Kenya Airways will now fly daily to India after the Asian country lifted the restrictions that had limited the national carrier to three flights a week, coming as a major boost to the airline that is struggling financially.

KQ, as the carrier is known by its international code, has been operating flights to India under a special arrangement normally referred to as ‘air bubble’ in aviation and which also limited the number of passengers to 400 a week.

The carrier, which resumed flights to India in September last year after it had stopped flying to the Asian country on April 2021, will also be making ten weekly flights to India starting April, coming as a major relief to passengers seeking to travel to the country.

“We are excited and ready for take-off to Mumbai with daily flights from March 28, 2022, and ten weekly flights from April, 17,” said KQ in a notice to its customers.

India has now opened its airspace to the national carrier as cases of Covid-19 in the country continue to decline.

The additional frequencies to Mumbai come just days after KQ cut frequencies to some of its destinations and stopped the launch of new routes citing declining demand for passengers.

A large number of patients from Kenya travel to India every year for specialised medical treatment, especially cancer care, helping to drive medical tourism in the densely populated country that boasts relatively more affordable healthcare.

Kenya Airways has postponed the launch of flights to Italy even as it suspended its operations to Cameroon due to low demand for passengers.

The national carrier was to start flying to Rome and Milan in June but it says the plans have been put on hold due to lower demand than it had earlier projected.

According to the initial schedule, KQ was to operate two weekly flights on Wednesday and Sunday using a large capacity aircraft Boeing 787 Dreamliner.

KQ re-introduced flights to Rome in 2019 after a seven-year hiatus, banking on increased traffic between the two continents and a new link in Geneva to boost its earnings.

Source: The East African

The South African government has concluded and signed a sales and purchase agreement for the sale of 51% of South African Airways with its preferred strategic equity partner, the Takatso Consortium, according to an announcement by the Ministry in the Presidency following a Cabinet meeting on February 23.

“The next step involves the approval of this transaction by various regulatory bodies,” it said in a statement.

The Department of Public Enterprises (DPE), SAA’s shareholder representative, had been locked in negotiations with Takatso for months, but aims to finalise the partial sale of the loss-making national carrier in early 2022, according to National Treasury’s 2022 Budget Review, also tabled on February 23. The terms of the sales agreement were not disclosed, but Takatso is to inject ZAR3 billion (USD196 million) in operational cash, while the government funds are to be used to settle SAA’s historical debts.

Takatso is a joint venture between asset fund manager Harith General Partners, the majority shareholder in the SAA transaction, and ACMI specialist Global Aviation Operations (GE, Johannesburg O.R. Tambo). “The Takatso deal is progressing well,” the DPE spokesman confirmed to ch-aviation.

Meanwhile, the government will pump another ZAR1.8 billion rands (USD119.3 million) into SAA during 2022/2023 despite the carrier continuing to rack up losses since resuming operations on September 1 last year.

By December 31, 2021, it had operated a total of 1,023 domestic and regional flights. Within those four months, it had also incurred a ZAR2.7 billion (USD179 million) loss against a budgeted deficit of ZAR2.3 billion (USD152 million), according to a National Treasury briefing to Parliamentary on February 15.

The latest financial support represents the balance of ZAR16.4 billion (USD1 billion) set aside for SAA in the 2020 Budget Review to settle state‐guaranteed debt and interest costs.

“To date, Government has paid ZAR14.6 billion (USD967.5 million) of this amount, with the remaining ZAR1.8 billion to be paid in 2022/23,” according to the government’s 2022 Budget Review tabled on February 23.

An additional ZAR10.5 billion (USD695.8 million) was allocated to SAA in 2020/2021 for the implementation of its business rescue plan. Of this, ZAR2.7 billion (USD179 million) was diverted to its subsidiaries in terms of a special appropriation bill in 2021.

Further state support of ZAR3.5 billion (USD232 million) is required over the next three years to implement the business rescue plan – as outlined in an interim business plan in June 2021 – but still needs to be approved. “Government will honour its commitment to implement the SAA business rescue plan,” a DPE spokesman told ch-aviation.

SAA intends to introduce long‐haul routes in the second half of 2022. The flag carrier resumed limited commercial operations in September 2021 in line with plans for a conservative re-entry into domestic and regional markets following a protracted business rescue process started on December 5, 2019, following years of continuous losses.

