Ch febuary 2006 by Newsline

Cover FEB 06.qxd

2/14/2006

2:01 PM

Page 1

February 2006

Rs 60

•THE NEW MR INDIAN •AMBIKA'S IDIOM •THE FIRST BIG MERGER •PRAFUL’S DINNER FOR EMIRATES PL US ALL OUR REGUL AR FEATURES

It was an eyeball-toeyeball confrontation between the Left and the government; it was the communists who finally blinked

ITDC AD.qxd

2/9/2006

11:07 AM

Page 1

Publisher_note_p_1.qxd

2/15/2006

2:51 PM

Page 1

EDITOR’S NOTE

Can we be friends?

ebruary 5 was a Sunday, a day when the Airports Authority of India (AAI) went to work overtime to issue the letter of intent to the two successful bidders of Delhi and Mumbai airports— GMR-Fraport and GKV-ACSA, respectively. The decision to open shop and complete the preliminary paperwork on a holiday was taken within hours of the final face saving meeting between Civil Aviation Minister Praful Patel and the Left-led union leaders of the airport employees. Maybe the desire to work even on Sabbath was a reflection of the Ministry of Civil Aviation’s desire to modernise the country’s airport infrastructure even if it meant foregoing a holiday. Or maybe it was prompted by news reports that one of the losers would go to the courts. Or maybe the simple idea was to make up for all the lost time. Whatever be the case, one thing that emerged clearly during the entire privatisation process and the subsequent strike and its aftermath was the hard fact that the Civil Aviation Ministry and Praful Patel were the ones calling the shots. Which is how it should be. After all, it’s Praful’s vision statement for a modern aviation system that Rajiv Gandhi Bhawan officials are working Sundays and every other day to translate it into reality. It’s the civil servants in the ministry who laid out the road map for the entire process. If indeed there were deviations or rethinks at crucial stages of the process, it came from the ministry. In that sense, if the ministry should take the credit, it should also be prepared to take the flak. But look at the irony of the whole situation. When the employees went on strike and geharoed Rajiv Gandhi Bhawan, it was the AAI Chairman P. Ramalingam who had to go out and pacify them. The ministry was nowhere in the picture. It was busy getting ready for the EGoM. But when it was time for the final handshakes, the ministry was in the loop.

CRUISING HEIGHTS February 2006

The affidavit filed in the Reliance case came on behalf of AAI, which speaks about a variety of issues that it had never dealt with. Frankly, these were issues that a division of AAI, called Key Infrastructure Development (KID), which reported directly to the civil servants, had been concerned with. No doubt, KID is part of AAI. The fact is it enjoys an Article 370 relationship with its parent. The fact is few at AAI knew what was happening on the whole issue, barring what they were told by the ministry. To stress that the airport employees and AAI is completely out of sync with the public mood on the modernisation issue would be to stress the obvious. Our gateway airports are in a shambles and no one is willing to believe that AAI can now spruce them up. It has done a great job in opening up the country by developing and managing airports all across the subcontinent. That’s its core competency and mandate. The argument that it has the money and, therefore, it should get the opportunity, is spurious, considering no one else ever got an opportunity. For fifty years, it has had enough chances to prove its mettle. Sadly, it made a hash of it. That over a hundred airports worldwide have gone the same route in the last 24 months should give it enough food for thought. But AAI has a point when it asks for fair treatment from its parent ministry. And for the freedom to innovate and evolve. It’s typical of our system to fire from someone else’s shoulder. That’s what’s happening in this case. The Ministry of Civil Aviation has taken a landmark decision and it should have the courage to stand up and be counted. Hiding in anonymity behind AAI can have disastrous consequences. It’s a fatal combination really: a disenchanted and distressed lot on one side and a gung-ho devil-may-care group on the other. Praful Patel has spoken unequivocally about the welfare of the employees. It’s a good gesture. Maybe he needs to use some more of the healing balm.

Off the cuff

Contents Page 2-3.qxd

2/15/2006

5:08 PM

Bhawan vs Bungalow There is a great advantage in having a ministerial bungalow at one’s disposal. One can conduct one’s business from home without feeling cramped or out of place. Ask Praful Patel and he will tell you how easy it was to make that life went on as usual without a hiccup when the Left-lead airport unions gathered around Rajiv Gandhi Bhawan, making life miserable for all and sundry. Praful is perhaps not a very good example. By and large, he attends office regularly, keeps a spotlessly clean table and has an efficient secretariat that ticks like clockwork. There are others who use office simply for official appointments or for a round of gossip with journo friends. Some simply use it as an extension of their home and do everything excepting what they ought to do in the office. But it must be said that working out of Rajiv Gandhi Bhawan is a lot easier on almost the entire spectrum of Civil Aviation officials. There was a time when the Union Minister for Civil Aviation functioned out of Transport Bhawan (stone’s throw from Parliament), the Secretary was located at Patel Bhawan and the rest of the staff were peppered all over town. Now each time Praful wants to summon an official, he simply has to walk across the corridor from another wing of Rajiv Gandhi Bhawan. Five minutes at the most, if you please. The sole exception being the DGCA, which is bang on the other side of the road. In a way, the airport employees must be thankful that the Civil Aviation edifice is at one place. Imagine the number of locations they would been forced to cover as part of their agitation. And Transport Bhawan, they couldn’t have got anywhere near that building, thanks to its proximity to Sansad Bhawan. In a sense, the modernisation of the Civil Aviation Ministry has been to their favour. It’s another matter that they are glum at the developments on the airport front.

Page 2

contents PRIVATISE OR PERISH p24

That is Civil Aviation Minister Praful Patel’s mantra as he faces mounting opposition to his modernisation dreams for Indian airports. A special report on the behind-the-scene drama in the airport-privatisation process.

DREAM DEAL?

p10

Is the Jet-Sahara marriage a dream deal? Has Naresh Goel done well to buy Air Sahara in an all-cash deal? An exclusive report. CRUISING HEIGHTS February 2006

Contents Page 2-3.qxd

2/14/2006

2:19 PM

Page 3

ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS TRAVEL & TOURISM PROFILES NEWS DIGEST

SNIPPETS

p42

Air Deccan files its IPO plans.

CRUISING HEIGHTS K. SRINIVASAN

NEWS DIGEST OFF THE RECORD

p32

Why has Malaysian Airline ‘surcharged’ the India route and not the China one?

Editor

R. KRISHNAN Consulting Editor

ANAMIKA VERMA Editorial Coordinator

What did the PM say to Captain Chandiok on his way to Guwahati?

DUSHYANT PARASHAR Creative Director

BHART BHARDWAJ Art Director

RAJESH KUMAR BHOLA Designer

YEH HAI DUNIYA

p16

Bellary is India’s chopper hub; there re more helicopters than limousines in this town!

Tourism Digest

p40

Brazil wakes up to tourism potential

Back page

p48

Dinesh Keskar finally looks relaxed and at ease.

Aviation Digest p22 If you want freshly cooked rice, you can now get it at 30,000 feet!

RAJIV KUMAR SINGH Gen. Manager (Admn.) Editorial & Marketing office: D-11, Nizamuddin (East) New Delhi-110 014 Tel.: 41825251/50, Fax: 41825250 All information in CRUISING HEIGHTS is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Published and edited by K. Srinivasan for and on behalf of Newsline Publications Pvt Ltd. 4C Pocket IV Mayur Vihar Phase 1, Delhi 110091 and printed by K. Srinivasan at Kaveri Print Process, 114, Patparganj Industrial Area, Delhi. Vol 1 No 1

CRUISING HEIGHTS February 2006

“

Periscope.qxd

2/14/2006

2:43 PM

Page 2

PERISCOPE

Political perks “It's

wrong, but it’s not capital murder either. It does elevate public officials above the rest of the citizenry. I can't understand why any politician receives a perk like this [free parking] for personal travel.” ANTHONY MUSCI Chairman of the watchdog group, Common Cause of Utah, USA On why politicians have free parking privileges at the airport

Big is big “The

United States is the world's largest single travel and tourism economy, making it a fitting place for us to frame the most significant issues facing our industry.”

LETTERS TO EDITOR

The Special Report, The Gulf War, in the January 2006 issue made a very interesting read. Hats off to the writer for analysing a complex situation in a lucid manner. I must appreciate the efforts being put by you to compile and present the magazine. Ratnakar Shah, Vadodara

The candid interviews of Praful Patel, Civil Aviation Minister, and Renuka Chowdhury, Tourism Minister, in the January 2006 issue, were highly informative and gave a deep insight into the aviation and tourism sectors. The vision that both of them have for India and the efforts they are putting in to achieve the same are highly laudable. I have no doubt if they continue to remain at the helm of affairs of aviation and tourism, India will be the ‘hottest’ country to visit in future. Mandeep Singh, on e-mail

VINCENT WOLFINGTON WTTC Chairman On choosing Washington for the sixth Global Travel & Tourism Summit,in April.

Paperless Indian! “Indian

has moved a step forward and will offer e-tickets by the end of this year.” ANIL GOYAL Commercial Director, Indian On the airline's move to become fully compliant with IATA's objective of achieving 100 per cent paperless air travel by end 2007

Injecting care “The marketing of India as a

medical tourism destination is done with great care. We cannot have quacks in the gullies.”

The Special report, IATA Diary (January 2006), was very informative and highlighted the actual position unfolding behind those soaring wings. Although I knew that IATA was a major organisation in the aviation industry, I did not know that it touched all aspects of the aviation industry—from asking airports to charges less to helping airlines save a few nautical miles. Ashutosh Sharma, Chandigarh The Tourism Digest column in the January 2006 issue was an interesting assortment of news items. What made it all the more interesting were the accompanying illustrations. It certainly was a nice combination. Ruby Jariwala, Mumbai

All correspondence may be addressed to Editor, D-11, Nizamuddin East (basement) New Delhi - 110 014 OR mail at newslinepublications@rediffmail.com

RENUKA CHOWDHURY Former Tourism Minister On the rise of medical tourism in the country.

Clean the cobwebs “A passion for change and improvement is required to achieve the objective [PIA to be world class airline].” SHAUKAT AZIZ Pakistan Prime Minister On the need to transform PIA into a world-class entity

CRUISING HEIGHTS February 2006

Periscope.qxd

2/14/2006

2:47 PM

Page 3

COLD STATISTICS

Singapore Tourism booms

The air raffic spiral z

AAI handled 7.3 lakh aircraft movements in 2004-05, an increase of 12 per cent over the previous year. Up to 59 million passengers travelled during 2004-05, an increase of 20 per cent over the previous year. Cargo also saw an increase of 22 per cent during the same period.

The tourism sector generated an estimated S $10.8 billion, posting a growth of 10 per cent over 2004. Nearly 8.94 million visitors arrived in 2005, recording an increase of seven per cent over 2004. Total visitor days touched 30.6 million days in 2005, marking an increase of 14 per cent over 2004.

LOOKING GLASS

Midair blues “This is privatisation [of the airports], not modernisation. The government will have to reverse its decision.” BRINDA KARAT, communist Party of India (Marxist) leader “In a democracy it is everybody's right to protest peacefully, but we are hopeful that the situation would not get out of control.” PRIYA RANJAN, ,I&B Minister “We do not want to invoke harsh measures against the employees of Airport

Authority of India. We are talking to them to ensure that there is no disruption of air traffic.” Civil Aviation Secretary AJAY PRASAD on the strike CRUISING HEIGHTS February 2006

Off the record.qxd

2/14/2006

3:44 PM

Page 4

OFF THE RECORD

D.P. Tripathi

Sitaram Yechuri

Prakash Karat

Networker DPT P.K. Mishra

Can we get the numbers? THE MINISTRY of tourism is hiring a consultant to put together a road map that will see the tourism numbers go up to ten million through the next decade. How it hopes to achieve it with the present infrastructure is anybody’s guess. But there is one thing that one must grant Messers Mishra and Kant: indefatigable energy. They have been networking this past month to get some of the taxes lowered an d get the states to also follow suit. The best part is their effort to get the trade bodies to consistently badger the Finance Minister on all these issues. Why, even Ambika Soni had called on Chidambaram within days of her taking over to discuss each of these issues. Quick work indeed.

Ambika’a Plans AMBIKA SONI, the new Union Minister for Tourism and Culture, is on a presentation spree. During the first week in office, the lady has virtually gone through the gamut of activities that involves the Tourism Ministry, including the modernisation and renovation of Hotel Ashok, the revamp plans for Hotel Janpath, the much-vaunted Atithi Devo Bhava that received plenty of flak all around and project Priyadarshini. Those in the know say that several of these projects are likely to get on the back burner, but others, like the renovation and facelift of Ashoka, are sure to go ahead without a hitch. “Mrs Soni knows who is doing what. She knows the background of each person and their connections. So expect some tough decisions, but reasonable ones,” said one insider knowingly.

NATIONALIST CONGRESS Party General Secretary D.P. Tripathi has been an indefatigable campaigner on behalf of Praful Patel. It’s something that the man from Gondia is ever grateful for. The friendship between the two has been as long and abiding as the friendship between Tripathi and the two stalwarts of the Left—Prakash Karat and Sitaram Yechuri. All three learnt the craft of politics in that crucible of communist politics—JNU. Some months back, Praful travelled all the way from Mumbai to Azamgarh to attend the wedding of DPT’s (as he is best known) son and just a few weeks back he was the chief guest at a DPT-organised function in Mumbai,

called ‘Mumbai Debates’. It had Mantriji speak on the future of Indian aviation with former Secretary (and now UPSC member) K. Roy Paul presiding over. The glamour bit was provided by the felicitation of the Indian’s women’s cricket team. But, DPT really came into his own when the communist unions went on strike over the modernisation of Delhi and Mumbai airports. He worked behind the scenes in gently persuading Karat and Yechury to tone down their rhetoric and gently got them to back off the precipice. As one insider summed it up, “He was passing messages to and fro and got both sides to agree to disagree without any long-term damage to the relationship.”

