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Mumbai: Around four years after the Mumbai police intercepted a drone flying with a pizza parcel for delivery that led to a complete crack-down on the drone operations in India by private players, the new drone policy regarding its use has finally come into force starting December 1.

The government had earlier cited privacy and security concerns while declaring a ban on its operations. The new policy- Drone Regulations 1.0 - allows basic operations like its use for infrastructure projects, marriage celebration, agriculture. However, its use for e-commerce delivery and air taxis will still have to wait, the officials said.

“It may happen in the drone regulation version-3.0 or may be even later” said a ministry source. “ We want to go step by step” added the source. However, with the coming of drone policy, more sectors will explore using drones now, claim experts. The significance of the usage of drones can be gauged from the fact that a research by BIS Research- a global market intelligence and advisory firm - has predicted that the Indian drone market will reach $885.7 million by 2021, and the global market size will touch $21.47 billion.

As a result, the Ministry of Civil Aviation on August 27 this year released the regulations for drone flying in India after much consultation with different stakeholders, including defence, aviation experts, academics, law enforcement agencies, hospitals, etc. As per an estimate, there are 40,000 drones operating in the country on the commercial side though the number of drones used by the armed forces is not available.

Watch this Zee Business video here:

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="315" scrolling="no" src="https://www.youtube.com/embed/PSEGKK1gub4" width="100%"></iframe>

According to a Mumbai-based aviation analyst, given their commercial benefits, there have been attempts in the past to formalise a regulatory framework for the operation of drones in India.

“Last year in November 2017, the government had released the draft CARs for permitting operation of civil drones after taking into consideration the comments and feedback from various stakeholders on the draft CARs.” the analyst said.

As per the regulation, the operator will first have to register itself, drone, and pilot with the regulator before getting the permission to fly. The operator can get clearance using a mobile app, which was launched by the civil aviation ministry last week.

The app only allows for registration of pilots, devices, service providers, and NPNT (no permission, no take-off). The system disables the flying of drones unless there is an approval from the aviation regulator Directorate General of Civil Aviation (DGCA), the ministry officials said.

According to junior civil aviation minister Jayant Sinha, his ministry is working on an advance version of drone regulations 2.0 over the past six months, so that that operators stay within the digital air corridor. The drones will be monitored using artificial intelligence (AI).

As per the drone regulations, the Indian airspace for drone usage has been partitioned into Red Zone (flying not permitted), Yellow Zone (controlled airspace), and Green Zone (automatic permission).

The law allows for visual line-of-sight daytime-only and a maximum of 400 feet altitude operations. Rabindra Jhunjhunwala (partner) and Shweta Dwivedi (principal associate) of law firm Khaitan &amp; Co in a newsletter released in September said that the drone policy, however, has certain hits as well as misses.

Relaxations and exemptions for nano and micro categories will provide relief to operators using drones in enclosed spaces for commercial activities (e.g. use by photographers, etc). A digital IT-driven platform in the form of Digital Sky Platform will ease the process for applying for permits.

This article was published in DNA Money first: <a href="https://www.dnaindia.com/business/report-e-tail-air-taxis-may-not-fly-drones-soon-2692002">E-tail, air taxis may not fly drones soon</a>

Around four years after the Mumbai police intercepted a drone flying with a pizza parcel for delivery that led to a complete crack-down on the drone operations in India by private players, the new drone policy regarding its use has finally come into force starting December 1.


Aviation: Drones and e-commerce delivery: Not happening any time soon

In order to push the development of electric vehicle (EV) charging stations in every nook and corner of the country, the government is considering allowing individuals to own such charging stations. This is reminiscent of the situation in the US in 1910, where individual fuel suppliers along the highways first fuelled growth in car sales among the masses.

Observers and experts tracking the industry are of the opinion that the move will create a new class of small entrepreneurs in the country as it did in the US over 100 years back when individuals bought gas from a wholesaler and supplied it along the highways.

The government has circulated the EV charging policy, seeking comments and suggestions from different departments and ministries. Power and New &amp; Renewable Energy minister R K Singh when asked whether individuals would be able to use the facility on a commercial basis, said, “Absolutely you don’t need a license”.

However, sources said that the individual would have to adhere to conditions set up by the ministry and regulator, including having a cap on the tariff that can be charged from the customer. At present, the regulatory norms prescribe compulsory license to supply electric, and therefore an amendment has been a necessity in this regard, industry insiders said.

A Mumbai-based analyst said that the new policy is likely to give a push to the EV industry, as a charging station is being planned every 3 km, though initially, it will start in bigger cities along the national and state highways. The industry is still awaiting the declaration of the Faster Adoption and Manufacture of (Hybrid and) Electric Vehicles (FAME-2) scheme which is expected to be announced in April. FAME-2 is the second phase of the incentive scheme being provided to the consumers of electric vehicles in India. The first phase, which is called FAME-1, was introduced in 2015 and offered incentives to hybrid and electricity vehicles of up to Rs 29,000 for two-wheelers and Rs 1.38 lakh for cars. The new scheme will have the financial support of around Rs 5,500 crore and is expected to last for around five years.

Sridhar V, partner, Grant Thornton India LLP, said that moving towards a significant coverage of electric vehicles in a short period of time is a serious challenge and one of those challenges is with regards to charging infrastructure.

“While the proposal to allow individuals to set up charging stations is a welcome move, it remains to be seen how the government would facilitate it through its clear-cut policy measures including on pricing, distribution mechanism, subsidies, approvals etc” added Sridhar.

A recent Icra report claimed that the battery cost of an electric vehicle, accounting for almost one-third of the total cost, will remain a key determinant in the rate of acceptance of EVs globally. In a significant development, the cost of lithium-ion EV battery has fallen to almost one-fourth to $208/Kwh in 2017 from $800/kwh in 2011.

According to industry experts, the electric vehicle industry is at a nascent stage in India. It is less than 1% of the total vehicle sales and has the potential to grow over 5% in next few years. At present, there are more than 4 lakh electric two-wheelers and a few thousand electric cars plying on Indian roads.

Industry volumes have been fluctuating, mostly depending on the incentives offered by the government, added experts. Further, more than 95% electric vehicles are low-speed electric scooters (less than 25km/hr) that do not require registration and licenses.

Almost all electric scooters run on lead batteries to keep the prices low. However, battery failures and low life of batteries have become major limiting factors for sales.

