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The bigger the better

Larry Page and Sergey Brin (Google co-founders) may have secured a Nasa landing spot for their personal planes that is the envy of their Silicon Valley colleagues, but in the field of private jet one-upmanship, their achievement is relatively modest. John Travolta, who has his own pilot’s licence and is well known as an ambassador for the Australian airline Qantas, demonstrated his enthusiasm for flying by naming his son Jett. His five planes, which include a customised Boeing 707, are within even easier reach than the Google jet—they are kept on the driveway of his house, which has a fulllength runway complete with a replica 1950s airport lounge. Some super-rich jet owners, however, outclass even Travolta. Airbus revealed earlier this year that they had received an order from a private client for one of their new A380s. Various designs for private use, which would add up to £200m to the price, have been proposed, including plans for two en-suite bedrooms (one with its own hot tub), two dining rooms, an office, a library, a gym with its own sauna, and a stateroom, as well as quarters for eight crew members. Although Airbus refused to reveal the identity of their client beyond stating that he was not European or American, Le Figaro this month reported the buyer to be Roman Abramovich, the Russian billionaire, who owns Chelsea Football Club. He has, however, denied having placed an order for the plane. Other men regarded as possible buyers include the jetsetting Indian billionaire Vijay Mallya, who owns Kingfisher beer as well as Kingfisher Airlines, which has placed an order for five of the planes for commercial use. Other rumours suggesting that it may be the head of a Middle Eastern state have focused their speculation particularly on the Sultan of Brunei, once the richest man in the world. Courtesy: www.timesonline.co.uk

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contents DRIVING

FROM THE FRONT p24 With a market share of 26 per cent in just two years of its existence, Paramount Airways has chalked out plans of going national by 2011. Clear about his business model, the airline’s chief believes in providing value-added services.

OFF THE RECORD

What went into the completion of the mother of all mergers? Inside dope on the creation of the country's biggest airline.

CRUISING HEIGHTS October 2007

SPECIAL REPORT

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With India becoming a battleground for international airlines fighting for passengers, we assess the lucrative Indo-North America and Indo-Europe market. Does it mean falling yields and lower margins?

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

INTERVIEW

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Virgin's India head Judith Wilcox speaks about the competition on the India-UK sector and the future plans.

CRUISING HEIGHTS K. SRINIVASAN Editor-in-Chief

TIRTHANKAR GHOSH Managing Editor

R. KRISHNAN

Consulting Editor

SUNIL BHASIN Editor (Quality)

NEWS DIGEST

SHIVANGI SHARMA

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Editorial Coordinator

Vijay Mallya has decided to re-launch Air Deccan with new colours. He has been trying to get permission to fly abroad, but will he be able to do so, now that the political situation is not conducive?

RUCHI SINHA PRADEEP JHA Layout Artists

BHART BHARDWAJ Art Director

H.C. TIWARI

Consulting Photographer

RAJIV SINGH

Gen. Manager (Admn.)

RENU MITTAL Executive Director

SNIPPETS

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Domestic and international news and events from the world of aviation and aviation infrastructure. Plus reports on happenings in the travel and tourism sector.

LOGISTICS MAJORS PLAN BIG

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The cargo and logistics business has started planning big for the air cargo boom. While First Flight Couriers is going in for bigger planes, Blue Dart has put its seventh freighter, a Boeing 757, into service.

GLOBETROTTING

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Imagine a monkey in the VIP lounge at Delhi's international airport! The authorities have tried their best to catch it but have now given up.

BACK PAGE

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The Concorde continues to fascinate. An auction for parts of the famous plane saw buyers picking up memorabilia.

CRUISING HEIGHTS October 2007

Editorial & Marketing office: Newsline Publications Pvt. Ltd. C-15, Sector 6, Noida 201 301 Telefax.: +91-120-4257701-03 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. Owned and published by K. Srinivasan 4C Pocket-IV, Mayur Vihar Phase-I, Delhi 110091 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase-I, New Delhi 110 020 Vol II No 6

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Fingers crossed

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“For the moment, there is some sanity in the (airline) market and we are not in favour of reducing prices.” SpiceJet director AJAY SINGH on the fares and the relative stability in the marketplace.

LETTERS TO EDITOR

PLEASE ACCEPT my compliments on your continuously insightful News Digest. You somehow seem to be able to get the inside stories and give us a real feel of what is happening in the Ministry of Civil Aviation. Now we know why Praful smiles every time he looks at Naresh Goyal or Vijay Mallya and we also get an understanding of who and what is the flavor of the season. Vimal Singh, Via email September 2007

GROUND HANDLING has become something of a muddle. How many times will the Ministry of Civil Aviation change the policy and how many times will they amend it to suit one airline or the other? In fact, the entire saga of ground (mis)handling only shows that on some issues there is simply no thinking at Rajiv Gandhi Bhawan. Radhika, Via email

Illustrations: Rajeev Kumar

“We have issued instructions to carry out inspection and, if required, corrective action through replacement or repairs and keeping the DGCA informed. The airlines have to carry out these inspections immediately.”

Directorate General of Civil Aviation DG KANU GOHAIN on the instructions to airlines after the US FAA issued Emergency Airworthiness Directive when a China Airlines 737-800 was destroyed in a fire caused by fuel leakage in Naha, Japan, in early August.

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PAWAN HANS new CMD, R.K. Tyagi must be congratulated for putting this public sector company on the fast track. It is a bit amazing that it took all this while for somebody to discover that a heliport at Akshardham would be a good idea. It only shows that if you have someone willing to think out of the box there are solutions to be found for every problem. Ashok Kumar, Tezpur

Prompt action

WHY SHOULD only the six major metros have a ground handling policy? Why can’t there be a uniform ground handling policy for the whole sector. Almost everything seems to be limited to the six big airports: Be it the airport regulator, be it the ground handler, be it the issue of slots or routes. When will we start to learn holistically of India as one? Aveek Kaul, Mumbai All correspondence may be addressed to Editor, Cruising Heights, C-15, Sector 6, Noida 201 301 OR mail to newslinepublications@rediffmail.com

Need to act “India is a signatory to it (Montreal Convention), but yet to ratify it... Thus, regrettably, our own laws have discriminated against our own citizens. This situation must be rectified.” Delhi Tourism managing director and former India rep at ICAO SANAT KAUL on the flaws in compensation for air crash victims.

Bloody keen “We are keen to take up other airport projects. We will bid aggressively for the Navi Mumbai as and when it comes up and also look at other airports.” GVK vice-chairman. G.V. SANJAY REDDY, on the group’s future plans for aviation.

Rarin’ to go “The combination of launch of services to Coimbatore and the decision to go back to our original summer schedule operations now that Colombo airport is open 24 hours will see us touch 100 weekly flights to India.” SriLankan CEO PETER HILL on the airline’s plans for India.

Up market low cost “Air Deccan will have a ‘premium’ look and feel, so that it changes into the best product in the low-cost airline space. Check-in staff will no longer be outsourced, but the service will be managed by airline employees. This will increase accountability and improve service delivery.” Kingfisher Airlines chairman VIJAY MALLYA on the makeover of his new baby, Air Deccan.

CRUISING HEIGHTS October 2007

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The Lok Sabha got an unusual reply from Civil Aviation Minister Praful Patel last month on bird hits sat major airports in India. Here are at the stats briefly: Total number of bird hits across India: 536 Highest number of bird hits: Mumbai (86 hits) Last in the ranking (seventh): Kolkata (25 hits)

COLD STATS

Others in the ranking: Delhi (79), Hyderabad (59), Ahmedabad (44), Bangalore (42) and Chennai (33) Period of assessment: January 2004 to December 2006 Praful's solution: Airfield Environment Management Committee to ‘manage’ the birds!

Bird-hit blues

LOOKING GLASS

“ I think this should be part of the civil aviation policy”

Goyalspeak “I want to produce a global Indian brand. That’s the passion for me, that’s what drives me...we have the capability to produce a global brand.” Jet Airways chairman NARESH GOYAL at the launch of the Delhi-Toronto flight.

Spin of the month “If Kingfisher Airlines, which holds 26 per cent in Air Deccan, plans to fly next year under its own logo, I don’t think there is any legal tangle to this issue. As far as civil aviation ministry is concerned, the policy of five years stands. The future decision has to be taken by the group of ministers (GOM).” Civil aviation minister PRAFUL PATEL’S reverse swing on how Vijay Mallya can jump the gun.

CRUISING HEIGHTS October 2007

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OFF THE RECORD

Plain tales from Air India Strictly speaking it should be celebration time at Air India and Indian. After two decades, the two airlines are receiving new aircraft, they are now a powerful new global brand, new routes are being planned and there seems a sense of urgency all around. So why is there a perpetual sense of melancholia amongst the employees? They are distressed and disillusioned, to put it mildly. Two weeks back, ‘the shit hit the ceiling’ so to speak, after the V. Thulasidas Chairman and Managing Director V Thulasidas spelt out the responsibilities of all the Directors and Executive Directors. Barring Joint Managing Director Vishwapati Trivedi and Deputy Managing Director Sushma Chawla, all the directors of the head of the Special Business Units (SBUs) were posted to Mumbai and were to report to the CMD. P P Singh, who is superannuated but continues to run Air India Express as a contract employee, was posted to Delhi and will report to Trivedi who heads this part of the business. So, all the big guns at Airlines House—Anup Shrivastava, Anita Khurana, Chandrashekar, and Deepak Brara—will move to Mumbai to the gleaming AI headquarters at Nariman Point. Airlines House at Rakabganj Road where so much history was made over the past 50 years will no more be the same.

Verma’s role In another dramatic move, Thulasidas divested Commercial Director V K Verma of most of his commercial responsibilities and decided that it was best if the department was handled by two Executive Directors reporting directly to him. However, in a surprise move, several days later, the CMD issued a fresh order, returning most of the responsibilities to the CD and having the EDs report to him as well. No one knows why this sudden V.K. Verma amendment, although the grapevine at Air India tells us that “based on input from colleagues and after a review of the situation, the CMD decided to amend his own order”. One of the EDs reporting to Verma is Deepak Brara, the articulate and sharp-as-a-razor former Director (PR) at Indian. Brara is no stranger to Air India (at least the old Air India). He worked several months as part of former AI Chairman Brijesh Kumar’s core team and knows the operations pretty well. For months there have been rumours that Brara is one of those shortlisted for a posting overseas Deepak Brara either in New York or London. That

could still be, considering the fact that the New York post will be vacant soon. But tell Deepak that and he shrugs his shoulder and says: “I don’t know where it all started.” Interestingly, all three EDs who report to Verma—Deepak, Manjira and Sunil Kishen—are from Indian. While Deepak is handling Sales and Marketing, Manjira who will be based out of Delhi has been given Customer Relations. That’s realManjira ly a huge and meaty job and includes, apart from the front-end operations at the airports, the whole in-flight system at Air India. Manjira has handled the job earlier at Indian; so, in a sense this is nothing really new to her.

Mantrji’s role One question that almost everyone has been asking is the role that Mantriji has played in all these jumbo transfers and postings. Ask him that and he flares up: “Do I look like someone who interferes in all this? The merger process is complete, it is now for the CMD to get his team, in place, make up for lost time and get the airline moving. They have a new fleet and a new agenda, so they shouldn’t be Praful Patel complaining.” But the fact of the matter is that staffers both in Air India and Indian are pleading their case at every tier possible: both in the Ministry of Civil Aviation and within their own organisation. Why, some have even moved outside to try and lobby with Congress and NCP politicians and civil servants to get what they want. A prime example is Vinita Bhandari who has been posted as an ED in the Personnel department in Mumbai. Reports are that Bhandari who has risen to the rank of ED without ever serving outside the national capital has managed to get her transfer reversed and is all set to continue in Delhi. If indeed this is true, Ms Bhandari can expect plenty of others to queue up outside her door to access the knowhow of how to stall a transfer and how to be permanently posted in Delhi!

Shifting base Will it work? Only time will tell. But the hard fact of life is that most PSUs have a huge presence in Delhi. That’s where the government is and consequently all the action. If one were to look at the number of trips Air India’s top management makes to the capital each week, one should have the answer. On an average, Thulasidas spends close to two days each week in the capital.

CRUISING HEIGHTS October 2007

Anita Khurana

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OFF THE RECORD It is the same with every director particularly Commercial Director V K Verma. For senior directors and board members at Indian, the shift is just one of the many woes that they have to face. Several of them have decided that the best way out for the moment will be to shuttle to Mumbai each week and continue with their home base in the capital, at least for the foreseeable future and make the transition slowly towards spring or summer when one academic season ends and another begins. “What is the point of looking at homes at Sterling Apartments? I don’t want to shift to Mumbai immediately. In fact, I can’t. I am dealing with the Ministry, three-fourths of the time. So, I may as well fly to Mumbai for meetings at headquarters,” said one senior director. But there are others like Indian’s erstwhile Commercial Director Anita Khurana, handling the Special Business Unit of cargo in the new dispensation, who is probably getting ready to make the move. The lady is believed to have seen a few flats at Sterling and may, perhaps, be the first to make the move to Mumbai from amongst the Indian team.

