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No Clarity On Bids Even As Air India Bidding Deadline Looms

However, if Tata group buys Air India and merges it with Vistara, it would get readymade infrastructure which Air India has built over the recent years.

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Air India 777

New Delhi: The deadline for submitting bids for Air India privatisation is ending by the end of the month among speculation that even the $3 billion debt still on the books of the airline may be becoming an impediment to the sale of the national carrier.

No airline or corporate group has publicly shown interest in bidding yet except US-based fund Interups Inc, which has said it is interested and is a strong bidder for Air India.

The government has been trying to sell Air India for the past few years. According to a report by financial services house, HSBC, previously, when the government tried to sell Air India, the terms and the shape in which the government wanted to sell Air India were not sufficiently attractive to any of the potential buyers. Hence the government has sweetened the deal this time and has decided to be more flexible with the terms.

First of all, the government is ready to sell 100 per cent stake in Air India (previously, it was selling only 76 per cent, which was a sticking point for potential buyers as the fear of continuous government intervention deterred many potential buyers). In addition, the government has shifted almost 60 per cent of the total debt to a special purpose vehicle (SPV).

The total debt on Air India’s balance sheet stood at $8 billon, but the government has transferred $5 billion of debt to an SPV and the buyer will have to absorb $3 billion of debt, most of which is aircraft related.

HSBC said the government is also trying to trim Air India’s work force to attract buyers although its employee cost to revenue ratio stands at around 11 per cent, which is broadly at par with IndiGo.

Reports suggest that the government is open to revisiting and refining the terms of the sales based on suggestions from the investors.

The remaining debt of $3 billion has become a sticking point with potential bidders and investors, who are now asking for the deal to be sweetened further.

The deadline for the bids ends on October 30. It was earlier extended on August 31 in the light of the Covid pandemic.

Interups Inc has talked about a bid for Air India. Laxmi Prasad, Chairman, Interups, said, “Getting ready to propose for Air India – valuation and financial structuring is almost complete. Will completely domesticate the investment including from NRIs that is now treated as domestic investment for Air India in exception. I am sure we will certainly please the government and the people of India by retaining Maharaja as our pride Indian carrier.”

Prasad had told IANS earlier that Interups Inc will be submitting its bid for Air India.

Prasad had said, “We carry 27,000 plus NRI retirement asset accounts and a group of very ultra-rich billionaire group and we are dead serious on our fight to have this airline piece not miss our hands. It shall be an acquisition for the people and by the people and participation is 100 per cent NRI and domestic Indian investor base.

“We have been seriously into Air India divestment since the opening of the interest, met the government several times and we have not dropped out of the race because of any pandemic affect. We are and we will be a very serious contender for acquiring Air India.”

While the Tata group was seen as a bidder for Air India, it is not clear whether it is still interested or will be putting in a bid.

“Air India fits very well with Tata group in our opinion. Although we believe it would take a few years for Tata group to turn around Air India, given the fact that Vistara (51 per cent owned by Tata, 49 per cent by Singapore Airlines) and Singapore Airlines both have strong expertise, it might not be as difficult as it may sound,” HSBC had said in a September report.

“Moreover, we believe the acquisition of Air India would help Vistara to be more competitive. At the moment, Vistara is a much smaller airline (6.5 per cent market share in domestic market during January 2020) and, due to that, it has not been able to make a profit (its cost structure has been less efficient in the absence of economies of scale, and it has not been able to grab corporate market share which is important in order for a flag carrier to be profitable),” the report said.

“We believe Vistara needs to increase its size to be competitive, to improve its cost structure and to grab corporate market share which could help it to be profitable in the medium to long term. However, if it grows organically, it might face significant challenges.

“First of all, it might take a long time for Vistara to grow to a reasonable size. However, the bigger challenge would be to get all the required infrastructure (slots at key airports, skilled manpower – although it is not currently difficult to get skilled manpower, and good slots at domestic and international airports),” the report added.

However, if Tata group buys Air India and merges it with Vistara, it would get readymade infrastructure which Air India has built over the recent years.

“Moreover, it fits very well with the strategic objective of Singapore Airlines in our view. We believe that the reason for Singapore Airlines investing in Vistara was to get access to the Indian market,” it added.

The report said, “However, with the current shape and small size of Vistara Airlines, Singapore’s access might be limited. The acquisition of Air India would not only give required access to Indian market, it would also strengthen Vistara and Singapore Airlines’ position in the Gulf market where Air India Express holds a very strong position. At the moment, Singapore Airlines doesn’t have much presence in the Gulf market.”

Business

Mi India’s Republic Day Sale: List of TVs, Smart Bands, and Smartphones available at Huge discounts

Flipkart VIP, Amazon Prime, and Mi VIP Club members will be able to take advantage of this sale from January 19, a day before.

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Amazon Flipkart

Mi India has announced the Republic Day offer. The sale offers huge discount offers on a variety of products including smartphones, smart TVs, and Smart Bands.

Mi India’s Republic Days offer sale will start from 12 noon on January 20, 2021, which will continue till 11.59 PM on the night of January 24, 2021.

This offer can be enjoyed on the e-commerce sites Amazon, Flipkart, and Mi.com. Flipkart VIP, Amazon Prime, and Mi VIP Club members will be able to take advantage of this sale from January 19, a day before.

