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Tuesday, January 28, 2020
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EVERYONE'S TALKING ABOUT...

The biggest news story today, explained.

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The Maharaja going on sale

The government has finally bitten the bullet and is selling a 100% stake in its biggest white elephant, i.e. our national airline. 

 

Wait, haven’t I heard this one before? Ah yes. The government has been trying to hock our beloved Maharaja for a while now—or at least parts of it. Last year, it generously offered 76% of the airline—and put on fancy roadshows across the globe—but (surprise, surprise) there were no takers. 

 

Why is that? For some inexplicable reason, no one wanted the government to own any part of their airline. Also, one tiny issue: Rs 60,000 crore in debt. The Maharaja’s financial position—as the Civil Aviation Minister Hardeep Puri puts it—is “very fragile.”  

 

How fragile is ‘fragile’? TBH, Air India’s EV/EBITDAR multiple is kinda crap.

 

Hain? That’s corporate speak for the ratio between how much a company is worth and how much operational profit it makes. Air India is at 11.6. That’s high (not in a good way) compared to Indigo (8.4), SpiceJet (9.3) or say Singapore Airlines (5.8). 

 

What’s this national treasure gonna cost? There is no minimum price, but all bidders need to have a net worth of at least Rs 3500 crore—down from the previous requirement of Rs 5000 crore. 

 

Who has that kind of money? Worry not. Government will happily entertain offers from anyone—even other domestic airlines with negative net worth (Looking at you, Vistara). They can bid as part of a consortium of other headache-loving global partners, as long as they limit their ownership to 51%. In this potluck version, each partner needs to pony up for at least 10%. So, none of that Shilpa Shetty rubbish where you have only 2% of IPL team Rajasthan Royals but call yourself the ‘owner’.

 

Why would anyone buy Air India? The government plans to seduce potential buyers with a super-duper festival sale offer:

  • The lucky buyer gets not just Air India, but also its cheaper cousin Air India Express. Plus: a 50% stake in its ground handling unit Air India SATS (AISATS), a joint venture between Air India and Singapore Airport Terminal Services.
  • Need more? The government has also reduced the debt on the Maharaja’s books to ₹23,287 crore—transferring out ₹56,334 crore of red ink.
  • Also: all the AI perks of preferential time slots, the best gates and—yay!—aerobridges!

 

And how many planes? 121, of which 65 are fully owned, and the rest are on lease. And that’s not counting the 27 jets in Air India Express’ fleet. Most of the owned planes are nearly a decade old. But on the bright side, 16 planes have been ‘on vacation’ thanks to cash flow issues—which totally cut down on the wear-and-tear. 

 

The bottomline: Let’s be honest. Between high costs of maintenance, employees it can’t fire, and an aging fleet it can’t afford to upgrade, Air India isn't exactly a best buy. No wonder the government says it is “open to revising, refining and tweaking” the terms of sale. Translation: Buy it, pleeeease!


Learn more: Mint offers an overview of the deal, and explains why even a sweetened offer will be hard to sell. Firstpost has a super-nerdy deep dive into Air India’s assets, and what a potential buyer will get for its money. Financial Express has an excellent read that concisely traces Air India’s journey to its current sorry state.

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IN CASE YOU MISSED IT...

planning to rock your bathrobe at the next party

Delhi election is turning nasty: BJP rallies for the Assembly election are taking an ugly turn:

  • Everyone was jolted by Home Minister Amit Shah’s statement at a recent rally: “EVM ka button itne gusse se dabana ki current Shaheen Bagh ke andar lage" (When you press the EVM button on February 8, do so with such anger that the current is felt at Shaheen Bagh).
  • More so since at the same rally, the crowd beat the crap out of a lone anti-CAA protester—with metal chairs, despite Shah’s requests not to do so. Clip here.
  • Not helping: BJP’s fave new slogan. At another rally, Cabinet minister Anurag Thakur chantedDesh ke gaddaron ko, goli maaro saalon ko (shoot the traitors)”—a slogan also used by the ABVP mob at JNU. Watch the clip
  • Related read: Ozy has a must read on how hospitals and ambulances have turned into a political battleground in the midst of protests—and why doctors are increasingly unhappy with the government.

