cut costs, but the so-called suave corporate travellers too are cautious about spending. In most cases, companies prefer to book low cost carriers for their executive, barring only the senior most. This has impacted the occupancies of the full service airlines. Unfortunately, the trend is expected to go on meaning challenging times for the full service airlines. 
 
Value for money is what Indian consumers want 
Well, looking at the overall behaviour of Indian consumers across sector, one can easily say that value for money is a key focus for them, especially in the service sector. This means that while a segment of consumers often prefer the cheapest option available, there is a huge segment of consumers which weighs what is it that they are getting out of their money. So they may want a specialized service, better seats, meals, lounge access, etc. and they might be inclined to pay premium for it. But the question is how much premium? And do they really see value out of that premium. 
 
If the Tata-SIA’s Vistaar and the other two full service carrier Jet Airways and Air India can work that equation well along with the right cost structure, they can make space for themselves in this cost driven airline industry.

Is Full Service The Way To Go In Indian Airline Industry?

Crew of an <keyword id="2573" type="CITY" weightage="20" keywordseo="Air-India">Air India</keyword> flight was reportedly detained in <keyword id="66499" type="CITY" weightage="20" keywordseo="Jeddah">Jeddah</keyword> last week for not carrying original documents and this is sending jitters to Indian airliners operating to <keyword id="50996" type="COUNTRY" weightage="20" keywordseo="Saudi-Arabia">Saudi Arabia</keyword>. As per the present practice, Saudi Arabia keeps the original passport of crew members on arrival and the members then have only photocopies of their travel documents during their stay in Saudi. This method has always worried the crew members and the recent turn of events have now scared them. "We operated AI 931 on July 26, 2017. After landing in Jeddah ... (three crew members) went for dinner... Our taxi was stopped by Saudi police to check our permits. On showing them our Xerox from immigration and our valid AI ID, we were put in police vans and were told not to use cell phones. Luckily, we made a call to (the) hotel and explained the situation and gave our location,” said a message, which was accessed by TOI, by one of the three AI crew members who were allegedly detained in Jeddah last week. The crew members said they were told that photocopies of passports won't do and that original documents should be shown for checking. They were allowed to leave three hours later. "Technically our xerox permits (passport copies) are invalid and going out is a big risk," the message says.

Crew of Indian airliners are scared to fly to Saudi. Here’s why

NEW DELHI: The spate of serious aviation mishaps globally is all set to impact the financials of already struggling <keyword id="1446" type="CITY" weightage="20" keywordseo="indian-airlines">Indian airlines</keyword>. A leading unlisted Indian airline will have to renew its aircraft <keyword id="35450" type="COMPANY" weightage="20" keywordseo="insurance">insurance</keyword> in coming days. To its horror, it found that insurance premia charged by foreign companies (Indian insurers do not provide cover for aircraft to airlines) have shot by 15-20%. 
 
"Our insurance covers have to be renewed shortly. The initial talks we had with insurers in past few days showed that premia are up by 15-20%. May be when we actually strike a deal, the hike is softened a bit but general insurers feel that their underwriting risk is up and they are going to charge more," said the CEO of this airline. 
 Another airline also confirmed that insurance premia are up. "We are trying to minimize this blow as any additional cost has to be passed on to the flyer. In India, however, irrational pricing by some airlines means that we are unable to recover our costs. For airlines in black, it means lower profits. And, for loss-making carriers, it means more red ink on the balance sheet," said a <keyword id="160569" type="POSITION" weightage="20" keywordseo="senior-official">senior official</keyword> of the airline. 
 Centre for Asia Pacific Aviation (CAPA) India head <keyword id="159658" type="PERSON" weightage="20" keywordseo="Kapil-Kaul">Kapil Kaul</keyword> said he did not see insurance costs going up sharply except for airlines in "war or conflict" areas. "Premiums have been at their lowest for quite some time and increases, if any, will be marginal," he said. 
 However, for Indian carriers battling high costs any rise in cost is a bad news. Of all desi airlines, only low-cost IndiGo claims to be consistently profitable. GoAir has started reporting profits since last two fiscals. All others are deep in the red, with one airline facing a serious question mark on its survival prospects due to a severe <keyword id="6357455" type="EVENT" weightage="20" keywordseo="Funding">funding</keyword> crunch. 
 "Indian carriers cannot survive in the existing cost structure. The government should provide relief on jet fuel price front else there will be some more Kingfisher-like fold ups," said an <keyword id="203924" type="POSITION" weightage="20" keywordseo="airline-official">airline official</keyword>. According to CAPA, collective losses of Indian airlines in past seven years till March 2014 are $10.6 billion and their combined debt is $15.8 billion. Airlines are expected to collectively lose $1.8 billion in FY 2013-14 and $1.4 billion in FY-15.

