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"Happiness can be defined, in part at least, as the fruit of the desire and ability to sacrifice what we want now for what we want eventually" - Stephen Covey

Saturday, June 11, 2022

Wapo Article on Russia Ukraine War

Hopes that Ukraine will be able to reverse Russian gains are fading in the face of superior firepower

By Siobhán O'Grady ,

Liz Sly and

Ievgeniia Sivorka

Ukraine is running out of ammunition as prospects dim on the battlefield

Hopes that Ukraine will be able to reverse Russian gains are fading in the face of superior firepower

SLOVYANSK, Ukraine — The euphoria that accompanied Ukraine’s unforeseen early victories against bumbling Russian troops is fading as Moscow adapts its tactics, recovers its stride and asserts its overwhelming firepower against heavily outgunned Ukrainian forces.

Newly promised Western weapons systems are arriving, but too slowly and in insufficient quantities to prevent incremental but inexorable Russian gains in the eastern Donbas region of Ukraine, which is now the focus of the fight.

The Ukrainians are still fighting back, but they are running out of ammunition and suffering casualties at a far higher rate than in the initial stages of the war. Around 200 Ukrainian soldiers are now being killed every day, up from 100 late last month, an aide to President Volodymyr Zelensky told the BBC on Friday — meaning that as many as 1,000 Ukrainians are being taken out of the fight every day, including those who are injured.

The Russians are still making mistakes and are also losing men and equipment, albeit at a lesser rate than in the first months of the conflict. In one sign that they are suffering equipment shortages, they have been seen on videos posted on social media hauling hundreds of mothballed, Soviet-era T-62 tanks out of storage to be sent to Ukraine.

But the overall trajectory of the war has unmistakably shifted away from one of unexpectedly dismal Russian failures and tilted in favor of Russia as the demonstrably stronger force.

Ukrainian and U.S. hopes that the new supplies of Western weaponry would enable Ukraine to regain the initiative and eventually retake the estimated 20 percent of Ukrainian territory captured by Russia since its Feb. 24 invasion are starting to look premature, said Oleksandr V. Danylyuk, an adviser to the Ukrainian government on defense and intelligence issues.

“The strategies and tactics of the Russians are completely different right now. They are being much more successful,” he said. “They have more resources than us and they are not in a rush.”

“There’s much less space for optimism right now,” he added.

Ukrainian forces remain resolute. In a cafe in the front line town of Slovyansk, two Ukrainian soldiers on a break from the trenches nearby recounted how they were forced to retreat from the town of Dovhenke, northwest of Slovyansk, under withering Russian artillery fire. Thirty-five of their 100-strong unit were killed in the assault, typical of the tactics Russia is using. “They destroy everything and walk in,” said one of the soldiers, Vitaliy Martsyv, 41.

“There is nothing there,” Andriy Tihonenko, 52, said of Dovhenke. “It’s all burned down.”

As troop fatalities mounted, the surviving soldiers felt “more motivated to hold our position,” Tihonenko said. To retreat after their comrades were killed defending the town, he said, would have felt like treating their deaths as insignificant.

But eventually, the defensive line was no longer effective, the two men said. With more than one-third of their force killed, the remaining soldiers had no choice but to pull back.

“Sometimes you feel down,” Tihonenko said. “But then you realize war is war — and you have to finish it.”

Russian artillery pummels Ukraine forces as Russia advances in eastern Ukraine

But the odds against the Ukrainians are starting to look overwhelming, said Danylyuk, the government adviser.

“The Russians are using long-range artillery against us, often without any response, because we don’t have the means,” he said. “They can attack from dozens of kilometers away and we can’t fire back. We know all the coordinates for all their important targets, but we don’t have the means to attack.”

Ukraine has now almost completely run out of ammunition for the Soviet-era weapons systems that were the mainstay of its arsenal, and the Eastern European countries that maintained the same systems have run out of surplus supplies to donate, Danylyuk said. Ukraine urgently needs to shift to longer-range and more sophisticated Western systems, but those have only recently been committed, and in insufficient quantities to match Russia’s immense firepower, he said.

