Right, Times Group says so.

There is no bankruptcy for federally guaranteed government entities, just like USPS cannot file for bankruptcy.

AI in business
Revenue $3.4 Billion
Debt servicing - $1.36 Billion (40% of Revenue)
Fuel - $1.36 Billion (40% of Revenue)
Staff Cost $ 408 Million (12 % of Revenue)
Other Expenses - $572 Million
Annual Loss - $300 Million Million

AI (Operationally shutdown)
Revenue - $0
Debt Servicing - $900 Million (after returning/repo of av assets)
Fuel - $0
Staff Cost - $250 Million (permanent employees absorbed by other government entities)
Other Expenses - $0
Annual Loss - $1.15 Billion.

kitplane01 wrote:

dtw2hyd wrote:

Few myths need to be busted.

Bankruptcy is not an option for sovereign entities, even US chapter 9 is limited to municipalities.

I wouldn’t want people to be confused. Bankruptcy is an option for Air India. Indian law allows this.

https://www.google.com/amp/s/m.economic ... 413241.cms

That would be correct. For a while Air India and Indian Airlines were part of the Dept of Civil Aviation. No more, they are a corporation.

If not for periodic govt. bailout's, any unpaid creditor could take them to NLCT for resolution.

dtw2hyd wrote:

Right, Times Group says so.

There is no bankruptcy for federally guaranteed government entities, just like USPS cannot file for bankruptcy.

AI in business
Revenue $3.4 Billion
Debt servicing - $1.36 Billion (40% of Revenue)
Fuel - $1.36 Billion (40% of Revenue)
Staff Cost $ 408 Million (12 % of Revenue)
Other Expenses - $572 Million
Annual Loss - $300 Million Million

AI (Operationally shutdown)
Revenue - $0
Debt Servicing - $900 Million (after returning/repo of av assets)
Fuel - $0
Staff Cost - $250 Million (permanent employees absorbed by other government entities)
Other Expenses - $0
Annual Loss - $1.15 Billion.

Ha ha! And the cost to Indian economy for throwing the spare capacity in the market?

AI not in business:
>30% of BOM slots available for likes of 9W, 6E, Udaan etc
50,000 overpaid hardly worked employees/contractors evicted from prime Bombay real estate
Prime real estate available for much needed BOM expansion
Prime real estate available for much needed economic activity, just like Pan AM building went on the chopping block
Slums around BOM airport are cleared out

vadodara wrote:

Ha ha! And the cost to Indian economy for throwing the spare capacity in the market?

AI not in business:
>30% of BOM slots available for likes of 9W, 6E, Udaan etc
50,000 overpaid hardly worked employees/contractors evicted from prime Bombay real estate
Prime real estate available for much needed BOM expansion
Prime real estate available for much needed economic activity, just like Pan AM building went on the chopping block
Slums around BOM airport are cleared out

Thanks for coming out. BTW math is not your forte.

The so-called preachers on this thread want AI to shut down ops so

EK can get more BASAs and pick up more traffic, will help a great deal for an airline literally and virtually parked 45 WBs.
6E can pickup BOM/DEL slots and crew
Real estate agents can grab land in Mumbai and Delhi.

A three bedroom high rise apartment in Vasant Vihar is $500K. AI has 30 acres of land. There goes lightsaber's theory of AI assets not having value.

dtw2hyd wrote:

Thanks for coming out. BTW math is not your forte.

The so-called preachers on this thread want AI to shut down ops so

EK can get more BASAs and pick up more traffic, will help a great deal for an airline literally and virtually parked 45 WBs.
6E can pickup BOM/DEL slots and crew
Real estate agents can grab land in Mumbai and Delhi.

A three bedroom high rise apartment in Vasant Vihar is $500K. AI has 30 acres of land. There goes lightsaber's theory of AI assets not having value.

Other than cutting and pasting some old COBOL code, do you actually do anything else for a living?

Yes, it is called capitalism. Air India is not a govt. department. If it cannot make money flying a route, others who can get a shot at it. And that means likes of Indigo, Spice, Vistara and any one else under the law.

Where is the problem?
[url]6E can pickup BOM/DEL slots and crew[/url]

Sure anyone can pick-up BOM/DEL slots. Afterall, they are owned by owners of those airports. Regarding Air India crew, are you sure?

