Tag: disruptions

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Health

Moody’s on influence of Covid-led disruptions on India’s infrastructure corporations

Moody's on impact of Covid-led disruptions on India's infrastructure firms

A container ship has docked in the Indian Adani Port Special Economic Zone (APSEZ) in Mundra, India.

Sam Panthaky | AFP | Getty Images

India’s second wave of the coronavirus outbreak will affect the country’s infrastructure companies to varying degrees, according to Moody’s Investors Service.

Energy companies and ports are expected to withstand the effects of pandemic disruption compared to airports and toll road operators, the rating agency said in a recently released report.

The South Asian country suffered a devastating second wave as reported coronavirus cases rose sharply between February and early May. As a result, the hospitals were overwhelmed and medical supplies such as oxygen and medication were scarce.

While the central government was reluctant to issue another nationwide lockdown, as it did last year, state authorities tightened local restrictions – including regional lockdowns – to curb the spread of the virus.

“The lockdowns, along with changes in public behavior, are holding back economic activity and mobility, which will affect infrastructure companies in different ways,” said Abhishek Tyagi, vice president and senior credit officer at Moody’s, in a statement.

India’s regional lockdowns resulted in lower electricity demand as well as lower traffic for transportation companies. However, the availability of labor has not yet been significantly affected.

Here’s what Moody’s says about the country’s infrastructure companies:

power

The business models of rated utility companies enable them to handle the current decline in demand and withstand a moderate increase in the cash conversion cycle, which refers to the number of days it takes a company to convert its investments into cash flows from sales. This is because Indian power companies are dependent on state distribution companies, which are likely to find themselves in financial distress due to lower demand.

In the event that demand remains low for longer and there is a subsequent liquidity bottleneck, the electricity companies have good access to liquidity and support, according to Moody’s.

Airports and toll road operators

Moody’s believes that the recovery of Indian airports, some of which are undergoing debt-financed expansion plans, will be further dampened by the second wave and subsequent regional lockdowns. International travel is expected to take even longer to recover due to border closings.

Although domestic and international traffic will increase between October this year and March 2022 – the second half of India’s current fiscal year – Moody’s said the disruption caused by the second wave “will likely result in lower traffic and revenue in fiscal 2022, and potentially for fiscal 2023 compared to our previous projections. “

The rating agency downgraded Delhi International Airport to a B1 rating this month – which is viewed as speculative and high credit risk – and said the airport is likely to need additional debt to complete its expansion due to lower operating cash flow .

An increase in Covid vaccination rates in India could be an important driver for an airport recovery, according to Moody’s.

Prolonged restrictions on movement or repeated blocks will continue to have a negative impact on toll road operators and put their credit quality under pressure, according to the rating agency.

Ports

India’s rated ports performed well in the past financial year despite the economic downturn due to the pandemic and, according to Moody’s, were able to improve their market shares.

Port operators have remained largely unaffected by the regional lockdowns as “goods traffic has remained normal across the country and both ports also have sufficient buffers in their financial profiles to accommodate temporary disruptions,” Moody’s said.

Road to economic recovery

The daily reported Covid-19 cases in India have been on a downward trend since their peak in early May. As the situation gradually improves, many states are easing restrictions to reopen the economy, but experts are warning of an inevitable third wave of infections.

Moody’s pointed out that if vaccination rates are still relatively low, the risk of subsequent waves of infection remains open, which could lead states to introduce further bans.

“The government’s ability to contain the spread of the virus and significantly step up its vaccination campaign will have a direct impact on economic recovery,” the rating agency said.

Categories
Business

FAA chief Steve Dickson sees ‘disturbing enhance’ in flight disruptions

FAA chief Steve Dickson sees 'disturbing increase' in flight disruptions

The head of the Federal Aviation Administration told CNBC on Thursday that there had been a worrying spike in disruptions on commercial flights in recent days, prompting the regulator to put in place a tougher enforcement policy.

“In the past few days, there have been an increasing number of incidents on board where passengers have disrupted flights due to their behavior,” FAA Administrator Steve Dickson told Squawk on the Street.

He said the episodes were partly due to leaflets violating face mask guidelines implemented during the coronavirus pandemic and also after Trump’s deadly uprising in the U.S. Capitol last week.

The FAA’s new enforcement policy comes from airlines and airports improving security ahead of President-elect Joe Biden’s inauguration next week.

For example, American Airlines will pause alcohol service on flights to and from Washington and Baltimore from Saturday to Thursday. The Fort Worth, Texas-based airline also implemented this suspension following the Capitol uprising last week.

