Ch october 2008 by Newsline

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CAPTAIN G R GOPINATH’S CARGO ODYSSEY

October 2008 Rs 60

Plus

Airports Unlimited AAI’s thrust on enhancing airport infrastructure around the country

Ready to fly into the future A detailed look at the present state of affairs of the country’s civil aviation sector and all its stakeholders.

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PUBLISHER'S NOTE

Enjoy! land back for development! For us at C RUISING HEIGHTS , this issue is a labour of love. Outlook 2009 is part gazing at the crystal ball, part intuitive assessment, and part feedback from the industry. After all, who can gaze better at the horizon than the players themselves? And, thanks, to them we have a cracker of an issue with news, views, interpretation and analysis. So, what’s the assessment. In forecast terms, you could describe it as ‘partly cloudy with medium to heavy showers’. In other words, the sun will shine, but intermittently and one has to brace for some tough times and losses. But through it all, the one impression that stood out was the unwavering belief of almost every player in the growing future of the aviation business in this country: their own commitment to consolidate and expand and their instinct that aviation in this country was preparing for the next big leap. We had a wonderful time putting this issue together. It was exciting and rewarding. Hope you feel the same way when you go through these 200odd pages.

t is no surprise that the country is getting an air show — a civil airshow that will alternate with the military one held in Bengaluru every two years. With a booming aviation business (not so booming, actually, of late), a growing fleet, expanding airports, Greenfield proposals and states salivating for a piece of the action, manufacturers, infrastructure giants, and airlines didn’t need much persuasion when Praful Patel decided it was time to set the ball rolling on a permanent showcase for Indian aviation. It is also appropriate that he has decided to take the show to Begumpet. The AAI airport, now closed for commercial traffic, is just perfect. It is bang in the heart of the city and just right for everyone wanting to get to the show, although one wonders how the A380 is going to get in. Hyderabad, will also give visitors an opportunity to look at the spectacular Rajiv Gandhi International Airport. This first of the two Greenfields to take off (the other one at Bengaluru though widely welcomed has drawn some flak as well).That he has also said that it will be permanently based in Hyderabad and alternate with the air show (military) that takes place is Bengaluru is just well. It will be a huge booster for AAI that has been desperate to keep the state government away from this prime piece of real estate. At one point in time the Rajashekar Reddy government wanted the

The sun will shine, but intermittently and one has to brace for some tough times and losses. The one impression that stood out was the unwavering belief of almost every player in the growing future of the aviation business in this country, their own commitment to consolidate and expand and their instinct that aviation in this country was preparing for the next big leap.

Enjoy and Happy Deepawali!

srini@newsline.in

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Contents

ARTICLES NEWS VIEWS EDITS INTERVIEWS

That’s ‘my’ show: India Aviation 2008 at Hyderabad will showcase the development of the country’s civil aviation industry at a time when India is becoming a major aviation player....... P4 Going strong: The country’s civil aviation has witnessed growth over the last four-and-a-half years. It has seen major developments from the merger of Air India and Indian to the opening of Greenfield airports at Bengaluru and Hyderabad. An update on developments in the civil aviation sector...... P12 The best in the business: Interviews with Air India Chairman Raghu Menon, DGCA Chief Kanu Gohain, GMR’s Kiran Grandhi and GVK’s S Reddy......... P22

PRAFUL PATEL’S INTERVIEW...........P8

Forging ahead: AAI is forging ahead to make India a major ‘air hub’ in Asia-Pacific by 2016. In a candid interview, AAI Chairman K Ramalingam shares AAI's future plans of developing airports across metros and non-metros. Plus an update on the airports from around the country....... P31

Civil Aviation Minister Praful Patel has seen ups and downs but through it all, he has managed to take Indian civil aviation on a growth path. In an exclusive interview, he throws light on various issues concerning the Indian aviation. C

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SNIPPETS AIR CARG0 QUOTES Down but not ‘out: After the merger of Air India and Indian, Air India is struggling to keep its nose out of the water. The airline has suffered heavy losses and continues to do so. What is in store for the Maharaja?.......P58

The air cargo operations in India are on the fast growth curve. While it has grown more than railways or shipping over the last few years, it is still in its nascent stage. A close look at the air cargo ‘scenario’ in India. C

K. SRINIVASAN Editor-in-Chief

TIRTHANKAR GHOSH Managing Editor

Still a long way to go: It is going to be a long haul for the MRO business in India, considering the downturn in the aviation business. Will the plans for setting up an MRO in the country be delayed?.......P72

R. KRISHNAN

Issue or non-issue: The new Ground Handling policy comes into effect from January 1, 2009. Will it spell disaster for Ground Handling operations in India or will it make the operations smoother? A look at the new policy and its implications.......... P92

BHART BHARDWAJ

Need a booster: It’s like murcury. As it goes up and down, it can turn an entire industry sick. Needless to say, it forms the bedrock of the airline business in India. Read more about the critical analysis of the ATF issue in India.... P80

H.C. TIWARI

Consulting Editor

RUCHI SINHA PRADEEP JHA RAVINDER GUSAIN Layout Artists

BIRENDRA KUMAR Copy Desk

JAYA SINGH Subscription

NEETI SRIVASTAVA Sr. Manager (Marketing)

RAJIV SINGH Gen. Manager (Admn.)

RENU MITTAL Executive Director

Cruising ‘greater heights’: Check-out the latest happenings and developments regarding the domestic and international airlines coupled with what domestic and international tourism players have got in store for you in the future........ P168 I

Art Director

Consulting Photographer

Go private: Private airports are ruling the roost and they have hit the spotlight ahead of their government-controlled counterparts. A sneak peek at the private airports of Delhi, Mumbai, Hyderabad and Bangalore and their functioning....... P102

CARGO............................................. P141

CRUISING HEIGHTS

Editorial & Marketing office: Newsline Publications Pvt. Ltd. C-15, Sector 6, Noida 201 301 Tele: +91-120-4145555 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-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase-I, New Delhi 110020 Vol III No 6

RNI NO. DELENG/2006/16897

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AIRSHOW

Preparing for

aviation tomorrow India Aviation 2008 at Hyderabad — jointly organised by the Ministry of Civil Aviation and the Federation of Indian Chambers of Commerce and Industry — will showcase the development of the country’s civil aviation industry at a time when India is becoming a major aviation player.

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oming as it does at one of the most crucial junctures in the history of civil aviation in the country â&#x20AC;&#x201D; Air India has reported a loss of Rs 2166 crore and aviation pundits predict that the current fiscal (2008-09) is going to be the worst in India's as well as the aviation history of other countries â&#x20AC;&#x201D; India Aviation 2008 can only emphasise the fact that India is well on its way to globalization. Despite the trying times, the first-ever international exhibition and conference on civil aviation will

highlight the history, growth and present stature of the sector in India. What will be keenly watched will be an exclusive open house inter-active session between Civil Aviation Minister Praful Patel and 35 CEOs from major aviation companies. The day will provide an opportunity to the CEOs to discuss their future plans and policy issues. In addition, there will be civil aviation ministerial delegations from 25 countries, who have been invited to participate in the event. There will be an international conference on civil

Supporting players Airports Authority of India (AAI) AAI manages 126 airports, which include 11 international airports, 89 domestic airports and 26 civil enclaves at defence airfields. AAI also provides Air Traffic Management Services over the entire Indian air space and adjoining oceanic areas.

Air India After the merger of Air India with Indian Airlines, the entity has a fleet of 115 plus aircraft, flying on both international and domestic routes. A new A319 Airbus will be inducted coinciding with the inaugural ceremony. Air India will also be displaying a B777 ER along with the A319.

The A380 will be on its second visit to India. The first occasion (in the picture) was when the Big Bird flew into Delhi.

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Supporting players Directorate General of Civil Aviation (DGCA) DGCA is the regulatory authority promoting safe and efficient air transport in the country.

Pawan Hans Helicopters Ltd One of India's leading helicopter companies and has a large fleet of helicopters which are appropriate for multifarious jobs.

From the Farborough Airshow: Air India’s Boeing 777-300 ER ‘Jammu & Kashmir’ was showcased.

aviation, with panel discussions by eminent aviation experts and industry leaders from more than 20 countries to bring into focus the cutting edge issues in the sector and help to prepare a roadmap for future development of aviation in the country. The event also aims to provide a platform for meeting of various aviation industries in order to forge partnership alliances and transfer of technology. With the presence of aviation majors, United States being the partner country and Andhra Pradesh as host state, the event

will pave the way for India becoming a major aviation hub in the near future as well as establishing the event as a major airshow in the world. Farnborough International Ltd, organisers of the Farnborough International Airshow, have been appointed to lead the international sales

Visitors at the Farborough Airshow take a look at the various types of aircraft on display.

and marketing activity for India Aviation 2008. The event is organised jointly by the Ministry of Civil Aviation with the Federation of Indian Chambers of Commerce and Industry (FICCI) and strongly supported by the Airports Authority of India (AAI), Air India, the Directorate General of Civil Aviation (DGCA) and Pawan Hans Helicopters Ltd. The opening ceremony will be supplemented with a spectacular fly-past by Surya Kiran and Sarang helicopters from the Indian Air Force, followed by parasailing, para-jumping and hot air ballooning by the Aero Club of India. One new Airbus 319 would be inducted to the Air India fleet, coinciding with the closure of the inaugural function. Another highlight will be the arrival of the largest passenger aircraft in the world, Airbus A380, from France. The aircraft, which can cover 3/4th of a football field, will be on both static and flying display at the event. The airfield area will have on display 37 international and domestic aircraft —from the A380 to Pushpak, the smallest aeroplane. The composition of display will include Boeing 777, Airbus 340-400, Learjet, Global Express, Challenger, CRJ900, Gulfstream, Illusion, Hawker Beechcraft, Cessna and Helicopter. They will be backed by more than 150 exhibitors from leading aviation and allied industries from around the world. Among them are Airbus, Boeing, EADS, HAL, BEL, Rolls Royce, Engine Alliance, Cessna Aircraft Company, Bell Helicopter Textron, ATR, Bombardier, etc to name a few. Major airlines like Air India, Kingfisher, Jet Airways, Spicejet, etc., will demonstrate their profile and services.

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INTERVIEW

As Civil Aviation Minister, Praful Patel has seen ups and downs but through it all, he has managed to take Indian civil aviation on a growth path few would have dreamt of a few years ago.

““ LAST THE DISTANCE” DISTANCE OUR AIRLINES HAVE THE RESILIENCE AND THE STAMINA TO

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India’s own Farnboroughstyle airshow will kick off in Hyderabad in October. It is understood that the show has received enthusiastic response from global majors. Could you tell us a little about the India Aviation 2008? I am excited. I think over a period of time, this show will have its own place in the world aviation calendar of events. I am certain it will be at par with the Paris and London’s Farnborough International Air Show.

As a government, we have been proactive in providing relief to the industry. I am grateful to the Prime Minister for his support and encouragement. The high-powered committee under the Cabinet Secretary was his initiative although with the prices dipping, the committee’s job is much easier. But one thing I keep stressing with the industry is that there is only that much we can do. If sales taxes are exorbitant, I can only ask the states to reduce them, I can’t force them. At the end of the day on many issues airlines will have to learn to talk to the state governments.

Why Hyderabad? Hyderabad is the right place to host the show as it has the requisite facilities and with some minor modifications it will become the permanent venue for the show to be held every two years. This time the show is being held in October, but from 2010 it will be held in February like the military air show in Bangalore in the alternate year.

Why aren’t the states more cooperative? We had a meeting of state Civil Aviation Ministers earlier this year. Honestly, they were all positive and wanted to help, but these are matters of finance and if it’s a loss of revenue... I also think there is a perception that flying is a high end business. This concept is at least 30 years outdated. Flying today is convenience, speed — really the best possible and quickest way of getting from Point A to Point B. Unfortunately, the perception scores over the reality and we continue to suffer. I am hopeful nonetheless, that this will change sooner rather than later.

The last twelve months have been pretty see-saw, zooming traffic numbers and then a severe slump. It must be taxing. Not really. Anyone in this industry knows that the very nature of the airline business is cyclical, if you didn’t have a fuel-induced crisis, you would have something else. Just look at the last decade - you had 9/11, the Iraq invasion, there was SARS. Each of them was catastrophic for tourism and for business and both these elements impinge sharply on the economics of aviation. But in each of these happenings, the airlines took a beating, reassessed their strategy and lived not just to fight another day but prosper. In the Indian context, I have no doubt in my mind that our airlines have the resilience and the stamina to correct course and last the distance. Since my last meeting with airline CEOs, there has been a lot of activity at their end, which is very good. After all, the government alone cannot be providing the cushion every time you confront a crisis. Their efforts to rationalise routes, relook at their acquisition strategy, reorient their route development and tweak both their staffing and pricing are all efforts in the right direction.

I think there is a perception that flying is a high end business. This concept is at least 30 years outdated. Flying today is convenience, speed —really the best possible and quickest way of getting from Point A to Point B. Unfortunately, the perception scores over the reality and we continue to suffer. I am hopeful that this will change soon.

What is your hope based on? Every day I get requests from Chief Ministers who want me to relook at airports in their states. If it’s not a question of modernization, it’s a question of upgrading airport infrastructure in the districts and in many cases there have been Greenfield requests. Clearly they realize that the cost benefit ratio of more flights and aviation activity in their region will have invaluable spinoff effects. Plus the fact that as our major metros and nonmetros get modernised, it has a huge multiplier effect on the hinterland. Just look at the impact the new Hyderabad airport is having in the region and you will realize what I mean. Back to the airlines, logically with lower fuel prices they should be passing on the benefits to the passengers. We hope that it (lower fuel prices) will have an effect on airfares. But to say that this will happen immediately will not be correct. Even if the prices stabilised at the prevailing levels, it

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Civil Aviation Minister Praful Patel with CEOs of airlines at a meeting held to discuss problems arising from the ATF price hike.

In the case of the Air India-Indian Airlines merger I believe that there are many areas where the integration could have been much faster than what it is. I also believe that if Air India has to truly compete with the best in the business, they have to raise their service standards several notches higher.

would take Indian airlines some more time to come out of the red and pass on the benefits, like lower fuel surcharges, to the air travelers. If oil rules around US $80 per barrel, then airline losses are seen at Rs 6,000crore, which were earlier seen at Rs 8,000 crore. So the impact is slightly reduced. But the losses are huge, so we need to be patient.

dards several notches higher. There is no point in being very good one day and just average another day. You have to be consistently good. Only that can help change the people’s perception about the national carrier. The staff seems morose and unhappy. Wrong. Yes the HR integration is complex, time consuming and not something that can please all. But it is moving ahead and I am sure the AI Board sub-committee that is looking at these issues will come up with a comprehensive schedule to address the grievances and give people their due. Only a happy bunch of employees can take the airline forward.

Is that why a bailout package of Rs 1000 crore for the Maharaja is on the cards? As far as Air India is concerned, It is not a bailout but an equity infusion issue. Air India is a national carrier and the government will have to invest in it. The proposal is to increase equity to Rs 1,500 crore from the present level of a paltry Rs 150 crore. A proposal has been received and we will go through all its details over the next few weeks. Airlines suffering losses is a universal phenomenon. What Air India is looking for are soft loans to meet its current requirements.

Almost at the fag end of your term, do you have any regrets on things not done? Once the AERA Bill is passed in the coming session of Parliament, it will be a major responsibility off our shoulders. You know one can never be fully satisfied. There will also be something left unfinished, it’s such a dynamic process. I guess streamlining the training process-although with the upgrading of IGRUA and the Academy at Gondia there is much relief, creating greater transparency in the DGCA, getting more Indian airlines to fly abroad, creating more pockets of excellence in our airports, getting the cargo complex at Nagpur going… there is so much on the plate. But, wait, there is still some time to go. I am not finished yet (smiles)…

Are you happy with the merger and the way it has gone forward? Yes and no. Airline mergers worldwide have issues. Frankly, in the case of the Air India-Indian Airlines merger I believe that there are many areas where the integration could have been faster than what it is. I also believe that if Air India has to truly compete with the best in the business, they have to raise their service stanC

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Phenomenal

all-round progress ! The opening of the Indian skies has brought about a big growth in the civil aviation sector. Spearheading the move to further liberalise and bring about changes in the sector and make it at par with the best in the world is the Ministry of Civil Aviation. A close look at the moves taken by the Ministryâ&#x20AC;Ś C

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ivil Aviation has been an area of phenomenal progress during the past four-and-a-half years. Just look at the figures during the year 2007-08. India moved to the ninth position in the world aviation market in the year 2007 from twelfth in 2006. The airlines business is growing at 27 per cent per annum in India, fuelled by expanding bilateral and increased international and domestic frequencies. In 2007, domestic aviation sector grew at 32.5 per cent. There have been a few hiccups this year thanks to the unprecedented increase in fuel prices. But it is a reflection of the resilience of the aviation business in India that airlines have made adjustments and course corrections to weather the storm and provide the same efficient connectivity to the travelling public. It has been, to put it simply, a season of growth, consolidation and expansion. Given below are a few highlights of the last

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remarkable 18 months:

Merger of Air India and Indian The combined Air India and Indian Airlines is a formidable network and bouquet of services that any alliance would love to have as part of its membership. NACIL was invited to become the member of Star Alliance. The Star Alliance network, which was established in 1997 as the first truly global airline alliance, seeks to offer customers worldwide reach and a smooth travel experience.