Air India - 11,200/120 planes (16,000 counting other GoI employees)

LCCs
Indigo 17,000/160 = 106 (Literally unskilled, no own GH, no Engineering skills, Do you need these many to beat passengers)
AI Express 1129/23 = 49
Spicejet - 6902/58 = 119
Southwest 57,112/717 = 79.6


Global Competitors
Emirates 64,000/260=246 (incl. dnata 104,000, 400/plane) (One working, three watching)
Lufthansa 129,424/279=463 (Group of airlines, Global TechOps, GH and Catering)
American 122,000/950 = 128
Delta 86,564/857 = 101 (Major TechOps)
United 88,000/754 = 116

vadodara wrote:

dtw2hyd wrote:

Right, Times Group says so.

There is no bankruptcy for federally guaranteed government entities, just like USPS cannot file for bankruptcy.

AI in business
Revenue $3.4 Billion
Debt servicing - $1.36 Billion (40% of Revenue)
Fuel - $1.36 Billion (40% of Revenue)
Staff Cost $ 408 Million (12 % of Revenue)
Other Expenses - $572 Million
Annual Loss - $300 Million Million

AI (Operationally shutdown)
Revenue - $0
Debt Servicing - $900 Million (after returning/repo of av assets)
Fuel - $0
Staff Cost - $250 Million (permanent employees absorbed by other government entities)
Other Expenses - $0
Annual Loss - $1.15 Billion.

Ha ha! And the cost to Indian economy for throwing the spare capacity in the market?

AI not in business:
>30% of BOM slots available for likes of 9W, 6E, Udaan etc
50,000 overpaid hardly worked employees/contractors evicted from prime Bombay real estate
Prime real estate available for much needed BOM expansion
Prime real estate available for much needed economic activity, just like Pan AM building went on the chopping block
Slums around BOM airport are cleared out

Slums around BOM airport are cleared- forget it. It is not because of AI it is because of local politics.
Prime real estate available for BOM expansion - again forget it (see above). Also the second airport is coming up and the state wants it. AI is not the primary cause.
50k employees evicted - almost forget it. Local, state and national politics.

On the other hand:
Slots availability - Yes, good for other airlines, as long as it is alloted only to Indian carriers.
Prime real estate available for other activity - Yes good for the city's economy.
And dont forget DEL too (slots/prime real estate).

hohd wrote:

vadodara wrote:

dtw2hyd wrote:

Right, Times Group says so.

There is no bankruptcy for federally guaranteed government entities, just like USPS cannot file for bankruptcy.

AI in business
Revenue $3.4 Billion
Debt servicing - $1.36 Billion (40% of Revenue)
Fuel - $1.36 Billion (40% of Revenue)
Staff Cost $ 408 Million (12 % of Revenue)
Other Expenses - $572 Million
Annual Loss - $300 Million Million

AI (Operationally shutdown)
Revenue - $0
Debt Servicing - $900 Million (after returning/repo of av assets)
Fuel - $0
Staff Cost - $250 Million (permanent employees absorbed by other government entities)
Other Expenses - $0
Annual Loss - $1.15 Billion.

Ha ha! And the cost to Indian economy for throwing the spare capacity in the market?

AI not in business:
>30% of BOM slots available for likes of 9W, 6E, Udaan etc
50,000 overpaid hardly worked employees/contractors evicted from prime Bombay real estate
Prime real estate available for much needed BOM expansion
Prime real estate available for much needed economic activity, just like Pan AM building went on the chopping block
Slums around BOM airport are cleared out

Slums around BOM airport are cleared- forget it. It is not because of AI it is because of local politics.
Prime real estate available for BOM expansion - again forget it (see above). Also the second airport is coming up and the state wants it. AI is not the primary cause.
50k employees evicted - almost forget it. Local, state and national politics.

On the other hand:
Slots availability - Yes, good for other airlines, as long as it is alloted only to Indian carriers.
Prime real estate available for other activity - Yes good for the city's economy.
And dont forget DEL too (slots/prime real estate).

BOM hasn't been able to expand because of lack of foresight, not because of AI. A mid-city hub is a global anomaly, but instead of replacing it with a distant but larger facility (like HKG and in the future, DWC), we've been pushing it to the limit repeatedly. Even without AIs unused slots, BOM is the busiest single runway airport in the world. Expanding it physically by clearing slums is a piecemeal solution - what will you do when there is need for a third runway? Clear out BKC and flatten Trombay hill? Navi Mumbai is a better solution and will offer room for everyone to grow (however as an urban and regional planner, I feel that there is a huge missed opportunity in not building a mega hub midway between BOM and PNQ and linking both with fast transit connections).

