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Plan to buy beleaguered Jet Airways flies into rough winds with Tata bosses

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New Delhi : Top representatives of the Tata group — the salt-to-software conglomerate — have red-flagged “reputational issues” of Naresh Goyal-led Jet Airways, from the time of inception of the airline, including sources of its funding. This could adversely affect the progress of a deal between the two.

While Tata Sons, after a board meeting on Friday, said it was in preliminary talks with Jet and that there was no proposal yet, an internal panel has been constituted within the Tata group to carry out due diligence on the financial aspects and funding of Jet. The findings of the committee will determine the direction of the talks for a possible acquisition of Jet Airways by the Tatas, sources indicated.

As things stand now, apart from a clean chit from the internal committee, the Tatas would need some more conditions to be fulfilled for the transaction with Jet to fructify.

 

The group is likely to insist on Goyal selling his entire 51 per cent stake in the airline and relinquishing the board positions held by him and his family. More than anything else, any decision on Jet is likely to hinge on what Tata Trusts Chairman Ratan Tata has to say on the matter, said a source.

Plan to buy beleaguered Jet Airways flies into rough winds with Tata bosses The recent board meeting of Tata Sons discussed whether the proposed acquisition would fit into the group’s overall strategy, especially in relation to aviation. The Tatas and Singapore Airlines have already invested Rs 20 billion in Vistara (the largest single equity infusion ever) to support its expansion plan. Scaling up business is a priority but a few board members are believed to have expressed doubts over the proposed acquisition of Jet. In pursuit of scaling up, when the Tatas did not go for Air India, what is the need to buy Jet.

A source said Jet’s high debt and regulatory issues such as inquiries by several ministries and government agencies over the years also weighed in.

Jet had a debt of Rs 84 billion as of end-September, including Rs 18 billion of aircraft-related debt. The airline was trying to sell and lease back its Boeing 777 and Airbus A330 planes to pare down debt, but large repayment is an area of concern.

In addition, there could be operational concerns as well.

For instance, Tata’s joint venture (JV) partner in Vistara, Singapore Airlines, would like to tread cautiously on the deal. If the deal were to mature, the Tatas would want to merge Jet with Vistara. Tatas run two joint airlines in India — Vistara in partnership with Singapore Airlines and AirAsia India with Malaysia’s AirAsia Berhad. Fleet alignment could come in the way too. Vistara operates an all-Airbus A320 fleet, while Boeing 737 is the mainstay of Jet’s fleet.

Vistara is a 51:49 per cent JV between the Tatas and Singapore Airlines. According to the civil aviation ministry, Tata Singapore Airlines (Vistara) is an Indian controlled entity. However, the Federation of Indian Airlines, or FIA (of which Jet Airways is a part) has challenged the grant of permit to Vistara in the Delhi High Court. Among other things, the FIA has alleged that Vistara is controlled by Singapore Airlines and that litigation is still pending.

Simone Reis, co-head M&A practice at Nishith Desai Associates, said, “Foreign airlines investing in an Indian company cannot hold more than 49 per cent (under the government route) and control of such company must be with Indian residents. In the absence of specific restrictions, any downstream investment by such an Indian company (including in another airline company) should be considered Indian. Should the original government approval permitting the airline to invest have conditionalities (including how the Indian JV company will invest going further), those will have to be taken into consideration.”

Analysts believe the Tatas will not rush into an acquisition and will drive down the purchase price by prolonging the transaction.


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Business

WPI inflation at 8-month low of 3.80 pc in Dec on softening fuel, food prices

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New Delhi: Inflation based on wholesale prices fell to a 8-month low of 3.80 per cent in December, 2018, on softening prices of fuel and some food items.

The Wholesale Price Index (WPI)-based inflation stood at 4.64 per cent in November, 2018, and 3.58 per cent in December 2017. According to the government data released on Monday, deflation in food articles stood at 0.07 per cent in December, against 3.31 per cent in November.

Vegetables, too, saw deflation at 17.55 per cent in December, compared to 26.98 per cent in the previous month. Inflation in the ‘fuel and power’ basket in December slumped to 8.38 per cent, nearly half of 16.28 per cent in November.

 

This was on account of lowering of prices of petrol and diesel through December. Individually, in petrol and diesel inflation was 1.57 per cent and 8.61 per cent, respectively, and for liquified petroleum gas (LPG) it was 6.87 per cent during December.