A new company â&#x20AC;&#x201D; National Aviation Company of India Limited (NACIL) â&#x20AC;&#x201D; was incorporated in March 2007 with its headquarters at Mumbai. The brand name of the new airline is Air India and its logo is the Maharaja. The company is the new entity after the merger of Air India and Indian Airlines. Soon after, NACIL was invited to become the member of Star Alliance. The Star Alliance network, which was established in 1997 as the first truly global airline alliance, seeks to offer customers worldwide reach and a smooth travel experience. Star Alliance was voted the Best Airline Alliance by Business Traveller magazine in 2003, 2006 and 2007 and by Skytrax in 2003, 2005 and 2007. The combined Air India and Indian Airlines is a formidable network and bouquet of services that any alliance would love to have as part of its

The departure lounge at Mumbai International Airport.

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membership. After all, the merger makes them the prime player in the Indian subcontinent. In addition, the recentlyannounced fleet expansion of over 100 aircraft would enhance Air India's operations in terms of global reach and services. The specialised teams at Air India, Star Alliance and its member carriers will now be working on the integration process, which once completed, will make Air India a part of the Star Alliance network.

Indiaâ&#x20AC;&#x2122;s accession to the Cape Town Convention and the Aircraft Protocol has been approved. The principal objective of the Convention/Protocol is the efficient financing of mobile equipment.

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matter of record that India has been consistently holding this position since 1944.

Cape Town Convention/Aircraft Protocol India's accession to the Cape Town Convention and the Aircraft Protocol has been approved. The principal objective of the Convention/Protocol is the efficient financing of mobile equipment. It is designed to establish an international legal regime for categories of high value and uniquely identifiable mobile equipments. The economic benefits of the Cape Town Convention are significant. It is likely to reduce the risk applicable to asset-based financing and leasing transactions by establishing an international legal framework, backed by treaty relations, and where necessary, implementing domestic laws. The risk reduction will not only increase the availability of aviation credit at a cheaper cost, but will also broaden the spectrum of financing alternatives available to aircraft operators.

Liberalisation of air services

Photo: H.C. Tiwari

In accordance with the policy of liberalisation in the civil aviation sector and with a view to attracting more foreign passengers, the government has adopted a

Amendment in aircraft rules/Act Keeping in view various developments in the civil aviation sector in the past few years, a review of the existing provisions of the Aircraft Act, 1934 was undertaken and it was considered necessary to carry out certain amendments to make it more effective and consistent with the present requirements. Through these amendments it would be ensured that air travel in India continues to meet international safety and security standards. Through the Amendment to the Aircraft Act, for ensuring Safety and Security Control, the Central Government will be empowered to make rules on: Licensing of personnel engaged in air traffic control. Certification, inspection and regulation of the Communication, Navigation and Surveillance/Air Traffic Management (CNS/ATM) facilities. Safeguarding civil aviation against acts of unlawful interference and ensuring civil aviation security since at present there is no legal provision under which the various orders on security are issued.

forward-looking approach in the matter of grant of traffic rights under bilateral agreements with various foreign countries. The India-US aviation market has registered significant growth under the new revised Air Services Agreement signed between the two countries. During the year 2007, traffic rights were enhanced with Singapore, Cambodia, Jordan, UAE (Abu Dhabi/Dubai/ Sharjah), Kuwait, Uzbekistan, Malaysia, Chile and Hong Kong. This would not only lead to more flights and better connectivity from these countries to India but also provide more commercial opportunities to all operating carriers. The India-Gulf route has been opened to eligible private schedule carriers with effect from January 1, 2008 and Jet Airways became the first Indian private sector carrier to fly to the Middle East.

The existing power of DGCA has been enlarged to issue directions on: Regulation of air transport services (e.g. aircraft operations, air traffic control or maintenance and operation of any aerodrome, communications, navigation, surveillance and air traffic management).

ICAO General Assembly In the ICAO General Assembly held in Montreal in September 2007, India was reelected as a member in the council of ICAO for a period of three years. It is a C

Air Traffic Management innovation State-of-the-art CNS solutions of the latest generation, together with weather systems and advanced airport air side solutions are today available within SELEX Sistemi Integrati to provide gate-to-gate operations wherever innovative approaches to air operations are required, in any part of the world.

Our systems solutions are at all times flexible, e x p a n d a b l e , scalable and cost effective. Our offer is complemented by ATC training facilities and In Service System Support. Innovation is of paramount importance for SELEX Sistemi Integrati, based in Italy, UK, USA and Germany, be it for land, sea or air operations.

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Prohibition of slaughtering and flaying of animals etc. within 10 kilometers radius of the airports. A new clause in the Act has been added to exercise regulatory control on foreign registered aircraft coming to or flying over India. Through these amendments it would be ensured that air travel in India continues to meet international safety and security standards.

in June 2007, which is to be funded through US Trade and Development Agency (USTDA). The proposed ACP is a public/private partnership between the USTDA, the Federal Aviation Administration (FAA) and US aviation companies. This programme is designed to provide a forum for communication between Indian and US public and private sector entities. The initial funding of the programme is proposed through the public institutions of the USA and private companies having stakes in aviation. The ACP's specific objectives are: To promote increased safety, operational efficiency and system capacity in the Indian aviation sector Facilitate and coordinate aviation industry training and technical ties between the U.S. and India; and Strengthen overall Indo-US aviation cooperation.

Montreal Convention 1999

The Montreal Convention 1999 provides for international legal regime to govern the liability of air carriers for injury or death of passengers, for destruction or loss of or damage to baggage and cargo and for losses caused by delay in international carriage of passengers, baggage and cargo. The Montreal Convention 1999 has been adopted for the unification of certain rules for international carriage. This new Convention aims at achieveing the dual purpose of modernising as well as consolidating the various instruments comprising the Warsaw System. The accession to the said Convention shall facilitate the higher compensation and fifth jurisdiction to international air passengers to and from India.The proposal for accession to the Montreal Convention 1999 has been approved and the Bill has been passed by Parliament.

An Aviation Cooperation Programme (ACP) has been signed with the USA during the visit of the Civil Aviation Minister Praful Patel in June 2007, which is to be funded through US Trade and Development Agency (USTDA).

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Development of airport infrastructure Development of airport infrastructure has been undertaken through the Public Private Partnership (PPP) route in major metro cities like Delhi, Mumbai, Bengaluru and Hyderabad. The modernisation of the Kolkata and Chennai airports is being undertaken by the AAI. The aim of the government is to transform these airports into world-class facilities through this hybrid mechanism.

Civil Aviation cooperation programme

Delhi and Mumbai airports

An Aviation Cooperation Programme (ACP) has been signed with the USA during the visit of the Civil Aviation Minister

The international airports in Delhi and Mumbai have been restructured and are being modernised through private sector participation. Work is going on at Delhi airport and the first phase is likely to be completed by March 2010.

International airport at Navi Mumbai "In-principleâ&#x20AC;? approval for the setting up of a Greenfield airport through Public Private Partnership (PPP) at Navi Mumbai, Maharashtra has been given and the necessary clearances are awaited.

Modernisation/Expansion of Kolkata airport Approval has been given and work is about to begin on an integrated terminal building to handle 20 million passengers per annum and airside works at a total cost of Rs 1942.51 crore, for completion in June 2010.

Expansion/Modernisation of Chennai airport Approval has been given and work is about to begin on expansion of C

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international and domestic terminal building to handle additional 13 million passengers per annum and major airside work, including extension of second runway at a total estimated cost of Rs. 1808 crore for completion in June 2010.

With the objective of creating a level playing field, to foster healthy competition amongst all airports, encourage investment in airport facilities, regulation of tariffs of aeronautical services, protection of reasonable interests of users, operation of efficient, economic and viable airports, etc., it has been decided to set up an Airport Economic Regulatory Authority (AERA).

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also been finalised. The constituted steering committee will examine all proposals for setting up of airports. The applicant will be required to apply for clearances from various Departments/Ministries of Government of India but all proposals will be submitted to the Steering Committee. The Ministry of Civil Aviation will serve as the secretariat of the Steering Committee and will be responsible for processing proposals received by the Steering Committee. These guidelines will apply to the setting up of all airports, heliports and upgradation of airfields. However, airports set up for private use, i.e. use of the aerodrome for non-commercial purposes, shall not be subjected to these guidelines. The Steering Committee will convey its recommendations regarding the Site Clearance within three months of the application being made to the Steering Committee.

Bengaluru International Airport Limited (BIAL) The Greenfield airport project at Devanahalli, Bengaluru, has been commissioned on a Build Own Operate and Transfer (BOOT) basis for 30 years with Public-Private Participation (PPP) at revised cost of Rs 2,470 crore.

Hyderabad International Airport Limited (HIAL) A Greenfield airport at Shamshabad, near Hyderabad, has commenced operations on BOOT basis with Public Private Participation (PPP) by the government of Andhra Pradesh. The approximate cost of the project is Rs 2, 478 crore.

Modernisation of 35 non-metro airports

An ambitious project of modernisation of Establishment of AERA 35 non-metro airports has been undertak- With the objective of creating a level en. As per a decision taken by the Com- playing field, to foster healthy competimittee on Infrastructure, airside work, tion amongst all airports, encourage including construction of terminal build- investment in airport facilities, regulation of tariffs of aeronautical services, protecings, would be undertaken by the AAI. tion of reasonable interests of users, operWork on most of these airports has been ation of efficient, economic and viable taken up. The work at Agra airport (Civil airports, etc., it has been decided to set up Enclave) has been completed and major an Airport Economic Regulatory works at seven other airports viz. Agatti, Authority (AERA). The functions of the Ahmedabad, Amritsar, Jaipur, Nagpur, Authority shall be as under: Trichy and Udaipur have been completed. It is expected that terminal buildings and associated air side works in respect of 24 airports will be completed by end of March 2009 whereas remaining 11 airport would be completed by the end of March, 2010. City side development of 24 select non-metro airports would be Sonia Gandhi, Chairperson of the UPA Government inaugurating the Rajiv taken up through Gandhi International Airport, Hyderabad. PPP. The city side development includes commercial To fix, review and approve tariff structure for the aeronautical services takexploitation and maintenance of terminal ing into consideration the capital buildings besides real estate development. expenditure incurred, the service proFinal details are being worked out. vided, its quality and other relevant Guidelines for Greenfield airports factors; The guidelines for approval of proposals To fix, review and approve users for setting up of Greenfield airports have development fees which may be levied

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The Kaw Committee has also recommended restructuring and strengthening of the DGCA. There is a need to keep the office of the DGCA in a dynamic state to keep pace with the challenges thrown by exponential growth of civil aviation in India.

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by service provider for the development of an airport; To monitor the set performance standards relating to quality, continuity and reliability of service as prescribed by the Central Government or its authorized agencies through concession agreement or such other agreement; To call for such information required to review the regulated tariff structure; and To perform such other functions as may be entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act.

Regional air connectivity To expand air connectivity on Tier II and Tier III cities and to promote regional air connectivity, a separate category of permit, Scheduled Air Transport (Regional) Services, was introduced. Scheduled Regional Air Transport Services means a Scheduled Air Transport Services which operates primarily in a designated region and which on grounds of operational and commercial exigencies may be allowed to operate from its designated region to airports in other regions, except metro airports of other regions. NoCs to operate regional air transport services were given to: Star Aviation (Southern Region), Jagson Airlines and MDLR Airlines (Northern Region) and Zav Airlines (East, Northeast region).

The Airports Economic Regulatory Authority of India Bill, 2007 was introduced in the Lok Sabha in September 2007. The Bill was referred to the Parliamentary Standing Committee on Transport, Tourism and Culture for examination. It is now expected to come up in Parliament in the winter session in October 2008.

Process re-engineering in DGCA Due to the exponential growth of air traffic in recent years, there is a mismatch of growing workload and the existing strength, resources and infrastructure of DGCA, especially, manpower, which has been static over a decade. The workload and responsibilities of DGCA officials have increased with the growing number of aircraft in commercial and general aviation. The Kaw Committee has also recommended restructuring and strengthening of the DGCA. There is a need to keep the office of the DGCA in a dynamic state to keep pace with the challenges thrown by exponential growth of civil aviation in India. The process of re-engineering of the DGCA has been initiated by developing systems like IT-based online examination, outsourcing of pilot medical examination, etc.

Streamlining and promoting cargo operations To streamline and promote the cargo operations, an Inter-Ministerial Group (IMG) is looking into various aspects of air cargo operations. Based on its recommendations, free time available for the cargo has been reduced to three days from five days. The IMG is deliberating on additional steps to be taken to streamline the procedures relating to air cargo operations so as to make the operations more efficient. The cargo activities, at present, are much below the potential available in the country. One of the steps contemplated is to promote cargo operations through PPP at non-metro airports.

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Augmenting helicopter services for non-accessible areas and tourism

Photo: H.C. Tiwari

The year 2008 was declared as Year of Helicopter Services. The Ministry has approved a large number of proposals for helicopter acquisition/ import. During the year PHHL (Pawan Hans Helicopters Ltd) inducted two additional Dauphin N3 helicopters. With the above acquisitions, the total fleet size of the company has been enhanced to 35 helicopters. Passenger services are provided by PHHL to Kedarnath and Badrinath Dham and Amarnath during yatra seasons. There are also plans to further diversify/connect to important adjoining tourists/tourism places in Uttarakhand such as Ghangharia, Hemkund Sahib, etc., subject to necessary permissions. It Important tourist destinations in Tamil Nadu (Coimbatore, Madurai, Kodaikanal, Rameshwaram, etc.), in Puducherry (Chennai-KaraikalC

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Puducherry sector) and in Uttarakhand etc. will also be started.

M/s CAE, Canada.

Construction of heliports

In order to actively engage the States/Union Territories in the developmental works and to provide a platform to them for placing their concerns directly to the Government of India with regard to civil aviation matters, the Ministry for the first time organized a national conference on civil aviation on January 18, 2008 at New Delhi. The event was a major success and attended by dignitaries from the centre and the states. The BCAS has its headquarters in New Delhi. It is headed by an IPS officer of the rank of Director General of Police, designated as Commissioner of Security, Civil Aviation (COSCA), who is the designated â&#x20AC;&#x153;Appropriate Authorityâ&#x20AC;? to ensure development, maintenance, updation and implementation of national aviation security programme for India and to fulfil all international obligations in this context. The Bureau has developed and implemented a National Civil Aviation Security Training Programme (NCASTP), which has been revised in the year 2007 and updated with all changes in AVSEC environment. The Aviation Security Training Centre located at New Delhi is utilised for the training of aviation. security staff and employees of airlines and air operators/executive staff of the Airports Authority of India. The training centre has upgraded further the training aids with the addition of X-ray BIS testing of screeners and other audio-visual aids such as multimedia projector, visualiser, laptop computer and LCD monitor etc. BCAS has formulated an IT plan for modernisation and automation of office procedures. Computerization work is in progress in the BCAS. All the staff members have been trained for basic operation. All documentation both in Hindi and English is being done on computer; leading to the development and administration of databases and electronic data processing. All computers are internally net worked in Local Area Network. Financial Software Package has been obtained from the NIC and the Official Human Resource Management Software Package is also being installed.

There are plans to construct a heliport in the National Capital Region (NCR) to meet the significant and growing demand for helicopter services both in the government and business sectors. A proposal to set up a heliport in South Mumbai is also under consideration. The Ministry of Youth Affairs and Sports has also been requested to include the project in the overall scheme of Commonwealth Games arrangements so that the various requirements related to this project are met on a fast track basis and the proposed heliport can be showcased as an additional facility for the Commonwealth Games.

Contingency measures on airport security As a preventive security measure, a contingency plan for handling aircraft hijack situation has been put in place. An Aviation Security (AVSEC) Manual giving the details standard operating procedures for operating the contingency plan has been finalized and issued to all concerned. The Bureau of Civil Aviation Security (BCAS) is regularly conducting aviation security audits and inspections to ensure compliance of all aviation security measures by airport and airlines operators. National Flying Training Institute at Gondia: A premier pilot training institute has been established at Gondia, Maharashtra to augment the ongoing efforts of flying training schools for increasing the number of qualified and well-trained pilots, to tackle the huge demand for pilots in the industry. The development of Birsi aerodrome at Gondia is going on at a fast pace.

Upgrading IGRUA Indira Gandhi Rashtriya Uran Akademi (IGRUA) was set up at Fursatganj, Rae Bareli (Uttar Pradesh) to bring about a quantum improvement in the standards of flying and ground training of commercial pilots in the country. Infrastructure at IGRUA is being upgraded to enhance its training capacity from 40 to 100 pilots per year and reduce the training period from two years to one year. Infrastructure development includes re-carpeting of runway, expansion of apron and taxiway, construction of hostel, class rooms, residential quarters and another hangar. Ten single engine and one multi engine aircraft are also being procured to meet the training requirement. Management of IGRUA is scheduled to be handed over to C

Conference on civil aviation

Rajiv Gandhi Bhawan: Headquarters of the Civil Aviation Ministry.