Tourism ahoy GUJARAT CHIEF MINISTER Narendra Modi has an obsession for tourism that has only been beneficial to the state in more than one way. He has declared 2006 as Visit Gujarat Year and has identified several core areas that he wishes to push ahead this year. If it was the Navratri festival that was close to his heart at one time, it is now the kite festival, the ruins of Champaner and the majestic tour of Gujarat. The modernisation of Ahmedabad and the improvement at Surat and Vadodara airports should come as a big fillip for the state’s plans. To top it all, a huge number of flights into the smaller centres have only added to the glamour and glitz that Modi wished to create. Will he manage to make Gujarat Number One in terms of numbers this year? CRUISING HEIGHTS February 2006

Ashwini’s plans ASHWINI KAKKAR, the highprofile Managing Director of Thomas Cook (India), has been in the news for the sale of the company to Dubai Financials Limited. No surprise, considering that the parent company was keen to get rid of the Indian subsidiary. But Kakkar, who helped the deal go through smoothly, is believed to have got a substantial parting gift from DFC, which, according to insiders, runs into several crores. Chairman of the India Chapter of the World Travel and Tourism Council (WTTC) and President of the Travel Agents Association of India (TAAI), Kakkar will now have plenty of time to attend to the outstanding issues that confront Indian tourism. That is, of course, till someone snaps up his expertise and hands him a new company. Meanwhile controversy is brewing that should Kakar head TAAI at all, ask some. After all, they argue, he isn’t in the travel business at the moment. Interesting point this.

SAHARA JET.qxd

2/14/2006

4:16 PM

Page 4

SPECIAL REPORT past few years. The acquisition deal, however, has to be cleared by the regulatory agencies. At stake, as stated earlier, is not just the fleet of 26 aircraft—19 Boeing and seven CRJ—but the parking lots, airport facilities and landing rights on routes that Air Sahara now has as well. With a combined fleet strength of over 80 aircraft Jet Airways as it is gets a 50 per cent market share in passenger traffic. The behemoth made the industry nervous and some of the newer players were indeed worried at the development. But Union Civil Aviation Minister Praful Patel was unfazed. He said that the proposed takeover of Air Sahara by Jet Airways will not lead to any monopoly and recalled in the same breath that Indian Airlines also enjoyed total monopoly for years before the private sector entered the scene. He said the market will play it out and there was no need to worry. Company Affairs Minister Prem Gupta was even quicker to react. He felt that the Air Sahara acquisition by Jet Airways was not likely to trigger any provision of the MRTP Act, and with the aviation sector opening up one would witness more such acquisitions in the near future. The Minister has stated that being large or in a dominant position is not the issue or the problem. The issue may come in for government scrutiny only when the entity indulges in abuse of the dominant position. There are provisions in the MRTP Act to deal with such a situation, should it come to that, he said.

y virtue of the agreement to take over Air Sahara, Jet will acquire 27.6 crore equity shares, with a face value of Rs 10, five crore preferential shares and the group loans. Naresh Goyal has gone on record to state that he would reemploy the flight crew, including pilots, in Jet Airways, based on merit. The brand name of Air Sahara will stand liquidated once the takeover process is complete. In a way Naresh gets readymade Boeing pilots from Air Sahara, which also has a leased fleet of 19 Boeing 737-400, 737-700 and 737-800. But Air Sahara pilots are not amused and have expressed serious apprehension that their seniority will not be protected and they will have to serve under juniors. For instance, will it mean that an Air Sahara commander will serve under a Jet co-pilot? Is it not strange that some months back few Air Sahara pilots migrated to Air India Express, only to quickly return, leaving Air India Express services to the Gulf in a shambles. Now these pilots must be finding that the taste of the medicine they were doling out to others is indeed bitter—their own bosses have left them in the lurch. Not only have they lost an opportunity to fly overseas but also their seniority, unless of

SHARAD PAWAR: Supporter Number One of the Jet Airways chief. When Javed Akhtar turned sixty last year, Sharad attended the party in the company of Praful Patel and Naresh Goyal. That’s how close they are. Supported him to the hilt in the deal. Will help manage external environment.

PRAFUL PATEL: Mantriji scythed all talks of a monopoly by stating that IA was one for decades. Described it as a natural process in the aviation business. Will help manage the internal environment when the DGCA takes up the complex questions of slots, parking rights, etc.

course Naresh Goyal is gracious enough to treat them at par with his own pilots. Does this mean other players—stateowned Air India and Indian, SpiceJet, Go Air, Kingfisher, Air Deccan and smaller ones, like Paramount, Indus Air etc—will be forced to redraw their strategies to survive, especially at a time when the two official carriers are on the verge of acquiring the most modern aircraft fleet, with deliverCRUISING HEIGHTS February 2006

SAHARA JET.qxd

2/14/2006

4:18 PM

Page 5

THE BIG BOYS: Vic Dungca, Member of the board of directors, Naresh Goel, Chairman and Saroj Dutta, Executive Director, Jet Airways, after the board meeting on Jet Airways buying Air Sahara. not fallen. May be competition instinctively brings out strategies for survival. At the same time it has been reported that for Jet funding the takeover of Air Sahara in addition to financing its own fleet-acquisition plan could pose a real challenge. These are really two acquisitions: firstly, the Air Sahara deal with Boeing for acquiring more than a dozen next-gen 737, for which it has reportedly even paid the advance. Jet is also on track to acquire not just the 737, but wide-body 777-300 ER to meet its global plans. Where will the money come from? For starters, Jet Airways board is meeting later in February to decide if it should look at the international markets or combine it with a domestic offering to raise what it has so far officially disclosed: US $800 million, or Rs 3,500 crore, about Rs 1,000 crore more than what it is planning to pay Subroto Roy. In a sense, 2006 will be a watershed year for the aviation business, with others, like Air India, Indian Airlines, Air Deccan and Kingfisher, entering the capital market with their IPOs. Jet’s stock is not ruling as high as it was when the airline came out with its IPO last February.

J PREM GUPTA: The newly promoted Cabinet Minister for Company Affairs has already hinted that there was nothing for his department to examine about the deal. Gupta’s boss Laloo Yadav is also a Naresh fan. Jet started a direct daily service to Patna soon after the UPA was sworn in.

JEH WADIA: Nusli Wadia’s son and head of the new kid on the block-Go Air-has already made plain his unease at the merger and what it means to the other players. But he is still keeping his powder dry. His father is as formidable a networker as Naresh is and could well speak up for his son.

ies due later this year? Perhaps, yes. We are already seeing advertisements by a leading player screaming across the biggest dailies—”Oh, My God” offering unbelievably low fares even on trunk routes. Indian has come out with fares that are nearly 70 per cent lower than the published ones on important sectors. Well it is not known how these airlines are able to offer such low fares when aviation turbine fuel prices have CRUISING HEIGHTS February 2006

et Airways’ third quarter results have already shown a serious drop. Its profit after tax declined by 53 per cent for the quarter ended December 31, 2005, to Rs 61 crore from Rs 129 crore in the corresponding period of 2004. This was despite an increase of 22.35 per cent in net income, at Rs 1,478.25 crore, in the third quarter of 2005 compared with Rs 1,208.24 crore in the same period of 2004. Jet Airways, in an official statement, announced, “We achieved a positive result for the quarter despite industry-wide capacity addition that was far in excess of the demand for growth in the market, higher fuel costs that were not fully mitigated through fare increases and operating losses on our newly launched international routes. However, profitability of our domestic business remains strong with seat factors consistently above 70 per cent.” For the nine-month period—AprilDecember 2005—Jet Airways registered a 13.15 per cent dip in profit after tax, to Rs 224.92 crore, compared with Rs 258.99 crore in the same period of 2004 on a 29.78 per cent increase in net income from operations, to Rs 4,068.43 crore (against Rs 3,134.66 crore). Meanwhile, Jet’s buyout may trigger a change not only in the domestic aviation landscape, but can even impact some of the

SAHARA JET.qxd

2/14/2006

4:19 PM

Page 6

SPECIAL REPORT

The Mallaya Slugfest

THE CIVIL AVIATION MINISTER is a friend his. He is on the Civil Aviation Committee in Parliament and is hugely networked in Delhi. That’s Vijay Mallya for you. But why is it that the king of good times flounders each time he wants a policy decision that helps Kingfisher Air as well. That perhaps has something to do with the extraordinary chemistry that his principal nemesis, Naresh Goyal, shares with not just Praful Patel but with Sharad Pawar as well. He has packed his board with powerful men who can network across the land by just picking up a phone. Lyricist and writer Javed Akhtar is a case in point. There are others like HDFC Chairman Deepak Parekh, who will move heaven and earth to help the Jet Airways chairman. And why not; they believe he has a world-class product that needs to be hugely supported. Parekh, for example, lobbied personally with Jaswant Singh during the NDA rule to let the private carrier fly overseas. But for the elections, the previous government would have announced it. So, Mallya has made up for all this with a ferocious turf war that shows no sign of petering off. His product, according to observers, is top quality. Each time Jet makes a move, he has a ready countermove. When Jet managed to get the Civil Aviation Ministry accede to its request to let the babus fly by Jet, he announced a huge concession for government employees. Those close to him discount rumours that Mallya will lose interest soon after his IPO, make his moolah and exit. “You don’t know him then,” said one confidant, and added, “He loves aviation, it’s a passion with him and his son. He is in this for keeps.” If that’s the bare fact, then the party has just begun. international services out of India. A large domestic base can help Jet take on the bigger competition abroad better. Admittedly these are early days but there are signs of possible polarisation of the market, aviation analysts say. The Jet-Sahara combine, with 50 per cent market share, clearly appears to be one side. The shape and size of the other players may also experience changes as time progresses. In fact, a churn in the startup carrier market cannot be ruled out. And if market sources are to be believed industrial espionage in the domestic aviation space is getting smarter and trickier by the day, since every morsel of advance information may give another competitor an unexpected edge. Meanwhile, an association of start-up carriers is already emerging to espouse their cause. The interests of the other carriers is being championed by Kingfisher chairman and Parliamentarian Vijay Mallya, who has made no bones about his desire to give Jet Airways a run for its money on its home turf (read corporate market). Mallya called for a meeting of various players at his Mumbai

It was decided to form an alliance called Indian Airline Operator’s Association (IAOA). It aims to collectively represent issues. CRUISING HEIGHTS February 2006

residence. Even Air Deccan promoter Capt G.R. Gopinath attended the meeting and signed the minutes. Later Gopinath is reported to have told the press that he did not believe in any alliance that was meant to be ranged against Jet-Sahara and he rather believed in a body, like NASSCOM, to take up industry issues. Mallya, who also hails from Bangalore, expressed surprise at the sudden volte-face by Gopinath and showed newsmen copies of the minutes of the meeting signed by Air Deccan boss. Mallya noted, “It is regrettable that Capt Gopinath has chosen to make insinuations and contradict a memorandum signed by himself that is self-explanatory. Later Gopinath, responding to Mallya, said that he was not opposed to such an alliance but wanted a broader role for such an alliance. As per the minutes of meeting, signed by representatives of all the four airlines—Kingfisher, Go Air, IndiGo and Air Deccan—who met at the Mumbai residence of Mallya on January 17, 2006, it was decided to form an alliance, called Indian Airline Operators’ Association (IAOA). It aims to collectively represent to the government for allotment of overnight parking slots and prime-time departure slots in a transparent manner and on an equitable basis. It sought to avoid conflicting departure slots among airlines, sharing ground support equipment and even sharing excess average seat kilometres (ASKMs) among the airlines. The signatories to the minutes of the meeting were Vijay Mallya, Capt Gopinath, Jeh Wadia and Rahul Bhatia.

hile Indian Airlines has always admitted that Jet is its biggest competitor, Kingfisher is possibly the only player to have come out in the front and declared an open war against Jet Airways even before this mega merger happened. In fact, Kingfisher, unlike Jet Airways, was openly in the race for acquiring Air Sahara. As mentioned earlier, Mallya’s sudden announcement that Kingfisher is not in the fray came days before the Jet-Sahara deal became public. Mallya did say his bid of $300 million plus, and not $550 million as speculated by some newspapers, was the best valuation for Sahara according to his bankers. It’s a different issue that other banking sources said UB Group’s financial consultants advised Mallya against spreading the available resources too thin. Kingfisher has already ordered 20 ATR-72 and 30 Airbus 320 family aircraft. Besides, an earlier order placed during the Paris Air Show binds Kingfisher to buy 15 widebody planes, including A330, A350 and A380, to drive its proposed international foray in 2007-2008. Together, it places a financial burden of $5 billion plus accord-

SAHARA JET.qxd

2/14/2006

4:21 PM

Page 7

ing to list prices. Discounts would reduce the final payout a little. Dropping all pretensions of being a budget airline, which Mallya says was never the airline’s plank, Kingfisher has made it clear that it is fighting for the same, predominantly corporate audience, targeted by Jet Airways. Kingfisher has even made attempts to woo Jet’s loyal band of frequent flyers with attractive fares and other goodies. The success of these aggressive measures can be gauged only with time. To get a larger share of the dollar paying traffic, which accounts for 20-25 per cent of Jet’s revenues, Kingfisher has started building its marketing and distribution network in key international markets. These agents and airline representatives will hard sell Kingfisher to foreigners and NRIs planning on travelling within India. And if this is not enough, Kingfisher has started interlining with international carriers, starting with Air Arabia. It expects to have 70-80 such

And if market sources are to be believed industrial espionage in the domestic aviation space is getting smarter and trickier by the day.

