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Air Costa suspends all flights till March 15

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Air Costa

Bengaluru, March 6 : Cash-strapped regional airline Air Costa has suspended its operations till March 15 for operational reasons, said a company official on Monday.

“We have suspended our services since February 28 and stopped bookings till March 15 for operational reasons. We will announce our revival plans on March 15,” Air Costa’s Marketing Vice-President Kavi Chaurasia told IANS from Andhra Pradesh’s Vijayawada.

The three-year-old feeder airline was operating daily service to eight cities, including six in the southern region – Bengaluru, Chennai, Hyderabad, Tirupathi, Vijayawada and Vizag and two in the western region – Ahmedabad and Jaipur.

“We have grounded our two Embraer aircraft. We are talking to investors for infusion of investments as we are facing fund crunch,” admitted Chaurasia.

Though the low-cost airline had four Embraer jets with a capacity to fly 112 passengers in each of them, two are stalled at the Hyderabad airport after they were impounded by GE Capital Aviation Services for defaulting on payments.

The budget carrier has about 600 employees.

According to the information with the Directorate General of Civil Aviation (DGCA), the Vijayawada-based airline was founded by L.P. Bhaskara Rao, a realtor.

The airline had reported Rs 130 crore loss on revenue of Rs 327 crore for fiscal 2015-16.

DGCA data for December showed Air Costa had the highest number of cancellations at 13.65 per cent and its market share was 0.6 per cent.

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Equity indices end volatile day in green

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Mumbai, Dec 18: Dancing to the tune of the assembly poll results of Gujarat and Himachal Pradesh, key Indian equity indices provisionally closed in the green on Monday after swinging from the extreme negative to the positive.

The wider Nifty50 of the National Stock Exchange (NSE) provisionally closed (at 3.30 p.m.) higher by 55.50 points or 0.54 per cent at 10,388.75 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 33,364.52 points, closed at 33,601.68 points — up 138.71 points or 0.41 per cent — from its previous close.

The Sensex touched a high of 33,801.90 points and a low of 32,595.63 points during the intra-day trade so far.

The BSE market breadth was bullish — 1,472 advances and 1,182 declines.

“Sectorally, pharma, PSU bank, auto, telecom and metals indices have gained the most, while Realty has slipped marginally into red,” Deepak Jasani, Head of Retail Research for HDFC Securities, told IANS.

IANS

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Telecom: Year of turmoil with bleeding balance-sheets under GST’s shadow

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GST

New Delhi, Dec 18: It was a year of turmoil for the hyper-competitive Indian telecom sector as the balance-sheets of many major players kept bleeding, prompting the government to form an panel to chalk out plans to bail out firms.

Reliance Industries’ Jio continued to disrupt the market with its free or low-priced offers while three or four majors fought for the telecom pie tooth and nail. Despite assurances to the sector, the central government’s policy did not help: the Goods and Services Tax (GST) hiked the tax on the sector from 15 per cent to 18 per cent.

Also, the Telecom Regulator Authority of India (TRAI) reduced the Interconnection Usage Charges (IUC) to 6 paise from 14 paise per minute from October 1, 2017, putting additional pressure on the incumbents.

However, a few mergers and acquisitions in the sector sparked hopes of a better tomorrow as consolidation would help the majors to cope with challenges better, even as the cumulative debt of telcos rose to around Rs 4.6 lakh crore and the revenues fell. The sector’s adjusted gross revenue fell to Rs 30,759 crore for the quarter ending September 2017 — a year-on-year decrease of 18.1 per cent.

“This is a consequence of a number of developments over the years, including the entry of new operators in 2009 and the voice tariff war. This was followed by expensive auctions for spectrum (2016), needed by the telcos to offer communications services,” Rajan S. Mathews, Director General, Cellular Operators’ Association of India (COAI), told IANS.

“In 2018, consolidation in the sector is likely to take shape and the telcos will get the benefit of synergy in operations and the overall costs are likely to come down. Eventually, pricing power could also return, enabling longer-term sustainability overall,” he added.

However, Mahesh Uppal, Director of consultancy firm Com First, feels competition from Reliance Jio would continue to hurt margins of the incumbents.

“With Jio guaranteeing free calls to its subscribers, other players will find it difficult to sustain revenues from voice calls. They will be forced to do the same. They will then compete aggressively in the market for data services, especially by providing larger data packs at even cheaper prices. It is not clear whether players will compete more vigorously on quality of service. This might take more time,” Uppal told IANS.