DEL at least is in the middle of municipally controlled and vacant, low-volume development land. Land acquisition and expansion here is far easier, and I'd go as far as to say that Jewar is just a money laundering scam. We'd do better by sanctioning a fifth runway at DEL, fast tracking terminal construction, and extending the metro express towards Noida and Ghaziabad.

I think the DEL region needs two airports. When a major city has only one airport, someone has to lose. Meaning some poeple will be so far away they lose the convienience of a nearby airport. Cities like AMS that are very compact and have fantastic trains can be fine with one airport (even an Uber from AMS to city center is like 25 Euro. BOM and DEL are well served by having second regional airports. The pity in BOM is that there is room for a parallel runway at the current BOM and the new airport can’t have more than two runways (what a shame)

dtw2hyd wrote:

There is no bankruptcy for federally guaranteed government entities

You change laws, which would be needed anyway for clean disposal of assets and entities to new owners, and to protect politicians, civil servants and consultants/advisers involved in the process.

CaliguyNYC wrote:

I think the DEL region needs two airports. When a major city has only one airport, someone has to lose. Meaning some poeple will be so far away they lose the convienience of a nearby airport. Cities like AMS that are very compact and have fantastic trains can be fine with one airport (even an Uber from AMS to city center is like 25 Euro. BOM and DEL are well served by having second regional airports. The pity in BOM is that there is room for a parallel runway at the current BOM and the new airport can’t have more than two runways (what a shame)

Perhaps this debate is better held on a separate thread? This one was meant to be on AI after all.

To keep things short, Jewar is a poor location, demographically and geographically, and reeks of land speculation. Its nearest NCR border is a longer distance away than IGI is from its farthest NCR fringe. Funds are better spent expanding DEL and its regional transit links (which btw are already provisioned for). Supplementary capacity is better diverted towards existing airfields like Hindon or Meerut, which already have decent and developed catchments, and are at the far end of NCR from IGI. I agree with you on BOM though - two growth limited airports is just plain myopic.

On AMS, I'd like to point out that Schiphol doesn't serve Amsterdam alone, but the entire Randstad, which is a 8200 sq km conurbation with just around 10 mn people spread around four urban cores - Amsterdam itself, Rotterdam, the Hague, and Utrecht. Sprawl wise, it's similar to NCR and Greater Mumbai. A single airport system only needs to be large enough and well managed.

The question was: can Air India go bankrupt? DTW2HYD says no. But reputable sources say yes.

dtw2hyd wrote:

Right, Times Group says so.

Correct. Over and over you post things that are just factually wrong. And yes I believe the Times Group over you. I imagine most people do.

[twoid][/twoid]

Planesmart wrote:

dtw2hyd wrote:

There is no bankruptcy for federally guaranteed government entities

You change laws, which would be needed anyway for clean disposal of assets and entities to new owners, and to protect politicians, civil servants and consultants/advisers involved in the process.

There is no need to change laws. Air India is not part of the government like the department of defense. Instead air India as a corporation who shares are owned by the government. That kind of thing can declare bankruptcy according to Indian law.

Googling “air India bankruptcy” will show lots of information. Or look up-thread, where I posted a link

Planesmart wrote:

dtw2hyd wrote:

There is no bankruptcy for federally guaranteed government entities

You change laws, which would be needed anyway for clean disposal of assets and entities to new owners, and to protect politicians, civil servants and consultants/advisers involved in the process.

A couple of issues with changing laws.

The current ruling party is no longer a majority.
India's sovereign rating will take a hit, dear leaders pet projects have to be renegotiated. Japan International Cooperation Agency is giving $17 Billion 50 year soft loan for one project.

The US lost credit rating just for not increasing the debt ceiling.

Option to list Air India denied. Why? Profits required to list a stock in India:

https://www.business-standard.com/artic ... 523_1.html

So, GoI still can write-off $3.1B as promised in PIM #1, AI will show a profit and can be listed.

Or the $3.1B write-off offer valid only to close friends.

dtw2hyd wrote:

CaliguyNYC wrote:

..
As I posted on another forum - now that the country knows AI is just lipstick on a pig, maybe the government can finally offer a deal that makes economic sense to a buyer. The opposition and AI unions / Communist party can't claim the current govt is giving away the family jewels. If they end up selling AI and they don't get huge backlash, then these games might actually be worth it.

Assuming GoI is sincere, can you walk us through few assets and debt combination numbers that make economic sense to any buyer.