This story first appeared in DNA Money: <a href="https://www.dnaindia.com/automobile/report-you-may-get-to-own-electric-vehicle-charging-stations-2687640">You may get to own EV stations</a> 
&nbsp;

The government has circulated the EV charging policy, seeking comments and suggestions from different departments and ministries. Power and New &amp; Renewable Energy minister R K Singh when asked whether individuals would be able to use the facility on a commercial basis, said, “Absolutely you don’t need a license”.


Want to own this great business of the future? Modi govt set to create new class of small entrepreneurs  

Siddhartha Lal, managing director and chief executive officer, Eicher Motors was just 30 years of age in 2004 when he took over the charge of chief operating officer of Eicher Group, which then had a diverse portfolio of 15 businesses ranging from motorcycles, trucks, tractors, garments, components, footwear. Over a period of time, he divested the 13 businesses and put his energy and money only on two -- motorcycle and truck. Since then the company has come a long way, especially its motorcycle brand, Royal Enfield, which today has grown by leaps and bounds. Lal spoke to Shahkar Abidi on the sidelines of India launch of its latest product - Continental GT 650 Twin and Interceptor INT 650 Twin mid-sized motorcycles, where he discussed at length about the company's global and India strategies, recent industrial unrest at the Chennai plant and the benefits of having a single specification of its latest products, among other things.

How are Twins models placed in your business strategy. Where does Royal Enfield go from here? 
It gives us the platform that can make us a global company in next 5-10 years. In markets around the world, including in India, there are some modern classics, but they are with much higher capacity and much more expensive. There are no true middle weights (motorcycles). In the true middle weight category, there are no such modern classics. So yes, there is a lot of opportunity for growth in the segment and that is why we are here for.

Harley too is trying to bring some middle weight category products in the market? 
That's a good point. It is not that there isn't (middle weight motorcycles). There might be some, but they are not successful. None of them is a breakaway success. Because there is something missing from the overall offering. So I believe we will be able to make it. Also, there is space for everyone to compete and grow in the segment.

What kind of volumes are looking you at for Twins? How big is the market for middle weight category motorcycles globally and in India? 
We do not make forward looking statements. The market size is relatively small globally. I think we can expand the market over next five years. Above 500cc, the market in India is around 10,000-15,000 motorcycles, whereas, overall the market is 20 million. So 10,000-15,000 units is just 0.1%, which is nothing. The way Royal Enfield has been able to grow in size (in 350cc) in India from virtually zero to now million, we think we can do the same in global markets for the Twin bikes, that is our objective for the next 5-10 years.

Does the Twin broadly remain for global markets? 
The 350cc is basically India-oriented. Twins, from the day one are made of a single specification for the entire world. It's a global bike by its design and vision. However, India obviously is super-critical for us because that is where we are distinguished, that is where we have the understanding and that is where we have customers, 3.5 million of them. And India is from where we can get scale. If we are able to do justice to this product and get huge in India, that will provide us a better cost structure. Already, our cost structure is good in India. We can make cost structure even better because of the scale and that will give us muscle in the end so we can sell these Twins in markets around the world at a true middle weight pricing. Otherwise, middle weight motorcycles end up being close to heavy weight pricing. We want to make this bike accessible for the people to try and have it.

Can we expect more motorcycles on this platform? 
Not just yet. Our focus right now is exactly on these motorcycles because of all the new emission norms that derailed all of our product plans we had a couple of years ago. For now for the next couple of years, this is what we have got. After a couple of years we may. But nothing for now.

So the production will all be in India or are there plans to make it global? 
It is not needed. We can make world-class products, and (for it ) we don't need to go anywhere else. The only reason we may eventually end up doing assembly in Brazil or in Thailand is from the tax perspective. But that will also be minimum completely knocked down (CKD) type. We are studying different options, but the intent is as much as possible to have our production to be in Chennai (India).

Recently, there has been a major industrial disturbance at your plant in Chennai due to which production of around 28,000 units was impacted. You blamed some "external influence" for it. Can you share something more on that? 
It was a tough period for us. The external influence was the main sticky point with the striking employees. They wanted us to recognise a third party person who has no bearing. Our point was that you have absolute liberty to form a union, but it is also our prerogative to talk with you guys (union) and not an external person, who actually has no interest in the well-being of the Royal Enfield or in fact employees. They have their own profit objectives or other things. That was it.

You spoke about having a standard product with the same specifications globally. Apart from saving some costs, do you think having the product fine tuned for India market would have been more useful? 
I would say no to that. The whole concept was to do extensive testing for markets around the world. We found that from power, delivery; we can have one specification. Even from the suspension point of view, where of course India has a lot more bad road conditions. We set up suspension that works extremely well for India. We have a single specification around the world and that is very helpful because then nobody feels that they are getting inferior motorcycles. That is always an issue people have had. The only thing is sometime we have different versions. For example, Euro IV version emission norms in Europe might be different from norms here. Similarly, there might be different lighting norms. We have harmonised everything and have single highest specs for every market in the world. Also, that has helped us in the testing only one type of model. We do not have to do same on 30 different variants, so that helped us a lot.

How was the sales during the just concluded festive season? 
It was alright for us. It was reasonable. We had of course production problem and all. Basically, our retails were strong. So, considering everything I think we did quite alright during the festive season. 
 
How is the growth of your truck business, especially at a time when the industry seems to be slowing down a bit? 
It is progressing very well and is moving in the right direction.

This article was first published in DNA as <a href="http://Twin bikes can make Royal Enfield a global company in next 5-10 years, says Siddhartha Lal">'Twin bikes can make Royal Enfield a global company in </a><a href="http://Twin bikes can make Royal Enfield a global company in next 5-10 years, says Siddhartha Lal">next</a><a href="http://Twin bikes can make Royal Enfield a global company in next 5-10 years, says Siddhartha Lal"> 5-10 years, says Siddhartha Lal'</a>

Siddhartha Lal, managing director&nbsp;and&nbsp;chief executive officer, Eicher Motors was just 30 years of age in 2004 when he took over the charge of&nbsp;chief&nbsp;operating officer of Eicher Group, which then had a diverse portfolio of 15 businesses ranging from motorcycles, trucks, tractors, garments, components, footwear.


