Airlines cut global traffic forecast on recovery setbacks

PARIS: Air traffic will recover more slowly than previously expected from the Covid-19 pandemic, as vaccination delays and government “risk aversion” slows the reopening of routes, global airlines body IATA said on Wednesday.
Global traffic this year will amount to 43% of pre-crisis levels based on passenger numbers and distance flown, the International Air Transport Association said, below the 51% it had forecast late last year.
IATA also predicted industry losses of $47.7 billion in 2021. While that represents an improvement on last year’s $126.4 billion deficit, the organisation warned that airlines would continue to need government wage support.
“This crisis is longer and deeper than anyone could have expected,” director general Willie Walsh said.
The latest industry outlook also sheds light on the multi-speed recovery underway, with large domestic markets led by the United States and China surging ahead. Europe, by contrast, will see only one-third of its 2019 traffic this year, IATA predicts.
Industry revenue is likely to grow 23% from last year’s low to $231 billion, it also forecast – still far below the $607 billion generated a year earlier.
Cargo demand will continue to be a bright spot outpacing passenger traffic with 13.1% growth in 2021 to exceed its 2019 level, IATA predicted. Total cargo volumes are seen at 63.1 million tonnes, close to their pre-crisis peak in 2018.

Oil prices drop as Covid surge in India dents demand outlook

LONDON: Oil prices fell for a second day on Wednesday, heading for their biggest daily drop in more than two weeks and weighed down by concerns that surging Covid-19 cases in India will drive down fuel demand in the world’s third-biggest oil importer.
Brent crude futures for June declined $1.14, or 1.7%, to $65.43 a barrel at 1250 GMT. US West Texas Intermediate (WTI) crude futures for June fell $1.28, or 2%, to $61.39 a barrel. The May contract expired on Tuesday down 1.5%.
“Demand jitters were thrust back into the spotlight yesterday amid a sharp rise in global coronavirus cases. Nowhere is this more obvious than in India,” PVM analysts said.
India, also the world’s third-largest oil user, on Wednesday reported another record increase in the daily death toll from Covid-19.
Further battering the market, data from the American Petroleum Institute (API) industry group showed US crude oil and distillate stocks rose in the week ended April 16, according to two market sources.
Crude stocks rose by 436,000 barrels, API reported, according to the sources. The US Energy Information Administration will release its inventory data for last week later on Wednesday. For a Reuters poll on EIA data, click
Raising the possibility of further oil supply, Iran and world powers have made headway in talks to save a 2015 nuclear accord, which, if successful, could see sanctions lifted and more Iranian barrels return to the market.
Still, major oil trading companies are stowing diesel and jet fuel on newly built supertankers in Asia and Africa in anticipation of Covid-19 vaccinations driving prices higher in the months ahead.

