Need To Know | GE arm takes back Kingfisher planes

Need To Know | GE arm takes back Kingfisher planes

New Delhi: US-based GE Commercial Aviation Service or Gecas has taken possession of three A320 aircraft it had leased to Kingfisher Airlines Ltd after a dispute over lease payments. Gecas had asked aviation regulator Directorate General of Civil Aviation to de-register four A320 aircraft from its India registry as, the lessor said, the airline had defaulted payments and it (the lessor) could take over its aircraft, according to a civil aviation ministry official who asked not to be named.

‘DNA’ newspaper reported the return of the planes on 14 December. Airbus A320 aircraft command a lease varying between $300,000 and $500,000 a month depending on the negotiations between lessor and the airline. The dispute had ended in the Karnataka high court.

On Monday Kingfisher, too, said the aircraft have been handed over. “It is Kingfisher Airlines’ case in the court proceedings that there is no money owing from Kingfisher Airlines to Gecas and that, in fact, Gecas is holding surplus funds of Kingfisher Airlines," said Vijay Mallya, chairman and chief executive officer of the carrier who has also been defusing a payments row with state-run oil firms such as Indian Oil Corp. Ltd and the airports regulator Airports Authority of India in the past three months.

An email sent to Gecas India remained unanswered.

The civil aviation ministry official cited above said the issue was an “embarrassment" as no other “major carrier" has in the recent past defaulted on lease payment. An analyst too said it was unusual from airlines to default on lease payments. “I have been covering the Indian market for the last five years and cannot recall such an incident during that time, but it’s possible that it may have occurred earlier," said Binit Somaia, Sydney-based director of Centre for Asia Pacific Aviation, for India and West Asia.

— Tarun Shukla


DIAL can’t charge any additional passenger fee

New Delhi: The civil aviation ministry has rejected a proposal by the Delhi International Airport Pvt. Ltd (DIAL) to charge an additional passenger fee from passengers beginning January after the law ministry said it was not permissible to impose such a fee for now, according to a civil aviation ministry official, who did not wish to be named.

DIAL had sought to levy Rs300 as a so-called airport development fee on each outbound domestic passenger, besides Rs1,000 each on those flying international routes between January 2009 and December 2011. Such a passenger fee alone will likely result in revenues of over Rs1,400 crore which can be used to fund airport expansion, as reported by Mint last month.

— Tarun Shukla


ATF prices cut; benefits to passengers not yet

New Delhi: Domestic oil marketing companies have reduced the price of aviation turbine fuel or ATF, as jet fuel is known, by 11% this fortnight to Rs32,691.28 a kilolitre in New Delhi—the seventh consecutive cut since August when prices touched a record Rs71,028.26 per kilolitre.

The new price will come into effect from midnight on Monday, according to Indian Oil Corp. Ltd’s website.

In Mumbai, ATF will cost Rs33,719.46.

It was not immediately clear if airline companies would reduce ticket prices. When contacted, a Kingfisher Airlines Ltd spokesperson said the airline’s management is evaluating the latest reduction in the jet fuel prices and will decide its future course of action shortly. A Jet Airways (India) Ltd spokeswoman said that her airline has not taken a decision on passing the benefits of reduction in jet fuel prices to passengers.

— Tarun Shukla and PTI


Playboy cuts 14% jobs,eyes India for expansion

New York: Adult entertainment magazine publisher Playboy Enterprises Inc., which has cut its workforce by 14% to save costs, has identified India as a key target region to expand its geographic distribution.

Other regions where the firm is targeting to expand its presence include China and Latin America.

In an investor presentation, it said that as part of measures to cut costs in “corporate and other overhead, the company has slashed its headcount by 14%", in addition to which finance, human resources and information technology staffing have also been reduced.



State of economy top of mind for professionals

Mumbai: As the financial meltdown follows businesses into the new year, the state of the economy is top of mind among 90% of India’s management level workers surveyed in the India Business Climate Perception Study, done by brand-comm Pvt. Ltd, an integrated brand communications firm.