JB is back Jitendra Bharagava is back doing what he does best — minding the media. For close to a year-and-ahalf, the articulate (he was at his true best when Air India went on strike some two-and-a-half years ago and he gave the pilots who instigated the shutdown a thorough walloping on the air waves. It was a class act.) Bharagava was, well, to put it mildly, out of the loop ‘coordinating’. As the head of coordination, he successfully saw Jitendra Bharagava through the arrival of the Maharaja’s new fleet and went about his chores without an iota of despair. At a gala function to celebrate the launch of the direct flight to New York, Bharagava finally spoke: “Inducting and integrating the new aircraft into the fleet has been one hell of an experience. It has been exciting and satisfying.” But touch your heart, Jitendra, and tell used us aren’t you happy to be back in familiar surroundings at Nariman Point? You have the national media to attend to, your magnificent office gives us a scintillating view of the Queen’s Necklace, Marine Drive and the Arabian Ocean and the pitch is back in your voice. And what the hell, he knows his job doesn’t he? As classical singers would say, “Gala saaf ho gaya hai.” Welcome back JB!

What of Venkat?

S.K. Punhani

A word for Bharagava’s predecessor S Venkat. As one of the key lieutenants of Thulasidas, Venkat worked himself to the ground these past twelve months. One minute he was talking to the Accenture guys, another moment he was chatting with the media and minutes later he could be telling a colleague how to docket ‘other income’ in the balance sheet. What was Venkat’s magic

receipe? Those in the know state that the good man had the unique ability of ‘connecting’ with his boss and understanding what was expected of him. But as far as the media was concerned Venkat was pretty lucky. The AI CMD has in the past three-plus years created his own formidable network of friends both in the electronic and print media and deals almost directly with them. As one of the Maharaja’s men correctly said, “V. Thulasidas is his own best PR man.” So, what really was Venkat’s chore? Making sure that the wires were uncluttered, there were no goof-ups and generally ensuring that what the boss said got done. As the ED (Finance)-1,Venkat in real terms is responsible for the Air India (erstwhile) finances and getting the integration into play with the Indian part of the deal. And he will have S.K. Kundra (who worked for years under Sushma Chawla when she was the Director-Finance at Indian) as the ED (Finance)-2 to help with the Indian part of the deal. AI’s Director (Finance) S.K. Punhani has also retired and if reports are to believed is moving completely out of the airline business to join the Akadshardham temple in Delhi. No he won’t be a volunteer but a whole-time employee looking after their finances. That’s what he is believed to have told some colleagues in AI. But his colleague Ranganathan who was handling ground handling has also retired but joined MIAL (Mumbai International Airport Ltd) after approval from the government.

Log kiska, kaam kiska There is so much more to say that one can literally compile a gazettenama as far an Air India update is concerned. Depending on who you speak, you get a perspective that can tell you what the thinking is in the domestic or international wing of Air India. In Mumbai, for example, Air Indians are upset at the influx of the Indians in to the rarefied Nariman Point headquarters. New offices are being built, people Sushma Chawla accommodated and a complete new mindset is evolving. But it will take time. So, the first thing you hear if you talk to the Maharaja’s subjects is: “Logo humara, log unke.” In effect, Air India is being inundated by outsiders. Come down to Delhi and Airlines House and the story is different: “Logo unka, transfer humare, log hamare, kaam hamara,” is the angry riposte. But the sad part is that IA’s seniormost employee, Sushma Chawla, has not got a meaty enough role.

Tailpiece But the best comment on the entire merger is linked to General Pervez Musharraf. The story goes that two Air Indians were discussing the re-election of the Pakistan President to that country’s top constitutional post. Musharraf had won the elections by getting 671 of the 685 votes polled. “Now how could he have won such a landslide?” one asked the other. Prompt came the reply: “He must hired Accenture as the consultant.” Just goes to show what a large number of employees think of the consulting giant and its Pervez Musharraf contribution to the merger process.

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Saying ‘Shukriya’ I

f he is in the right mood, then Praful Patel can be more than fair with his colleagues. It happened the other day at the inauguration of the new terminal building at Chatrapati Shivaji Airport. Sitting in one corner of the huge dais was Airport Authority chairman K Ramalingam. In the normal course, Mantriji would have made a general spiel of the growth in aviation and how slowly but surely Indian aviation is catching up with global standards. But somehow something happened to him that day and he told GVK and his team that at least as far the new terminal was concerned, he couldn’t only thank but had to say ‘thank you’ to Ramalingam and the Airport Authority of India for their initiative

and effort. Thankfully, he was also fulsome in his praise of Hafeez Contractor who he insisted on being chosen as the architect for the project and who had delivered marvellous results as far the aesthetics were concerned.

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GLOBETROTTING

AT A GLANCE

You’re dressed inappropriately; get off

wenty-three-year-old Kyla Ebbert was settling in her seat aboard a Southwest Airlines plane and the plane was preparing to leave San Diego’s Lindbergh Field for Arizona. She was taken aback when a Southwest employee walked up to her and said, “You’re dressed inappropriately. This is a family airline. You’re too provocative to fly on this plane.” When she asked, “What

part is it? The shirt? The skirt? Which part?” he said, “The whole thing.” He was placated after she made adjustments that included covering her stomach by adjusting her sweater. He eventually allowed her back on the plane, but she said she was humiliated and embarrassed. Kyla said, “I felt like everybody was staring at me. They had all heard him lecturing me.”

Environment, bio-fuels and cheap flights

ir New Zealand has announced that it will be one of the world’s first commercial airlines to run a trial of using bio fuel in its aircraft. The airline said it had signed a memorandum of understanding with Boeing and Rolls Royce; that the three would work towards ensuring the commercial aviation sector become more environmen-friendly. The first trial of a bio-fuelled RollsRoyce engine on a Boeing B747 without any passengers on board will be held in late 2008 or early 2009, the airline announced. The aircraft will not fly entirely on bio fuel for the test run; one engine will run on a blended biofuel-kerosene mix, while the other three engines will run on regular aviation fuel. Auckland Airport is the most likely site from where the test plane will take off. Meanwhile, Britons are “addicted” to cheap flights and confused about the climate impact of flying, according to a research. In

a government-funded study, even people living generally “green” lives said, they were reluctant to fly less. The research was carried out by Exeter University. They state that cheap flights have become a lifestyle choice. Aviation accounts for about 7persent of the UK’s emissions and research suggests that Britain will not meet its climate targets without curbing the industry. In July the Advertising Standards Authority ordered Ryanair not to repeat advertisements claiming that aviation accounted for just 2persent of carbon emissions and the company did not explain the figure was based on global rather than UK statistics. Researchers found that as many as one-fifth of the population regarded themselves as committed environmentalists, who would routinely take measures such as composting, recycling and curbing water and electricity consumption. CRUISING HEIGHTS October 2007

Touching gesture

ufthansa German Airlines has made a touching move for the benefit of the Diabetes and Hypertension Help Society (DHHS), to enable it help millions of less privileged people, including sufferers in Nigeria. It has donated a business class ticket valued at $4,000 but auctioned for $6,414. General John Shagaya, a retired army officer who is also the chairman of the Board of Trustees of the DHHS bought the ticket. The airline said it fully identified with the objective of DHHS of reaching out to the less privileged in the society in the area of creating awareness of the danger of diabetes and hypertension and helping sufferers. Lufthansa has been operating to Nigeria for the last 45 years and has spent huge resources on projects to help the underprivileged in the communities through the Help Alliance, which is an organisation formed in 1999 by Lufthansa employees to help the poorest of people living in developing countries. DHHS is a non-governmental organisation that not only campaigns against the two killer diseases but also takes affirmative action against them in the form of management.

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Illustrations by Rajeev Kumar

Critical sticker strikes back

n American Airlines pilot got so frustrated by comments made by Jeff Brundage, the company’s vice president of human resources that he pasted a small sticker critical of the airline’s executive bonuses over a logo for American’s ‘oneworld’ airline alliance on his MD-80 aircraft in Fort Worth, Texas, United States of America. An infuriated management move saw

Goats sacrificed to appease god

hen Nepal Airlines, which has two Boeing aircraft, had to suspend some services in recent weeks following technical problems, officials decided to sacrifice two goats to appease Akash Bhairab, the Hindu sky god. And they did it. The animals were sacrificed in front of the problematic aircraft in Kathmandu in accordance with Hindu traditions. Although the officials did not specify what the snags were, they merely said that the snag in the plane had now been fixed and the aircraft had resumed its flights. Nepal Airlines has international flights to five cities in Asia.

Monkey occupies VIP lounge

he VIP lounge in Indira Gandhi International Airport, New Delhi, had a most unusual visitor recently—a monkey. It was hanging around for weeks at the airport and when it found a hole in the ceiling of the structure, which was undergoing construction, managed to evade the security personnel and crawled in. Officials have been trying to capture it ever since. They are giving the monkey fruits to keep it in one area around which a net has been put.

Credit card fraudsters held

he trio boarded the flight from Aizawl and arrived at Kolkata by a Deccan Airways flight like any other passengers. They hoped to sneak away quietly, but much had transpired on the ground while they were in the air. Guwahati-based businessman Amit Kumar had received a message on his mobile phone from his bank that two transactions had been made with his credit card to purchase Air Dec-

him being suspended for one month without pay, amounting to about $12,000. The management’s move was not liked by the Dallas/Fort Worth chapter of the Allied Pilots Association, and it called the punishment as extreme, adding that no reasonable person would even consider placing such a financial hardship on one of the pilots and his family for a minor infraction of company policy.

can tickets. He had made one but who had made the other? He immediately checked with the Air Deccan authorities and lodged a complaint with the police. It was found out that the trio had managed to use Kumar’s credit card to purchase the tickets. Police suspect the involvement of officers at Aizawl airport.

Pilot points police to drug plants

pilot was flying over a cornfield near Bosanquet in Lambton Shores, Ontario, Canada, when he noticed an unusual pattern in the fields. Smelling a rat, he thought it fit to contact the police. Officers found about 25 marijuana plants, each about a metre tall with leaves stretching a metre wide among the corn in two locations. The crop, worth an estimated $15,000 if harvested and sold on the street, was destroyed. Marijuana growers usually plant their crops in cornfields along creek beds and in bush lots, police said.

Airline misrepresents island

he residents of tiny Pacific nation of Niue were surprised to see Air New Zealand’s website depicting Niue as having palmlined sandy beaches and verdant green islands. In fact, Niue has neither. Niue’s tourism office describes the place as undiscovered, unspoiled and unbelievable. It is one of the world’s largest coral atolls, and much of its rugged coastline rises 20 to 30 metres straight out of the sea. The airline has apologised to the people of Niue for misrepresenting the island in an advertising campaign.

CRUISING HEIGHTS October 2007

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INTERVIEW

“Bring Judith Wilcox, Regional Manager, Indian subcontinent, Virgin Atlantic, believes she has come at the right time to see the growth of the airline. In this conversation with Tirthankar Ghosh, she says that travellers could look forward to more destinations in India.

: First, let's talk about the Open Skies between India and UK. Jet has started flights, Air India is pushing in more services, etc. It in such a situation that bmi withdrew. Do you feel that there will be a bloodbath? You are also upbeat about India. In the next 18 months you plan to start new flights from more Indian destinations. What is so special about the situation? : About open skies between India and Britain, there are limitations on the UK-India flights. However, the important thing to note is—I think it was about three years ago—that there was a liberalisation and I think essentially that gives you an indication of the confidence

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on the competition”

What I am seeing is a lowering of fares or to put it more correctly, the fares are low. I would say that the fares are great value for money. My understanding is that last summer Jet actually led with a Rs 16,000 (Delhi-London) economy fare. This year all of us are selling economy around Rs 26,000. Now, of course there are going to be tactical opportunities where you know you have a four-six-week period that is soft and you may do a little bit tactical pricing. I think that summer is a very interesting differentiator. This year all airlines have held their ground. All I can tell you is that what I am looking at and what I am being told about what the market was doing last year compared to what the market is doing this year is actually very different. And I think the upper and premium fares have held very con-

sistently. Economy, I think there is no question that the market has grown into its capacity. The premium economy, which we have, has proved to be an incredible success for us this summer. We are seeing something like a 130 per cent increase in demand of that product. We have relaunched that product and we have actually promoting it. The demand for that product is fabulous. We are very, very positive about that and I think it appeals across a wide spectrum and it’s appealing to the small corporate, it is appealing to your mature traveller, it is appealing to your highly successful, young funky person. It compliments the other ranges of our product. We are getting a good really good reaction to that product. Do you think the aviation sector has realised the full potential of the India-UK Open skies policy? Before I came to India, I had read a lot about India and till you come here you really do not understand how dynamic this country is right now or the pace of growth. The astonishing predictions and the volume of people here: It is just an incredible opportunity. So, has it realised it? I think the people are very tuned into it. I was at the British High Commission recently and a UK Department of Trade in the India-UK initiative and also an Indo-UK event. It was absolutely amazing. India is the biggest investor in England and at the same time you are seeing fabulous growth out of the UK in terms of tourism, you are see visiting friends and relatives, and traffic continues to thrive. So, you have got a really good mix of sectors and which make you a lot

less vulnerable… So, has it realised? I think, everybody has got their eye on it and is very confident about UK-India. As far as Virgin is concerned, what kind of load factors have you been getting? We are very comfortably tracking where we are meant to. Obviously, I have to be very careful about what I reveal because it is commercially sensitive. I am seeing, for most cabins, between five and ten per cent growth year on year in terms of load factor, which is fantastic. But I am also seeing the soft months’ traffic and that is around 75 per cent and each cabin is slightly different. And I am seeing there are times when we are hugely seeing somewhere up in the Nineties, which is lovely. What about your Upper Class load factors from India on the outbound? In the summer months, we are seeing around 75 per cent. I think we are very happy with what we have seen this summer. I think the work that my colleagues have done over the last few years in establishing the brand, in marketing the brand and the work of the sales team added to the and given the market’s confidence, I think you can really see that coming through. Having said that, it is a greatly competitive market. You know the challenge that is in front of us when you have a very successful local carrier. We used to compete with British Airways and in fact, we have done that for years. Our success, I believe, is very much based around the fact that Indians are open-minded and adventurous and when they

CRUISING HEIGHTS October 2007

“

The lack of infrastructure definitely affects part of your judgment. You are sending a trillion dollar aircraft... you have got to be sure they can handle them.

