Isro’s commercial boosters

This piece originally appeared on Livemint.com.

 

The Indian Space Research Organization (Isro) is all set to launch 104 satellites in one go aboard its trusted rocket, the Polar Satellite Launch Vehicle (PSLV), on Wednesday—a world record for the most satellites launched in a single mission. Of the 104, 101 are foreign satellites, which will bring revenue to the government agency. Till 2016, Isro had launched 75 foreign satellites, out of a total of 121. Forex revenues of Isro’s commercial arm, Antrix Corporation, rose 204.9% in 2015 (see chart 1) on the strength of foreign satellite launches. In 2015-16, commercial launches brought in Rs 230 crore, which was 4% of Isro’s average spending over the previous three years (see chart 3).

Isro’s low prices are drawing foreign clients. Private space programmes such as Arianespace and SpaceX are yet to equal its cost-effectiveness. Besides, Isro has a 100% success rate in foreign satellite launches. While a satellite launch on Arianespace’s rocket will cost about $100 million after subsidies, SpaceX will charge $60 million. In contrast, Isro charged an average $3 million per satellite between 2013 and 2015 (see chart 2).

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    What’s holding back card usage in India?

    This piece originally appeared on Livemint.com

     

    Among the debates that demonetisation has kicked off is whether India is ready to go cashless. Some argue that Indians’ preference for cash has to do with their mindset, and that it will take time to change, irrespective of the options one may have. Others say that it has more to do with the infrastructure and that the country simply doesn’t have the capacity to significantly increase the share of digital payments. The data on point of sale (PoS) terminal transactions from the pre-demonetisation years suggests that the problem is the latter.

    While the number of transactions on PoS terminals has been going up over the years (chart 1), the number of number of devices has not gone up in tandem(chart 2).

     

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    It’s not that India already has enough. There is a shortfall of PoS terminals compared to other countries, measured against the number of people and the number of debit cards in the country (chart 3). These suggest that more terminals would mean more transactions.

     

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    Also, while big banks have been active in pushing PoS terminals, the smaller banks can step on the gas. The top five banks’ share in the ATM network is less than 50%. However, they control 80% of PoS terminals (chart 4).

     

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      The on-time numbers that IndiGo is contesting

      This piece originally appeared on Livemint.com

       

      In the last five years, IndiGo’s share in domestic flights to and from Mumbai has increased from 21.5% to 30%. During this period, the market leader’s ‘on-time performance’—defined as taking off or landing within 15 minutes of the scheduled time—has taken a beating: down from 72% to 56%. Its fall is most pronounced in the past year (chart 1), and it trailed SpiceJet and Jet Airways in December 2016. Even other airlines have seen drops in Mumbai, but none as much as IndiGo.

      In late December, IndiGo wrote to the aviation regulator, citing issues with data-collection methods followed by the GVK Group-run Mumbai airport to compute on-time performance. These methods, it alleged, were inaccurate and favoured rival airlines. The regulator has since set up a panel to examine the issue, opening another front of friction between airlines. On-time performance data put out by the Mumbai airport shows that IndiGo is losing out in the busy part of the day (chart 2), though it was the best in controlling what’s in its hands (chart 3).

       

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        Indian aviation: passengers, position, profits

        This piece originally appeared on Livemint.com

         

        In a year in which new-economy sectors made all the news, one old-economy business finally delivered a maturing it had been promising for two decades now: domestic aviation. The stage for this coming of age was set in 2015, when the price of aviation fuel—the biggest cost head for an airline—tumbled and the sector started turning in 20%-plus growth in passengers. But 2015 was also coming off a turbulent 2014. In comparison, 2016 was challenged by a high base and it bested that, as airlines steadily added routes, flights and passengers—catapulting India up the global ranks in domestic aviation.

         

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