All Newspaper editorials in one place – January 17, 2024



January 17, 2024

Historic hearing

A provisional order by ICJ on Israel will cast shadow on legitimacy of its war


Whatever the outcome of the preliminary hearing at the International Court of Justice (ICJ) at The Hague, South Africa’s case against Israel’s ongoing military campaign in Gaza has garnered global attention in a way no proceeding at this elite inter-state forum may have done before. As the 15-member court assembled, along with two ad hoc judges representing South Africa and Israel, quite a bit of history must have weighed on the parties. Of the two countries on either side of this dispute over whether the Gaza war is aimed at wiping out the people, one has left behind its apartheid past, but believes that the other is practising 75 years of ‘apartheid’ against the Palestinian people since 1948; one firm in its belief that it is acting in the interest of justice and humanity, the other equally firm in its belief it can never be accused of genocide, a crime that was sought to be prevented by the Genocide Convention of 1948, a treaty to prevent the sort of Holocaust the Jewish people had suffered. Both countries spent many years in the last century in diplomatic isolation, as countries and sporting bodies boycotted them, but both had the support of their western allies. Today, save for those few allies, the entire world supports a ceasefire in Gaza to end the epic suffering of its people.


At this preliminary stage, South Africa sought to demonstrate that some of Israel’s acts were capable of falling within the terms of the Genocide Convention and that there was ‘genocidal intent’ behind its acts. It relied on data on deaths and destruction and the collapse of civilian life and health infrastructure in Gaza. It drew upon statements attributed to key Israeli government figures to underscore what it called ‘genocidal intent’. The provisional measures sought include a suspension of military operations and steps by the parties to prevent the occurrence of genocide. Israel described the South African case as ‘blood libel’ before the hearing, but sought to make a case that its Gaza operations were a legitimate response to the terrorist attack on October 7 last year. It played down the relevance of its leaders’ statements, calling them mere rhetoric. It attributed the civilian casualties to Hamas using civilians as shields and hospitals as storage for explosives and launching pads for attacks. The issue before the court is quite straightforward, but the larger concern is whether Israel will abide by any provisional measure. Russia ignored an ICJ order to suspend its operations in Ukraine in March 2022. However, there is little doubt that any provisional measure will cast a shadow on the legitimacy of Israel’s Gaza war.





January 17, 2024

Vote for continuity

Status quo seems to suit Taiwan best in its relationship with China


The Democratic Progressive Party’s (DPP) victory in Taiwan’s presidential elections for a historic third consecutive term reflects a vote for continuity from the 14 million voters, most of whom favour a maintenance of the fragile status quo in relations with China and the preservation of Taiwan’s current status. The results will see Vice President William Lai Ching-te take over from incumbent Tsai Ing-wen, as he defeated Hou Yu-ih from the main opposition Kuomintang (KMT), which has pushed for rapprochement with China, and newcomer Ko Wen-je from the Taiwan People’s Party (TPP), a new emerging political force that has broken the DPP-KMT duopoly. Mr. Lai said the elections — the first in what has been dubbed the year of elections given the many countries, including India, that go to the polls in 2024 — were a message to the world, showing “the commitment of the Taiwanese people to democracy”. Beijing, which has over the past decade under the DPP accused the ruling party of seeking outright independence over the island that it claims, said the results showed that the DPP “cannot represent the mainstream public opinion”, pointing to its reduced vote share. Mr. Lai secured 40% of the vote, Mr. Hou 33% and Mr. Ko 26%. The KMT and TPP’s attempts to form a joint opposition alliance, which could have threatened the DPP’s bid, failed in the run-up to the elections. While the DPP has returned to power, its exercise of authority may be constrained given that it has lost its status in the legislature as the largest party to the KMT, which may exert a moderating influence on its policies to carve out a greater international space for Taiwan — a major bone of contention with Beijing.


