Indian efforts and Iranian assistance

Dino D'Amore
By Dino D'Amore November 29, 2013 12:09

Indian efforts and Iranian assistance

As mentioned here before, India is to increase Qatar’s entitlement of airline seats under their bilateral traffic rights agreement, which has been reached and final numbers are being negotiated at this time. Qatar is looking for 72,600 seats from the current 24,800. This deal would put Oneworld and Qatar ahead of Etihad/Jet and Emirates for ME transit seats offered. It is likely that Qatar Airways will get what it wants as the Indian government is also negotiating a complex LNG supply deal with Qatar right now. It is also understood that Qatar is trying to team-up with Air India by sponsoring entry into Oneworld, or if that fails, launching a separate codeshare agreement with the Indian flag carrier.

Meanwhile Jet Airways is telling employees they are going to be laid off. This is good news in the sense that Jet Airways is finally doing something about its collapsing affairs now that Etihad is pulling some of the strings. The losses will initially come as Etihad combines its network with Jet but look sharp on this matter as if Jet just leave cuts at that then effectively it is standing still and doing nothing while it continues haemorrhaging money. Jet management has stated this week that the darkest times are behind them; this might be true in that Etihad will keep them rolling, but in terms of Indian domestic market the dark clouds that have been hanging over the same for many years are giving way to a storm as AirAsia and co approach.

Interestingly as all this is going on, the Indian government is passing legislation to criminalise wilful default which will allow creditors to seize assets far more easily than today. The Reserve Bank of India defines a wilful defaulter as a borrower that is able but unwilling to pay, has diverted loan proceeds for other than their initially stated use, or has overstated profits in order to obtain a loan.

All this is designed to stop India going over the edge into deep recession as banks cease loaning to businesses after stresses such as Kingfisher. Take for example poor Kemrock, which makes carbon-fibre components for aircraft, its factories are shuttered to such an extent that they are running at just 18% capacity because they are running low on working capital and banks won’t extend loans to them, even in this delivery phase. Kemrock is turning to the US distressed debt investment market for working capital.

And yet as Indian banks slow their economy to a crawl, Vijay Mallya, has not been named a wilful defaulter by the very same banks.

Meanwhile expect Iran Air and other airlines in Iran to beat a door to Airbus and Boeing in the coming months and lessors should also be in line to benefit. Parts companies will, in the short term, be the real winners without a doubt. We received a nice message last week about our editorials on Iran over the past 12 months, which has already earned one company a nice packet. By the end of 2013, all being well, we will all be thanking Iran for playing the diplomatic game as oil weakens during what should be is strongest months. The going is good.

Dino D'Amore
By Dino D'Amore November 29, 2013 12:09
No Comments Yet!

Let me tell You a sad story ! There are no comments yet, but You can be first one to comment this article.

Write a comment

Only <a href="http://www.aviationnews-online.com/wp-login.php?redirect_to=http%3A%2F%2Fwww.aviationnews-online.com%2Feditorial-comment%2Findian-efforts-and-iranian-assistance%2F"> registered </a> users can comment.