As a preventive security measure, a contingency plan for handling aircraft hijack situation has been put in place. an Aviation Security (AVSEC) Manual giving the details standard operating procedures for operating the contingency plan has been finalized and issued to all concerned.

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INTERVIEW

As civil aviation moves from one stage to the next, the man who has the responsibility of seeing that everything is hunky-dory is Kanu Gohain, the Director General in the Directorate general of Civil Aviation (DGCA). Excerpts from an interview with the man in the hot seat:

Q: A:

Indian aviation has undergone a paradigm transformation, but has there been any change really in the DGCA? The fundamental changes in the DGCA have been its ability to take in its stride the ever-increasing demand of the industry. Many reforms were brought in and adopted in the regulatory system which not only ensured safety of aircraft operations but also provided a certain degree of flexibility to facilitate the growth.

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“I DO NOT

CONSIDER MYSELF TO BE A

” POLICEMAN Could you elaborate on this concept of safety and flexibility? The basic concept of safety is that you have to have a safety management system in place whether it is in an organisation or in some aspects of the organisation’s functioning. For example, operations, engineering... the safety management system was put in place to make everyone accountable for safety. Then we have introduced reforms in the regulations wherein we have considered the degree of risk, that is the risk assessment cross-plan in many of the operations whether it be the field of flying, the field of engineering and after the risk assessment mitigating factors were introduced the safety level remains at its threshold. Improved and more frequent operational requirements were met where possible. You are talking of greater efficiency. The pilots and even the ATC in many cases are talking of inefficiency and grave dangers. Why this mismatch? They seem to be at loggerheads with you. Loggerheads… I do not know the exact meaning of that, but yes I am friendly with the pilots as well as with the ATC. I talk to them on equal terms. I do not consider myself to be a policeman for them neither do I consider myself something superior to them. I have got their confidence and their support in many areas of work because I consider them to be equal partners in the whole aviation scenario. But in instances, where I may also go wrong or where they go wrong I counsel them, I advise them. But if such acts are coupled with deliberate negligence on their part in C

adhering to our regulations, it’s time to take some harsh actions and so we do that. You have outsourced several activities, primarily medical certification. How successful has that been? I don’t know what you mean when you say outsourced. Earlier, the medical examinations were conducted by the Air Force centres. With the growth in the industry, with the number of aspirants who want to become pilots, this meagre Air Force establishment was not enough. Therefore, besides taking the help of the Air Force to increase the number of centres for both primary (ab-inito) and renewal medicals, we have taken recourse to outsource to private hospitals. At present, we have got three hospitals: Apollo in Chennai, Nanavati in Mumbai and Max Hospital in Delhi. The opening up of these private hospitals have facilitated many of these young boys and girls to get their medical examination completed at short notice so that they can use that time gained in fruitfully flying activity. Some of them have gone abroad to do their flying and come back while some have got enrolled in the large number of flying institutes that have opened up in the country.

The basic concept of safety is that you have to have a safety management system in place whether it is in an organisation or in some aspects of the organisation’s functioning.

Now that the DGCA is the licensing authority, it is believed there is considerable friction between you and the Airports Authority? Not at all. It is how you look at things. If the government has decided to give the responsibility of licensing the aerodromes to the DGCA we have got H

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DGCAâ&#x20AC;&#x2122;s Kanu Gohain at a recent seminar on helicopters

to do our jobs. And the licensing process which is the regulatorâ&#x20AC;&#x2122;s function will always have some checklists to be complied with. There will always be some standards to be enforced to get the license because after all when an aerodrome is licensed it has to be ensured. As I said earlier, safety parameters are complied in full and operational activities are carried out in a very systematic manner to generate the optimum productivity. It is the question of accepting the authority. It is the question of walking with the authority. Then the process is a success and for your information all the international aerodromes in India have been licensed as per the ICAO (international Civil Aviation Organisation) standards.

There will always be some standards to be enforced to get the license because after all when an aerodrome is licensed it has to be ensured. As I said earlier, safety parameters are complied in full and operational activities are carried out in a very systematic manner to generate the optimum productivity.

service provider, regulator or the airline operations. The processes are there, but in some cases and in some areas, the growth is very rapid while in others it takes time because of procedures and issues that one has to follow. There needs to be a greater balance and we are working towards that. One other perception is that the DGCA is not transparent, rather it is too opaque. There is also the perception that you have too much power that ends up being misused. Yes and no. I will not say I disagree with you but at the same time I canâ&#x20AC;&#x2122;t agree with you. For transparency, we have introduced computerised online systems in the DGCA. Our website is elaborate and it is always updated. But overnight you cannot introduce transparency. The job is very elaborate and we are in the process of achieving full transparency. You talk about a lot of powers and misuse of powers. Here I would like to inform you that there are always checks and counter-checks. If an individual has misused his power, do you think the industry will keep quiet? No. Today because of transparency we have a lot of reports coming in. Some are false but where we find there is some iota of truth we go into the matter deeply. At various levels of officers, there is always a channel of complaint. If the complaints are attended to, naturally the issues of power will be reduced. But I agree, it takes time to change the

What is your roadmap for the next 12 months? Optimising the operational procedures so that they are cost-effective as well as efficient. Today, we have to introduce some measures to make the airline operations and in fact the entire aviation industry very cost-effective whether it is in the training areas or in the scheduled operational areas or non- scheduled operational areas. For that we need to have a lot of interaction with various agencies as well as the stakeholders. One has to understand each other in a better way to achieve our goal. The growth in the industry should not be one-sided. All the players should be encouraged to grow whether it is the C

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mindset of the people and, secondly, now that the government has given us so many facilities through the Pay commission and others… we should not have anything to complain about.

Going back to the pilots and the ATC, one of their prime grouses is that there is no consultation before issuing specific CARs.

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indicates that you are on the side of the operator, not the public. No, no, no. Many of our reforms are in line with public requirements. But you have made a point. We will look into, and as I told you before we take action, I and my officers must have some legal backing. Now, as far as tariff is concerned, I will again like to reiterate to you that tariff is not regulated. So, before I go into action I must have a legal backing in the form of rules, in the form of CAR.

There is also a feeling that you gloss over your own directives and you take action as it suits you. I can assure you we will do something and it is not that we aren’t doing anything. For example, you talk of refund of tickets. We have already got the refund rule in place and it is for the airlines to follow. That has also been circulated widely on our website so the air travelling public has been sensitised. We have on our website various forums of the government, which the travelling public can use and claim their refund with respect to the requirements issued by the DGCA. If it is not followed and if a number of complaints come to us we will also take action. It is not the DGCA alone but the government is also seized with the problem. If the airlines do not adhere to the regulations we shall crack down. Coming to the issue of ticket-pricing, you must know that tariff is not regulated today in our country but we have taken steps to ensure that when the airlines publish their total fare they also indicate the break-up of the fare. Now some airlines have started charging for congestion. The DGCA has ensured that it is not referred to as congestion tax.

Yes we do.When a civil aviation requirement (CAR) is issued, which is concerning the pilots or the ATC or for that matter the service provider or the stakeholders, the draft CAR is circulated and comments and suggestions are invited. They are given due consideration before finalising the CAR.

You have had a lot to do with IGRUA (Indira Gandhi Rashtriya Uran Academy). Tell us something about it. IGRUA is the premier training institute for pilots. Now that it has gone to the CAE, the quantum of training will increase… the number of pilots who will come out of that institute will certainly add up to fulfilling the demands of the industry. In earlier years, we have noticed that IGRUA has produced some of the best candidates and many of them have achieved senior level positions in the airlines apart from being pilots. Well it’s a flying training school so the regulatory provisions have to be complied with by the IGRUA and the DGCA works as a watchdog. Any issues that need resolution by the government? Government is seized with the problems and they are trying to help the DGCA by restructuring it and giving it more manpower. The process is on, the proposals have been drafted and the Ministry is scrutinising. This time we have indicated in our proposal that the DGCA is also earning revenue. So, whatever enhancement occurs in our strength can be met from the revenue earned by DGCA through its licensing or the examinations, etc.

But airlines are advertising fares to London at Rs 9999. How can you allow that? That’s subterfuge. You are shutting your eyes. We do not shut our eyes as explained to you. If you read that advertisement which I have also seen in the newspapers there is a small asterix and that small asterix has got an explanation…

How long will it take? The exercise is ongoing but don’t ask me the time because it is not the DGCA or the Ministry of Civil Aviation only that is involved. Other ministries too are involved.

Conditions apply... why should conditions apply on issues of fare and taxes? Yes, you have that point. But when ‘conditions apply’ is indicated, can I proceed against them legally until and unless it is known what the conditions are?

How much staff do you require? In the next five to seven years, we need to double our strength from 256. We need to have a minimum of 500 persons. You are also constructing a new building… Yes, that is also on the anvil. The whole campus will be re-modelled. The old order has to change for the new.

The simple answer is full fare must be published. Period. Your inaction only C

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Air Transport Industry: What’s hot and what’s not Inderjit Singh

New airports are being built and old ones being refurbished, more planes are being ordered and passenger lists are lengthening but the civil aviation sector in the country is in deep waters. One reason for this state of affairs is a lack of balance between aviation's three main constituents: airports, airlines and aircraft manufacturers. Visualise: An aircraft, the largest passenger plane ever built: longer, taller and wider than the White House. Imagine: Large airports in their new avatars as airport cities and "aerotropolis," larger than the two largest on either side of the Atlantic, symbolically put together. Picture this: Airlines as alliances and mega-alliances, rapid emergence of low-cost carriers.

But that sort of public co-operation, rather than a continual battle of wits between the big three, remains very much the exception rather than the rule. Examples of implementation are few and far between. The suspicion lurks that each sector has, like the proverbial ostrich, been sticking its head in the sand for too long, immersed in its own world and its own interests without looking around and seeing the bigger picture. We stand accused — each one of us — of being too confined, too content, too secure, and of failing to think about the challenges ahead. Instant, incisive analysis is paramount and to do this effectively we need to evaluate each of the industry’s three vital organs and how they interact. There is a dire need for airports and airlines on the one hand, and airlines and aircraft manufacturers on the other, to communicate better with each other. They need to collaborate more, and make a collective effort to face a whole array of issues together if they are to draw up a blueprint for the future of the industry. The potential benefits from improved relations between airports, airlines and manufacturers cannot be understated. The biggest beneficiary of this alliance between the “holy trinity” would be the passenger. So, the first parameter we must consider is that the air passenger is the raison d’ etre, the sole reason for the existence of all of us, without exception, who work in the air transport industry. The passenger is our livelihood, our income, our profit, our future, and, as such, is not an interruption to our daily lives. Often referred to as ‘pax’ (a horrible word) in airline and airport parlance, an air passenger is not a unit to be regarded as being of a basic standard, usually miniscule in size, somewhat lacking in both

espite all this, our industry is in crisis. It is perhaps a strange reflection in the face of unprecedented surge in air traffic volumes, allied to a corresponding growth in airports and airport infrastructure worldwide. Network and low-cost carriers are mushrooming and the demand on aircraft manufacturers is huge. Exactly what is ailing the international aviation industry? One of the reasons, I believe, is that there may be a lack of balance between aviation’s three main constituents: airports, airlines and aircraft manufacturers. There is a lack of balance in growth; mismatched levels of investment and a lack of interaction. It is this third point that needs to be addressed urgently. If we can improve relations between this “holy trinity” it will lead to a better understanding between them — an understanding that can only reap benefits for all concerned. It was as a spokesman for airports — at an unprecedented joint forum for these three key sectors — that I shared a platform with airline and aircraft manufacturing representatives back in 1997 at Tacoma. Called “Flight to Prosperity”, the forum established the need for better synchronisation of their respective agendas and concerns.

Instant, incisive analysis is paramount and to do this effectively we need to evaluate the industry’s three vital organs. There is a dire need for airports, and airlines and aircraft manufacturers to communicate better with each other. C

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The need of the day is not the grandiose statement of architectural styles but safe, functional, flexible, spacious, convenient, comfortable, aesthetically pleasant, efficient and above all ‘passenger friendly’ terminal buildings. C

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intelligence and general ability to find his way about and all too frequently an individual to be treated with disdain and even with contempt at times, and with his special desires all too often ignored, or at best treated with reluctance. If this seems to be too harsh a judgement, I suggest that all those of us who are either airline or airport employees, benefitting, perhaps, from special treatment, should put ourselves in the position of a mere ‘pax’ at a foreign airport late at night, tired, bewildered and even perhaps ill, to get just some flavour of what millions of air travellers have to put The airport village at the new Hyderabad International Airport. up with. You will then find that my judgement is not so harsh, after all. factor.’ Terminal buildings that offer an He is not a mere ‘pax’! The passenger intelligent level of information, a miniis the First Foremost Frontier. As soon as mum of imposed controls, smooth and everybody, high and low in world air unobstructed continuous flow, consumer transport recognises this fact, the sooner related concessions, fully manned checkthe system will improve. in, customs and immigration desks and Billions of dollars have been spent unobtrusive yet effective security checks. worldwide on the development of air The last half a century has witnessed terminals over the past 20 years or so and a truly dramatic evolution of the air the result is often, with some exceptions, transport industry which has seen pasof course, a potpourri of designs, styles senger numbers soar from nine million a and shapes resulting in monsters of steel, year in 1945 to 11 million a day in 2005 — plate glass and concrete. Over another even though factors such as fear of terrortwo hundred billion dollars are likely to ism, bird flu, the second Gulf War and be spent in the next two decades on the the soaring cost of jet fuel would, on the design, development and construction of face of it, appear to conspire against such new terminals and reconstruction and a remarkable success story. In the last 10 refurbishment of existing ones, the years alone, air traffic has more than tremajority of them in the Middle East, bled from 1.1 billion to four billion, and is Africa, the Indian Subcontinent, CIS and estimated to rise by seven per cent per the Asia-Pacific region. year, doubling the number of travellers in Major aircraft manufacturers are the next decade. In 2015 an estimated flush with orders for new aircraft to be eight billion passengers — 135 per cent of delivered in the next few years. This is a the projected world population — will solid endorsement for the growth of the take to the air. The challenges that face industry. As per an estimate, the airlines the industry today and tomorrow are in these regions, to cope with the both real and promising. unprecedented surge in air traffic and the To meet the challenges of the future rapid emergence of the low-cost-carriers, there ought to be a paradigm shift. The would require 2203 new aircraft, worth word paradigm comes from the Greek $410 billion, over the next 20 years. For word meaning a model, theory, every dollar spent on the purchase of an perception, assumption or frame of refaircraft, as a rule of thumb, 50 cents addi- erence. The term ‘paradigm shift’ is a tionally should be earmarked towards break with the tradition of old ways of the compatible airport infrastructure thinking. development. That in itself is a mindAt the end, we are, perhaps, left with boggling figure. as many questions as there are answers The need of the day is not the or more questions still to be answered. grandiose statement of architectural But then it is better to debate a question styles vying with one another for without settling it than to settle a quesawards but safe, functional, flexible, tion without debating it. spacious, convenient, comfortable, aes(The writer was Executive Director, thetically pleasant, efficient and above all AAI. He now holds a senior position with ‘passenger friendly’ terminal buildings Dubai Aerospace Enterprise, which manages that reduce travellers ‘over-all irritation Dubai Airport.) U

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October 2008

CRUISING HEIGHTS S P E C I A L

S U P P L E M E N T

O N

A I R P O R T S

A U T H O R I T Y

O F

I N D I A

AIRPORTS NORTH

EAST

NORTH-EAST

WEST

SOUTH

Airports in tourist destinations are being upgraded along with those in hill areas

Kolkata’s modernisation is top priority for AAI and some other airports are getting a makeover

In tune with the ‘Look East’ policy, the AAI is transforming the North-East

Nagpur shapes up as a cargo hub while AAI concentrates to establish full-fledged airports

With special attention to Chennai, AAI focuses on enhancing infrastructure

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AAI SPECIAL FEATURE

“AAI will make

India a major air hub in Asia-Pacific by 2016”

Our two main objectives are firstly construction, modification and management of terminal buildings and apron infrastructure and, secondly, provision of efficient communication, navigation and surveillance equipment and system.

will certainly be a challenging year for the organization as by that time, India will be able to witness more than 24 modern airport terminal buildings with world class infrastructure facilities. By that time, the development at Kolkata and Chennai airports will be taking shape.