Among food articles, potato prices became cheaper substantially with inflation at 48.68 per cent in December, as against 86.45 per cent in November.

Inflation in pulses stood at 2.11 per cent, while in ‘egg, meat and fish’ it was 4.55 per cent. Onion witnessed deflation of 63.83 per cent in December, compared to 47.60 per cent in November.

The 3.80 per cent inflation is the lowest in 8 months, and a lower inflation than this was last seen in April at 3.62 per cent. Data for retail or consumer price index-based inflation would be released later in the day.

The Reserve Bank of India (RBI) mainly takes into account retail inflation data while formulating monetary policy. In its fifth monetary policy review for the fiscal, last month, the Reserve Bank kept interest rates unchanged, but held out a promise to cut them if the upside risks to inflation do not materialise.

The central bank lowered retail inflation projection to 2.7-3.2 per cent for the second half of the current fiscal, citing normal monsoon and moderate food prices.

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Air tickets, identity cards to become redundant; flyers can use facial recognition to enter airport

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New Delhi: The hassle to show air tickets and identity cards at Airport will be over as air travellers can soon enter airport with facial recognition biometric facility.

GMR Hyderabad International Airport Ltd (GHIAL) that operates the Rajiv Gandhi International Airport (RGIA), has successfully conducted the trial of facial recognition technology. During the first phase of the trial, employees of GHIAL were included. The second phase of the trial is expected to be launched by the end of this month, in which GHIAL will include common air fliers. And if the second phase of the trial is successful, GHIAL will implement facial recognition technology in Hyderabad airport from March onwards.

Three phases of facial recognition technology

 

First phase: GHIAL has installed facial recognition cameras in the Hyderabad. In the first phase, the imaging of passengers will be done through these cameras which will recognise the faces of the flyers.

Second phase: There would be a centralised registration system for passengers. Each passenger’s face will be attached with his/her photo identity like passport, Aadhaar, voting id, driving licence etc. The details of passengers along with his facial mapping will be scanned and stored by GHIAL through the centralised registration system at the Airport.

Third phase: The ID proof of the passengers along with their facial mapping will be stored at the e-boarding gate of the Airport.The data centres at Airlines will also have similar information. Whenever such passengers book tickets, the data system will alert the Hyderabad Airport authorities.

The moment you book a flight ticket originating from Hyderabad airport, your details will be shared by the data centre and the information will be given to all the concerned authorities.

When you reach the Hyderabad terminal gate, face recognition technology will identify you and all your details will be shared on the screen. The security personnel at the gate will access all your information via the system.

Similarly, your details can be accessed by the security personnel at the check-in counter, security check-in. Once the formalities are done, passengers will get an online boarding pass on their mobile phone.

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Maruti all-new WagonR 2019 available for booking at Rs 11,000

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New Delhi: Country’s largest car manufacturer Maruti Suzuki India on Monday said that its all-new WagonR is available for booking starting.

Customers can book the 3rd generation WagonR at authorized dealer network across the country by paying Rs 11,000. They can also book the car online.

The New WagonR is powered by the advanced K-series engine offering high fuel efficiency and an unmatched driving experience, Maruti said. The car now comes with a new 1.2 L engine option that delivers powerful and impressive performance coupled with great fuel economy. Customers will also have the choice of 1.0 L engine for the all-new WagonR.

 

Maruti Suzuki’s acclaimed two pedal technology will also be offered in the new WagonR. The Auto Gear Shift (AGS) offers. Maruti said that for the first it is going to offer the most innovative SmartPlay Studio infotainment experience in the Big New WagonR.

The car will be available in Pearl Poolside Blue, Pearl Nutmeg Brown, Magma Grey, Pearl Autumn Orange, Silky Silver and Superior White Range of variants. The Petrol: 1.0 L engine will be available in Lxi, Vxi / Vxi AGS variants while the Petrol: 1.2 L will be available in Vxi, Vxi AGS, Zxi / Zxi AGS variants.

“The new WagonR gets bigger with enhanced comfort. The car’s sturdy and masculine look with true tall boy design makes for a strong road presence. The Big New WagonR not only embodies strong looks but is also stronger inside out,” Maruti said in a release.

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