Gopi’s Tango

IF YOU tango smartly and tap your feet well, then you are a smart cookie in airline parlance. Captain Gopinath, of Air Deccan, perhaps qualifies best to be the Fred Kelly of the aviation business. After his relentless attack on Jet Airways and its ‘unfair’ treatment of competition, Gopi has signed a cosy interline deal with Naresh Goyal. It speaks volumes for his tenacity just as it does for Naresh’s matter-of-fact attitude. It’s something that has brought him into sharp conflict with fellow Bangalorean, Vijay Mallya. The two have shared the same love-hate relationship that Gopi had for long with the Jet Airways chairman. He fought with Mallya for poaching his pilots and then signed an MoU with him that went far beyond just the poaching business. In fact, many believed that the two would enlarge their group to include other players who could join the anti-jet alliance. But, that never happened because of Gopi’s distaste, as one of his close comrades put it, for backroom manoeuvring.

agreements in place soon. This will increase the access of international airlines to more domestic pockets, while Kingfisher will enjoy patronage from overseas traffic that may otherwise have flown on a competing airline. The fight can only get bitterer when Kingfisher introduces first-class cabins on board its A320 aircraft this April. Mallya has made it clear that he will personally drive the campaign for getting corporate customers on board by tapping his vast highbrow social circle. Also interesting will be its strategies to carve a larger share of the government travel market thrown open recently to the cheapest-fare airlines by the Finance Ministry in its quest to reduce travel costs. While Jet has decided to give frequent-flyer status almost automatically to frequently flying babus, patronising Indian Airlines till now, Kingfisher says any government employee with proper identification will be extended some very attractive fares.

If that was the case, then why did Gopi go at all to the Mallya-organised meeting of the other private players, barring SpiceJet, at the Kingfisher Chairman’s South Mumbai residence? The meeting went to the extent of setting up an industry form and demanded equitable distribution of key elements, like slots and parking bays. But later Gopi said he wasn’t a party to the move. However, he had uncharacteristically signed the joint statement. Perhaps he didn’t want to unnerve Naresh Goyal, with whom he has just got into an understanding. Perhaps he had second thoughts on playing along with Mallya. Perhaps he wasn’t serious, in the first place. But one thing is clear, Gopi is focused laser-like on what he believes is best in Deccan’s interest. And if that means supping with the enemy, then he would go waltzing to meet Naresh Goyal. Also, with an IPO round the corner, he wants few controversies. Just take a look at the picture above. There is Gopi in conversation with another feisty no-hold-barred new entrant into the business, Adel Ali of Sharjah’s Air Arabia. Like Gopi, Ali, too, had to contend with the big shark, Emirates in neighbouring Dubai. But these days he is supping plenty with Vijay Mallya, with whom he has an interline in place and Gopi is dancing with Naresh. That’s what the airline business can do to you in twelve short months.

CRUISING HEIGHTS February 2006

yeh hai dunia.qxd

2/14/2006

4:24 PM

Page 2

YEH HAI DUNIYA

US airline sued over hot-water burn, cold-shoulder service

Squabbling couple delays flight GEORGE JOSEPH MULAVARICKAL and his wife Goldy’s squabbling grew to such an extent that the Dubai-bound Emirates flight, which they had boarded at Nedumbassery, in Kerala, had to be taxied back to the parking bay before take-off on their demand that they be offloaded immediately. They were accompanied by their child and the man’s parents—the subject matter of the tiff. Mrs Mulavarickal was objecting to Mr Mulavarickal’s taking his parents, instead of her parents, home to the US, where the couple lives. Finally, the aircraft left, an hour behind schedule, without the Mulavarickals. Emirates’ authorities detained the bickering family in the airport till evening for security reasons. According to aviation rules, if a passenger alights from a flight, he is to be detained in the airport till the aircraft reaches its destination.

ang Ping, a civil servant from Jiangsu Province, sued US-based Northwest Airlines over a cup of hot water that was spilled on her lap and had scalded her stomach when she was on a flight from Hawaii to Shanghai, via Tokyo, on August 4, 1999. Zhao Junlian, Yang’s lawyer, said that the flight attendant had made a mistake, as she didn’t put the cup in the dent on the table. Ping further alleged that she had to endure panic for six hours on the plane, as there wasn’t any medicine to treat her burn and she couldn’t go to the toilet. To add to her woes, she was asked to shell out US $200 before receiving treatment in the Tokyo airport clinic. She said she didn’t have any money with her at the time, so she couldn’t receive treatment. Northwest countered saying that the cup fell when the plane hit turbulence. Yang Ping had originally sued the airline in Hawaii, but walked away from the case when a Japanese missionary came forward to testify against her. He said he saw Yang overturn the cup of hot water herself, because she wanted the flight attendant to fill it with beer. Yang is demanding Northwest run a public apology in five newspapers and pay her US $1 for mental anguish. The airline has already paid her US $13,000, but has refused to apologise.

THE FLOURISHING mining industry in Bellary district, in Karnataka, is in the process of giving rise to heli-commuting. Industrialists and mine owners in the district are on a chopper-purchasing spree, with a few eyeing aeroplanes as well. According to a story in the Deccan Herald, more than 30 whirligigs are expected to land in the district shortly. It is a well-known fact that Bellary’s soil is considered as good as gold, given its rich iron and manganese deposits. Exporting metallic and non-metallic iron and manganese ores to China, Japan, Pakistan and other foreign countries, the district’s mine owners have

CRUISING HEIGHTS February 2006

Illustrations by Zahid Ali

Bellary: Flights in reality

yeh hai dunia.qxd

2/14/2006

4:26 PM

Page 3

Waiting for take off for 13 years THIRTEEN YEARS ago, a 26-seater F-27 aircraft landed at Bhopal’s airport in an emergency. Since then, it has been parked in the airport’s hangar. The aircraft’s owner—an NRI, Sam Verma— has not got in touch with the airport authorities till date despite continuous correspondence. The aircraft, registered with the Civil Aviation Department of New Delhi, is no longer operational. Although the aircraft costs nearly Rs 15 crore, but all the airport authorities of Raja Bhoj Airport are interested in is the outstanding rent of Rs 80 lakh, towards aircraft parking.

Fuel scarcity strands former head of state GENERAL IBRAHIM BABANGIDA, former head of state, Lagos, was stranded for over two hours at the Presidential Wing of the Murtala Mohammed Airport, Ikeja, Lagos, because of the ongoing fuel scarcity in the aviation sector. The scarcity arose due to the refusal of petrol tankers to transport fuel in protest against seizure of some of their vehicles by the Lagos State Government. As per practice, chartered aircraft serving VVIPs are ready for them much before the arrival of the dignitary at the airport. It was well over two hours after Babangida arrived at the airport, amid heavy downpour, and the aircraft was nowhere to be found. It was only around 4 pm that the aircraft taxied out and re-fuelled. The aircraft then took off at about 5 pm.

Who’s to blame? JOEL JATTAN came home, in La Romaine, from Florida for Christmas with music CDs for his 14-year-old sister, shoes for his mother, telephones, sneakers and clothing. His luggage, however, remained in the US, and when he recovered it, a week later, the presents had disappeared. More than US $1,500 in items had been stolen, Joel alleged. The airline offered to compensate him with an airline ticket worth US $259, which was turned down. Jattan said he did not have a chance to protect his belongings because airline policy is that suitcases should not be locked. The airline official said that they no longer had full responsibility for passenger luggage.

Pilot ‘disturbs’ cricket match in Solapur PILOTS ATIQUE PASHA and Thomas Lynn, commanding an Air Deccan aircraft, flying from Mumbai to Ramadari, in Andhra Pradesh, noticed an engine fault and decided to make a precautionary landing at Solapur. They were at their wits’ end when they ran into hundreds of people on the runway, some apparently in the middle of a cricket match. FYI, residents regularly encroach upon Solapur airport’s ground and landing strip for a game of cricket or football. Some even use it as an openair loo. Further, the airport is surrounded by illegal housing societies that have mushroomed in the last two decades. To top it all, the airport has no telephone and the staff is inadequate for security. The aircraft used emergency brakes, burst two tyres and came to a halt after a 100-m skid. All were saved.

made their global mark. As a mark of prestige, these mine owners, besides other industrialists and bigwigs of the region, now prefer flaunting helicopters, rather than expensive cars, as a symbol of their affluence. Bellary district BJP president G. Janardhana Reddy has already booked a 36seater aeroplane as well as a helicopter. Others have followed suit. A few 10seater helicopters have already made their presence felt in the district. The palatial houses of most mine owners are now abuzz with activity. Workers are busy constructing helipads and hangars in their backyards. A few industrialists are even building hangars equipped with air-conditioners, soundproofing and other luxurious facilities for their flying birds. The mine owners have reportedly placed advertisements in newspapers of metropolitan cities, such as Mumbai, calling for professional pilots. Some of them have already employed young pilots from Mumbai and Hyderabad, sources say. On condition of anonymity, a mine owner said that he had imported a car worth Rs 1 crore and had to pay lakhs of rupees in tax, not to speak of the maintenance of a foreign car on Indian roads. Compared with that, purchasing helicopters worked out to be cheaper. He went on to add that helicopters cost around Rs 6 crore each, which was not a burden on them, and that they were in touch with the ministry of civil aviation besides other departments concerned with the matter. CRUISING HEIGHTS February 2006

IA MD.qxd

2/15/2006

4:03 PM

Page 4

PROFILE

And since 1977, he has been a distinguished member of the steel frame of India (also known as the Indian Administrative service—IAS) and allotted to his home state, Madhya Pradesh. But this peripatetic bureaucrat has spent more time out of Bhopal during his 28 years in the business. He took a Sabbatical to travel to Vancouver, one of the most scenic spots in the world, for his doctorate. He spent four useful years in Washington assisting India’s Executive Directors, two distinguished men by the name K.P. Geetakrishnan and M.R. Sivaraman at the International Monetary Fund (IMF). “He was hard working and efficient. The boy knows his job,” said one of them. The appointment to IMF almost didn’t happen. He was right on top in the shortlist of three, but a classic bureaucratic sleight of hand had the guy third on the list cleared for appointment to Washington. Manmohan Singh was then the Finance Minister under Narasimha Rao and when well-wishers intervened, he promised to look afresh at the issue. Look he did and the consequence was that the ‘boy’ was on his way to Washington. Well the ‘boy’ has now graduated to become Indian Number One. It was a long haul, though through the Public Enterprise Selection Board (PESB) and a longer haul though the Ministry of Civil Aviation. According to one extremely well informed Delhi journo who knows Trivedi well, “the file spent several weeks tossing and turning in Praful Patel’s almirah.” Does it mean that the Minister for Civil Aviation had reservations on his candidature? Where there any second thoughts? Patel declines to discuss details or even names, for that matter, but he does offer one nugget of information: “Please remember that all ACC (Appointments Committee of the Cabinet) are approved first by the minister, and every officer in the ministry has my full support and backing.” Then why the long haul through the bureaucratic labyrinth starting from Rajiv Gandhi Bhawan? Patel offers an enigmatic smile. But it did convey for a moment that Trivedi wasn’t the minister’s first choice. He wanted an additional secretary in the ministry, Raghu Menon, at Airlines House. To cut a long story short, the PESB didn’t have Menon on their shortlist. Trivedi was their only choice. The rest, as they say, is history, starting with Praful Patel’s almirah. But for Trivedi it was a difficult choice to make: should he opt for Delhi? He had com-

It was a long haul, though through the Public Enterprise Selection Board (PESB) and a longer haul though the Ministry of Civil Aviation.

CRUISING HEIGHTS February 2006

pleted his cooling off (civil service parlance for the time you spend in your home state) and had been posted as joint secretary in the Industries ministry. Or should he stay back in Bhopal and wait for the almirah to open? Anyway he did come to Udyog Bhawan and lived out of his suitcase for a few weeks till the Indian appointment arrived. And he has really landed at an opportune time. The airline has just undergone a facelift, new aircraft are being acquired after close to two decades, an IPO is round the corner and there is a buzz in the aviation business. Growth is exploding and Indian only has to sustain and build on the momentum. “So far, at least on the issue of the interiors for the new aircraft or in leveraging strengths in other areas, the CMD (short for Chairman and Managing Director and the preferred acronym in the corporation) has been unequivocal that we must benchmark ourselves against the best. He talks of competing with Jet and taking it headlong,” said one perceptive insider. Of course, he is “easy going, extremely informal, witty and a man of detail” are some of the other qualities insiders attribute to him. These are then the first impressions of Vishwapati Trivedi’s first few weeks in office. The wit and the informality will most certainly help, but as he moves along he will need a few ounces of steel, a thick skin and large doses of patience as he faces the on and off turbulence that is a yearlong occurrence in the route between Rakabganj Road and Rajiv Gandhi Bhawan. But it should help that he has been given an unequivocal five year tenure as Indian’s CEO. PS: For the record, Dr Trivedi is 53. He and his wife, Mona, are health freaks. She is an aerobics expert (and also served as a magistrate in the Consumer Court in Bhopal, trained lawyer that she is) and their three daughters—Eshani (married and settled in the US), Namami and Anjani (studying in the US of A)—follow in the footsteps of their parents. His ten-year-old son, Anant Vijay, loves cricket, though the father is into badminton. His sister Aradhana Shukla is a civil servant in Uttar Pradesh and brother Prajapati Trivedi works for the World Bank in Saudi Arabia. His father Dharanidhar Trivedi is a former IT officer and mother Kranti comes from one of MP’s (now Chhattisgarh’s) well known political families: she is Pandit Ravi Shankar Shukla’s daughter and her brothers include Shyamacharan and Vidyacharan Shukla.