Q: What is the roadmap of the AAI for the next 12 months? Will 2009 be a defining year for the organization? he Airports Authority of India (AAI) draws out a work plan in commensurate with the requirements under the Five Year Plans. Annual plans are finalized out of these Five Year Plans for taking up the work. In the Eleventh Five Year Plan, there is a sea-jump in the plan allocation in so far as development of infrastructure at airports in the country is concerned. Let me tell you that the net outlay for the Eleventh Plan is Rs 12434 crore. And we intend to use every rupee to enhance the country's airport infrastructure across all regions. Our two main objectives are, firstly, construction, modification and management of terminal buildings and apron infrastructure and, secondly, provision of efficient communication, navigation and surveillance equipment and system. Keeping these two objectives in view, we have developed a corporate plan with a vision to become “a world class organization providing leadership in air traffic services and airport management and making India a major hub in Asia Pacific Region by 2016”. Coming back to your question regarding the development plan of thr AAI over the next 12 months, I must mention that the year 2009

AAI Chairman Dr K Ramalingam is optimistic about the future and is justifiably proud of the organisation’s expertise and human resources. He points out, in this interview, that the AAI team has worked in tough conditions to deliver quality products to all stakeholders.

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On the CNS/ATM front also, the AAI has taken action for providing safe, efficient, reliable, and costeffective and environment friendly air services so as to encourage overall growth in the civil aviation sector. The planned outlay for CNS/ATM during the Eleventh Plan period is about Rs 1743 crore, which works out to an average of Rs 350 crore per year. When it is compared with the annual outlay for the year 2006-07 i.e. Rs 67 crore, the current outlay is nearly five times. In addition to the CNS/ATM and airport infrastructure, by that time, cityside development at some of the airports — to begin with, hopefully, Amritsar and Udaipur — will also be completed under the PPP route. You have been at the helm for several years. These have been very exciting years for the AAI? As a consequence, the unprecedented growth in the civil aviation traffic in our country there have been lot of activities concerning modernization and expansion of civil aviation infrastructure in the country which includes modernization of Delhi and Mumbai airports through the joint venture route and development of two Greenfield airports at Bangalore and Hyderabad. As regards the highlights of this period, I am able to recall that the real challenge has been management of the growth in traffic at various airports in the country, particularly at Delhi and Mumbai airports where the growth was really unprecedented and the runway orientation is very typical. I must mention that our skilled manpower with the assistance of various experts in the field not only evolved innovative techniques and procedures to manage the traffic in an efficient and optimum manner, but also put it to reality. You will agree with me that the gestation period for development of airport infrastructure is generally long; hence the gap between the demand and the available capacity was visible at our airports. In this area also, the skilled and efficient manpower has of the AAI as a team put in its efforts in developing airport infrastructure at most of the airports. The modem technology being inducted at the airports is of “glass and steel structures” which not only provides aesthetically good looking terminals but are also being delivered in the shortest span of time. At the same time, these terminals are user-friendly and customer-oriented. The non-metro airports development has been stuck in a limbo. How fast will you move forward on the development of these airports? I don't agree that the non-metro airports are stuck in any limbo. So far as the AAI is concerned, development of the identified 35 non-metro airports is progressing as per the stipulated time frame i.e. the first 24 airports will be completed by March 2009 and another 11 airports by March 2010. Simultaneously, AAI is also developing additional 11 non-metro airports within the same time frame.

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O U T L O O K

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Chennai and Kolkata airport modernisation is a real shot in the arm for the AAI that now has the opportunity to showcase its talent to the rest of the world. Would you like to share your blueprint with us? Yes, you are right with the change in the airport business model in the country, particularly the coming in of private sector companies and overseas firms in construction and operation of airports. There has been a sea change within AAI! Our dedicated and skilled human resources has geared up to meet the upcoming challenges in the civil aviation sector and the successful completion of these projects will be a shot in the arm for the organisation. Also, if I may add, it is an opportunity to showcase our talents. As regards the blueprint of these two mega projects, I must mention that these will be ultra-modem terminal buildings with the latest infrastructure. Kolkata airport will have a terminal building at an area measuring more than 180,000 sq.m., 104 check-in counters, 22 arrival and 22 departure immigration counters, nine international and 16 domestic security Gates, five conveyor belts of long length and 15 modemern aerobridges. The new terminal building will be capable to handle 20 million passengers annually which will be sufficient to meet the demand till the year 2015-16. In addition, an integrated automation system will be introduced in CNS/ATM operations and a new ATS Complex and Control Tower will be built. This project envisages an investment of about Rs 1942 crore. The project is targeted to be completed in 30 months from award of work. As regards Chennai airport, the AAI has undertaken development of a modem terminal building with an annual handling capacity of 10 million passengers which also has provision to integrate the existing terminals along with the new terminal building over a period of time. This will provide the handling capacity of seven million international and 16 million domestic passengers per year. Keeping in view the current traffic forecasts, it will be sufficient to cater to the demand upto the year 2017-18 in respect of international passenger traffic and upto the year 2012-13 in respect of domestic passenger traffic. It envisages an investment of Rs 1808 crore. The project is targeted to be completed in 26 months from the award of work. This terminal building will have an area measuring more than 140,000 sq.m. with modem features such as 140 check-in counters, 60 immigration counters, three international and four domestic security gates, four conveyor belts, seven aerobridges and eight travelators.

Our dedicated and skilled human resources has geared up to meet the upcoming challenges in the civil aviation sector and the successful completion of these projects will be a shot in the arm for the organisation.

Continued on Page 36

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AAI SPECIAL FEATURE

Srinagar

Leh

Kullu Shimla Amritsar Chandigarh Dehradun Ludhiana Pantnagar

Passighat Dibrugarh Raxaul

Lucknow

Agra Jaipur

Jaisalmer

Gwalior

Jodhpur Udaipur

Bhuj

Deesa Kandla Ahmedabad

Jamnagar

Varanasi Jhansi Khajuraho Indore

Rajkot

Bhopal

Porbandar Keshod

Satna

Jabalpur

Bilaspur

Khandwa Surat

Gondia

Raipur

Akola

Jharsuguda

Nagpur

* ***

Bhubaneswar

Aurangabad

Juhu

Guwahati Patna Dimapur Bagdogra Tura Imphal Muzzafarpur Shillong Gaya Kailashahar Balurghat Jogbani Malda Khowai Kamalpur Asansol Agartala Ranchi Kolkata Turial Behala Chakulia

Lalitpur

Vadodara

Tezu

Jorhat Zero

Rupsi

Cooch Behar

Pune Hadaspur Warangal

Sholapur

Vizag

Vijayawada Donakonda

Belgaum Goa

Cuddapah Hubli

PHASE I PHASE II PHASEIII Tirupati Chennai

Hassan

Mangalore

Vellore

Mysore

Calicut

The Airports Authority of India (AAI) has set up an ambitious programme to upgrade and modernize airport facilities across India. This is apart from the major revamp effort at Chennai and Kolkata expected to commence shortly. By 2010, the face of airports across India will be completely different: squeaky clean, modern and efficient.

Pondicherry

Coimbatore Trichy Madurai

MODERNISING ACROSS THE COUNTRY

Trivandrum

AIRPORTS UNLIMITED CH graphic by Ruchi Sinha

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H E I G H T S

6. 7. 8. 9. 10. 11. 12. 13. 14.

WEST REGION

Phase I Development of airports by end of 2009 1. Ahmedabad 2. Akola 3. Aurangabad 4. Bhopal 5. Gondia

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Goa, Indore Nagpur Pune Raipur Rajkot Surat Vadodara Khajuraho

Phase I Development of airports by end of 2009 1. Kolkata*** 2. Bhubaneswar 3. Cooch Behar 4. Ranchi

Phase I I I 1. Bilaspur 1. Deesa 2. Hadaspur 3. Khandwa 5. Panna 6. Satna 3. Sholapur

1. 2. 3. 4. 5. 7. 6.

Phase I I 1. Bagdogra 2. Gaya, 3. Jharsuguda* 4. Behala* 5. Malda * Phase I I I

N-E REGION

Asansol Balurghat Chakulia Jogbani Muzzafarpur Port Blair Raxaul

developed 1. Tirupati 2. Cuddapah 3. Pondicherry 4. Vellore* Phase I I I 1. Warangal, 2. Hassan 3. Donakonda

6. Mysore 8. Trivandrum 9. Trichy 10. Vizag 11. Vijayawada. 12. Calicut 13. Belgaum Phase I I A: Airports to be

Phase I Development of airports by end of 2009 1. Agra 2. Amritsar 3. Chandigarh 4. Dehradun

NORTH REGION

Port Blair

S P E C I A L

Phase I I 1. Bhuj 1. Gwalior 2. Jabalpur 2. Juhu 3. Jamnagar 4. Kandla 5. Keshod 6. Porbandar

Phase I Development of airports by end of 2009 1. Chennai** 2. Coimbatore 3. Hubli 4. Madurai 5. Mangalore

SOUTH REGION

EAST REGION

O U T L O O K

5. Jaipur 6. Kullu 7. Lucknow 8. Varanasi 10. Udaipur 11. Srinagar Phase I I 1. Jaisalmer

Phase I 1. Dibrugarh 2. Dimapur 3. Guwahati 4. Imphal 5. Agartala

2. Leh 3. Ludhiana, 4. Jodhpur 5. Pantnagar 6. Shimla Phase I I I 1. Jhansi 2. Lalitpur

Phase I I 1. Jorhat 2. Shillong 3. Passighat* 4. Tezu* 5. Zero* 6. Kailashahar*

7. Kamalpur* 8. Tura* Phase I I I 1. Khowai 2. Rupsi 3. Shella 4. Turial

additional 10 airports under consideration that require land from respective State Governments * These AAI has also undertaken development of Chennai Airport with a new integrated modern terminal ** with an annual handling capacity of 23 million building has taken up development of a modern integrated passenger terminal building at Kolkata *** AAIto handle Airport 20 million passengers CE after an airportâ&#x20AC;&#x2122;s name in the following pages notifies either an Air Force/Navy airport where the AAI runs a civil enclave for domestic/international passenger traffic.

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AAI SPECIAL FEATURE

36 K Ramalingam with AAI officials at an inspection of Puducherry airport.

The AAI has provided state-of-the-art ultra modem equipment. Upgradation/modernisati on of equipment is a continuous ongoing activity within the AAI. At this stage, I must mention that recently a high level team of ICAOâ&#x20AC;&#x2122;s ANS experts visited India where they have inspected two major airports of the country and they have appreciated the efficient and effective handling of CNS/ATM services by the AAI.

Your question requires comprehensive analysis. Let me sum up by saying that the AAI, over a period of time, will develop a full-fledged grid of over 100 airports with modem infrastructure spread allover the country. Gagan is truly a feather in the cap of the AAIâ&#x20AC;Śwhat an exciting project. I am involved in this project from the inception stage. I am aware how we have steered this project to this stage where our technical competence has been proven and yes, you are right this is an exciting project not only for its end-users rather for its developers. GAGAN (GPS Aided Geo Stationary Augmented Navigation) is being jointly developed by AAI and ISRO. The GAGAN will be operational by 2010. The TDS and IEP phases have been completed successfully. The final system acceptance Test has already been completed successfully a year back (August 2007). The overall capability of the GAGAN system covers a large portion of the Asia Pacific Region. Once finalized, it will also take into account the Equatorial Ionosphere Spatial and Temporal Variability during Equatorial High Magnetic Conditions. For specific suitability in the Asia Pacific Region, Ionospheric and Tropospheric (IONOTROPO) models for GAGAN will be developed and implemented. Ultimately, GAGAN will be capable of meeting the ICAO's GNSS SARPs. This is a project of great national importance and pride for the country as with the successful implementation of the GAGAN, India will join the elite club of the SBAS service providers i.e. USA, Europe and Japan. One of the key areas of concern is the working of the ATC, thanks to short staff and equipment. How are going to meet the challenges in these areas? At the outset, I must mention that equipment involved in providing CNS/ATM services are highly sophisticated and we need equally skilled manpower to handle such equipment. Developing air traffic controllers not only involves rigorous training schedule rather it is a time consuming process. As regards shortage of staff in the area of ATC is concerned, I must mention that this issue has been flagged by most of the organizations at various international platforms and this over a period of time has become a global concern area and all specialized institutions are working to mitigate the shortage. As regards shortage of equipment I must mention the AAI has provided state-of-the-art ultra modem equipment. Upgradation/modernisation of equipment is a continuous ongoing activity within the AAI. At this stage, I must mention that recently a high level team of ICAO's ANS experts visited India where they have inspected two major airports of the country and they have appreciated the efficient and effective handling of CNS/ATM services by the AAI. Coming back to your question regarding shortage of staff, I must mention that more than 1200 recruitments are in progress in various cadres of the AAI which includes 500 ATC officers; in addition over the past two years more than 1700 promotions have been made effective.

Further, the AAI is also going to conduct a technical study through ICAO for the feasibility of the new Greenfield airport at Sriperumbudur operating along with the existing airport in Chennai. You are also playing a major role in developing airports in the North-East. Could you elaborate on that? Civil aviation provides crucial transport infrastructure in hilly and inaccessible areas, which is more suited for the type of terrain in the North-East. Therefore, development of airport infrastructure in the North-East has always been given special emphasis. So far as CNS/ATM is concerned, the AAI has a dedicated Sub-FIR for North-East. For overall development in the North-East, we have got a dedicated set-up under the Regional Executive Director (North-East Region). Keeping in view the special requirements of the North-East Region, recently the AAI had posted another Executive Director level officer for overall management of projects in the NorthEast Region. During the tenth plan period, about Rs.200 crore had been invested in North-East infrastructure that includes new terminal buildings at Agartala and Lilabari, upgradation of terminal building at Guwahati, strengthening/extension of runways for operation of AB-320 at Agartala, Dimapur, Imphal and Lilabari and expansion of apron at Agartala, Imphal and Guwahati. The Eleventh Plan outlay for the North-East region is about Rs 650 crore. The Eleventh Plan projects include operationalisation of airports at Passighat and Tezu, a new terminal building at Shillong, Dibrugarh and Jorhat, upgradation of terminal building at Silchar, Imphal, Guwahati (international terminal) and Dimapur (facelifting), strengthening and extension of runways at Dibrugarh, Guwahati and Shillong, expansion of apron at Agartala, Dibrugarh, Imphal, Guwahati, Dimapur and Shillong and construction of new control tower-cum-technical block at Guwahati. Works on the CNS/ATM front include implementation of new radar at Guwahati, new ATC Automation System, ILS at Lilabari and Lengpui and provision for DVOR at Dimapur and Lengpui. Apart from expansion and modification works, the possibilities of developing Greenfield airports in the North-East are also being explored. Two Greenfield airports at Paykong in Sikkim and Itanagar in Arunachal Pradesh are going to come up in the next 3-5 years. This will certainly improve the air connectivity in the North-East Region. There are also reports that you are upgrading infrastructure in airports in the North, West and the South. Where are these efforts being made?

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Kolkata’s

airport of joy No longer can irate passengers complain about the facilities at the Netaji Subhas Chandra Bose International Airport. The AAI is going all out to upgrade the airport and the passenger terminal.

hat is in a name? Calcutta, Kolkata, Kalikata. Never mind the name tag. It is an exuberant city irrespective of how you prefer to call it. It is the city of joy. But how far has this joy percolated down to the passengers travelling in and out of Kolkata’s airport? In the past, one often heard from irate passengers flying in and out of Dum Dum airport that the airport ought to be named Dumb Dumb airport derisively. The airport is now named after India’s most patriotic leader, Netaji Subhas Chandra Bose (NSCB International Airport). The Flight Information Region (FIR), headquartered in Kolkata, is responsible for all aircraft movements within its allotted airspace. Rather than getting into technicalities, it is best described by naming airports, for better understanding, by the

Kolkata airport The Flight Information Region (FIR), headquartered in Kolkata, is responsible for all aircraft movements within its allotted airspace. Rather than getting into technicalities, it is best described by naming airports, for better understanding, by the airspace over which Kolkata FIR provides air traffic services ensuring safety. It starts from Bagdogra (northwest Bengal) and extends to Patna and Gaya (Bihar), to Ranchi (Jharkhand), Bhubaneshwar (Orissa) and till Port Blair (Andaman & Nicobar Islands).

airspace over which Kolkata FIR provides air traffic services ensuring safety. It starts from Bagdogra (northwest Bengal) and extends to Patna and Gaya (Bihar), to Ranchi (Jharkhand), Bhubaneshwar (Orissa) and till Port Blair (Andaman & Nicobar Islands). The airspace is not rigid but seamless. As aircraft fly from one FIR airspace and enter into the next, the air traffic services are automatically taken over by the next FIR depending on the aircraft’s flight path (Kolkata FIR is always in contact with nine other FIRs around its airspace). This is guided by the United Nation’s International Civil Aviation Organisation (ICAO) directive worldwide. Arrival and departures from Kolkata have increased several fold in the past three years. Overflights in Kolkata FIR airspace, too, have increased phenomenally. Aircraft movements in

Clockwise from top left: Passengers check in at Kolkata’s airport and artist’s impressions of the upgraded airport and its approach.

