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India's luxury airline Vistara flies into the sunset

Indian full-service carrier Vistara will operate its last flight on Monday, after nine years in existence.

A joint venture between Singapore Airlines and the Tata Sons, Vistara will merge with Tata-owned Air India to form a single entity with an expanded network and broader fleet.

This means that all Vistara operations will be transferred to and managed by Air India, including helpdesk kiosks and ticketing offices. The process of migrating passengers with existing Vistara bookings and loyalty programmes to Air India has been under way over thepast few months.

"As part of the merger process, meals, service ware and other soft elements have been upgraded and incorporates aspects of both Vistara and Air India," an Air India spokesperson said in an email response.

Amid concerns that the merger could impact service standards, the Tatas have assured that Vistara's in-flight experience will remain unchanged.

Known for its high ratings in food, service, and cabin quality, Vistara has built a loyal customer base and the decision to retire the Vistara brand has been criticised by fans, branding experts, and aviation analysts.

The consolidation was effectively done to clean up Vistara's books and wipe out its losses, said Mark Martin, an aviation analyst.

Air India has essentially been "suckered into taking a loss-making airline" in a desperate move, he added.

"Mergers are meant to make airlines powerful. Never to wipe out losses or cover them."

To be sure, both Air India and Vistara's annual losses have reduced by more than half over the past year, and other operating metrics have improved too. But the merger process so far has been turbulent.

The exercise has been riddled with problems − from pilot shortages that have led to massive flight cancellations, to Vistara crew going on mass sick leave over plans to align their salary structures with Air India.

There have also been repeated complaints about poor service standards on Air India, including viral videos of broken seats and non-functioning inflight entertainment systems.

The Tatas have announced a $400m (£308m) programme to upgrade and retrofit the interiors of its older aircraft and also a brand-new livery. They've also placed orders for hundreds of new Airbus and Boeing planes worth billions of dollars to augment their offering.

But this "turnaround" is still incomplete and riddled with problems, according to Mr Martin. A merger only complicates matters.

Experts say that the merger strikes a dissonant chord from a branding perspective too.

Harish Bijoor, a brand strategy specialist, told the BBC he was feeling "emotional" that a superior product offering like Vistara which had developed a "gold standard for Indian aviation" was ceasing operations.

"It is a big loss for the industry," said Mr Bijoor, adding it will be a monumental task for the mother brand Air India to simply "copy, paste and exceed" the high standards set by Vistara, given that it's a much smaller airline that's being gobbled up by a much larger one.

Mr Bijoor suggests a better strategy would have been to operate Air India separately for five years, focusing on improving service standards, while maintaining Vistara as a distinct brand with Air India prefixed to it.

"This would have given Air India the time and chance to rectify the mother brand and bring it up to the Vistara level, while maintaining its uniqueness," he adds.

Beyond branding, the merged entity will face a slew of operational challenges.

"Communication will be a major challenge in the early days, with customers arriving at the airport expecting Vistara flights, only to find Air India branding," says Ajay Awtaney, editor of Live From A Lounge, an aviation portal. "Air India will need to maintain clear communication for weeks."

Another key challenge, he notes, is cultural: Vistara's agile employees may struggle to adjust to Air India's complex bureaucracy and systems.

But the biggest task for the merged carrier would be offering customers a uniform flying experience.

These are "two airlines with very different service formats are being integrated into one airline. It is going to be a hotchpotch of service formats, cabin formats, branding, and customer experience. It will involve learning and unlearning, and such a process has rarely worked with airlines and is seldom effective," said Mr Martin.

Still, many believe Vistara had to go − now or some years later.

A legacy brand like Air India, with strong global recognition and 'India' imprinted in its identity, wouldn't have allowed a smaller, more premium subsidiary to overshadow its revival process.

Financially too, it makes little sense for the Tatas to have two loss-making entities compete with one another.

The combined strength of Vistara and Air India could also place the Tatas in a much better position to compete with market leader Indigo.

The unified Air India group (including Air India Express, which completed its merger with the former Air Asia India in October) "will be bigger and better with a fleet size of nearly 300 aircraft, an expanded network and a stronger workforce", an Air India spokesperson said.

"Getting done with the merger means that Air India grows overnight, and the two teams start cooperating instead of competing. There will never be one right day to merge. Somewhere, a line had to be drawn," said Mr Awtaney.

But for many Vistara loyalists, its demise leaves a void in India's skies for a premium, full-service carrier - marking the third such gap after the collapse of Kingfisher Airlines and Jet Airways.

