Macquarie-SBI may investrs466 cr in GMR airports division

After raising money for its power division from a clutch of PE investors like Temasek, IDFC PE, UTI Ventures and Arganaut, GMR Infrastructure is looking at raising funds for its airports division. Macquarie-SBI was in advanced negotiations with GMR Infra to invest $100 million (Rs 466 crore) in the latter’s airports division, investment banking sources told. GMR’s airport portfolio includes Delhi International Airport (P) Ltd (DIAL), GMR Hyderabad International Airport Ltd (GHIAL) and Sabiha Gokcen Airport Ltd in Istanbul, Turkey. GMR has also bid for an airport project in the Maldives. The total valuation of this division has been pegged at around Rs 13,000 crore. The transaction is expected to close within a month. GMR CFO A Subba Rao termed the development as speculation and refused to comment.

An e-mail sent to Macquarie elicited no response. It is still not clear if the investment would be similar to the power one, in terms of capital getting converted during the time of an IPO, with a guaranteed internal rate of return (IRR) of 18-25 per cent. The investment could be at a considerable premium as stock brokers said there was tremendous potential of value upside from the real estate. “They might be pitching the real estate associated with airports as part of their airports business. If you look at that, $2-2.5 billion or even $3 billion does not seem too farfetched,” said a Mumbai-based analyst. GMR has a 54 per cent stake in DIAL and is operating it on a build, operate and transfer basis. In GHIAL, it holds 63 per cent. The airport was commissioned in 2008 and has an initial capacity of 12 million passengers and 100,000 tones of cargo handling capacity a year. In 2009, the company commissioned the Rs 3,143-crore Sabiha Gokcen International Airport in Turkey, with a capacity of 20 million passengers. GMR Infra, with interests in power, roads, airports and urban infrastructure, has a market capitalization of 22,362 crore. Company sources said GMR was looking at a strategy to unlock value in its various divisions.

The company is known to have plans for getting financial investors in each of these divisions and is planning to list them in about three and a half years. The financial investors, who would exit through the IPO, have a potential 25 per cent IRR. GMR has been in the market for close to seven months, exploring ways to raise equity for its high profile division. Funds like JP Morgan, 3i and Chrys Capital had also been approached, sources said, but high valuations especially that of the real estate embedded in the project proved to be a dampener. Macquarie-SBI raised a $1billion PE fund for investment in Indian infrastructure sector a year ago. Macquarie and GMR had earlier teamed up to bid for $2-billion Singapore based Tuas Power. However, they lost to Chinese company Huaneng.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Austrian Air expands services

Expanding its operations in India, Austrian Airlines has decided to add Mumbai as a new destination on its network and increase the number of flights to Vienna from the national Capital during this winter. Austrian Airlines is expanding the long-haul capacity from five to 11 weekly frequencies in its 2010-11 winter schedule for its customers from India, a statement from the airlines said today. From October 31, Austrian Airlines – a member of the Lufthansa Passenger Airline Group – would be flying from Mumbai to Vienna providing connections to Europe and beyond.

One additional flight per week from New Delhi would also provide connection to 130 destinations covered by the airline’s route network from the beginning of the winter schedule, the statement said. Apart from it, Vienna would also work as a hub providing connections to New York City, Washington and Toronto to Indian flyers. The Mumbai-Vienna flight would be operated on Monday, Tuesday, Wednesday, Friday and Sunday. The flight time from Mumbai to Vienna is 8 hours and 40 minutes.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Jet pays loyalty incentive to top fliers

Frequent flyers of Jet Airways can look forward to inexpensive corporate meetings as the airline has tied up with the Regus Group that provides office spaces like meeting rooms, business lounges, across the world. Thus, fliers can obtain more than 50% discounts when they book office spaces with Regus which has presence across the globe. Globe-trotting corporate and individuals aiming to save money on booking business suites or conference rooms can do that in style as the Regus Group has tied up with Jet Airways to offer hefty discounts to the airline's frequent fliers. JetPrivilege members are frequent travelers, and with that come the challenge of maintaining productivity and comfort while on the move. We are pleased to be able to provide them with world-class facilities and services, so that they can work productively wherever, whenever and however they need, whether traveling and working across, India, Asia or the world," said Madhusudan Thakur, regional vice-president, Regus India. Regus has more than 1,000 business centers across 450 cities worldwide including 22 in India.