Continental GT 650 Twin, Interceptor INT 650 can take Royal Enfield global: MD & CEO Siddhartha Lal

Naresh Goyal-promoted Jet Airways on Monday reported a consolidated net loss of Rs 1,261 crore for the July-September quarter. The carrier had posted a net profit of Rs 71 crore a year ago. The airline’s current liabilities exceed its current assets.

The management blamed the rising aircraft fuel cost that increased over 50%, depreciating rupee, a challenging airfare pricing situation in a domestic market with over capacity among the prime reasons for the continued losses. The company had declared Rs 1,323 crore of loss during the previous quarter. A back of the envelope calculation shows that Jet Airways has been losing around Rs 14 core every day. In comparison, the debt-ridden national carrier Air India’s per day losses were at less than Rs 10 crore last year.

Concerned over the severe losses, Jet Airways, which is working on a turnaround strategy, is believed to be in talks with a few private equity firms and corporates including Tata Sons for fund infusion.

The point of contention, according to reports, has been a controlling stake of 51% that Tata Group is demanding while Goyal is said to be opposing it. Mumbai-based Tata Group, which already runs two airlines in India - the full-service carrier (FCC) Vistara and low-cost carrier (LCC) AirAsia - wants to merge Jet Airways with the former.Additionally, Jet Airways’s management said it plans to save around Rs 2,000 crore over the next couple of years by the way of sub-leasing some of its fleet, renegotiation of contracts, better utilisation of resources, etc. Cost saving of over Rs 500 crore has already been realised to date (in H1FY19), the airline said in a statement.

Watch Zee Business Tweet Video here:

<blockquote class="twitter-tweet" data-lang="en">
<a href="https://twitter.com/hashtag/ZBusinessInMumbai?src=hash&amp;ref_src=twsrc%5Etfw">#ZBusinessInMumbai</a> | अच्छे स्टॉक और दमदार स्ट्रैटेजी से ही बनता है बाज़ार में पैसा, जानिए कमाई वाले 20 शेयर संदीप ग्रोवर और सुमित मेहरोत्रा से।<a href="https://twitter.com/AnilSinghviZEE?ref_src=twsrc%5Etfw">@AnilSinghviZEE</a> <a href="https://twitter.com/SumitResearch?ref_src=twsrc%5Etfw">@SumitResearch</a> <a href="https://twitter.com/sandeepgrover09?ref_src=twsrc%5Etfw">@sandeepgrover09</a> <a href="https://twitter.com/deepaliranaa?ref_src=twsrc%5Etfw">@deepaliranaa</a> <a href="https://twitter.com/dkalra81?ref_src=twsrc%5Etfw">@dkalra81</a> <a href="https://twitter.com/poojat_0211?ref_src=twsrc%5Etfw">@poojat_0211</a> <a href="https://twitter.com/devganrajat9?ref_src=twsrc%5Etfw">@devganrajat9</a> <a href="https://twitter.com/12_AparnaRoy?ref_src=twsrc%5Etfw">@12_AparnaRoy</a> <a href="https://t.co/plRJfNqmo8">pic.twitter.com/plRJfNqmo8</a>
— Zee Business (@ZeeBusiness) <a href="https://twitter.com/ZeeBusiness/status/1062188801466998784?ref_src=twsrc%5Etfw">November 13, 2018</a></blockquote>

Analysts say that while the industry is in adding capacity despite the massive losses, Jet Airways has consciously begun to reduce it. Airlines increased domestic capacity by 18% during Q2 of this financial year (FY), but Jet Airways reduced it by 4%. Similarly, while the industry capacity grew 14% (Q2FY18), 14% (Q3FY18), 18% (Q4FY18), 18% (Q1FY19), Jet Airways recorded an increase of just 6.7%, 6.7%, 6.6%, 6.8%, respectively.

According to industry observers, Jet Airways has been facing headwinds for the past few quarters.

The deciding point came in August after the top management of the airline told its employees that it will not be able to survive beyond 60 days if cost rationalisation measures were not taken. Though the airline denied the reports, it accepted that cost-cutting measures were on. The carrier has also been losing market share.

This Article was first Published by DNA :&nbsp;<a href="https://www.dnaindia.com/business/report-jet-airways-flies-into-rs-1261-loss-in-second-quarter-2685061" target="_blank">Jet Airways flies into Rs 1,261 loss in </a><a href="https://www.dnaindia.com/business/report-jet-airways-flies-into-rs-1261-loss-in-second-quarter-2685061" target="_blank">second</a><a href="https://www.dnaindia.com/business/report-jet-airways-flies-into-rs-1261-loss-in-second-quarter-2685061" target="_blank"> quarter</a>

Concerned over the severe losses, Jet Airways, which is working on a turnaround strategy, is believed to be in talks with a few private equity firms and corporates including Tata Sons for fund infusion.


Jet Airways current liabilities exceed assets! Naresh Goyal pilots crisis, but Q2 in a mess

Mumbai: Mahindra &amp; Mahindra (M&amp;M) is rethinking launching six products under Furio platform in the Bharat Stage IV regime after the Supreme Court banned the sale of vehicles under the emission norms after April 1, 2020. The company is considering shifting at least a couple of products to the BS-VI regime.

Sources said other original equipment manufacturers (OEMs), too, are bringing changes to their strategies for a smooth transition to the BS-VI regime. Bharat Stage norms are emission standards imposed on automobile manufacturers that specify the maximum permissible limits for pollutants in the exhaust fumes of automobiles.

Furio, a platform of 21 products, was introduced by M&amp;M in July this year for its new range of Intermediate Commercial Vehicles (ICVs). Designed by its Italy-based subsidiary Pininfarina, Furio has been developed with an investment of Rs 600 crore.

The company had then announced its plans to launch six trucks in the current fiscal while the rest will come straight in the BS-VI era. Vinod Sahay, chief executive officer, Mahindra Truck and Bus and Construction Equipment Divisions, M&amp;M said, “We are right now debating.

We will not launch all the six products under BS IV, as the Supreme Court has decoded everything.” “Out of six, we would have to postpone a couple of products because the window of BS6 has reduced,” Sahay said on the sidelines of the launch of the Blazo X, an upgrade of its Blazo range of heavy commercial vehicle trucks, on Friday.

Watch this Zee Business video here:

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="315" scrolling="no" src="https://www.youtube.com/embed/gXC7LWq2YcM" width="100%"></iframe>

Sahay said if the BS-VI deadline had been four years away, then M&amp;M would have launched all 21 products under BS IV itself as it would have had all the time to recover its investment.