“

in the traffic. There was a doubling effectively on the LondonHeathrow-Mumbai and Delhi routes: from 28 services to 56 is what currently is permitted. And that’s aside from the growth in some of the other cities. My understanding is that it was a very challenging couple of years. I have come in this summer and I would say that the numbers I am seeing and I am comparing year-on-year growths in load factors, yields, market share, I would definitely say there is evidence that the market has hardened and it has grown in terms of capacity. I think the question you asked about the bloodbath… I think you would have got a very different answer from a number of airlines 12-18 months ago.

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INTERVIEW We dealt with it and the other interesting thing is that we have very quickly grasped that. The world has changed and the staff needs to understand their responsibilities. (We have to understand that) Some of the big international governance has an effect on individuals and so we just rolled out some training on that. We have learnt our lesson.

WORLD-CLASS SERVICE: (Top)Cabin crew attend to a passenger while (above)video games keep another occupied

try us they find us to be very Indocentric: Indian cabin crew, Indian product, Indian movies, food… we are not being a British colonial carrier, you know what I mean. The competition that we have got makes you better. You have to be good.

“

Imitation is a serious form of flattery and the fact that the other airlines have copied us, says quite a lot.

“

Jet is ramping up. It has a great product. So is Air India with its new planes. How do you view the competition? We are watching that. We are keeping an open eye and are recognising that Air India will always have its loyalists and supporters and we are used to competition and it just makes us better. So, bring it on. Has the recent price-fixing problem and the subsequent fines being levied on Virgin had an effect on your credibility? We believe that the fuel surcharges are legitimate to cover costs. The rest has been dealt with in the court. A lot of research has been done within the company as to whether it (the case) has damaged the brand. You have to be conscious of that. We put our hands up and said, ‘We have found a practice which wasn’t right’.

Do you think that there is a huge market from Britain onwards and have you tapped that market? It is probably one of the biggest challenges we have faced. Virgin is a UK-based long-haul point-to-point carrier. That is our business model and it is really a great success. But, in a way we are the victims of our own success, because people like us. They just won’t stop at London and they want to travel on to the US, which is great. The problem is, at the moment, from India onwards I don’t have that many connection opportunities. We do have partnerships with other airlines out of the UK and Continental is one of them. But passengers want to experience the same product onwards. Changing carriers also changes all that... a lot of things come into play. Are there plans to operate India flights out of Manchester or Birmingham? We do operate out of Manchester as well. Obviously, there are pockets of Indian businesses (there). We are long haul, point-to-point and Heathrow is our key base. We are just looking at Manchester and looking at the opportunities that presents. Obviously, there is a hugely strong economic boom up in the north of England, which that area feeds tremendously. That apart, there are economies of scale which revolves around your key airport and having the right aircraft base. Now, we have got a Boeing fleet based in Manchester. So, that would complicate matters (if we were to fly to Manchester) since we actually fly an Airbus into Delhi and Mumbai. As for new destinations in India, we have got on our radar Hyderabad, Bangalore and Ahmedabad. And we are also looking at Chennai as well. We have definitely got them all on the radar and we have the 787 Dreamliners on order. So a lot of expansion is driven by aircraft availability and you know the A380s are

CRUISING HEIGHTS October 2007

joining lots of airlines and fleets. I think you will see a lot more … Do you feel that the lack of infrastructure has deterred your growth in the country? Those things (the lack of infrastructure) definitely affect part of your judgment. You are sending a trillion dollar aircraft you have got to be sure they can handle them. We very much believe that the battle for passengers is not just about what goes on in the air but also about what happens on the ground. Heathrow is a great example of that. We are partnering with BA to invest in Terminal 3 because we recognise that is not a good experience for passengers currently. There are some fantastic developments there: there is a funky drive-through check in which is going live in November. I was previously based in the Caribbean: there is very much the same thing you are experiencing here. The airports were designed for 25 years ago. They weren’t designed for the aircraft that operate now or for the amount of traffic that operates now. And the amazing is that human spirit somehow accommodates and adapts, but the government do know that they have to do something and they are doing something, obviously it is not soon enough. You have to be realistic about the infrastructure you have got and you have to work around that accordingly. What was perhaps initially viewed as a negative: our timing of departure from India (in the afternoons) has actually become our USPs. What are you doing to improve your services in the Upper Class? Imitation is a serious form of flattery and the fact that they (other airlines) have copied us, says quite a lot. Our competitors have not copied that (the masseur on board). That and our bar are our two USPs. And also people to say that our style is a little more relaxed and friendly and that appeals to a lot of people. Have you any tie-ups with Indian carriers? We have through check in with Air India and Jet. We are hoping we can have some reciprocity in the frequent-flyer programmes with Jet, which is in the works.

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Mallyanama! W

E told you earlier and now we are telling you again. Vijay Mallya will not sit in peace unless he has had Air Deccan for breakfast, lunch, tiffin and dinner. It is a different matter that Air Deccan does not serve any of these on its flights barring sale of sandwiches and coffee to hungry customers who in any case cannot ask for free lunch because of the really low fares they pay. Will that all change is what the industry is asking. Mallya has now got 51 per cent of Air Deccan. Does that mean that Air Deccan pioneer Captain Gopinath may go back to his farm. In keeping with their gung-ho mood, Kingfisher Airlines expects to break-even by the first half of next financial year (2008-09). “We are hoping an early break-even because of accelerated revenues and cost synergy of the combined entity (Kingfisher and Air Deccan),” UB Group Chief Financial Officer Ravi Nedungadi told reporters. The open offer was oversubscribed. It received bids for 35 million equity shares against the issue size of 27 million shares. The combined entity may earn total revenues of Rs 20,000 crore by March 2011, said Nedungadi. He also said Kingfisher Airlines would not come out with an IPO in the next 18 months. He said the biggest strength of Air Deccan was its vast network, and added that its philosophy

CRUISING HEIGHTS October 2007

and management were being changed to leverage the strength of both companies. Kingfisher Airlines has appointed Accenture to provide consultancy for integration of the merged entities. When asked about acquisition of aircraft, the executive said, “We would see through the process of integration how many aircraft we require.”

In preparation of this exercise, Mallya has decided to re-launch Air Deccan in mid-October 2007 with new colours, etc. Not only that he has even decided that the combined deliveries of 18 A 320s which Kingfisher and Air Deccan were supposed to take in 2008 will be cut to 8. Mallya being the kind of businessman he is, can look forward to selling his slots with Airbus Industrie for a tidy US $ 30 million or more to others, mainly leasing companies who will want the aircraft tomorrow as lease rentals have gone through the roof. The second reason for his hurried move is also to prepare for the foreign flights. Mallya by now knows that notwithstanding his closeness to NCP leaders and central heavyweights, getting international rights may be even more difficult than Congress getting UPA to agree to the Indo-US nuclear deal. He had already booked slots with Airbus Industrie for A 340-500 that was initially to be delivered in February 2007. The uncertainty over the rights issue postponed it to April and now we hear it may be delayed to June 2007. Yet another issue that is causing anxiety to the Kingfisher boss is the much-promised training of its pilots for long-haul international flights. The latest we understand in the industry is that Mallya is also looking at the American option not just in terms of flying to the Big Apple but also getting the aircraft from there. But here he is discovering that slots are a big issue. Slots not for landing or take off but to acquire aircraft.

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The Jupiter tangle in MRO !

s there any basis to a recent news report about a mother of all MROs with both Boeing and Airbus participating in the venture? According to sources there is completely no basis to these reports. The reports suggested that the proposed two MROs to be set up with the assistance of US aircraft manufacturer Boeing and European plane maker Airbus may be rolled into one excepting for the separation of the wide body aircraft from the narrow body. Therefore, their locations too, could be different was the argument. This news has already caused some confusion and Boeing has reiterated that it will not be a party to it as the terms of its MRO

agreement are totally different. Chandrashekar spent plenty of time hobWhen Boeing signed the contract in nobing with Airbus representatives. Of January 2006 for selling 68 aircraft to Air course, it is a well-known fact that he is a India, it had apart from agreeing to a hefty friend of Civil Aviation Minister Praful set off, pilot training school and simula- Patel. Something was indeed cooking tors, had also stated that it will set up a Air then. Rajeev’s venture Jupiter Aviation Frame MRO at Nagpur entailing an invest- found expression when he signed a deal ment of at least USD 100 Million. Soon with Indian Airlines (now part of merged thereafter, steps were initiated to carve out entity branded Air India) to set up the Airspace for the MRO in Nagpur where the frame MRO either in Hyderabad, Bangaairport is now being expanded, refurbished lore or Delhi. This particular MRO was and modernized. A SPV was also floated backed by Airbus Industrie as it had in its to smoothen the land sale contract with Indian for transfer for the MRO. And 43 Airbus aircraft stated that as per the original plan, it would help set up the the Boeing MRO was and MRO in India. is to be majority-owned by And therein lies the difBoeing Commercial Airference. plane Company, Air India While Boeing ensured and another preferably that it held majority equity foreign company with in the MRO venture it was expertise in aircraft / airinitiating, Airbus was to be frame maintenance like merely a facilitator without ST Aero Space, etc. So it any stake. The confusion was to be a three-partner became so much that when Rajeev Chandrasekhar venture to which Air India work division was announced had also agreed. between the PESB directors after the forBut then enters Rajeev Chandrasekhar mal merger of Air India and Indian, two of BPL fame. With plenty of cash in his posts of MROs were created with one hantrouser pocket, thanks to the mobile deal, dling the Airframe and the other

INFRASTRUCTRURE

NEWS ‘Busy’ airport spurns drill Two special planes sent to check communication and navigation systems at Calcutta airport returned to Delhi with the job unfinished. apparently the air traffic control didn’t cooperate. The planes—called calibration aircraft in aviation parlance —would have checked the newlyinstalled Category II instrument landing system. The checks are usually carried out when traffic is light. “Since night traffic is very heavy at Calcutta airport, with planes bound for Southeast Asia taking off or flying over the city, afternoon was thought to be the best time. The ATC had agreed to the plan

GVK, RIL may link up for Navi Mumbai airport A strategic alliance may be in the works between the Reliance group and the GVK group for the proposed Navi Mumbai airport. Various options, including Reliance group picking up a possible stake in MIAL—the Mumbai airport operator—or the GVK Group first increasing its stake in MIAL and then diluting in favour of Reliance group, or associate company or fund are being considered.Sources said exploratory talks are on—though at informal levels—with the preliminary understanding that Reliance group will support the GVK-led consortium’s bid for the second airport in the city. The greenfield airport—expected to be ready by 2012—will be the gateway for two SEZs at Navi Mumbai and Maha Mumbai promoted by Reliance Industries .

Mumbai airport opts for fresh blueprint Sixteen months after it took over India’s busiest airport, Mumbai International Airport Pvt Ltd (MIAL)—the GVK-led joint venture consortium is believed to be undertaking an overhaul of Chhatrapati Shivaji International Airport (CSIA). Civil Aviation Ministry officials confirmed that the re-worked plans have been submitted to the Ministry of Civil Aviation.

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engineering and spares. May be it was a temporary arrangement to be resolved once the stop-gap Director in charge of Ground Handling Suresh Punhani retired. While the American plane maker was making quick progress, the Rajeev Chandrasekhar-led JV was making slow progress and its business plan could not be justified, for many others were also looking at similar business. It is very important to note that while addressing the press before the launch of Delhi-Brussels-Toronto flight on September 5, 2007 by Jet Airways, its Chairman Naresh Goyal said it was a risky business and an MRO would require a business equivalent

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of 250 aircraft annually to sustain. That is why he was keener on a Cargo airline than MRO per se. With high monetary stakes, Boeing is keen to make Nagpur a major hub for MRO activities. This is not true of Airbus that has no monetary stake except to provide technical support and spares. But if its other customers become bigger supporters of Airbus aircraft, can the European manufacturer afford to ignore them? Obviously not. That should leave Rajeev Chandrasekhar scurrying for cover and hence his indirect ways of seeking to pressure Boeing to let him in, take over the business and even head it. Air India engineers (we are talking of the original Air Indians and not of those after being merged) have expressed reservations. But what can anyone do in the season of mergers. Mergers till now have taken place after the merging businesses have long run course separately. The new rules being written by those close to the power centre is to merge before businesses take off. Last we heard was the Yankees are not keen to have Rajeev and, therefore, Airbus on board.