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AAI SPECIAL FEATURE national and six domestic parking lots, strengthening of secondary runways and integrated cargo complex (export wing has been put into operation). The planned future works are the development of the Rs 225 crore Phase-I International domestic terminal building (Module II) and a corridor connecting the metro station and terminal building. In fact, there is good scope for cargo traffic, especially of perishable variety, considering that many north-eastern states produce is not able to reach the markets due to lack of quick access, and Kolkata could be a convenient hub. Fruits and flowers grow abundantly but have not been exploited on commercial scale. Kolkata has 24000 mt. capacity for perishable goods apart from 225000 mtr. for general goods. It is hoped that the integrated cargo complex would alleviate the woes of exporters from the north-eastern states.

Kolkata airport registered a massive 22 per cent increase in 2005-06 over the corresponding previous year; International aircraft movements in the year were 9250 and that of domestic were 42299. There is tremendous strain on both runways and terminal buildings. There is dire need to upgrade ground facilities and modernise the airport, and, for unfathomable reasons, which is neither resource constraint nor techno-feasibility, the project is yet to take off. It is well-known in aviation circles that Kolkata was shunned by international airlines and domestic growth was stunted in the previous two decades. But things are changing for the better, as the figures prove. Today, 11 international airlines touch Kolkata and domestic growth is equally impressive, as seen through arrival and departure of aircraft and passengers. Currently, the work in progress are nine inter-

The work in progress are nine international and six domestic parking lots, strengthening of secondary runways and integrated cargo complex (export wing has been put into operation). The planned future works are the development of the Rs 225 crore Phase-I International domestic terminal building (Module II) and a corridor connecting the metro station and terminal building.

Chennai airport expansion to be

completed by 2010

The modernisation and expansion of the Chennai airport, involving an investment of Rs 1,800 crore, would be completed by 2010.

AI has undertaken the development of Chennai airport â&#x20AC;&#x201D; a new domestic modern terminal building with an annual handling capacity of 10 million passengers and extensions to the international terminal with an annual handling capacity of four million. Provision has been catered to integrate the existing terminals along with the new terminal building over a period of time. This will provide the handling capacity of seven million international passengers per year and 16 million domestic per year. Keeping in view the current traffic forecasts, it will be sufficient to cater to the demand up to the year 2017-18 in respect of international passenger traffic and up to the year 2012-13 in respect of domestic passenger traffic. It envisages an investment of Rs 1,808 crore. The project is targeted to be completed in 26 months from the award of work. The Public Investment Board (PIB) has approved the proposal to upgrade the Chennai International Airport in Tamil Nadu to global standards. Development work began in September this year following approval from the Cabinet Committee on Economic Affairs (CCEA). The government had decided in April last year to modernise the Chennai airport through state-owned AAI. The AAI has prepared the master plan that has been approved by an inter-ministerial group overseeing the project. The project: The overall capacity of the Chennai

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Glimpses of the Chennai Airport

Airport will be increased to 23 million passengers per year. More than double the current capacity of nine million passengers. The project involves setting up of a new domestic terminal with a capacity of 10 million passengers. The airport at present has a domestic terminal that handles six million passengers annually. The existing international terminal will be expanded to handle seven million passengers as against the current three million. In 2007-08, the airport handled a total of 10.65 million passengers, including domestic and international, which was nearly 19 per cent higher than the 8.97 million passengers in 2006-07. Completion schedule: Construction of runways, taxiways, parking bays is expected to be completed in 20 months and the terminal buildings in 26 months. The runways, taxiways and parking bays are scheduled to be completed by April 2010 and the terminal buildings by December 2010. Cost and financing: The project is estimated to cost Rs 1,808 crore out of which Rs 1,077 crore would be used for the new domestic terminal and the extension of the existing international terminal, AAI will bring 80 per cent of the cost through internal accruals while the remaining would be raised through commercial borrowings. No User Development Fee (UDF) or budgetary support is envisaged. Contractors: Around six contractors including ITD of Hong Kong and TAV of Turkey have been short-listed. Louis Berger Group of USA is amongst the project management consultants shortlisted. Land Acquisition: The state government has handed over about 130 acres of land to the AAI for the development of the secondary runways. Land has also been made available by defence authorities. Another 21 acres of defence land would soon be made available. Saturation Point: The new international terminal

In 2007-08, Chennai airport handled a total of 10.65 million passengers, including domestic and international, which was nearly 19 per cent higher than the 8.97 million passengers in 2006-07... The Chennai airport modernisation was widely regarded as the biggest opportunity in Indian aviation infrastructure development, after the Mumbai and Delhi International airports were handed over to the private sector. Leading private sector developers like the GMR Group, GVK Group, Tata-Changi consortium were reportedly keen in the Chennai airport project.

is expected to saturate in 2017-18 while the domestic terminal would do so by 2012-13. The Chennai airport modernisation project (as also the Kolkata airport) was earlier envisaged to be done through private participation on the lines of the Mumbai and Delhi airports. The Centre, however, succumbed to pressure from Left parties and proposed to let state-run AAI undertake both the projects. The government's dithering on finalising the mode of implementation has set back the project schedule besides militating against the philosophy of encouraging private participation in infrastructure development. The decision of AAI implementing the project taken in June last year by the Committee on Infrastructure (COI) headed by the Prime Minister, closed an opportunity for prospective private sector developers. The Chennai airport modernisation was widely regarded as the biggest opportunity in Indian aviation infrastructure development, after the Mumbai and Delhi International airports were handed over to the

Chennai Airport

private sector. Leading private sector developers like the GMR Group, GVK Group, Tata-Changi consortium were reportedly keen in the Chennai airport project. Gammon India in May 2007 had tied up with Macquarie Bank of Australia, specially to bid for the Chennai airport project.

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AAI SPECIAL FEATURE

AAI in the

NORTHERN R

North

Jammu & Kashmir

With Delhi being the centre of attention in the northern region, the Airports Authority of India has concentrated its efforts to boost the airports not only in the tourist destinations of Rajasthan but also in the largely hilly areas of Uttarakhand and Himachal Pradesh.

Himachal Pradesh Punjab

Uttarakhand Delhi

Jammu & Kashmir Himachal Pradesh Delhi Punjab Rajasthan Uttar Pradesh Uttarakhand

Rajasthan

Uttar Pradesh

Srinagar (CE)

JAMMU AND KASHMIR

Suitable for A320/ B737 operations. The terminal building can handle for 400 passengers. The aprons can accommodate four aircraft. Work undertaken includes expansion/modification of terminal building to cater to 950 passengers (500 domestic/450 international) expected to be completed this year at a cost of Rs 100 crore. Also, the aprons is being expanded to park nine aircraft. There are plans to construct a cargo complex and expand the car park.

There are three airports in the state of Jammu & Kashmir: Jammu, Srinagar and Leh. In the last several years, a major effort has been undertaken by the AAI to upgrade the facilities both on the airside and the terminal for the benefit of passengers. Here are a few details: JAMMU(CE): Suitable for A320 aircraft operations. The terminal can handle 400 passengers. The aprons is meant for four aircraft. Works under planning are: modification/expansion of terminal for 150 additional passengers. The expansion of aprons for additional parking for two aircraft. A new civil air terminal complex is being established.

There are three operational airports in the state of Punjab. Following are the details: AMRITSAR: Suitable for operation of wide-bodied aircraft (B767/B747). The existing infrastructure includes a terminal for 500 passengers with aprons for nine aircraft and one cargo parking stand. The

There are four airports in the state of Himachal Pradesh. The status is as follows: SHIMLA: Suitable for ATR42 operations with aprons for two aircraft. The terminal building is suitable for 50 passengers. There are plans to construct a new fire station (CAT IV). Also, there are plans to restore the basic strip and prevent soil erosion. The feasibility of runways extension to the extent possible is being examined. KULLU-MANALI: Airport is suitable for ATR72 operations. The terminal can handle 100 passengers. There is aprons space for two aircraft. The work completed includes: resurfacing of runways construction of new aprons and taxiways and new terminal building for 100 passengers. Among the ongoing work are rersurfacing and strengthening of runways. The works under planning include extension of runways plus new aerodrome control tower-cum-technical block. KANGRA: The airport is suitable for ATR-72 operations while the terminal is suitable for 100 passengers with apron for two aircraft. The completed work includes extension and

The Kushok Bakula Rimpochhe Terminal is suitable for A320/B737 operations. The terminal building can handle 250 passengers. The aprons can accommodate two aircraft. The work completed includes modification of terminal building for 250 passengers and new civil apron for two aircraft. The works planned include new terminal for 400 passengers with two boarding bridges.

PUNJAB

HIMACHAL PRADESH

Leh (CE)

strengthening of runways and construction of aprons. There are plans to study feasibility of further extension of the runways by 1200 ft. PATHANKOT (CE): Suitable for A320/ B737 aircraft. The terminal can handle 300 passengers with aprons for three aircraft. There is no scheduled operation. Work completed includes construction of new terminal for 300 passengers, plus new civil aprons and link taxi track.

Amritsar airport

major works undertaken include extension and resurfacing of existing runways, CAT I, the lLS and simple approach lighting system on extended runways. The on-going work includes expansion of terminal to accommodate 700 additional passengers, further extension of runways 34 and four additional stands for parking of A340-600 aircraft. The provision of CAT II approach lighting system has been completed and will be commissioned soon.

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C R U I S I N G Construction of part parallel taxi track with link taxi track is also being carried out. Works under planning include: construction of remaining length of part parallel taxi track and allied works. A model concession agreement for cityside development is under finalisation by the Planning Commission. LUDHIANA AIRPORT (SANEWAL): Suitable for ATR42 aircraft, the terminal building can handle 100 passengers (50 arriving/50 departing) with aprons for parking a single aircraft. Currently, no scheduled operation is taking place. Work under progress includes: resurfacing and strengthening of runways, aprons and taxiways that is scheduled for completion by April 2009. CHANDIGARH(CE): Suitable for A320 operations. The terminal building suitable for 200 passengers and aprons for two A320 aircraft. Work under progress includes a new terminal building, plus aerobridges for 400 passengers scheduled for completion by February 2009. CIVIL AIR TERMINAL (MOHALI): This is a fresh proposal. A MoU was signed between AAI, Greater Mohali Area Development Authority (GMADA, Punjab) and Haryana Urban Development Authority (HUDA, Haryana) in April 2008. BHATINDA (CE): Bhasian Airport Station is suitable for A320 operation. There are no civil operations at present. A request has been received from the Punjab government to establish a civil air terminal.

RAJASTHAN There are six airports in the state of Rajasthan. Their status is as follows: JAIPUR: Suitable for A300 operations. The existing terminal building is suitable to handle 500 domestic and 100 international passengers at a time. The aprons is suitable for five aircraft. Work completed includes construction of new aerodrome control tower-cum-technical block. The on-going work includes: construction of a new international terminal for 500 passengers at a cost of approximately Rs 95 crore, new aprons to park three AB340-600, three B767 and four AB321 type of aircraft along with link taxiways and part parallel taxi track. UDAIPUR: Suitable for A320 operations. Existing terminal is suitable to handle 600 passengers with aprons suitable for three aircraft. Work completed includes: construction of new terminal for 600 passengers and expansion of aprons to park five B767 type of aircraft. On-going works include: extension and strengthening of runways for operation of wide-bodied aircraft, construction of new control tower-cum-technical block, provision of Simple Kullu airport

H E I G H T S

O U T L O O K

S P E C I A L

Approach Lighting System (SALS) and CAT I Approach Lighting System (APLS).

Kota

UTTAR PRADESH

Suitable for ATR42 operations. The existing terminal can handle 40 passengers at a time with apron for one aircraft. Currently there are no scheduled operation from this airport. Provision of runway edge lights and apron lights are being taken up and is under planning. Extension of runway to the extent feasible is also being examined.

There are eight airports in Uttar Pradesh. Their status is as follows: LUCKNOW (Chaudhary Charan Singh Airport): Suitable for A300 operations. Existing terminal is suitable for 500 passengers with aprons for seven aircraft. A major initiative has been construction of the new control tower-cum-technical block. On-going work includes: construction of a new integrated terminal to cater to 500 passengers (250 inbound and 250 outbound), expansion and strengthening of aprons for 18 aircraft and construction of new taxiways. VARANASI (Lal Bahadur Shastri Airport): Suitable for A320 operations. The terminal is suitable to handle 250 passengers (150 domestic/100 international) with aprons for parking six aircraft. A major initiative has been the strengthening of the runways. On-going works include — new terminal building for 800 passengers (500 domestic/300 international) to be completed in February 2009. KANPUR: Suitable for Dornier-228 operations. The terminal building is suitable to handle 25 passengers with aprons for two aircraft. At present, no scheduled operation. AGRA(CE): Suitable for B737/A320 operations. The terminal is suitable to handle 500 passengers with aprons for three aircraft. At the moment, apron is being expanded to park two aircraft at night. Refurbishing of terminal building and renovation of VIP lounges, etc, are being taken up. ALLAHABAD (CE): Suitable for A320 operations. The terminal is suitable to handle 40 passengers at a time for civilian use. GORAKHPUR (CE): Suitable for B737 operations. Terminal suitable for 50 passengers with an apron suitable for one aircraft. KANPUR CHAKERI (CE): Suitable for B737 operation. Terminal building is suitable for 50 passengers at a time. The existing apron is suitable for parking one aircraft. Works planned include expansion of terminal building and an apron.

Jodhpur (CE) Suitable for B737/A320 operations. The terminal can handle 300 passengers with aprons suitable for four aircraft. Work completed includes expansion and modification of the terminal building for 300 passengers, expansion and strengthening of civil aprons and construction of new link taxi track. Works under planning include modification of terminal building to increase the capacity and provision of aerobridges.

Jaisalmer (CE) Suitable for B737/ A320 operations. The terminal is suitable for 50 passengers. Now there is no scheduled operation. In the planning stage is a new civil enclave which will cater to 300 passengers and a civil apron for three A320 aircraft.

Bikaner (CE) Suitable for B737/A320 operations. The terminal building can handle 40 passengers.

UTTARAKHAND There are two airports in the state of Uttarakhand— Dehradun and Pantnagar. Details are as under: DEHRADUN: Suitable for A320 operations, the existing terminal building can handle 75 passengers. The apron is suitable for two aircraft with a link taxiways. Work completed includes—strengthening and extension of runways, construction of aprons for parking aircraft and link taxiways, etc, provision of runways and taxiways lights, construction of temporary terminal building for 75 passengers. On-going work includes: construction of new terminal building for 150 passengers and building of a control tower-cumtechnical block. PANTNAGAR: Suitable for ATR72 operations, the terminal building can handle 40 passengers with apron for one aircraft. Works completed include extension of runways. There is a proposal for construction of a new terminal building.

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C R U I S I N G by the AAI, State Government and Indian Navy. A new runway suitable for B767-400 operations along with apron for six aircraft was commissioned last year. Night operations have been approved by the DGCA and ILS. Ongoing work includes construction of terminal building for 300 international and 400 domestic passengers. TIRUPATI: Runway suitable for A320/321 operations with apron for three aircraft. Terminal suitable for 300 passengers. Ongoing works include installation of ILS.Works planned include construction of terminal for handling 700 passengers. VIJAYAWADA: Suitable for the B737 operations. An MoU has been signed between AAI and the government of AP for the phased development of this airport. Ongoing works include extension and strengthening of runway and new apron for five aircraft. Planned works include construction of new terminal for 250 passengers. WARANGAL: The existing airport is nonoperational. It is suitable for the Dornier operations. An MOU has been signed for the development of the airport for ATR72 type aircraft initially and later for A321 operations.

Tamil Nadu There are seven airports in Tamil Nadu. The details are as follows: CHENNAI INTERNATIONAL AIRPORT: This airport is being modernized and will be ready by 2010 (please see page 35 for more details). COIMBATORE: Is a Customs airport for handling limited international flights. Suitable for widebodied aircraft. The terminal is suitable for handling 400 passengers. Completed works include extension and strengthening of runway and taxiways. Ongoing works include expansion of cargo complex, terminal building for handling 600 passengers, construction of New apron at Coimbatore airport

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Salem airport

Rajahmundry Suitable for ATR72 operations with a terminal for 20 passengers â&#x20AC;&#x201D; renovation being taken up to ease congestion. An MOU has been signed between the AAI and the government of AP for developing Rajahmundry airport. Completed works include repairs to the runway. Ongoing work includes construction of new terminal for 150 passengers, new fire station and control tower. Works planned include extension of runway for A321 operations.

aerobridges. SALEM: Suitable for B737-200 operations with apron for two aircraft. Terminal has capacity for the 100 passengers. There is a proposal for upgrading infrastructure for operation of A320/A321 aircraft. TIRUCHIRRAPPALLI: A Customs airport, it is suitable for A320/B737-800 operations with apron for seven aircraft. Terminal has capacity for 200 domestic and 200 international passengers. Completed works include: Strengthening and extension of runway, apron, etc. Ongoing works include construction of new terminal building complex for 400 passengers. There is a plan to Trichy airport

extend the runway to 12500 ft in phases. TUTICORIN: Suitable for ATR42 operations with apron for one aircraft. Terminal has capacity for 100 passengers. Ongoing work includes night landing. Planned work includes extension of runway and associated facilities for operation of A320 aircraft. VELLORE: Suitable for flying club activity. At present, Madras Flying Club is occasionally operating training flights from the airport. Inspection of the site has been carried out by the AAI for future expansion.