Mi Smart Band 4

Selling Price – 2,299

Sale price – 1,899

Mi TV Stick

Selling Price – 2,799

Sale price -2,299

Mi Box 4K

Selling Price – 3,499

Sale price – 3,299

Mi LED TV 4A PRO 108 cm (43)

Selling Price – 24,999

Sale Price – 23,999

Mi LED TV 4X 50

Selling Price – 34,999

Sale Price – 33,999

Mi Watch Revolve Midnight Black & Silver

Selling Price – 10,999

Sale price – 8,999

Earphones (TWS) – Mi True Wireless Earphones 2C

Selling Price – 2,499

Sale Price – 1,999

Earphones (TWS) – Mi True Wireless Earphones 2

Selling Price – 3,999

Sale price – 2,499

Mi Beard Trimmer 1C

Selling Price – 999

Sale Price – 799

Mi Smart Water Purifier (RO+UV)

Selling Price – 12,999

Sale price – 9,999

Redmi Earbuds S

Selling Price – 1,799

Sale price – 1,499

Redmi Smart Band

Selling Price – 1,599

Sale price – 1,299

Redmi 9i (4+ 64GB)

Selling Price – 8,299

Sale price – 7,999

Redmi 9 Prime (4+64GB)

Selling Price – 9,999

Sale price – 9,499

Redmi Note 9 (6+128GB)

Selling Price – 14,999

Sale price – 13,999

Redmi Note 9 Pro (4+128GB)

Selling Price – 15,999

Sale price – 13,999

Redmi Note 9 Pro Max (6+64GB)

Selling Price – 16,999

Sale Price – 14,999

Mi LED TV 4A PRO 80 cm (32)

Selling Price – 14,999

Sale Price – 14,499

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Business

Dogfight: Airlines unleash deep discounts to dominate the sky

IndiGo’s Chief Strategy and Revenue Officer Sanjay Kumar said: “Low fares always helps stimulate the demand for the travel period far out and works as a part of airline strategy.”

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Preparing for Landing

New Delhi, Jan 19 : Fare wars induced deep discounting has reappeared in India’s aviation sector, as airlines seek to augment cash reserves, consolidate market share and bring back more capacity.

The first shot in this war of extremely low prices was fired recently with most airlines commencing their sales offers.

The development comes around a year since Covid-19 lockdown devastated the sector.

Industry insiders, however, now believe that the roll-out of anti-Covid-19 vaccination programme will give a boost to air travel.

Besides, some of the travel period offered under these schemes are beyond the current expiry of the fare cap imposed by the Centre.

IndiGo’s Chief Strategy and Revenue Officer Sanjay Kumar said: “Low fares always helps stimulate the demand for the travel period far out and works as a part of airline strategy.”

“These sales stimulate traffic among extremely price sensitive customers and helps airlines meet overall objectives.”

The latest passenger traffic data from the sector regulator DGCA indicate that the growth in passenger volumes is not yet adequate enough for a revival in the airline sector.

The aggregate passenger traffic in December 2020 at 73.27 lakh was still 43.7 per cent lower on a year-on-year basis.

“Lack of adequate demand in the post festive season along with higher available capacity has therefore, led a drop in passenger load factor for some of the airlines in December 2020 on a sequential basis vis-a-vis Nov 2020,” said Suman Chowdhury, Chief Analytical Officer at Acuite Ratings & Research.

“Such a scenario is possibly leading to a deep discounting strategy from airline companies. This involves sale of seats over the next few months through an attractive discount or add ons to ensure higher PLF over the next 1-2 quarters.”

Nevertheless, deep discounts are expected to hurt the already fragile financial condition of the sector.

“It will have an impact on the profitability of airline operations which has already been under losses in the last few quarters. In our opinion, however, passenger demand will witness a significant improvement in the next few months with the tapering of the Covid infection rate as well as the progress on the vaccination,” Chowdhury said.

Apart from ensuring a minimum PLF in the coming months, experts contend that deep discounts will trigger liquidity enhancement for airlines.

“Low airfares this month indicate the expected dip in travel post holiday season in December. Airfares in Jan across key routes have decreased 15-20 per cent MoM,” said Rajnish Kumar, Co-founder & CTO, ixigo.

“Heavy discounts being rolled out by major domestic and international airlines will definitely woo travellers who are planning vacations this year. With government caps ending on March 31, the discounts will attract flyers to plan their trips in advance and accelerate recovery in bookings to pre-Covid levels this year.”

On the other hand, the government has till now permitted the industry players to operate at 80 per cent of their pre-Covid capacity.

The operational capacity deployment level is expected to reach pre-Covid mark by the end of calendar year’s first quarter.

“In the current scenario of impact on demand due to the pandemic, while some aircraft continue to be grounded, the passenger load factors (PLFs) of airlines have also been impacted despite the lower capacity,” said Kinjal Shah, Vice President, ICRA.

“Thus, airlines have to take a calculated call on fares and its impact on demand.”

(Rohit Vaid can be contacted at [email protected])

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Azim Premji and Dr Devi Shetty chosen for PCB awards

Besides them 25 senior journalists have been selected for the ‘Press Club Annual Awards’, a release said.

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Azim Premji Wipro

Bengaluru, Jan 19: The chairman of Wipro Limited Azim Premji and the founder chairman of Narayana Health Dr Devi Prasad Shetty are among those who have been selected for the annual awards given by the Press Club of Bangalore.

Premji has been chosen for ‘Press Club Person of the Year’, while Dr Shetty and actor-Director Sudeep Sanjeev have been selected for the ‘Press Club Special Award.’

Besides them 25 senior journalists have been selected for the ‘Press Club Annual Awards’, a release said.

Chief Minister B S Yediyurappa will facilitate the awardees at a function scheduled for the third week of February, it said.

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