Govt of India exploring options to buy Embraer's commercial aircraft biz
The Indian government is keen to buy Embraer’s commercial aircraft division, said a top-ranking government official. “We are very interested. We are exploring alternatives,” the official said, confirming a development reported earlier by Reuters on Brazil’s plans to reach out to India and China as possible new partners.
One of the arrangements the government is considering is a tie-up with a sovereign fund to finance the deal. This is the first time the Indian government has expressed clear willingness to enter the deal.
Flybig, India's newest airline, to begin operations from January 3: All you need to know
The first week of 2021 will see the Indian aviation industry get its newest airline Flybig, which will begin operations on January 3. The inaugural flight will take off from Indore, the airline's base, at 2.30 in the afternoon to Ahmedabad. The total flying time will be an hour and five minutes.
In the initial couple of weeks, the airline founded by Sanjay Mandavia - a pilot-turned-aviation entrepreneur - will operate thrice a week. "We will later scale up to have five flights a week, from mid-February," CEO Srinivas Rao told Moneycontrol.
From January 13, Flybig will add the Indore-Raipur route in its network. And from February 1, the airline will begin flying from Ahmedabad to Bhopal. By the end of March this year, the airline will have daily flights connecting all the three tier-2 cities.
Flybig has an ATR aircraft, and is in the process of getting a second one.
"We opened up bookings two days ago. The interest is good and we have seen bookings of 25 percent," Rao, added. The airline has tied up with over 15,000 agents, many of them in the tier-2 cities. Talks are also on with online travel agencies.
The airline, which organised a 'special flight' for a differently abled on December 31 in Jabalpur, will add the city in its network in the second stage.
The launch of the new airline comes even as the domestic air traffic continues to improve, having got a push during the festive season and year-end travel. While the government had hiked the cap, enabling airlines to now use 80 percent of their capacity, the hope is now that this will be eased further.
Some concerns remain. Despite the governments beginning to administer vaccines, a new strain of COVID-19 has again brought back fears, especially for international travel. As a precautionary measure, India has suspended flights to the UK, where the new strain originated, till January 7.
The airline, which had gotten its permit from regulator DGCA on December 14, partly began operations on December 21, when it operated a chartered flight with the aircraft taken on wet lease from SpiceJet. The airline flew from Delhi to Shillong, to coincide with the Meghalaya government's step to open up the state for tourism as domestic travel recovers gradually from the COVID-19 pandemic.
"We have won the tender from the state government to operate the Delhi-Shillong flight for three years," Rao had told Moneycontrol. From January, the company will operate two weekly flights on the route. Eventually, added the senior executive, the company plans to deploy its own aircraft on the route.
The airline will follow a hybrid model, by serving snacks on board, but un-bundling other services. "We don't want to sell food on-board as the flying time is less. That will prevent us from giving a proper service and could lead to frustration among fliers. Thus we opted to offer snacks as part of the ticket," he said.
Post the launch, the airline will look to serve tier 3 cities such as Bilaspur and Satna from Bhopal.
"...I'm actively pursuing Airbus to try and get them to come to India to start manufacturing aeroplanes in India," said Goyal.
Airbus could use the opportunity to cement its dominance in the world's second largest market in terms of aircraft order, over its American rival Boeing. Especially when Boeing, which has been on the back foot since the grounding of its Max 737 aircraft, may have dropped the plan to set up a manufacturing base in India, as per this report.
"Why not? They produce in China and the US. India is now one of their largest A320 markets," said Sanjiv Kapoor, Senior Advisor, Alton Aviation; former COO SpiceJet and CSCO, Vistara, when asked about the possibility of Airbus setting up a manufacturing shop in India.
The A320 aircraft, which is used by IndiGo and GoAir, has helped Airbus keep the lead over Boeing when it comes to commercial aircraft market in India. And it will want to keep it at that.
According to Boeing's own estimate in 2019, Indian aviation market will need 2,380 new commercial airplanes valued at $330 billion in the next 20 years. Though COVID-19 may have clouded that estimate by a bit, the India's domestic aviation market has been among the fastest on the recovery road. And IndiGo, one of the biggest Airbus customers globally, has stayed on its massive fleet expansion plan.
If that is so, why has Boeing trimmed its India plan? "Boeing has lost its way," says a senior executive from the Indian aviation industry.
Though the Max 737 has slowly made a comeback in some parts of the aviation map, Boeing continues to suffer from the aircraft's grounding. And if COVID-19 made recovery all the more difficult, its planes continue to be involved in incidents - not all because of its fault - giving it bad press.
Boeing Vs Airbus in India
Boeing had dominated the Indian market, like it initially did all over the world. It has been present in India for more than 75 years in its overall 103-year history. Indian Air Force has been a customer since the 1940s. And, in civil aviation, Tata Airlines (which later became Air India) got the first commercial plane.
Jet Airways suspending its operations in April has been a setback for the US manufacturer. The airline had given an order of 225 Boeing aircraft. Apart from Jet, SpiceJet has an order of 205 Boeing aircraft, and Vistara 10.
With Jet Airways, whose new owners are still waiting to get its keys, long way from coming back to its old self, Boeing loses out to Airbus, who has a 300-aircraft order from IndiGo alone.
Commercial aviation apart, Boeing seems to have had a larger presence in India. The American manufacturer does $1b worth procurement from India annually, versus $650 million of Airbus. Its supplier-partner network is over three times that of its European peer. Also, its JV with the Tata Group - Tata Boeing Aerospace Limited - has been making more news than Airbus venture with the Mahindra Group.
While one doesn't know what kind of manufacturing Airbus will want to have in India, any factory set up will be a big push in its race with Boeing. China has Airbus’ first wide-body centre outside of Europe. Perhaps in India, the company could start with a final assembly line like the one it has China?
Parliament proceedings | IndiGo, SpiceJet & GoAir had on-time performance of 93.7%, 76.9% and 72.8% in January: Puri
IndiGo, SpiceJet and GoAir had on-time performance (OTP) of 93.7%, 76.9% and 72.8%, respectively, in January this year, Civil Aviation Minister Hardeep Singh Puri said on Wednesday.
IndiGo's OTP was highest among the three airlines in November and December last year too, stated data presented by Mr. Puri in his written reply to a question in Rajya Sabha.
IndiGo's on-time performance in November and December 2020 was 97.5% and 94.7%, respectively, the minister mentioned.
While SpiceJet's OTP was 91.7% and 79.2% in these two months, GoAir's on-time performance was 84% and 77.8%, he added.
The minister also presented data about the flights cancelled by the aforesaid three airlines. IndiGo cancelled 1.29%, 1.36% and 1.35% flights in November 2020, December 2020 and January 2021, respectively, he noted.
SpiceJet cancelled 1.14%, 1.57% and 2.3% flights, while GoAir cancelled 0%, 0.47% and 1.59% flights in these three months, he added.
Currently, IndiGo has around 54% share in domestic market in terms of passenger numbers, while SpiceJet and GoAir have around 13% and 8.2% share, as per aviation regulator Directorate General of Civil Aviation (DGCA).