They provide video-conferencing (VC) studios, meeting rooms and business lounges. "So rather than booking a conference room at a hotel, people can book the facilities which are also present across various airports or near the airports across the world. The charges are 1/10th of what they would pay at the hotel," says an official from Regus. The VC studio is available for Rs5,000 per hour, meeting room is for Rs1,200-Rs 1,500 per hour and workstations with internet, phone facility and beverages for Rs2,500 a day. The frequent fliers will get a Regus business-world gold card that will help them access to office facilities in more than 1,000 business centers. "With this we will get a clientele of 1.15 to 1.5 lakh fliers," he said.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Fledgling airlines set to spread wings over Gujarat

Low-cost, startup airlines are eyeing the increasing air-traveler base in the expanding industrial towns of Gujarat. According to Gujarat civil aviation officials, airlines are keen on flight operations between the state’s two major cities — Ahmedabad and Surat — as well as the other industrial/ commercial and far-flung centers, such as Bhuj, Jamnagar, Rajkot and Bhavnagar. “We have Luan Airlines which will launch its ATR flights between Surat and other towns like Bhuj, Bhavnagar and Rajkot in two months. One more company, Ventura, is also planning to launch operations between Ahmedabad and other towns,” Vipul Mittra, secretary, tourism and civil aviation, told Hindustan Times. With industrial clusters, such as parks and SEZs, scattered over places far away from Ahmedabad, and with negligible flight operations of mainstream airlines to nearby towns like Rajkot and Bhuj, Gujarat provides immense business potential for airlines that can reduce hours of traveling time to minutes. Luan is said to be starting its operations with a fleet of one or two aircrafts (ATR, with a capacity of around 50).“Gujarat has immense potential for air traffic but is very poorly connected by air. The thrust on industrialization (from processing industries, petrochemicals to power projects) along with development of ports etc is generating a great deal of travel demand from both corporate and individuals. 


Gujarati people are big spenders by nature and frequent travelers both for business and leisure. Hence, we thought Gujarat would provide us with the right platform to launch operations,” a Luan representative said. Like other startups, the low cost airlines will initially function as regional airlines and then plan for connecting cities at the national level. Such airlines primarily target low density point to- point connectivity. Counting the Sardar Vallabhai Patel International Airport at Ahmedabad, Gujarat has around 10 small to medium sized airports at locations like Rajkot, Porbandar, Bhuj etc. A new international airport is proposed at Federa, around 100 km southwest of Ahmedabad.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

'No hike in Delhi, Mumbai airport user fee'

The country's airports regulator, Airports Economic Regulatory Authority (AERA), has rejected demands of the Delhi and Mumbai airport to hike airport user charges by 10 per cent from the 2006 levels with a retrospective effect from May 2009. Airlines have to shell out airport charges for usage of services like landing, parking and air navigation fees. In its order issued recently, the regulator has said that both the airports have failed to justify the demand for hike in charges and the airport operators were allowed a lO per cent hike in 2009. The authority has said that there is no case for hiking aeronautical charges automatically by 10 per cent during the third year following the completion of mandatory projects, at the start of the fourth year and every year thereafter. According to the regulator, the revision of charges cannot be determined in isolation and several other factors have to be taken into consideration. "One of these factors being the concessions offered by the Central government," AERA said in its order. 
AERAs stand has been backed by the civil aviation ministry in its views on the matter. The Delhi and Mumbai airports, privatized in 2006, are operated by GMR-led Delhi International Airport Limited (DIAL) and GVK-led consortium Mumbai International Airport Limited (MIAL) respectively. As per the state support agreement, the airport charges could be hiked by 10 per cent in case the concessionaire completes and commissions all the mandated facilities in the first two years of operation. The ministry had earlier allowed both DIAL and MIAL to hike charges by 10 per cent upon completion of two years, even though they had failed to complete the mandated projects within the stipulated time limit In their proposal for hiking charges, DIAL and MIAL had argued that the privatization agreement allowed them to hike charges by ten per cent, with authority's approval, on commencement of fourth year, ie 2009-10, and for every year thereafter. 
Aeronautical charges form 80 per cent of the total revenue stream for an airport. Domestic airlines are dead opposed to any upward revision in the charges as they say recovery process is still underway. It will also mar traffic growth as well place additional burden on airlines, airlines have said. National carrier Air India has in fact said that the charges should not be hiked for another two years.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Centre mulls more power to DGCA, new air safety board

Sweeping changes are in the air. The government is thinking of giving more powers to the directorate general of civil aviation (DGCA) and setting up an independent safety board to investigate air accidents. The move comes after the Mangalore air crash on May 22 in which 158 persons were killed. Civil aviation minister Praful Patel said on Thursday the independent safety board being thought of would be along the lines of America's national transportation safety board (NTSB).

