New For­mula Seeks to Give Wings to For­eign Air­lines’ In­dia Ex­pan­sion

The Economic Times - - Front Page - Mi­hirMishra@ times­group.com

New Delhi: For­eign air­lines will now be able to of­fer more seats on routes to In­dia in cases where do­mes­tic car­ri­ers have not been able to utilise even one-third of the ca­pac­ity as per their en­ti­tle­ments un­der bi­lat­eral air ser­vices agree­ments.

A com­mit­tee of sec­re­taries has is­sued an or­der to this ef­fect, de­vis­ing a new for­mula to cal­i­brate the open­ing up of In­dian skies to gen­uine de­mands of over­seas car­ri­ers. The panel, headed by the cab­i­net sec­re­tary, was con­sti­tuted to dis­cuss re­forms in bi­lat­eral air ser­vices agree­ments, in­clud­ing auc­tion­ing of rights.

“With coun­tries where In­dian car­ri­ers have not utilised even one-third of the to­tal seat en­ti­tle­ments and do not have any im­me­di­ate plans, the panel is of the view that bi­lat­eral en­ti­tle­ments should be in­creased,” said an avi­a­tion min­istry of­fi­cial, who did not want to be iden­ti­fied.

An­other cost com­po­nent that has recorded an in­crease over the years is in­ter­est rel­a­tive to oper­at­ing profit (EBIT). The ra­tio was at 26.5%, the highest since the June 2014 quar­ter, when it was 22.1%.

On the sec­tor front, compa- nies from the au­to­mo­bile, cap­i­tal gods, ce­ment, con­struc­tion, con­sumer goods and tex­tile sec­tors re­ported growth in net profit at the ag­gre­gate level. On the other hand, pharma, power, re­alty, re­tail, steel, tele­com sec­tors re­ported a de­cline in profit.

The sat­is­fac­tory mon­soon in sev­eral parts of the count- ry and higher sow­ing ac­tiv­ity should sup­port ru­ral spend­ing in the quar­ters to come. The fes­tive season in the Septem­ber and the De­cem­ber quar­ter will add more mo­men­tum to con­sump­tion de­mand. In­dus­trial de­mand may, how­ever, re­main tepid con­sid­er­ing there aren’t any ma­jor signs of cap­i­tal ex­pen­di­ture and ef­forts by debt-laden com­pa­nies to seek fi­nan­cial re­struc­tur­ing.

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