Delta Air Lines does not allow passengers flying to airports serving Washington to check firearms, CEO Ed Bastian told CNBC on Thursday.

Dickson said his new FAA command will temporarily bolster his longstanding approach to flight disruption.

Instead of issuing warnings or advice, the FAA intends to take legal action against “any passenger who attacks, threatens, intimidates or disturbs crew members,” a press release said. The order is valid until March 30th.

“I say inspectors, I tell my attorneys at the FAA law firm that we need to speed up fact-gathering on all of these subjects [incidents] and we will take immediate enforcement action in appropriate situations, “Dickson told CNBC.

In a letter viewed by CNBC on Monday, two key House Democrats urged the FAA to take action against unruly passengers. Lawmakers pointed to media reports of politically motivated disruptions in the days following the forcible seizure of the Capitol by supporters of President Donald Trump.

Dickson agreed to the need to protect flight crews and passengers alike.

“Every time we see a trend like this, we need to take action because traveling on a commercial airline in the US is the safest form of travel in human history,” he said. “I want to make sure it stays that way.” “”

– CNBC’s Leslie Josephs contributed to this report.

Categories
Business

FAA chief points stern warning to vacationers after politically motived flight disruptions

Flight attendant unions raise alarms about disruptive travelers after pro-Trump riots at Capitol

A flight attendant collects trash on a flight aboard a Boeing 737 Max from Dallas Fort Worth Airport to Tulsa, Oklahoma, December 2, 2020.

Carlo Allegri | Reuters

The head of the Federal Aviation Administration said Saturday that travelers will face grave consequences for unruly behavior on airplanes. This is a stern warning following multiple incidents on board last week with pro-Trump chanting and passengers refusing to wear masks requesting to fly on U.S. airlines.

“The FAA will take tough enforcement action against anyone who threatens the safety of a flight. Penalties range from fines to imprisonment,” FAA Administrator Steve Dickson said in a statement.

Unruly passengers can face fines of up to $ 35,000.

Alaska Airlines said Friday it banned 14 passengers on a flight from Washington DC to Seattle. The travelers “were not mask-conforming, vocal, argumentative and harassed our crew members. Their behavior was unacceptable,” said Ray Lane, spokesman for Alaska Airlines. “We apologize to our other guests who felt uncomfortable on the flight.

Videos of multiple incidents were shared on social media. An American Airlines pilot on a Washington-to-Phoenix flight warned travelers that he would “park this plane and drop people off in the middle of Kansas” in order to convince passengers to “behave” on board.

“At American, we take our customers’ safety seriously and value the trust they place in our team to look after them throughout their journey,” American said in a statement. The pilot made an announcement emphasizing the importance of following the instructions of the crew members and complying with the mandatory guidelines on face covering. “

Earlier this week, some passengers sang “traitors” on a Delta Air Lines flight with Republican Senator Mitt Romney of Utah. Delta said his “crew got involved quickly and solved the problem”.

On another flight this week, American Airlines flight attendants turned on the lights and ordered passengers to take their seats after passengers yelled at and cursed each other. This comes from a video shared by Twitter user @MaranieRae who said she was on the flight.

“I expect all passengers to follow the instructions of the crew members for their safety and the safety of the flight,” said Dickson. “The FAA monitors and tracks all commercial passenger flights in real time, and there are reporting mechanisms in place for crew members to identify any number of safety concerns that may arise in flight.”

Dickson said unruly behavior could distract crews and compromise crew members’ ability to perform safety-related duties.

Dickson’s testimony comes after flight attendant unions this week raised safety concerns over politically motivated flight disruptions after a pro-Trump mob stormed the U.S. Capitol and demanded that the presidential election results be overturned.

“The mob mentality behavior that occurred on multiple flights to the DC area yesterday was unacceptable and threatened the safety of every single person on board,” said Sara Nelson, president of the Association of Flight Attendants-CWA, which represents approximately 50,000 flight attendants United, Alaska and more than a dozen other airlines said Wednesday.

The airlines had taken precautions and moved crews to airport hotels after the politically motivated uprising in the Capitol. American Airlines has stopped serving alcohol on flights to Washington DC.

“We should work harder to keep problems on the ground,” the AFA told flight attendants after the FAA warned on Saturday. “Make sure you strictly adhere to the masks before pushing back. Work as a crew, communicate, and bring your concerns to the flight deck and supervisors.”