After addressing the first meeting of the civil aviation safety advisory council (Casac), set up within a week of the Mangalore crash, he said that if needed, the government would bring in "suitable legislation" to turn DGCA into a fully autonomous body with overriding authority in all regulatory matters. "I assure you they [DGCA] have the fullest autonomy and will continue to have it. We will try to bring in appropriate legislation if necessary to further strengthen and empower DGCA so that their autonomy is well respected.

" The government was thinking of setting up a separate body to probe accidents since it felt that the regulator (DGCA) should not be doing the job of investigating too, the minister said. NTSB investigates all major accidents in the US, including air crashes or accidents at sea or on highways. It also helps other nations probe such accidents. During Thursday's meeting, DGCA gave a summary of its new guidelines on operations and airworthiness that can be used by aviation safety inspectors. A surveillance and enforcement division has been set up in DGCA for its annual surveillance programme. The agency conducted 4,327 surveillance activities in 2009 and plans another 4,788 this year.

The meeting was chaired by the director-general of civil aviation N Zaidi and attended by 28 members from aviation sub-sectors such as public sector and private airlines, flight operations and air worthiness. Representatives from the international civil aviation organization, the US federal aviation authority, Boeing and Airbus also attended the meet.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Emirates flights to Prague, Madrid soon

Emirates Airlines, which had five new route launches, will be operating flights to two new destinations from India – Prague and Madrid from July and August this year respectively. The carrier, which operates 184 flights with 53,000 seats a week from India, is bullish on the domestic leisure and corporate traveling market this fiscal.


“The West Asia and Indian Ocean region account for about 12.6 per cent of our global turnover. Last fiscal, we clocked revenue of $ 11.8 billion through the Group's airline business,” Mr. Orhan Abbas, the airlines Vice-President, India & Nepal, told. It is expecting a growth of 20 per cent in the domestic travel market this year, with Andhra Pradesh registering a growth of 18 per cent in the last four months. “With a strong economy, political stability and increasing number of leisure travelers, India is a major market for us. In fact, 10 per cent of our cabin crew is from this country,” he pointed out. Emirates, which has a current fleet of 145, with a combination of Airbus and Boeing planes, is in the process of inducting 146 new aircraft in a phased manner with an investment of over $ 48 billion. “This fiscal, we will induct 7 A380s and a Boeing aircraft,” he said. It has come out with three new summer special packages for Indian families, which include Kids Go Free and Dubai Stopover. It is also offering the facility to enable passengers to book tickets over mobile phones.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Bengaluru airport bags Best Emerging Airport award

The Bengaluru International Air¬port (BIA) has bagged the Best Emerging Airport - Indian Sub-continent award, given bv the Emerging Markets Airports Awards (EMAA) in Dubai. BIA was declared the win¬ner after the tabulation of the poll results from industry chiefs and leaders across the world airports.

BIA CEO Marcel Hungerbueh-ler said that this award was a showcase of the team's hard work and dedication. "It has been only under two years and this airport has received accolades for its opera¬tional efficiency on an international level," he said

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

GMR invites fresh bids for duty-free shops at Hyderabad airport

The GMR Group operating Rajiv Gandhi International Airport (RGIAL) here has called for fresh bids to take over the management of duty-free shop at the airport with the present operator Nuance Group AG deciding to stop operations from May 31, a top official said. "The tenders would be finalised shortly to select the new operators. Efforts are on to complete the process by May 7. so that the new operator can commence operations by June," the official associated with the development told PTI. Nuance Group, which was awarded a seven-year contract in 2007announced sudden exit from the contract citing weak sales at the airport. "The duty free operations did not reach its full potential during the first year of operations.