He said it made absolutely no sense to launch any product in August 2019 because after four months its production will need to be stopped. The Indian auto industry is slated to jump to BS VI, skipping BS V, and a deadline of April 1, 2020, has been set.

Mahindra &amp; Mahindra (M&amp;M) is rethinking launching six products under Furio platform in the Bharat Stage IV regime after the Supreme Court banned the sale of vehicles under the emission norms after April 1, 2020.


After Rs 600 cr spend, Mahindra forced to rethink 21 vehicle Furio platform

Mahindra &amp; Mahindra (M&amp;M) is rethinking launching six products under Furio platform in the Bharat Stage IV regime after the Supreme Court banned the sale of vehicles under the emission norms after April 1, 2020. The company is considering shifting at least a couple of products to the BS-VI regime.

Sources said other original equipment manufacturers (OEMs), too, are bringing changes to their strategies for a smooth transition to the BS-VI regime.

Bharat Stage norms are emission standards imposed on automobile manufacturers that specify the maximum permissible limits for pollutants in the exhaust fumes of automobiles.

Furio, a platform of 21 products, was introduced by M&amp;M in July this year for its new range of Intermediate Commercial Vehicles (ICVs). Designed by its Italy-based subsidiary Pininfarina, Furio has been developed with an investment of Rs 600 crore. The company had then announced its plans to launch six trucks in the current fiscal while the rest will come straight in the BS-VI era.

Vinod Sahay, chief executive officer, Mahindra Truck and Bus and Construction Equipment Divisions, M&amp;M said, “We are right now debating. We will not launch all the six products under BS IV, as the Supreme Court has decoded everything.” “Out of six, we would have to postpone a couple of products because the window of BS6 has reduced,” Sahay said on the sidelines of the launch of the Blazo X, an upgrade of its Blazo range of heavy commercial vehicle trucks, on Friday.

Sahay said if the BS-VI deadline had been four years away, then M&amp;M would have launched all 21 products under BS IV itself as it would have had all the time to recover its investment.

He said it made absolutely no sense to launch any product in August 2019 because after four months its production will need to be stopped.

The Indian auto industry is slated to jump to BS VI, skipping BS V, and a deadline of April 1, 2020, has been set. 
&nbsp; 
Source: DNA Money&nbsp;

Furio, a platform of 21 products, was introduced by M&amp;M in July this year for its new range of Intermediate Commercial Vehicles (ICVs). Designed by its Italy-based subsidiary Pininfarina, Furio has been developed with an investment of Rs 600 crore. The company had then announced its plans to launch six trucks in the current fiscal while the rest will come straight in the BS-VI era.


BS-VI regime: Mahindra & Mahindra may not launch six products under Furio platform 

Prabhakara Rao, who is currently the executive director of Delhi International Airport (DIAL), has been associated with the GMR Group for nearly eight years, including seven years as its CEO. He told DNA Money’s Shahkar Abidi that uncertainty over tariffs has been slowing investments in the aviation sector. Below are excerpts from the interview.

What are the challenges the private airport operators facing today? Uncertainty over tariffs is one of the most prominent ones, especially for someone like GMR?

Uncertainty over tariffs is the first one. As an investor, I don’t know what kind of tariff I will get. This is the kind of challenge which is slowing the investment. That is why we are asking the government to come out with some policy on the same. Can you make a fixed tariff upfront like in Philippines? The investor knows there what the tariff is (before deciding to invest).

The second challenge is real estate. Though it is an important aspect and funds the aviation growth, there is a lot of uncertainty surrounding its usage.

Thirdly, we are a private company, and there is a lot of scrutiny like that is government sector which makes the decision making slow. I think the government needs to come out with something to make it friendlier for investors. Further, the alignment of stakeholders is the biggest task for us. Around 220 companies work in one airport and aligning them for a common cause is a huge task, especially the government ones like immigration, customs, security among others.

Recently GMR made an arbitration settlement with private equity investors in which it agreed to pay `3,560 cr to them. In addition, PE investors will also acquire a 5.86% stake in the airport business. Will this development affect your current operations and future funding?

Nothing will get affected. Things will continue as planned and we are on track to achieve our growth.

How big is a funding problem in today’s scenario?

It’s a challenge but we have innovative ways to fund the project. Today DIAL doesn’t lack funding. We have gone for international bonds and it helped us in funding our projects.

How has been the growth for private airport sector in general and particularly in GMR?

When we got our first airport in Hyderabad in 2004, it was the first private airport in the country. Later, Delhi, Mumbai, and Bengaluru came into existence. If you look at the decade, these airports have not only brought in the capacity enhancement but also growth. Also, it gave a name to the country.

I remember in 2006, when I went with the Delhi airport card, nobody gave me the treatment. I went to the Changi airport, they did not allow me to come inside. That was the stage for us then. Today, our name is there before us. That is how the growth has happened. Today 50% of passenger traffic is handled by five airports in India (Delhi, Mumbai, Bengaluru, Hyderabad, and Cochin).

Source: DNA Money

"Uncertainty over tariffs is the first one. As an investor, I don’t know what kind of tariff I will get. This is the kind of challenge which is slowing the investment. That is why we are asking the government to come out with some policy on the same. Can you make a fixed tariff upfront like in Philippines? The investor knows there what the tariff is (before deciding to invest)," said Prabhakara Rao.


Aviation: Uncertainty over tariffs slowing investments, says Prabhakara Rao, executive director DIAL

When GVK Group patriarch GVK Reddy was accepting congratulations for winning the Mumbai airport privatisation bid in 2006, a senior executive from the rival global bidder walked up to him and said, “All the best.”

The executive’s firm was running a handful of large private airport projects and he was aware of the challenges Reddy was about to face in developing the Mumbai airport that was surrounded by slums.

GVK needed all the wishes as developing such a big infrastructure was not going to be walk in the garden.

GVK and GMR, which won the Delhi airport bid around that time, had to navigate red tape, snail pace approvals, political vote banks not leading to handover of land and other hurdles.

Fourteen years on, the two groups manage six international airports in India, GVK has Mumbai and Navi Mumbai. It sold Bengaluru airport recently to Fairfax. GMR has Delhi and Hyderabad.Both have bid for international airports too.&nbsp;While GVK has also bagged the Navi Mumbai International Airport (NMIA), GMR has got Goa and Nagpur airports.