Aviation digest.qxd

2/14/2006

5:35 PM

Page 2

AVIATION DIGEST

Aussies not satisfied with security at Bali airport AUSTRALIA IS still unhappy with security at Bali’s Ngurah Rai International Airport, which it believes, does not comply with International Civil Aviation Organisation (ICAO) standards. Australian and US carriers continued to operate normal services to Bali, but had temporarily added their own additional security that conformed to ICAO security standards. US Transportation Security Administration (TSA) representatives are assisting local authorities with correcting security deficiencies at the airport as quickly as possible. The Aussies are involved in a training programme at Denpasar and Jakarta to try to improve the skills of security staff in cooperation with the Indonesian government. Further, Australia plans to identify weak links in security at Asian airports by stationing two new officials in Singapore and a third in Jakarta and others who would identify holes in security and alert Canberra. This comes in the wake of the nine Australians arrested in Bali on heroin charges, but it is actually the terrorists that the Australian government is mainly seeking to stop. Upon spotting problems, Australia would assist the countries to fix them.

Lee Kuan Yew recommends divestment of SIA units SINGAPORE’S FORMER prime minister, Lee Kuan Yew, has remarked that Changi Airport needs to defend its position as a regional air hub and has recommended that this can be done only by ensuring that there was competition among ground handlers and caterers to ensure the lowest cost. The former prime minister said Singapore Airlines Ltd should allow its catering and engineering units to become separate companies. He proposed that the divestment be carried out over a period of two to three years. Lee is father of present prime minister Lee Hsien Loong and holds the Cabinet title of Minister Mentor.

Freshly cooked rice in midair

Illustrations by Zahid Ali

reshly cooked rice is a luxury that has not been made available to air passengers so far. The rice served is cooked before take-off and is reheated before serving. Household rice cookers simply couldn’t do the job because of their limited capacity and electronic rice cookers with the right specifications for use on a commercial jetliner were too expensive. But now, Jamco, one of Boeing’s Japanese suppliers, in cooperation with Sharp, has developed a new microwave oven with a rice cooker to freshly cook rice in flight, and Japan Airlines was the first to use it on flights between London and Tokyo and New York and Tokyo. Sufficient rice for nearly 40 passengers can be cooked in about 30 minutes. Incidentally, Jamco supplies the lavatories for Boeing’s jets and recently was awarded the contract to supply lavatories for the 787 Dreamliner. It also offers galleys for most Boeing and Airbus jets. CRUISING HEIGHTS February 2006

Greater compensation for air travellers, court upholds rules THE EUROPEAN COURT OF JUSTICE has upheld the new rules, introduced last year, that give air passengers greater compensation for cancellations, delays and overbooking, saying they are in line with EU regulations. The decision has been widely criticised by almost all airlines. The International Air Transport Association claimed that the ruling would add $700 million worth of costs to the industry, which would have to be recouped. The European Commission welcomed the ruling as good news for air passengers. The EU says it introduced the measure because of growing complaints about overbooking, which lead to bumping—when a passenger is asked to take the next flight.

Aviation digest.qxd

2/14/2006

5:40 PM

Page 3

Saudi Airlines and Qatar Airways join hands QATAR AIRWAYS’ Chief Executive Officer Akbar Al Baker and Saudi Arabian Airlines’ Dr Ayed Al-Amri, General Manager, Commercial Agreements and Haj Affairs, recently signed a bilateral code-share agreement that will link two of the region’s largest airline networks. This is the first code-share agreement for Qatar Airways with a Gulf carrier. Saudi Arabian Airlines has signed several agreements with other regional carriers, such as Kuwait Airlines and Gulf Air. Qatar Airways is one of the four airlines in the world ranked as a ‘Five-Star’ carrier by Skytrax, an independent aviation industry-monitoring agency, and Saudi Arabian Airlines is one of the largest airlines in the world with some 150 aircraft. In October 2005, the airline celebrated its 60th anniversary and the carrying of 16 million passengers during the year.

Tianjin airport plans expansion

US proposes space tourism rules

CAPITAL AIRPORTS HOLDING CO and the Civil Aviation Administration of China plan to spend two billion yuan (around US $247.8 million) on expanding Tianjin airport this year. Tianjin is one of the most important economic centres in North China and has the only free-trade zone in Northern and Northwestern China. The first phase of the project, expected to be complete at the end of 2007, envisages a 60,000 square-metre terminal as well as a 2,90,000 square-metre parking and other facilities. This will triple the airport’s size, enabling it to handle six million passengers annually. Tianjin City will also build a metro system, expressways and bus lines for the airport to meet the demand for the 2008 Olympic Games, scheduled to be held in Beijing. Upon completion, in 2015, the airport is expected to handle 10 million passengers and 2,50,000 tons of cargo annually.

US FEDERAL AVIATION ADMINISTRATION (FAA) has proposed regulations for space tourism to regulate the commercial space industry in a bid to ensure minimum safety standards. The suggestions include that space tourists must be screened to ensure they are not terrorists, conduct security checks similar to those for airline passengers, give safety advice, including the number of flights the spacecraft has been on and any problems experienced with the craft, and impart pre-flight training to handle emergencies, such as loss of cabin pressure or fire. However, the report has no strict proposals on the health of any space tourist and has left it to the tourist, who should decide themselves if they are fit to fly. The FAA is expected to publish its final report before June 2006.

Budget terminal at Changi

ingapore’s aviation history opens a new page with the completion of the Budget Terminal, a customised terminal for low cost carriers (LCCs). The winning name—Budget Terminal— was selected from among 12,000 entries submitted to the Civil Aviation Authority of Singapore (CAAS) in its ‘Low Cost Terminal Naming Contest’. The 25,000-square-metre terminal is about the size of three football fields or about a tenth the size of Changi Airport’s Terminal 1. The Budget Terminal will initially be able to handle about 2.7 million passengers per annum. There is scope for future expansion to accommodate up to five million passengers per annum. The decision to build a customised terminal for LCCs was made in early 2004 in response to the

emerging trend in low-cost travel in the region. CAAS obtained the Temporary Occupation Permit (TOP) for the Budget Terminal in December 2005. With the TOP, airport agencies and operators can move in to prepare their operations set-up. Preparatory works, including airport system tests, are in progress and will be completed before the opening date,

Snore away in London Yotels COMING SEPTEMBER, Heathrow’s Terminal 4 and Gatwick’s South Terminal will, respectively, have 40 and 50 Yotel cabins, on the lines of Japanese capsule hotels. A Yotel, measuring about 110 square feet, will offer a traveller a cubicle with a double bed, desk, TV, private toilet and Internet access. The cubicles can be booked for four hours, priced about $45, or for the night for around $70. Yotels are ideal for passengers who have a few hours to kill between planes or if they want to spend the night at the airport to catch an earlymorning flight. Japanese capsule hotels are simply sleeping berths built into plastic cubicles having nothing more than a pull-down screen at the foot of the bed to cordon off guests. Of course, the screens cannot cordon off snores, but Yotel cabins will be soundproof with lockable doors.

March 26, 2006. While a key consideration is to keep operating costs low to meet the needs and operating models of LCCs, basic services and facilities are provided so that passengers can enjoy a pleasant travelling experience. Up to 3,000 square metres of floor space has been set aside for retail as well as food-and-beverage outlets. There will also be free Internet terminals and free local calls for passengers. CRUISING HEIGHTS February 2006

Strike.qxd

2/14/2006

4:43 PM

Page 2

COVER STORY

DAY

COLLATERAL

FEB 1

DAMAGE

■ Cabinet approves modernisation plan ■ Mumbai airport employees lathi-charged ■ Air traffic normal despite strike ■ Government clarifies that no ESMA against striking workers ■ Left-controlled unions vow to continue strike, Kolkata strike total ■ Passengers face first day of unease and tension

DAY FEB 2

■ Hunger strike at Mumbai airport ■ Delhi High Court warns employees against disrupting airport operations ■ Airports strikes continues, flight services at most airports are delayed, passengers are nervous and irritated, garbage bins overflow, shortage of trolleys, toilets are dirty ■ Left blasts Praful Patel and accuses him of ‘selling the country’

DAY FEB 3

DAY JAN 31

■ GMR-Fraport gets Delhi Airport, GKV-ACSA gets Mumbai ■ Reliance cries foul ■ AAI employees threaten to go on strike, government puts Air Force on standby

THE PRIVATISATION OF MUMBAI AND DELHI AIRPORTS MARKS A WATERSHED MOMENT IN INDIAN CIVIL AVIATION, BUT THE YEARLONG PROCESS WAS NOT WITHOUT ITS DRAMA, WHICH CULMINATED IN A BOISTEROUS STRIKE BY AAI EMPLOYEES. THE GOVERNMENT DECLINED TO BUCKLE, SIGNALLING A PARADIGM SHIFT IN THE COUNTRY’S AVIATION OUTLOOK. A SPECIAL REPORT.

ost frequent flyers would be aware of companion-free schemes offered by international airlines, usually during the lean season. Passengers who wish to take a companion along on their journey love such schemes. However, one unwanted companion has been accompanying all major moves in the Indian civil aviation sector, be it policy decisions or aircraft acquisition by government companies. Whether the stakeholders like it or not, there are protests from the Left, opposition parties and the players involved in the deals. Boeing feels that the Indian Airlines deal was not good, Airbus feels that the Air-India deal was unfair and most airlines feel the policy of allowing only Jet Airways and Air Sahara to fly abroad is not correct. No wonder, then, the plan to modernise Delhi and Mumbai airports with privatesector participation has run into controversy, caught in the crossfire between vested interests and leaving the passengers as well as the government to face all the resultant trouble. That the move to hand over the management of the country’s two largest airports would face rough weather was clear right from the beginning. There was no scope for

■ Employees hint at ending strike ■ PM meets Left union, is firm and says the process is irreversible ■ Delhi airport workers defy court order, clash with the police ■ Sanitation and hygiene at their worst at airports, terminals are functional ■ Passengers are tired and angry, wonder when the strike will end

DAY FEB 4

■ Airport employees call off strike ■ Praful Patel meets union leaders and gives written guarantee of job security ■ PM hints at review of privatisation process for Chennai and Kolkata airports ■ GMR-Fraport and GKV-ACSA issued letter of intent (LoI)

Strike.qxd

2/14/2006

4:43 PM

Page 2

COVER STORY

DAY

COLLATERAL

FEB 1

DAMAGE

DAY FEB 2

DAY FEB 3

DAY JAN 31

■ GMR-Fraport gets Delhi Airport, GKV-ACSA gets Mumbai ■ Reliance cries foul ■ AAI employees threaten to go on strike, government puts Air Force on standby

DAY FEB 4

Strike.qxd

2/14/2006

9:07 PM

Page 6

COVER STORY

THE

id Praful Patel threaten to resign if the government rescinded on the airport modernisation (privatisation) programme? There is an enigmatic smile on Mantriji’s face when you ask him the question. Those in the know state that he told the empowered group of ministers (EGoM) that he may as well ‘quit’ if the process was now to be stalled. For as long as it was feasible and possible, Praful tried his best to help friend and fellow Mumbaikar Anil Ambani bag one of the two projects. But when it was evident that Anil wouldn’t get either of the two projects, he decided that he had to look ahead and go along with the process. “I saw him have a long chat with Praful at Rishi Kapoor’s son’s wedding in Mumbai and he told him plainly that there wasn’t much he could do,” said a close friend and associate. Ironically, Reliance-ADAG’s (Anil Dhirubhai Ambani Group) not getting the airport contract seems to have actually stopped several court cases against the government. Subhash Goyal, of Zee, for example, is said to be disappointed at having lost the race. He is believed to have told Praful, though, that he would have gone to court if he had awarded any of the two airports to Anil Ambani. Just a day after the strike ended, on February 4, the government issued the letter of intent to GMR-Fraport and GKV-ACSA for their bagging the Delhi and Mumbai airport projects, respectively. The Airports Authority of India raised the bid bond guarantee from Rs 50 crore to Rs 500 crore. The

qualification benchmark, of 80 per cent, suffering a major blow. Sreedharan Committee suggested that GMR-Fraport was the only qualified bidder and was eligible to be selected as partner for either Delhi or Mumbai. Since Delhi airport modernisation faces a sharp deadline due to the Commonwealth Games, the committee suggested that GMR-Fraport be assigned the Capital’s airport and that the Mumbai airport be upgraded by a special purpose vehicle (SPV) floated by AAI or the government call for fresh bids, as there was no qualified bidder remaining, and went ahead and laid out a roadmap for selection of joint-venture partners for other airports. Given Sreedharan’s image, the CoS simply forwarded the report to the EGoM. The real corporate lobbying began at this point. The earlier situation was that GMR-Fraport and Reliance would get one airport each and the others had no chance. With Reliance being brought down below the technical qualification benchmark, the field was wide

A FACTOR

‘ ’

ANIL AMBANI: Fought a lonely battle to defend his position. Fellow corporates worked hard to dislodge him.