Sell it off for a token sum of INR 1.00 (USD 0.015).

Advantage buyer: less cash up front to the crooks (Government of India). Freedom re-organise the damned airline as you please and sack inefficient bloated work force (which can be poached by other airlines if good enough).

Advantage Government: Bragging rights that they got rid of garbage (feather in cap for Swachh Bharat Campaign) and no more money being thrown away.

Write off $3.1b now, the national beggar will be back with demands of $6.2b in 5 years. No big deal. Btw, as has been repeatedly pointed out, no company that makes less money (RASK) than it costs (CASK) is profitable. And no, this happens before finance costs. Accounting 101.

So the offer is valid only for crony friends. Got it.

Malaysia and Zimbabwe were sincere in fixing their airlines, India is not. As simple as that.

Not willing to debate wild political theories. Sticking to facts, AI is deep in the red, bailout or not.

dtw2hyd wrote:

Malaysia and Zimbabwe were sincere in fixing their airlines, India is not. As simple as that.

Throwing billions of taxpayers money onto a state owned airline trying to compete in the open market is NOT "fixing" it.

P1aneMad wrote:

dtw2hyd wrote:

Malaysia and Zimbabwe were sincere in fixing their airlines, India is not. As simple as that.

Throwing billions of taxpayers money onto a state owned airline trying to compete in the open market is NOT "fixing" it.

No one asked GoI to own or run an airline. No one asked seven cabinet-level ministers to micromanage this airline. Of course, it is better than deciding GST on salty snacks.

Malaysia gave MAS ownership and management to Khazana.
India cannot do that because Indian PSBs(SBI, PNB, BoB et.all) are the real turds sucking AI's blood.

Air India still hasn't paid pilots.
https://m.timesofindia.com/business/ind ... 650152.cms

My take is that sounds like a call for a blue flu.

Lightsaber

Yeah it is the PSBs who are holding AI back. Otherwise AI would have been a five star airline paying billions in dividends back to the exchequer

dtw2hyd wrote:

P1aneMad wrote:

dtw2hyd wrote:

Malaysia and Zimbabwe were sincere in fixing their airlines, India is not. As simple as that.

Throwing billions of taxpayers money onto a state owned airline trying to compete in the open market is NOT "fixing" it.

No one asked GoI to own or run an airline. No one asked seven cabinet-level ministers to micromanage this airline. Of course, it is better than deciding GST on salty snacks.

Malaysia gave MAS ownership and management to Khazana.
India cannot do that because Indian PSBs(SBI, PNB, BoB et.all) are the real turds sucking AI's blood.

Looks like there is no easy solution to the Air India pickle. What is your suggestion to get out of this ?

dtw2hyd wrote:

So, GoI still can write-off $3.1B as promised in PIM #1, AI will show a profit and can be listed.

Or the $3.1B write-off offer valid only to close friends.

Please read my prior link. To list a company in India requires 3 years of profits apparently.

The write off is under new management who take the risk. Not for another decade of corruption.

AI needs so much subsidy it is difficult for the funds to be released timely (e.g., pay staff).

I bet the meetings at the GoI are facinating. Urgently needing 3,000 crore ($440+ million depending on currency value) shows the prior sale had major issues.

The fact AI is facing industrial action for non-payment of wages is... Yeah..

Lightsaber

sabby wrote:

...
Looks like there is no easy solution to the Air India pickle. What is your suggestion to get out of this ?

Immediate (One week)
Remove AI brand from the entities which have nothing to do AI, When the brand has a negative image and negative value why tarnish these debt-free profitable and good entities. AIX, AIESL, AISATS, AIATSL should be out of the group.

GoI deposits $3.1Billion in an escrow account.
Short Term (One Month)
Hire Christopher Mueller.
Fire ALL staff, those who cannot be fired(federal employees) send them back to other government departments/entities.
Everyone has to apply and get a job
If AI can achieve this AI can payoff $3.1Billion WC debt from the escrow account

Long Term(One Year)
Close Mumbai crew base.
Sell HQ, residential buildings, and hangars in Mumbai
Move MX base to Nagpur.
In Delhi, find a builder who can build a skyscraper to accommodate all employees, sell what is left of 30 acres.

But this is a real fix, will not satisfy EK,6E PR, and real estate grabbers.

lightsaber wrote:

AI needs so much subsidy it is difficult for the funds to be released timely (e.g., pay staff).

I bet the meetings at the GoI are facinating. Urgently needing 3,000 crore ($440+ million depending on currency value) shows the prior sale had major issues.