The study, which was conducted in November among 450 professionals from New Delhi, Hyderabad, Mumbai, Bangalore and Chennai, found that the industries likely to feel the heat of recession next year would be aviation, real estate, travel, automobiles and information technology (IT) enabled services. Sectors such as education, news and media, healthcare, fast moving consumer goods (FMCG), biotechnology, advertising and public relations and organized retail would actually gain ground in 2009.

— Staff Writer


Indian Hotels opens new Taj hotel in Bangalore

Bangalore: Despite suffering a setback after the terror attacks at one of its leading hotels in Mumbai, Indian Hotels Co. Ltd, which operates the Taj chain of hotels, says it will continue with expansion plans.

The firm, which runs 60 hotels in India and 16 overseas, opened its fifth hotel in Bangalore on Monday at the International Tech Park, which houses companies such as Tata Consultancy Services Ltd and IBM Global Services Pvt. Ltd. “The business has to go on. We will continue with our expansion as planned," said Rohinton Commissariat, director—marketing, premium hotels.

Taj’s latest hotel ‘Vivanta by Taj—Whitefield, Bangalore’ cost Rs120 crore. The hotel has tied up with several firms and says it expects an occupancy rate of 85% after three-four months. Due to heightened security at the hotel, Vivanta claims it will not take any walk-in guests who might not have a prior reservation, which needs to be done through a source known to the hotel.

— Deepti Chaudhary


Najam Sethi gets Golden Pen of Freedom award

New Delhi: The World Association of Newspapers (WAN) has named Najam Sethi, editor-in-chief of ‘Friday Times’ and ‘Daily Times’ of Pakistan, for the 2009 Golden Pen of Freedom award.

“Sethi, whose newspapers advocate liberal and secular ideas in a country too-often torn by religious extremism, was honoured for his outstanding defence and promotion of press freedom under difficult circumstances and constant personal danger," said a WAN statement in Paris on Monday.

The award will be presented at the World Newspaper Congress and World Editors Forum to be held in Hyderabad, from 22 to 25 March.

— Staff Writer


RTE Bill does not specify cost-sharing details

New Delhi: The government introduced the Right to Education Bill in the Rajya Sabha on Monday, which calls for reserving seats for the poor in private schools and enforces quality standards in government-run schools. But the Bill failed to specify how the cost for meeting these quality standards will be shared between the central government and the states.

It was widely expected that the central government will give the exact formula for sharing of cost just as it did under its flagship Sarva Shiksha Abhiyan or SSA, a programme aimed at putting every child in school. The relative success of the SSA, at least in improving enrolment ratios, is credited to this clear-cut sharing of costs. Education is a concurrent subject in India, meaning the cost of any programme is shared between the central government and states.

"What is clear is that the Centre is not looking at a uniform sharing of funds with states. More affluent states might have to contribute more for implementation of this scheme," said Ashok Agarwal, lawyer and child rights advocate.

— Staff Writer


MPs allocation may be raised to Rs5 crore

New Delhi: The government may soon increase the allocation of members of Parliament Local Area Development Scheme (MPLAD) from its present limit of Rs2 crore to Rs5 crore.

Replying to a recommendation by a parliamentary panel on MPLAD to the same effect, the ministry of statistics and programme implementation (Mospi) has replied that the proposal is “under examination". The committee submitted its report in the Lok Sabha on Monday.

When asked Pronab Sen, chief statistician of India and secretary in Mospi said: “We have sent a note to the finance ministry. It has asked it to be circulated among various ministries. Once we get feedback from the ministries, we will have to approach the expenditure finance committee for approval." However, Sen declined to commit any time line for the same.

When asked whether this is part of the government’s strategy to increase government funding in infrastructure sector due to the current economic downturn, Sen said, “This should be seen more as a regular measure. Because once the limit is increased, it cannot be rolled back."