According to Civil Aviation Ministry sources, a major chunk of the master plan MIAL had submitted to the ministry nearly a year ago have significantly changed—including the design and look of the integrated terminal building at Sahar and the location of the Air Traffic Control (ATC) tower. It is learnt that the design drawn up by MIAL’s master planners—Netherlands Airports Consultants BV (NACO)—has been replaced with a fresh design by Skidmore, Owings and Merrill (SOM), one of the largest architectural firms in the US. SOM has a worldwide reputation with airports. Among several airports they have planned worldwide, SOM are also the architects for One World Trade Center—the eagerly anticipated 84-storey high-rise that will come up at Ground Zero—the first office tower to rise on the actual World Trade Center site. If reports are to be believed the peacock-inspired design handpicked by MIAL Managing Director G V Sanjay Reddy is out. There has been a turnaround on that design for greater efficiency and convenience and of course asthetics. “The main reason for changing the design was that the number of gates (boarding bridges) was not adequate in the earlier design-we only had 106 aircraft parking bays in all, with 67 nosein bays. This would greatly limit and slow down our passenger processing capacity,” a top MIAL official told one Mumbai journalist, who had reported on the issue sometime last month. Now there will be about 190 bays in all, with most having

Deccan update It is all happening in Bangalore. Without much ado here is a quick recap of the changes at Air Deccan-Kingfisher combine: The brand change will be official with a massive party planned by Chairman Vijay Mallya in Mumbai on October 15. At the moment he is busy with his non-stop instructions on the entire rebranding strategy. The hands-on man at Air Deccan (to be rechristined Deccan) is Ramki Sundaram Air Deccan offices have got a complete facelift (would that be the right word?) and the maroon Kingfisher is all over the place. The airports are getting the once over. Reports are that the personnel from the two airlines have meshed beautifully and there is a sense of excitement in the air. What about Captain Gopinath? The Captain is in. But he is keeping a low profile. While he may have sold the company to Mallya, what is happening is not really his baby. So, does it mean Gopi is going to be out of the loop soon, very soon? Watch this space for an update.

aerobridges. This will enhance passenger handling since fewer passengers will have to be transported by buses. “The remote bays will essentially be for the low-cost carriers who can’t afford aerobridges,” the official added. Asked about cost escalations, the official said, “The original design would have been much cheaper for us since it was only spread over 2.5 lakh sq m. The new design now will sprawl across 4.5 lakh sq m—that is nearly double of what was proposed earlier.”

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A liking for the big bird

V. Thulasidas

Manmohan Singh

new wind is now blowing across the committee that was set up to determine what type of aircraftâ&#x20AC;&#x201D;wide body as well as narrow body needs to be acquired by Air India after 2011 to stay on in competition once it receives all the 111 aircraft (68 Air India

Nicolas Sarkozy

and 43 Indian) for which it had placed orders on Boeing and Airbus during 200506. A committee set up by Air India under K.M.Unni, who is now a Director of one of the two MROs looking after Airframe, had submitted its initial report to Air India management that in turn passed it on to the Ministry of Civil Aviation. A letter was

Praful Patel

also written to PMO about the impending need of Air India to acquire more aircraft for additional strength as much of what it had already ordered would go for mere replacement of the older fleet. Speculation in aviation circles suggested that Air India could go in for 30 Continued on page 22

a flight from Bangalore and not from any other airport, the sources said. Bangalore airport has apparently turned out to be a safe exit Meanwhile, immigration authorities at the Bangalore airport point for those who want to illegally sneak out of the country, are likely to face embarrassment as about 1,000 migrants are on thanks to the laxity on the part of the immigration officials. the verge of being deported from different nations. It has come On an average, 40 migrants are annually deported back to to light that the officials had cleared these passengers even Bangalore from various countries though they did not have the Emigrafor travelling on a fake passport or tion Clearance Not Required (ECNR) visa. In the latest incident, the UAE stamp, the sources said. Interrogation authorities deported a Sri Lankan of the deported Sri Lankan nationals national from Dubai after he was has revealed that in most cases they found travelling on a stolen visa. had decided to flee their country as Immigration officials at Bangalore their close kin had been killed in the airport had cleared Nimala Kasan ethnic conflict. They wanted to settle (21) of Jaffna, who boarded an abroad, particularly in Canada, the Emirates Airline flight to Dubai. US. and Australia. Many of them had According to sources in the procured fake passports and visas in Bangalore police, in five years, Chennai, the sources said. three persons on an average, have In view of the increase in the been deported every month. Most MORE SAFE: The new Bangalore Airport would be most secure number of deportations, the Union of them were Sri Lankan nationals Home Ministry some time ago and were sent back mainly from Singapore, Malaysia, Dubai, planned to hand over the immigration desk at Bangalore airport Germany and the US. to the Intelligence Bureau (IB). According to sources, the IB is People who want to travel on fake/incomplete documents likely to take over the immigration desk only after the internapreferred to fly from Bangalore as checks were reportedly not tional airport at Devanahalli starts operations in April next. As strict there, the sources said. In fact, Nimala Kasan was advised the IB is short-staffed, personnel from Bangalore police will by Senthil of Chennai, who allegedly got him the visa, to board assist it at the immigration desk, they said.

Bangalore safe for illegal migrants?

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A liking for the big bird more aircraft of which 20 could be wide body and 10 narrow body split between the Yankees and French. To this specific question, CRUISING HEIGHTS was told that the committee was neither looking at Super Jumbo Airbus A 380 nor the stretched version of Jumbo Boeing 747-8. But in two months that is August and September 2007, something has happened. Simultaneous tail wind and head winds are blowing in Air India creating new stillness in the business of flying. Recently, Civil Aviation Minister Praful Patel had stated that if Air India sent in its requirement say by November ’07, clearances could be given by December ’07.

The decision to include the Super Jumbo and New Jumbo appears to be an over thought and like the skewing of MRO proposals a similar fate may also visit Air India’s new acquisition programme. We say this because CRUISING HEIGHTS is aware of Ministry’s views on the two aircraft. But geo-political realities are another thing. With India seeking support of the

Nuclear Suppliers Group (NSG)— France is a major player in the NSG—to kickstart its Indo-US nuclear deal, there could have been a change in strategy. And if indeed they buy the A 380, the first flight could be between Mumbai/Delhi to Sreesanth’s hometown Kochi (after some work on the runway). Call it a joke or what you like, but Kochi airport the first private airport in India to have constructed two parking bays for accommodating Airbus A 380. However, the runways and shoulders are so narrow that the airport cannot allow an A 380 to land or take off. But it has a parking bay to house it. How about that?

Sriperumbudur approved The government has approved a 4,000-acre site for Chennai’s second airport at Sriperumbudur, an hour’s drive from the city centre. The Dravida Munnetra Kazhagam (DMK) party, which rules Tamil Nadu had proposed the site. Chennai’s Anna International Airport, which handled 8.7 million passengers in 2006-07, is likely to reach its capacity of nine million this year. The government has already approved a plan to upgrade the present Chennai airport at Meenambakkam, at an estimated cost of between Rs1,700 crore and Rs2,000 crore ($420 million to $495 million). Bids for modernising the airport, run by the Airports Authority of India (AAI), are likely to be invited by January, and awarded on a turnkey basis rather than splitting the contract between multiple engineering firms. The civil aviation ministry has been operating on the assumption that upgrading the existing airport could accommodate Chennai’s growing air traffic. Chennai’s Anna International Airport is spread over 1,152 acres. It is India’s third largest in terms of air traffic, which is growing at 17.3 per cent annually. Since there isn’t enough land to expand operations, the government now believes Chennai will need a second airport. Civil aviation secretary Ashok Chawla said the ministry had asked the state government to freeze the land, so that whenever the process for building a second airport starts,

the illegal encroachments that have hampered expansion at airports elsewhere in the country are not allowed to come up. Sriperumbudur is the fifth site that the state government picked after the idea for a second airport in Chennai was floated a decade ago. Feasibility studies at the site are ahead. Though the site is on the existing Chennai-Bangalore highway, the state government is to examine the feasibility of building an expressway that can handle high-speed road traffic from the highway to the city. The highway is already clogged, as Sriperumbudur is home to many automotive and other industries.

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Seminar on ISO/IEC 27000 Information Security Management Systems As information security management is gaining popularity worldwide, there is pressure on Indian stakeholders to go for international certification programmes on information security. To provide an overview of the latest developments in the area of information security management system and also a correct understanding of the requirements of ISO 27000â&#x20AC;&#x201D;ISMS standard, QCI is organising a series of programmes. Objectives To understand the new ISO 27000 family of standards with focus on ISO/IEC 27001:2005 To enable conducting of Risk Assessment as per ISO/IEC 27001 and 27002

Awareness on ISO 27001 and Risk Assessment Date Venue 26-27 November, 2007 New Delhi 28-29 November, 2007 Mumbai 30 November-1 December, 2007 Bangalore Topics to be discussed at the seminar The New 27000 family of Standards What is the New ISO/IEC 27001 The Accreditation Standard ISO/IEC 27006 Standards currently in development (27000, 27003/4/5) Threats, vulnerabilities and risks Calculating risks Risk treatment and controls ISO/IEC 27002 and ISO/IEC 18044 Speaker: The speaker is Dr Angelica Plate, an expert in the area of information security and risk assessment. She has been involved with German Information Security Agency and with ISO/IEC JTC/1/SC 27, the group dealing with ISMS Standards. Who should attend: Anyone responsible for the development and implementation of ISMS, IT managers, IT security officers, Information security trainers, Consultants and Auditors.

Registration fee: Rs 5,000 per delegate for each programme Kindly forward your registration to Quality Council of India II Floor, Institution of Engineers Building, Bahadur Shah Zafar Marg, New Delhi-110 002 Tel /Fax: (011) 2337 9621/ 0567/9260 Email: negi@qcin.org; info@qcin.org Registration form is also available on QCI website, www.qcin.org

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CRUISING HEIGHTS October 2007

In two years, Paramount Airways has quietly built a steady reputation as a quality business class carrier out of Chennai. Is it a flash in the pan or is M Thiagarajan a marathon man? K Srinivasan and R Krishnan discovered that the top-of-the-bracket feeling has not stopped the airline's chief to dream big: he has chalked out his expansion plans in great detail.

urugesan Thiagarajan should be particularly delighted with October. Not just because the weather is wonderful in most parts of the country. It’s simply because Paramount Airways of which he is Chairman celebrates its birthday this month. On October 19, the airline will complete two years in operation and Thiagarajan should be pretty pleased with the way things have turned out. His small (five aircraft fleet) but growing airline (40 aircraft by 2011) has managed to hold its own in the fiercely competitive Southern markets against the likes of Air Deccan, Kingfisher and Jet Airways and stay right up front with a 27 per cent share of the market. But the ‘youngest airline CEO in the world’ as some of his minders quaintly describe him, revels in the fact that they are the market leaders and have managed to hold their own against all comers: Jet has 22 per cent of the market, followed by Kingfisher (20 per cent) and Air Deccan (16 per cent). He hopes that the Paramount footprints will move across the country and achieve a pan-India presence in the next four years. In 2006, Paramount flew 2.25 lakh passengers — of the nearly 33 million who took to the skies. That’s a miniscule 0.7 per cent of the market. Between April ’06 and March ’07, the airline flew 3.5 lakh passengers. That translated to 954 passengers a day. That figure upped between April and September 2007 to 1500 passengers a day. At the moment, the company does 52 flights across eight sectors each day. That is about 1600 flights a month and an average of 90,000 passengers. Company executives believe (at Paramount, Thiagarajan is the face of the company and only he can be quoted) that this is “bang on

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“We are the dominant player” Paramount chief M. Thiagarajan emphasises that his airline offers valueadded services and is meant for people who want service excellence. On the competition from regional airlines and your own plans Well, a country like India needs as many aircraft as it takes. That is my view on more regional operators coming in. We have always made our intentions to go national and beyond that, very clear from Day One. And Paramount is not a regional airline; we are a national airline. Though, at present, we are operating mainly within the South. Today, we dominate the region. Now looking beyond the South: by the middle to the end of 2008, we will be entering Western India and in 2008-09, hopefully, we should be saturating and dominating Western India, as we had done in Southern India and in 2010, we are getting into North and by 2011, we are looking at a national presence and being the dominant player in the national scenario. This is the outline of Paramount.

able to match. From the time the passenger enters the airport, the valet service, all-business-class flying experience, the gourmet meals provided on board, all these put together pampers the passenger and takes them to an altogether different level. And all this is provided to the passenger at a costeffective fare. That is the differentiator of the Paramount model. So in this kind of operating scenario, I don’t think any player who comes—who jumps on to the bandwagon—would make any dif-

ference or significance to us. On the present competition It is not that we are flying without competition. We have Jet Airways and Kingfisher to contend with. You look at Chennai-Bangalore. Paramount has six flights a day and Kingfisher also has about three flights a day and Jet Airways also has three-four flights a day. They fly Boeings and Airbuses, and on certain routes, they fly ATRs since they also have a pot-pourri of aircraft. So,

we have been facing competition and it is not that we have been in an exclusive environment. If you look at Chennai-Madurai, you have Jet Airways, Air Deccan and Indian flying… you have a host of them flying and there is literally no route in the South where you can say Paramount is the only airline flying or no route where you can only have very few airlines flying. Every route today, within the South, is as populated as, say, Mumbai or Gujarat. So, first of all, two more extra carriers coming in will hardly make any significant difference to Paramount, particularly as far as yields are concerned. Today, our yields are higher than Jet Airways’ or Kingfisher’s. Our fares have always been higher than them and our loads have been higher than them. We are the market leaders in the South and have a market

