Airlines

Banks must pay Jet Airways staff’s PF, gratuity: Jalan-Kalrock

Banks slowing down Jet airways takeover. Why Indian banks unsupportive to Aviation Industry ?

The successful bidder for Jet Airways, the Jalan-Kalrock consortium, has filed a petition with the National Company Law Appellate Tribunal (NCLAT), saying that the provident fund and gratuity obligations of Jet employees must be covered by the airline’s current financial stability, with the remaining balance coming from the lenders’ share.

Until the date of insolvency graduation in June 2019, the appeal tribunal had ordered the consortium to pay gratuities and provident funds to the airline’s employees on October 21. Around ₹275 crore is the total declared.

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The banks, who already receive an average 95% haircut as part of the decision process, have refused to split the cost of PF and gratuity dues, casting additional doubt on the two-year-old decision deal. The Jalan-Kalrock consortium (JKC) has stated that all claims must be resolved within that amount and that it is not obligated to pay creditors anything more than the total amount of Rs. 475 crores.

The airline’s cash balance, which is approximately 50 crore, will be used to cover all extra claims that haven’t been taken into account in the authorized resolution plan, with the remaining funds coming from the banks’ stake of the airline, said.

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JKC’s overall obligation to former Jet Airways creditors is set at 475 crores. The resolution plan, which has been accepted by Jet Airways lenders, NCLT, and NCLAT, already clearly lays out the source and method of payments, according to a consortium representative.

In 2020, Jalan-Kalrock was successful in its bid to revive the bankrupt airline through a bank-run insolvency process, but since then, little progress has been made due to disagreements over payment concerns that have arisen between the lenders and the consortium. Employee legal challenges have also slowed down the procedure.

The consortium offered a price of Rs. 1,375 crores for the carrier, of which Rs. 475 crores would be used to pay stakeholders and Rs. 900 crores would be allocated for working capital and capital expenditure. The consortium must fulfill the plan’s upfront payment requirement of 185 crores within 180 days; that period ends on November 29. Lenders are unlikely to transfer the airline to the consortium without getting their initial payment.

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Airlines

Cathay Pacific asks business class customers to bring their own cutlery

In an innovative move towards sustainability, renowned Hong Kong carrier Cathay Pacific has recently floated an unconventional idea to its business class customers.

Bringing their own cutlery sets onboard. This initiative, revealed through a member survey circulated within the airline’s “Cathay Lab” community – a platform comprising frequent business class travelers – has stirred a wave of curiosity within the aviation industry.

With sustainability becoming an increasing concern in aviation, Cathay Pacific’s survey aimed to gauge passengers‘ willingness to partake in various eco-friendly practices during their journeys.

Among the initiatives presented, including refilling reusable water bottles and recycling plastic, the prospect of bringing personal cutlery garnered significant attention. Some members expressed practical concerns, questioning the feasibility of carrying cutlery through airport security and the potential inconvenience for passengers unaware of regulations.

Others suggested that Cathay Pacific should simply provide reusable cutlery onboard instead. Furthermore, there were suspicions among some respondents that the BYO cutlery proposal might be a precursor to introducing additional charges, with one user humorously envisioning a scenario where the airline lends cutlery sets for a fee.

Despite the skepticism surrounding the proposal, Cathay Pacific’s exploration of innovative sustainability measures reflects a broader industry trend towards environmental consciousness.

Airlines

Air India and IndiGo’s Joint Initiative, Plans for 170 Wide-Body Aircraft

In a bold move that underscores their confidence in India’s burgeoning aviation sector, Air India and IndiGo have revealed ambitious plans to acquire a combined total of up to 170 wide-body aircraft.

This strategic investment marks a significant shift in the country’s aviation landscape, as it brings European aircraft manufacturer Airbus into a domain traditionally dominated by American giant Boeing.

With India positioned as one of the world’s fastest-growing aviation markets, the timing couldn’t be more opportune for such expansion endeavors. The aim is clear: to elevate India’s status as a global aviation hub by enhancing connectivity through direct flights between Indian cities and international destinations.

Currently, a substantial portion of India’s international air traffic relies on overseas hubs, particularly in the Gulf region. IndiGo’s announcement of firm orders for 30 A350-900 aircraft, with an option for an additional 70, signals its commitment to capturing a larger share of the long-haul market.

Meanwhile, Air India’s comprehensive order, unveiled last year, encompasses 70 wide-body planes, including a mix of A350 and Boeing 787 models.

Recognizing the potential for disruption in the long and ultra-long haul segments, aviation consultancy CAPA India has emphasized the pivotal role Indian carriers can play in driving innovation and transformation.

With the current combined fleet size of Indian airlines exceeding 700 aircraft, the stage is set for Air India and IndiGo to spearhead a new era of growth and connectivity in the Indian aviation sector.

Airlines

Air China Makes Landmark Deal: Orders 100 C919 Jets from COMAC

In a strategic move that could reshape China’s aviation industry, Air China has inked a monumental deal with Comac, signaling a significant shift in the nation’s commercial aircraft procurement landscape.

The agreement, valued at a staggering $10.8 billion based on list prices, entails the purchase of 100 Comac C919 jets, a resounding endorsement of the homegrown challenger to aerospace giants Airbus and Boeing.

The announcement, disclosed in a filing by Air China, underscores the airline’s commitment to bolstering its fleet with domestically manufactured aircraft. These C919 jets, slated for delivery between 2024 and 2031, are poised to amplify Air China’s operational capabilities and enhance its competitive stance in the global aviation arena.

The C919, a formidable competitor to Boeing’s 737 Max and Airbus’s A320neo, symbolizes China’s ambitious foray into the global aviation market. With Air China’s commitment to acquiring a substantial fleet of C919s, the aircraft is poised to carve out a formidable niche in the industry, challenging the dominance of established players.

Notably, Air China‘s existing fleet comprises an extensive array of Airbus and Boeing aircraft, showcasing its diverse operational portfolio.

With nearly 500 airplanes in service, including models from the A320 family and the 737 series, Air China’s decision to incorporate the C919 into its fleet underscores a strategic diversification strategy.

While Airbus has enjoyed notable success in China, buoyed by its local assembly line, Boeing has faced formidable challenges in recent years. However, Air China’s resolute investment in the C919 signals a paradigm shift, amplifying China’s quest for self-sufficiency in aviation.