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A Tax Haven Blacklist

 

European Union has blacklisted certain nations that are considered tax havens and do not comply with its taxation standards. Army has ‘wiped out’ terrorists who had masterminded Amarnath Yatra attack this year. Airlines are expecting a slightly higher profit per passenger next year. Government has provided sops to the small and medium industries to help improve exports. 

 

17

What is it? The number of countries that feature on a European Union (EU) blacklist of nations that are non-compliant with EU standards for tax purposes, including Saint Lucia, South Korea and Barbados.

Why is it important? This EU name-and-shame action comes about a month after the publishing of The Paradise Papers, which made public how the world’s rich and famous used tax havens and contentious tax structures to avoid taxes. However, the onus to act against these 17 countries—a list that, tellingly enough, doesn’t include a single EU member—lies on individual member countries, and it remains to be seen if they will follow through.

Tell me more: The EU also placed another 47 jurisdictions on a newly established ‘grey list’—countries that are also deemed to be non-compliant, but have committed to changing their tax rules. This list includes Switzerland and Hong Kong.

 

5

What is it? The number of months since a militant group attacked a group of pilgrims on the Amarnath Yatra.

Why is it important? On Tuesday, Jammu and Kashmir’s Director General of Police (DGP) tweeted that the gang that carried out the July attack has been “wiped out”. In the attack near Anantnag on the Srinagar-Jammu National Highway in South Kashmir, seven pilgrims were killed and 15 injured. This year has seen a series of successful encounters by security forces, where top militants such as Lashkar-e-Taiba (LeT) commander Abu Dujana, Hizbul Mujahideen’s Sabzar Ahmad Bhat and Jaish-e-Mohammed chief Masood Azhar’s nephew Tallah Rashid have been killed.

Tell me more: LeT chief Abu Ismail, who was the mastermind behind the Amarnath attack, was killed by the security forces in the outskirts of Srinagar in September.

 

$8.9

What is it? The expected average net profit per departing passenger in the global airline sector in 2018, according to the International Air Transport Association (IATA).

Why is it important? If the prediction is met, it would be a slight increase from $8.45 in 2017. This is even as overall net profit is expected to increase to $38.4 billion in 2018, from the projected $34.5 billion in 2017. IATA says the key drivers of profitability would be a likely 6% increase in passenger traffic, an expected 4.5% rise in cargo volumes and lower debt levels. However, costs, too, are expected to increase: oil prices are expected to average $60 per barrel, and labour costs, which are a larger expense item than fuel, will continue to rise.

Tell me more: IATA expects seat occupancy to reach 81.4% next year whereas yields, which is a measure of fares, would improve by 3%. For the 10 months of 2017 till October, the seat occupancy of IndiGo ranged from 81.6-91.1%.

 

Rs 8,450 crore

What is it? The cumulative additional incentives announced by the Indian government for labour-intensive MSME (micro, small and medium enterprises) sectors under two schemes, as part of its mid-term policy review released on Tuesday.

Why is it important? This is to boost exports, which fell 1.1% to $23 billion in October, the slowest pace of growth since July 2016 and the first decline after 14 months of positive growth, likely due to the roll-out of the goods and services tax. The President of the Federation of Indian Export Organisations believes these incentives are likely to have a positive impact on export numbers from January, though he expressed disappointment about a number of sectors having been left out.

Tell me more: Some major sectors that would benefit from the incentives include ready-made garments and made-ups in the textile sector, leather and footwear articles, and agriculture and related products. The earlier incentives under the two schemes totaled Rs 25,000 crore.

 

704 days

What is it?  The number of days after which South African star batsman AB de Villiers will return to play test cricket, if he is selected for the Boxing Day test against Zimbabwe.

Why is it important? AB de Villiers has been one of the pivots of South African batting, but a combination of wanting to play less cricket and injuries have meant him not playing tests. His possible return comes at a crucial time for South Africa, as its next two test assignments are stern examinations: against India, the only side ranked above it in the ICC test rankings, and Australia.

Tell me more: Among current South African batsmen, who are a relatively inexperienced lot, only Hashim Amla leads de Villiers in runs scored and tests played.

 

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Misbehaving Airline Staff: What Does The Data Say About Indigo?

Indigo suffered two major PR disasters within a week – one where a passenger was hurt after she fell off a wheelchair because of gross negligence by an Indigo crew member and another, where a passenger was pinned down by yet another Indigo crew member. The last couple of weeks have been somewhat traumatic for Indigo, with yet another incident wherein ace shuttler P V Sindhu alleged misbehaviour by Indigo crew members.

Indigo, largely known for its on-time USP and pre-flight formalities, is in an expansion drive while already controlling 40% of the domestic Indian market share.

Which airlines do Indians fly domestically?

Monthly data from the Directorate General of Civil Aviation shows that while Air India has been gradually ceding market space to its private rivals, Indigo has maintained its dominating presence catering to 4 out of 10 Indians flying domestically.

Market share of Indian domestic airlines

Misbehaving crew has been a major grouse for passengers, with complaints under that tab ranging from 6-12% of all complaints.

Share of misbehaving crew

Air India has also seen the highest number of complaints per 10,000 passengers over time. Considering its scale of operations, Indigo has till now maintained one of the lowest rates of passenger complaints. However, its recent run-ins with misbehaving crew members, it is yet to see whether data will reflect the same. Watch this space for regular updates.

No. of complaints per 10k pax

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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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Why Indian airlines favour international flights over domestic ones

This piece originally appeared on Livemint.com

 

India this month relaxed rules for new airlines wishing to fly overseas. The consistent demand from these airlines for easier rules has been due to a single reason: the favourable economics of international flights over domestic ones.

Higher growth and margins

Jet Airways leads all airlines in international air passenger traffic in and out of India. International operations accounted for 56% of Jet’s revenues in 2015-16, but it started flying abroad in 2004.

Today, a more illustrative representation of the potential of the international segment for a new airline is IndiGo, which started foreign flights in 2011. At Rs1,470 crore, international flights accounted for 9.1% of IndiGo’s total revenues in 2015-16. But on every headline growth and profitability metric, IndiGo’s international piece is outperforming its domestic piece (launched in 2006). That’s partly because of the longer distances flown, even for IndiGo, which does short-haul international flights only, unlike Air India and Jet, which do both short-haul and long-haul flights.

 

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Greater share of India’s international air traffic

The share of Indian airlines in India’s international air passenger traffic has increased in the last decade. In 2014-15, 15 airlines accounted for 75% of this traffic. In this bucket are all the five Indian airlines allowed to fly abroad, with a cumulative share of about 37%. IndiGo and SpiceJet, which started international flights only in 2011 and 2010, respectively, and oriented their international operations around shorter routes, are already ranked nine and 10, respectively.

 

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Volumes in the shorter routes

For an Indian airline looking to fly international, volumes are in the shorter routes to the Middle East and Asia-Pacific. The likes of IndiGo and SpiceJet have capitalized on this, in the process mostly preserving their low-cost character and fleet portfolio. Among the top 15 countries, which account for 88% of India’s international traffic, 12 are short-haul routes with India. Likewise, of the top 15 city routes, which account for 30% of India’s international traffic, 13 are short-haul.

 

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Source: Directorate General of Civil Aviation (DGCA), financial results of InterGlobe Aviation Ltd (which operates IndiGo) and Jet Airways (India) Ltd.

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