— Asit Ranjan Mishra


DoT worried over BSNL’s dwindling quarterly rev

New Delhi: Bharat Sanchar Nigam Ltd (BSNL) has reported a drop in net profit for the year amounting to almost Rs4,796.8 crore or 61.45% over the previous year’s. BSNL as it is better know reported net profit of Rs3,009.39 in the fiscal year ending March as compared with Rs7,805.87 crore for the fiscal year 2006-07. The firm reported a net profit of Rs8,939.70 crore in 2005-06.

— Shauvik Ghosh


National Investigation Agency proposal cleared

New Delhi: The Union cabinet on Monday gave its approval to the proposal to amend the Unlawful Activities (Prevention) Act 1967, and for the setting up of a federal investigative agency. It also approved the proposal to amend the Central Industrial Security Force Act. The bills for these proposals will be introduced in the current session of Parliament.

— Staff Writer


Maharashtra Govt issues to TV shows with kids

Mumbai: The Maharashtra Government has issued notices to producers of television shows featuring children, seeking an explanation on the work environment provided to the minors.

“The Labour Commissioner has issued the notices under Child Labour Act 1996, asking the producers to explain if the work environment for the children was conducive and that there was no violation of any laws," Labour Minister Nawab Malik said.

“If any one is found violating provisions of the Child Labour Act, action as per provisions of the law would be taken," the minister said.

“There have been reports that children working in television shows are made to work for 12 to 14 hours at a stretch," Malik said.

“We would like to ensure that work environment does not in any way hamper their education and cause undue mental stress," he said.

Meanwhile, sources in the labour department said notices have been sent to producers of various shows featuring children including the popular ’Ballika Vadhu´, ’Uttran´ and ’Chhote Ustad´ on Colors channel, ’Chhota Package Bada Dhamaka´ on Zee TV and ’Chak De Bacche´ on 9X channel.



Infosys wins 5 yr outsourcing contract from AstraZeneca Plc

Bangalore: Infosys Technologies Ltd, India’s second largest software exporter by revenue, said it won a five year multi-million dollar outsourcing contract from AstraZeneca Plc, which include taking on its rolls an unspecified number of the British pharma firm’s employees in Sweden and the UK. The deal size was not revealed.

Infosys will maintain application software of AstraZeneca’s global operaitons in areas such as manufacturing, supply chain, finance, human resources and other corporate functions.

The deal is a part of AstraZeneca’s transformation initiative to accelerate innovation and bring products to market faster, and will help improve its operational efficiency significantly, a statement said on Monday.

The deal is structured on fixed price model for outcome-based deliverables, and flexible, unit pricing for managing changes in the base scope of the engagement, it said. Infosys did not specify the number of people it would take in from the British firm.

Indian firms are increasingly moving away from its traditional time and material or bill based on person deployed towards fixed price deals, aiming to earn better margins through improved productivity and better use of tools.

- Staff Writer/Bangalore


Electrolux AB to slash over 3,000 jobs globally

New Delhi: Consumer electronics maker Electrolux AB will slash over 3,000 jobs globally as a part of cost-reduction measures which the company is taking to drive sustainability. However, according to the company’s official in India, the move would not impact domestic operations.

Electrolux is witnessing slowdown in demand of appliances in markets such as Europe and North America and is unlikely to achieve the outlook for the full year of 2008.

“In light of the sharp market decline, Electrolux is reducing the number of employees by more than 3,000 in the fourth quarter of 2008 and in 2009," the company said in a statement.

“The weak market has had a negative impact on Electrolux sales volumes and product mix during the fourth quarter."

However, there will be job cut in India, according to Anirudh Dhoot, senior vice president marketing and sales, Videocon Industries Ltd.Videcon had bought Electrolux’s Indian operations some years back.

“The job cut announced by Electrolux is for their global operations, it will not have any bearing on India," Dhoot said.