The fact AI is facing industrial action for non-payment of wages is... Yeah..

Lightsaber

I know you are repeating this everywhere, AI hasn't paid May allowances to 1120 pilots. Paid in full to everyone else and base salaries to 1120 pilots.

AI took $580 Million loan for VVIP aircraft, with a cash burn rate of $2 Million a month without generating any revenue. Whose fault is that?

Let Indigo buy 2 Dhokla capable 77Ws and keep them on standby.

They just need to stop it, just cease operations, this thing will go on and on and on, they will take loans to pay off loans and just use the shit loads of tax payers money. AI cannot be fixed.

Sell the aircrafts to Indigo, Spicejet, Vistara or whoever. Will that pay off their current loans? it won't, but at least more money won't be wasted.

I have skimmed through these 10 pages and with no prejudice to one and all , what is the likelihood of this sale?

https://m.businesstoday.in/story/air-in ... 79299.html

Funny how they suddenly found operational profits after a failed disinvestment attempt. Election years can be quite wondrous. I suppose LAX and NBO will be back on the drawing board now.

Instead of buying new planes, GoI should hire a CEO who actually knows how to run an airline and give him/her a wide berth to do whatever it takes to turn the beast around. Half the problem with AI is that it's helmed by IAS officers who have no background in aviation and advised by politicians who dangle flights like carrots. Contrast that with SQ and ET, both successful government owned airlines, where the senior leadership is almost always a longtime employee who has risen up the ranks, and the government maintains a safe distance.

subramak1 wrote:

I have skimmed through these 10 pages and with no prejudice to one and all , what is the likelihood of this sale?

There are two chances - slim and none. Slim's already left town.

Nobody with any sense would touch AI with a proverbial bargepole.

Now what?
Are they just going to pretend for a year more money won't be needed?

Late edit:. AI losing 15 crore/day per this link $2.2M USD/day):
https://m.timesofindia.com/business/ind ... 656355.cms

scbriml wrote:

subramak1 wrote:

I have skimmed through these 10 pages and with no prejudice to one and all , what is the likelihood of this sale?

There are two chances - slim and none. Slim's already left town.

Nobody with any sense would touch AI with a proverbial bargepole.

Not as one airline with a large number of employees.

But split it up so there are no more than 2,500 full time employees and a total (with contractors, including part time) of less than 4,000 employees and a sale could happen.

Meh. This problem won't go away...

Lightsaber

dtw2hyd wrote:

sabby wrote:

...
Looks like there is no easy solution to the Air India pickle. What is your suggestion to get out of this ?

Immediate (One week)
Remove AI brand from the entities which have nothing to do AI, When the brand has a negative image and negative value why tarnish these debt-free profitable and good entities. AIX, AIESL, AISATS, AIATSL should be out of the group.

GoI deposits $3.1Billion in an escrow account.
Short Term (One Month)
Hire Christopher Mueller.
Fire ALL staff, those who cannot be fired(federal employees) send them back to other government departments/entities.
Everyone has to apply and get a job
If AI can achieve this AI can payoff $3.1Billion WC debt from the escrow account

Long Term(One Year)
Close Mumbai crew base.
Sell HQ, residential buildings, and hangars in Mumbai
Move MX base to Nagpur.
In Delhi, find a builder who can build a skyscraper to accommodate all employees, sell what is left of 30 acres.

But this is a real fix, will not satisfy EK,6E PR, and real estate grabbers.

I see two possible problems with this.
1. Hiring Mr. Mueller. He got a big post at Emirates a couple yrs ago, don't know if he could be convinced to come to AI, an airlines notorious for Govt meddling and the politics and corruption associated with it. I know he did take helm of Govt Airlines before but AI is more messy and GoI is much more powerful and egoistic and prone to vote bank politics than those other government.
2. Once they follow the steps you described and the $3.1B is paid to the lenders, how would they operate for the first year or so without any working capital ? They are in no shape to churn profit in a short time in my opinion.

And of course all this depends on if the GoI really want to and willing to make AI a completely free entity from it's hands. But you are right that they need to rip off the band aid in one go, they can't please their various employees and politicians if they want to solve this issue once and for all.

sabby wrote:

I see two possible problems with this.
1. Hiring Mr. Mueller.
2. Once they follow the steps you described and the $3.1B is paid to the lenders, how would they operate for the first year or so without any working capital ? They are in no shape to churn profit in a short time in my opinion.