Govt may come out with definition of essential supplies

NEW DELHI: The government may come out with a clear definition of essential and non-essential supplies made by e-commerce companies after finance minister Nirmala Sitharaman told industry captains that inconsistencies in classification of items across states will be looked into, sources said.
At a meeting she had with industry captains associated with FICCI, Sitharaman was told that there exist inconsistencies across states on what qualifies as essential and what is non-essential supplies by e-commerce companies.
To this remarked that this was a fit case for examination and she would take the matter to group of ministers, sources with knowledge of the deliberations at the meeting said.
The finance ministry and FICCI did not immediately comment on the issue.
Several states have imposed local lockdowns to control the fresh wave of coronavirus infections. They have allowed only essential deliveries by e-commerce companies but the list of such items varies with a state even allowing home delivery of liquor in the essential items.
Addressing representatives of industry chambers CII and FICCI, Sitharaman urged the industry to wait and watch for the next few days to assess the situation amid the second wave of the Covid-19 pandemic and also assured India Inc of full government support.
With the five-fold strategy adopted in handling the Covid-19 cases — i.e., test, track, treat, Covid-19 protocols and vaccination — there may be a positive change in the way the second wave of the Covid-19 pandemic is moving.
“Industry is watching out and I would want you (industry) to keenly observe what is going on and we are together with the industry in (fighting) this (pandemic).
“I am sure all of us together will understand how best to now ramp up and sustain the growth momentum which all of us are keen to see between the last quarter and this quarter,” she added.
She further said sectors like hospitality, aviation, travel, tourism and hotels faced great difficulty since the start of the COVID-19 pandemic.
“We have extended the Emergency Credit Line Guarantee Scheme (ECGLS 2.0) for these sectors, and I will ensure the efficiency with which it was performing last year,” she said.
Sitharaman praised the Indian Industry for its extreme forbearance, patience and perseverance, and described it with Japanese word ‘Gamanzuyoi’.
Speaking on the oxygen supply, the finance minister said the supply has been neatly mapped and new permissions have been given particularly for the hard-stressed 12 states (Delhi, Maharashtra, UP, Chhattisgarh, MP, Gujarat, Rajasthan, Punjab, Haryana, Karnataka, Tamil Nadu and Kerala).
The supply is being monitored at a district level along with reviews which are being undertaken and for the next 15 days, they will be closely monitored.
“The government has exempted all inter-state movement of oxygen tankers, exempted from registration and permits, they can operate round-the-clock, and cylinder filling plants are operating 24 hours to fill the gaps with necessary safeguards,” she said.
She expressed hope that as soon as the medical oxygen demand is met, the industry would also get the necessary supply of oxygen since the import of medical oxygen has been allowed.
Sitharaman shared details of initiatives to help ramp up capacity of Remdesivir from 36 lakh vials per month to 78 lakh vials per month. She added that rapid clearances for new capacities, stopping exports, stopping the exports of APIs and formulations used in the manufacture of this life saving drug, and allowing EoUs and manufacturers located in SEZs to also sell in the domestic market are being taken.
Elaborating on the recent announcements on the vaccination, the finance minister said suggestions from various quarters on opening up of the vaccination to all adults, allowing industry to vaccinate its employees and their families and allowing vaccine imports have all been accepted in the policy.
Sitharaman emphasised on the need for adopting micro-containment strategy in dealing with the second surge of the pandemic and acknowledged that the deliberations with CII had helped shaped this strategy.
Explaining the rationale, she said that unlike last time, “we now have important tools such as vaccines and medicines, to deal with the pandemic”.

Digital platforms emerge as lifelines as Covid spikes

NEW DELHI: With Covid cases touching new highs, digital platforms – right from Twitter to Tinder – have become lifelines for people looking for hospital beds, medicines and oxygen for the patients.
A total of 2,95,041 fresh infections were registered in a span of 24 hours, while the active cases crossed the 21-lakh mark with a record 2,023 daily fatalities, according to the Union health ministry data updated on Wednesday.
“My grandmother needs oxygen machine (5L). She’s aged 80. Location: Kalyan, Mumbai. Have tried all numbers that I have seen here, still not able to get,” read a tweet.
Another one urged people for leads on finding a hospital bed in Noida.
Social media timelines on platforms like Twitter and Facebook are filled with desperate requests by family members and friends of patients for hospital beds and medicines. These posts have been reshared to amplify the reach to a larger audience.
While social media platforms had played a significant role last year too amid the lockdown, the situation is grim this year.
The unprecedented surge in cases has placed tremendous strain on healthcare services and resources across India, and hospitals are running short of beds and medicines.
Interestingly, a Twitter user, Sohini Chattopadhyay narrated how a plasma match was found for a friend through a dating app Tinder. Chattopadhyay went on to add, “Dating app 1, govt 0”.
While there are calls for help, others are also proactively sharing information on various social media platforms.
Social media posts and WhatsApp messages are aplenty with collated lists of hospitals with available beds, names and phone numbers of distributors of medicines like Remdesivir (used in the treatment of Covid) and even food delivery services for Covid patients.
Various actors and social media influencers are also updating their accounts with details of Covid-19 resources. Some people have gone the extra mile to verify the information, which is often crowdsourced, to benefit the masses.
Misinformation has been a major challenge for social media platforms in the past. Tech giants Google, Facebook and Twitter have been stepping up efforts to curb misinformation around Covid-19 on their platform.
Facebook, for example, is working with independent third-party fact-checking entities, covering many Indian languages, to identify misinformation around Covid-19.
It had also launched a Coronavirus Information Centre to provide the latest news and updates from MyGov Corona Hub, ministry of health & family welfare (MoHFW) and global health organisations.