SUBHASH GOYAL: Cheesed off with Praful for not helping him. Didn’t go to court because Anil was out of the reckoning.

next day GMR, which has tied up with Fraport (Frankfurt airport) submitted the requisite Rs 500 crore bid bond guarantee for the modernisation of Delhi airport. GVK, which has tied up with South African Airport, has also furnished the bond. On February 6, the Delhi High Court took note of Anil Ambani’s petition challenging the government’s decision. The High Court didn’t stay the award but hinted at a speedy disposal of the issue. Noting that the modernisation of Delhi and Mumbai airports was of national importance, the court agreed to dispense with various procedural laws to dispose off the petition. At the High Court here, Reliance counsel Mukul Rohatgi alleged that the GMR-Fraport group had made a disclosure, during the bidding process, that it was not involved in any irregularities or case of criminal misconduct in the projects it had executed worldwide. Moreover, Rohatgi pointed out, it was Fraport’s technical handling of the construction of airports at Manila, Philippines and Frankfurt, Germany, that had led the Evaluation Committee to give it “high ratings as far as technical specifics were concerned.” However, the allegations were refuted by both GMR and Fraport to PTI. According to a GMR spokesperson, “All information (including the Manila case) was declared in the bid document.” Fraport sources said the particular case was being heard by the Philippines Supreme Court, adding that at the time of the company’s participation all relevant inputs, including the case, were declared.

The Metro Man lived up to expectation and submitted a pithy, concise and no-nonsense report in record time, earlier than the deadline set by the government. Given Sreedharan’s image, the CoS simply forwarded the report to the EGoM. CRUISING HEIGHTS February 2006

open now. Other bidders came alive once again, rather than simply clamouring for rebidding. And for Reliance, it was a question of fighting back to safeguard its advantage. Naturally, the EGoM could not take a decision and the Sreedharan Committee was asked to ‘verify’ the evaluation of other bidders, too. At this stage, Civil Aviation Minister Praful Patel came out with the second most important dramatic twist in the entire selection process—he told other EGoM members that he might as well quit if the modernisation of both airports did not go through. He also met the Prime Minister to convey his exasperation and got Agriculture Minister Sharad Pawar, the leader of NCP, to which the Civil Aviation Minister belongs, to accompany him to emphasise on the seriousness of the issue. After this, the EGoM discussed considering three or four financial bids for each airport. Only lowering the technical eligi-

Strike.qxd

2/14/2006

4:56 PM

Page 7

bility benchmark from the original level of 80 per cent could do this. While there was no consensus on this and differences persisted on the number of bids that should be opened, the issue of Sreedharan getting upset if his views were not accepted, was communicated to the EGoM members. Going by the expert committee’s view, partner for only one airport can be selected. Therefore the idea of setting up an SPV through AAI and the other option of re-bidding were ruled out first. The via media worked out was to ask the only technically qualified bidder to choose one of the two airports. In any case, only the GMR-Fraport financial bid could be opened if the EGoM was to go by the technical evaluation and the rating done by the expert committee. To be doubly sure, the government wanted GMRFraport to match the best financial bid for the airport it selects. In effect, this meant a combination of the best technical capability and the highest financial bid for the airport of GMR’s choice. The EGoM decided to open the financial bids of four top bidders in terms of technical capability. With this formula sealed, financial bids were opened on January 31—the deadline set by Patel amidst speculation that he might quit if the process did not move forward. What followed was even more dramatic: financial bids were opened after sanitising Rajiv Gandhi Bhavan and sealing the entire area to prevent protesting AAI employees from disrupting the proceedings. Additional precautions were taken since the agitation had once led to blocking of this building for several hours. While slogan shouting was going ahead at feverish pitch outside, GMR selected Delhi airport and agreed to match the highest bid for this airport, which happened to be Reliance’s. That led to GVK winning the Mumbai airport on the strength of its financial bid, which turned out to be the highest. All hell broke loose, as un-fancied GVK, a low-profile player from Hyderabad, had upstaged giants such as Reliance, Sterlite and Essel. Only time will tell whether litigation would halt the modernisation of Delhi and Mumbai airports. However, the government seems to be confident that it has done the right selection. Even the AAI strike has failed to make an impact since flights were not disrupted, but backroom lobbying is expected to go on for some more time. Ultimately, consumers will benefit if the two airports are modernised and it will be left to the government to guide AAI in the right path to upgrade other airports and learn to live with its limited resources. The last word, as always, will be said only after years.

ANGRY PROTESTS: The countrywide protests by AAI employees only reinforced the stereotype that they were sloppy, unhelpful and uncaring.

PRESSURE

POLITICS

ome months back CPM politburo member and Rajya Sabha MP, Sitaram Yechuri bluntly said that the Left doesn’t just bark, it can also bite. The airport privatisation fracas and the subsequent strike has proved only one thing conclusively: the Left can’t bite, it can only growl and bark. Tragically, one of the casualties of its vociferous barking may be Kolkata airport. One of the comprise moves was for the government dropping Kolkata and Chennai from the list of airports to be modernised, in an attempt to appease the Left unions. Instead of the privatisation model being followed for the airports in Delhi and Mumbai, which triggered the agitation, the government may adopt a model of public-private partnership for the other two airports. Another option is to ask the Airports CRUISING HEIGHTS February 2006

Authority of India to undertake the modernisation. Kolkata and Chennai are part of the long list of airports, which also has 35 non-metro ones, that the government plans to modernise in phases. This will be a body blow to the dreams of Buddadhev Bhattacharya who has been straining every muscle to get West Bengal out of the backwardness of industrial development. Last year, the state received a huge dose of bad press when call-centre employees were stopped from going to work by Left Unions despite the CPM government exempting them from a general strike call. During the four-day airport strike, Kolkata airport had the dubious distinction of most flights being cancelled and the city being lost for connectivity with the rest of India. It’s another matter that the Left leaders didn’t see the sharp public opinion against their antagonistic stand. In the end their workers got taken for a royal ride-the people were angry with them and the country got a bad name. But who cares?

dummy 1.qxd

1/29/2008

1:26 PM

Page 1

A perfect blend of holiday comfort and an ambience for conducting business is what youâ&#x20AC;&#x2122;ll find at Le Meridien New Delhi. You'll discover that it is ideally located, in the hub of the city, yet suitably away from the din. To experience satisfaction and a taste of the finest, just make

I have

sure your next stay is with us.

the simplest taste.

FOR FURTHER INFORMATION

I am only satisfied

and reservations call

with the best.

91 11 23710101 now or log on to www.lemeridien.com

You

can

also

enjoy

the

Le Meridien experience at one of our many hotels around the world including:

ABU DHABI BALI

AHMEDABADB

CAIRO

HONG KONG

DUBAI JAKARTA

JAIPUR JEDDAH KOVALAM PHUKET SINGAPORE TOKYO

MERIDIEN NEW DELHI

www.lemeridien.com

BATES/D/LM/193

News Digest.qxd

2/15/2006

1:48 PM

Page 2

NEWS DIGEST

D Makhtoum lunches with Praful

BIG-T TICKET MEETING: (Top) HH Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group, flanked by Civil Aviation Minister Praful Patel (right) and Agriculture Minister Sharad Pawar (left). (Above left) Air India CMD V. Thulasidas with Ghaith Al Ghaith, Emirates’ Executive Vice President (Commercial Operations Worldwide). (Above right) Petroleum Minister Murli Deora with Sheikh Ahmed bin Saeed Al-Maktoum.

espite his very busy schedule, with AAI workers hitting the streets protesting against Delhi and Mumbai airports privatisation, Civil Aviation Minister Praful Patel set aside time to meet Emirates Airline’ chief, Sheikh Ahmed bin Saeed Al Maktoum. Also present at the luncheon meeting on February 3 were Praful’s boss and Agriculture Minister Sharad Pawar, Petroleum Minister Murli Deora and Air India Chairman and Managing Director V. Thulasidas. Sheikh Ahmed’s top management was in India to launch Emirates’ new direct non-stop services to Thiruvananthapuram. This is the sixth gateway, with others being Mumbai, Delhi, Chennai, Hyderabad and Kochi. Sheikh Al Maktoum has expressed that his group would be very keen to participate in India’s hospitality business and even take part in the subsequent rounds of airport modernisation. With Chennai and Kolkata airports modernisation on the cards, we will now see the expertise of Dubai airport as well being brought in if Changi does not return after its hasty retreat from the DelhiMumbai rounds of privatisation. The fact that in the last seven years there has been a drastic change in perception is evident from the fact that when the NDA government initially thought of allowing foreign participation in ground handling, Dubai’s official agency, DANATA, received a cold shoulder. It now looks like DANATA could well be a serious player helping Emirates Group in India’s airport privatisation. Sheikh Ahmed said, “I would like to thank the Indian Government and the Ministry of Civil Aviation for their support. Emirates is delighted to increase its services to India—one of the airline’s most important markets worldwide.” He added, “Emirates and India enjoy very strong relations right from 1985 when the airline launched its global operations, with Mumbai and Delhi as its first online destinations. I am confident that our relationship with India will strengthen with time.” Emirates’ new service to Thiruvananthapuram will reinforce connections from Kerala to the Middle East region via the airline’s hub in Dubai. The airline’s operations in the Middle East include 140 flights per week to 13 destinations.

INDIAN NEWS Praying for the wide bodied wonders

aircraft during one-year timeframe beginning February 2006. Government has already designated Indian, albeit after a long delay, to operate flights to Australia, US, UK and Canada. This is the second time IA floated tenders for leasing wide body aircraft after its earlier attempt failed to evoke any response.

Joining the battle

INDIAN AIRLINES continues to search the global leasing market to identify suitable companies that can dry lease it badly required widebodied aircraft to launch Indian’s medium to long haul services starting London in the coming summer. After a committee headed by IA’s then Deputy Managing Director T.S.Chandrashekar recommended leasing of wide body aircraft in April 2004, the search began. Unfortunately for IA, the global aviation market also started its upswing and getting a leased A 330 or even Boeing 767 became next to impossible. Twice it tendered and drew a blank. Last heard, IA has extended the closing date for leasing 12 wide-body aircraft by two weeks to January 31, 2006. The tender had requested leasing companies to offer any of the aircraft – A 330, A 340, A 310-300, Boeing 767 ER and Boeing 777. IA has planned to lease the aircraft for a period of five to seven years and looking at taking delivery of the

INDIAN AIRLINES has offered very competitive fares on select sectors in South East Asia. The airline, which has a load factor of over 70 per cent on the Chennai-Bangkok sector, has offered a special return fare of Rs 8,950 excluding tax of Rs 2,021. On the Chennai-Singapore sector the airline has a fare of Rs 10,475 (plus taxes of Rs 3321. The load factor on this sector is over 80 per cent and the new fares are available only on day flights. The same fare is applicable on the Chennai-Kuala Lumpur sector as well. Indian Airlines has also come up with special scheme to target school children by tying up with Singapore Tourism Board. Even as Indian Airlines is sharpening its competitive edge, Sri Lankan Airlines has also announced special promotional fares to cities in South India to destinations in East Asia. The special fares priced 30 per cent lower than normal fares exclude the taxes. Sri Lankan will offer special fares from Bangalore, Chennai, Tiruchi, Thiruvanathapuram, Kochi, Kozhikode, and Hyderabad to five cities in East Asia – Beijing, Bangkok, Hong Kong, Singapore and Kuala Lumpur. The special fare economy tickets will be valid for use till the end of March first week.

CRUISING HEIGHTS February 2006

News Digest.qxd

2/16/2006

5:01 PM

Page 3

AIR INDIA Express is fighting a battle royal to retain its pilots. It has even offered them salary hikes so that its low cost carrier remains afloat never mind the rise in cost. Simultane-ously, Air India has invited global recruitment firms to offer 75 pilots for both Boeing and Airbus aircraft on a 12-month contract to start with but extendable to 36 months or three years. Since the pilots cannot be put on AI roles, it has been decided that Air India Charters will hire them on contract. Of the 500 pilots currently flying for Air India, nearly 40 are expats. It may be of interest to know that after DGCA made it mandatory for pilots to give six-month notice before a pilot desired to quit an airline many airlines accordingly amended their contracts. However, Air Sahara now in the process of being taken over by Jet Airways did not do it. In fact pilots in Air Sahara are literally in a state of Trishanku with an unchanged contract allowing one-month notice to quit despite a DGA mandate to change that a 6 six-month notice. Clearly the management was so busy with other things that there was no one to take up their request. Jet has already stated that they would choose the best pilots and not necessary all of them. Perhaps the pilots who left Air Sahara and joined Air India to only go back to Air Sahara must be repenting their short terminator flights. They are now in the danger of seeing their services terminated.. Interestingghly,Air India has restored parity in service conditions of male and female crew on board its aircraft. With this move, the female crew become entitled for the position of inflight supervisors in the management category on board the aircraft. The move further provides for complete interchangeablity of job functions between male and female crew and removes discrimination at various levels of hierarchy. In another development, the airline has threatened its 1,600 cabin crew to lose weight or face getting grounded. Although the limits of excess weight have not been spelt out, overweight pilots and flight attendants have a couple of months to trim themselves of flab. An apt remark came from an official, “If crew members can’t fasten their seat belts, how can they fly?”

Pilot problems

MRO in Nagpur BOEING IS in talks with six State Governments for setting up a US $ 100 million MRO (Maintenance, Repair and Overhaul) facility. The Chicago based aircraft manufacturing company will finalise the precise location in the next four months according to Boeing Commercial Airplanes’ Senior Vice President Sales Dr Dinesh A Keskar. The allocation for MRO is part of the US $ 185 million investment that the aircraft maker has committed while signing the acquisition deal with Air India on January 11, 2006. Besides Boeing will also invest US $ 75 million in a pilot training facility that would have four simulators of the most commonly used Boeing aircraft in the country including the Boeing 737, 777 and the 787. Another US $ 10 million will be invested for setting up incremental facilities to tone up the infrastructure. The MRO is likely to be set up in partnership with an airline most probably Air India and Nagpur is the front-runner for the location. Already Jet Airways and Spice have committed their aircraft to the Boeing driven MRO. Dr Keskar said the total Indian orders was valued at US $ 15 billion which was nearly 12 per cent of the firm 1002 orders Boeing received in the year 2005.