Mueller has been sitting on the sidelines for the same the reasons you listed. Compared to EK, AI is an easy fix for Mueller, if all IxSs are sent back to MoXX.

AI has $3.4 Billion in revenue. Below is AI's expenditure.

Expense 1 - 40%
Expense 2 - 40%
Expense 3 - 12%
Others - 8%

#2, #4 cannot be cut, and the goal is to cut 20% of the total expenditure to break even. The $3.1 Billion write-off cuts #1 by 66%.

Aviation debt is good for pundits to throw around big numbers, but the total frame value shows up as debt on books even for leased frames. When you lease a car, entire car value shows up as debt on your credit report. EK has $12+ Billion debt. It is not how much debt company holds, it is whether the debt as structured is serviceable or not. The $3.1 is not serviceable because of high-interest rates and banks are not ready to restructure.

But none of this is not going to happen, because AI is a shell company to prop up failing public sector banks.

I've been on A.net for over a decade, and I've been reading the same things about AI since then.

As this thread shows, and has been proven often in the past, AI is a mess that is so convoluted and corrupt, that nobody really knows what is going on. I was going to say that nothing has changed...but that's not true...it has gotten way worse.

It is so mired in so many lives and schemes that sorting it out would be impossible.

There is no White Knight for AI. Nobody is riding up to save the day because it can't be saved. It's a huge, bloated carcass steaming on the beach and it will poison anything it touches.

There are two options for AI; just accept that it will never not be a perpetual, unfixable money sinkhole, or finally, mercifully, put it out of its, and everyone else's misery. For good.

....in my opinion.

dtw2hyd wrote:

sabby wrote:

I see two possible problems with this.
1. Hiring Mr. Mueller.
2. Once they follow the steps you described and the $3.1B is paid to the lenders, how would they operate for the first year or so without any working capital ? They are in no shape to churn profit in a short time in my opinion.

Mueller has been sitting on the sidelines for the same the reasons you listed. Compared to EK, AI is an easy fix for Mueller, if all IxSs are sent back to MoXX.

AI has $3.4 Billion in revenue. Below is AI's expenditure.

Expense 1 - 40%
Expense 2 - 40%
Expense 3 - 12%
Others - 8%

#2, #4 cannot be cut, and the goal is to cut 20% of the total expenditure to break even. The $3.1 Billion write-off cuts #1 by 66%.

Aviation debt is good for pundits to throw around big numbers, but the total frame value shows up as debt on books even for leased frames. When you lease a car, entire car value shows up as debt on your credit report. EK has $12+ Billion debt. It is not how much debt company holds, it is whether the debt as structured is serviceable or not. The $3.1 is not serviceable because of high-interest rates and banks are not ready to restructure.

But none of this is not going to happen, because AI is a shell company to prop up failing public sector banks.

Nitpick, but you don't just put the whole lease as debt. You put the required minimum payments with penalties and accumulated maintenance. That is the point of an opperating lease, the ability to walk away after a severance penalty. What you describe does apply to a financial lease unless there are break out clauses reducing the payout.

The point of a lease is to transfer risk. But in return the leasing company owns the assets. And how do you arrive at $12 billion for EK, with their substantial discounts on A380s and 777s and where they are on the leases...

Please recall the increase in service since 2009 has slowed. Both India and China locked out EK. In 2016 DXB became close to impacted, so for two years EK has been whittling down obligations. Leasing companies are happy with their practices. In particular that EK stores the aircraft for free at end of lease until the next opperator takes possession.

So comparing good risk hedging to AI doesn't make sense. EK has $1.82. Billion in debt. Although $1.11 billion comes due in 2019... The lease obligations add a few billion in obligations. However, do recall how much larger an airline EK is. In particular due to higher aircraft utilization.

https://finance.yahoo.com/news/airshow- ... 49067.html

Lightsaber

dtw2hyd wrote:

But none of this is not going to happen, because AI is a shell company to prop up failing public sector banks.

That is the saddest part. I do believe even if the Bank issues were solved, a lot of politicians would impede as well. I read stories about various aviation ministers and what they did to AI for personal gains. Not to mention the VVIP flights provided free of cost along with the quota for various GoI personnel in many scheduled flights. If (a big IF) anyone do eventually buy AI, I think it will probably be either Qatar (because of their exhausted bilateral in India along with possible growth) or Singapore group. Personally I'd have preferred LH group because of their experience in so many airlines as well as MX which could absorb AI MX. But I don't think they'd touch AI with a pole.

