What are the hidden expenses in your flight ticket

Have you ever taken a close look at your flight ticket fare? If yes, you would have likely come across different charges such as user development fee (UDF), passenger service fee, aviation security fee. 

Here, we simplify some of these terms how the money you paid is being utilized for.

UDF: This is the most common charge in the flight tariff. This is charged from passengers to fund the modernization of airports. This fee depends on the airport that you embark on your journey from. For example, the UDF charge for a passenger starting the journey from Delhi airport is 63, while it is 142 for passengers starting from Mumbai.

Airline Fuel Charge: To pass on the higher fuel costs to the customers, airlines may also charge ‘airline fuel charge’ or the ‘fuel surcharge’ from passengers, in addition to the base fare. For example, some of the international airlines have started charging fuel surcharge costs from April 2021 to reflect the rising fuel costs.

CUTE fee: This is also called the passenger handling fee (PHF). This is charged for providing services at the airport. This also depends on the airport you are departing from ranges between 50 100 per passenger.

RCS Fee: To fund regional air connectivity to unserved / underserved areas, the government introduced  the Regional Connectivity Scheme (RCS). The RCS fee is levied on passengers departing from most airports. The fee of 50 charged from every passenger is used for the development of airports covered under the scheme.

Passenger service fee (PSF): This fee is levied to meet the expenditure on airport security passenger facilities at airports. This is charged only for passengers departing from specific airports such as Kochi, Delhi, Bangalore would be in the range of 83 – 236.

Passenger security fee: Passenger security fee or aviation security fee is used to pay for the deployment of CISF (Central Industrial Security Force) personnel for providing security at airports. The fee of 236 per passenger is collected at all airports.

Note that these charges are in addition to the base fare the internet handling fee that the platform you are using to book the ticket charges further taxes.

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‘Post-correction, price value gap for banks is favourable’

Have market valuations turned attractive now? 

Yes, the correction of about 15% has turned market valuations attractive. This correction is primarily led by the oil commodities shock caused by the ongoing Russia-Ukraine conflict, which will have a negative impact on India’s current account, inflation, consumer demand. While these would cause demand/margin issues erratic earnings in FY23, FY24 earnings per share (EPS) is resilient as it’s driven by a bottom-up revival in a few large sectors like financials, IT, telecom, metals. 

Overall, if we pivot to 1000 + EPS for Nifty in FY24, the same is broadly intact despite recent developments. Internal earnings divergence would be high with upgrades for exporters commodity companies, consumer sectors will see a downgrade, while for financials it will be neutral. Overall, markets are now trading at about 15-16x FY24 EPS, which we believe is reasonable given that post the ongoing headwinds, the long-term growth drivers are intact. 

Among large caps, mid small caps, is there any one segment better than the other? 

We would prefer large caps for multiple reasons. Firstly, the valuation is similar, generally large well-managed companies have a better ability to withstongoing shocks. Secondly, in India, the long-term growth potential is intact for large caps. In addition, the ongoing consolidation across businesses is in favour of strong large companies. Lastly, we have seen that a large part of the recent foreign institutional investor (FII) selling has been skewed in large-caps thus, is a technical factor that is leading to quotation, rather than permanent loss. Overall, we continue to recommend investors to allocate about 70-75% of exposure in large caps the remaining in the mid-caps. 

With Russia’s removal from the MSCI other indices, will a lot of money come to India because  it will get a proportionately higher weight in indices? 

There are many moving parts as of now we need to sequence the importance of the headwinds. We believe the most important issue is where oil prices settle in the medium term, followed by the extent of a global increase in interest rates. Flows generally determine the near-term movement in markets, are not necessarily driven by medium to long-term fundamentals. While not related, what could be meaningful would be if there is any progress on the inclusion of government securities in global indices, as it could lead to sustainable flows on the fixed income side, help mitigate current account challenges. 

What is your view on new age tech companies? 

Mirae bought into some IPO they have come off new prices since then. 

We believe that some of the new-age companies could create wealth in the long-term depending on the strength of the business model, competitive positioning, execution. These businesses need to be looked at from a long-term lens, as they are still in the investment phase. As regards our exposure, it is calibrated risk-adjusted at about 1-1.5% of AUM spread across a few names. For us, any business (new tech or old economy), our decision to buy, hold or sell will be driven by regular dispassionate assessment of long-term assumptions. If there is something wrong in terms of our assessment or the business itself not doing well or a combination of both, we would take a call accordingly. For now, while stocks have corrected, the underlying markers for business stability are intact. 

On anchor allocation IPOs, does it confer an advantage to mutual funds to come in that way rather than afterwards in the secondary market? Is it that you are able to get a higher allotment?