If the previous presidential election, in the aftermath of China tightening its grip on Hong Kong, was seen as a referendum on the future of cross-strait relations and a rejection of a possible “one country, two systems” future for Taiwan that has been mooted by Beijing, in the latest polls, local issues, including the economy and jobs, have assumed increasing salience, even as the broad preference for continuing with the status quo remains. The last decade has seen rising tensions, and the latest vote will ensure these will continue, including from the frequent military drills conducted by China in the waters and skies surrounding Taiwan. China has refused to rule out the possible use of force in “reunification”, although the consensus among most experts is that the devastating economic consequences of a conflict for China, Taiwan and the region will certainly give Beijing pause. That Taiwan’s voters have backed the DPP to continue helming Taiwan’s politics, despite China’s threats, suggest diminishing returns from Beijing’s moves to squeeze Taiwan, politically and militarily.





January 17, 2024


Delhi airport chaos underlines need to plan for uncertainties,including those caused by fog and bad weather


On Sunday, a passenger on an IndiGo Delhi-Goa flight was arrested for allegedly assaulting the pilot after dense fog forced a flight delay of more than 10 hours. This IndiGo flight was not the only one to have been delayed. As reported in this paper, data from Flightradar24 show that 508 outbound flights from Delhi’s Indira Gandhi International Airport were delayed on Sunday, while 87 were cancelled. More than 400 inbound flights were delayed and 42 were cancelled. As airline networks are integrated, and aircraft and crew tend to serve multiple flights across sectors, delays due to bad weather in one airport, especially a hub like Delhi, can have ripple effects. Social media platforms are awash with passengers complaining about long delays and cancellations.


There cannot be any justification for the violence by the passenger. However, the recent criticism of the aviation sector should lead to course corrections. In recent times, several cases of passenger neglect, shoddy services and unprofessional behaviour by airline staff have come to light. Part of the explanation could be traced to the structure of the sector — a duopoly dominated by IndiGo and the Tata Group.


DGCA data show that IndiGo controls 60 per cent of the market, while the TATA Group-owned Vistara, Air India and AIX Connect have a combined market share of 26 per cent. It is axiomatic that in markets characterised by a lack of strong competition, companies focus less on innovation and quality. This has a bearing on the services they offer. The consumers, airline passengers, in this case, have limited alternatives. While delays due to weather, inadequate airport infrastructure or unforeseen emergencies may be beyond the control of airlines, at the very least they can ensure that the passengers are well looked after.


The Delhi airport has four runways, of which two can handle aircraft in extremely low visibility. However, as reported in this newspaper, one of these runways is currently inoperative. Compounding the problem, the other runway “was recently downgraded in category from one end due to construction activity”. Following the chaos on Sunday, the authorities seem to have sprung into action.


The DCGA has issued a set of standard operating procedures asking airlines to publish real-time information about flight delays and ensure that all passengers are kept informed. The aviation sector needs to do more. Dense fog has become inextricably linked to Delhi’s winter season. These aren’t really unforeseeable weather events. Shouldn’t the airlines, the airport authorities and DGCA plan for them? The inadequacy of infrastructure facilities can be anticipated in advance and corrective actions taken to prevent chaos. Considering the dramatic expansion of the airline sector in India — the number of operational airports in the country has touched 148 — much more planning and preparation is called for.




January 17, 2024


Modi-Putin meeting, EAM Jaishankar’s Iran visit show India’s capacity to engage diverse partners at odds with each other


The current moment in international affairs is marked by renewed great power rivalry. The conflicts in Europe and West Asia – between Russia and Ukraine, Israel and Hamas – and the broader tussle between the US and China on economic, technological and strategic fronts make it tempting to view the global scenario in binaries. Two recent events, however, show that New Delhi has managed to engage with diverse partners who are often at odds with each other. If India’s non-alignment during the Cold War was — in principle if not practice — defined by its claim of equidistance from the two blocs, its current “multi-alignment” is guided by national interest and the need to forge bilateral relationships.