While in business rescue, SAA defaulted on ZAR890 million (USD.58.5 million) of revenue owed to former franchise partner Airlink (South Africa). It still owes Comair (South Africa) ZAR750 million (USD49.5 million) as part of a SA Competitions Tribunal settlement.

Harith General Partners – the majority shareholder in the Takatso Consortium which has been leading the negotiations with the government – is 30% owned by South Africa’s state-owned Public Investment Corporation (PIC). It manages the Government Employees Pension Fund (GEPF), which continues to be “well funded and financially sound”, according to the 2022 Budget Review. “At the end of March 2021, the GEPF had a net cash flow position of ZAR34 billion (USD2.2 billion),” the document states.

Delivering his 2022 Budget Speech in Parliament on February 23, Finance Minister Enoch Godongwana did not mention any allocation to SAA but warned of “tough love” for state-owned companies going forward. He said the future of state-owned companies was under review by a Presidential State-Owned Enterprises Council. “Their future will be informed by the value they create and whether they can be run as sustainable entities without bailouts from the Fiscus.”

“Some state-owned companies will be retained, while others will be rationalised or consolidated. To reduce their continuing demands on South Africa’s public resources, the National Treasury will outline the criteria for government funding of state‐owned companies during the upcoming financial year,” he said.

Source: Ch-Aviation

With many countries beginning to ease their travel restrictions, airlines are eyeing 2022 as a year for recovery. Kenya Airways is once such carrier, with the Nairobi-based operator projecting a notable rise in passenger revenues this year. The airline is hoping for a busy summer despite the uncertainty of an upcoming election.

Revenues up by a fifth

Speaking to Reuters, Kenya Airways’ Chief Executive Officer, Allan Kilavuka, explained that the airline’s worst days in the coronavirus pandemic are likely behind it. He stated that “we have been through the worst patch,” with this likely referring to the early months of the crisis. Indeed, Reuters notes that, during 2020, revenues at the Kenyan flag carrier halved. Since then, it has been on the comeback trail.

While 2020 was the most challenging year for Kenya Airways during the present pandemic, it still faced challenges in 2021. Despite a 21% growth in passenger revenue last year, which narrowed its losses by a fifth, the national airline also lost 11.5 billion Kenyan Shillings ($101 million) in the first six months of 2021.

Moving into 2022, Kilavuka foresees calmer skies for Africa’s only SkyTeam alliance member. He explained to Reuters that he expects passenger revenues to rise by a further 20% this year. This will help establish a consistent recovery path away from the chaos of 2020. However, the projection is dependent on certain factors.

Relying on a consistent market

One of the primary areas of financial concern for airlines amid the present crisis has been the difficulty in adapting to ever-changing travel restrictions. With these regulations liable to sudden changes, it can be hard for airlines to make economic plans with much certainty. Equally, it can take time to respond to positive changes.

With this in mind, Reuters notes that a consistent market will play a key role in enabling Kenya Airways‘ positive revenue projections. Indeed, its CEO told the agency that the forecast “is dependent on no further travel disruption or restrictions caused by any new coronavirus variants.” This, of course, remains to be seen.

For the country of Kenya itself, there is also the small matter of a general election to contend with this year, on August 9th. Kilavuka hopes that the election will be a peaceful occasion, given that the peak summer season has seen ‘promising’ booking levels. However, violence has marred two of the country’s last three elections.

Aiming to return to profitability

As it looks to recover from the impacts of the early months and year of the ongoing coronavirus pandemic, Kenya Airways’ longer-term aspirations include a return to profitability. With this in mind, it has commissioned a report from Seabury, a consulting group. Kilavuka explains that, ultimately:

“We are looking for a more efficient airline. The network should not lose money.”

This may lead to cuts in certain areas, with the CEO telling Reuters that the carrier will take “a critical look at staffing and the renegotiation of contracts with suppliers and plane leasing firms.” It will be interesting to see what comes of these efforts, and how successful Kenya Airways profitability plans will prove to be.

Source: Simple Flying

Ethiopian Airlines has announced that it plans to put its Boeing’s 737 Max back to service for the first time since the aircraft model was involved in a crash that claimed 157 lives three years ago. Chrystal Zhang has studied the business models of airlines. We asked her to make sense of the source of Ethiopian Airlines’ confidence.