First of all, whether IPO of secondary market transactions, the template to invest does not change. In this context, there is no specific advantage from a price-value perspective. You are right that during anchor allocation, there is a liquidity or execution advantage to all large funds to build a position. 

In an environment of high oil prices, which sectors are best leads to endure thrive? 

The best pocket is which has corrected only because of market sentiments, the underlying business is broadly neutral to positive. Pharma, IT, manufacturing exports will fall in the category. An important point in stock investment is that sectors that are materially impacted by current headwinds could be good stock provided the fall in valuations more than factor the near-term impairment, the long-term thesis remain intact. Few consumer businesses would fall in this segment. Overall, we should look at strong companies as they are better positioned to weather the oil crisis. It is equally important to keep valuation discipline as once the oil crisis settles, the end of the low-interest rate era would need to be considered particularly in a few companies whose P/E multiple expanded owning to earlier low-interest rate regime. 

How bad is the oil shock for banks? 

All else being the same, high-interest rates is not negative for banks as they have access to stable low-cost current account savings accounts (CASA) deposits, asset repricing is faster than liabilities. An important positive for banks is that the risk of non-performing assets (NPAs) is low as the system is significantly cleansed.  In our opinion, we would see stable earnings for banks.

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Balfour Beatty boosts dividend after profits exceed forecasts

Balfour Beatty shareholders set for bumper payout as the infrastructure group hikes dividends boosts its buyback scheme to £150m

  • The firm has upped its share buyback programme for this year by another £50m
  • Hong Kong joint venture Gammon saw the value of its order book jump by 24% 
  • Balfour Beatty is currently working on the Hinkley Point C HS2 projects 

Balfour Beatty shareholders are set to cash in on a six-fold hike in dividends after the group’s annual operating profits surpassed expectations.

The infrastructure business has recommended a 9p per share dividend, equivalent to around £57million, compared to just 1.5p in the prior year when the outbreak of Covid-19 caused it to temporarily suspend investor payouts.

Balfour Beatty will also up its share buyback programme for this year by another £50million, having announced back in December that it would purchase at least £100million of its own shares. 

Acquisition: Balfour Beatty will up its share buyback scheme for 2022 by another £50million, having declared in December that it would purchase at least £100million of its own shares

The company reported a significant recovery in demfor building projects in Britain, which helped underlying earnings nearly quadruple from 2020 to £197million, even though its overall revenue declined by over £300million.

Balfour Beatty said this was primarily due to a drop in trade at its US construction arm its Hong Kong-based joint venture Gammon offsetting higher revenues at its UK construction division.

Among the projects that the firm is currently working on are the high-speed railway line HS2 Hinkley Point C nuclear power plant, where it recently completed an outfall tunnel for the scheme’s cooling water system. 

In addition, the FTSE 250 multinational finished an upgrade of the A19 road earlier than planned handed over the Woolwich Whitechapel stations to Crossrail ahead of the Elizabeth Line’s planned opening sometime this year. 

While is British construction business returned to profit in the second half of the year, it still made a slight underlying loss of £2million.

But this was down from an underlying loss of £26million in 2020, which it blamed on its withdrawal from three Central London private sector property projects.

By comparison, Balfour Beatty’s support services division disclosed its operating earnings more than doubled to just over £100million, thanks to its decision to exit the water gas industries.

Major schemes: Among the projects Balfour Beatty is currently working on include the Hinkley Point C nuclear power plant (pictured) high-speed railway line HS2

Major schemes: Among the projects Balfour Beatty is currently working on include the Hinkley Point C nuclear power plant (pictured) high-speed railway line HS2

A further bonus came from completing its work on the Eleclink project, an electrical interconnector running through the Channel Tunnel designed to help provide more renewable energy to homes in the UK France.  

Its US construction segment also saw underlying earnings almost double to £51million, while Gammon’s profits remained flat at £30million, both of which were in line with pre-pandemic levels.

Meanwhile, the value of Gammon’s order book jumped by 24 per cent after gaining contracts to build seven new residential buildings an office tower in Hong Kong, as well as tunnels a station on Singapore’s Mass Rapid Transit system.  

Chief executive Leo Quinn said: ‘Balfour Beatty emerges from the last two years with capabilities intact a higher quality order book. Together these provide the visibility to deliver profitable managed growth sustainable cash generation.

‘With a transformed portfolio focused on favourable infrastructure markets across our chosen geographies our sector-leading balance sheet, we are confident of delivering significant future returns to shareholders.’ 

Looking ahead, the company is hoping to reap some considerable benefit from the successful passage of the $1.2trillion Infrastructure Investment Jobs Act that was signed into law by US President Joe Biden in November.

The legislation includes $550billion of new spending, with around 20 per cent destined for building repairing bridges roads, $66billion for rail projects, $25billion for upgrading airports. 