On Monday, Prime Minister Narendra Modi and Russian President Vladimir Putin had a phone conversation in which they reportedly discussed the “special and privileged strategic partnership” between the two countries, the Ukraine conflict and a further deepening of bilateral ties. Around the same time, External Affairs Minister S Jaishankar was concluding a two-day visit to Iran, where he met his counterpart and other senior officials and finalised cooperation on developing the Chabahar Port. Russia and Iran are, in a sense, on the “other side” vis-a-vis India and China. In the early stage of the Ukraine conflict, the US put considerable pressure on Delhi to take a stronger position against Russia’s aggression. Iran, too, is embroiled in a regional cold war with Israel and Saudi Arabia — India has deep partnerships with both nations. That it has managed to maintain these bilateral ties even as its partnership with the US and Europe grows is significant. Significantly with both nations, Delhi hasn’t compromised on its core principles: PM Modi reportedly reiterated India’s position to Putin — that war cannot be a solution and Jaishankar communicated zero tolerance for terror and how the Houthi attacks on merchant vessels harm India’s interests.


It is equally important to recognise the underlying conditions that have allowed New Delhi room to manoeuvre on the global stage. The first of these is India’s continuing economic rise. The size of its market as well as its potential for future growth give Delhi both strategic and diplomatic heft. Second, as China has grown more aggressive in Asia, and beyond, many in the US and the West see India as a crucial regional counterbalance. Among the many factors that make India an attractive partner is its credentials as a liberal, pluralist democracy. As it continues to navigate the choppy waters of geopolitics and geoeconomics to secure its interests, India must ensure it does not slip on either front.






January 17, 2024

The perfect matrix

He might not be the first celebrity to turn writer, but Keanu Reeves has chosen his moment right


In 2021, Hollywood star Keanu Reeves teamed up with graphic designer and writer Matt Kindt and illustrator Ron Garney for a comic book series, BRZRKR. The 12-issue series that follows the adventures of an immortal warrior, Berzeker, was a runaway hit, registering the highest sales in its category in more than 25 years.


Now, the Matrix star has announced his first novel in collaboration with British speculative fiction writer, China Miéville. Slated for publication in July, The Book of Elsewhere will be an extension of the BRZRKR universe. Unsurprisingly, there will also be OTT adaptations to follow.


Reeves is hardly the first star to have used his celebrity status to launch a literary career. Writer-directors such as Nora Ephron, George A Romero or Woody Allen apart, Hollywood is full of big-ticket actors and comedians — Carrie Fisher and Dolly Parton, Steve Martin and Richard Osman, Tom Hanks and Millie Bobby Brown — who have segued into writing at the peak of their careers. If the desire to tell stories, gleaned over careers that have seen their fair share of crests and troughs, is temptation enough, there is also the commercial interest of building a franchise, an intellectual and artistic corpus representative of the artiste.


Fiction, though, tends to be prickly territory. On-screen stardom rarely translates into stellar reviews, not unless one is Osman, whose success as the author of the Thursday Murder Club series has overshadowed his previous, quite robust career as a television presenter and comedian. In 2017, after years of providing inputs on scripts, Tom Hanks published his collection of short stories, Uncommon Type, to modest reviews. Millie Bobby Brown’s Nineteen Steps, ghost-written by author Kathleen McGurl, was panned for a variety of reasons, not all related to literary merit. Yet, like Osman, Reeves might end up bucking the trend. After all, in the post-pandemic attention-deficit economy that relies on platforms such as #BookTok to offer literature in a capsule, a celebrity author is one step closer to a readership.





January 17, 2024

The Big Fog Up

Bad weather isn’t alone causing airport chaos. Preparing for it has been neglected inexcusably


IGIA is the biggest aviation hub in India by far. It follows that when the season of fog descends on Delhi, it sets off a cascade of disturbances at airports across the country. Several cities find themselves struggling with delays, diversions and similar low-visibility conditions. But the main culprit of the widespread passenger anguish of the current season is not the weather, which is only doing what it does every year. The blame lies with an indefensible failure of airlines, airport operators and aviation authorities to make proactive preparations for the season. Ministry’s measures this week are welcome but come only with most of the fog season behind us.