Further during mid 2009, two shops were closed due to non-clearance from the Customs department which further weakened sales," sources said.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

New investors may pick up stake in SpiceJet

About half a dozen fund houses have submitted proposals for a possible investment in India’s second largest low-fare carrier SpiceJet Ltd. The proposals, also known as term sheets, come at a time when some of the airline’s investors are looking to exit their investment, said two persons with knowledge of the development. The Gurgaon-based airline, which is listed on the stock exchanges, is currently holding road shows to raise $75 million (Rs332.3 crore) by selling new shares ahead of launching international flights.

“Including two very big financial investors, the airline has received good response for proposals for potential investment. More players may submit their term sheets in the coming days,” one of the executives said on condition of anonymity. The airline’s fund-raising coincides with some of its strategic investors separately talking to Indian companies and financial institutions to exit from the airline. “The airline in its capacity is talking to potential investors, but at the same time several investors are talking to various companies and financial institutions at their own level. But nothing has been finalized as yet,” the second executive said. In early February, the Dubai government’s investment arm Istithmar PJSC, which was an anchor investor in SpiceJet, sold bulk of its 13.39% stake to a clutch of domestic funds that included DWS Invest BRIC Plus Fund, Reliance Mutual Fund and Birla Mutual Fund.

The stake sale came at a time when the airline had mandated IDFC- SSKI Securities Ltd and Edelweiss Capital Ltd to find new investors for a fresh round of fund-raising. SpiceJet’s chief executive officer Sanjay Aggarwal was not available for comment and a spokesperson declined to do so. Tata group holds around 6% while Wilbur L. Ross, who specializes in investing in and restructuring distressed firms, holds 32% equity. Ross injected $80 million into SpiceJet in July 2008 through his eponymous private equity fund and persuaded investment bank Goldman Sachs to invest $20 million at the same time. According to the second executive quoted earlier, Ross, as well as UK-based Bhupendra Kansagra, who holds equity in SpiceJet through Royal Holding Services Ltd, and a few others are looking to exit the carrier. However, Kansagra denied any such move, saying he plans to remain invested with the airline.

“I have stayed invested for a decade now, I am not selling,” he told Mint. “In the case of fund-raising, we are going ahead with the programme and I cannot comment on the details,” added Kansagra, whose shareholding is currently at 12.89%. The India representative of WL Ross and Co. declined to comment.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

International low-cost airline to enter market

Saudi-based National Air Services (NAS) Airlines has plans of expanding its routes by operating to three more destinations in India during the next three months, covering Delhi, Calicut and Kochi, a statement by Waleed Al Shaikh, Director Marketing and Communications of Nas Air released on April 18 this year on their website, said.

Nas Air already operates four flights every week between Riyadh and Mumbai and has plans to expand its route map by introducing flights from Riyadh to Delhi, Calicut and Kochi and back. Although a spokesperson in the city refused to divulge any details, sources told FPJ that details of its strategic plans, routes and entry in India would be furnished on April 30. As per the website, the new route feasibility study came after in-depth studies conducted by Nas Air that shows a high demand on this destination in addition to the value expected by facilitating the traffic between Saudi Arabia and other nations.

While the website confirms flights on the Riyadh-Kochi and Riyadh-Calicut sectors to take off on June 1 and July 1 respectively, the airline is yet to announce the date of commencement of flights between Riyadh and Delhi

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Air India gets $475-million bridge loan from StanChart

National Aviation Company of India Ltd, the holding company of Air India, has secured a bridge loan of $475 million (Rs 2,137 crore) from Standard Chartered Bank at an overall rate of 350 basis points above Libor. The loan is to part finance the purchase of three Boeing 777-300 ER aircraft. The airline has already received the first of the three aircraft in March this year. The remaining two will be delivered by the end of May and July respectively. “It is a bridge loan taken for six months against the security of aircraft. This loan will be re-financed with a delivery finance loan in the next four to six months, which would be a cheaper loan,” said a senior official in Air India. NACIL had floated a tender on April 6, 2010 inviting offers for long-term loan funds for financing the purchase of three B777-300 ERs and one spare engine for up to $475 million, scheduled for delivery in 2010.