‘Hero Moto’s electric vehicle coming this year’

NEW DELHI: Hero Moto will be setting up a large network of electric battery-swapping stations across the country in a joint venture with Taiwanese unicorn Gogoro as the country’s largest two-wheeler company prepares to launch its first green vehicle by the end of the year.
“We will be launching our first electric vehicle later this fiscal. Hero Moto intends to build electric products, and these will be powered by the network that we develop with Gogoro,” Hero chairman Pawan Munjal told TOI as the company looks at a transition towards green wheels.
Hero’s rivals such as Bajaj Auto and TVS have already launched electric two-wheelers in the market, though concerns around a robust charging network and high retail price has meant a slow adoption.
Munjal said that Hero is working on a variety of technologies to build its electric vehicles, apart from looking at different models to make them affordable. These include making battery cost optional for customers by leasing them out and charging on usage through a subscription model.
“We intend to give different options to customers, which could include a vehicle where we charge for the battery or one where we give it out on lease. We are also learning from Gogoro’s experience in Taiwan,” Munjal said in the presence of Gogoro founder Horace Luke.
A swapping model (leased or self-owned) would mean near-instant recharge time for customers of electric vehicles.
For example, instead of looking at spending time on charging a battery, a customer would simply walk into a swapping station, take out his vehicle’s drained-out battery and replace it with a fully charged one. All s/he may have to pay is a subscription fee for the service and the payment for the electric charge.
Gogoro, founded in 2011 , has created a grid of battery swap stations in Taiwan and boasts of having more than 3.75 lakh riders and 2,000 stations on its network. It manages nearly 2.6 lakh battery swaps daily with more than 174 million battery swaps to date. It also sells electric two-wheelers.
Hero Moto and Gogoro will set up a battery swapping grid in India now which will be used by their potential customers.
Munjal said they also intend to have franchise partners and the JV can also looking at opening the charging network to rival two-wheeler brands if they have similar batteries.
Hero is working on a slew of technologies for its EV foray and the research is being carried out at its Centre of Innovation and Technology (CIT) in Jaipur and also the tech centre in Germany. It also has financial investments in Indian EV start-up Ather.

‘Consumer confidence among urban Indians weakens’

NEW DELHI: Consumer confidence among urban Indians weakened by 1.1 percentage points in April 2021 amid a surge in Covid-19 cases in the country, as per a monthly Refinitiv-Ipsos Primary Consumer Sentiment Index (PCSI) survey.
Consumer sentiment was down across all 4 indices — jobs, personal finances, economy and investments for the future, the survey said.
The online survey was conducted between March 26, 2021, and April 9, 2021. A sample size of 500 adults from Ipsos’ India online panel aged 16-64 years were interviewed.
The monthly PCSI is driven by the aggregation of the four weighted sub-indices.
PCSI Employment Confidence (Jobs) sub-index is down by 0.6 percentage points, Current Personal Financial Conditions (Current Conditions) sub-index fell 1.5 percentage points, and Investment Climate (Investment) sub-index declined 0.9 percentage points.
Economic Expectations sub-index slipped by 0.8 percentage points in the survey.
“The second wave of the coronavirus is in full swing and it is already starting to impact normalcy and livelihoods. Businesses had started recovering post the first wave, and now the new wave (which is more infectious) has already started to negatively impact the sentiment around jobs, finances for the daily running of households, savings and investments and the economy,” Ipsos India CEO Amit Adarkar said.
Refinitiv-Ipsos India Primary Consumer Sentiment Index is a monthly survey of consumer attitude on the current and future state of local economies, personal finance situations, savings and confidence to make large investments.

Pandemic effect: IndiGo to induct freighters in its fleet

NEW DELHI: With cargo proving to be the only bright spot for airlines during the pandemic, India’s largest carrier — IndiGo — has decided to hitch on this wagon.
It will make a start with four Airbus A321s converted from passenger planes to freighters. Struggling-to-survive SpiceJet is the only Indian carrier with freighters at the moment.
IndiGo is scheduled to get its first freighter by the June, and that will be used for both domestic and regional missions.
The remaining three aircraft are within a year “and further aircraft may be sourced depending on market development.”
IndiGo CEO Ronojoy Dutta said: “CarGo has been a success story over the last year, scaling new heights and creating new records, but our belief in the cargo business goes beyond the special circumstances right now. IndiGo was already the largest carrier of cargo in domestic India before Covid-19, and we expect the market to continue to grow after the pandemic.”
“ur investment in the Airbus Freighter Programme will help strengthen our product and services in the segment, and not only help accelerate our own business recovery but also be a strong engine of economic growth for the country,” he added.
The low cost carrier, which flies one in every two domestic travellers, is sourcing four A321ceo aircraft each of which will be converted from passenger to a full freighter configuration.
A letter of intent has already been signed with a lessor for two aircraft and the agreement for the next two is expected to be signed shortly. “The initiative will make best use of the natural synergies, using the same pool of pilots and engineers that fly and service its current fleet,” the airline said in a statement.
The A321P2F (passenger-to-freighter conversion) offers 24 container positions and supports a payload of up to 27 tonnes.