CAT III mess | Flights cannot operate in zero-visibility conditions. But smooth traffic is possible at threshold visibility thanks to CAT III technology. IGIA has had two CAT III equipped runaways for over a decade. Except, only one has been operational this winter, with repairs underway on the second, which happens to be the backbone in foggy conditions. Even the operational one had a non-functional end until yesterday – because it had been downgraded to CAT I with cranes erected for a nearby expressway project causing signal interference. To underline, IGIA was at only 25% of CAT III capacity for a few days.


Pilot deficit | Staff data for the present fog spell is awaited. But of the 58 IGIA flights diverted during December 24-25 and 27-28, as many as 50 were reportedly diverted because their captains were not trained to fly in low-visibility conditions. DGCA has served notice to AI and SpiceJet for this. Point of worry is how different stakeholders are showing similar laxity on compliance on CAT III efficiencies, despite a decade of learning. Growing domestic passenger traffic, where December saw the biggest monthly number ever, means that we need to spread the technology to more cities in north India. But it won’t be much help when cobwebs grow on it.


Passenger distress | Why haven’t the advances in ticket booking apps been matched by flight updating systems? On Monday DGCA issued SOPs to airlines regarding communicating real-time information to passengers. What needs to be done is neither a mystery nor rocket science. That no one is taking this job seriously reflects how unserious they are about passenger comfort. Changing this mindset is at the core of stopping the next weather challenge snowballing into a countrywide crisis.






January 17, 2024

Looking For Trillions

Oxfam believes trillionaires are a decade away. Could they be already around?


Oxfam brought out its annual inequality report to coincide with a gathering of the world’s business elite at Davos. The report uses a shock and awe tactic to highlight inequality. It says that at the current rates of growth, it could take 230 years to end poverty but we could have our first trillionaire in just 10 years. Trillionaires are a measure of their financial assets. They may already exist.


Nothing beats oil | Oxfam estimated oil and gas companies were their big winners in the recent past. How should one value people who control them? Saudi Aramco has a market value in excess of $2 trillion. It’s state-controlled. The state in question is an absolute monarchy. Jeff Bezos figures often in the Oxfam report and the House of Saud not at all. But it’s the monarchy that has trillions at its disposal.


Opaque holdings | Conversations about trillionaires are based on an assumption that people know what the rich own. That may be misplaced. Consider the mysterious Brunei Investment Agency (BIA), the country’s wealth fund under the Sultan’s control. It owns the Dorchester Collection, a chain of luxury hotels. But boycott calls over Brunei’s sharia laws have made BIA mask an already opaque investment portfolio. Who knows their true worth after four decades of investment?


Finally, funny trillions | The key idea underlying trillions is creation of business value. Trust central banks to turn the idea on its head. The US Federal Reserve has made trillions into a mere matter of creating money out of nothing at all through a tool called quantitative easing. A balance sheet that was less than $1 trillion before the global financial crisis in 2008 had expanded to almost $9 trillion by 2022.





January 17, 2024

Tackle Air Pollution Of a Different Kind

DGCA’s SOP will better information management


Short of having a special hotline with the weather gods, India needs to fix a serious problem: handling its air traffic when weather conditions get bad. The chaos that the country’s largest airport, New Delhi’s Indira Gandhi International (IGI) airport, witnessed in the last few days was due to three reasons: bad weather conditions that saw visibility at times dropping to zero, infrastructural gaps (limited parking bays and disruption of instrument landing system on the only runaway equipped with CAT 3 navigation system, which helps planes land in inclement weather conditions), and the inability of Terminal 2 to handle surging passenger numbers. Close to 500 flights were delayed and 87 cancelled as dense fog enveloped the Capital those two days. As for inbound flights, 414 were delayed, while 42 were cancelled. The situation improved on Tuesday, but it’s not back to normal.