The issues of pricing As far as Paramount is concerned, we have never fought a battle on price. I have always believed that the low-fare game is not the business that Paramount has entered into. We are looking more into value-added services, premium passengers and looking at people who want service excellence. That is the whole basis on which the Paramount model was built on. We have always priced ourselves higher than, say, Kingfisher or Jet Airways. And passengers have paid that premium to us. And the experience is completely different, which no competition has today been

target”. Does it mean the company is in the black? Ask him about profits and Thiagarajan grins. He states that his company is making some money although these are “not from sale-and-lease-back or foreign exchange hedging”. But it is a closely-held company and few know any details of its financials. But there is obviously plenty of meat. How else does one explain the desire to go national, fly overseas and look at wide jets as another option and also seek a company

share of about 26 per cent. This is how we have been always. We have not been worried about what the competition’s fares are. Airport charges Today, the landing and parking charges are exempt for all aircraft with less than 80 seats; so, we are exempted. Even the turboprop ATRs of Jet, Kingfisher and Deccan are exempted. So, I think the law has not made any distinction between national players or regional players. But if you want only to be a regional player, then you don’t have to meet the cash requirements that are insisted upon national players. That is where the government wants to encourage small operators to get into the business. They want to break away, probably, from the myth that only huge capitalisation projects can succeed in this industry. How successful these regional airlines would be competing against national players is something one has to wait and see. I would say that any business that is run properly with a strategic vision and a road map clearly laid out has a goal for survival. Today, we are seeing aviation as a competitive industry but Paramount as a group has been in the textile industry. Tell me of an environment where there is no competition. In fact, we have been facing cutthroat competition from China, Mexico and Africa. So, we have always been tuned to live in global competition. The issue of slots Out of Chennai, we have five of the best parking slots. There are no new slots available between six and nine in the morning and the evening. We have some of the best slots. But when it comes to a new player, he will have a problem finding parking space in Chennai. Even if he does, you can’t park and find that your first departure

to buy out? Big plans indeed for the man from Madurai! The new policy allowing regional airlines to take off, leaves him unfazed despite the fact that three of the four have a Southern presence: “I would say straightaway that any new regional airlines that is coming in, whether it comes in the form of a fullservice carrier or a low-cost carrier, would make absolutely no impact on Paramount. Reason: We are already flying against fullservice carriers, like Jet and Kingfisher, CRUISING HEIGHTS October 2007

head on and we have been able to dominate them in the South. Although both Kingfisher and Jet are big carriers and have a national presence, what is their market share in the South? Paramount has made all other airlines completely obsolete, so that is the impact we have. If you want to go to Madurai, look at Paramount’s schedule— I give you four flights a day. Tell me who in the competition can give you so much connectivity?” A trained commercial pilot who flies a

Cessna, Thiagarajan is a far cry from the flashy, young aviation geeks that dot the airline business landscape. If anything, he is conservative and extremely low key in his efforts. Hailing from the temple town of Madurai, where his family for generations has been occupying one of the top slots (they founded the Bank of Madura which was later taken over by ICICI Bank), the idea of launching an airline had always been Thiagarajan’s dream. Two years down the line, the dream is a

pleasant reality. But there are many who believe that if the dream run has to indeed be a long-term success story, then there are several issues that the textile magnateturned-aviation entrepreneur will have to address urgently. For one, there is virtually no management structure in place. “If Paramount has to be a long-term player it needs to have a clear team in place that oversees not just the day-to-day operations, but strategises on the long-term vision. The vision of the founder sometimes simply CRUISING HEIGHTS October 2007

out of Chennai is going to be after nine: it is not a very economical way of doing business. Coming to other airports like Madurai, Trichy and Coimbatore, they are practically empty. They have enough and more parking bays and not a single aircraft is parked there. So, I think if a regional airline chooses one of these Tier II airports, it would make better sense for them. As far as Hyderabad and Bangalore are concerned, with the arrival of the new, international, state-of-the-art terminals, I think that will definitely solve the infrastructure issues that the two cities are facing. More so in Bangalore, because Bangalore’s HAL airport is almost closed, as it has hit saturation point. So, I think Bangalore airport is something we all are looking forward to. On multiple airports As an airline operator, I can say that India has now come to a time when we must have multiple airports in cities. London, a classic example, has four or five airports. So, it is always good to have multiple airports in cities, and make these airports compete with each other, as it is happening the world over. It raises the quality of service of airports. Moreover, it gives an airline the opportunity to choose which airport to service. On a thirtyminute flight, you would not like to travel two hours on the road to go to the airport. We have made a request but the civil aviation ministry has got certain agreements with the new airport operators, saying that these airports will have limited functionality. So, we are trying to push for it and it will be good for the country to have multiple airports, especially when airports are available. Why close down those airports? After all, lots of money has been spent on creating that infrastructure.

isn’t enough.” Perhaps that is the reason why Thiagarajan is slowly putting people in place. He recently hired two expats to look at key areas—operations and maintenance —of the company’s business. He is also looking at hiring others although those who have known him well and interacted with him believe that it is unlikely that there will ever be “a hands-off approach” as far as Thiagarajan is concerned. Their logic is simple: he is passionate about the airline business

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Paramount’s fleet plans

hiagarajan is looking at the bigger Embraer jets for the simple reason that like the Airbus family there is a huge amount of commonality in the cockpit and the engineering. So, it is easy for the pilots and the engineers to migrate back and forth. At the moment, Paramount has five of these Brazilian jets: two Embraer 170s and three 175s. While two are owned, three are on lease. One more aircraft—an Embraer 175—will join the fleet by end October/early November. Paramount is looking at a total of nine aircraft to service the Southern market. All the five aircraft are parked at Chennai at

and loves to dabble in every aspect of it. Interestingly, of the 36 pilots on board Paramount, 23 are foreign (primarily Thai, the Director - Operations is also one). And, his cabin crew has a pan-Indian flavour right from the plains of Punjab to the distant drums of the North East. Considering the Paramount announcement to move to the West in 2008 and then slowly, pan out across the rest of the country, it makes sense to get his team in place. Not just that, Thiagarajan states that in daring to dream bigger to make Paramount Airways a truly national airline in four years, he will continue to constantly upgrade his product. So for starters, his jets will continue with the ‘no middle seats’ concept, the cuisine will continue to be eclectic and varied (Thiagarajan prefers the word gourmet). But he is adding a huge dose of in-flight entertainment with personalized TVs, telecasting current programmes and a mobile link from the sky. All this will cost a lot of money and will the passengers pay? Thiagarajan thinks they will, considering that his fares even today are more than the so-called full carriers Jet and Kingfisher charge on similar routes (Thiagarajan says his prices are about 10-15 per cent higher). And to make sure that he was able to fill his aircraft, the airline apparently signed bulk deal with scores of companies. The Paramount chief claims that closer to 90 per cent of his passengers belong to this segment and this is not a “price sensitive, but price inelastic band”. Nonetheless, it won’t be a cakewalk as his fleet grows and the market expands. Most recently, the Southern head of Jet Airways stated that 40 per cent of Jet’s business was generated in the South

CRUISING HEIGHTS October 2007

the moment and the airline has permission for three more. Beyond eight, they are looking at Hyderabad and Bangalore as possible options. The airline has committed for 20 more Embraer 175s to join the fleet, although they have 40 aircraft on order. Some of the balance could be bigger aircraft from the same company. “Embraer has bigger aircraft and the fleet commonality is an advantage. We will automatically evolve. By 2011, our fleet strength will be close to 40 aircraft. Our aircraft will start arriving from the middle of 2008,” said Thiagarajan.

If Paramount’s dream run has to be a long-term success story, then there are several issues that M. Thiagarajan will have to address urgently.

and it was growing. Soon Silk Air of Singapore will be flying direct to Coimbatore from the city-state in South-East Asia besides increasing the frequency of SIA to Southern cities of India. Malaysia is planning to increase its frequency to Southern cities. Perhaps, he sees an opportunity in all these threats. For instance, his Brazil-made all-Embraer fleet is the most modern. An Embraer can fly non-stop for four hours and can reach Singapore and KL from his Southern stations. Perhaps, once he completes five years in the flying business or if the government reduces it to three years, he will be ready to fly out. As on date Paramount has five leased Embraers of which two are E-170 type with 70 seats all business class and three E-175 aircraft with 75 seats comprising 11 first class and 64 business class. The airline prides itself for not offering a Middle Seat to anyone as it does not have one in its aircraft nor is planning to have one in any of its 40 Embraer aircraft it is planning to acquire over the next four to five years at a MoU declared value of US $ 2 billion. The deliveries of these 40 aircraft will be between mid-2008 and 2011. US $ 2 billion in Indian rupees before it appreciated in early 2007 was equivalent to Rs 8800 crores. Today, it is Rs 7900 crores. So, even before he begins to buy, Thiagarajan is lucky that his same rupee earnings will fetch him more dollars. So, where is the money coming from? From the promoter and debt. As the fleet strength grows over the next four years, Paramount will add 280 Indian and 120 expat pilots adding up to 400 pilots. There has been no pilot attrition from his airline. Though one may say nobody flies CRUISING HEIGHTS July 2007

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A training centre and a MRO

aramount has a training centre in Chennai for pilots, cabin crew and engineering training. They have a sophisticated CBT (computerbased training) system there that can train the pilots and engineers on Embraer aircraft completely. The training centre has been recognized by both the Indian DGCA and Thai DGCA. That is because they have a lot of Thai pilots flying their fleet. “Going forward, our eventual idea is to turn this training centre into a full-fledged academy, which is very much on the cards. It will be in Chennai or Madurai,” said Thiagarajan. That apart, he is also exploring the possibility of setting up a MRO jointly with

Embraers in India other than Paramount, so where would they go, the fact is that they seem happy with the company and haven’t left for better pastures overseas. Thiagarajan is proud of this. “Our attrition rate is zero,” he claims in a matter-of-fact tone. Another favourite phrase of the Paramount MD is “boutique brand”. So what do you mean by that? Clearly what Thiagarajan means is being different and classy, the fares are higher, the planes — the only ones of its kind in the country—and the food…well “gourmet”. “We have marketed some of our city pair flights in such a way that businessmen can have their breakfast on board, then attend meetings and return by afternoon to have lunch on board or if they wish dinner, depending upon when they choose to end their business meetings,” he says. The Paramount argument for managing all this is the huge focus on costs. Fuel costs are only 20 per cent of its total operational cost as against 30 to 35 per cent for other airlines including the big dads. Moreover, as his jets are configured to carry less than 80 passengers he also enjoys all the concessions that are available to regional carriers including the crucial exemption from payment of landing charges. There is also a bit of tough negotiation and bargaining. Just two weeks back, Thiagarajan was in Kerala to meet with the top brass of the state government. He told the CM that Paramount was ready and keen to connect the three important international airport cities of Kochi, Thiruvananthapuram and Kozhikode provided the Kerala government assured him that 30 to 40 per cent seats per flight would be booked by the state

Embraer in the South. As he explained: “Barring the President’s fleet, there is nobody else using the Embraer (in this country). But if you look at the West of India, all the Middle East airlines —Royal Jordanian, Egypt Air, and Saudi Arabian Airlines have them. If we look at the other side of India, the eastern side, you have now Mandarin coming up, Virgin Blue has inducted Embraer aircraft, Malaysian Airlines is looking at inducting Embraer aircraft. So, I think, we are geographically well-situated for both east or west to have a MRO here. The MRO need not be located within the airport. It can be located even near it.”

Paramount’s focus is on costs. Fuel costs are only 20 per cent of its total operational cost as against 30 to 35 per cent for other airlines... As Thiagarajan’s jets carry less than 80 passengers, he enjoys all concessions that are available to regional carriers including exemption from payment of landing charges. CRUISING HEIGHTS October 2007

government for its official travel between the three cities. Knowing Thiagarajan, one can, perhaps, speculate that he must be having in the back of his mind complete parking arrangement so that he may use his Embraers to tap the Gulf-rich business from Kerala once the Ministry of Civil Aviation takes a final call on who all can fly overseas. But there are some areas of his business that Thiagarajan is clearly unwilling to talk about. “I do not want to speculate,” he said plainly. But those in the know state that financial institutions have been talking to him among who are some who hold nearly 62 per cent in Delhi-based SpiceJet. Asked if his intention was to only take over the parking bays and slots, will it not be too high a price to be paid as realised by Naresh Goyal of Jet for taking over Sahara, Thiagarajan grins and then slowly answers: “This is no reference to SpiceJet. I am not taking any names. But the answer is obviously not. It will be based on valuation and association.” Clearly, he doesn’t want to talk any further on the issue, though his appetite for a bigger share of the pie is evident. Similarly, he is non-committal when it comes to a little more insight on his plans to acquire both narrow and wide body aircraft made by Boeing and Airbus. He says blandly, “We are looking at it.” He has actually been talking to both and tossing the options. In essence that really sums up the man and his mission. Keep the powder dry, keep tossing the options and keep pegging away. If you have a good business plan, you’ll walk away the winner!

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Carving the market

R. Krishnan makes a clinical assessment of the lucrative IndiaNorth America and India-Europe market in the first of a two-part series. With Air India launching a non-stop into the US, the battle has only gathered more steam. Does it mean falling yields and lower margins?