Care Ratings revises GDP growth forecast to 10.2%

MUMBAI: With economic activities getting affected across the country due to curbs imposed by states amid surge in Covid-19 cases, Care Ratings has revised down its forecast for GDP growth to 10.2 per cent in 2021-22 from earlier projection of 10.7-10.9 per cent.
This is the third revision by the rating agency in the last one month.
“We have revised our forecast for GDP growth for FY22 as the underlying conditions have changed rapidly in the last 30 days or so. It stands now at 10.2 per cent,” Care Ratings said in a report.
On March 24, 2021, the agency had projected GDP growth between 11-11.2 per cent based on GVA (gross value added) growth of 10.2 per cent.
The spread of the virus in Maharashtra had led to the announcement of a “lockdown” by the state government which began in a less stringent manner from the first week of April, it said.
Factoring the potential loss of economic output due to the restrictions in the state, the agency, on April 5, lowered its GDP forecast for the current fiscal year to 10.7-10.9 per cent.
But the “lockdown” was made more obtrusive to business activity by April 20, with more stringency expected for the forthcoming fortnight, it added.
Further, the spread of the virus to other states has caused similar actions by governments which have ranged from night curfews and weekend lockdowns to full lockdowns.
The report said two events in the country — state elections and Kumbh Mela — have seen millions of people coming together with social distancing norms not being followed.
This has potential to spread the virus at an exponential rate throughout the country and several states have announced measures to test people returning from the pilgrimage, it said.
The agency said the post-election lockdowns in five states/UT –Assam, West Bengal, Tamil Nadu, Kerala and Puducherry– can be expected once polling is completed and more people are tested for Covid-19.
The rating agency had projected GVA (gross value added) to increase from Rs 124.11 lakh crore (FY21) to Rs 136.82 lakh crore (FY22) which was an increase of 10.2 per cent.
With a potential fall in output of Rs 1.13 lakh crore, GVA will be Rs 135.69 lakh crore and growth will be 9.3 per cent. As tax collections too would be affected, there would be an impact on GDP growth which is now placed at 10.2 per cent.
According to the agency, the loss in GDP this year due to the lockdowns would be to the extent of 0.8-1 per cent from our earlier estimate of 11-11.2 per cent.
This estimate would be subject to further revision as more information would flow through May and the agency gets a sense on whether these lockdowns will get extended further, the report said.