It's still too early to say if Air India, which often ranks at the bottom of airline surveys, can successfully fill that void.

https://www.bbc.com/news/articles/c5ygp1w5eq7o

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HVAC Contractors Need to Adapt to Repair Market

Repair or replace is a question homeowners often need to answer, and it greatly impacts an HVAC contractor's business. During COVID, the residential HVAC industry saw a replacement market boom. But in 2023 and now the beginning of 2024, there has been a shift to a repair market that HVAC contractors need to be aware of as they run their businesses.

According to numbers from the Air-Conditioning, Heating and Refrigeration Institute (AHRI), shipments of unitary air conditioners and heat pumps were down 16.7% in 2023, compared to 2022. Gas furnaces were down 23%.

"The replacement market is performing worse when you strip out new construction," said industry leader Matt Michel. "Housing starts were down around 5%, according to the St. Louis Federal Reserve, so the replacement market for unitary air conditioners and heat pumps was down in the low 20s."

Distributors are seeing similar numbers, according to the Heating, Air-conditioning, & Refrigeration Distributors International (HARDI).

"We definitely are seeing a shift here. And that shift has actually been visible for some time," said Tim Fisher, HARDI director of market intelligence.

HARDI receives data from FieldEdge on the invoice and quote trends exhibited by their users. Invoices reflect work that has been completed, whereas quotes reflect potential future work and are most often provided for new system installations. HARDI has found that, over time, the ratio of new invoices to new quotes is a useful indicator of whether a market is trending more toward repair than replace and vice versa.

The numbers show the annual growth rate bottomed out in the spring of 2022 but remained negative through most of the year, indicating that replacement trends were broadly higher in 2022 than in 2021. That figure increased through 2023, peaking in May but generally remaining positive for most of the year. While the three-month growth rate has slowed in recent months — an encouraging sign — they don't expect much of a negative drift in 2024, meaning that repair versus replace trends will broadly remain similar to where they were in 2023.

So why is this change happening? It can't be attributed to any single factor but rather a combination of items. Certainly, higher costs of both HVAC systems and housing in general play a role.

"Adapting to the economy is something contractors need to do. We can't just assume people are going to reach into their pocket and replace," said ACCA CEO Bart James. "Contractors need to help customers get through the current need. People are slowing down on theirspending. People are worried about what is coming and how they are preparing for it. Wages and other things are not keeping up with how fast prices are going up."

James said reading the numbers shows there is a shift in the home improvement market.

"Just look at the Walmart and Home Depot quarterly projections. Walmart did well with more visits but had smaller purchases, while Home Depot did not hit their numbers. That tells you that people are handling investments into housing differently. That will catch up with HVAC, too. "Contractors need to prepare by making investments in their team to meet the needs of the customer. And that need is not always a replacement option but also can be a repair option," James continued.

The sluggish home resale market is another reason for the shift towards a repair market. "Home improvement spending, in aggregate, tends to follow existing home sales totals nationally," Fisher said. "People invest more in their homes prior to selling to boost its value, and new homeowners spend more in their first year of moving than homeowners who stay put. This has major implications for HVAC replacement demand, which, historically, peaks when existing home sales are at their highest and falls off when existing home sales decline.

"Both the 3-month and 12-month growth rates bottomed out earlier in 2023, and while still negative, have slowed significantly," he continued. "We believe that home sale totals are at or nearing their trough, and over the duration of 2024 should steadily improve and finish at or ahead of 2023 totals."

The final reason is the cyclical nature of HVAC. It reflects the shipment cliff from 15 years ago, when the industry contracted 40% after peak shipments in 2005. Contractors cannot replace what was never installed.

How do HVAC contractors deal with this shift? Michel believes they should embrace the repair market.

"The money is better in replacements," he said. "It always has been and always will be. However, margins are better in service. For the next couple of years, anyway, contractors should focus on building up their service business and making money on it."

Since service involves more labor, and labor carries more overhead than equipment and material, keeping a close watch on overhead expenses is a must.

"Contractors need to build the service base, watch your marketing expenses drop, and down the road, the replacement margins and close rates to a satisfied service base will rise," Michel said. "Once we get past the shipment cliff, the replacement market will begin a decade-long run with every year being better than the year before it. We know this because it's what happened in the past, and when it comes to replacements, the past truly is a prologue."

Contractors in most parts of the country are already feeling the pinch of a slower market, and their experiences in 2024 are unlikely to be much different from their experiences in 2023 though rebounds from themilder temperatures we saw during peak months last year would go a long way in improving demand in 2024.