The chaos at IGI cascaded across other airports, leaving passengers furious — to the point of incidents of the air travel equivalent of road rage — and ground officials and crew stressed. Much of the pain could have been minimised if airlines had put in place a crowd and information management system well before Delhi’s fog season, which, like air pollution, is no longer a rarity. Finally, on Monday, the civil aviation ministry nudged the Directorate General of Civil Aviation (DGCA) to issue a standard operating procedure (SOP). The long-needed directive asks airlines to provide precise real-time updates to passengers on flight delays through their websites and messaging platforms; train airline staff to inform passengers about any delays and cancel — reasonably in advance — flights that are anticipated to be delayed more than 3 hours.


According to DGCA, there were 152 million domestic air travellers in 2023, the highest-ever. The economic impact of this surge is enormous. To keep this momentum going, airlines must follow the DGCA SOP, and ensure airports don’t become stress zones and air travel not such a ‘normal’ harrowing experience.






January 17, 2024

Flexing Bonds More Than Just Muscles


The ultimatum by Maldivian president Mohamed Muizzu to India to withdraw its military personnel by March 15 ‘or else’ is an extreme rendition of multipolarity, a.k.a. ‘non-alignment’, in the 21st century. In the broader South Asian region (barring Pakistan, which has carved its partner’s name and path in stone), non-alignment 2.0 manifests as ‘competitive bargaining’, something that India is well adept in on the bigger global stage. Irrespective of how GoI deals with Male, India can do well to work on its Neighbourhood First policy.


Being in the middle is not easy. Unlike other global players, India does not have deep pockets to make the wheels of outreach move faster. Nor does it, thankfully, have a ‘neo-imperialist’ tag. A common colonial past binding the region, and a large PIO and expat population, give India a special currency. This bond, and India’s success as a vibrant democracy and growing economy that is seeking to overcome developmental challenges, should make it the natural choice as partner for the region’s smaller nations — not as a Big Brother but as an elder sibling that has taken a few knocks itself. GoI has taken this route. But it has been in fits and starts, and mostly when the prime minister has taken the lead. India needs to determine its long-term foreign policy goals, and step up on its global responsibility as perhaps the only country that has much in common with both G7 and V20 (Vulnerable 20) countries. It must build bonds based on a common approach to tackling global challenges of the present and future. It is this working together in a real partnership that can ensure that India’s place in the region is strong and resilient. That it’s not a victim to the vagaries of power but a power that won’t be wished away.






January 17, 2024

GIM dynamics

FDI interest has improved, but not across States


The message that went out at the recently held Global Investor Meets in Gujarat and Tamil Nadu was unmistakable – that India is a big investor draw as the fastest growing economy with impressive fundamentals, besides offering political and policy stability. The ‘vibrancy’ of the State-level GIMs must be viewed against the context of India positioning itself as a China plus one supplier, as well as a country equipped to run new-age industries ranging from AI and EVs to renewables.


To this end, it has rolled out performance linked incentive policies across 14 sectors. Therefore, the Gujarat summit led to MoU’s worth over ₹26-lakh crore ($313 billion) being signed, while Tamil Nadu inked MoUs of about ₹6.6-lakh crore (about $80 billion). To place these figures in perspective, Gujarat has garnered FDI worth $34 billion over four years till September 2023, in third place after Maharashtra and Karnataka which have drawn FDI amounting to $62 billion and $47 billion, respectively, over this period. Tamil Nadu has seen an investment of $9.9 billion, and is at fifth place. While it is true that just a fraction of these expressions of interest translate into actual investment, there can be no denying the overall rise in the interest quotient, even if perhaps less so in Tamil Nadu’s case.