Russia is firing as many as 50,000 artillery rounds a day into Ukrainian positions, and the Ukrainians can only hit back with around 5,000 to 6,000 rounds a day, he said. The United States has committed to deliver 220,000 rounds of ammunition — enough to match Russian firepower for around four days.

The majority of the American M777 howitzer artillery guns that U.S. officials said would enable Ukraine to match Russian firepower are now in use on the battlefield, according to the Pentagon. Yet the Russians continue to advance.

Four of the more sophisticated and longer range HIMARS multiple-rocket launcher systems that the Ukrainians had long requested from the United States are on the way, along with three similar systems pledged by Britain. But the Ukrainians will first have to be trained how to use them, and they are still weeks away from reaching the battlefield, U.S. officials say. The Pentagon has hinted that more systems will be made available once the Ukrainians have demonstrated they can be used.

But the Russians started the war with about 900 of their own similar systems, and although the Ukrainians claim they have destroyed hundreds, the Russians still have hundreds left, Danylyuk said.

The Russians have meanwhile adapted their tactics in ways that have let them take full advantage of their firepower by remaining at a distance from Ukrainian positions, pounding them relentlessly, then taking territory once the Ukrainians have been forced to retreat.

The Russians are also doing a better job of combining their arms, of using close air support and deploying dismounted infantry, said Rob Lee, a former U.S. Marine now with the Foreign Policy Research Institute.

Russian officials have claimed they are advancing more slowly than during the initial invasion to avoid civilian casualties. Instead, however, the tactic helps reduce Russian casualties while inflicting heavy losses on the civilians who live in the towns and villages being targeted, analysts say.

“I’m afraid of every single boom or sound,” said Irina Makagon, as she sat in her kitchen in Kostiantynivka, a town near the front line that has suffered intense bombardments. She was sitting in her kitchen earlier this week when a boom and a whistle heralded an incoming shell that crashed into the house next door, killing a young man.

'They're in hell': Hail of incoming Russian artillery tests Ukrainian morale

The Ukrainians are still fighting well and can inflict tactical pain on the Russians when the opportunity presents itself, said Dmitri Alperovitch of the Silverado Consultancy, citing Russia’s disastrous attempt late last month to cross the Siverskiy Donets river; hundreds of Russians were killed and scores of military vehicles destroyed. The Ukrainians are also conducting successful drone strikes against Russian positions and supply columns, he said.

Russia has not released casualty figures since March. “But when you look at what’s happening, I’d be shocked if the Russians are sustaining casualties anywhere close to what the Ukrainians are right now,”

Alperovitch said. Manpower is less of a problem for the Ukrainians than the shortages of ammunition and equipment, said Danylyuk, who put the number of men who have signed up to potentially fight at 6 million. But Ukraine doesn’t have the equipment, including protective gear and guns as well as artillery systems, to field all those willing to volunteer. “We would be sending them to their deaths without equipment,” he said.

The Russians face manpower shortages too, after the heavy losses they suffered in the earliest days of the war. Western officials put the number of Russian deaths at 15,000 to 20,000 so far, with as many as a third of the original invasion force rendered unfit for combat due to injuries, capture and equipment losses after the disasters of the first two months.

But Russia has regenerated its forces to a greater extent than anticipated by many military analysts, bolstering its depleted army by as many as 40,000 to 50,000 men over the past two months, by increasing the age of the reserve force, deploying new forces and refurbishing units that had been decimated, Danylyuk said.

For now, the Donetsk River stands in the way of significant new Russian advances. Western officials say they expect that Russian troops will soon secure full control of the town of Severedonetsk and then are likely to turn their attention to the town of Lysyshansk, on the opposite bank of the river, which would put them in full control of the region of Luhansk. After that, they can be expected to target the larger region of Donetsk that Russia has partially controlled since 2014.

Lysyshansk will be a tougher challenge because the Ukrainians control the high ground, and the Russians’ artillery strength is less of an advantage in close urban combat, said Konrad Muzyka, director of the Warsaw-based Rochan Consulting defense consultancy. Russia may find it difficult to sustain its recent gains for much beyond that, given the losses it has suffered so far, he said.