When, and why was Boeing’s 737 Max grounded?

By 12 March 2019, two days after Ethiopian Airlines flight 302 crashed, civil aviation authorities in China, Australia, Britain, France, Germany, Ireland, Malaysia, Mongolia, Oman and Singapore had already grounded the 737 Max.

This was in addition to airlines in Brazil, South Africa, South Korea, Norway, India, Turkey and other countries. On March 13, 2019, the US Federal Aviation Administration grounded the entire 737 Max fleet.

The decision was made following the fatal crash of Ethiopian Airlines’ 302 flight enroute from Addis Ababa to Nairobi. The accident killed all 157 passengers and crew members on board.

This wasn’t the Boeing 737 Max aircraft’s first incident.

On 29 October 2018 there was a fatal crash of a flight operated by Lion Air, an Indonesian low-cost carrier. The airline was enroute from Jarkata to Pangka Pinang and the crash resulted in 189 casualties.

Two years earlier, in March 2017, the US Federal Aviation Administration had granted an amended-type certificate to Boeing for the 737-8 aircraft, the first of the 737 Max family. An amended type certificate approves modification, and how such modification affects the original design. The Max is the fourth generation of the 737 model airplane, and is the successor to the company’s 737 Next Generation family of aircraft.

The 737 Max was the 12th derivative model of the 737 aircraft, which was first certified half a century earlier in 1967. Two months after the US Federal Aviation certification, the first 737 Max entered revenue passenger service with Malindo Air, a Malaysian air carrier. Seventeen months later the 737 Max suffered its first fatal crash.

Is there a consensus on the cause of the accidents?

A study has analysed the cause of the 737 Max crashes. The model had a new feature in its flight control computer – the manoeuvring characteristics augmentation system – that has become the centre of scrutiny for Max crashes.

The new system had an ability to trigger flight control movements that challenged the pilots’ command of the aircraft. In addition, the software operated on input from one of the two sensors externally mounted on either side of the aircraft’s fuselage (main body).

For Ethiopian flight, the system triggered four times as a result of false sensor readings, forcing the airplane into a nose down from which the pilots were unable to recover. Faulty sensor data that erroneously triggered the system to repeatedly activate landing played critical roles in the Max crashes.

Given significant advances in aviation safety over the last two decades it was extraordinary for two new airplanes, of a new derivative model, to crash within five months of each other.

While certain facts and circumstances surrounding the accidents differed, a common component in both was the new flight control feature.

Boeing developed the system to address stability issues in certain flight conditions induced by the plane’s new larger engines and their relative placement on the 737 Max aircraft compared to the engines’ placement on the 737 NG.

Is Ethiopian Airlines jumping the gun?

So far, 13 airlines have resumed flying Boeing’s 737 Max. These include The Ryanair Group of Ireland, Air Canada, American Airlines, Alaska Airlines and India-based SpiceJet.

In the case of Ethiopian airlines, the reasons for resuming its flights include:

• The action taken by both Boeing and the US Federal Aviation Administration in terms of product redesign, pilot training requirements, commitment to corporate culture change and certification. These seek to ensure that the aircraft model satisfies all regulatory requirements.
• Boeing’s 737 Max has its unique market positioning to serve the short-medium haul market
• The aircraft is more economically viable for airlines to use to serve their target market
• The airline had made financial commitment to aircraft procurement

Have the crashes been fully analysed and resolved?

The US House Committee on Transportation and Infrastructure conducted an 18-month investigation into design, development, and certification of the 737 Max aircraft, and related matters.

The Committee’s investigation has revealed multiple missed opportunities that could have turned the trajectory of the Max’s design and development toward a safer course. The model resulted from flawed technical design criteria, faulty assumptions about pilot response times, and production pressures.

Boeing failed in its design and development of the Max. The US Federal Aviation Administration, on the other hand overlooked its aviation safety mission. It failed in its oversight of Boeing and its certification of the aircraft.

At the direction of Committee Chair Peter DeFazio and Subcommittee on Aviation Chair Rick Larsen, the 245-page report is being released to help inform the public’s understanding of what went so horrifically wrong and why.

What are the lessons learnt?

