ModiLuft may be relaunched as Royal Airlines
New Delhi: After several aborted take-off attempts, erstwhile private player in the domestic skies, ModiLuft is, once again, set to fly in the Indian airspace. The airline has tied up with Allied Boston Bank for a $22.5-million loan, which is to be routed through Mauritius to Royal Finance, a company affiliated to the NRI partners identified by the S K Modi group.

Since Lufthansa has parted ways with the S K Modi group, the airline now hopes to take wings on the strength of its new partners and the company is likely to be renamed as Royal Airlines.

Allied Boston Bank agreed to finance the relaunch of ModiLuft after Speedwings, the consultant appointed by the airline, agreed to handle strategy formulation, operations, management and settlement of past dues.

The ultimate plan of the company is to re-launch its services under the banner of Royal Airlines with the progressive induction of 12 Boeing 737-400 aircraft, according to Jack Grover, executive vice-president of Allied Boston Bank.

However, the airline’s ability to restart operations, will depend on its clearing its dues to oil companies for supply of aviation turbine fuel. Besides, the now-defunct airline has to pay inland air travel tax dues to the customs department besides clearing landing, parking and navigation charges due to the Airport Authority of India.
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Finally, new products from LIC
Calcutta: In view of the threat to its business from private players, the country’s largest and monopoly life insurance player, the Life Insurance Corporation, is planning to launch a few new products by the end of November this year to cater to various segment of customers. It will also, simultaneously, withdraw or restructure some of the products, which are not doing too well in the market.

The corporation had envisaged four to five new products, including one exclusively for ladies, and was planning to launch these new schemes by the end of the year.
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VSNL to get big monopoly compensation
Calcutta: In an announcement that is likely to please the recent shareholders of VSNL at the NYSE, the department of telecommunications stated that Videsh Sanchar Nigam will receive a generous compensation package from the government, in case its de-monopolisation exercise is implemented ahead of the scheduled 2004 deadline.

The secretary to the department has gone on record stating that the government was considering multiple options to design a comprehensive compensation package for VSNL.

This, according to the secretary, is being done to maintain its market capitalisation, protect the interest of its large pool of foreign shareholders and also ensure the government doesn’t renege on its international commitment in this light.

The secretary also mentioned that the compensation package could be an all-cash compensation along the lines of what was offered to SingTel and HongKong Telecom during their demonopolisation.

As an alternative, the government could consider reimbursement of the Rs 500-crore entry fee following VSNL’s proposed foray in the national long-distance realm coupled with the issue of a national ISP licence.

Shortly, VSNL will soon be able to offer bandwidth on demand, excepting cases where individual demands exceed 155 mbps.
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Telecom staff to go on indefinite strike from September 6
New Delhi: For yet another time, the telecom services throughout the country may be affected from September 6 for an indefinite period as the three telecom federations representing the employees of department of telecom services and department of telecom operations decided to go ahead with their call for an indefinite strike from Wednesday against the corporatisation of the two departments.

Earlier, the communications minister, Mr. Ram Vilas Paswan, had tried to get the three unions to withdraw their strike. The telecom employees have mainly three demands. One, they want job security after their migration to the corporate entity. Two, they are demanding the government should securitise their pension. Three, they want that the government should ensure that the new corporate entity would not become sick.

On Friday, Paswan gave an assurance that the government would create a separate pension fund. The group of ministers on the corporatisation of DTS and DTO also said that the framework for adding the pensionary benefits would be introduced as an amendment under article 309 of the constitution to the CCS pension rule.
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Oil prices touch 10-year high
London: As the meeting of the apex oil controlling body, Organisation of Petroleum Exporting Countries, failed to halt the turmoil in the markets, the price of oil jumped to a ten-year high. In the London futures market, contracts for Brent blend finished at $32.80 a barrel, a gain of 95 cents on the day and its highest close since 1990, when prices were buoyed by Iraq's aggression towards Kuwait.

Another crucial Opec meeting is to begin in Vienna on Sunday, where Saudi Arabia is likely to press other members of the cartel to agree an increase in crude output. Saudi Arabia, the world's leading oil producer, has been under increasing pressure from the US and other oil consumers, to engineer lower crude prices.

However analysts said that any rise in production agreed by Opec could be too late to prevent shortages later in the year. Oil prices have been rising in recent months because of evidence that the stockpiles of oil in the US, the world's largest consumer of the commodity, are at their lowest for more than 20 years.

Analysts also state that Opec is not releasing enough oil to meet global demand. They say that even if Opec changed its policy at the Vienna meeting, the cartel would fail to prevent a shortage of supplies during the Northern Hemisphere's winter.

Refineries owned by large oil companies have been reluctant to add to stocks while the futures markets traders have been betting that oil prices will be lower in the future than they are today.

The worry is that such a reversal in sentiment might require a shock that could just as easily send prices tumbling out of control rather than stabilise them.
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