Globalization in Aviation after Pandemic is over.

Open Skies agreements eliminate government interference in the commercial decisions of air carriers about routes, capacity, and pricing, freeing carriers to provide more affordable, convenient, and efficient air service for consumers.

Open Sky Agreements are bilateral agreements that the two countries negotiate to provide rights for airlines to offer international passenger and cargo services. It expands international passenger and cargo flights. USA and European Union has such agreement which permits unlimited flights subject to operational feasibility between 2 countries.

Policy of India:

India has Air Service Agreements (ASA) with 109 countries including UAE covering aspects relating to the number of flights, seats, landing points and code-share. But does not allow unlimited number of flights between two countries.

The National Civil Aviation Policy (2016) of India:

The policy of 2016 allows the government of India to enter into an ‘open sky’ air services agreement on a reciprocal basis withSouth Asian Association for Regional Cooperation (SAARC) nations as well as countries beyond a 5,000 kilometre radius from New Delhi.

In plain English this means that countries within 5,000 kilometer of distance need to enter into a bilateral agreement and mutually determine the number of flights that their airlines can operate between the two countries.

India has many such open sky agreements with countries like Greece, Jamaica, Guyana, Finland, USA, Japan, etc.

That was pre Pandemic world of globalization. With air traffic coming to a hault on 24 March 2020 we are in a new world. India has started entering into agreements with many countries like Germany and UK which have been called air bubbles but these are simply bilateral agreements fixing the number of flights which each country will operate into territory of each other.

This means all previous agreements are as good as dead letter or will those agreements revive automatically in future?

Something tells me that this pandemic gives another opportunity to clean up the mess created by previous Government in it ten years corrupt regime when everything was for sale including lives of people and territories. Yes Manmohan Singh, We know it now.

Therefore the Government may use the clean slate to work and create an actual bilateral agreements not dictated by ‘donations.’

Another Economic Slap on China with luv from India

Luv to China from India:

On First April or Day 8 of Lockdown, a scheme called Production Linked Incentive Scheme was launched for Large Scale Electronics Manufacturing which extends an incentive of 4% to 6% on incremental sales (over base year) of goods under target segments that are manufactured in India to eligible companies, for a period of five years subsequent to the base year (FY2019-20). The scheme was open for filing applications till 31.07.2020. Incentives are applicable under the scheme from 01.08.2020.

This will spell a loss of INR 11,50,000 crore approximately to China.

Global who of who of Mobile Industry Arrive:

A total of 22 companies have filed their application under the PLI Scheme.

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Pandemic or not, rich get richer all the times?

Mukesh Ambani works from home:

Reliance Industries has become the first Indian company to enter the ranks of top 50 most valuable companies in the world, as its share price crossed the Rs 2,050 mark last week, giving the oil-to-telecom major a market cap of over Rs 13.06 lakh crore ($174.34 billion).

Thus Reliance Industries is the first Indian company to cross the Rs 13 lakh crore mark in market cap. It is now more valuable than Chevron and Unilever, whose market cap stood at $169.97 billion and $135.18 billion respectively.

Globally Reliance is at 48th position in the list of 50 most valuable companies, which is headed by Saudi Aramco, at $1.7 trillion. Incidentally, Saudi Aramco is currently in talks with RIL for a stake purchase in the latter’s oil business.

If one adds the market cap of RIL’s partly paid shares, the Mukesh Ambani-controlled company’s total market cap rises to Rs 13.56 lakh crore. The company’s market cap has more than doubled since the last week of March, when its share price hit a yearly low of Rs 867.

The upward revision in valuation of Reliance has also propelled Ambani to the 6th rank on the Bloomberg Billionaires Index, with a net worth of $75.6 billion (Rs 5.66 lakh crore).

This weekend the Reliance share last traded at Rs. 2067 down from the daily high of 2129.

What a work from home for Mukesh Ambani it’s CEO!!

But position is not very different for other billionaires. See:

China: An Economic Power or a black hole in the making?

Economic bubble called China!

China wants War with India (Part 10)

The total debt of China is 303% of it’s GDP as per Reuters which quoted International Institute of Finance. Thus in 2019 the total debt of China stood at 40 trillion USD which is equivalent to 15% of global debt. Imagine out of 192 countries, just one country owes over 1/6th of the global debt.

As per South China Morning Post this debt has risen to 317% in May 2020. Remember that this news paper is, like all media inside China, prints only what is suitable to Government. Now do a quick math and calculate what shall be servicing cost of this debt? It means the annual liability to pay interest even if no debt is repaid in a particular year. As per this link the rate of interest fixed by Reserve Bank of China is 2.72%

Please note that the countries, especially those whose currency is not pegged to dollar have to pay interest much higher than that is fixed by reserve Bank. Even USA whose Reserve Bank called Federal Reserve is presently at 0.25% yet it is forced to borrow money at six times that rate. Now Assuming that China has to service its debt at 4.5% per year, how much is yearly pay out?

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Will the lockdown in India end on 14th April or any time soon?

It is supposed to be last Sunday of the lock down but yesterday most Chief Ministers have already indicated that it must be extended by two weeks. Prime Minister has to take the final call but he has chosen not to speak, so far. So what would he do?

Can a patient be on ventilator forever?

Individuals have savings even if they are not salaried person who are supposed to get paid during this lock down but no industry can pay the employees, indefinitely. Prime Minister may have consulted the Chief Ministers of States yesterday but has not consulted the Industrialists as yet. Worse he has not invited suggestions from them, as to how they may run their industries under the new normal of social distancing. But before they may give those suggestions, they may have to interact with their floor managers which may not be possible in the lock down. That is another challenge. However the CII or Confederation of Indian Industries has made a representation on behalf of industries, to the Government.

These may be most challenging time in which a virus is out there to destroy every statistics the science and medicine has made in last 100 year to increase the longevity of human existence. The life of mature adults between the age of 20 to 40 may not be affected much and may be likely to survive but all those who hang in balance with severe conditions, with the help of medicine or surgery are at the risk of personal extinction.

Lies, Damn Lies and WHO lies:

We now know it as a fact that the initial assurance of China or it’s stooge WHO, was a lie that rate of mortality is about 3-4% of those infected. We will know about it after the dust of death settles down and this blood storm is over. It is however doubtful if we will ever know it correctly because every death does not precede a diagnosis and every diagnosis does not result in death. There shall always be patients who may succumb to death without putting up a fight or medical help.