Never be complacent: Boeing is renowned for its disruptive innovation and novel products. It has served the global aerospace and aviation markets throughout its one-century history. But the company has become more of a financially successful business than a great engineering firm. It was the intent of Harry Stonecipher, its President and Chief Operation Officer in 2004, who championed the corporate culture change. But past glory does not warrant future success. Staying competitive in the market requires innovation, but more importantly, respect and protection of customers and stakeholders.

Do things right and do the right things: These are the fundamental ethical values that a good engineer upholds to be accountable for the safety, health, and welfare of the public. Driven by the desire to outpace its rivals – while designing, developing and introducing B737 Max to the market – Boeing failed to meet both criteria. Boeing, and any other business, need to adhere to these fundamental values and be accountable for its conduct.

Improve safety cultures: There is an ongoing debate that upholding highest safety standards and nurturing safety culture jeopardises a business’s financial success and operational efficiency. However, safety is the foundation of aerospace and aviation business. A safety culture ensures trust, accountability and responsibility. It eventually leads to a firm’s sustainability.

Face the truth and act honestly, and with integrity: When in a crisis, the most effective way to win trust from the public and society is to face the truth and act honestly and with integrity. Any attempts to cover up the truth or mislead the public are doomed to fail.

Source: The Conversation

Africa has 357 airlines, the top 10 of which carried more than 60% of traffic. This reflects the fact that many airlines on the continent are very small: some have as few as two aircraft. Between them the airlines carried 95 million passengers in 2019, according to Routes, an online source of information on route announcements.

Airlines operating on the continent face particular challenges.

Firstly, the industry has to contend with huge disparities in economic and air transport development. There is also an uneven distribution of international air passenger traffic across regions and within countries. The traffic is predominantly centered in a few hubs in North, East and South Africa; and in the large and medium-size cities.

Other challenges include high costs of operation, market protectionism as well as safety and security concerns.

There are very few profitable African airlines. In 2020, only the Ethiopian Airlines made a profit in the continent. And with financial woes compounded by COVID-19, it is likely many more airlines will go under.

Two of the continent’s biggest carriers – South African Airways and Kenya Airways – are under financial stress. Both have made significant losses over the past few years and lost market share and destinations to competition. South African Airways came close to being wound up, but for its part Kenyan Airways reported losses of $333 million for the 2020 financial year.

In November, the two national airlines signed a Strategic Partnership Framework, formalising their plan to set up a pan-African airline in 2023.

In my view the partnership will only succeed if certain conditions are met. The two most important ones are that, firstly, there must be strong national and political agreement and will. But, secondly that the tie-up must be driven by the private sector.

My recent research on Air Afrique’s failure found that the airline was doomed by conflicting national objectives and some of the 11 participating countries were unhappy with what they called a subordinate role.

The case for a partnership

A range of academic studies show that alliances affect the production costs of participating airlines through economies of scale (by means of joint operations of air and ground services), increased traffic density (through network expansion and additional traffic feed) and scope (through increased reach and efficient connections).

Joint ventures, have been, and will continue to be, the key in the future development of airline business. Air France and KLM are good examples why airlines are better off working together. Both have experienced significant growth since getting together in 2004.

Some of alliance arrangements may lead to a reduction in costs and increased efficiency. But they do not necessarily lead to a reduction in competition in the market.

Apart from these benefits, an alliance between South African Airways and Kenya Airways would be good for a number of reasons specific to Africa.

Firstly, it would help them overcome some of the existing market challenges, such as market access restrictions, increased competitions from major non-African airlines such as Turkish Airlines, Emirates and Europeans carriers.

Secondly, the alliance could take advantage of a return to pre-COVID travel levels. The International Air Transport Association anticipates a full return to 2019 air traffic levels in late 2023.

And it’s estimated that air transport will grow on average by 3.2% over the next decades in Africa and by 4.8% if African States implement the Single African Air Transport Market.

Thirdly, it would enable them to create and encourage a market services specialisation among airline operators. Airlines may specialise on feeder services and fly destinations with smaller demand and catchment areas. An example of this type of specialisation include the interlining agreement between Ethiopian and Airlink.

In my view, the cooperation deal would also improve the financial viability of the two national airlines. They could pool maintenance services and reduce costs by pooling purchases, sales and financial transactions. It would boost customer volumes if cost savings were passed on to customers by means of lower fares.