The proposals point to an ‘agglomeration process’. The proposals for Tamil Nadu and Gujarat tie in with their traditional strengths, be it auto, electronics and leather in the case of the former or petrochemicals, textiles and auto with respect to the latter. There are two stand-out features of FDI equity flows into India since 2000: first, they have been concentrated in peninsular India and second, they have been driven by quite the same sectors. The two factors are linked, as sector-specific capital prefers regions with existing competencies. Over 80 per cent of the total FDI in the last four years has gone into five States: Maharashtra, Karnataka, Gujarat, Delhi and Tamil Nadu. Tamil Nadu appears to have lost some of its pre-eminence; Chennai was in third place after Mumbai and Delhi between 2000 and 2015. While FDI flows have gone up impressively from about $45 billion in FY15 to $85 billion in FY22 and then falling to $71 billion last fiscal, their composition since FY05 has hardly changed. Computer software accounts for 20 per cent of FDI flows since 2014, against 6 per cent in the preceding 14 years. Financial services accounts for 16 per cent of FDI equity flows in the 2014-23 period, against 18 per cent earlier. There is a growing interest in renewable energy, pharma and education.


Studies have shown that per capita income plays a role in choice of investment destination, as does the cost of labour, its skill-sets, availability of power, land, logistics, natural resources and above all, efficient governance. The poorer northern States need fiscal support to usher investment into sectors hitherto untapped. But they must create the infrastructure, of which there fortunately are some signs.






January 17, 2024

Development debate

The policy must now go beyond poverty numbers


A new discussion paper released by the NITI Aayog this week showed that about 248.2 million Indians escaped multidimensional poverty over the past nine years. Written by NITI Aayog member Ramesh Chand and senior advisor Yogesh Suri, with technical inputs from the United Nations Development Programme and Oxford Policy and Human Development Initiative, the paper intended to show the impact of various government programmes on multidimensional poverty. The paper, which reflects the personal views of the authors, found that multidimensional poverty declined from 29.17 per cent in 2013-14 to 11.28 per cent in 2022-23, and the level of poverty was expected to decline to single digits soon. Notably, the latest national multidimensional poverty index was based on the National Family Health Surveys-IV (2015-16) and -V (2019-21). Since data for the exact relevant periods was unavailable, the study made calculations based on the available data.


The multidimensional poverty index is considered a better indicator than the traditional measures. For instance, it is difficult to get income estimates. Similarly, consumption surveys have been found to be inadequate in gauging the levels of poverty and well-being. Besides, these methods may not fully capture the impact of policy interventions. The global multidimensional poverty index takes into account 10 indicators in three broad areas — education, health, and standard of living. The Indian version, apart from global indicators, also includes maternal health and bank accounts. To be sure, while the multidimensional poverty index gives a much broader picture, the need for income and expenditure data should not be underestimated.


More data on different aspects of poverty is likely to give a clearer picture and better inform policymaking. The outcome of the last consumer expenditure survey, conducted in 2017-18, was rejected by the government over data quality issues. Higher economic growth and policy interventions in the past few decades enabled significant poverty reduction. As the paper notes, the proportion of the multidimensional poor in population reduced by 40.38 percentage points in about 15 years from 2005-06. The intensity of poverty also declined significantly. While the reduction in poverty is worth celebrating, India still has a long way to go. Policy efforts, therefore, must focus on attaining and sustaining high economic growth over the long run. The country is still seen as a lower-middle-income one. Sustained high growth in per capita income will pull more people out of poverty and improve well-being.





January 17, 2024

Rising global risks

Alarming WEF report highlights the need for collective action


At a time when the world is beset by shocks, the findings of the World Economic Forum’s Global Risks Report 2024 come as no surprise. Based on a risk perception survey of around 1,500 experts worldwide, this report puts forth a pessimistic outlook for the global risk landscape over the next two and 10 years. Climate-related risks, particularly extreme weather events, remain a dominant theme, both in the short and long terms. The threat from misinformation and disinformation is identified as the most severe short-term threat, including in India. Societal polarisation is also perceived as a major threat.


Disinformation, or deliberately misleading information and narrative manipulation, is not new, but the internet has magnified its reach and scope. This is particularly significant in a year when almost half the world’s population is set to vote in upcoming elections. In this context, foreign and domestic actors alike can leverage fake news to malign the legitimacy of political players. Disinformation also has the potential to corrode democratic processes in the long run. Just as there are risks from government inaction, there is also a risk of repression and erosion of rights as authorities seek to crack down on propagation of false information.