A decade later

Though it was predicted at the turn of this decade that privatisation of airports will spread to non-metro airports, too, the development haven’t matched up to the expectations.&nbsp;While Delhi, Mumbai, Bengaluru and Hyderabad airports are now recognised among the most developed airports in Asia, it was a hard struggle for the operators. For example, in 2007, the slums occupied 147 acre of airport land in Mumbai. A decade later, it increased to 308 acre.

An execuive with Mumbai International Airport Ltd (MIAL), the GVK owned airport operator, said, “The government did not provide us the land free of encroachment and we are still awaiting it. The vote bank politics is also making flying unsafe.” Similar is the case with other airports including the Hyderabad airport, where around 120 acre of land is still under encroachment.

Uncertainty over tariff

Prabhakara Rao, GMR Airport’s executive director, told DNA Money that in India, there is uncertainty over tariff, unlike in other countries such as the Philippines where it is known upfront. The uncertainty makes decision making difficult for the operator. “We need more clarity on it,” Rao said.

The tariff concerns have been serious from the airport operator’s point of view.

With effect from July 7 last year, Delhi International Airport (DIAL), on the basis of the judgment from the Supreme Court, implemented a tariff order which led to significant reduction in its revenue. However, a TDSAT order on April 23 this year laid the principles for tariff determination and provided clarity on various pending issues. “The company expects the positive impact of the TDSAT order to reflect in the tariff determination by the regulator for the next tariff control period i.e. 2019 -2024,” said G M Rao, chairman of GMR group, in the firm’s latest annual report.

Operating income from airport segment decreased by 23% from Rs 7,100 crore in fiscal 2017 to Rs 5,418 crore in fiscal 2018, primarily due to revision of tariff in DIAL,

However, Comptroller and Auditor General (CAG) and Airport Economic Regulatory Authority (AERA), a regulator for airport tariff, have a different take on drop in revenues.

CAG had highlighted that “undue benefits” of thousands of crores of rupees were doled out by the civil aviation ministry to the private airport builders. Similarly, AERA did not mince words when it referred the private airport development as “gold plating” with unnecessary and expensive fittings. For example, the use of Italian marbles instead of a Rajasthani ones, which come at a much cheaper rate. The increased costs then gets passed on to the airlines and finally to the passengers. Likewise, a civil aviation ministry official said it was poor management by airport operators in question which kept the development cost high and which they are trying to put blame on government and others. The airport operators have denied the charges.

Funding slowdown

According to industry observers, though funding came quite easily in the earlier years due to economic boom, it slowed down later. While the Mumbai airport development cost has been in upward of Rs 13,000 crore for GVK, MIAL now needs to raise money for meeting the developmental work at Navi Mumbai airport, whose cost has escalated 50% to over Rs 14,000 crore.

“No way, we could have let any other operator take over the NMIA project as that would have seriously affected our business at Mumbai airport,” said a GVK official. In order to raise funds, GVK had to sell its stake in Bengaluru airport. “The sales proceeds were fully utilised to repay the outstanding obligations, to the extent possible,” the company later said. According to the senior MIAL executives, the company is now looking to raise additional Rs 6,000 crore by dilution of equity in its airport arm.

Similarly, GMR-led consortium has invested so far over Rs 13,000 crore in the first phase of Delhi airport alone and plans to spend another Rs 9,000 crore in second phase of development. Prabhakara Rao, GMR Airport’s executive director, when asked whether the arbitration decision will affect the company’s funding plans, said that it will have no effect whatsoever.

In order to hedge its losses, GMR is aggressively looking for international projects. However, Nawal Taneja, airline business strategist, author and former professor of aviation management at Ohio State University, has a word of caution. “ Smaller airports will be taken over and or managed by larger airport management groups such as Singapore Airports Group and the Frankfurt Airports Group. Smaller groups such as GMR will face competition from the larger groups unless they can offer better value propositions.”

G S Bawa, a former Airport Authority of India (AAI) executive and an aviation expert said it makes sense for GMR and GVK to explore projects in foreign countries and reap benefits of their expertise.

Forced to bid?

While NMIA was won by GVK, Goa and Nagpur went into the kitty of GMR. Though both the companies competed in bidding, highly placed sources in both the companies said that there have been pressure from the government to bid even though it may not have been inclined to do so. For example, in case of NMIA bidding a senior executive from GMR said that they were not really interested, but the government asked them to participate for “competitive glossary” reasons. Similarly, a source from GVK Airports said that bidding for Goa did not make sense to them and so was the case with Nagpur. However, a section of people in GVK claims that Nagpur would have made tremendous sense as it is centrally located and has tremendous potential to develop and could even pose threat to the Mumbai airport.

Reliance Airport Developers Private Ltd 
Reliance Infra (RInfra) with its subsidiary company, Reliance Airport Developers Private Ltd was in 2009 awarded the lease rights for 95 years to develop and operate five small airports in Maharashtra. Though scheduled flights initially started from some of these airports, the airlines could not fill the empty seats, leading to their withdrawal. Today, the airports are now available for flying of only private jets.

Other airports 
About 15 profitable airports, including Jaipur, Kolkata, Chennai and Ahmedabad, is being planned to be put under private management. Experts said it will not be an easy thing to do considering massive protest in the past by AAI employees against it. The government had earlier decided to award only management contracts at AAI-owned airports to private parties. However, attempts to award contracts for Jaipur and Ahmedabad airports haven't received encourageing bidding interest.

Source: DNA Money

GVK and GMR, which won the Delhi airport bid around that time, had to navigate red tape, snail pace approvals, political vote banks not leading to handover of land and other hurdles.


Aviation: Even as GMR, GVK thriving, airport modernisation remains work in progress  

Tata Motors on Wednesday reported a consolidated net loss of Rs 1,009 crore for the second quarter ended September 30, 2018 dragged down by its British subsidiary Jaguar Land Rover (JLR), The company had reported a net profit of Rs 2,501.67 crore a year ago.

Total revenue from operations, however, rose 3.3% to Rs 72,112.08 crore as compared to Rs 69,838.68 crore in the year-ago period, Tata Motors said in a regulatory filing JLR sales dropped 13.2% on the slowdown in the Chinese economy and poor consumer sentiment.