Balfour Beatty shares rose 5 per cent to 243.4p on Thursday, making it one of the top five risers on the FTSE 250 Index. However, their value has declined by around a fifth over the last 12 months. 


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Number of new-build homes in Engldrops, data shows

The number of homes being built in Englfell in the last three months of 2021, piling further pressure on the nation’s housing shortage. 

Fresh figures from the Office for National Statistics the Department for Levelling Up, Housing Communities show the number of dwellings where building work commenced on site during the period was down 3 per cent on the previous quarter. 

Based on building control inspections, there were 41,600 new-builds underway in October to December 2021, a 3 per cent decline on the same point a year earlier. 

Stats: The number of homes being built in Englfell in the last three months of 2021

The number of completed new-build properties was 41,330 over the three months, which is 4 per cent lower when compared to the previous quarter, 11 per lower against the same quarter a year ago. 

Toby Fields, a director at Langley House Mortgages, said the data was ‘damning’ a ‘huge sucker punch for buyers’.

Concerns are mounting that the lack of new-builds being completed is continuing to drive up property prices hampering the Government’s ‘levelling up agenda’. 

While the number of new homes being built in Englhas been dwindling, fresh listings at estate agents for all types of properties have also remained stubbornly low over the past couple of years; but they have, in some locations, started to show signs of improvement in the last few weeks. 

In the most sought after locations, homes are being snapped up rapidly after being listed, with only the most organised buyers in with a chance of bagging the property of their dreams. 

Mr Fields, said: ‘The lack of supply of houses is causing astounding competition for each property on the market therefore driving prices up. 

Data: A chart showing seasonally adjusted trends in quarterly building control reported new build dwelling starts completions in England

Data: A chart showing seasonally adjusted trends in quarterly building control reported new build dwelling starts completions in England

‘We are hearing from local estate agents that there are at least 25 buyers per property buyers are desperate to purchase, offering hugely over the asking price, some without even viewing the property. 

‘With more more deposits coming from the Bank of Mum Dad, some buyers will have much more leeway if a higher deposit is needed, again allowing more competition higher prices. 

‘Until we are building more houses, I cannot see property prices plateauing.’

The Government said there were 216,490 net additional dwellings between April 2020 March 2021, marking a 11 per cent decrease on the number of net additional dwellings constructed the year before.

In total there were 61,119 new dwelling EPCs lodged in Englin the quarter ending December 2021, representing a 6 per cent drop against the same period a year ago.

In the year to December 2021 new dwelling EPCs totalled 243,780, marking an increase of 13 per cent on the year to December 2020. 

The report said there was an net increase of 201,850 in the number of domestic properties with a council tax bin Englbetween April 2020 March 2021. But, this hike was 17 per cent lower than that seen in the same period the year before. 

New-builds: Index of building control reported new build dwelling starts completions, quarterly (seasonally adjusted), for England

New-builds: Index of building control reported new build dwelling starts completions, quarterly (seasonally adjusted), for England

On the new-build figures, Lewis Shaw, founder mortgage expert at Shaw Financial Services said: ‘This data perfectly illustrates why our property market is defying all expectations with double digit house price growth. 

‘Our property market is firing on all cylinders purely because of a lack of supply causing an imbalance forcing prices higher, not because we’ve got a growing economy. 

‘The reality is that house prices will likely keep rising until we fix the structural issue build more quality homes faster. 

‘It will be fascinating if house prices continue to rise as we enter our spring, summer winter of discontent the seemingly inevitable recession.’

Trends: : Trends in building control reported estimates of starts completions in Englshowing 12 month rolling totals

Trends: : Trends in building control reported estimates of starts completions in Englshowing 12 month rolling totals

Imran Hussain, a director at Harmony Financial Services, said: ‘This report highlights exactly why house prices remain stronger than Thor’s hammer right now. 

‘As long as demcontinues to outstrip supply until the planning process is looked at in detail to speed up the process for small large developers, this massive imbalance will continue.’

In his election manifesto, Boris Johnson pledged to build 300,000 new houses a year across the country by the mid-2020s. Recent Government data also suggests there are around 238,306 properties that have been sitting empty for more than six months in the UK. 

In total, however, the number of vacant properties stands at over 600,000 across the country, according to the figures. 

Today’s report from the ONS the Government says annual new build dwelling completions in Englgenerally increased from 2003 to 2004 until the end of 2007.

It added: ‘Completions then gradually fell, reaching a low of 106,720 in the year ending December 2010. 

‘Thereafter completions increased gradually to 177,880 in the year ending December 2019. Completions then dropped steeply in Spring 2020 due to the restrictions introduced during the Covid-19 pandemic, recovered sharply to a peak of 183,430 in the year ending June 2021, have since fallen slightly to 175,390 in the year ending December 2021.’