Pvt life insurers’ new premium income grows 8% in FY21

MUMBAI: Contrary to expectations, private sector life insurers logged in a stellar 40 per cent new premium growth in the fourth quarter of FY21, driven by a still higher 90 per cent growth in March, according to an industry analysis.
The better-than-expected Q4 growth has helped the industry, except LIC, log in an 8 per cent annual growth in the just concluded financial year, according to an analysis by Kotak Securities. It attributed low base effect for the better-than-expected show in the March quarter and also for the month.
The brokerage also expects the low base effect to help companies log in better numbers for the next few months.
Life insurers reported stellar individual annual premium equivalent (APE) growth of 90 per cent in March due to low base, translating into a 40 per cent growth in Q4 and a full 8 per cent for FY21, said the report. It, however, added that the two-year individual APE growth was a modest 6 per cent for the year.
The overall good numbers were driven by SBI Life, HDFC Life, Bajaj Allianz Life and Tata AIA Life, which delivered 13 per cent, 12 per cent, 11 per cent and 17 per cent two-year individual APE growth, respectively, while ICICI Prudential Life and Max Life were flat.
Another growth driver was the strong traction in non-par savings businesses, revival in Ulips and credit life businesses, said the report adding that it expects the low base to support growth over the next few months.
Stating that the 8 per cent annual growth was significantly better than initial expectations at the start of the pandemic, it said. The report added that two-year individual APE annual growth was modest at 6 per cent, which is lower that the four-year annual growth of 12 per cent in the preceding four years.
However, the APE growth would have been higher had it not been for the low 2 per cent two-year individual APE in 2020-21 for LIC, which led its loss of market share over the past few years by 350 basis points (bps) over FY18-21 to 40 per cent.
Demand for non-par savings retained strong momentum throughout the year, likely reflecting investor preference to lock into a fixed rate in a falling rate regime, coupled with a rise in the insurers’ appetite to underwrite such products. Credit life was weak in the first half due to lower disbursement volumes but picked up swiftly in the second half.
On the new year, the report expects the industry to report strong growth in individual APE in 2021-22 due to the low base driven by revival in Ulips (equity-oriented inflows were positive after nine months in March), continued traction in non-par, pension and annuity based products; and pick-up in credit life from trough levels in FY21.
Focus on new product addition, diversification of channel mix, increasing digital capabilities of proprietary channels and push through non-core channels have led to a gradual increase in market share for private players in individual business. With this, their market share in individual APE rose to 43.8 per cent in FY21 from 40.3 per cent in FY20.
Equity-oriented inflows were modest in March at Rs 9,600 crore, compared to Rs 20,167 crore outflows since June 2020. Gross inflows adjusted for SIPs started to pick up from December though elevated redemptions continued to drag net inflows.

India records 22 IPOs worth over $2.5bn in Jan-Mar

NEW DELHI: India witnessed 22 initial public offers worth over $2.5 billion in the first three months of 2021 amid “high momentum” in the country’s capital markets and the trend is likely to stay bullish in the current quarter also, according to a report.
Leading consultancy EY India’s IPO (Initial Public Offer) report released on Wednesday showed that consumer products and retail, diversified industrial products, automotive and transportation were the most active sectors in terms of the number of IPOs in the 2021 first quarter.
The IPOs include both in the main as well as SME (Small and Medium Enterprise) markets.
“With a robust Q1, IPO market likely to stay bullish in Q2 2021,” it said, adding that India ranks ninth globally in terms of the number of IPOs year-to-date (YTD) 2021.
There were 22 IPOs that mopped up $2,570.44 million in the first quarter of this year, including five in the SME space.
During the first quarter, Indian Railway Finance Corp’s IPO — with an issue size of $634 million — was the largest.
“In the main markets (BSE and NSE), there were 17 IPOs in Q1 2021 versus 1 IPO in Q1 2020 and 10 IPOs in Q4 2020, representing an increase of 1,600 per cent compared to Q1 2020 and an increase of 70 per cent compared to Q4 2020,” the report said.
In the SME segment, there were 5 IPOs in the first quarter of this year versus 11 and 9 IPOs in the first quarter of 2020 and fourth quarter of last year, respectively. This represents a decrease of 55 per cent compared to Q1 2020 and a decline of 44 per cent compared to Q4 2020.
“We are witnessing high momentum in the Indian capital markets. Significant amount of activity is driven by huge dry powder awaiting investment and companies exploring a listing in India or overseas.
“The markets continue to reward companies with robust, scalable and technology-led business models,” Sandip Khetan, partner and National Leader of Financial Accounting Advisory Services (FAAS) at EY India said.
As per the report, the IPO pipeline has over 20 companies that have filed their Draft Red Herring Prospectus (DRHPs) and more than 30 PE-backed companies are planning exits. InvITs worth almost $5 billion are in the pipeline.
However, the report also noted that there are reasons for caution in the near-term, given the slow start to vaccinations in India relative to the size of the population, renewed spike in Covid infections with the second wave and threats from new variants of the virus.
Globally, the report said that attractive market conditions in 2021 so far have resulted in the best-performing first quarter by deal numbers and proceeds in the last 20 years.
“Just as traditional IPO markets have been highly active, the Special Purpose Acquisition Company (SPAC) IPOs in Q1 have also been breaking records, completing more deals and raising more in proceeds than in the whole of 2020.
“Through Q1 2021, the global IPO market saw 430 deals raising $105.6 billion in proceeds, increasing by 85 per cent and 271 per cent year-on-year, respectively,” it added.