Introducing services in the South African market would be a great addition for Kenya Airways and vice versa. With their hub-based model, (a hub is a central airport that flights are routed through), cooperation will help to boost the route networks of both airlines across Africa.

Why alliances fail

Many alliances don’t achieve the desired outcome. Examples include KLM – Alitalia, and the European Quality Alliance which brought together Air France, SAS and Swissair.

Alliances fail for various reasons. Studies show that ineffective governance, insufficient quality of alliance members and internal competition in the alliances are the most common reasons.

Other studies show that more than 50% of strategic alliance fail due cultural differences, mistrust or poor operational integration.

In the case of Africa, the two airlines have to contend with the fact that there isn’t a single African air transport market. Most of the continent’s 54 countries have their own national arrangements or have under-performing state-owned airlines, resulting in protectionist policies.

There is hope that this will change. The Single African Air Transport Market, which by November last year had been signed by 35 countries, envisages a share aviation space. This would enable eligible airlines from one African state to fly into another using only a prior notification procedure.

But there’s a great deal of work that still needs to be done for this to become a reality.

A number of other factors could stymie the proposed alliance.

A big one is the governance structure, which is the oversight required to make and implement decisions essential to the success of an alliance. Elements of governance include legal form, communication structures, cultural differences, trust and commitment.

Yet another factor will be the extent to which the two governments allow efficient decision making to happen. Airline managers should be left to select a course of action – and then to get on with it. This could be difficult given that the state owns substantial stakes in South African Airways; same case with Kenya Airways where the Kenyan government’s share holding is 48.9%.

Other factors include trust, transparency and communication about what both airlines do together and what they don’t do together. Establishing trust and ensuring that both airlines understand each other’s goals and objectives and that they are the same is key.

Recipe for success

A strategic alliance is similar to a marriage. In most cases there is no perfect match. To be successful partnerships must be nurtured and well managed. Mapping out all the stakeholders that are relevant to the story and are going to help the partners achieve the key performance indicators set out in the alliance is paramount.

In my opinion, setting clear performance measures is important, as they will set the partners on a path that is measurable.

Source: The Conversation

Kenyan flag carrier Kenya Airways will not renew its contract with an undisclosed breeding farm that paid the airline to ship monkeys from Mauritius to a research laboratory in New York, where they were used in medical experiments.  

The decision comes after a truck towing a trailer with monkeys was involved in a crash on a Pennsylvania highway. 

In an interview with AP News, Kenya Airways CEO Michael Joseph said that following the contract, the carrier flew 100 long-tailed Macaques from Mauritius to New York (JFK) on January 21, 2022.  

On arrival at John F. Kennedy International Airport, the animals were put into a truck trailer for further transportation. However, the truck collided with a dump truck in Pennsylvania later that day.  

Due to the crash, which is currently being investigated by the US Department of Agriculture, some of the monkeys were injured. Several escaped and were caught by Pennsylvania State Police. Unfortunately, some of the macaques were “shot and killed” during the catch, according to media reports.  

Following the incident, American animal rights organization, People for the Ethical Treatment of Animals (PETA) contacted the Kenya Airways CEO regarding the treatment of the macaques.  

In response to the recent event, Kenya Airways announced that it will not renew its shipment contract with the breeding facility. The current contract expires in February 2022. 

Source: Aerotime Hub

Stringent travel advisories have continued to depress the performance of airlines’ in Africa with numbers still below 2019 capacity, the African Airlines Association (AFRAA) has said.

According to AFRAA, African airline revenues have remained low with many operators battling with cash-flow issues with full-year revenue loss for 2021 estimated at $8.6billion.

This is equivalent to 49.8 per cent of the 2019 revenues.

“As a result of these uncoordinated measures, air passenger traffic from January to December was only 42.3 per cent compared to the same period in 2019,” AFRAA noted.

The capacity improved and reached 52.7 per cent in January 2022, and AFRAA expects it to inch up by 6.3 per cent to 59 per cent in the year.

According to the airline lobby group, the domestic market maintained the biggest share for capacity deployed, though actual passenger traffic saw a dip.

Domestic demand was at 42 per cent and outperformed intra-Africa and intercontinental which remained subdued at 31.9 per cent and 25.6 per cent respectively.