Karnataka part parallel taxiway, extension of apron, etc. Planned works include construction of new terminal for handling 2000 passengers and extension of runway. MADURAI: Suitable for operation of upto AB-320/ B-737-800 class of aircraft in all weather conditions. Apron suitable for five aircraft. Instrument Landing System (ILS) under installation. Terminal can handle 200 passengers. Completed works include strengthening and extension of runway, expansion of apron for five aircraft. Ongoing works include installation of ILS and construction of new terminal complex for 500 passengers including two

There are five Airports in Karnataka. The details are as follow: BANGALORE INTERNATIONAL AIRPORT (CE): Belongs to Hindustan Aeronautics Limited. All scheduled airline operations have stopped after new Greenfield International Airport at Devanhalli, Bangalore, became operational in May. Nonscheduled general aviation and VIP aircraft are being operated. The AAI Board has accorded in-principle approval for utilisation of the infrastructure at the existing Civil Enclave for: (i) General Aviation Aircraft Operations (ii) Establishment of Convention Centre BELGAUM: Suitable for ATR72 operations. Completed works include recarpeting of runway,

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AAI SPECIAL FEATURE taxiways, apron and upgradation of ground lighting. Ongoing works include expansion and modification of existing terminal. Planned works include upgradation of airport, extension of runway for A320 operations and construction of new terminal and apron. HUBLI: Suitable for ATR. The airport has an apron for two aircraft. Completed works include strengthening of runway, taxiway and apron along with upgradation of night landing facilities, expansion and modification of

Bellary Existing airport has no scope for further extension in any direction due to the presence of Medical College and hillocks in the approach path of runway. A private airfield belonging to M/s Jindal Vijayanagar Steel Ltd, has been approved and given licence of an aerodrome by the DGCA for commercial scheduled operations.

Baggage conveyor at the international arrival at Calicut Airport.

passengers at a time. Completed works include strengthening and expansion of runway. On the cards are: Extension of apron including additional link and extension and modification of the international and domestic terminal building with aerobridges. Planned work includes new terminal building, apron, cargo complex and MRO facility, etc. COCHIN: Cochin International Airport belongs to M/s Cochin International Airport Ltd. (CIAL). The AAI provides air traffic services at the airport.

Karwar The Navy has a proposal for a naval airport at Karwar. It has been proposed to Indian Navy to construct the runway suitable for A320 operations and permit civil commercial flights. The final decision is awaited from the government.

Modified terminal building at Hubli Airport

the existing terminal for handling 100 passengers and extension of apron for parking of five aircrafts. Ongoing works include installation of ILS. Planned works include extension of runway for A320 operations, construction of new terminal and apron. MANGALORE: A Customs airport suitable for A 310 operations with ILS and terminal suitable for 200 passengers. Completed works include new runway, arrival terminal and apron for five aircraft. Ongoing works include construction of a new terminal for 500 passengers and extension of runway. MYSORE: The airport is non-operational and is being developed through MoU with the state government. The work for construction of runway, apron and associated facilities has been completed. Ongoing works include terminal building, technical block-cumcontrol tower-cum-fire. There are future plans to expand runway for A320 operations. BIDAR: An IAF airport. Request to establish a Civil Enclave at Bidar under consideration.

Other proposals KANNUR GREENFIELD AIRPORT: The proposal of the Kerala Government to set up a Greenfield Airport at Kannur has been considered and "in principle" approval has been granted.

Lakshadweep Agatti: Suitable for fair weather Dornier operation, it has a terminal with capacity for 40 passengers. Aircraft are parked on overrun of Runway 22 as there is no space for separate apron. Completed works include night landing facilities at Agatti airport, construction of new terminal building for 50 passengers, technical buildingcum-control tower and fire station, etc. at a cost of Rs.5.39 crore. The construction of departure block is nearing completion and new arrival block is not being taken up in view of the proposal for extension of runway within the island towards city side which may result in shifting of the terminal building.

Kerala

Puducherry

There are three airports in Kerala. Here are the details: THIRUVANANTHAPURAM: This international airport is suitable for the B747 operations with an apron for seven aircraft. The terminal is suitable for 520 international and 800 domestic passengers. Ongoing works include construction of new international terminal building for 1000 passengers. Further development has been planned with the construction of a new domestic terminal, technical block-cum-ATC, cargo and other cityside development. CALICUT: Calicut is an international airport suitable for A300 operations with apron for 10 aircraft. The terminal can handle 1000 international and 500 domestic

Puducherrry: Suitable for Dornier operations, there are no scheduled aircraft operations. The airport has only flying club activities. Terminal building suitable for 40 passengers at a time. An MOU has been signed between the government of Puducherry and the AAI and a master plan has been prepared for upgrading in phases initially for ATR-72 and subsequently for A320. Ongoing works include the extension and strengthening of runway and construction of new apron. Planned works include the extension and strengthening of the runway for handling A-320 new terminal building complex, apron with all associated facilities.

New Greenfield Airport at Karaikal

Thiruvananthapuram Airport.

There is a proposal by the government of Puducherry for the construction of a Greenfield airport at Karaikal. The initial feasibility study was undertaken by the AAI in February 2007 for the identified sites at Karaikal and the suitability of the site falling in survey areas of Puthakudi, Varaichakudi and Ponbethy at Karaikal was recommended to the government of Puducherry for taking further action to develop a Greenfield airport.

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AAI in the

East

West Bengal

Orissa

Andaman & Nicobar island

installation of ILS. Works planned include extension of runway to 9000 ft and approach lights for night landing. CHAKULIA: Has no passenger infrastructure facilities, except runway strip. RITES is carrying out feasibility study for commercial operation of this airport.

JOGBANI: It is not fit for any kind of operation. RITES is carrying out feasibility study for commercial operation of this airport. MUZAFFARPUR: Suitable for Dornier-228 operations. RITES is carrying out feasibility study for commercial operation of this airport. RAXAUL: RITES is carrying out a feasibility study for commercial operation of this airport.

Patna

Airport belongs to Airports Authority of India and it is suitable for operation of A320 class of aircraft in all weather conditions. At present Air India (Indian), Jet Airways and Kingfisher are operating scheduled flights. A new integrated cargo complex has been planned for which land measuring 1.5 acres has been provided by the state government.

JHARKHAND There is only one airport in the state of Jharkhand. RANCHI: The airport is suitable for A320 operations

Gaya Popular with the Buddhist circuit travellers, the airport will soon be getting a new terminal building. It is being revamped to accommodate chartered flights of heavier aircraft.

Ranchi airport

Ranchi and the terminal can handle 100 arriving and 100 departing passengers. The airport is suitable for three aircraft with two link taxiways. Works completed include construction of a new fire station. Ongoing works include: expansion of existing terminal building to be completed by January 2009; construction of new integrated terminal building for 700 passengers (domestic: 250 inbound/250 outbound) and (international: 100 inbound/100 outbound) with modern amenities and two aerobridges to be ready by December 2009; expansion/strengthening of apron for five parking stands and two link taxiways and resurfacing of runways and allied works. Works planned include: construction of new control tower-cum-technical block. Further upgradation of Ranchi airport (at an estimated cost of Rs 200 crore)

CH graphic by Ravinder Gusain

Gaya airport

Bihar Jharkhand Orissa West Bengal Andaman & Nicobar island

There are six airports in Bihar. The details are as below: PATNA: Suitable for A320 aircraft. The apron is suitable for three A320/ two B737 aircraft with two link taxiways. The airport is provided with customs, immigration and health services for the operation of international flights. The terminal can handle 150 inbound/150 outbound passengers. There is no feasibility in extending the runways for operation of wide-bodied aircraft. Efforts are being made to remove obstructions in the approach funnel of the runways to restore the threshold so that A320 can operate without load penalty. A new integrated cargo complex has also been planned. Among the work that has been planned are construction of integrated cargo complex through a joint venture with a state government undertaking. GAYA: Suitable for A320 aircraft. Works completed include— new integrated terminal building for 500 passengers, construction of a new fire station (CAT VI), extension of an apron for three aircraft,

EASTERN

Jharkhand

BIHAR

S P E C I A L

Bihar

The Airports Authority of India has taken up the development of airports in the eastern part of the country. To begin with there is the modernization of Kolkata airport, which will get it more attention than it receives now from domestic as well as international carriers.

O U T L O O K

The present runways — 2713 m x 45 m — is fit for Airbus and Boeing aircraft. Expansion work is in progress to enable the airport to accommodate more aircraft.

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AAI SPECIAL FEATURE BAGDOGRA (CE): It is suitable for operation of A 320 operations. Terminal building can handle 400 passengers and the apron suitable for three (A320) aircraft. Ongoing works include expansion /strengthening of runways/aprons for eight aircraft. Works planned include installation of the ILS and CAT 1 approach lights for night landing for which 23 acres has been requisitioned from the state government. For upgradation of Bagdogra airport, 118 acres of additional land is required. BALURGHAT: Construction of boundary wall in progress. RITES is carrying out a feasibility study for the development of the airport. BEHALA: Suitable for general aviation activities only in fair weather conditions. There is no facility for commencement of commercial flights through this airport. At present, flying clubs operate from the airport. On-going works include construction of boundary wall and resurfacing work of existing runways. Works planned include a RITES study for feasibility of using airport for ATR operations. The airport is among 32 non-operational airports selected for revival. For development of the airport for ATR operations, additional land of 91 acres has been requisitioned from state government. COOCH BEHAR: Completed renovation of existing infrastructure to make it suitable for ATR42 operations. On-going works include construction of new terminal and extension of runways. MALDA: Airport is non-operational. Works planned include development of airport for ATR42/72 operations. Present status: Additional land of 55.3 acres has been requisitioned from the state government. RITES is conducting a feasibility study for the development of the airport.

requires an additional 582 acres of land for which requisition has been sent to the state government. This development is likely through public-private partnership (PPP) mode.

ORISSA There are two airports in the state of Orissa. The details are as under: BHUBANESWAR: Suitable for A320/A310 aircraft. The terminal is suitable for passengers and there is a new apron suitable for parking of seven A321 aircraft. Works completed includeâ&#x20AC;&#x201D;expansion of aprons for three additional stands and strengthening

Kolkata

The Netaji Subhas Chandra Bose Airport started operations in 1942, though the first plane, a DC-3, landed at the airport in 1924. The first terminal building was commissioned in 1970. In 1995, the first domestic terminal building was commissioned and a new arrival hall for international passengers was inaugurated in 2000.

Bhubaneswar airport

and extension of runways for A310 operations. Ongoing works include construction of new domestic terminal complex for 800 passengers. The work has been awarded and the completion is scheduled for October 2009. Work planned include construction of parallel taxi track for which 17 acres of land has been requisitioned. In addition, 18 acres have been identified for cityside development through the PPP mode. JHARSUGUDA: Non-operational AAI airport. The Vedanta Group of industries has limited operations with Cessna aircraft for corporate requirements. For development of Jharsuguda airport, additional land of 815 acres has been requested from the state government. RITES is carrying out feasibility study for commercial operation of this airport.

Bhubaneswar Busiest airport and second only to Kolkata in the eastern region. Runway being extended to take heavier aircraft and enable international operations in the future. A mono-pulse secondary surveillance radar has been set up at Behrampur, south of Bhubaneswar.

ANDAMAN & NICOBAR ISLAND There is only one airport in the state: Port Blair. The details are as below: PORT BLAIR (CE): The Veer Savarkar

WEST BENGAL There are seven airports in the state of West Bengal. The details are as follow: ASANSOL: Asansol airport is not suitable for any operation due to coal mining activity beneath the runways. RITES is carrying out a feasibility study for the development of the airport. There is a proposal for Aerotropolis in the PPP mode at Andal (Asansol district) near Durgapur. Port Blair airport

International Airport belongs to the Indian Navy. The runways is for unidirectional landing and departure. It can handle A300 operation. The existing terminal is suitable for 400 passengers and the apron is suitable for parking of two A320s. Ongoing works include expansion /strengthening of aprons with two additional taxiways for six parking stands and the installation of glide path unit, the ILS. Works planned include construction of integrated terminal building for 1200 passengers and cargo complex.

Bagdogra airport

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AAI in the

N-E

North East

The Airports Authority of India has been particular about enhancing air capability in the northeastern part of the country. It has in this regard been working closely with both NEC (North Eastern Council) and DoNEAR (DepartArunachal Pradesh ment of North Eastern States). Arunachal Pradesh Manipur Meghalaya Mizoram Nagaland Tripura Sikkim Assam

Sikkim

ARUNACHAL PRADESH For Arunachal Pradesh, the AAI (Airports Authority of India) has taken heed from the Prime Minister’s announcement that “Our government has given the highest priority to the development of the North Eastern Region (NEC), including Arunachal Pradesh.” As part of this exercise it is proposed to develop two Greenfield Airports at Itanagar and Tawang. That apart, the state has five other airports—Passighat, Along, Ziro, Daparizo and Tezu. Here is a brief look at the present status of the various airports: ALONG: The airport at Along belongs to the state government and air traffic services are being provided by the IAF. The unidirectional runways is suitable for operation of 20 seater aircraft in fair weather condition. Pre-feasibility report indicates extension of runways for operation of ATR42 type of aircraft. Alternate location at Tarmoba is under consideration by the state government. A draft master plan of the airport has been forwarded to state government for acquiring 20 acres of land for operationalisation of airport for ATR42 class of aircraft. ZERO (ZIRO): The airport at Zero belongs to the state government and air traffic services are provided by IAF. Suitable for operation of 20 seater aircraft. The state government proceeded to acquire 125 acres for expanding runways to facilitate ATR42 aircraft operations. DAPARIZO: The airport at Daparizo belongs to the state government and air traffic services are being provided by the IAF. The 25.4 acres of land for development of the airport for ATR 42/72 aircraft under consideration of the state government. TEZU: The airport belongs to the state government and air traffic services are provided by the IAF for defence activities in the area. The runways suitable for ATR42 class of aircraft. The AAI has submitted its report to the state government for phased development of a airport at an estimated cost of Rs 100 crore. PASSIGHAT: The airport at Passighat belongs to AAI and is suitable for 20 seater aircraft. The AAI has submitted its report to the state government for the

Assam Nagaland

Greenfield airport at Itanagar

Meghalaya Manipur

A Detailed Project Report (DPR) submitted in April, 2008 outlined the requirement of 928 hectares of land with estimated cost of Rs 674.65 crore. Approval for setting up a new greenfield airport has been accorded by the Ministry of Defence. Approval of DGCA is in process.

Tripura Mizoram

phased development of the airport at an estimated cost of Rs 100 crore. The development of Passighat airport will be done by the Ministry of Defence (MOD).

Greenfield airport at Tawang

MANIPUR Imphal is the only airport in Manipur. This AAI airport is suitable for operation of jet aircraft (A320/B737) in all weather conditions during daytime. Presently; it has 32 flights each week by Air India, Alliance Air, Jet Airways, and Air Deccan to this airport. The aprons can accommodate three A320 and one ATR72 types of aircraft at a time. The terminal building is suitable to handle 250 inbound and 250 outbound passengers at a time. The AAI has requested the state government for 512 acres of additional land for future development of the airport as per the feasibility study conducted by the AAI team and master plan drawn for. Also, a request has been made for additional 178.8 acres for future expansion of runways.

A pre-feasibility study has been conducted by the AAI on the suitable sites identified at the Tawang by the state government of Arunachal Pradesh. The report indicates that there is a possibility for construction of airport. The report has been submitted to the NEC (North Eastern Council) / DONER (Department of North Eastern Region) the project Report will be prepared on receipt of confirmation from the DONER. The project has been deferred for the present.

MEGHALAYA There are three airports in Meghalay: Shillong, Tura and Shella. Shillong is the gateway to the state. A briefer on the airports: SHILLONG: Belongs to the AAI and is suitable for operation of ATR72 class of aircraft in fair weather conditions. Alliance Air is operating scheduled flights on Kolkata — Shillong sector. The existing terminal building can accommodate 50 passengers at a time. At the moment, construction of a new passenger terminal building will be built for handling 100

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AAI SPECIAL FEATURE Measuring Equipment) and PAPI (Precision Approach Path Indicator). At present Alliance Air is operating ATR42 from this airport. The terminal building is suitable to handle 500 passengers at a time (250 inbound and 250 outbound). Amongst the works under planning are expansion of aprons, face-lifting of terminal building, and construction of isolation parking stand all to be completed by December 2009.

TRIPURA There are four airports in Tripura with Agartala being the most active of the four. The others are

Shillong airport

passengers at a time with parking to accommodate 150 cars. PDC June 2009 (Rs 22.70 crore) is underway. Amongst the various works under planning include extension of runways upto 7500 ft for operation of A320 type of aircraft and further upgradation of airport. TURA (BELJEK): Tura airport in Beljek valley of Meghalaya belongs to the state government and is suitable for operation of 20-seater type of aircraft in fair-weather conditions. An MOU (Memorandum of Understanding) is to be signed between the government of Meghalaya and the AAI for operational lease of the airport and is under coordination. Amongst the works under consideration include: extension of runways for operations of ATR42 type of aircraft operations for which additional land of 48 acres has been requested from the state government.

