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In India, mass flight cancellations by one of the country’s biggest airlines have turned the spotlight on the country’s struggling aviation sector. The government says it is trying to address the problems faced by an industry crucial to the growth of India's economy.
Hundreds of passengers were stranded, across the country, as Kingfisher Airlines announced more flight cancellations on Tuesday. The airline is operating less than half of its 64 planes and has scrapped nearly 100 flights on some of the busiest routes in recent days.
Kingfisher has been cash-strapped for several months. But the company's problems deepened when tax authorities froze its bank accounts after it failed to pay taxes. Many pilots have quit as the airline battles to pay creditors and staff. Until last year, Kingfisher was counted as India’s premier airline, but it is now the worst hit among domestic airlines that are struggling with debts and losses. Regulators Tuesday ordered Kingfisher to prove its operational viability and said its safety standards would be scrutinized. Aviation Minister Ajit Singh has ruled out a bailout for the company. But he says the government is concerned about the health of a sector that is crucial for the country’s developing economy. “Any industry, if one big company goes down, it does affect people," Singh admitted. "Since demand is more and seats are less, we have to monitor. Safety issues are there and safety is impacted by the financial situation also.” Minister Singh expressed hope that a recent proposal to allow foreign investors to buy stakes of up to 49 percent in domestic airlines will give cash-strapped Indian carriers access to more funds. The policy has been approved, but has not yet been formally implemented. However, aviation analysts say the government also needs to address other problems faced by the industry. High taxes on aviation fuel in India make it expensive. Several states also levy high local taxes. As a result, fuel accounts for 40 percent of the operating cost in India, as opposed to 20 percent in most other countries. A fierce price war among carriers has resulted in airlines selling tickets at discounted prices. Sanat Kaul, chairman of the India chapter of the International Foundation for Aviation and Development, says foreign investors are likely to run into the same problem as the domestic industry.“I don’t see how foreign investment by airlines is going to improve the overall scenario," Kaul said, "unless the government changes certain policy parameters which are leading to this kind of loss…taxation, import of fuel.” India’s aviation sector expanded at a furious pace in the past decade as domestic traffic grew. But it could post losses of $3 billion in the financial year that will end in March.
Indian Airline Industry Scrutinized After Mass Flight Cancellation
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Source: Tax Lien Investing Conference from The Tax Lien Lady
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The tender process for G-Cloud began last November when NTT Communications created a detailed response outlining its expertise and ability to support the government in this area. As part of its tender process it highlighted its experience working with public sector organisations in the UK and abroad, its ability to ensure agile service deployment, understanding of the risks associated with migration projects and its stability as having the highest credit rating in the industry (S&P 2010). Of the 288 suppliers that responded to the Invitation To Tender, NTT Communications was selected to provide Infrastructure Service.
Bob Welton, Regional Director for Northern Europe of NTT Europe, wholly owned subsidiary of NTT Communications, commented, "We are excited to announce our involvement in the G-Cloud initiative. The UK government is under increasing pressure to spend tax payers' money wisely and therefore has to think very carefully about who it partners with to ensure it succeeds. Our successful tender illustrates that our services are the right choice for organisations that need a supplier to deliver cost-effective, secure solutions. From our experience, the biggest challenges the potential G-Cloud users will face will be to find suppliers with the ability to meet the specific needs of their organisations rather than opting for one-size-fits-all services."
About NTT Communications
NTT Communications provides consultancy, architecture, security and cloud services to optimize the information and communications technology (ICT) environments of enterprises. These offerings are backed by the company's worldwide infrastructure, including IPv4/IPv6 Global Tier-1 IP Network, Arcstar Universal One™ VPN network reaching over 150 countries, and over 120 secure data centers. NTT Communications' solutions leverage the global resources of NTT Group companies including Dimension Data, NTT DOCOMO and NTT DATA.
Further information: http://www.ntt.com | http://www.twitter.com/nttcom | http://www.facebook.com/nttcomtv.
SOURCE NTT Communications
...Source: NTT Communications Ticks All the G-Cloud Tender Boxes
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