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U.S. inflation jumped 7.9% this past year — before oil prices spiked – National

Propelled by surging costs for gas, food housing, consumer inflation jumped 7.9 per cent over the past year, the sharpest spike since 1982 likely only a harbinger of even higher prices to come.

The increase reported Thursday by the Labor Department reflected the 12 months ending in February didn’t include most of the oil gas price increases that followed Russia’s invasion of Ukraine on Feb. 24. Since then, average gas prices nationally have jumped about 62 cents a gallon to $4.32, according to AAA.

Even before the war further accelerated price increases, robust consumer spending, solid pay raises persistent supply shortages had sent U.S. inflation to its highest level in four decades. What’s more, housing costs, which make up about a third of the government’s consumer price index, have risen sharply, a trend that’s unlikely to reverse anytime soon.

Read more:

Canadian dollar no longer rising with oil prices, adding to inflation

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The government’s report Thursday also showed that inflation rose 0.8% from January to February, up from the 0.6 per cent increase from December to January.

For most Americans, inflation is running far ahead of the pay raises that many have received in the past year, making it harder for them to afford necessities like food, gas rent. As a consequence, inflation has become the top political threat to President Joe Biden congressional Democrats as the midterm elections draw closer. Small business people say in surveys that it’s their primary economic concern, too.

Seeking to stem the inflation surge, the Federal Reserve is set to raise interest rates several times this year beginning with a quarter-point hike next week. The Fed faces a delicate challenge, though: If it tightens credit too aggressively this year, it risks undercutting the economy possibly triggering a recession.

From January to February, nearly every category of goods services got pricier. Grocery costs jumped 1.4 per cent, the sharpest one-month increase since 1990, other than during a pandemic-induced price surge two years ago. The cost of fruits vegetables rose 2.3 per cent, the largest monthly increase since 2010. Gas prices spiked 6.6 per cent, clothing 0.7 per cent.

Click to play video: 'Poll finds Canadians cutting back on spending in face of rising inflation'

Poll finds Canadians cutting back on spending in face of rising inflation

Poll finds Canadians cutting back on spending in face of rising inflation – Feb 28, 2022

For the 12 months ending in February, grocery prices leapt 8.6%, the biggest year-over-year increase since 1981, the government said. Gas prices are up a whopping 38%. And housing costs have risen 4.7 per cent, the largest yearly jump since 1991.

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Energy prices, which soared after Russia’s invasion of Ukraine, jumped again this week after Biden said the United States would bar oil imports from Russia. Oil prices did retreat Wednesday on reports that the United Arab Emirates will urge fellow OPEC members to boost production. U.S. oil was down 12 per cent to $108.70 a barrel, though still up from about $90 before Russia’s invasion.

Yet energy markets have been so volatile that it’s impossible to know if the decline will stick. If Europe were to join the U.S. the United Kingdom bar Russian oil imports, analysts estimate that prices could soar as high as $160 a barrel.

The economic consequences of Russia’s war against Ukraine have upended a broad assumption among many economists at the Fed: That inflation would begin to ease this spring because prices rose so much in March April of 2021 that comparisons to a year ago would show declines.

Should gas prices remain near their current levels, Eric Winograd, senior economist at asset manager AllianceBernstein, estimates that inflation could reach as high as 9 per cent in March or April.

Read more:

Bank of Canada raises key interest rate, but inflation could prove ‘difficult to tame’

The cost of wheat, corn, cooking oils such metals as aluminum nickel have also soared since the invasion. Ukraine Russia are leading exporters of those commodities.

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Even before Russia’s invasion, inflation was not only rising sharply but also broadening into additional sectors of the economy. Many prices have jumped over the past year because heavy demhas run into short supplies of items like autos, building materials household goods.

But even for some services unaffected by the pandemic, like rents, costs are also surging at their fastest pace in decades. Steady job growth high home prices are encouraging more people to move into apartments, elevating rental costs by the most in two decades. Apartment vacancy rates have reached their lowest level since 1984.

Click to play video: 'Inflation rate likely to get worse: expert'

Inflation rate likely to get worse: expert

Inflation rate likely to get worse: expert – Feb 16, 2022

In the final three months of last year, wages salaries jumped 4.5 per cent, the sharpest such increase in at least 20 years. Those pay raises have, in turn, led many companies to raise prices to offset their higher labour costs.

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Soaring energy costs pose a particularly difficult challenge for the Fed. Higher gas prices tend to both accelerate inflation weaken economic growth. That’s because as their paychecks are eroded at the gas pump, consumers typically spend less in other ways.

That pattern is akin to the “stagflation” dynamic that made the economy of the 1970s miserable for many Americans. Most economists, though, say they think the U.S. economy is growing strongly enough that another recession is unlikely, even with higher inflation.

© 2022 The Canadian Press

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