Greenfield airport at Chiethu, Kohima

On the request of state government, the site for construction of greenfield airport at Chiethu, 30 kms, north of Kohima in Nagaland has been examined by the AAI and considered adequate for development of an airport for operation of 50-seater aircraft (ATR72) in fair-weather conditions. A detailed project report has been completed and is under review since it involves huge land filling at a cost of Rs 1111.14 crore whereas civil / airside development works cost is Rs 120.18 crore out of the total project cost of Rs 1231.63 crore. In view of the huge cost, the state government has been asked to identify another location for the greenfield airport as the present location appears to be unviable.

Agartala airport

Kailashahar, Kamalpur and Khowai. A briefer on the airports: AGARTALA: This AAI airport is serviced by Indian Airlines, Alliance Air, Air Deccan, King Fisher, Jet Airways and Indigo— are operating 62 flights a week. It is suitable for operation of A320/B737 aircraft. The aprons can accommodate three A320 and one ATR42 type of aircraft, at a time. The terminal building is suitable to handle 500 passengers—250 inbound and 250 outbound, at a time. Work is in progress for the expansion of aprons and construction of two link taxiways to accommodate four A321 and three ATR72 aircraft at a cost of Rs 18.66 crore. KAILASHAHAR: The airport is non-operational and assets need major renovation and repair. The airport is, therefore, not feasible for operation of ATR42. Land requisition for 79 acres has been made to the state government. However, 20-seater aircraft operation may be feasible after undertaking the development costing Rs 32 crore. KAMALPUR: This AAI airport is suitable for operation of Dornier operations and the terminal building needs

MIZORAM LENGPUI: Lengpui in Aizwal is Mizoram’s main airport. It belongs to the government of Mizoram and is suitable for operation of B737/A319 class of aircraft. The airport was constructed by state PWD (Public Works Department) at an estimated cost of Rs118 crore for operation of B737/A320 class of aircraft in fair weather conditions. It was commissioned in December 1998. Alliance Air, Air India and Air Deccan are operating ATR42 and A319 type of aircraft on Kolkata - Aizwal and Guwahati Aizwal sector. The terminal building is suitable to handle 400 passengers at a time and is being operated and maintained by the state government. Amongst the works under planning are installation of ILS (Instrument Landing System), extension of aprons and construction of Isolation Bay, CAT I approach lights, installation of additional DVOR (Doppler Very High Frequency Omni Range) etc. TURIAL: Turial in Aizwal belongs to the AAI and was operational till November,1998. Vayudoot had operated Dornier 228 class of aircraft during 1986-88 in fair weather condition. The airport was closed in December, 1998 on commissioning of new airport at Lengpui.

Dibrugarh airport

NAGALAND There is plenty of developmental activity in all the airports in Nagaland apart from plans for a greenfield venture. The broad details: DIMAPUR: The airport at Dimapur belongs to AAI and is suitable for operation of B737/A320 aircraft. The airport is equipped with aeronautical ground lighting facilities, ILS, DVOR, DME (Distance

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C R U I S I N G major repair and renovation and suitable for 40 passengers at a time. Pre-feasibility study has been conducted and it is observed that the airport can be operatinalised for ATR42 aircraft with modifications and development works at an estimated cost of Rs 36 crore. KHOWAI: The airport belongs to Airports Authority of India (AAI) and now become unfit for operation due to construction of buildings all around the airport.

ASSAM As the largest state of the seven sisters of the north east, it is no surprise that Assam has seven airports—- Dibrugarh, Guwahati, Jorhat (CE), Lilabari (North Lakhimpur), Rupsi, Silchar (CE) and Tezpur (CE). The status and development plan of each of these seven airports is indicated below: DIBRUGARH: The A320/B737 is suitable for operation in this airport. Over 200 passengers (100 inbound/100 outbound) can be handled — the existing aprons is suitable for parking of three A320s with two link taxiways. Expansion of aprons for parking of additional four aircraft at a time of A321/A310 class costing (Rs 19.71 crore) is planned A modern terminal building for 500 passengers with two passenger boarding bridges is under construction. There is also a proposal to construct new control tower cum technical block and allied facilities. GUWAHATI: The Lokpriya Gopinath Bordoloi International Airport, the state's biggest airport is suitable for operation of wide bodied aircraft (A300) for day and night operations. The integrated terminal building is suitable— can handle 1800 passengers at a time: 1500(domestic) and 300(international). The aprons is suitable to handle six aircraft of A320 / B737 aircraft with two link taxiways. Currently, 161 domestic flights and one international flight are operated every week by Air India, Jetlite, Kingfisher, Air Deccan and Indigo. Amongst the works completed are: construction of corridor for two aerobridges to existing terminal building, expansion and modification of terminal building on city and airside amongst the ongoing projects. Extension of runways and expansion of aprons for 11 bays and link taxiways is in progress. It may be mentioned that

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modification of existing terminal building is under planning stage. JORHAT: The airport belongs to the IAF and the AAI, and maintains a civil enclave. It is suitable for operation of A320 .The terminal building can handled 100 inbound and 100 outbound passengers at a time. There is space for two aircraft in the present aprons. Two acres of land has been requested for. Working permission was received recently. LILABARI (NORTH LAKHIMPUR): Suitable for A320

Greenfield airport at Pekyong A site near Pekyong village, 33 km southwest of Gangtok, was considered suitable and adequate (out of six sites) for construction of airport for operation of ATR72-500 class of aircraft in fair-weather conditions. The funding of the project is on 90:10 basis (90 per cent grant from Government. of India and 10 per cent contribution of AAI). Rs 100 crore has already been sanctioned by the12th Finance Commission and provided to the State Government of Sikkim. PIB approval to the project cost of Rs 358.36 crore is awaited.

Jorhat airport

class aircraft, the terminal can handle 400 passengers at a time .The aprons can accommodate two A320 at a time. There is a proposal by NEC (North East Council) to set up a pilot training centre on PPP (Public Private Partnership) mode. Plot of land measuring 75 bigas adjacent to Lilabari airport has been identified. SILCHAR (CE): The AAI maintains a civil enclave in this air force airport. The airport is suitable for A320 and the terminal can handle 250 passengers. The aprons is suitable for parking of four aircraft at a time. The runways is being extended to 2286m for operation of A320 without load penalty. Work is in progress and expected to be completed by December 2008. Works planned: The runways will be equipped with aeronautical ground lighting facilities, instrument landing system, and approach lighting system for operation in all weather conditions during day and

Greenfield airport at Kokrajhar Secretary, Bodoland Territorial Council, Kokrajhar, has forwarded details of new two sites to the Assam government approval for the greenfield airport at Kokrajhar. The approval from Assam government is awaited.

Silchar Airport

night subject to approval from the DGCA (Director General of Civil Aviation). TEZPUR: AAI maintains a civil enclave in this Air Force airport that can handle 400 passengers. The aprons is suitable for parking of two A320. AAI has also installed DVOR and DME as one of the important navigation aids for operation of commercial flights. Night landing facilities have been provided by the IAF but the same are not available for commercial flights.

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AAI SPECIAL FEATURE

WESTERN R

N Gujarat

Madhya Pradesh Chattisgarh

Maharashtra

Gujarat Maharashtra Chattisgarh Goa Madhya Pradesh

AAI in the

Goa

West

The west of India has some of the countryâ&#x20AC;&#x2122;s fastest growing airport footprints; detailed below is a brief outline of the Airport Authorityâ&#x20AC;&#x2122;s plans for the region.

GUJARAT There are eleven airports in Gujarat. Here is a brief look at the present status of the various airports: AHMEDABAD: The Sardar Vallabhbhai Patel International Airport is suitable for wide-bodied operations. The domestic aprons can accommodate 16 aircraft and the international six aircraft. The Ahmedabad airport

domestic terminal can handle 1400 passengers, while the international terminal can handle 250 passengers. Work completed includes: new domestic departure block for 600 passengers, new domestic arrival for 800 passengers, and construction of aprons for new international terminal. The link taxi track from runway 05 to aprons has been completed as well as modifications to the existing international terminal building. The on going works include construction of new international terminal building to handle 1600 passengers (cost Rs 390 plus crore) to open in March 2009. Also, new technical block cum control tower and the remaining portion of parallel taxiways construction are under planning. BHAVNAGAR: Suitable for B737 aircraft. The

terminal can handle 200 passengers. Works under planning include extension of runways for operation of A320, installation of approach light system plus construction of new terminal building for 400 passengers. BHUJ (CE): Airport suitable for A320/B737/A321 aircraft. The terminal has capacity to handle 400 passengers at a time and aprons for two aircraft. There is also a link taxi track and car parking capacity for 125 cars. Work under planning includes expansion of existing aprons to increase capacity for four aircraft. DEESA (PALANPUR): This Airport is suitable for 20 seater operations. There is a no scheduled operation through this airport for over 10 years. Ongoing works include construction of boundary wall (Phase-II). JAMNAGAR (CE): It is suitable for aircraft like the A320/B737. The ATC (Air Traffic Control) is being provided by Indian Air Force (IAF) .The terminal has capacity to handle 150 passengers. Works planned include: construction of new terminal for 400 passengers, expansion of existing aprons for the parking of five instead of two at present, development of car parking etc. The estimated cost is Rs 150 crore and additional land acquisition is essential. The AAI has placed a request for the acquisition of additional over 17 acres with the state government. KANDLA: Suitable for ATR operations. The terminal can handle 50 passengers. Works planned include: night landing, construction of integrated new fire station of CAT V, technical block cum control tower, and the construction of new terminal building for 150 people, resurfacing of runways and associated pavements. The AAI has placed a request for the acquisition of additional 282 acres of land with the state government.

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C R U I S I N G KESHOD: Suitable for ATR operations, no scheduled airline is operating from here. The terminal can handle 50 passengers at a time. Runways have been resurfaced recently at cost of over Rs four crore. Night landing facility is being provided by the end of December 2008. PORBANDAR: Airport suitable for ATR operations. New terminal building to accommodate 200 people after being completed. Works planned include construction of a new terminal complex with associated aprons and link taxiways etc, and extension of runways. The AAI(Airports Authority of India) has placed a request for the acquisition of additional over 275 acres of land from the state government. RAJKOT: Suitable for B737 aircraft, terminal building can handle 200 passengers at a time. Works planned are extension of runways, construction of new terminal building for 250 people, including construction of new aprons and link taxiways, and construction of new fire station. This is likely to be taken up when the required land is available. SURAT: Suitable for A321 operations with aprons for four aircraft. The runways and part of the terminal building were put into operation in May 2007 and Air India has commenced operations. The terminal has the capacity for 240 passengers. Works completed include runways extension, ATC tower-cum-technical block, new terminal building (Phase I) for 240 passengers. Works planned include new terminal building (Phase II), construction of new isolation parking stand with link taxi track, construction of 10 night parking stands and installation of the ILS. VADODARA: Suitable for B737/ AB320/A321 aircraft. Aprons parking for seven aircraft. The terminal can handle 500 passengers at a time. Works completed include expansion of aprons, construction of link taxiways and new aprons for six aircraft. The ongoing work includes expansion and modification of existing terminal building, construction of an aircraft hangar for Code C. Works planned include construction of new integrated terminal for 700 passengers and construction of parallel taxiways.

MAHARASHTRA There is a general feeling that Maharashtra means Mumbai. That is just not true. Two of the fastest growing airports in the region include Nagpur and Pune. The status and development plan of these airports: AKOLA: Airport suitable for ATR42 aircraft with an old terminal suitable for 40 people. Aprons for three ATR aircraft. No schedule flight operations present. Work completed includes extension and strengthening of runways, expansion of existing aprons and modification of existing terminal. Works planned include further upgradation of airport for ATR72 aircraft, including extension of runways to 1800 metre, construction of new technical block-cumcontrol tower. AURANGABAD: Airport is suitable for A320 operations with four parking stands. The domestic terminal can handle 200 passengers at a time. Work completed includes construction of new aprons and link taxi track. On-going works include construction of

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Pune airport

new integrated terminal to handle 400 domestic/300 international passengers. It is expected to be completed this year (cost nearly Rs 100 crore), strengthening and extension of runwayâ&#x20AC;&#x2122;s likely to be completed by March, 2009. BARAMATI: Under the control of the Maharashtra Industrial Development Corporation (MIDC) â&#x20AC;&#x201D; a state government undertaking. Proposal and draft MOU to take over Baramati airport is pending with the state government. Works planned include development of Baramati airport for Code C type operations in all-weather conditions. A consultant is being appointed for carrying out feasibility study of 326 non-AAI airports which includes Baramati. HADASPUR GLIDEROME: Used for glider flying activities. The airport has only non-scheduled flight/ general aviation flights. Works planned include construction of new terminal building for 50 passengers, construction of aprons and link taxiways. For extension of runways towards sea side, underground tunnelling of Juhu Tara road is required. KOLHAPUR: Suitable for ATR aircraft. Terminal can handle 50 passengers. Airport has been leased to the State Government of Maharashtra for a period of 15 years. LATUR: Airport belongs to the State Government of Maharashtra. No scheduled operations at present. On-going works include DVOR site under finalisation. MOU for CNS/ATM services is being finalised with MIDC. NANDED: A state government property, suitable for B737/A319 operations. On going works for installation of DVOR. MoU and CNS/ATM services is being finalised with MIDC. SHOLAPUR: Suitable for ATR operations. No scheduled operations at present. Leased to state government for 15 years. The terminal can handle 50 passengers. PUNE (CE): The runways suitable for operations of A320 aircraft in all-weather conditions with aprons for eight aircraft, the existing terminal can handle 300 passengers at a time. ATC services by IAF. Work completed includes construction of parallel taxiways and new link taxiways to join two taxiways. On-going

Nagpur The Babasaheb Ambedkar International Airport is suitable for wide-bodied operations in all-weather conditions and has 12 parking bays. The airport, except CNS/ATM functions has been handed over to MADC for formation of JVC with equity holding of 51 per cent by MADC and 49 per cent by the AAI. Works completed include extension and modification of terminal building for integrated operations to cater for 500 domestic/300 international passengers. Works planned include construction of new technical block-cum-control tower.

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AAI SPECIAL FEATURE these nine airports are as indicated below: BHOPAL (RAJA BHOJ AIRPORT): The airport is suitable for operation of B737/A319 aircraft. The terminal can handle 250 passengers. The state government has handed over 354 acres of land and the remaining 33 acres required is yet to be handed over. This will facilitate future development. Work under implementation includes extension and strengthening of runways for B757/B767/AB310 aircraft operations including CAT I approach light and ground lighting system to be completed in April 2009. New integrated terminal for 700 passengers, construction of new aprons, expansion of existing aprons and link taxiways. It is planned to further extend runways for operation of B747/B777. INDORE (DEVI AHILYA BAI HOLKAR AIRPORT): Suitable for B737/A320 aircraft with aprons for four aircraft. Terminal building can handle 500 passengers. Work under process includes: construction of integrated terminal for 200 international/500 domestic passengers. Also, strengthening and extension of runways for operation of B757/B767/A310 aircraft. Plus, the construction of new aprons with link taxi track for parking of four planes and construction of isolation bay along with link taxi track for B767- 300 type of aircraft. JABALPUR: Suitable for B737/A320 operations. Terminal can handle 200 passengers. Work completed includes runways extension along with aprons and taxiways and construction of terminal building and car parking. Work under progress includes: installation of aerodrome ground lights — runways, aprons and taxiways edge lights. It is planned to extend runways to facilitate A321 operations, installation of Approach Lighting System (ALS). Also, construction of new aprons, new technical block-cum-control tower, fire station, MT workshop and other allied facilities. KHANDAWA: Airport non-operational. RITES are carrying out feasibility study for commercial operation of this airport. KHAJURAHO: Suitable for operation of A320 aircraft. Terminal suitable for 200 passengers’. Aprons suitable for two B737 aircraft. Work under planning includes: strengthening and extension of runways, construction of new aprons and taxiways plus provision of Cat I lighting system. Works underway include: construction of a new terminal for 500 domestic passengers/100 international passengers GWALIOR (CE): Suitable for A320 operations— the existing terminal can handle 300 passengers. The aprons is suitable for parking three B737/A320 aircraft. Works under progress are: renovation of terminal building, including air-conditioning. SATNA: No operation for last two decades. There is a proposal to revive 32 non-operational airports in the first phase, for which initial feasibility studies are being carried out and Satna is one of them. PANNA: No operation for last three decades. There is a proposal to revive 32 non-operational airports in the first phase, for which initial feasibility studies are being carried out and Panna is one of them.

works include expansion of terminal for 600 domestic/200 international passengers to be completed by the end of 2008. Other objectives include installation of ILS and car parking.