NDIA IS BECOMING a great battleground for many airlines, as the number of Indians wanting to travel far and wide is rising exponentially. If Air India has drawn up plans to fly to the US direct, besides Europe, Australia, the Far East and Central Asian Republics, from a number of Indian cities, competitor Jet Airways has closely followed the national flag carrier to the US, Canada, Europe, Mainland China and west coast of the US from Singapore. Not to be left behind, Air France feels it has good opportunities to grow its business in

If Air India has drawn up plans to fly to the US direct,competitor Jet Airways has closely followed the national flag. CRUISING HEIGHTS October 2007

India by 15 to 20 per cent. Other European carriers have begun to seek more frequencies in their bilateral air services agreements with India. However, those that believe India is a goldmine are the Gulf-based carriersâ&#x20AC;&#x201D;they feel their aircraft would be underutilised but for beyond traffic offered by passengers originating from the subcontinent. Air India, after merger with stateowned domestic carrier Indian, is expanding its footprint not only within India but also beyond. After it launched direct non-stop flights from Mumbai to New York from August 31, 2007, it is

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The India-US sector continues to be the highest revenue generator for Air India and the traffic between the two countries is rising annually by 30 per cent. The India-US sector accounts for nearly 33 per cent of Air India’s overall revenues. now getting ready to fly to New York direct from New Delhi. This flight is expected to be launched on January 8, 2008. From April 2008, when the new greenfield Bangalore International Airport Limited becomes operational, Air India will launch direct flights to San Francisco and if necessary with a stopover in Singapore. May be an adjustment to India-Singapore bilateral agreement would be required to allow traffic beyond on a limited scale. The India-US sector continues to be the highest revenue generator for Air India and the traffic between the two countries is rising annually by 30 per cent. Air India earned revenues of Rs 2,865 crore in 2005-06 (April-March), which is approximately equal to $710 million, based on an exchange rate of Rs 40 to a dollar. The India-US sector accounts for nearly 33 per cent of Air India’s overall revenues. This was against revenues of Rs 2,413.94 crore in the previous year, 2004-05. Let us look at India-US traffic. Air India has been traditionally connecting

CRUISING HEIGHTS October 2007

Delhi and Mumbai to four US destinations—New York, Newark, Chicago and later Los Angeles. All these flights were either via London, Paris or Frankfurt, and the aircraft type was 747-400, 747-300 Combis and 777-200 ER on lease. With the acquisition of Boeing 777-200 LR the non-stop flights have begun. Air India is acquiring eight 777200 LRs and is planning to acquire few more to connect other Indian cities for direct non-stop flights and increase frequencies from both Delhi and Mumbai if traffic pattern shows an increase. Incidentally, US carriers—Continental and American Airlines—started India-US direct flights in late 2005. The former flew to New York and the latter to Chicago from New Delhi. Beginning October 2007, Delta is launching direct non-stop flights between Mumbai and New York. Both Continental and American Airlines are using the older 777200 ERs, which involve heavy payload penalty on non-stop India-US flights with little belly cargo space of not more than five tonnes on each flight. In contrast, Air India has introduced the brand new 777-200 LR Worldliner. The fight for India-US sector has now acquired a serious proportion, with both Continental and Delta offering fares of less than US $600, besides taxes, for two months beginning October 1, with a likelihood of extending it further. This has already begun to impact Air India, which, after a long break, introduced a world-class

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The India-UK sector contributed revenues of Rs 453.04 crore during 2005-06, up from Rs 246.59 crore in the previous year, 2004-05. The jump was because of increase in flight frequency by Air India.

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product, but is now finding it difficult to charge a fair fare. Air India is also acquiring fifteen 777-300 ER and 27 787 Dreamliners. Deliveries of the ordered 50 wide-bodied Boeing planes will be completed by November 2011. So one can imagine the kind of churning markets will undergo as competition begins to hot up. As per Air Indiaâ&#x20AC;&#x2122;s plans, the other US destinations it may connect, either direct or with a stopover, include Houston, San Francisco and Washington, besides the already connected New York, Newark, Chicago and Los Angeles. The UK connection: The India-UK sector contributed revenues of Rs 453.04 crore during 2005-06, up from Rs 246.59 crore in the previous year, 2004-05. The jump was because of increase in flight frequency by Air India with the induction of five older Boeing 777s in 2005. Air India started, besides its usual Delhi-London and Mumbai-London, a Delhi-AmritsarBirmingham-Toronto flight. Air India had revived this flight to Toronto in May 2005. This came close to twenty years after it stopped flights soon after the Kanishka bombing incident in 1985. The newly revived India-Canada sector yielded Rs 192 crore in revenue to Air India in 2005-06. In sharp contrast to the Gulf, the UK market has been delivering less to Air India, notwithstanding the onward traffic to the US. Perhaps this is one of the reasons (falling yields and stopover) for Air India to fly direct to the US. Incidentally, Air India is looking for a new hub in Europe, and in all probability it could be Munich. Jet Airways has already set up a hub at Brussels. It recently launched its New York flight from Mumbai, via Brussels, and has launched, from September 5, flights between Delhi and Toronto, via Brussels. It is also looking at east coast of the US (like Air India), via Singapore. According to Jet Airways chairman Naresh Goyal, the India-US market was expanding beyond all dreams. After Jet Airways launched its Mumbai-NewarkMumbai flight, via its European hub at Brussels, on August 5, with a Boeing 777-300 ER, the loads from India have reached as high as 94 per cent and return loads from Newark to India were lower, at 55 per cent (being off-season, he says), yielding average seat load factor of over 65 per cent. Following this, Jet launched five times a week Delhi-Toronto flights, via Brussels, on September 5. Initial reports suggest Jet has been drawing good traffic. The CRUISING HEIGHTS October 2007

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Sensing more competition in the near future, Jet Airways has begun to talk of strategic ties with Air India despite the fact that the state-owned carrier never liked the clout of Jet Airways with the ministry of civil aviation. Jet got things done that were not to the liking or interest of Air India.

biggest Indian private airlines claims that since it launched the India-US flights, it has carved out a market share of 23 per cent. It was below that of Virgin’s and BA’s because the capacity they offered out of London was much higher than Jet’s. Like Air India, Jet Airways also faced severe constraints in the form of ‘no slots’ in Heathrow, Frankfurt and Paris. Of the one million people of Indian origin in Canada, nearly half are located in Toronto and half elsewhere. While it is possible that Jet Airways may launch flights to JFK, in New York, from New Delhi/Mumbai in early 2008, it is also keen to connect Vancouver, in Canada. The time line has not yet been decided, but should happen before the first half of next year. Jet will also connect Delhi/Mumbai with Shanghai and San Francisco in February 2008 besides seriously looking at the possibilities of flying out of Ahmedabad, Amritsar and Kolkata to its Brussels hub. Naresh Goyal’s serious competitor, Dr Vijay Mallya, who owns Kingfisher Airlines, is also waiting in the wings to launch non-stop direct Bangalore-San Francisco flights from mid-2008 should the government relax the mandatory fiveyear rule and bring it down to three years. Kingfisher began domestic operations in India in May 2005. Sensing more competition in the near future, Jet Airways has begun to talk of strategic ties with Air India despite the fact that the state-owned carrier never liked the clout of Jet Airways with the ministry of civil aviation. Jet got things done that were not to the

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liking or interest of Air India. Goyal told newsmen in New Delhi the other day that there was nothing wrong in sharing common services, like engineering, ground handling and catering, with Air India. The idea should be to capture 50 per cent of the ex-India market by Jet and Air India. In support of his contention, Goyal said that despite fierce competition, airlines like Air France, KLM and Lufthansa shared certain common facilities. But what he did not say was what would happen after two years when other Indian carriers also become eligible to fly international routes and seek to share common services with Air India. Jet may talk of common services because both Jet and Air India have common fleet type—Boeing aircraft. A leading LCC in India, SpiceJet, has ordered Boeing 737 next generation aircraft. While it is flying 12 Boeing 737-800 aircraft domestically, another 18 are in the firm order book and will join SpiceJet over the next two years. It is also keen to fly to foreign stations like Singapore, Bangkok, Kuala Lumpur and Dubai. As for Air France, the French

Air France, the French official carrier is fine-tuning its India strategy. Air France currently flies 28 times out of India and connects New Delhi, Mumbai, Chennai and Bangalore. CRUISING HEIGHTS October 2007

official carrier is fine-tuning its India strategy. Air France currently flies 28 times out of India and connects New Delhi, Mumbai, Chennai and Bangalore. It had earlier successfully launched airlines’ Phoenix USA programme targetting specific expectations of US customers. A similar programme is being launched for India. Air France at present carries 1.5 lakh Indian customers yearly. Air France network executives stated that, while US airlines were raising their profile of flights between India and the US with non-stop services, the airline also had to contend with aggressive policies of airlines based in the Gulf. There was also competition from new Air India, Jet Airways, Kingfisher and the wellentrenched legacy carriers like BA and Lufthansa. The load factor of Air France on its India route was a high of between 82 per cent and 92 per cent. The Paris hub of Air France is used by 80 per cent of Air France’s Indian passengers for their onward flight connection. So there is a story in that as well. NEXT MONTH: The battle for the Gulf!

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CARGO

Domestic logistics

MAJORS PLAN BIG Thinking big has become a national obsession and business houses are doing just that. The cargo and logistics business is no exception. While First Flight Couriers has new plans for its small ATPs and is going in for bigger planes, Blue Dart has put its seventh freighter, a Boeing 757, into service, reports Tirthankar Ghosh.

HE GROWTH IN THE ECONOMY has seen an explosion in the cargo sector in the last three years. In fact, air cargo has galloped ahead well past the traditional favourites—railways and shipping-to take the biggest bit in freight traffic. According to a study done by ASSOCHAM, if immediate measurers are not taken, railways and shipping would be the biggest losers in the long run. The ASSOCHAM Eco Pulse (AEP) study, ‘Changing Pattern of Cargo Traffic in India’ has analysed the three major transportation modes—aviation, railways and shipping-for the 2000-07 period and found that air cargo has grown by around 19 per cent as against 10.3 per cent and 9.2 per cent growth in shipping

An ASSOCHAM study has pointed out that air cargo has grown by around 19 per cent as against 10.3 per cent and 9.2 per cent growth in shipping and railways. CRUISING HEIGHTS October 2007

and railways during the last three years. The study quotes ASSOCHAM President Venugopal Dhoot who has pointed out that with the government emphasising on food processing sector and horticulture, “there arises a need for greater capacity in the domestic airway facility at low cost”. In such circumstances, dedicated freight aircraft on national and international routes would provide a boost to industry. It is no wonder then that air cargo carriers are ramping up operations. In a move that surprised many in the business, the Mumbai-based First Flight Couriers Ltd —which had announced its air cargo services not too long ago when it leased small ATPs - said that it would end the lease of two of its small cargo planes. Instead, First Flight would be going in for bigger

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CARGO

For the moment, no cut in FDI

he government's decision not to carry forward the plan to curb foreign direct investment (FDI) in courier services has been welcomed by the multinationals operating in the county. Dayanidhi Maran, the then communications and IT minister, had taken the lead to frame the draft Indian Post Office (Amendment) Bill of 2006, which had sought to bring down FDI in courier and express cargo services to 49 per cent. With Maran's departure, the draft bill has been sent to the cold storage. That has come as sweet music for the likes of FedEx, TNT and DHL. Also in the picture are UPS, which has a joint venture with Jetair and Singapore's Temasek, which has invested heavily in First Flight. At present, there is 100 per cent FDI in courier services and if indications emanating from the communications ministry are to be believed, the government does not seem too keen to clip the FDI limit. In fact, the courier and the logistics sector has

been attracting big-ticket investors: DHL, for example, took over Blue Dart; FedEx acquired Prakash Air Frieght (PAFEX) while TNT bought over Speedage. Though FDI in courier services will not be touched for the moment, there are indications that the bill would see a number of amendments since it is more than a century old. Even so, the Foreign Investment Promotion (FIPB) pointed out that all approvals for foreign investment in the logistics sector would be subjected to government norms. This has, however, been criticised by the Express Industry Council of India (EICI), the apex body of the express industry in the country. The argument put forward by the EICI mentions that multinationals would need investments to expand their business in the country. In such circumstances, restriction of FDI would affect the growth of the sector.

aircraft. According to R.K. Saboo, deputy managing director, First Flight, “The company will restart operations once we acquire bigger aeroplanes. We are planning to bring in two Boeing B737-300 cargo planes on lease in the next three-four months,” he said. The new planes will be part of the Rs 100 cr investment that First Flight has planned in anticipation of the air cargo boom, expected as a spin-off from the explosion in the retail sector. Part of the investments—to be made over the next year—will enable the company to enter into the third party logistics business by setting up warehouses across the country. First Flight Couriers with its 721 offices at 1,800 destinations in the country handles more than 150 million shipments every year. The Boeings that First Flight will lease would be put on the trunk routes plying between Mumbai, Delhi and Chennai. These jets would be used for “interline arrangements with international carriers”, as Saboo put it. The ATPs would then be used on the feeder routes. First Flight is in the process of tying up with international cargo carriers for their last leg routes. Essentially that means goods booked from a foreign destination to any of the cities other than those on the trunk routes would be lifted by First Flight and delivered. Goods booked on Lufthansa, for example, to Ahmedabad, would be brought in to Mumbai. For the last leg—MumbaiAhmedabad—First Flight would get into the act.

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Interline operations would, according to Saboo, bring better yields than dedicated freighter operations. According to industry sources, First Flight’s last leg interline operations would ensure regular supply of cargo for the company. The ATPs, which have been taken on long lease from BAE Systems Regional Aircraft, Saboo said, would be used for express shipments. First Flight’s move comes close on the heels of Blue Dart, the largest integrated express courier and package distribution company in the country. From this month, Blue Dart has inducted its seventh freighter, a Boeing 757, into service. In talks with CRUISING HEIGHTS, Blue Dart Express’ Managing Director Anil Khanna said, “We plan to invest approximately Rs 1,000 crore over the short to medium term —next five to eight years—in air infrastructure, aircraft, and ramping up of ground infrastructure with state-of-the art facilities, transit hubs, with hi-tech material handling equipment among others.” The 757 is owned by DHL Express’ European

The boom in air cargo can be gauged from the fact that Blue Dart Express has been looking around for dedicated cargo space in Delhi, Mumbai, Bangalore, Hyderabad and Kolkata.

