Tag: India

Indian courier AFL wants to take to the skies

Posted by | Aug 20, 2007 | |

Indian air express operator AFL plans to launch its own flights in the latest move by specialist companies to cash in on the booming Indian express market, according to reports from India. The express airline would compete with DHL-owned Blue Dart Express, First Flight Couriers and passenger airlines offering freight capacity on domestic routes.
Managing director Cyrus Guzder told online news site Mint that he planned to take a minority share in a new cargo airline that would operate with jet freighters. Capacity would be used by AFL but also rival operators.

“We have received in-principle approval from the government for the venture and will start with two narrow-bodied jets,” Guzder said. “We plan to operate a cargo service that would service the domestic market for time-sensitive cargo in India, doing a round robin of all the six major cities between 10.30pm and dawn, and then fly regional routes to the Gulf and South-East Asia during the day.”

AFL, owned by the Guzder family, had revenues of some eight billion rupees (EUR 145 million) in 2006/07. The company, founded in 1945 and now with some 1,800 employees, is active in air express under the AFL WIZ Express brand and has a freight logistics joint venture with Germany’s Dachser.

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Raja may dust off postal bill in bid to revive India Posts

Posted by | Aug 20, 2007 | |

After putting the issue on the backburner for a couple of months on account of strong protests from private courier players, the ministry of communications under telecom minister A Raja has now revived work on amendments to the controversial postal bill.

Private courier companies are opposed to the proposed bill as it intends to prevent them from carrying any letter or parcel below 150 grams and also seeks to limit the foreign direct investment in the sector to 49 pct. The bill also envisages that private courier companies who want to deliver letters below this slab (150 grams) do so at a price which is five times more than the rates charged by India Post or 2.5 times Speed Post rates.

At the same time, the communications ministry is yet to take a call as to whether the bill would be introduced in the current session of the Parliament.

The source also said that despite opposition from private courier industry, the government was unlikely to renegotiate on key issues like creation of a regulator for the postal sector — Mail Regulatory Development Authority, the 150 grams weight slab reservation for India Post and mandating that large courier companies pay 10 pct of their total revenues as an universal social obligation fee as in the telecom sector.

The ministry official also added that the government was yet to take a final call on limiting the FDI cap to 49 pct. If this FDI cap is imposed, then multinational players like DHL, TNT and Federal Express will soon have to go scouting for Indian partners.

Besides, the draft bill also recommends that foreign players be subject to an entry fee of Rs 1 million and a renewal fee of Rs 0.5 million per annum, as against Rs 25,000 and Rs 10,000, respectively for Indian courier companies.

The Express Industry Council of India (EICI), the umbrella organization representing both domestic and international courier companies in India, has said that the proposed amendments, if approved, could maim the Rs 35 billion, domestic industry, especially the small players while also limiting the choice for consumers.

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India Post to open forex counters in select metros

Posted by | Aug 18, 2007 | |

Post offices in metros are set for a major change with the Government deciding to introduce new facilities like forex counters, cargo services, access to instant money order and other revenue generating services.

“We have got the license from the RBI to start the foreign exchange business in some post offices in selected metros. We are finalizing the deal which would be operational soon,” S Samant, Chief General Manager, Business Development, Department of Post (DoP), told PTI.

The department is acquiring an Air India flight to operate a dedicated cargo service carrying parcels, mails and couriers to north eastern states which will swift the delivery of mails in the region, Samant said.

The cargo flight would take off from Kolkata every morning and return in the evening after delivering the services at Agratala and Imphal, he said.

The Postal department recently signed and MoU with the Railways to sell train tickets in some of the post offices. Besides, it has undertaken the task of verifying pre-paid mobile subscribers in some areas, Samant said

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India Post will have own aircraft to meet private challenge

Posted by | Aug 16, 2007 | |

State-run India Post is seeking to beat growing competition from private courier companies by acquiring its own aircraft that would carry mail by the end of this month.

‘All these years, the postal department was considered to be a social service unit, but now we want to make it into a business unit. Our focus will be on the business clientele,’ said John Samuel, general manager, India Post.

The aircraft is being taken on wet lease from domestic carrier Indian.

All details of the new operation have been worked out and it would be just be a matter of days before the first plane carrying mails and parcels will take off. The aircraft will bear the India Post logo, while the color is still kept under wraps.

The postal department will start its operations focusing on the northeast states with a single aircraft, but has plans to increase its fleet in the days to come.

As night landing is not allowed in these states, the flight will operate in the daytime. The department intends to operate on the Kolkata-Guwahati-Agartala-Imphal route. It also plans to acquire a few more aircraft in future for other routes.

The new service will not only help deliver mail faster but also bring down overall postal charges.

While private couriers will find it difficult to match up the move, the postal department denies being under pressure from any competition.

‘We are an organization with an annual revenue of Rs.7,000 crore (USD 1.72 billion) and are far ahead of others. While they follow the benchmarks we have set, we too will follow some of their best practices.

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Liberalization process in India

Posted by | Aug 14, 2007 | |

After a long period of a command and control regime, we have started moving towards a market economy. But the reforms in that direction are still incomplete. Not only do controls survive in several areas, but surprisingly there are still policy and legislative initiatives emanating from ministries that would appear anachronistic in today’s policy environment.
At the heart of the market economy lays the principle of free and fair competition. Competition maximizes consumer surplus and offers wider choice and better prices. It improves efficiency, both allocative and productive efficiency, and in both the static and dynamic sense. It pushes enterprises into innovation and as, Schumpeter states; it creates gales of creative destruction.
Liberalization has contributed to India’s transition from dismal growth rates to the present rate of 9 pct, among the highest today in the world. After decades of being served sub-standard goods, the Indian consumer is experiencing the benefits of competition in sectors such as automobiles, consumer electronics and durables, telecommunications, insurance, and so on.
These can be prevented only through the enforcement of the Competition Act, which is awaiting certain amendments. India is amongst the very few economies today that do not have an active competition law. To enable the economy and the consumer to reap the full benefits of vigorous competition, it is imperative to make the Competition Commission fully functional as early as possible after the Act has been amended.

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