Desi Carriers' Insurance Costs Rise 20% On Global Crashes

The Federation of <keyword id="1446" type="CITY" weightage="20" keywordseo="indian-airlines">Indian Airlines</keyword>, having <a href="http://www.businessinsider.in/now-find-an-uber-ready-for-pick-up-for-your-next-jet-airways-flight/articleshow/57647515.cms">Jet Airways</a>, <a href="http://www.businessinsider.in/discontinuation-of-a-320-neo-planes-hasnt-impacted-finances-says-indigo/articleshow/57687582.cms">IndiGo</a>, <a href="http://www.businessinsider.in/spicejet-to-buy-205-boeing-aircrafts-for-22-billion/articleshow/56516282.cms">SpiceJet</a> and <a href="http://www.businessinsider.in/GoAir-announces-special-concession-fares-for-students-in-the-ongoing-exam-season/articleshow/52453063.cms">GoAir</a> as its members, has taken a decision to ban <keyword id="6358821" type="ORGANIZATION" weightage="100" keywordseo="Shiv-Sena">Shiv Sena</keyword> MP <keyword id="139929" type="PERSON" weightage="100" keywordseo="Ravindra-Gaikwad">Ravindra Gaikwad</keyword> from flying after he assaulted an <keyword id="2573" type="CITY" weightage="20" keywordseo="Air-India">Air India</keyword> staff member. Even though <a href="http://www.businessinsider.in/vistara-to-fly-international-asearly-as-possible/articleshow/56389236.cms">Vistara</a> is not a part of <keyword id="43642" type="ORGANIZATION" weightage="20" keywordseo="FIA">FIA</keyword> yet, it has said it supports the decision and would not allow the MP to board their flights. 
 
A detailed statement on the issue is expected soon. 
 
Gaikwad had <a href="http://www.businessinsider.in/shiv-sena-mp-denied-business-class-assaults-air-india-staffer-with-a-slipper/articleshow/57793556.cms">slapped</a> an Air India ground staff on Thursday after he was made to fly economy class between Pune and Delhi. Even though he had a business-class ticket, the aircraft on this sector was all economy. 
 
Also read: <a href="http://www.businessinsider.in/someone-loss-is-someone-elses-gain-indian-airline-companies-set-to-benefit-from-us-ban-on-in-flight-gadgets/articleshow/57768672.cms">Someone loss is someone else’s gain! Indian airline companies set to benefit from US ban on in-flight gadgets</a> 
 
Reportedly, Air India has blacklisted the MP, the first time that the national carrier has done so. Blacklisting unruly passengers is a common practice followed by several international and some private Indian airline companies. 
 
(Image source: Daily News Online)

Shiv Sena MP Ravindra Gaikwad banned from all Indian domestic flights

COIMBATORE: The government wants Indian airlines to take up more international routes and is ready to sign new bilateral agreements towards this, said Union <keyword id="13124" type="POSITION" weightage="80" keywordseo="Civil-Aviation-Minister">civil aviation minister</keyword> Ashok Gajapathi Raju Pusapati on Monday. 
 
“The government would definitely not mind the increasing number of international passengers and raising freight. But this should contribute to our economy’s GDP and not to another country’s GDP,” the minister said while reacting to a request from the industry to directly connect Coimbatore with Dubai. 
 The minister was in the city on an invitation from <keyword id="166814" type="ORGANIZATION" weightage="80" keywordseo="Indian-Chamber-of-Commerce">Indian Chamber of Commerce</keyword> and Industry (ICCI), which submitted a memorandum to him on improving the Coimbatore airport’s infrastructure and connectivity. 
 
“It would be a great help if Coimbatore was connected directly with Dubai because then we are directly connected to any destination in Europe,” said ICCI president D Nandakumar. 
 “Now we are forced to send all our export-oriented goods to Dubai through Kochi, Bangalore, Kozhikode and Chennai, where we waste a whole night in transit,” said former head of PSG <keyword id="106925" type="ORGANIZATION" weightage="80" keywordseo="Institute-of-Technology">Institute of Technology</keyword> C R Swaminathan. 
 
“Recently SpiceJet, which is an Indian carrier, and Fly Dubai met us saying they were ready to operate flights from Coimbatore to Dubai and back, if only the city is included in the bilateral agreement,” he added. 
 
“Right now we have industries in Karur, Palakkad, Tirupur and Coimbatore which need to send their goods to Europe, but are forced to send it through Mumbai, Kochi and Bangalore. We can bring all that freight business back to Coimbatore if we are connected to Dubai,” stressed CII’s Coimbatore zone chairman Ravi Sam. 
 
The minister agreed to look into why Coimbatore was not included in the Bilateral Aviation Safety Agreement which included 18 cities, including Madurai and Trichy. However, he said Indian airlines were not making use of the existing bilateral agreements. “Such agreements are pointless if Indian airlines do not perform and use it,” he added. 
 He maintained that the government was open to privatizing non-performing assets like certain airports and airstrips but said it would not be a solution. “There are so many airstrips which are running on heavy losses. Those even in the private sector would not be interested in,” said Raju. “So we would probably try creating a mix which would result in the <keyword id="74939" type="ORGANIZATION" weightage="60" keywordseo="Airport-Authority-of-India">Airport Authority of India</keyword> (AAI) getting a revenue out of everything,” he added. 
 He said there were plans to professionalize the management of <keyword id="2573" type="CITY" weightage="80" keywordseo="Air-India">Air India</keyword>. “There is a long way to go to turning around Air India and making it our nation’s pride,” he added.

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Soon, Rs 2500/hr flights. No fuel charges or tax added

BI India Bureau

Troubles mount for Indian airlines, even in good times

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Indian airlines are in no mood to give perks to MPs

BI India Bureau

Indian carriers to report $1.6-1.8 billion consolidated loss in FY24 says industry body CAPA

PTI

Is Full Service The Way To Go In Indian Airline Industry?

Pallavi Srivastava

Crew of Indian airliners are scared to fly to Saudi. Here’s why

BI India Bureau

Desi Carriers' Insurance Costs Rise 20% On Global Crashes

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Shiv Sena MP Ravindra Gaikwad banned from all Indian domestic flights

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Indian Govt Wants More Indian Airlines To Take Up International Routes, Says Civil Aviation Minister

TOI

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