But if the Russians manage to breach the river, they could start to make rapid advances, he said.

“The Ukrainians are resting their defense on the Donetsk river. If Russia successfully crosses the river, my concern is that the Russians will enter Donetsk with their full might, and then the Ukrainians might be overwhelmed,” he said.

Sly reported from London. Heidi Levine in Slovyansk contributed to this report.

Wednesday, June 08, 2022

State of the Civil Aviation Sector in India

By Tanvi Vipra - March 2022

India is one of the fastest growing aviation markets in the world. Its domestic traffic makes up 69% of the total airline traffic in South Asia. India’s airport capacity is expected to handle 1 billion trips annually by 2023. The Ministry of Civil Aviation is responsible for formulating national aviation policies and programmes. Today, Lok Sabha will discuss and vote upon the budget of the Ministry of Civil Aviation. In light of this, we discuss key issues with the aviation sector in India.

The aviation sector came under severe financial stress during the Covid-19 pandemic. After air travel was suspended in March 2020, airline operators in India reported losses worth more than Rs 19,500 crore while airports reported losses worth more than Rs 5,120 crore. However, several airline companies were under financial stress before the pandemic affected passenger travel. For instance, in the past 15 years, seventeen airlines have exited the market. Out of those, two airlines, Air Odisha Aviation Pvt Ltd and Deccan Charters Pvt Ltd exited the market in 2020. Air India has been reporting consistent losses over the past four years. All other major private airlines in India such as Indigo and Spice Jet faced losses in 2018-19.

Sale of Air India

Air India has accounted for the biggest expenditure head of the Ministry of Civil Aviation since 2011-12. Between 2009-10 and 2020-21, the government spent Rs 1,22,542 crore on Air India through budgeted allocations. In October 2021, the sale of Air India to Talace Ltd., which is a subsidiary of Tata Sons Pvt Ltd, was approved. The bid for Air India was finalised at Rs 18,000 crore.

Up to January 2020, Air India had accumulated debt worth Rs 60,000 crore. The central government is repaying this debt in the financial year 2021-22. After the finalisation of the sale, the government allocated roughly Rs 71,000 crore for expenses related to Air India.

In addition to loan repayment, in 2021-22, the government will provide Air India with a fresh loan (Rs 4,500 crore) and grants (Rs 1,944 crore) to recover from the shock of Covid-19. To pay for the medical benefits of retired employees of Air India, a recurring expense of Rs 165 crore will be borne by the central government each year.

In 2022-23, Rs 9,260 crore is allocated towards servicing the debt of AIAHL (see Table 1). AIAHL is a Special Purpose Vehicle (SPV) formed by the government to hold the assets and liabilities of Air India while the process of its sale takes place.

Privatisation of Airports

Airports Authority of India (AAI) is responsible for creating, upgrading, maintaining and managing civil aviation infrastructure in the country. As on June 23, 2020, it operates and manages 137 airports in the country. Domestic air traffic has more than doubled from around 61 million passengers in 2013-14 to around 137 million in 2019-20. International passenger traffic has grown from 47 million in 2013-14 to around 67 million in 2019-20, registering a growth of over 6% per annum. As a result, airports in India are witnessing rising levels of congestion. Most major airports are operating at 85% to 120% of their handling capacity. In response to this, the government has decided to privatise some airports to address the problem of congestion.

AAI has leased out eight of its airports through Public Private Partnership (PPP) for operation, management and development on long term lease basis. Six of these airports namely, Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram, and Mangaluru have been leased out to M/s Adani Enterprises Limited (AEL) for 50 years (under PPP). The ownership of these airports remains with AAI and the operations will be back with AAI after the concession period is over. The Standing Committee on Transport (2021) had noted that the government expects to have 24 PPP airports by 2024.

The Committee also noted a structural issue in the way airport concessions are given. As of now, entities that bid the highest amount are given the rights to operate an airport. This leads them to pass on the high charge to airline operators. This system does not consider the actual cost of the services and leads to an arbitrary increase in the cost of airline operators. The Ministry sees the role of AAI in future policy issues to include providing high quality, safe and customer-oriented airport and air navigation services. In 2022-23, the government has allocated Rs 150 crore to AAI, which is almost ten times higher than the budget estimates of 2021-22.