While there has been a general decline in trust as a result of disinformation, the number of people believing in false narratives has surged. People frequently only skimming news stories without checking sources, and then sharing the same with others in their network, only aggravates the problem. This is a classic case of the deleterious effects of human networks. Another risk closely linked to threats from disinformation is societal polarisation. One tends to amplify the other. A growing distrust of information deepens polarised views and leads to a vicious cycle that could trigger civil unrest and possible confrontation. Legislation can, theoretically, regulate the spread of false information. Governments can also focus on awareness campaigns to help citizens spot disinformation. However, some of these steps could give governments the power to regulate content on the internet, thereby undermining freedom of expression. Thus, there are no easy answers in the short run, even as the risk continues to increase.


The report identifies extreme weather events as the most pressing risk over a longer period and lists as threats issues like critical change to earth systems, biodiversity loss and ecosystem collapse, natural resource shortages, and pollution. This becomes more important as global warming is projected to reach 1.5 degrees Celsius above pre-industrial averages by the 2030s. Extreme weather and planetary changes are mutually reinforcing; for instance, heat waves collapse coral reef systems. Addressing these issues requires an evolved approach to climate risk management and increased investment in research and development to boost preparedness for inevitable events. The report also highlights the importance of collective action and technology that can act as an enabler against the climate threat. However, collaboration at the global scale has not been forthcoming, particularly due to the reluctance of advanced economies.




January 17, 2024

Trouble in the air

While unruly passengers must be punished, Monday’s chaos also reflects poorly on India’s airports and airlines


The irony could not be starker. On the day the Directorate General of Civil Aviation released data showing domestic air passenger traffic at an all-time high of 152 million passengers in 2023, over 100 flights from New Delhi’s Indira Gandhi International Airport were delayed and at least 20 cancelled due to dense fog leading to zero visibility for a few hours. The disruptions at the country’s largest airport had a cascading effect even in other cities. While certain delays cannot be avoided, what was concerning was the absolute lack of preparedness on the part of airlines and airports even though fog is an annual affair during these times in the National Capital Region.


On Monday, it took the civil aviation minister, Jyotiraditya Scindia to direct Delhi International Airport to expedite the operationalisation of the CAT III-enabled fourth runway, in addition to the existing CAT III-enabled runway. Despite the Delhi airport authority’s clarification on the issue on Tuesday, it’s rather strange that only one CAT III equipped runway was in operation all this while. It is to be noted that only CAT III compliance isn’t enough as airlines are also required to deploy aircraft equipped for ILS CAT IIIB and pilots trained to handle low-visibility operations. None of this is unknown to either airlines or airport authorities.


The minister also directed the DGCA to issue a standard operating procedure (SOP) to ensure better communication and facilitation of passengers to minimise discomfort in view of flight cancellations and delays due to adverse weather. It took an unfortunate incident of a passenger assaulting an IndiGo pilot to announce measures that should have been a standard operating procedure even in normal times. While the unruly passenger’s behaviour was unpardonable and he should be punished as per the norms in force, there’s plenty for which airports and airlines need to be made accountable for.


The SOP, which was announced on Monday, makes it clear that airlines will have to cancel sufficiently in advance flights that are expected to be delayed by over three hours and inform passengers in real-time about flight status. The video of passengers being served food on the tarmac at the Mumbai airport because the flight was running some 12 hours late also doesn’t speak well for a sector which stands for hospitality and service. The growth of India’s civil aviation sector, particularly the low-cost carriers, has made businesses and leisure dependent on it, therefore the machinery needs to be well oiled at all times. It’s again ironic that everything bad about transport service which was once attached with railways—a government-owned transport medium—has now travelled to private airlines. The Railways, meanwhile, is working hard to improve services by launching Vande Bharat trains and renovating stations.