On the actual number of passenger seats offered, domestic, intra-Africa and intercontinental account for 47.3, 24.9, and 27.8 per cent respectively.

As at the end of 2021, African airlines had reinstated approximately 80.8 per cent of their pre-Covid international routes, though frequencies remain low.

The Intra-African connectivity reached 76 per cent of the pre-Covid level in November 2021 and increased to 80 per cent in December.

AFRAA forecast the intra-African connectivity to slide back to 76 per cent in January 2022 because of the closure of some routes.

“Across Africa in general, passenger traffic volumes remain depressed due to the unilateral and uncoordinated travel health restrictions imposed by some governments following the outbreak of the Omicron variant of COV-2,” said AFRAA.

Source: Capital Business

Emirates Airline will resume passenger flights between the United Arabs Emirates (UAE) and Nairobi on Saturday after Dubai lifted a ban it had imposed on all inbound and transit passenger flights from Kenya since last year.

The announcement offers relief to hundreds of travellers who have had to factor in extra expenses during the ban.

National carrier, Kenya Airways (KQ) did not, however, give a specific date when it will resume passenger flights between the two destinations.

The two carrier suspended passenger flights on January 11 after Kenya retaliated the UAE move to block it from its airspace.

The suspension of operations by the two airlines did not, however, affect cargo flights that are normally operated by carriers such as Kenya Airways (KQ) and Emirates Airline.

“Emirates will operate ten weekly flights to Nairobi from January 29, 2022,” said Emirates in statement released yesterday.

While lifting the ban on Kenyan flights into Dubai on Wednesday, the UAE government also announced the resumption of entry for passengers from Tanzania, Ethiopia, Nigeria, Congo, South Africa, Botswana, Eswatini, Lesotho, Mozambique, Namibia and Zimbabwe, from January 29.

However, passengers from Uganda, Ghana, and Rwanda will be subjected to strict entry requirements.

Dubai will require passengers from the three countries to present a negative Covid-19 PCR test certificate with a QR code for a test conducted at an approved facility no more than 48 hours before departure.

Source: Business Daily

The Airports Authority of India (AAI) is taking legal recourse against a Canadian court order that allows the seizure of millions of dollars collected by the International Air Transport Association (IATA) on behalf of Air India (AI, Mumbai Int’l) and the Indian regulator, reports Indian Express.

This follows after the Superior Court of Quebec passed separate orders on November 24 and December 21 on multiple petitions filed by three Mauritius-based shareholders of India’s Devas Multimedia Private Limited to enforce arbitration awards against the Indian government.

This includes USD6.8 million in air service fees collected by IATA on behalf of the AAI and an as-yet-undisclosed amount in Air India ticket sales collected through IATA’s Billing and Settlement Plan (BSP).

“The AAI has not been served any order by the Quebec Court, Canada, in this matter. However, IATA shared certain documents on the AAI’s request for suspending the transfer of the amount collected on behalf of the AAI. The AAI is taking legal recourse to defend itself,” the regulator said in a statement.

The Devas shareholders involved are Devas (Mauritius) Ltd, Telcom Devas Mauritius Ltd, and Devas Employees Mauritius Pvt. Ltd. Air India removed its inventory from the Global Distribution System (GDS) following the December 21 court order.

The dispute dates back to a deal annulled in 2011 between Devas Multimedia and Antrix Corp, a state-owned Indian Space Research Organisation (ISRO) unit, by which Antrix Corp would have leased satellite transponders to Devas. Antrix Corp has initiated liquidation proceedings against Devas Multimedia pending before the Karnataka High Court in India.

Meanwhile, the Delhi High Court on January 4 dismissed an attempt to have the government’s disinvestment in Air India set aside. The appeal by Bharatiya Janata Party (BJP) leader Subramanian Swamy was based on the allegation that the government’s methodology in the valuation of the national carrier was “arbitrary, illegal, and against the public interest,” reported The Economic Times. Swamy is an economist and statistician who serves as a Member of Parliament in Rajya Sabha, the upper house of the Indian Parliament.