Raising the moolah

KINGFISHER AIR is proposing to raise about US $ 200 million. The fund raising option includes Foreign Currency Convertible Bonds or through the private equity route instead of the earlier IPO idea. According to Kingfisher Chief Vijay Mallya instead of confining itself to the option of IPO, the airline is examining other options as well. Within seven months of its launch, Kingfisher promoted by UB group has earned revenues of Rs 600 crore and clocked passenger load factor of 75 per cent. Mallya has claimed that between May and September 2005, the loads were as high as 99 per cent. This has given confidence to Mallya who has now predicted that his airlines will break-even in fiscal 200607. The airline has already paid US $ 100 million for the purchase of new aircraft and part of the US $ 200 million to be raised shortly will also be used to part-finance the purchase of more aircraft. Kingfisher expects add six more A 320 between February and December 2006 by when it will have a total fleet of 21 aircraft that will include six ATRs. It has also ordered A 330s due for delivery by 2007. As for the A 380s Mallya has stated that he will not go back on that decision while using the aircraft would depend on how fast the government created the infrastructure. Meanwhile in a smart move, Kingfisher has signed up with Air Arabia-the Sharjah based low cost carrier to offer customers in Mangalore direct flights to UAE. With a single reservation, passengers will be able to fly via Kingfisher Airlines to Mumbai and then to Gulf with Air Arabia. The airline will offer 30 per cent savings against competing airlines. Excluding taxes, the one way fair is fixed at Rs 6800. Air Arabia will also offer visit visa service to all passengers arriving in Sharjah. It’s a very Emirates like approach and will surely give the Dubai based behemoth a run for their money.

CRUISING HEIGHTS February 2006

News Digest.qxd

2/14/2006

8:58 PM

Page 6

NEWS DIGEST

Qatar flies to Nagpur

QATAR AIRWAYS will add Nagpur as its sixth destination in India from the coming summer season. This is the second carrier from the West Asian/Gulf region after Air Arabia got rights to fly to Nagpur. According to Qatar Airways CEO, Akbar al Baker, the airline will use Airbus A319 (110 seater) for its Nagpur services. The West Asian carrier currently operates daily services from Delhi, Mumbai and Thiruvananthapuram, besides five from Kochi and four from Hyderabad. Baker said Qatar Airways has been per-

mitted by the Indian authorities to operate additional frequencies and larger aircraft to and from the five Indian cities during the winter schedule. Qatar now becomes the second major player to enter the Nagpur market. The Central Indian town is closest to Civil Aviation Minister Praful Patel’s home in Gondia, in the neighbouring Bhandara district. Nagpur’s growing importance is in keeping with Praful’s deep desire to see his hometown become a national and international hub for air transport.

CRUISING HEIGHTS ONLY Rs 60/PER ISSUE Please accept my subscription for 6/12 issues of CRUISING HEIGHTS Name_________________________________________________________ Address_______________________________________________________ _____________________________________________________________ Payment Cash Cheque/DD No. Drawn on_____________________________________________________ Cheques/DDs should be drawn in favour of ‘NEWSLINE PUBLICATIONS PVT. LTD.’ Send your subscription to D-11, Nizamuddin East, New Delhi 110 014

CRUISING HEIGHTS February 2006

AMBICA.qxd

2/14/2006

8:17 PM

Page 2

PROFILE

â&#x20AC;&#x153;I AM Ambika Soni, the high-profile political advisor to Sonia Gandhi, is the new Union Tourism Minister. She is a first timer to the government and is enthused and excited about the challenges of her new job. A profile of the 64-year-old lady from Hoshiarpur. 38

CRUISING HEIGHTS February 2006

AMBICA.qxd

2/14/2006

8:20 PM

Page 3

EXCITED” I

T’S DIFFICULT to believe that after three-plus decades in politics, this is Ambika Soni’s first ministerial job. There were some reports that the lady would take over as the Tourism Minister in the first round when Manmohan Singh took oath as the head of the UPA government. But that did not happen and she continued in her larger-thanlife role as a key advisor to Congress President Sonia Gandhi. Now after nearly two years down the line, Soni is indeed the Tourism Minister and, thankfully, Culture is also part of her turf. She is candid, but self-effacing, “You know I don’t mean it from my point, but Tourism-and-Culture makes sense. Culture really is a large part of tourism.” But it is such a far-removed world from the rough edges of the day-to-day politics that’s been her cauldron for over three decades. Is she happy with the trade-off? Well, it is quite a change, she says matter of fact, but admits she is “enthused by the tremendous potential and opportunities that tourism offers. “IT produces revenues in millions, but this is a billion-dollar business. The employment potential is so vast and the requirements so varied that the opportunities are unlimited.” Nonetheless, she is clear that it is not just the big bucks or the foreign exchange component that enthuses her. “I truly believe that tourism must be for all.” She is right, the to and fro traffic within the country has the potential to completely change the face of the nation and that’s something that is still waiting to be tapped. She has an example to offer. When the Congress-PDP alliance came to power in Kashmir, Sonia Gandhi decided to hold the Chief Ministers’ convention in Srinagar. The NDA government in Delhi and the Home Ministry tried to dissuade us from holding the meet, but Sonia Gandhi was firm and the meeting was a great success. All the media coverage and the reporting

Those who have known Ambika Soni for years, from her days as a highprofile Youth Congress President, are blunt that the her stamp will soon be evident both in tourism and culture CRUISING HEIGHTS February 2006

had a huge spin-off effect for the state. Tourism boomed and people went there and found that the situation was normal. We talk about Delhi’s woes and the Commonwealth Games in 2010 and she talks about what Melbourne officials had to say about the infrastructure in that city for this year’s edition of the Games. “They mentioned the example of Sydney after the Olympics and said that tourist traffic had doubled after the Games, thanks to the infrastructure and the huge publicity of the Olympics.” She can see Delhi reaping the benefits of such a spin-off. Ambika also believes that tourism and culture are catalysts for national integration and unity; that it helps build great affinity between people, languages and traditions. “There is so much variety and colour and history in our country that it helps people connect with each other,” she says, and adds in the same breath, “Of course, they also get plenty value for their money.” Those who have known her for years, from her days as a high-profile Youth Congress President, are blunt that the Ambika Soni stamp will soon be evident both in tourism and culture. They recall her days in the Youth Congress and say that if there is any special quality that the lady has in her, is her “willingness to learn and attention to detail.” “I am fortunate that everything is booming and people are looking at India. I think, I am at a stage where I can only help consolidate this huge opportunity.” But, like many of her predecessors, she, too, has a long list of tourism imbalances that she hopes she can rectify. Aviation Turbine Fuel (ATF), lands for hotels, less taxes are all issues that are on her table. “I am meeting the Finance Minister to press on these issues,” she said as we were chatting. Hopefully, Ambika Soni will be able to impress P. Chidambaram that less taxes is good business. And for tourism, it is the only way to do business.

Tourism_Digest.qxd

2/14/2006

4:34 PM

Page 2

TOURISM DIGEST

AT A GLANCE Increased spending in tsunami-hit countries VISA HAS said that its cardholders are now spending more in most of the countries devastated by the tsunami than in the period just before the disaster. The spending in the tsunamiaffected countries as a whole grew by about eight per cent as compared to the previous year’s. The figures released by Visa are as follows: tourist spending in the week ending December 11 was up 23 per cent in India, 12 per cent in Thailand and eight per cent in Phuket; Malaysia and the Maldives, too, reported an increase; but tourist spending in Sri Lanka and Indonesia was down 11 per cent and two per cent, respectively.

Brazil wakes up to tourism potential BRAZIL IS gearing up to market its steamy Amazon jungles and sun-baked Atlantic beaches as world destinations, and aims to be among the top ten global holiday spots by 2010. Practically unknown in the world as a tourist destination—ranked 40th last year among the world’s most popular holiday destinations—the country has doubled its income from foreign tourists in the last three years. In spite of being Latin America’s largest country, Brazil is way behind far smaller Asian and Caribbean countries. Brazil opened a dedicated tourist ministry only in 2003 when President Luiz Inacio Lula da Silva entered office. It tripled the tourism ministry’s budget since 2003 despite wider budget cuts to reduce debt were in force.

Tanzania is top ecotourism destination TANZANIA HAS been voted the world’s top ecotourism destination in an online travel poll. It topped due to its policy of connecting tourism with responsible activities such as conserving wildlife and promoting work in local communities. Kenya and Egypt also figured in the top three spots. India’s Kerala and Ecuador’s Galapagos Islands were listed as other ecofriendly destinations for the environmentally aware traveller. Incidentally, Tanzania also recently won the Torchbearer Award for Best Performing Tourist Entity in another tourism category recently, because of its internationally acclaimed Holiday Inn Dar es Salaam.

Illustrations by Zahid Ali

Philippines launches medical tourism campaign

IN AN effort to grab a slice of the multibillion-dollar medical tourism industry, Philippines recently launched a campaign to promote the archipelago as ‘islands of wellness’. Health Secretary Francisco Duque III said government agencies and private clinics and hospitals will strive to make the Philippines the ‘new hub of wellness and medical care in Asia’. Medical tourism, which is both healthcare and travel and leisure, last year generated more than one billion dollars in revenues for Thailand, India and Malaysia. The Philippines will target medical tourists from the United States, the large Filipino-American community, in particular, Europe, Australia, South Korea, Japan and Pacific island states, as the prices of medical and surgical procedures in the Philippines are 30 to 50 per cent cheaper than elsewhere. CRUISING HEIGHTS February 2006

Tourism_Digest.qxd

2/14/2006

4:36 PM

Page 3

Nepal’s tourism looks bleak

Thailand is world’s best tourist country

LOCAL TOURISM entrepreneurs claim that the rise in political unrest has scared tourists away from the Himalayan Kingdom. Tour operators reported that roughly 50 per cent potential visitors cancelled bookings, whereas hotels reported around 20 per cent cancellations. To worsen matters, several Kathmandu-based foreign embassies are asking their citizens to avoid travelling to Nepal. Home to eight of the world’s 14 highest mountains, including Mount Everest, 2,77,129 tourists visited the country last year, which was down by nearly four per cent from the previous year. Although the insurgents have so far not attacked tourists, they choose to demand ‘taxes’, instead, from trekkers in remote areas. Tourism’s share is about four per cent of the gross domestic product of Nepal.

FOR THE third year in a row, Thailand has been named as the World’s Best Tourist Country in the 2005 Grand Travel Award, held recently in Norway. Greece and Italy stood second and third, respectively. The Travel Trade Jury and 300 tour companies in Norway gave the honour to Thailand after deliberations and decision. Thai news agency said that this showed tourists remained impressed by the friendliness of Thai people as well as the natural beauties and charms of the country’s tourist sites, though it suffered great losses from the tsunami disaster in late December 2004.

Lonely Planet is a ‘power brand’ LONELY PLANET has been voted the eighth most powerful brand in the Asia-Pacific region in Brand channel website’s 2005 Readers Choice Awards for Brand of the Year. The awards measure the brands that had the most impact on readers during 2005, and were voted for online during November and December 2005. Lonely Planet has consistently ranked

Americans’ hot destinations US AIRWAYS and Barclays have launched a first-of-its-kind programme, wherein Americans are asked to vote online for their favourite travel destinations; in return, they are offered a chance to purchase tickets for flights to the most popular destinations for 50 cents. Since the launch of the programme, last month, thousands of Americans have cast their votes at 50centflights website. Surprisingly, Americans voted Rome as the top destination. While Rome is winning by a landslide over Number Two destination, Las Vegas, the top five US destinations are Las Vegas, Orland, Los Angeles, Honolulu and Phoenix. The top five international destinations rank as follows: Rome, Paris, Venice, London and Dublin. This month, all those who have signed up for a US Airways Dividend World MasterCard from Barclays are eligible to earn a 50-cent flight on US Airways. The destinations announced are Miami, Vegas, Hawaii and Los Angeles. Additional destinations will be announced for each business day throughout the entire month and will be available on a first-come-first-serve basis.

Singapore hoteliers vs Dubai hoteliers

in the top ten most powerful AsiaPacific brands since the awards began in 2001. The Number One brand for Asia-Pacific was Sony, while Google was the first choice for brand impact globally. Confirming its commitment to the Asia-Pacific region, Lonely Planet also recently announced a new publishing partnership with SDX Joint Publishing Company, one of China’s most respected publishing houses. The first set of Lonely Planet guidebooks, translated into simplified Chinese script, will be launched in June 2006. Launch titles will include guidebooks to key outbound destinations such as Australia, Germany and Britain. The new Chinese guidebooks will be available in Xinhua and private bookstores in major cities throughout mainland China.

SINGAPORE’S F I V E - S TA R hotels have finally mustered courage and are pushing room rates up by as much as 25 per cent. A report released by Jones Lang LaSalle Hotels revealed that Singapore hoteliers were charging lower room rates than their counterparts in Bangkok, Hong Kong and Shanghai. The average daily rate for five-star hotels in Singapore is around US $120, while Hong Kong hoteliers charged an average of US $248. Hotels say that increased tourist arrivals into Singapore has helped to boost the demand for hotel rooms. It is interesting to note that rather than the holidaymaker, it is business and MICE travellers—so called due to the Meetings, Incentives, Conventions, Exhibitions they attend—who have contributed more to better business for hotels. Curiously enough, according to industry leaders, high prices of rooms in Dubai are having a negative impact on the growth in the tourism sector. Industry leaders also claim that the high room rates, which have been hiked as much as 100 per cent, are killing the industry, as visitors are now thronging the neighbouring Emirates to find accommodation. CRUISING HEIGHTS February 2006

Kerala in WTTC shortlist THE WORLD Travel & Tourism Council (WTTC) announced the 12 finalists for the 2006 Tourism for Tomorrow Awards. The awards represent the highest accolade for best practice in tourism development around the world. The finalists were selected by an international committee of experts from over 100 applications from more than 35 countries representing the full spectrum of travel & tourism enterprises, large, medium, and small. Costas Christ, Judging Chairman for the Awards and an internationally recognised expert on sustainable tourism, said, “The committee was extremely impressed by the high quality of entries for these awards. It is inspiring to see the growing number of businesses and organisations around the world committed to the principles of responsible tourism. From small lodges to entire regions, we are seeing role models emerging in all corners of the globe.” Kerala has been short-listed for the destination category along with Crete’s Culinary Sanctuaries, Greece and Sierra Gorda, Mexico.