Air India to introduce a revamped Business / First Class called the Maharaja Class!

lightsaber wrote:

Nitpick, but you don't just put the whole lease as debt. You put the required minimum payments with penalties and accumulated maintenance. That is the point of an opperating lease, the ability to walk away after a severance penalty. What you describe does apply to a financial lease unless there are break out clauses reducing the payout.

The point of a lease is to transfer risk. But in return the leasing company owns the assets. And how do you arrive at $12 billion for EK, with their substantial discounts on A380s and 777s and where they are on the leases...

Please recall the increase in service since 2009 has slowed. Both India and China locked out EK. In 2016 DXB became close to impacted, so for two years EK has been whittling down obligations. Leasing companies are happy with their practices. In particular that EK stores the aircraft for free at end of lease until the next opperator takes possession.

So comparing good risk hedging to AI doesn't make sense. EK has $1.82. Billion in debt. Although $1.11 billion comes due in 2019... The lease obligations add a few billion in obligations. However, do recall how much larger an airline EK is. In particular due to higher aircraft utilization.

https://finance.yahoo.com/news/airshow- ... 49067.html

Lightsaber

AI has only very few A320s on operating lease. Rest all are on finance lease/SLB.

Even for AI, the current av debt is very little not $5 Billion, and AI has enough revenue to service current av debt obligations. Even the $3.1 Billion WC debt is not much if restructured at international market rates.

To compare apples to apples AI has $8 Billion total debt and EK has $12+ Billion debt.

Also, No lessor want to offer discounted leases on A380 at $200 Million or B77W at $130 Million. Those were great prices when EK negotiated, not now.

sabby wrote:

dtw2hyd wrote:

But none of this is not going to happen, because AI is a shell company to prop up failing public sector banks.

That is the saddest part. I do believe even if the Bank issues were solved, a lot of politicians would impede as well. I read stories about various aviation ministers and what they did to AI for personal gains. Not to mention the VVIP flights provided free of cost along with the quota for various GoI personnel in many scheduled flights. If (a big IF) anyone do eventually buy AI, I think it will probably be either Qatar (because of their exhausted bilateral in India along with possible growth) or Singapore group. Personally I'd have preferred LH group because of their experience in so many airlines as well as MX which could absorb AI MX. But I don't think they'd touch AI with a pole.

Not sure if you follow AI's debt saga but if you recall PSBs didn't accept Life Insurance Corporation's proposal to take over AI's debt. GoI didn't force PSBs either. There is absolutely no valid reason.

QR would have purchased AI, but Hindu fundamentalists threw a wrench initially. SIA group has no cash to fix AI.

BTW, SIA Engineering tied up with AIESL, sending MX/MRO work to India.

ronitkadam777 wrote:

Air India to introduce a revamped Business / First Class called the Maharaja Class!

Fantastic news! Hopefully, at the very least, this means that the click Business Class seats that were installed on the latest 77Ws will be rolled out to the remaining 77Ws.

dtw2hyd wrote:

lightsaber wrote:

Nitpick, but you don't just put the whole lease as debt. You put the required minimum payments with penalties and accumulated maintenance. That is the point of an opperating lease, the ability to walk away after a severance penalty. What you describe does apply to a financial lease unless there are break out clauses reducing the payout.

The point of a lease is to transfer risk. But in return the leasing company owns the assets. And how do you arrive at $12 billion for EK, with their substantial discounts on A380s and 777s and where they are on the leases...

Please recall the increase in service since 2009 has slowed. Both India and China locked out EK. In 2016 DXB became close to impacted, so for two years EK has been whittling down obligations. Leasing companies are happy with their practices. In particular that EK stores the aircraft for free at end of lease until the next opperator takes possession.

So comparing good risk hedging to AI doesn't make sense. EK has $1.82. Billion in debt. Although $1.11 billion comes due in 2019... The lease obligations add a few billion in obligations. However, do recall how much larger an airline EK is. In particular due to higher aircraft utilization.

https://finance.yahoo.com/news/airshow- ... 49067.html

Lightsaber

AI has only very few A320s on operating lease. Rest all are on finance lease/SLB.

Even for AI, the current av debt is very little not $5 Billion, and AI has enough revenue to service current av debt obligations. Even the $3.1 Billion WC debt is not much if restructured at international market rates.

To compare apples to apples AI has $8 Billion total debt and EK has $12+ Billion debt.

Also, No lessor want to offer discounted leases on A380 at $200 Million or B77W at $130 Million. Those were great prices when EK negotiated, not now.