But Amresh Nandan, Research Director, Gartner, said Jio’s disruption with free voice and data offers would eventually subside and become normal.

“Beyond a point, quality and reliability of service matter most. As that takes centre-stage, which has started to happen, free or even discounted services won’t help. If Jio comes up with products beyond connectivity — that enables greater interaction and transactions for consumers with necessary quality and reliability, then the competitive scenario may change,” he said.

Talking about mergers and acquisitions, Uppal said the sector was in the process of reaching an optimal number of players. “I expect the eventual survivors to be Airtel, Jio, the combination of Idea and Vodafone and the government-owned MTNL-BSNL,” Uppal said.

Nandan said mergers and acquisitions were good for the market from the economic perspective.

“Four telcos are dominant in the market and it should lead to a better scenario. However, real value from these deals will take time. These M&As are yet to reach operational culmination, which in itself will shake-up things a bit more,” he added.

“As far as consolidation is concerned, no market in the world has more than five telecom operators, but in India, there were more than 10. In 2018, the Bharti Airtel-Tata Teleservices-Telenor combine and the Idea Cellular-Vodafone combine would take shape,” said Mathews.

The country saw almost 40 per cent jump in 10 months in the number of wireless broadband users from 217.95 million at the end of December 2016 to 322.18 million users at the end of October 2017.

The regulator also came up with recommendations on net neutrality during the year, largely in agreement with suggestions made by the industry on “no blocking, no throttling, no fast lanes”, while allowing reasonable traffic management.

However, according to Mathews, the industry was disappointed that the authority did not adopt their recommendation “to have a wider approach to net neutrality, where issues of OTT (over-the-top) players, definition of net neutrality to include issues around connecting the next one billion unconnected users and national development priorities.”

The industry is now awaiting norms for in-flight connectivity, which is scheduled to come from the regulator by the year end.

The highlights of the year were:

** Announcement of merger of Vodafone India and Idea Cellular

** Airtel’s MoU with Tata Teleservices & Tata Teleservices Maharashtra to merge their Consumer Mobile Businesses

** JioPhone’s digital empowerment of 50 crore feature phone users at an effective price of zero

** Reliance Communications completion of merger with MTS

The telecom buzzword for 2018 appears to be 5G — smarter, faster communication. But that’s going to take around two to three years for full deployment.

IANS

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Adani parts ways with mining services company Downer over Carmichael mine

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Adani

Sydney, Dec 18: Embattled Indian miner Adani Group has parted ways with mining services giant Downer and said it will build and run the Carmichael coal mine, Australia’s biggest coal venture in central Queensland’s Galilee Basin, on its own, a media report said.

Adani in a statement on Monday revealed that both parties had cancelled a conditional $2.6 billion contract as part of Adani’s cost-cutting drive following last week’s decision by the Queensland state government to veto an A$900 million federal government loan to Adani.

The split comes after Australian company Downer became the target of a nationwide activist campaign pressuring it to quit the Carmichael project in central Queensland, abc.net.au reported.

The move raises further questions about the fate of the massive project, with Downer one of only two mine contractors – along with Thiess – considered capable of handling an operation producing up to 60 million tonnes of coal a year.

It is the latest in a long series of project hiccups for the Carmichael mine, including the veto of Adani’s application for a Northern Australia Infrastructure Facility (NAIF) loan last week, and its so far unsuccessful attempts to raise finance in China.

Adani said in a statement it remained committed to the project and the split with Downer was “simply a change in management structure”.

“Following on from the NAIF veto last week, and in line with its vision to achieve the lowest quartile cost of production by ensuring flexibility and efficiencies in the supply chain, Adani has decided to develop and operate the mine on an owner operator basis,” the statement said.

“Adani and Downer have mutually agreed to cancel all Letter of Awards and Downer will provide transitional assistance until March 31, 2018.

“Adani remains committed to develop the Carmichael project and will ensure the highest level of standards and governance.

“This will not affect our commitment or the number of local jobs across Queensland.”

Adani had intended to outsource the operation of its Carmichael mine to Downer under an agreement that was worth $2bn at the time of its announcement in 2014.

The very first act of Queensland’s newly re-elected Labor government was to make good on its election promise to veto a loan to Adani of up to $1bn from the federal Northern Australian Infrastructure Fund (Naif).

The government has said it backs the mine and wants the jobs it will create, but also says the project must be viable without taxpayer funds, including federal funds.

Adani is yet to secure funding for the mine. Earlier this month, Chinese lenders ruled out providing finance, joining Australia’s big four banks in avoiding the controversial project.

IANS

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