The Electrolux division of Videocon currently employs around 500 people. The division’s turnover in 2008 is expected to be 400 crores and the target for the next year is 450 crores.

While globally, the demand for appliances in Europe and North America continues to show a sharp decline. “As sales in December are seasonally low, there is a risk that operating income for the month will be slightly negative," the statement said.

Due to the negative development on the main markets, cost-saving activities would be further intensified.

“Electrolux continues to move production capacity to low-cost countries in accordance with the restructuring program launched in 2004. The programme, which will be completed in 2009 and 2010, will further reduce the number of employees," the statement added.

- Staff Writer


Students opt for FMCG companies over the financial sector

New Delhi: Large business houses are finding favour with job seekers as a slowing economy has taken some of the sheen off the financial services sector. The fast moving consumer goods sector (FMCG) has emerged as the most popular industry for the 2009 batch of management graduates in the latest Nielsen Campus Track–B School Survey, conducted by New York-based information and media company The Nielsen Co.

According to the survey, based on response of 1,311 soon-to-be graduates from top 40 management institutes of companies, FMCG topped the list with 38% respondents voting for the sector. The other sectors featuring in top five most popular industries include management consulting (chosen by 35% graduates), software/information technology consulting (23%), foreign banks and retailing (both got 22% votes). “Preferences seem to have shifted in favour of large business conglomerates and the IT sector as a consequence of the current global financial turmoil. In particular, students are opting for FMCG companies over the financial sector," said Vatsala Pant, associate director, The Nielsen Co in a statement. “Indeed, considering the current financial job market, the security offered by the FMCG industry has become a major attraction for graduates."

According to the survey, the “dream company" for students includes McKinsey & Co, Google India Pvt. Ltd, Hindustan Unilever Ltd, Accenture Ltd and P&G. The average salary expectation of students is 14 lakh a year although more than half the respondents, especially those specializing in finance, have lowered their salary expectations because of impact of the current downturn, the survey reveals.


Sony India mulls price cut; expects 30 pc growth in FY’09

New Delhi: On the heels of consumer durable companies such as Samsung and LG announcing price cut, Sony India has said it is mulling over the idea and is waiting for “an opportunity" to pass on the benefit to consumers.

Sony India Sales Head Sunil Nayyar said “despite a reduction in excise duty, the adverse exchange rate fluctuations have been a reason for us to hold the prices for now. However we will definitely look for an opportunity where we can pass on the benefit to consumers."

Nayyar further said “we are working on it and consider it to be positive and are pretty sure that these initiatives will stimulate demand."

Last week Samsung and LG decided to marginally slash prices of plasma and LCD (liquid crystal display) TVs, refrigerators and washing machines.

The move by these consumer durable companies was pursuant to the government slashing Cenvat by four per cent across the board to boost demand as part of package to stimulate the economy, hit hard by the global financial crisis.

This year durable industry suffered due to increase in input costs declining demand and adverse exchange rate fluctuations.

Echoing similar sentiment Nayyar said “both the appreciating yen in the first half of the year and the depreciating rupee, has lead to a “double impact" on our import costs. But till now, we have not passed on this cost to our customers."



Regulate TRP system, Par panel tells Govt

New Delhi: Pitching for regulating the TRP system to gauge viewership to make it more accountable, a parliamentary panel today demanded that the government bring in a legislation for effective oversight of broadcast content without any further delay.

Perturbed by the fact that a suitable legislation on broadcasting is yet to materialise despite Supreme Court’s 1995 judgement, which had said that airwaves are public property which need to be controlled by public authority, the Committee criticised the government for its lack of seriousness on the issue.

In its report titled "Television Audience Measurement in India", which was presented in Parliament here, the Standing Committee on Information Technology said that the government should "fructify a self enabling, people friendly and comprehensive legislation on broadcasting services without wasting further time".