Describing the situation “very serious” the JLR management has launched a turnaround for the company, by “re-calibrating” its investments plans and strategies on the lines of its parent Tata Motors.&nbsp;JLR has cut its planned spending by 500 million pounds and will now instead spend 4.03 billion pounds over this and next financial year, the executives said.

On a standalone basis, Tata Motors reported a net profit of Rs 109.14 crore against a net loss of Rs 283.37 crore in the year-ago quarter. Standalone total revenue from operations grew 33% to Rs 17,758.69 crore year on year while standalone volume rose 25% to 1,90,283 units driven by robust sales of commercial and passenger vehicles.

N Chandrasekaran, chairman of Tata Group, said for JLR, market conditions, particularly in China, have deteriorated further. “To weather this volatile external scenario, we have launched a comprehensive turnaround plan to significantly improve our free cash flows and profitability.” The cost and cash flow improvements of 2.5 billion pounds have been planned over the next 18 months, the executives said.

Ralf Speth, chief executive officer, JLR, said the sales fall primarily reflected the challenging market conditions in China, where demand was adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US. In North America, demand for SUVs remained strong, but overall sales were held back by slowing orders for passenger cars in line with the markets as a whole. Further, in Europe, the sales were also affected by continuing weakness in diesel demand and the introduction of new WLTP homologation rules on emissions. The UK sales were adversely impacted by diesel taxation and regulations, alongside continuing uncertainty related to Brexit. “All kinds of challenges have come together” Speth said.

P Balaji, chief financial officer of Tata Motors Group, clarified that the re-calibration of investment entails cutting down or postponement of activities that are not immediately required. “However, there will be no compromise on the products or innovation.” Balaji did not comment whether there will be any restructuring in the management or staff.

The company sources said that dealer profitability, production delay and cost structures of products are some of the immediate concerns for the JLR management. A Board committee and consultants have been appointed to look into the issues, sources said. “Sales were slowing down since past few months. But even in June we did not realise that things will get pulled down so much. It’s only in August that we began feeling the heat,” a source said.

A Mumbai-based analyst said JLR has been facing headwinds for some time, but the situation was never so serious, though some of its problem are due to external factors not in its control.

“Our solid, all-around performance in Q2 has demonstrated that our ‘Turnaround 2.0’ is in full swing. This was possible due to a robust product and innovation pipeline, strong market activation, rigorous cost cuts and structural process improvements,” chief executive Guenter Butschek said.

Provision for impairment of capital work-in-progress and intangibles stood at Rs 93.21 crore and provisions for closure of operations of the Thailand subsidiary stood at Rs 537.08 crore, hitting the bottomline, the company said. Operating margin fell by 130 bps to 9.9% and pre-tax margin contracted 310 bps to 1.7% in the reporting quarter.

JLR revenue degrew 11% to 5.63 billion pounds as retail sales dropped 13.2% to 1.29 lakh units.

Source: DNA Money

Describing the situation “very serious” the JLR management has launched a turnaround for the company, by “re-calibrating” its investments plans and strategies on the lines of its parent Tata Motors.&nbsp;JLR has cut its planned spending by 500 million pounds and will now instead spend 4.03 billion pounds over this and next financial year, the executives said.


How Jaguar Land Rover drove Tata Motors into Rs 1,009 cr loss

With 22% more flights scheduled this winter season asking more for seats to be filled, the domestic airlines have once again started a fare war, offering tickets for as low as Rs 900.

Market leader IndiGo has come up with discounts for 10 lakh tickets, with fares starting from Rs 899 for travel period from November 8 to April 15 next year. The period after Diwali until the second half of December sees sales softening a bit. Rival airline GoAir had earlier come out with a similar low fare offer followed by AirAsia, Jet Airways and others.

Neelu Singh, CEO and director, Ezeego1, said, “While unsold inventory level is reducing to a large extent, airlines introducing new aircraft is leading to capacity growth, forcing them to introduce last-minute sales to fill the extra seats.”

Rahul Bhatia, co-founder and interim CEO, IndiGo, during a conference call with analysts said that as competition intensifies the ticket booking outside the 15-day period before departure, which was previously about 60%, has now come down to 54%. “The real problem is the last-minute discounts,” said an IndiGo executive. Most of the airlines are facing overcapacity as around 1,000 planes are on order.

According to data available with Director General of Civil Aviation, Indian airlines will operate 22% more flights during winter schedule 2018 at 23,117 departures a week as compared to the similar period last year. Globally, the winter schedule runs from the last Sunday of October to last Saturday in March of the following year.

Aloke Bajpai, CEO and co-founder, ixigo, said all major airlines are offering promotional sales for destinations, including Lucknow, Patna, Guwahati and Dehradun, in order to lure passengers and boost demand in the domestic market. “Owing to this, we have seen an increase of 22-24% in bookings for domestic travel in the coming months.”

John Nair, head-business travel, Cox &amp; Kings, said this year there is an increase in capacity across sectors, and new sectors such as Mumbai-Jodhpur have come onstream, thereby diverting some traffic from hubs such as Jaipur.

However, according to industry insiders, the fares during the days of Diwali and Christmas are likely to go up further.

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Rajeev Kale, president &amp; country head - holidays, MICE, visa &amp; passport services, Thomas Cook (India), said the domestic air fare position this year is seeing significant peaks this Diwali-festive season, with fares to favourites like Andaman as high as Rs 35,000-40,000 per person.

Source: DNA Money

Market leader IndiGo has come up with discounts for 10 lakh tickets, with fares starting from Rs 899 for travel period from November 8 to April 15 next year. The period after Diwali until the second half of December sees sales softening a bit. Rival airline GoAir had earlier come out with a similar low fare offer followed by AirAsia, Jet Airways and others.

N


Aviation fare war: About 22% more flights would be operated, forcing carriers to offer low rates 

Mumbai: Vehicle makers are hoping for a bright Diwali after NBFC crisis, fuel prices and confusion over insurance premiums hit sales during Dussehra. They are pinning hopes on new launches and upgrades to drive sales during Diwali, which accounts for around 75% of total festive sales annually.

Confusion over new insurance policy premiums, tightening of financing to the end-consumers by non-banking financial institutions (NBFCs) in backdrop of crisis at IL&amp;FS and high fuel prices are some of the reasons that led to drop in bookings.

A sales executive at one of Mahindra &amp; Mahindra’s (M&amp;M) showrooms in suburban Mumbai told DNA Money that though enquiries were higher this year over the last year, sales were down.

