Winging abroad: AirAsia India expected to soon get international flying permit – ET TravelWorld

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Winging abroad: AirAsia India expected to soon get international flying permitWith AirAsia India getting close to obtaining international flying rights, conglomerate Tata Sons, will in the near future, have four airlines with permits for overseas operations. At present, only Vistara operates on international routes.

The development assumes significance since Tata Sons’ subsidiary Talace is expected to soon acquire Air India and Air India Express after conclusion of the share purchase agreement (SPA) with the Centre. Both Air India and Air India Express operate international flights.

Recently, AirAsia India, in which Tatas own a majority stake, received security clearance to operate international flights, said industry insiders. Nevertheless, many procedures with the country’s Civil Aviation Ministry and the regulator still remain to be fulfilled before the airline commences international operations. These procedures include obtaining permissions for scheduling, slotting, and training.

Civil Aviation Secretary Rajiv Bansal, also highlighted that with better utilisation, the number of flying hours for an aircraft will increase.

According to industry insiders, these steps might take anywhere up to 2-6 months to fulfil. However, they pointed out that even after obtaining all the permissions, the airline might not fly abroad in the near future, due to the ongoing pandemic. The Bengaluru-headquartered airline is a joint venture between Tata Sons and AirAsia Investment Ltd. Commencing operations on June 12, 2014, it flies over 240 direct and connecting routes across India with a fleet of 28 aircraft.

The Tata Sons’ subsidiary had emerged as the highest bidder for the national carrier under the divestment process. It quoted an enterprise value of INR 18,000 crore for the 100 per cent equity shareholding of the Centre in Air India along with that of Air India Express and AISATS. On the acquisition of Air India, the Centre is expected to enter into a SPA with Talace by December-end.

The industry executives warn that it might cost more than USD 1 billion and require fixing myriad problems for Air India to make a successful return to the market.

Out of INR 18,000 crore, Talace will retain Air India’s overall debt worth INR 15,300 crore, while the rest will be paid to the Centre as the cash component. All in all, Tata Sons’ subsidiary Talace will, among other assets such as human resources, get more 140 aircraft as well as 8 logos.In terms of fleet, Tatas will get Air India’s 117 wide-body and narrow body aircraft and Air India Express’s 24. A significant number of these aircraft are owned by Air India. It will also operate these aircraft on over 4,000 domestic and 1,800 international routes. Additionally, it will get access to Air India’s frequent flyer programme which has more than three million members.

DIPAM Secretary, Tuhin Kanta Pandey, said that Tata is not getting a cash cow but an airline which is bleeding where money needs to be pumped in to refurbish obsolete aircraft and dust up strangled ones while being unable to touch any employee for one year and only be able to resize staff after paying a VRS.



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