Bad practices by the airlines lead to talks of monopolistic behaviour of the leading carrier, which has over 61% market share and figures quite regularly among complaints by passengers on social media platforms. At the core of the problem between carriers and passengers is that often delays are not properly communicated. Lack of trained pilots with carriers is also an issue which often gets highlighted. A recent change in rule which extends rest hours for pilots has also been flagged by carriers as having the potential to create a manpower crisis once it gets implemented. While human resource issues would always remain in a sector which is growing, they should not become a cause of bad service and communication.




January 17, 2024

Bain’s software fails offer lessons in M&A tactics


Bain Capital has this week lost out on a second European software deal in a year. While the first was careless, the second looks more like misfortune. But successive failed approaches can only raise the stakes the next time the US buyout firm attempts a deal in this sector.


On Monday, Swiss tech firm SoftwareOne Holding AG decided to stay independent after rejecting a bid proposal from Bain valuing its equity at 3 billion Swiss francs ($ 3.5 billion). Neither side comes out unblemished from a saga that’s created uncertainty around the stock since takeover interest emerged in June.


Bain appeared to have a commanding tactical advantage: the support of SoftwareOne’s founding shareholders, who hold 29%.They planned to keep some of their stake after it went private. The board explored whether it could support a buyout, evidently conscious of the appetite for a deal among the founders and doubtless some of the ordinary shareholders too. They showed spine by ultimately sticking to their view that the mooted price was too low.


But it’s hard to see why it took quite so long to establish that a deal wasn’t feasible. A drawn-out process — in this case involving a full strategic review—is forgivable if it culminates in an acceptable offer. Instead, the shares closed down 9% on Monday to return to their level before the ill-fated adventure began.


Does SoftwareOne now look like damaged goods? The board rejected an initial approach at 18.50 francs a share — roughly the price of its 2019 initial public offering — and in July Bain dangled a range of 19.50 francs to 20.50 francs. The directors still had misgivings. But they later opened up the books to Bain, only to see their suitor revise its proposal down to 18.80 francs. This risks becoming a ceiling for the share price; the average analyst target for the stock is 18.56 francs, according to estimates compiled by Bloomberg.


Some investors may fret that Bain found something nasty when going through the accounts. But it’s worth remembering that SoftwareOne reduced its financial guidance in November. That would have given Bain grounds to drive a hard bargain. SoftwareOne usefully reconfirmed that lowered guidance on Monday.


Bain looks like it’s been cautious and strived to avoid overpaying. But what happens the next time the buyout firm seeks to take a company private? The target is likely to be more wary of granting due diligence at a particular bid price if it thinks Bain may subsequently push for a discount. This episode isn’t going to help in future negotiations.


Still, this latest setback looks less regrettable than Bain’s failure to acquire Germany’s Software AG last year. That came down to a simple tactical error. The situation again turned on a major shareholder, in this case a foundation. Rival buyout firm Silver Lake Management LLC secured a 25% stake from the foundation prior to launching a bid that later prevailed; Bain failed to disrupt that bidder-shareholder alliance despite making a higher offer.


But Bain’s position with regard to its Swiss ambitions isn’t completely hopeless. A hostile bid may well be a viable option here when usually it would be almost unthinkable. Buyout bidders typically don’t make offers directly to shareholders because they can’t conduct due diligence. But Bain has already crossed that hurdle, and we know the founders think going private is a good idea. SoftwareOne Chief Executive Officer Brian Duffy is scheduled to update the market on strategy next month. If his plan fails to inspire, the wider shareholder-base could telegraph its receptiveness to receiving a direct approach from private equity.


Duffy’s board did its job by taking a view on behalf of investors and sticking to it, putting the directors’ reputations on the line. If shareholders disagree they can always appoint new stewards. That’s how it should be. As for Bain, its travails have shown that getting kingmaker shareholders on side is a necessary condition of doing a deal — but not a sufficient one when a resolute board can still say no.



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