According to the tender document, US ExIm Bank's final commitment for the delivery financing has already been received. The document said the Government has approved the provision of the Government of India guarantee to support the financing for the project cost.

“However, NACIL would prefer to obtain the GoI guarantee to the minimum extent to save on guarantee cost”. The financing for first 17 aircraft had been tied up in three tranches of seven, three and seven aircraft. According to the document, NACIL has already taken delivery of these aircraft.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Airlines reschedule flights in view of bandh today

Almost all the airlines operating from Kolkata have rescheduled their flights for tomorrow in view of the 12-hour bandh. Jet Airways plans to operate its flights from Kolkata before 6 a.m. and only after 6 p.m., a spokesman of the airline said today. Mr Vijoy Matta, Kolkata chairman of Airlines Operators' Committee, said Indigo has advanced the departure of some of its morning flights.

The flights will be operated before 6 a.m. and after 6 p.m. The same will be done by Kingfisher Airlines and Spicejet. Air India will not operate its flight between Kolkata and Kathmandu. It has also changed the schedule of some of its flights. IC-201 from Kolkata to Delhi will leave Kolkata at 6:30 p.m. instead of 5 p.m. IC-765, from Kolkata to Chennai will leave at 7 p.m. instead of 6:30 p.m. and IC-217 from Kolkata to Hyderabad will leave Kolkata at 6:45 p.m. instead of 4:30 p.m. IC-771 from Kolkata to Bangalore will leave at 7 p.m. AI's flight, IC-213 will operate at 11:50 a.m. between Kolkata and Imphal and will not be operated to Aizwal, a spokesman of the airline said. Mr Matta added Emirates has deferred the departure of its flight from Kolkata to Dubai tomorrow. The flight will leave NSC Bose airport at 6:15 p.m. instead of 8:40 a.m.

Air Asia has also deferred the departure of its flight from Kolkata which will leave at 6:30 p.m. instead of 4 p.m., Mr Matta said. Kingfisher Airlines has cancelled 10 flights while Jet Airways cancelled 17 flights from Kolkata tomorrow. The number of flights cancelled by Spice Jet and Indigo are 10 and 13 respectively.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

United, Continental merger talks stalled

Merger talks between United Airlines and Continental Airlines reached an impasse over the weekend over a disagreement about the price of a deal, people involved in the negotiations said. More specifically, the two companies have not been able to reach an agreement over the value of the stock prices used to compute the exchange ratio in a stock-for-stock deal, these people said. The ratio would affect the price United would ultimately pay for the deal. Many other elements of a potential merger had already been agreed upon, including keeping the United name.

The companies had also settled on naming United’s chief, Glenn F Tilton, as chairman and Continental’s chief, Jeffery A Smisek, as chief executive of the combined airline.But one person involved in the discussions described the disagreement over the stock ratio as a potential deal-breaker for the talks, though the companies are continuing to negotiate. The chief executives of the two airlines spoke on Friday and Saturday about the exact ratio of shares that United planned to pay for Continental, these people said. It was their first discussion about a stock exchange ratio since the two airlines resumed merger talks more than a week ago.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Mysore airport to open on May 15

Chief Minister B.S. Yeddyurappa on Wednesday announced that the newly build airport in Mysore and new airport terminal at Mangalore will be inaugurated on May 15. Mr Yeddyurappa said that civil aviation minister Praful Patel had a discussion with him and agreed to inaugurate the airport and new terminal on May 15. The Chief Minister also announced that the state government would start the construction of airports in Shimoga and Gulbarga district in a month under a Public-Private- Partnership (PPP).

“We had a meeting with the civil aviation secretary to discuss the launch of airline operations from Belgaum and Bidar districts,” he said. The government has decided to adopt the PPP model to beautify dam sites such as Bhadra, Kabini, Hidkal, Markandeya and Narayanpura. “These sites will be developed and promoted as centers of tourist attraction during the Global Investors Meet(GIM) which is slated to begin on June 3.

We have already achieved a lot of success in developing Almatti dam on these lines,” he explained. Replying to a question on land encroachment in and around Bengaluru, Mr. Yeddyurappa said he was planning spot visits on encroached properties so that the recovery process is expedited. “I know for sure that there is a section of ‘influential’ people who are responsible for land grab in and around the city. I therefore need to visit these properties to make the recovery faster,” he explained.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).