Snippets.qxd

2/14/2006

9:00 PM

Page 42

SNIPPETS

arrives

LEFT TO RIGHT: Bab Goyal, Dhruv Shringi and Manish Amin

ATRA ONLINE, to be launched in the second quarter of 2006, is the first online and centralised travel services company for the India market. Customers can book airline, railway and bus tickets, reserve hotel rooms and car rentals by either calling Yatra’s call

centre, or by logging into the company’s website, www. yatra.in, or by using their mobile handsets. The company will provide travel-related information, pricing, availability and reservations for airlines, hotels, railway, buses and car rentals across 5,000 large cities and small rural areas throughout India. Yatra’s multilanguage customer service centre will provide travellers with a 24 x 7 service to make bookings, through its online, call centre and mobile support. In addition, the company will also offer free travel-related news and travel advisory services to make travelling a pleasant experience. Worldrenowned investors such as Norwest Venture Partners (NVP)—Promod Haque’s leading venture capital firm, Reliance Capital—a member of Reliance Group headed by Anil Ambani, Television 18 Group (TV18)—India’s premier news broadcaster (CNBC TV18, CNN IBN and Awaaz), and a leading Internet player— operating moneycontrol.com, commoditiescontrol.com and ibnlive.com, founded by Raghav Bahl, are a few names that have funded the Yatra project.

NOBLE CAUSE: The International Chef's Day & Child Charity Donation programme was held at the Le Meridien Hotel, New Delhi, on January, 30, 2006. On this occasion, the proceeds collected from the Charity Dinner, which was held at the Taj Palace Hotel, New Delhi, a cheque for Rs 2.13 lakh each was donated to CRY and to PHD Family Welfare Fund. Seen in the picture are Vice Admiral H. Johnson, Advisor to CRY, receiving the cheque of Rs 2.13 lakh from Sushma Berlia, President, PHD Chamber of Commerce & Industry, and Anil Bhandari, Managing Director, International Travel House Ltd, New Delhi.

Three cheers for Navaid Rajji Rai hosted a big party to celebrate the promotion of Navaid Desai as the Chief General Manager of Jet Airways. There was plenty of bonhomie, laughter and of course goodwill. This airline industry veteran is much loved and it was evident from the turnout at the party.

CRUISING HEIGHTS February 2006

Snippets.qxd

2/14/2006

9:04 PM

Page 43

The Oberoi Rajvilas among the best in the world for service

Oberoi properties bag awards Conde Nast Traveler’s Gold List has ranked The Oberoi Rajvilas, the luxury resort in Jaipur, as among the highest ranked hotels in the world for service. The Gold List, released annually by Conde Nast Traveler, USA, lists the world’s best hotels, resorts and cruise lines, as ranked by the readers of the magazine. A perfect score of 100 for for its rooms in the 2006 has placed The Oberoi Rajvilas in the coveted ranks of hotels like Ritz-Carlton, Bali Resort & Spa; Amankila, Bali and Chewton Glen, England; and ahead of The Peninsula, Beverly Hills; Four Seasons Hotel, Chicago; and Four Seasons, Cairo; among others. Recently, another property of the Oberoi group—The Oberoi Udaivilas, Udaipur—was ranked the best hotel in the world for service in a separate worldwide readership survey carried out by the UK edition of Conde Nast Traveller. If The Oberoi, Mumbai, had a location better than Hotel Bora Bora’s, in French Polynesia, and The Raffles Plaza’s, in Singapore, it would have been rated the best hotel for location in Asia, Australia and Pacific Nations—it was ranked third, with a score of 97.2.

Munjal Award for Goyal

THE FIRST BML Munjal Award for Excellence in Learning & Development in the Private Sector category was awarded to Naresh Goyal, Chairman, Jet Airways (India) Ltd, in a special function held in Delhi. Civil Aviation Minister Praful Patel also presented Goyal with a citation. The awards ceremony was organised as part of Hero Mindmine Institute’s Summit on “Emerging Business Challenges: Search for Winning Responses.” The jury, headed by Deepak Parekh, HDFC, included personalities such as Shobana Bhartia, The HT Group; Arun Maria, BCG; Ajay Sriram, DSCL; Dr Vinayshil Gautam, IIT Delhi; Tarun Das, CII; and Sunil Munjal, Hero Mindmine Institute. A delighted Goyal thanked his colleagues, particularly mentioning the front-line staff that delivered the product and service smilingly often under difficult and stressful situations, in Jet Airways, and added that to be the first recipient of this prestigious award was particularly significant and meaningful.

The king of good times New flights: Kingfisher Airlines, which has been selected the No 3 Most Successful Brand launch of 2005 by the Brand Derby Survey, has announced the launch of its new service between Mumbai and Mangalore. The new route will provide convenient service for business and leisure travellers alike at inaugural True Value fare of Rs 1,999 onwards for travel between the two cities. With the launch of this new route, the number of daily flights offered by the airline has gone up to 58, connecting 14 key Indian cities. Say it with perfumes: In another of his ‘heady’ moves, Kingfisher Airlines has tied up with leading international perfume brands, such as Pierre Cardin, Paul Smith and Kenzo, to provide a first-of-its-kind offer to its patrons. To avail of the airline’s ‘Scent of Good Times’ offer, all that a guest needs to do is buy a Kingfisher Airlines ticket coupon booklet, containing two flight coupons, worth Rs 10,000, and get perfumes and cosmetics, worth Rs 4,000, on the spot and absolutely free. These flight coupons, valid until June 30, 2006, can be used for travel between any two destinations where the airline operates flights.

Srilankan’s new area manager for India

SHARUKA WICKRAMA-ADITTYA has replaced Lalini Weerasinghe as the new Area Manager of Sri Lankan’s operations in northern India, Nepal and Bangladesh. Weerasinghe had headed the portfolio for two years. Before this, Wickrama-Adittya was working in the airline’s sales division in Colombo. All set to change the perceptions of tourism in his country, the new Area Manager is confident his carrier will continue to be the biggest contributor to the promotion of tourism on the island. Sri Lanka dislikes its ‘cheaper destination’ billing and is seeking premium positioning. Wickrama-Adittya is keen to grab a fair share of tourists from Ahmedabad and Kolkata, and is also looking at Pune, Jaipur and Goa as prime source markets. SriLanka currently operates to 17 destinations, but has got the green signal to operate to a total of 25 destinations in India. CRUISING HEIGHTS February 2006

Snippets.qxd

2/14/2006

9:02 PM

Page 44

SNIPPETS

Arjun Sharma

Tourism Ireland and Thomas Cook launches Special Holiday Packages TOURISM IRELAND and Thomas Cook have come together to offer the Indian traveller an irresistible special holiday package for four nights and five days in a heaven that is long known as Europe’s Emerald Island—Ireland—for the amazing greenness of its countryside. Today Ireland is also renowned as the home of the Celtic Tiger, one of the world’s most consistently successful economies. Bertie Ahern TD, the Irish Prime Minister recently visited India and hosted a series of tourism events to introduce the Indian market to the beauty, culture and rich heritage of the island of Ireland. The Tourism Ireland India office was set up in February 2004 by Beena Menon and Huzan Fraser in Mumbai. Until then Ireland was an unexplored destination for the Indian market. Travel agents and tour operators are now including Ireland itineraries in their brochures. In 2006, more than 20 agents would have included Ireland in their programmes. Tourism Ireland has taken initiative of joint packages with airlines to promote Ireland.

Even mathematically, Andamans stand the best THEY SAY once scientifically proven, arguments take a back seat towards the authencity. Innumerable pages have already been written about the heavenly beaches of Andamans. But now, Mr. Wim de Ruiter, the renowned tour operator turned author of Germany, propounds a mathematical formula to decide the perfect beach, and rates Andamans as the best in his list of the areas containing the World’s 10 beaches, carried in ‘The Independence’. Others to follow in the top four are Laccadive Islands, the Maldives and the Seychelles, all in the Indian Ocean. For Mr. de Ruiter , who has spent three invaluable decades in the International Tourism Management business, the quest for a perfect beach has been an obsession. He says,-“ I have closely researched the relevant and objective measurable factors which define the quality of a beach.” The travel brochures, he says, claim the beaches they are promoting have “ the finest white sand, with crystal-clear emerald waters”. But often holidaymakers are disappointed. Less hard-headed observers, he notes, may be affected by “other influences such as clear horizons, cleanliness, crowdedness, ugly buildings, noise, and presence or absence of attractive members of the opposite sex”. So, for Mr. Ruiter no more decorative statements about swaying palm trees or shimmering seas. He has applied hard science to the issue. Mr de Ruiter’s top 10 is based solely on verifiable factors such as sand quality, depth of water and the angle of the sun - which are rated on a scale of 1 to 5.

CRUISING HEIGHTS February 2006

Le Passage Embraces ‘Select’ LE PASSAGE to India Tours & Travels, an inbound tour company, has acquired Select Vacations Pvt Ltd, a company in the business of promoting leisure travel overseas, and is now venturing into the outbound tours market segment. Born just three years ago, Le Passage to India has achieved remarkable growth and today ranks in the top three destination management companies. Speaking on the new moves made by the company, its managing director, Arjun Sharma, noted that it is but natural for Le Passage to India to enter into the growing market—Indian outbound travel has been growing at the rate of 15-20 per cent annually during the last 2-3 years—to become a leading tours and travel company. He added that the ready market access and service delivery infrastructure of Select Vacations will provide the foundation from where Le Passage to India can aggressively move forward in the next three years to become one of India’s leading outbound tour operators.

Snippets.qxd

2/14/2006

5:19 PM

Page 45

Freighters for First Flight BAE SYSTEMS Regional Aircraft has signed long-term leases with First Flight Couriers Private Limited (FFCL) for three ATP Freighters, which will be used by the company to start its own Indian domestic freighter operations. The three aircraft—msn 2039, 2051 and 2054— will be delivered from the second quarter of 2006 and will be configured as E-Class bulk freighters. In addition to leasing the aircraft, FFCL has signed up for a Material and Component Repair and Overhaul (MACRO) support contract, as well as a full suite of Customer Training packages from Regional Aircraft. Founded in 1986, FFCL has become India’s largest courier company by volume, handling over 150 million shipments every year, with 721 offices spanning 1,800 destinations in the country and serving 229 countries worldwide. Currently, shipments within India are carried on belly-hold space on domestic airlines and then transported to their final destinations using a large fleet of trucks, vans and small delivery vehicles.

Emirates’ forays into South and Northeast India

BOOKINGS ARE now open for Emirate’s Dubai-Thiruvananthapuram flight service, launched on February 1. The airline will press A 330-200 and Boeing 777-200 aircraft into service and fly eight times a week between the two destinations. It is estimated by the airline that of the 1.5 million Non-Resident Keralites that live in the Middle East countries, 41 per cent of them visit their home state once a year, and the airline will provide them with timely, efficient and reliable air links between the two countries, via the airline’s hub in Dubai. Further, the airline will operate six nonstop, direct flights per week between Dubai and Kolkata effective March 26, 2006. These moves will enhance Emirates’ India network to a total of seven cities being served by 63 flights per week.