HARDI advises contractors should consider the following six tactics in '24:

• 
  
• •Offer financing options: Any homeowner considering a new system is likely going to feel some sticker shock if it's been a few years since they
• last bought a system. Financing a new system helps to alleviate that shock, making the big sticker prices much more palatable monthly payments.
• •Protect margins: Work to ensure that your pricing for jobs is consistent with market trends, and attempt to pass through as much of the higher system costs as possible. Likewise, now is a critical time to manage operating expenses closely. Together, good cost  management and smart pricing can help protect business margins in 2024.
• •Educate homeowners: Many homeowners may not fully understand the long-term benefits of replacing their HVAC system versus frequent repairs. Offer educational materials, such as blog posts, videos, or pamphlets, explaining the advantages of a new system 
• in terms of energy efficiency, lower maintenance costs, and improved IAQ. Also, be sure to make clear to your customers which incentives they may qualify for through IRA or other state-level rebate/incentive programs. 
• •Focus on value proposition: Emphasize the value proposition of a new HVAC system, highlighting its reliability, longevity, and performance. Help homeowners understand that investing in a replacement now can save  them money and hassle in the long run.
• •Offer maintenance packages: Create maintenance packages that bundle regular servicing with discounts on repairs or replacements. This can encourage homeowners to invest in preventive maintenance and build a long-term relationship with your company. 
• •Diversify services: Explore diversifying your services beyond just HVAC installations and repairs. For example, you could offer IAQ assessments, smart thermostat installations, or energy audits to provide additional value to homeowners and generate new revenue streams.

https://www.achrnews.com/articles/154324-hvac-contractors-need-to-ad apt-to-repair-market

Brazil must legalise drugs – its existing policy just destroys lives

For decades, guns and imprisonment have been the hallmarks of Brazil’s war against the drug trafficking. But the only way to beat the gangs is to stop creating criminals, says a top Brazilian judge

“The war raging in Rocinha, Latin America’s largest favela, has already been lost. Rooted in a dispute between gangs for control of drug trafficking, it has disrupted the daily life of the community in Rio de Janeiro since mid-September. With the sound of shots coming from all sides, schools and shops are constantly forced to close. Recently, a stray bullet killed a Spanish tourist. The war is not the only thing being lost.

For decades, Brazil has had the same drug policy approach. Police, weapons and numerous arrests. It does not take an expert to conclude the obvious: the strategy has failed. Drug trafficking and consumption have only increased. […]

In a case still before the Brazilian supreme court, I voted for decriminalising the possession of marijuana for private consumption. […]

Drugs are an issue that has a profound impact on the criminal justice system, and it is legitimate for the supreme court to participate in the public debate. So here are the reasons for my views.

First, drugs are bad and it is therefore the role of the state and society to discourage consumption, treat dependents and repress trafficking. The rationale behind legalisation is rooted in the belief that it will help in achieving these goals.

Second, the war on drugs has failed. Since the 1970s, under the influence and leadership of the US, the world has tackled this problem with the use of police forces, armies, and armaments. The tragic reality is that 40 years, billions of dollars, hundreds of thousands of prisoners and thousands of deaths later, things are worse. At least in countries like Brazil.

Third, as the American economist Milton Friedman argued, the only result of criminalisation is ensuring the trafficker’s monopoly.

With these points in mind, what would legalisation achieve?

In most countries in North America and Europe, the greatest concern of the authorities is users and the impact drugs have on their lives and on society. These are all important considerations. In Brazil, however, the principal focus must be ending the dominance drug dealers exercise over poor communities. Gangs have become the main political and economic power in thousands of modest neighbourhoods in Brazil. This scenario prevents a family of honest and hard-working people from educating their children away from the influence of criminal factions, who intimidate, co-opt and exercise an unfair advantage over any lawful activity. Crucially, this power of trafficking comes from illegality.

Another benefit of legalisation would be to prevent the mass incarceration of impoverished young people with no criminal record who are arrested for trafficking because they are caught in possession of negligible amounts of marijuana. A third of detainees in Brazil are imprisoned for drug trafficking. Once arrested, young prisoners will have to join one of the factions that control the penitentiaries – and on that day, they become dangerous.

[…]

We cannot be certain that a progressive and cautious policy of decriminalisation and legalisation will be successful. What we can affirm is that the existing policy of criminalisation has failed. We must take chances; otherwise, we risk simply accepting a terrible situation. As the Brazilian navigator Amyr Klink said: “The worst shipwreck is not setting off at all.”

Disponível em:<https://www.theguardian.com/global-development/2017/nov/15/brazil-must-legalise-drugs-existing-policy-destroys-lives-luis-roberto-barroso-supreme-court-judge>. Acesso em: 14 nov. 2017.