The executive said his showroom delivered just 38 cars while it counted around 50 units last year during Dushera. Importantly, around 65-70% of the total deliveries were newly launched Marazzo. “Some of the deals could not get completed due to financing issues. However, we still hope the sales to pick up during Diwali,” said the executive. M&amp;M said that Marazzo has managed to garner over 10,000 bookings since its launch in September.

Market leader Maruti Suzuki, which sells one in every two cars sold in India, saw its vehicles like Brezza, Vitara and S-Cross continuing to generate interest among the consumers during the ongoing festival season.

An executive of a Mumbai-based showroom of luxury car maker BMW said this festive season 6 series GT and X 1 cars are much in demand though some of the older models are still getting a second look. The showroom could manage to book just around half of sales as compared to last year’s 34 units.

“We have already started getting enquiries for Diwali discounts” the executive said.

The situation was similar in the two-wheeler segment.

K N Radhakrishnan, CEO at TVS Motor, who has been appointed as whole-time director, on Tuesday said that the confusion over new insurance rules and increasing fuel prices impacted the sales, especially in the entry-level segment. The impact has been more significant in the rural and semi-urban areas. Radhakrishnan said that issues related to insurance are well settled now, and demand will pick up for the rest of the festival season.

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“Major part of the festive season is yet to come,” said Radhakrishnan on a conference call.

However, Sridhar V, partner, Grant Thornton India LLP, said it’s a “wait-and-a-watch situation” for the industry and it is too early to say how the sales will turn out during Diwali.

Confusion over new insurance policy premiums, tightening of financing to the end-consumers by non-banking financial institutions (NBFCs) in backdrop of crisis at IL&amp;FS and high fuel prices are some of the reasons that led to drop in bookings.


Maruti Suzuki to Hyundai, carmakers hope for a cracker of a Diwali even as NBFC suffer fund crunch

Japanese carmaker Nissan Motors, which has had a tough time in India so far, except for some success of its subsidiary brand Datsun, now wants to focus on pushing the parent brand in the country.

Thomas Kuehl, president, Nissan India Operations told DNA Money at the unveiling of KICKS car, "In the past, we had a little bit dip of Nissan lifecycle management. In the last four years, we were focused on launching Datsun. Now, the strategy we have is that of having a clear production and launches in a proper cycle."

According to the company executives, the strategy would also involve introducing the company's global products in India, including electric car Nissan Leaf. The company management expects KICKS to lead in garnering volumes.

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On the other hand, Datsun, which has REDI-GO, GO and GO+ in its kitty, will have its distinctive strategy separate from Nissan. Datsun now forms around 70% of total sales of Nissan India. Further, Nissan is aggressively working to double the number of dealers, especially in Tier-2 and 3 cities.

However, the experts remain sceptical as the company has made several efforts in the past to push its sales but without much success. As a result, the company continues to shift the goal post for 5% market share in India. Now, the target is to reach there by 2021. On a global level, the company is aiming a 30% increase in annualised revenues to 16.5 trillion yen by the end of fiscal 2022, along with the cumulative free cash flow of 2.5 trillion yen.

The insiders claim the first major shift in Nissan's strategy happened in 2015, when it decided to focus more on the domestic market so as to bring more parity with exports in the next five years. However, its domestic market share fell to 1.6% in FY18 from 1.8% during FY2015. Further, exports, which were their strength began to decline, with the company dropping to sixth position in passenger vehicle category in fiscal 2018 from second position earlier.

Stagnant product portfolio, frequent changes and resignations of some key executives led to dealers' exodus with around leaving or being terminated, leading to long legal battle, the insiders said. Now, the company is trying to double its retail showrooms in three years from 270 dealers at present.

Kuehl, who has been meeting with the dealers to apprise them of his strategies, said that a lot has changed in India at since the time of his last stint here when he was brand head of Skoda India. With regard to dealerships, Kuehl said earlier people thought that they can put some money (into dealerships) and then make some money, though they may not have any definite plans for it. "However, things are different now," he said.

Asked why Nissan has not been able to make a mark in the Indian market while the likes of Hyundai have been successful, Kuehl said every challenger company except two are struggling. "In fact, there is only one brand, Maruti Suzuki, which made the perfection of offering right product and price strategy. While I should not mention others (Maruti Suzuki), they did that and you have to give it to them," he said.

Kuehl denied that Nissan will get into MPV segment, as it's not a growing segment. " It's practically dominated by just one brand (Toyota Innova) and it's mostly institutional," he said. An analyst with a global consulting firm said that though Nissan still has a good perception in the India market, it will have to work a lot in getting its strategy and product right. " The after-sales service needs a push, too," the analyst said.

Premium Drive

Datsun, which has REDI-GO, GO and GO+, will have its distinctive strategy separate from Nissan&nbsp;&nbsp;

Nissan is aggressively working to double the number of dealers, especially in Tier-2 and 3 cities

Source: DNA Money

Japanese carmaker Nissan Motors, which has had a tough time in India so far, except for some success of its subsidiary brand Datsun, now wants to focus on pushing the parent brand in the country.


Nissan Leaf electric car coming to India; Check what Thomas Kuehl has to say about car-maker's strategy

Car makers have started offering vehicles on lease in the retail segment to lure the millennial generation customers. The financing model is likely to help millennials, who often find it difficult to make initial huge down payment and do not want to share the hassle of ownership, maintenance, insurance, etc, drive their own vehicles.&nbsp;

Japanese manufacturer Isuzu, which launched ISUZU mu-X in India on Tuesday, is toying with the idea of vehicle financing on a lease. A few days ago, Mahindra &amp; Mahindra (M&amp;M) announced the leasing model for its cars. Analysts expect other players to come up with similar schemes.&nbsp;

Ken Takashima, executive vice-president and deputy managing director at Isuzu India Pvt Ltd (IIPL), told DNA Money, “Those kind (leasing) options are constantly being studied on the financial sides, so as to what can be done with our sales. There is a possibility of bringing it in the future.”

For the time being, the company has come up with another financing scheme which provides customers the option to refinance the remaining loan amount after payment of 36 equated monthly installments (EMIs).&nbsp;

Takashima, on the sidelines of Isuzu’s latest launch, said he expects the total number of sales for his company to go up by around 40-50% during the current fiscal. The company has 37 retail outlets in the country and plans to add 4-5 this year. It has sold around 5,000 units in fiscal 2017-18 as compared to just 2,000 units in the previous fiscal.