CAPA announcements CENTER FOR Asia Pacific Aviation Executive Chairman, Peter Harbison, today outlined the company’s strategic plans for 2006. Highlights include the launch of a major new airport/ ATC finance and development conference with Airports Council International in Singapore later in the year (supported by CAAS), further expansion of the Centre’s information/data services offering and a push by the consulting unit for further airline restructuring assignments.“2006 is a year of challenges ahead for the industry and we are well positioned to advise the industry on the best course of action through our unique range of solutions, including strategic consulting services, intelligence and data services, and niche summits for industry leaders”, said Mr Harbison. The Center currently has four major Aviation Leadership Summits planned in 2006: z India & Middle East Aviation Investor Summit, 3-4 April, Mumbai z Airport Business Asia 2006, Late August, Singapore z India & Middle East Low Cost Airline Symposium 2006, Delhi, Early October z Aviation Outlook Summit 2007, Late November

IATO wants awards restored IATO (INDIAN ASSOCIATION OF TOUR OPERATORS) is unhappy at the low priority given to tour operators in national tourism awards. Since the time these awards were initiated, tour operators were given a special recognition in varied categories, based on foreign exchange earnings. In 1999-2000, there were over 12 awards for tour operators, three awards each in four different categories. According to IATO, this unilateral decision is not only counterproductive, but is also very depressing for its members. “For our country, tour operators play a bigger role, with enchanting packages bringing in valuable foreign exchange as well as creating millions of jobs and meaningful livelihood for people,” the association said in a statement. IATO has made a representation to the Tourism Minister to reinstate the awards for the tour operators as per the criteria that was being followed earlier so that small tour operators are also encouraged. CRUISING HEIGHTS February 2006

Snippets.qxd

2/15/2006

4:07 PM

Page 46

SNIPPETS

INDIAN NEWS Indian goes for e-ticket INDIAN HAS partnered with Amadeus to implement the first electronic ticketing solution in India with global reach, further strengthening its leadership in the Indian aviation market. The airline will implement Amadeus Electronic Ticket Server (ETS) to fully manage and distribute LEFT TO RIGHT: Ankur Bhatia, MD, electronic tickets, including Damian J. Hickey, Vice President, interlining. This contract with an Airlines Business Group, Amadeus Asia airline of the Indian subcontiPacific; Anil Goyal, Commercial Director, nent reinforces Amadeus’ posiIndian; Sharat Bansal, National Head, tion in the region as the e-ticketIBM Business Consulting Services ing leader, in terms of IT provision as well as e-ticket distribution. The agreement is in relationship with IBM, which will undertake the upgrade of processes and systems at Indian to IATA e-ticketing standards. “Indian has moved a step forward and will offer e-tickets by the end of this year,” said Anil Goyal, Director Commercial, Indian, which expects to become fully compliant with IATA’s objective to achieve 100 per cent paper-less air travel by end 2007. “We are pleased to partner with Amadeus for the support and eticketing solution. Amadeus’ commitment to deliver tailored technology solutions that best meet our needs is clear. Its cutting edge e-ticketing system is able to deliver direct business benefits and considerable cost savings to Indian, ensuring the smooth ticketing of flight itineraries,” Said Ankur Bhatia, MD, Amadeus India, “Eticketing has revolutionised the travel process today, ushering in greater convenience and efficiencies for the travel agent, airlines and most importantly for the end traveller. As a leading travel technology provider we are committed to offer the best of breed technology solutions that enable our airline partners and the travel agent fraternity to seamlessly switch to e-ticketing. In fact it’s worth mentioning that we have received tremendous response so far for e-ticketing with a total of 40,000 etickets already being issued per month on the Amadeus system in India.”

Hyderabad bags fortune safari The popular IA Fortune-Safari contest for passengers flying Indian from OctoberDecember 2005 ended with the lucky winner, Dr J. Subbanna of Secunderabad, driving away with the Mega Prize of a Tata Safari Dicor-VX car, for the Fortune Safari-4 contest. Mohan Jacob Kurien of Kolkata and Jagdish Acharya of Bangalore also won a Tata Safari-LX car each in the same category for the second (October 15-November 14, 2005) and third months (November 15–December 14, 2005), respectively. Jignesh H. Sheth of Mumbai was the lucky winner of two 12-coupon Executive Class Super Saver tickets, the ‘Mega’ Prize for the Fortune Safari-2 contest. At a draw held in Delhi recently, the airline’s Chairman and Managing Director Sushma Chawla announced the names of the lucky winners of the IA Fortune Safari-4 and 2 for the second month and third months in the presence of media persons and other senior officials of the airline. As many as 80 second, third and consolation prizes comprising Holiday Packages, Super Saver coupons and tickets of Indian, were announced.

Desh Videsh bonanza Indian has launched a new scheme, Desh Videsh 2006, with immediate effect. Desh Videsh 2006 offers reward tickets to passengers completing the requisite travel within the period February 6 to May 5, 2006. The details of the scheme are as follows: z A reward of one international or domestic return ticket of two coupons in M class for a total travel value of Rs 75,000. z A reward of one international or domestic return ticket of two coupons in C/J class for a total travel value of Rs 1,00,000. z A reward of two international or domestic return tickets of two coupons in M class for a total travel value of Rs 1,25,000. z A reward of two international or domestic return tickets of two coupons in C/J class for a total travel value of Rs 1,60,000.

CRUISING HEIGHTS February 2006

New destinations and freebies from GoAir GOAIR HAS acquired a third A320 aircraft and ]has thus added Indore, Kochi, Pune and Vadodara to its network, in addition to flying on two new sectors—Chennai- Pune-Chennai and PuneAhmedabad- Pune. With this, the airline’s network spreads to 14 cities and 30 flights per day. In addition, the airline is offering 10,000 ‘free tickets’ on

the new destinations and sectors. The lucky passengers have to shell out a mere Rs 221 per ticket as taxes. The booking for GoAir FreeFares is open until March 26 on a first-come-first-serve basis, till stocks last. GoAir had previously also offered 10,000 FreeFares on its Ahmedabad, Bangalore, Chennai, Coimbatore, Goa, Hyderabad, Jaipur and Mumbai routes.

Jetstar Asia touches down in Bangalore JETSTAR ASIA has launched flights to Bangalore marking a new chapter in Indian aviation as Singapore’s first value for money carrier to establish links with Karnataka. “We’re delighted to be flying to Bangalore, and if our forward bookings suggest anything, then so are our passengers,” said Mr Neil Thompson, Acting CEO for Jetstar Asia. “Being the first value for money carrier between Southeast Asia and Bangalore we’re keen to tap into a combination of SME business travellers and the growing tourist trade that’s coming from India to Singapore and onwards,” Mr Thompson said. “We are also confident that we’ll not only be able to take market share, but also tap into the latent demand that exists in the market. The prices for airfares between Bangalore and Singapore have been too high, for too long,” he said.Hot food, snacks and beverages along with duty free items may be purchased on board. Jetstar Asia, Singapore’s leading value for money airline today announced the appointment of Bird Travels Pvt. Ltd, the airline distribution arm of The Bird Group, as its General Sales Agent for India with immediate effect. Bird Travels will be responsible for the management of Jetstar Asia’s sales and marketing operations in India.

Snippets.qxd

2/14/2006

5:24 PM

Page 47

DECCAN KHABAR Plan your may trip Air Deccan has opened bookings on all Airbus sectors for travel from 1 May 2006 to 31 May 2006. Fares on all Airbus sectors begin at Re 1/- (plus Rs 221/- taxes). Deccan files for IPO:Deccan Aviation limited, operating Air Deccan, a leading no-frills, low-cost, scheduled commercial passenger airline in India, has drawn out their expansion plans. The plans include setting up of a training centre, a hangar facility for basic and medium level maintenance checks at Chennai and creating infrastructure at airports. The plan also covers market development initiatives. The Company is also a leading provider of Private helicopter and airplane chartering service in India. To fund this expansion plan, Deccan Aviation Limited soon proposes to enter the capital market with a public issue of 24,546,000 equity shares of Rs 10 each through 100% book building process. The issue would constitute 25% of the fully diluted post issue paid-up capital of the company.

Air Deccan began scheduled operations in August 2003, with a single ATR turboprop aircraft flying a single route between Bangalore and Hubli. Since inception, Air Deccan has: Carried approximately 2.7 million passengers, till November 30, 2005. Expanded its fleet to 23 aircraft .The airline has grown its schedule to 185flights daily, as on December 6, 2005 Increased its route network to 46 airports as on December 6, 2005

IATA’s Singapore Summit ASIA IS home to one of the most dynamic markets in aviation today - India. With less than 1% of its population travelling by air, India’s growth potential is enormous. Within a period of 15 years, the number of Indian carriers has grown from 2 players to more than 10 today. Indian carriers also placed over US$12 billion of aircraft orders at the Paris Air Show. There are great opportunities and great challenges. India will change the face of modern aviation. Change-to recover lost ground and take advantage of new opportunities-has never been more important. Iata is hostin g a conference in Singapore on February 20-21 tp debate all these issues. The Summit will have three discussion panels: Panel Discussion 1 : Mapping The Future, Winning Strategies The air transport industry is changing - new markets are emerging, costs are rising, shifts in travel patterns and many more. Panel Discussion 2 : Let’s Help The PassengerPanel Discussion 3 : Accommodating New Markets. The Indian air transport sector is among the most vibrant and fastest growing in the world. The number

of Indian carriers has grown from 2 players in 1991 to more than ten today. Indian carriers also placed over US$12 billion of aircraft orders at the Paris Air Show. With GDP growth of 7.2% for 2005 to 2009, air traffic growth can be expected to be in the 15% range. Significant changes, both regulatory and infrastructure, are taking place in India. This panel will discuss the travel trends, opportunities and changes in taking place, and will also give an insight into the huge market. Amongst the speakers are: Robert Milton(Chairman, Air Canada),Chew Choon Seng, (Chief Executive Officer, Singapore Airlines),Mr Koen Rooijmans, Managing Director and Chief Executive Officer, Brisbane Airport ,Mr Peter Negline, JP Morgan ,Naresh Goyal( Chairman, Jet Airways), V. Thulasidas( Chairman and Managing Director, Air India), Peter Hill(CEO, Sri Lankan Airways) John Koldowski( Director, Strategic Intelligence Centre, PATA)Civil Aviation Minister Praful Patel will be keynote lunch speaker, and Singapore’s Transport Minister, Mr Yeo Cheow Tong, will give the opening address.

APPOINTMENTS Malaysia Airlines is tops MALAYSIA AIRLINES overcame stiff competition from three Asian, one European and one Middle East Airline and flew on to receive the Best Airline to Asia award. The award was given on the basis of polls conducted by Travel Weekly, a UK-based magazine, which recognises excellence amongst travel industry suppliers. The delighted airline went on to announce the appointment of Shamsol Ali as the new Regional Accounting Manager for South Asia. Ali has a proficient experience of ten years and speciales in the area of financial reporting and accounting. Before this senior position, he has successfully held various posts within Malaysia Airlines group finance division. Ali has already assumed charge of his official responsibilities and will be based in Malaysia Airlines South Asia head office, in New Delhi. Currently, Malaysia Airlines operates 33 weekly flights from New Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Ahmedabad and Kolkata.

Nambiar is Gulf Air pointsman GULF AIR has appointed Rajeev Nambiar as the new General Manager for India operations based at Mumbai. He moves from Dubai, where he was General Manager for Dubai and Northern Emirates. A consistent achiever and winning performer, Nambiar has risen from the ranks of Gulf Air, having joined it in 1999 as District Sales Manager in Doha, Qatar from KLM Royal Dutch Airlines. A Bahrainborn Indian, Nambiar brings to the position a depth of knowledge and experience that will serve him well in this highly competitive market. “I am delighted to take up the new position in India, which is an important market for Gulf Air,” says Nambiar. And adds:”Gulf Air is, and will continue to be, a major player in this rapidly growing travel market. I hope to continue with my undeterred spirit to further develop the market. I am thankful to Gulf Air management for their confidence.”

CRUISING HEIGHTS February 2006

Back Page.qxd

2/14/2006

9:09 PM

Page 2

BACK PAGE

Luethi runs the Marathon IN A couple of weeks Peter Luethi will return home to the US after three eventful years with Jet Airways as its Chief Operating Officer. And before he moves home, Luethi, in a lovely gesture, practised hard to run the Mumbai Marathon. And indeed he did run the event with thirty other colleagues from the airline to support Magic Bus, an NGO that supports underprivileged children. Colleagues from all over India flew into the city to run with hundreds of others, but for us the enduring image is Luethi practising with several of his team for the big day. As you get ready to sign off, it’s a special kind of commitment. One wished Jet Chairman Naresh Goyal was there at the rally. It would have been good press and good for his physique. A couple of kilos off the mid riff would have done him no harm.

RELAXED AND SMILING

If you look at the man on the left, he is clearly relaxed and perhaps feeling relieved. And why not? After many millions of miles of up and down travel, Boeing Senior VP, Dinesh Keskar, finally had the historic Air India deal wrapped up without a hitch. He also made sure that the company’s President and CEO, Alan R. Mulally, was there to sign the agreement. What must have made the event even more sugary was the fact that the ceremony was held in his home state, with plenty of Marathi bonhomie all around the conference hall at AI headquarters in Nariman Point. A quarter-century-old Boeing veteran, Keskar has seen it all, including the Airbus mauling of Boeing in the IA sweepstakes, in the mid-Eighties, to the remarkable turnaround where his company has the largest fleet of aircraft (the 737 series) in the private sector in India and finally the icing on the cake: the all-Boeing deal from AI. It’s been a long haul, but clearly worthwhile. No wonder, Dinesh can’t stop smiling.

Well done, Ayesha CAPTAIN AYESHA RABIA NAVEED created history when she commanded a Fokker aircraft from Islamabad to Lahore on January 26. It was the first all-woman flight in Pakistan and came as a huge surprise to the passengers who learnt of the history that was created only when the aircraft landed at Allama Iqbal airport in Lahore and the station manager garlanded the two lady pilots. The co-pilot of the turbo prop was Captain Sadia. At present, Capt Ayesha is the sole woman pilot of PIA who is licensed to fly Fokker planes only. She remained co-pilot or first officer for 15 years and has 6,000 flying hours behind her. Nonetheless the path that she has traversed is sure to enthuse scores of others to take up flying.

Having the last laugh Recognise the balding gentleman sitting next to Civil Aviation Secretary Ajay Prasad. Well, he is the former Joint Secretary in the Ministry of Civil Aviation and now the country’s pointsperson in ICAO (International Civil Aviation Authority). His name is Dr Naseem Zaidi. This picture was taken when the easy going Zaidi, Prasad and AAI Chairman Ramalingam addressed a news conference to address the modernisation process for Delhi and Mumbai airports. It’s been a long while since then. Dr Zaidi left some months back after piloting the processes till the halfway mark. He must be having the last laugh in below-zero Montreal. His fellow civil servants had a few hot moments last month, but he can take consolation in the fact that what one-third credit (or discredit, depending on the angle you choose) can go to the good man.

CRUISING HEIGHTS February 2006

AIR INDIA

AD.qxd

2/9/2006

11:04 AM

Page 1

INDIAN AIRLINES AD.qxd

2/15/2006

5:56 PM

Page 1