Regional Connectivity Scheme (RCS-UDAN)

The top 15 airports in the country account for about 83% of the total passenger traffic. These airports are also close to their saturation limit, and hence the Ministry notes that there is a need to add more Tier-II and Tier-III cities to the aviation network. The Regional Connectivity Scheme was introduced in 2016 to stimulate regional air connectivity and make air travel affordable to the masses. The budget for this scheme is Rs 4,500 crore over five years from 2016-17 to 2021-22. As of December 16, 2021, 46% of this amount has been released. In 2022-23, the scheme has been allocated Rs 601 crore, which is 60% lower than the revised estimates of 2021-22 (Rs 994 crore).

Under the scheme, airline operators are incentivised to operate on under-served routes by providing them with viability gap funding and airport fee waivers. AAI, which is the implementing agency of this scheme, has sanctioned 948 routes to boost regional connectivity. As of January 31, 2022, 43% of these routes have been operationalised. As per the Ministry, lack of availability of land and creation of regional infrastructure has led to delays in the scheme. Issues with obtaining licenses and unsustainable operation of awarded routes also contribute to the delay. As per the Ministry, these issues, along with the setback faced due to the pandemic acted as major obstacles for the effective utilisation of funds.

Potential of air cargo

The Standing Committee on Transport (2021) had noted India’s cargo industry’s huge potential with respect to its geographical location, its growing economy, and its growth in domestic and international trade in the last decade. In 2019-20, all Indian airports together handled 3.33 million metric tonnes (MMT) of freight. This is much lower than the cargo handled by Hong Kong (4.5 MMT), Memphis (4.8 MMT), and Shanghai (3.7 MMT), which are the top three airports in terms of the volume of freight handled. The Standing Committee on Transport (2021) has noted inadequate infrastructure as a major bottleneck in developing the country’s air cargo sector. To reduce such bottleneck, it recommended the Ministry to establish dedicated cargo airports, and automate air cargo procedures and information systems to streamline redundant processes.

The Committee has also highlighted that the Open Sky Policy enables foreign cargo carriers to freely operate cargo services to and from any airports in India having customs/immigration facilities. They account for 90-95% of the total international cargo carried to and from the country. On the other hand, Indian air cargo operators face discriminatory practices and regulatory impediments for operating international cargo flights in foreign countries. The Committee urged the Ministry to provide a level-playing field for Indian air cargo operators and to ensure equal opportunities for them. The Ministry revised the Open Sky Policy in December 2020. Under the revised policy, the operations of foreign ad hoc and pure non-scheduled freighter charter service flights have been restricted to six airports - Bengaluru, Chennai, Delhi, Kolkata, Hyderabad, and Mumbai.

Rising cost of Aviation Turbine Fuel

The cost of Aviation Turbine Fuel (ATF) forms around 40% of the total operating cost of airlines and impacts their financial viability. ATF prices have been consistently rising over the past years, placing stress on the balance sheets of airline companies. As per recent news reports, airfares are expected to rise as the conflict between Russia and Ukraine is making ATF costlier.

ATF attracts VAT which is variable across states and does not have a provision for input tax credit. High rates of aviation fuel coupled with high VAT rates are adversely affecting airline companies.

The Ministry, in January 2020, has reduced the tax burden on ATF by eliminating fuel throughput charges that were levied by airport operators at all airports across India. Central excise on ATF was reduced from 14% to 11% w.e.f. October 11, 2018. State governments have also reduced VAT/Sales Tax on ATF drawn on RCS airports to 1% or less for 10 years. For non-RCS-UDAN operations, various state governments have reduced VAT/Sales Tax on ATF to within 5%. The Standing Committee on Transport (2021) has recommended ATF to be included within the ambit of GST and that applicable GST should not exceed 12% on ATF with full Input Tax Credit.

For more details, please refer to the Demand for Grants Analysis of the Ministry of Civil Aviation, 2022-23.