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Air Transport (DHL has 81 per cent stake in Blue Dart) has undergone conversion at the US-based Flightstar Aircraft Services facility in Jacksonville. Blue Dart Aviation has a fleet of seven aircraft: four Boeing 737s and three Boeing 757s. With the induction of the seventh freighter, the total tonnage that will be handled will be around 300 tonnes per night. In addition to the seventh aircraft, Blue Dart launched its new ground express service, Surfaceline. Khanna provided details about the expansion plans: Blue Dart would be ramping up its operations from the present 14,600 locations to 17,500 locations. The expansion was intended because “the rapidly improving road infrastructure provides us with an opportunity to achieve this goal”. Khanna also said: “We command a modest market share of 5.8 per cent in the ground segment, but we aim to take this to 20 per cent in the short to medium term and become market leaders in the segment.”. There are also plans to set up 58 warehouses across the country by 2010. As the only private operator in the domestic air express segment, Blue Dart has a market share of 41.7 per cent. This, Khanna said, would be enhanced in the next few years. “Our objective is to be the unmatched, premium, complete endto-end service provider in the domestic distribution space, focussing on the needs of our customers.” Speaking on the occasion of the launch, Anil Khanna, Managing Director Blue Dart Express, said, “Our objective is to be the unmatched, premium, complete end-to-end service provider in the domestic distribution space, focussing on the needs of our customers.” The boom in air cargo can be gauged from the fact that Blue Dart Express has been looking around for dedicated cargo space, which will be shared with DHL, in Delhi, Mumbai, Bangalore, Hyderabad and Kolkata. The express major is focusing on around 15,000-30,000 sq metres of space in the bigger cities. Once the cargo space is in place, it will help Blue Dart to cut down on turnaround time for loading and unloading cargo and courier in airports. Said Khanna: “We are keen on dedicated cargo space in major airports with access to both air and city sides.” The induction of the Boeing 757 freighter with 15 pallets will enable the express major to operate long and short haul flights as well as ferry perishables since the plane will have controlled temperature ambience on board. According to Tulsi Mirchandaney, Senior Vice President, Marketing and Projects, Blue Dart,

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the induction of the new 757 will fulfill demands of the domestic market which is growing by leaps and bounds and needs fast distribution.” The seventh Boeing 757-200 that Blue Dart has leased from its parent company, DHL subsidiary European Air Transport, will not be last one. The company plans to add a 757 every April till 2009. While industry pundits believe that induction of an aircraft per year is a conservative move, it is nevertheless quite adequate to cater to the demand of the booming cargo market, which is expected to have a double-digit growth for the next five years. Over a period of time, if the market behaves as it should, the 737s, which the company has at present, would be phased out with 757s and by 2010 there could be an all-757 fleet. The company, incidentally, could increase its market share by carrying general cargo with its lower yields but it has restricted itself to the express sector. Blue Dart presently offers 250t of capacity per night with an average load factor of 80 per cent. Its point-to-point network operates from 11 pm to 7 am, linking seven major cities. Each night, the carrier flies four 737s and two 757s while the fifth 737 is kept on stand-by. The 757s in the Blue Dart fleet has made it possible for the company to start cargo flights to Ahmedabad and

Blue Dart and First Flight are not the only ones in the fast forward mode. Cargo transporter Safexpress Pvt Ltd, which made a name for itself in the logistics sector by distributing the last Harry Potter bestseller has decided to take a bite of the air cargo market. CRUISING HEIGHTS October 2007

Hyderabad. Earlier, Blue Dart delivered to these destinations through bellyspace on passenger carriers. The acquisition of more aircraft would also see Blue Dart going expanding services to neighbouring SAARC countries like Bangladesh, Nepal and Sri Lanka. Blue Dart and First Flight are not the only ones in the fast forward mode. Cargo transporter Safexpress Pvt Ltd, which made a name for itself in the logistics sector by distributing the last Harry Potter bestseller, Harry Potter and the Half Blood Prince, has decided to invest Rs 800-1,000 crore in the next five years by taking a bite of the air cargo market. Presently, a large part of Safexpress’ business involves ground transportation with only around 10 per cent from air cargo. Operating from 550 destinations, 41 hubs and 186 gateways, the company handled 50,000 shipments a month in 2006-07. For aircargo, Safexpress uses bellyspace in regular commercial carriers. To take a stake in the rapidly growing air cargo market, Safexpress has decided to tie up with a company - as yet unnamed — that will be starting its own cargo airline. According to Pawan Jain, chairman and managing director of the company, the airline would only be carrying Safexpress cargo. In fact, Safexpress has also decided on making Nagpur its hub for its cargo airline operation. Slated to begin operations early next year, the air cargo move will go hand in hand with plans to set up the new warehouses. Other than these main players, there are others waiting in the wings to take bites from the aircargo market. There are the regular passenger carriers who are readying operations for cargo: Air India, Jet and GoAir. In addition, there is Hyderabad-based Flyington Freighters Ltd, which wants to start domestic and international operations. While Reliance Capital Ltd, part of the Anil Dhirubhai Ambani Group, had acquired a 44 per cent stake in courier and express company DTDC Ltd, his elder brother Mukesh has plans to start a dedicated freighter airline to service the retail and perishable goods industry. All in all, the expansion moves augur well for the sector. Driven by the fast growth of the economy, air cargo is all set to boom. However, the main deterrent is still the lack of cargo infrastructure at our airports. While the construction of the new cargo-friendly airports in Bangalore and Hyderabad has enthused most cargo operators, the way the new operators of the country’s top gateways—Delhi and Mumbai—have been addressing the needs of the air cargo sector, can only help to enhance the growth of the industry.

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CARGO NEWS Air cargo hits the high note worldwide ALONG WITH INDIA, the whole world is witnessing a buoyant market for airfreight. The global growth rate of 6 per cent, according to IATA, is partly due to higher levels of competitiveness compared to sea freight. The August 2007 figures suggest climbing levels of demand as over the past twelve months growth has been less than 4 per cent. Ratios are tightening as growth has nosed ahead of available capacity. Asia Pacific and Europe are driving growth with 8.5 per cent and 6.5 per cent volume growth in August—a substantial bounce-back for Europe—which previously had shown figures between 2-3 per cent. The figures have prompted IATA chief Giovanni Bisignani to comment that “while the credit crunch clearly shook both business and consumer confidence in August, demand for air travel remained solid with record high load factors for August”. However, Bisignani pointed out that the industry was experiencing better load factors.

DHL Express focuses on customer services DHL Express believes in going “all the way” to understand and serve its customers better and keeping this tradition of customer orientation alive, DHL recently celebrated Customer Service and eCom International Week in India. Bringing this initiative for the first time to the country, DHL Express India hoped to raise awareness on the vital role played by customer service professionals across the globe. Each year several companies across the Americas, Europe, Asia Pacific such as Barclays Bank, Visa, MetLife, Microsoft, GE and Nestle, among others celebrate Customer Service Week and what unites them in their commitment to quality customer service. During the celebration, DHL looked forward to listening to valuable customer feedback that would help set higher benchmarks. Internally, DHL has been using this platform to raise awareness and engage employees of the vital role by recognizing and rewarding all the hard work of its customer service professionals.

Logistics and Supply Chain awards TRANSPORT CORPORATION OF INDIA has bagged the Express, Logistics & Supply Chain Conclave Award for “Best 3PL of the Year”. The Awards were part of the Express, Logistics & Supply Chain Conclave held in Mumbai at the end of September 2007. TCI SCS emerged as the winner amongst a host of strong contenders for its ability to understand client needs, customize solutions for clients, range of specialized services, size of transport and warehouse network, IT capability, level of local knowledge of developing Asian markets and the most optimum cost of services. At the same conclave, Blue Dart Express Limited won the “Cargo operator of the year (Cargo Airline)" award. Blue Dart was adjudged winner in the category for its size of network, reliable service, range of products and value added services, introduction of new products and services and cost efficiency. CRUISING HEIGHTS October 2007

Deutsche Post and UNICEF fight against child mortality DEUTSCHE POST WORLD Net has been supporting the United Nations Children’s Fund, UNICEF, in the battle against childhood mortality for the past 12 months. Walter Scheurle, the board member in charge of human resources at Deutsche Post World Net, highlighted the commitment of the corporation’s more than 500,000 employees: “Colleagues from all business divisions and regions have donated and collected a total of more than EUR 200,000. In addition, last year, ten volunteers supported the work of UNICEF on location in Kenya. In the next few weeks, employees of our corporation will again assist the UNICEF experts in Kenya,” said a DP spokesperson. During the first year of the partnership, the cooperation focused on improving health care for children in Kenya. DHL helped UNICEF distribute around 3.5 million mosquito nets as part of one of the largest health campaigns in East Africa. Further, measures to improve long-term health precautions such as optimizing equipment and the stocking and cataloging of drugs and vaccines in local health centers were also supported. “With the commitment of Deutsche Post World Net and the logistical expertise of its staff, UNICEF was able to help many children in Kenya,” said Dieter Garlichs, the Executive Director of UNICEF Germany. The pilot project in the Kwale region has improved the living conditions for many families. Deutsche Post World Net will continue its support in Kenya, for example by building a logistics center for medical purposes in the Kwale region. During 2008, the cooperation between Deutsche Post World Net and UNICEF will be expanded on a global scale.

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NATIONAL OnAir to fly with Kingfisher ONAIR HAS ANNOUNCED that it has been selected by Kingfisher Airlines to offer its passengers a full range of passenger communication services. Starting in 2008, Kingfisher Airlines’ long-haul passengers will be able to use Webmail OnAir and Webchat OnAir, followed by Internet and Mobile OnAir to access the Internet during flights, as well as send and receive emails and make and receive phone calls in 2009. OnAir’s services will initially be installed on five new A330s and five new A340s, with plans in place to instal the system across its entire long-range fleet. Kingfisher Airlines will use its A330s on routes to Europe and Asia, while the A340s will service longer non-stop flights, such as to the USA.

Air India wins UN Environment Award The national carrier has been awarded the prestigious Montreal Protocol Public Awareness Award on the occasion of the 20th anniversary of the Montreal Protocol. The award, presented by the United Nations Environment Programme (UNEP), is in recognition of Air India's efforts in protection of the ozone layer. Vishwapati Trivedi, joint managing director, National Aviation Company of India Limited, received the award in Montreal in the presence of Nobel Prize winners who postulated the depletion of the ozone layer and other high-level dignitaries. Air India’s association with the UNEP began in 2005 with a number of collaborative activities that were launched with OzonAction Programme of Division of Technology Industry and Economics in Paris. Based on the strategic approach that Air India finalised with UNEP, it undertook several awareness raising activities related to the issue of ozone layer protection and other environmental issues, such as conservation of energy, forests, and other natural resources, through in-flight magazines and videos.

Air Deccan to connect Bangalore and Vijayawada THE LOW-COST carrier has announced that beginning the 29th this month, it proposes to begin new flights connecting Bangalore and Vijayawada. An ATR aircraft will be deployed to serve this route. Bookings for the flight are open. Presently, the only travel options between the two cities is either by road or trains taking up to more than 16 hours. The OnAir service is based on an onboard server, and is connected to the ground infrastructure through Swift Broadband, Inmarsat’s broadband satellite infrastructure. Fees will be based on data download for Internet usage, and per flight for webmail and instant messaging, and for Mobile OnAir the cost will be similar to international roaming rates, with passengers being billed by their operator on their regular bill.

SpiceJet plans to expand route network STARTING THIS WINTER, SpiceJet is planning to expand its route network with addition of destinations like Port Blair and Coimbatore. The airline recently added Kochi to its network. Currently, the airline serves 15 destinations. As part of its trade initiative, SpiceJet has created special group desk for tour operators.

Jet gets rights to Gulf and Middle East THE MINISTRY of civil aviation has given its approval to Jet Airways for traffic rights on the India-Gulf/Middle East routes, effective January 1, 2008. With this approval, the airline will be able to operate on routes like Delhi-Kuwait, Thiruvananthapuram-Kuwait, KochiKuwait, Kochi-Muscat, Thiruvananthapuram-Muscat, Kozhikode-Muscat, Mumbai-Doha, Kozhikode-Doha, Mumbai-Bahrain and Kochi-Bahrain. CRUISING HEIGHTS October 2007

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DIAL NEWS Progress report: The modernisation of the Indira Gandhi International Airport, being carried out by Delhi International Airport Pvt Ltd (DIAL) is on schedule. A team of senior officials from the ministry of civil aviation and ministry of urban development recently visited the construction site to apprise themselves of the progress of the project. Currently, work is on simultaneously for the construction of a new domestic terminal, the modernisation of the existing international terminal, a world-class integrated passenger terminal (Terminal 3) and a third runway for the airport. The team from the ministry of civil aviation comprised Ashok Chawla, secretary, K.N. Shrivastava, joint secretary, Anna Roy, director, Sandeep Prakash, director, and other senior officials from the ministry. M. Ramachandran, secretary, ministry of urban development, also participated in the site visit. Switches to digital telephony: Delhi International Airport Limited has commissioned a new IP based digital EPABX system with advanced multimedia applications and services to improve passenger facilitation. With the implementation of the exchange, the airport now receives a new set of telephone numbers. Callers can now dial 011-2566 1000 for Terminal 1 (both 1A & 1B), 011-2560 2000 for Terminal 2 (International) and 011-2560 1000 for International Cargo Terminal. Some salient features are advanced voicemail providing single mail box for email, fax and voicemail with 100 per cent non-blocking switching systems; computerised phone directory information with click and call features; Webbased service configuration, unrestricted network expansion; IP phones and Soft phones, network interfaces and support; and, Remote working. Wins e-Asia 2007 Award: The cargo operations of DIAL has won e-Asia 2007 Award for Implementation of e-Commerce/Electronic Data Interchange in Air Cargo Sector at an international convention held recently in Bangkok. The award was given by Asia Pacific Council for Trade Facilitation & Electronic Business (AFACT). Over 30 contestants from 18 countries had made presentations on their e-operations and DIALâ&#x20AC;&#x2122;s entity was adjudged best by the Evaluation Committee of AFACT. Implementation of Electronic Commerce/Electronic Data Interchange is one of the thrust areas of the government of India under Export Promotion Board (EPB) and is coordinated by ministry of commerce. This results in paperless e-transactions as per international standards. The said project was initiated by AAI at four metro Indian airports and steered by a core team of DIAL officials for IGI Airport.