This comes ahead of the Tata Group’s 100% takeover of Air India and Air India Express (IX, Mumbai Int’l) following its successful bid announced in October last year, representing the first privatisation in the country in 20 years. The Tata Group also takes over 50% of ground handler Air India SATS in a joint venture with the government, which retains 50%. The Tata Group has been granted indemnity from USD4.7 billion worth of Air India debt in its shareholder agreement with the government.

According to the share purchase agreement signed on October 25, the government has sold Air India for INR180 billion (USD2.4 billion), of which the Tata Group will pay INR27 billion (USD362.6 million) in cash and INR153 billion (USD2 billion) for Air India’s existing debt.

Lenders to Air India have reportedly offered Tata a loan of INR350 billion (USD4.6 billion) for a weighted average dividend of 4.25% – the rate at which the state is lending for one year, reports Hindi publication Zaroorat. Tata had invited bids from the airline’s existing lenders for a one-year general loan of INR230 billion (USD3 billion). This would include INR180 billion (USD2.4 billion) to repay the carrier’s debt and an additional INR50 billion (USD671 million) for initial operating costs.

Tata will notify each lender of the allotment in the first week of January and draw the sanctioned limit between January 10 and 15, 2022, the report said. The takeover and refinance of Air India’s debt was due to be completed before January 23, the long-stop date for closing the Air India agreement with the government. However, regulatory processes appear to have delayed the deadline, now extended by mutual consent to the end of January, reports the Hindu newspaper Jagran.

By August 31, 2021, Air India had a total debt of INR615.62 billion (USD8.2 billion); 75% of this debt will be transferred to Air India Assets Holding Limited (AIAHL), a special purpose vehicle, before the airline is handed over to the Tata Group.

According to company information, in 2020/21, the combined revenue of Tata companies was USD103 billion.

Source: Ch-Aviation

British Airways and Qatar Airways shared that they intend to extend their joint business partnership. Amid the announcement, the two flag carriers of their respective countries proudly highlighted that they will perform up to six flights a day to Doha from London Heathrow and London Gatwick this winter. 

Plenty on offer

Both airlines have formed strong connections over the years, especially since Qatar Airways joined oneworld in October 2013, an alliance British Airways is a founding member of. The carriers promote attractive fares, smoother connections, integrated booking platforms, joint customer support, and an extensive network as benefits of the agreements between each other.

Now, British Airways and Qatar Airways propose to expand the partnership and give their passengers greater access between Europe and the Middle East, Asia-Pacific, and Africa. Those flying to destinations such as Nairobi, Colombo, Singapore, Sydney are set to benefit from the move. Moreover, passengers flying to and from popular European cities, including Amsterdam, Madrid, and Dublin, are expected to notice advantages.

Executive agreements

Qatar Airways Group CEO Akbar Al Baker shared the following about the partnership in a company statement: 

“Expanding our Joint Business with our strategic airline partner, British Airways, is an important milestone in our ambition of providing customers access to the most extensive route network and unrivalled product.” 

Meanwhile, BA chairman and CEO Sean Doyle added:

“The launch of our first flight from Gatwick to Doha was an important milestone in our existing joint business with Qatar Airways. The proposed expansion of the joint business will be great news for customers, offering them access to more destinations across the world with seamless connections. We know customers are always looking for more options to connect onto popular holiday hotspots such as the Maldives and Seychelles, and this expansion will allow them to do just that.”

A colorful relationship

Altogether, this announcement comes on the back of British Airways returning its daily operation to Doha. The first service since the relaunch was Flight BA2033’s December 9th takeoff, which saw a British Airways Boeing 777-200ER depart for the capital of Qatar from Gatwick.

Despite the close relationship between the two carriers, their leaders haven’t always had kind words for each other’s services. For instance, in April this year, Al Baker likened BA to a low-cost carrier and dubbed it “a two out of ten airline” amid his disappointment of the operator in recent times. Nonetheless, Al Baker expressed his optimism for the British outfit under the leadership of Doyle, sharing that he hopes that the company can get its glitter back.

At the beginning of last year, the two airlines applied to the Australian Competition and Consumer Commission (ACCC) to coordinate nine major routes between the UK and down under via Doha. This move hoped to open up new promising opportunities for British Airways before the global health crisis took its toll on Australian operations. Amid the extension of the joint business partnership, we could see plenty more promising avenues such as this in the next chapter of global aviation.

Source: Simple Flying