Where are you getting such a high number for EK debts? I posted their current at $1.81 billion USD.

Please post a link.

lightsaber wrote:

...
Where are you getting such a high number for EK debts? I posted their current at $1.81 billion USD.

Please post a link.

There was a thread on FlyerTalk titled "Is Emirates a financial scam", read posts by eternaltransit. He is probably the most knowledgeable person about Emirates Airline finances. This was a multiyear thread with close to ~1000 posts.

Of course, Planesmart can always explain both numbers.

Yes that's good news! One thing their long haul fleet needs is WiFi connectivity and an upgrade to their IFE in their economy class!

globetrotter94 wrote:

ronitkadam777 wrote:

Air India to introduce a revamped Business / First Class called the Maharaja Class!

Fantastic news! Hopefully, at the very least, this means that the click Business Class seats that were installed on the latest 77Ws will be rolled out to the remaining 77Ws.

dtw2hyd wrote:

lightsaber wrote:

...
Where are you getting such a high number for EK debts? I posted their current at $1.81 billion USD.

Please post a link.

There was a thread on FlyerTalk titled "Is Emirates a financial scam", read posts by eternaltransit. He is probably the most knowledgeable person about Emirates Airline finances. This was a multiyear thread with close to ~1000 posts.

Of course, Planesmart can always explain both numbers.

I tend to find people get worked up. I'd love to know Planesmart's opinion. But if that were true, EK would have gone down 18 months ago.

For the record, I have had a very negative opinion of EY and QR finances for years. EY is exposed and reforming. QR is a mess that needs someone less machismo who will run it as a business.

What we know is AI is not making profits and increasing debt. It is actually almost irrelevant now about EK due to the capacity constraints since 2009. (The allowed growth in 2014 was negligible.).

How does AI turn an overall, post tax, cash flow profit?

Lightsaber

lightsaber wrote:

...
I tend to find people get worked up.

Lightsaber

Interesting choice of words lightsaber. You are the one maintaining double standards between EK and AI.

250 planes - 65,000-104,000(group) staff - Good
120-160(group) planes - 11,000-27,000(group) staff - Bad

$12 Billion Debt - Good
$8 Billion Debt - Bad

lightsaber wrote:

...
I'd love to know Planesmart's opinion. But if that were true, EK would have gone down 18 months ago.

Lightsaber

Even if the policy is to have all leased fleet, airlines have of av related debt on their books. Delays in SLB for various reasons like no secondary market for A380s, low resale value of 77W or GTF issues with Indigo NEOs. It is not current and the airline is not excepted to repay.

ronitkadam777 wrote:

Yes that's good news! One thing their long haul fleet needs is WiFi connectivity and an upgrade to their IFE in their economy class!

globetrotter94 wrote:

ronitkadam777 wrote:

Air India to introduce a revamped Business / First Class called the Maharaja Class!

Fantastic news! Hopefully, at the very least, this means that the click Business Class seats that were installed on the latest 77Ws will be rolled out to the remaining 77Ws.

Yes, once Indian regulators approve inflight wifi use, I believe AI will probably be the first to adopt it. However, given trends around the world, I doubt that it will be free--especially not in economy! IMO, the most important upgrade to economy IFE (at least on their 77Ws--their 788s were fine) is sensitivity to actual touch. I remember it being quite hard to change menus on those screens on several 77W aircraft.

Does this also mean that AI is getting rid of First Class? If so, that would be a good move. First Class is largely a waste of space on the plane these days, as more airlines are opting for a Business-Premium Economy-Economy configuration.

dtw2hyd wrote:

lightsaber wrote:

...
I tend to find people get worked up.

Lightsaber

Interesting choice of words lightsaber. You are the one maintaining double standards between EK and AI.

250 planes - 65,000-104,000(group) staff - Good
120-160(group) planes - 11,000-27,000(group) staff - Bad

$12 Billion Debt - Good
$8 Billion Debt - Bad

lightsaber wrote:

...
I'd love to know Planesmart's opinion. But if that were true, EK would have gone down 18 months ago.

Lightsaber

Even if the policy is to have all leased fleet, airlines have of av related debt on their books. Delays in SLB for various reasons like no secondary market for A380s, low resale value of 77W or GTF issues with Indigo NEOs. It is not current and the airline is not excepted to repay.

Whether or not EK is in trouble is irrelevant in regards to AI being in trouble. Dubai can afford to float EK indefinitely...India can't afford to do the same with AI.