M&amp;M, which had announced its leasing model on October 10, expects this segment to add around 5-7% to its accrued sales once the market matures in the next few years. The company’s automotive division sold over five lakh units during 2017-18.

The car leasing industry in India is around 1% of the total sales, and nearly all of it to the corporate sector. In comparison, over 30% of the new vehicle sales come from leasing in developed markets such as the UK (45%), the US (33%), Germany (32%) and France (15%). The challenges in India are manifold as the wear and tear of vehicles is higher due to the road conditions and accidental damage.

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Higher repair expenses, unregulated and unorganised resale market and the changes in technology all add to the costs associated with mobility, an analyst said. According to an estimate, the local car leasing market is estimated to be over Rs 1,500 crore and is poised for 15-20% compound annual growth rate over the next 10 years.

Source: DNA Money

Car makers have started offering vehicles on lease in the retail segment to lure the millennial generation customers. The financing model is likely to help millennials, who often find it difficult to make initial a down payment and do not want to share the hassle of ownership, maintenance, insurance, etc, drive their own vehicles.


Want a car, but don't have money to buy it? Drive free, just go for this instead

The looming US sanctions on Iran have put the deal for Chabahar port between India and Iran on the fast track. The two countries are working on amending the clause that mandates activation of the deal after receiving funding from India. Under a May 2016 pact, India was to pay $150 million to Iran after receiving an application seeking payment from the latter. Following this, the project was to be handed over to India for 10-year operations.

However, Iran alleged that India was delaying the development process and Indian authorities responded that Iran never submitted the application seeking payment on time and kept changing its decisions. The payment was to be made within three months of receiving the application. Now, an application for payment of euro 13 million ($18 million) made by Iran is under consideration.

Iran’s insistence on payment being made in euros have made things more difficult for India, sources said.

According to the sources, a high-level Iranian delegation visited India last Wednesday to discuss issues related to Chabahar port.

“A few amendments are likely to be made soon before things can move to signing of the main contract,” a senior government official aware of the development said.

An agreement for the start of interim operations was signed on May 6, 2018. However, two days later, the US announced its decision to re-sanction Iran, which slowed the whole process as India is not able to provide a bank guarantee for the project.

“So even the interim operation is in a slight problem. We should have started the operations by June. Everything is ready, but not being able to provide bank guarantee is a problem. So certain amendments are being made even is this regard, following which we can hope to start interim operations by November” a senior official said.

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When contacted, A K Gupta, managing director, India Port Global Ltd (IPGL), confirmed the development of de-linking the payment and project activation, though refusing to comment further. IPGL, a 60:40 joint venture between Jawaharlal Nehru Port Trust and Deendayal Port Trust (previously Kandla Port Trust), was set up by the government to make strategic investments in ports overseas.

Source: DNA Money

The looming US sanctions on Iran have put the deal for Chabahar port between India and Iran on the fast track. The two countries are working on amending the clause that mandates activation of the deal after receiving funding from India.


Rules tweaked even as India set to get strategic Chabahar port in Iran

Arun Firodia, chairman of Kinetic Group, who is credited with success of iconic brands - India’s first moped Luna and automatic scooter Kinetic Honda, believes that Tata Motors’s small car Nano can still be successful if it is exported to markets like the US and positioned as a student’s car or something similar.

Speaking at a conference to announce his company’s tie-up with some of the global super bike brands in Mumbai on Thursday, Firodia said while Luna was meant for common man and Kinetic Honda was targeted at women commuters, they did not advertise it so. “We never said that. Otherwise, it could have been a disaster,” Firodia said. Instead the company marketed Luna as, “Luna takes you faster” while Kinetic Honda was projected as a “family vehicle”, Firodia said.

Offering a perspective to it, Firodia cited the example of Nano, which was touted as world’s cheapest car. Though the car garnered tremendous interests at all the global automobile events, it failed to make a mark with the customers. “Tatas said Nano is for the common man. However, the common man said if I drive a scooter or a car, I will still be a common man. So Nano never tasted the success,” Firodia said.

According to a Zion market research report, the US education market was valued at around $1,350 billion in the year 2017 and it is expected to reach approximately $2,040 billion by 2026. The US education market is expected to exhibit a CAGR of more than 4.5% between 2018 and 2026.

Luna, which was meant as a vehicle between bicycle and motorcycle, was launched in the early 1970s was ubiquitous on the country’s roads till the 1990s. Later, Kinetic Honda (JV with Japan’s Honda Motors) became a money generating product for the company during the 90s. Kinetic Group, headed by Firodia, which later parted with its joint venture partner Honda Motors in 1998, further sold a majority stake to Mahindra &amp; Mahindra (M&amp;M) in 2008, giving the latter an entry into the two-wheeler segment.

As per statistics available with the lobby group Society of Indian Automobile Manufacturers (SIAM), the moped segment grew by 2.84% during the period from April-August 2018 over April-August 2017. On the other hand, scooters, which is the fastest growing segment within two-wheelers, grew 6.77% during the same period.

Meanwhile, Kinetic’s Motoroyale, which claims itself to be the country’s first multi-brand super bike company on Thursday announced three further global tie-ups with SWM, FB Mondial, Hyosung. The company had earlier associated itself with MV Agusta and Norton in 2016 and 2017, respectively. Seven new super bikes across the price point ranging from Rs 3.37-23.70 lakh were launched.

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According to Ajinkya Firodia, MD, Motoroyale, the market size of super bikes in India is over 10,000 units (leaving out Royal Enfield and KTM) and his company expects to sell over 2,500 units within a year. Further, around Rs 30 crore has already been invested in the business and there are plans to raise about Rs 100 crore form PE investors.&nbsp;

Source: DNA Money

Luna, which was meant as a vehicle between bicycle and motorcycle, was launched in the early 1970s was ubiquitous on the country’s roads till the 1990s. Later, Kinetic Honda (JV with Japan’s Honda Motors) became a money generating product for the company during the 90s. Kinetic Group, headed by Firodia, which later parted with its joint venture partner Honda Motors in 1998, further sold a majority stake to Mahindra &amp; Mahindra (M&amp;M) in 2008, giving the latter an entry into the two-wheeler segment.


Shahkar Abidi