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INTERNATIONAL Emirates gets its first 777-200LR THE AIRLINE RECENTLY received the first of its ten Boeing 777-200LRs on order, bringing its fleet count to 108. The new aircraft also represents the 50th Boeing 777 to have joined the fleet of the airline. This new entrant will make its debut on the airline’s non-stop Dubai to Sao Paulo route, launched this month, representing the first non-stop air link between the Middle East and South America. The same aircraft type will also be used on the Dubai-Houston service that begins on December 3. Equipped with eight luxurious private suites in first class, 42 lie-flat seats in business and 216 seats in economy, the aircraft will also feature ICE Digital Widescreen, which offers over 1,000 channels of movies, TV and game entertainment on demand.

ACG orders 25 more A320s US-BASED LESSOR Aviation Capital Group (ACG) has signed a firm contract for 25 additional A320 family aircraft, including six A319s, 15 A320s and four A321s. With this order, the wholly-owned subsidiary of Pacific LifeCorp will have 121 A320 family aircraft in its portfolio. R. Stephen Hannahs, ACG Group managing director and CEO said the group decided to add more A320 family aircraft to its portfolio because of high customer demand. So far, more than 5,300 A320 family aircraft have been ordered and more than 3,200 delivered to almost 200 customers and operators worldwide, making it the world’s best-selling single aircraft family ever. Each aircraft features fly-by-wire controls and unique cockpit commonality across the entire Airbus family. This allows flight crews to fly each aircraft with minimal additional training.

Malaysia Airlines posts profits in Q2 THE AIRLINE HAS reported a net profit of RM 113 million for the second quarter ended 30 June 2007, thereby improving its performance by RM 290 million, from RM 177 million in losses a year earlier. This marks the airline’s fourth successive quarter of net profit since the launch of its Business Turnaround Plan (BTP) in February 2006. Malaysia Airlines’ sales increased 17 per cent, to RM 3.55 billion from RM 3.03 billion a year ago. Revenues rose RM 519 million, with passenger revenue increasing 20 per cent, to RM 2.5 billion. Yield, the average fare per passenger per kilometre flown, grew 13 per cent, while seats filled, or seat factor, rose 1.2 percentage points, to 70 per cent. This enabled Malaysia Airlines to post an operating profit of RM 48 million (before finance costs and exceptional items) from losses of RM 163 million previously. In recognition of the excellent performance in the first half of the year, Malaysia Airlines recently rewarded all staff with an interim half-month bonus.

KLM offers e-tickets KLM ROYAL DUTCH AIRLINES is offering e-tickets to passengers travelling to any of its 124 destinations. In addition, KLM e-tickets can be used when flying with 72 interline partners. The airline is leading the international airline industry in the replacement of paper tickets with e-tickets and at present, e-tickets account for around 89 per cent of all tickets. KLM intends to raise this to 100 per cent as of January 1, 2008, when it will begin issuing e-tickets only. Paper tickets will still be available on request, but KLM will impose a surcharge on issuance.

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Singapore Airlines adds flights from Chennai THE AIRLINE HAS added two additional services from Chennai, taking the total number to 10 times a week. In addition to the night flights seven days a week, there will be morning flights on Sundays, Wednesdays and Fridays to Singapore. Beginning with Boeing 777-200 aircraft, with two-class configuration, the airline will switch to a three-class seat arrangement—12 first, 42 business and 234 economy—from this month. To commemorate the occasion the airline launched its new in-flight menu from Chennai.

InterGlobe announces new appointments INTERGLOBE AIR TRANSPORT has announced new appointments as per its leadership re-design and managerial broadbanding. This follows the airline and cruise management company’s announcement of organisation changes and creation of a new Leadership Council. Sanjay Kapoor: He takes charge of Virgin Atlantic as its commercial head. At Virgin, he will have responsibility for all sales and marketing and customer relations. Prior to this, he had a successful stint with United Airlines. Internally to InterGlobe Air Transport, Sanjay is designated as associate vicepresident. Saurabh Karnik: He has been appointed as sales manager, northern region, for South African Airways, wherein his key responsibilities will include new business development and strategy formulation for sales and future business plan. Prior to this, Saurabh was associated with Virgin Atlantic Airways as sales managerNorth and East India.

Lokesh Bardia: He has been appointed as business manager for Turkish Airlines. In this position he will be responsible for creating a strong market presence for the airline. Internally at InterGlobe Air Transport, Lokesh is designated as general manager.

Navneet Jaggi: He has been appointed as manager sales and marketing for United Airlines. Prior to this, he played an integral role in the growth of South African Airways (SAA) in the Northern region. In his tenure at SAA, he was also responsible for creating a successful route between South Africa and India. Internally, at InterGlobe Air Transport, Navneet is designated as general manager. CRUISING HEIGHTS October 2007

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TRAVEL & TOURISM Fiona Jeffery is WTM’s chair

Oberoi Udaivilas ranked best in the world THE OBEROI GROUP’S OBEROI Udaivilas has received top honours in the Travel+Leisure World’s Best Awards 2007 readers’ survey. The luxury hotel in Udaipur has been ranked the best hotel in the world with the highest overall score of 94.36. To arrive at this ranking, hotels across the world were evaluated on characteristics ranging from accommodation and service to location. In the same survey, The Oberoi Amarvilas, Agra, has been ranked the tenth best hotel in the world and The Oberoi Rajvilas, Jaipur, has been rated the 11th best hotel in the world. The extraordinary rise of India among the top hotels and resorts in the world is a significant landmark for Indian tourism and will further encourage tourists to visit the country.

FIONA JEFFERY, who was managing director of World Travel Market (WTM) till recently, has been appointed its chair. As managing director, she was instrumental in driving and developing the WTM brand. Now as chair, she will be concentrating on the event’s strategic development as well as building and developing ‘Just a Drop’ and WTM’s World Responsible Tourism Day. She has a two-decade long association with World Travel Market brand. Also, Craig Moyes has taken over as exhibition director, WTM. He will be responsible for day-to-day running of global business events in London of WTM. With more than 15 years experience in the exhibition industry, Moyes was instrumental in launching the China International Boat Show in 1993 along with his partner.

Mumbai to get new Shangri-La hotel THE SHANGRI-LA GROUP OF HOTELS is on an expansion spree in the Asia Pacific region and is coming up with its new 400-room hotel in Mumbai in 2009. This will be the fifth property of the group in India. The addition comes as a result of an agreement between the Shangri-La Group and Pallazzio Hotel & Leisure, a subsidiary of Phoenix Mills. The hotel will be located within the residential and corporate hub of Lower Parel, between the central business district of Nariman Point and Bandra Kurla.

Swosti Group plans retreat in Puri SWOSTI GROUP OF HOTELS is planning to introduce Swosti Chandan & Spa Retreat at Puri with two specialty restaurants and bar. It would be one of the best-equipped spas in the eastern part of India on its completion, which is expected some time in 2008-09. Swosti Group has three hotels in operation currently.

Fortune Landmark Indore gets 5-star rating ITC’S WHOLLY OWNED SUBSIDIARY, Fortune Park Hotels chain, has announced that its Fortune Park Landmark Indore has recently received a five-star rating. Owned by Suraaj Hotels & Resorts, the hotel became part of the Fortune chain in August 2003. Set in three and a half acres of landscaped gardens, Fortune Park Landmark Indore offers 78 rooms and suites. The chain’s superior brand of rooms, in the Fortune Club category, have been created by leading Mumbai designer, Prakash Mankad, who has also been commissioned to upgrade all the hotel’s other existing rooms and suites, within the next year.

Sarovar Hotels in aggressive expansion mode SAROVAR HOTEL GROUP has announced the launch of four new properties—Hometel in Hyderabad (Ameerpet), Hometel in Mumbai (Mallad), Grand Sarovar Premiere in Mumbai (Goregaon, West) and Savannah Sarovar Premiere in Bangalore (Whitefield)—by end of 2007. The hotel chain currently manages 30 hotels and resorts, and is continuing with its rapid expansion in the country with plans to open a total of 20 new hotels in the next three years. Apart from the management route, Sarovar will now be investing in its own hotels, too. The first foray into ownership, Sarovar Portico, Indore, is already operational.

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Aura wins accolades Aura, the retreat at The Park, Chennai, has bagged the top two awards—Most Innovative Spa of the Year and 50 most exotic spas of the world—at AsiaSpa Indian Awards 2007. The ceremony took place in Mumbai recently at the Grand Hyatt. In its third year, the AsiaSpa Awards recognise and benchmark the best spas in the region as well as around the world and also puts the spotlight on Asia’s best spas around the world. The judges included experts in the field of spa, healing and beauty from across Asia. The award function was a mega event with Superstar Rekha being the chief guest this year. Neeta Lulla and Malini Ramani showcased their designer collection on the occasion. Also present were Milind Soman, Jackie Shroff, Sheetal Malhar, Candice Pinto and others. Other winners at the awards included Ananda Spa & Resorts (Best Destination Spa), The Amatra (Best Day Spa) and The Oberoi Udaivilas (Best Resort Spa).

TAT India office to have new director TOURISM AUTHORITY OF THAILAND (TAT) office in India is all set to have a new director: Chattan Kunjara Na Ayudhya. He is currently serving as director, international public relations division, TAT. TAT is also planning to open its office in Mumbai by the end of this year.

Raj Travel World launches winter packages to Finland

RAJ TRAVEL WORLD, in association with various service providers in Helsinki, Kemi and Rovaniemi, has plans to offer winter packages to Finland to Indian outbound starting this year. Two packages are on offer-eight-day/seven-night package, costing Rs 1,55,555 per person on twin-sharing basis (Rs 96,666 per child below 12 years) and the other is a six-day/five-night package, costing Rs 1,36,999 per person on twin-sharing basis (Rs 72,222 per child below 12 years). Raj Travels also has plans to open an Indian restaurant in Rovaniemi in partnership with Lapland Safaris. The package tours will commence from January 2008 till March for three months.

Tourism Australia’s ITM 2007 a big draw TOURISM AUSTRALIA RECENTLY organised its largest India Travel Mission (ITM) in the country. The event took place at Hotel Rajputana Sheraton, in Jaipur, and witnessed participation of about 51 Australian suppliers. Through ITM, India travel trade

partners got a new insight into selling Australian destinations. India is one of the fastest-growing tourism markets for Australia.

TAFI convention concludes on high note TAFI INTERNATIONAL ANNUAL convention was held in Kota Kinabalu from September 6-9 this year and was attended by over 900 delegates. Spanning three days, the business sessions

covered areas such as aviation boom, relevance of travel agents, growing impact of technology, the redundant regulations in tourism and the growing problem of skilled manpower. To make the business sessions more stimulating and informative, special 10 minute presentations were inserted on a variety of topics. The final touches to the convention were the grand evenings comprising a sit-down gala dinner, buffet dinner by the sea and a grand awards night.

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A slice of

history b

a. In the hangar, getting ready for the museum b. Exhibits on display at the auction c. Opening of the auction sales of Concorde in Toulouse

he Daily Mail put it perfectly when it said, “A toilet seat from a Concorde has sold at auction for 1,800 pounds.” The loo, if one is permitted to use the word, went under the hammer along with hundreds of other items from the magical plane that last flew in 2003. This is the third auction of Concorde parts. Previous auctions, in London and Paris in late 2003 and 2004, included an engine, lavatory cubicles and several of the plane’s distinctive 3.7-metre, or 12-foot, nose cones, one of which sold for more than $500,000. Believe it or not, a Mach meter, which registered the break of the sound barrier, went for close to $25,000, way above the listed price of $3,500. The auction, held in Toulouse, France (better known as the headquarters of Airbus Industrie and home as well to the company behind the Concorde), was organised by a group of former engineers and executives. All the items on sale are either unused replacement parts or components that were actually

CRUISING HEIGHTS October 2007

A Mach meter

installed on a working Concorde. The Concorde made its first flight in 1969, but was formally retired in 2003, as ticket sales plummeted after a crash near Paris in 2000, which killed 113 people. Only 20 planes were built, and just 14 entered commercial service, with Air France and British Airways, catering to a transatlantic jet set, ranging from investment bankers to rock stars. With a maximum cruising speed of 2,170 kilometres, or 1,350 miles, per hour, the Concorde was capable of flying from London to New York in less than three-and-half hours.

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8/10/2007

9:14 PM

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10/6/2007

4:53 PM

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