The committee in its recommendations, also disagreed with the views expressed by Indian Broadcasting Foundation (IBF), a body of private broadcasters, that while the Television Rating Point (TRP) certainly measures what the audiences view, its economic effect is only felt by the broadcasters, advertisers and advertising agencies.

The committee observed that "the rating system in vogue in utter disregard to the viewers’ sensitivities and preferences is promoting misuse of the television’s platform in the spread of violence, vulgarity, crime and sex... ignoring India’s great cultural traditions.All this is being done to attract viewership, especially of vulnerable groups".

"It is high time the government intervened in the matter and put in place some sort of governmental oversight or regulation on TRP system to make it credible and accountable to the choice of viewers," it said.

Acknowledging Doordarshan’s social obligations as a public broadcaster, the committee has suggested that it should find ways to generate adequate resources and sufficient advertisements to augment the infrastructure and produce quality programmes enabling it to increase its TRP and compete with private channels.

The report also called for coverage of states like J&K, Bihar, Jharkhand and the entire North-East region, which are not covered by media rating agencies like TAM Media Research and a-MAP.The committee observed that only these two players have been active in the field of television ratings.

It added that there is no restriction on the entry of new players. Therefore, the ministry for information and broadcasting along with stakeholders should take effective measures to facilitate entry of new players in order to create more competition.

In order to bring greater transparency in the rating system, the committee also suggested that agencies should disclose their data and methodology in detail to the clients and users as well as the public in general.



TRAI moots flexible packaging, pricing of channels

New Delhi: Sectoral regulator TRAI today mooted flexible packaging and pricing of channels, control of carriage fees and making interconnection agreements public, among others, to deal with issues arising out of increase in number of platforms for distribution of TV channels.

In a consultation paper on interconnection issues relating to broadcasting and cable services, the Telecom Regulatory Authority of India (TRAI) said there was a need to evolve new regulations in the wake of developments in the broadcasting sector, which has seen the emergence of addressable platforms such as IPTV, voluntary CAS and the imminent roll out of head-end in the sky (HITS) and mobile TV services.

"There have been demands for giving flexibility to addressable platforms for distribution of TV channels with regard to packaging and pricing of channels. Whether such provisions should be introduced in interconnection regulations is an issue of consultation," TRAI said.

The regulator said there have been demands from some stakeholders for regulation of carriage fee charged by distributors of TV channels and views have been sought on the need to regulate some aspects of it, such as stability transparency, predictability ad periodicity as well as relationship between TAM/TRP ratings and carriage fee.

TRAI said with interconnection agreements kept confidential, it was not possible for any distributor to know about the terms on which signals were being provided to other distributors of TV channels and whether he has been discriminated against or not.



3G spectrum charges to be recovered through auction price

New Delhi: One of India’s GSM lobbies Cellular Operators Association of India, has come out against the telecom regulatory authorities recommendation of 2% administrative charge applicable to all telecom operators who successfully bid for 3G spectrum not be implemented.

According to a letter, from the Cellular Operator’s Association of India’s Director General, TV Ramachandran, to the DoT secretary Sidhartha Behura, the new levy is a new burden on a sector that is already heavily taxed.

“At the very least, we expect that the burden would not be increased in such an unwarranted manner as is being recommended by TRAI," the letter says.

The COAI has asked that the charges for 3G spectrum be recovered through the auction price and a spectrum usage charge as originally envisaged.

“Alternatively, if at all an “administrative charge" is to be imposed, then it should be in place of, and not in addition to, the slab system of spectrum usage charges," the letter adds.

The telecom regulatory authority of India or TRAI had recommended a 2% administrative charge saying “as we move towards auction as the means to allocate future spectrum, the slab system for determining the spectrum charges are not implementable particularly when the market determined spectrum price is being realized..." and therefore “…levying of administrative charges at a flat rate will be simple and easy to implement"

COAI alleges that the telecom operators already pay as much as around 30% of their revenues as levies and taxes.