 

Your viral outbreak update is here: Here’s the latest on the deadly new coronavirus spreading across the world. (FYI, our explainer)

  • The latest tally: 2,744 documented cases, and 81 deaths.
  • There have been no confirmed cases in India, but patients suspected of being infected are under observation in Hyderabad, Jaipur, Bihar, Bengaluru and Kerala. Meanwhile, airports and border checkpoints have been put on alert.
  • One big cause of worry: the disease has reached India’s borders with Nepal reporting its first case.
  • Also infected by the virus: US stock markets. The Dow was down 454 points in its worst one-day percentage drop since October. Also tanking: S&P 500 and Nasdaq. As one analyst put it: “The problem is for most investors this is just not a risk event they are prepared for—a true black swan in the making.”
  • China, OTOH, has temporarily shut down its stock exchanges until February 3.
  • The government is readying a special Air India flight to rescue 250-plus Indians stranded in Wuhan. 

 

India has a child porn problem: Over 25,000 cases of suspected child pornography material were uploaded on social media in just five months. The number one source: Delhi, followed by Maharashtra and Gujarat. The reason we know this: information shared by the US-based National Center for Missing and Exploited Children with the Home Ministry as per a new agreement. In related news: A parliamentary panel has recommended breaking end-to-end encryption on messaging platforms to trace distributors of child porn.

 

Your Grammys roundup is here: It was an eventful night, and especially memorable for us Indians—but not because of the music.

  • The most memorable moment: Priyanka Chopra’s see-it-to-believe-it barely there dress. It landed her right on top of the ‘worst dressed’ list. And drew rude talk about open bathrobes. Heard around the office: JLo she is not. NDTV has helpful compare-and-contrast photos so you can decide for yourself.
  • Vogue has a best dressed list for you to check out.
  • Hubby Nick Jonas had his own problems to deal with: namely, something green wedged in his teeth. Hindustan Times has the story and clips.
  • There were a number of other awkward moments. Buzzfeed has them all.
  • Oh right, the actual awards. Billie Ellish won five and made Grammy history.
  • Also: Demi Lovato gave a moving emotional performance.

 

India is number #2! We just dethroned the United States as the second-largest market for smartphones—right after China. Indians bought 158 million smartphones in 2019. Our stellar achievement is primarily due to mid-tier brands like Xiaomi, which is the top selling smartphone in India. (CounterPoint Research)

 

Anti-CAA protests spread to JLF: Five people were detained by the police for raising slogans during one of the panels at the Jaipur lit fest. This thread has clips of the protests and arrest. Also making JLF news: This Guardian story which is making everyone very cranky because of lines such as: “It’s all too rare that India does an event well, never mind an event marked on the international cultural calendar.”

 

Your Kobe Bryant update: includes the following:

  • BBC has a video report on tributes paid around the globe.
  • BBC also messed up and aired footage of LeBron James in its report on Bryant’s death.
  • Everyone remembered that time when Bryant talked about his daughter Gianna being the heir to his basketball legacy. Reminder: Gianna also died in the helicopter crash. Watch the clip here.
  • Events no one wanted to remember: the time Bryant was accused of raping a nineteen-year-old hotel employee. A Washington Post reporter was suspended for tweeting a 2016 story on it. Swaddle has more details on the case.

 

The world's longest commercial airliner: successfully completed its maiden flight. The Boeing 777-9X is 251 feet long and can accommodate 426 passengers. To make its 233-foot wingspan airport-friendly, its 11-foot wingtips unfurl just before take-off and retract upon landing. Watch it in action here. (CNN)

 

Cool stuff we learned online: includes the following:

 

  • Washington Post explains exactly how exercise reduces anxiety and makes you feel more connected.
  • Did you know we each have a unique dancing ‘fingerprint’—and an AI machine can identify it?
  • Yes, women do indeed find bearded men more attractive. Big Think explains why and which sort of woman is more likely to do so.
  • Quartz explains why most of us end up giving Uber drivers five stars.
  • Business Insider put together a video report to show us why it’s no big deal if a plane is hit by lightning. 

 

Your daily quota of sunshine items: includes the following:

 

  • This moving story about a school program run inside a garbage dump in Coimbatore.
  • The newest Nigerian English words added to the Oxford Dictionary. We’re definitely using ‘next tomorrow’.
  • The stories of two amazing Padma Shri winners: Harekala Hajabba, a roadside seller of oranges, and Mohammed Sharif who cremated 25000 unclaimed bodies.
  • This hilarious clip that’s every Indian teenager sneaking out on her parents—and her posse of bros.
  • This charming and oddly restful video of an old woman making ma po tofu from scratch. But the real joy is at the very end. So wait for it.
  • We missed this one yesterday: Michael Palin’s moving tribute to his Monty Python co-star Terry Jones, who passed away over the weekend.
  • This collection of iconic music album covers—but in each, the now deceased band member has been erased. The result is eerie and compelling.
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