CHATTISGARH There are two airports — Raipur and Bilaspur— in the state of Chhattisgarh, the details are given below: RAIPUR: Suitable for operation of B737/A320 aircraft. The terminal can handle 300 passengers. Runways extended to 2286 metre. Aprons for four aircraft. Construction of new aprons has been completed. On-going works include construction of new integrated terminal building complex to cater for 700 passengers at a time (300 international/400 domestic passengers) at a cost of over Rs 129 crore, to be completed in September 2009. Works planned include construction of new control tower-cumtechnical block, new fire station and CAT VI facility plus further runways extension. BILASPUR: Non operational—for a long time, has two runways. No scheduled operations. Runways and associated pavements, terminal building and other supportive infrastructure need upgradation.

Gondia

The airport is of reference code 4C, suitable for the operation of A321 aircraft. It has new aprons and two link taxiways, helipad with connecting taxiways. There is also a hangar constructed at the cost of Rs 2.66 crore for IGRUA (India Gandhi Rashtriya Uran Academy), Fursatganj. A joint venture operation has commenced in September this year with the first group of students sharing infrastructure with Gondia Engineering College. On going works include construction of new passenger lounge (Capacity-25), control tower, fire Station, residential quarters etc. Also the lateral expansion of existing aprons to accommodate additional numbers of aircraft is in progress. ILS installed. Works planned include construction of two additional hangars for further upgradation of the airport, request for acquisition of additional land has been placed with state government for future expansion of runways to 12000 feet and for the construction of full length parallel taxi track.

GOA(CE) Belonging to the Navy, this international airport is suitable for A310/A330 aircraft and can accommodate six aircraft at a time. The domestic terminal is handling 150 inbound/150 outbound passengers at a Goa airport

time with annual capacity of 5.50 lakh passengers. International terminal building handles an equal number. The terminal handled 4.03 lakh international passengers and 18.08 lakh domestic passengers during 2006-07. As per the traffic forecast of AAI for the period 2006-07 to 2016-17, the International passenger traffic is estimated to grow at the rate of 15 per cent for the first five year and thereafter 12 per cent with domestic passenger growth at the rate of 25 per cent and 18 per cent. Both the buildings are already saturated. There is a proposal for expansion of civil aprons and construction of link taxiways for which additional land was granted. The construction work is likely to be completed this year. A building for 3400 passengers — 1000 international/2400 domestic— is awaiting approval

Madhya Pradesh There are nine airports in the state of Madhya Pradesh. The status and development plan of each of

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Gagan for seamless

navigation

The governmentâ&#x20AC;&#x2122;s approval to the AAI to implement the GPS-Aided Geo Augmented Navigation (GAGAN) project will put India among the four nations that have a satellite-based navigation system.

he government recently approved the Airports Authority of India (AAI) and ISROâ&#x20AC;&#x2122;s proposal for the implementation of the GPS-Aided Geo Augmented Navigation (GAGAN) project for seamless navigation over Indian airspace at an estimated cost of Rs 774 crore. With this, India will be the fourth country in the world to have a satellite-based navigation system. The management of airspace is a sovereign function which has been assigned to the AAI. The AAI currently uses ground-based terrestrial navigation system for providing safe navigation over the Indian airspace. This system however, has site limitations and range problems. To overcome the limitations of ground based navigation systems, the ICAO (International Civil Aviation Organisation) in 1993 endorsed a Global Satellite Navigation System as a future air navigation system for aviation. Following this, the AAI and ISRO entered into an MoU in 2001 for the implementation of

the GAGAN project for seamless navigation over Indian airspace. The USA has, with the help of 29 satellites in the 20000 km orbit, put in place a Global Positioning System (GPS). The position accuracies required for precision approach and landing for civil aviation cannot be met by core GPS constellation. The constellation needs to be augmented to provide higher accuracy, reliability and integrity. The GPS data can be augmented with the help of Space Based Augmentation System (SBAS). The uncertainties in the position accuracies available through the core GPS are due to the ionospheric delays, satellite ephemeris and clock errors. In order to provide enhanced accuracies with integrity, reliability and continuity, it is essential to have an augmentation system capable of collecting data in two frequencies over the service area, separate these errors at the master control centre and communicate and correct messages to the aviation user in the frequency as that of the core GPS. To achieve this, an

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AAI SPECIAL FEATURE

The GAGAN project will enable better airspace management and help AAI in effective discharge of a sovereign function, and will also result in fuel savings/efficiency for airlines besides allowing higher air traffic within limited airspace.

signal in space is available for flight validation. Flight inspection of GAGAN signal in space at Calicut, Hyderabad and Bangalore airports have been carried out and the results have been observed to be satisfactory. GAGAN-FOP (Final Operation Phase) to be implemented for operational use and to be certified by DGCA. This phase is expected to be completed by May 2011. The project cost is approximately Rs 774 crore of which Rs 148 crore was spent in the TDS phase and Rs 626 crore is to be spent in the FOP phase. Of this, the AAI’s contribution is expected to be Rs 596 crore and ISRO’s contribution will be Rs 178 crore. The TDS phase was taken up on an experimental basis and it is only upon the successful completion of this phase that the entire project is being taken up. The project GAGAN, which involves development of indigenous technology in frontier areas, is expected to yield the following benefits: Enable aircraft to navigate on a straight path/route instead of navigating in a zig-zag path over land-based stations. Provides coverage of oceanic areas, which is not possible by terrestrial systems. Improve efficiency and flexibility by increasing use of operator-preferred trajectories at all altitudes. Increases safety by using three dimensional (3D) approach operations — enabling multiple approach capability. Improves airport and airspace access in all weather conditions. Enhances reliability and reduces delays. Reduces workload and improve productivity of air traffic controllers. Provide uniform and accurate levels of navigation performance over the entire airspace. Achieves greater runways capability. Provides fuel-efficient air corridors. Helps in gradual phasing out of terrestrial navigation aids. Assists in upper air-space management. Provide CAT-I approaches without ground element support. Broadly, the project which will enable better airspace management and help AAI in effective discharge of a sovereign function, and will also result in fuel savings/efficiency for airlines besides allowing higher air traffic within limited airspace. GAGAN system will be ready for operation by the end of year 2010-2011.

SBAS consisting of a geo-stationary space segment for the core constellation, a ground segment consisting of reference stations, the master control centre and an uplink earth station are required. The reference stations collect dual frequency data, which is communicated to the master control centre. At the master control centre, the errors are separated and the corrected navigation message is sent to the navigation transponder on board the geo-stationary satellite, which translates it to the user GPS civil frequency. India is a low latitude country and lies in a region where the equatorial anomaly occurs. This results in large variations of delay with day-to-day variations of the anomaly peak and its intensity of the region. The TEC value varies strongly during solar flares and magnetic storms, which are unpredictable. As a part of GAGAN programme, a network of 18 Total Electron Content (TEC) monitoring stations were installed at various locations of India to analyse the behaviour of the Ionosphere over the Indian region. The TEC monitoring stations are continuously recording the data of Ionospheric delay measurements at one minute intervals on a 24x7 basis, using a dual frequency GPS receiver. Developing and testing of a suitable Ionospheric model for GAGAN is in progress. The GAGAN system proposes to augment the GPS data with the help of a geo-stationary satellite to be launched by ISRO and the ground based infrastructure of reference stations, uplink earth stations and master control centre created by the AAI. The implementation of the GAGAN programme is being realised in two phases: GAGAN TDS phase (Technology Demonstration System) to develop and demonstrate the technological capability. This phase was successfully tested and completed in August 2007. Final System Acceptance Test (FSAT) was completed on August 14, 2007. The results have been observed to be well within the specified limits. After the success of FSAT of TDS, GAGAN

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Can we get our act together? Naresh Goyal

Airport facilities and air traffic management systems are nowhere near what they should ideally be. The only way out, suggests the writer, is a dialogue between airport developers and airlines. n my opinion, the extraordinarily rapid strides that the Indian civil aviation industry has been taking in recent years has brought to the forefront the sorry state of affairs of the supporting infrastructure, both in terms of airport facilities and air traffic management systems. We all know that development and modernisation of infrastructure must go hand in hand with the growth of air travel, and the induction of additional aircraft by the operators. The role that aviation plays in this era of globalisation needs no emphasis. The industry has witnessed rapid technological developments in all its facets. Aviationâ&#x20AC;&#x2122;s global economic impact is estimated at approximately US $ one trillion and is expected to grow by 70 per cent over the next decade. With the liberalisation of the civil aviation sector starting in the early 1990s, the aviation industry in India has also undergone rapid transformation. About 90 per cent of foreign tourists travel to India by air and about 40-45 per cent of export and imports by value are carried by air. The rate of expansion of air travel in India is one of the highest in the world. In India, domestic air travel is growing much faster than the growth in GDP of eight to nine per cent per annum, with domestic passengers registering nearly 46 per cent growth in the year 2006. However, I expect the growth rates to stabilise at around 20-25 per cent per annum, both on the domestic and international routes to and out of India for the next five to ten years. In my opinion, the two principal issues that the Indian civil aviation industry needs to tackle on a priority basis are firstly, the economic health of the industry and secondly, the infrastructure constraints. It has been widely estimated that in 2006-2007, Indiaâ&#x20AC;&#x2122;s scheduled air carriers

In my opinion, the two principal issues that the Indian civil aviation industry needs to tackle on a priority basis are firstly, the economic health of the industry and secondly, the infrastructure constraints. C

incurred a combined loss in excess of Rs 2,000 crore. I would not be surprised if at the end of 2007-08, the operators once again cumulatively incur at least a similar level of losses, if not higher. External factors such as the rapid rise in crude oil prices, coupled with the fiscal policies of the central and state governments have, of course, contributed to the unhealthy state of the industry. I believe, however, that operators themselves have played a large part in creating this unhealthy situation by pursuing irrational pricing policies, often charging fares that do not cover costs, attempting to gain market share at any cost, providing excess capacity and offering unsustainable pay and qualified and trained personnel, etc, all leading to unachievable break-even load factors. The solution, therefore, I believe largely lies in the hands of the operators themselves and it is time that we all took joint initiatives without ceasing to compete amongst ourselves. The second major problem plaguing the airline industry in India is infrastructure constraints. Airline operations are presently severely constrained by lack of adequate infrastructure in India in terms of slots, night parking, runway capacity, etc, notwithstanding the enormous T

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efforts that the current government has been making to make up for lost time. As air traffic has grown, Delhi and Mumbai airports, which account for nearly 65 per cent of total passenger traffic, have been facing increasing capacity constraints both from passenger as well as air traffic point of view. The ground infrastructure like parking bays and hangarage is saturated and cannot cater to increasing demand. As a result, even at our metro airports, service levels are virtually nonexistent, delays are common and future growth cannot be accommodated unless the new privatised owners of these airports take immediate steps to improve and expand the facilities. The two critical infrastructure constraints that the Indian civil aviation industry faces are airport capacity and air traffic congestion. The result is that single runway airports in India like Mumbai and Delhi can handle only 28 to 30 movements per hour when other similar airports elsewhere in the world daily handle 40 to 42 movements per hour. Can I request MIAL to achieve its target sometime in late 2009? May I request DIAL to start and complete work on the second parallel runway with somewhat greater urgency than they seem to be doing at present? Traffic congestion has become an endemic problem. The additional money that airlines have to spend for the extra fuel that they burn to cater to the anticipated delays and long holdings at destinations has become a commonplace event. Lack of trained air traffic controllers to handle growing large volume of air traffic and operations efficiently is another issue that needs immediate attention. With regard to airspace management, I believe, that modernisation of the ATC equipment and the training of additional Air Traffic Controllers need to be tackled with greater urgency. May I suggest that, since the availability of trained and experienced air traffic managers needs a lead time of two to three years, the policy makers examine the feasibility of sending Indian candidates for training abroad and â&#x20AC;&#x153;importingâ&#x20AC;? foreign trained air traffic controllers for a limited period. Also, a lot of flying space is restricted to use by the military and is virtually out of bounds to civil air traffic even during periods that the military do not actually have a requirement to use them. Therefore, more synergy and coordination is required between authorities. Let me list below, the other, less C

talked-about issues that need to be dealt with urgently, if air travel at the metropolitan airports is eventually going to become a pleasurable experience: CARGO FACILITIES: Carriage of cargo by air, particularly to international destinations, has become a very important component of the business of airlines. For a country such as India, it is particularly important since we are trying to rapidly improve our export earnings. Unfortunately, the ground facilities for handling air cargo at the airports are pathetic, if not non-existent. I urge the airport operators and the government to pay particular attention to the development of these facilities. ACCESS TO AIRPORTS: One of the most important requirements for efficient running of airports is easy access to the airports from the cities and towns. As air travel grows in India, creation of more convenient access facilities becomes particularly important if we are to avoid long travel times to and from airports. SECURITY PROCEDURES: Without in any way undervaluing the importance of adequate and efficient security at airports I believe the security systems and procedures at Indian airports need a tough review. Currently, a multiple of agencies, including the airlines themselves, seem to be responsible for providing security services at airports thereby creating a requirement for a larger than necessary deployment of personnel and duplication of work and, therefore, lower productivity and efficiency. AIR TRAFFIC MANAGEMENT PROCEDURES: I have talked about the need to modernise the ATC system and of the need to create a cadre of qualified and experienced personnel. One other issue that I would like to bring to your notice relates to the modernisation and privatisation of airports. I think there needs to be much greater degree of interaction of the airport operators and planners with the users, namely the airlines, to assess the actual requirements in specific areas. The airlines as primary users of the facilities being created have the experience in dealing with the ground realities in India. They know what would make their travel more enjoyable. I would urge, therefore, that there be much greater dialogue and discussions between the airport developers and the airlines than seems to have taken place so far. (The writer is Chairman, Jet Airways and the column is extracted from a speech he delivered at the 59th AGM of the Aeronautical Society of India.) T

I think there needs to be much greater degree of interaction of the airport operators and planners with the users, namely the airlines, to assess the actual requirements in specific areas. 0

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AIR INDIA ir India has sought a rescue package of Rs 2,500 crore from the government to shore up its equity base that will enable the Maharaja to not only borrow more from the market but also meet its rising working capital requirement and money needed to pay to acquire the 111 aircraft it had placed orders with from Boeing and Airbus Industrie between September 2005 and January 2006. The merged Air India has so far received 38 aircraft and the rest of them should arrive between now and 2012-13. Recently, Air India inked a US $ 550 million financing arrangement with the US Exim Bank in Washington for financing three 777 aircraft and five 737-800 aircraft. The agreement was signed between

Raghu Menon, Chairman and Managing Director of Air India and James Lambright, Chairman of the US Exim Bank at the US Exim's Headquarters in Washington. This facility would be financed by Standard Chartered Bank with a guarantee from the US Exim Bank and has been raised at rates sub libor. The guarantee of the US Exim Bank is in turn guaranteed by a Government of India guarantee. The commercial portion of 15 per cent is being financed out of a term loan from IDBI Bank for Rs 285 crore. With this the total amount of facility raised by Air India for acquisition of 25 Boeing aircraft is US$ 1.750 billion. The remaining 43 aircraft are also proposed to be financed through the support of US Exim. NACIL has so far raised over US $ 3 billion in the acquisition of induction of 38 new generation aircraft in its fleet till

The merger of Air India and Indian still has a long way to go. To top its woes, Air India has been bleeding heavily. Though the management has worked out methods to cut costs and reduce the losses, the carrier has to work hard to ensure that passengers keep flying with it.

Air India needs a mid-course

correction C

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date with 73 more to follow in the next few years. This ‘lend me more’ request has come when Air India made a loss of Rs 2,166 crore in fiscal 2007-08 and is on way to make even greater losses in the current financial year (2008-09). But as a mid-course correction, Air India management has introduced — beginning mid-August 2008 — serious cost-cutting measures that include not only pruning unnecessary expenditure but also closure of unprofitable foreign stations in order to contain losses. This, Air India believes, will help it focus more on tried and tested markets where it is also able to justify higher loads without sacrificing yield or revenue. In line with an unannounced restructuring exercise, Air India is finalising the orders for putting in place the Passenger Service System (PSS). In all probability this will be placed on EDS (a US company which was taken over by HP) at a cost of Rs 600 crore spread out over five years. This is not a cash-down payment by Air India, rather EDS will spend over the years (between five and ten) to provide a most modern yield/revenue management system, reservation facilities and other requirements to get a

Induction schedule of Air India’s new fleet Aircraft Type

Inducted as on date

FY 08-09

FY 09-10

FY 10-11

FY 11-12

B777-200LR

B777-300ER

B787-8

B737-800

A319

A320

A321

Total

FY 12-13

FY 13-14

Total

20*+(7)

111

* Received revised delivery schedule of only 20 out of 27 aircraft ordered from Boeing. Delivery schedule of remaining 7 B787-800 aircraft is still awaited. The average age of the passenger fleet is now 10.2 as against 14.1 in April 2007.

clear picture day after day each evening where Air India stands in terms of flights, loads, revenue earned, etc so that corrections can be taken in hours. As on date, Air India has no clue as to how much it earns each day from which sectors, which flights, loads and the entire gamut of running a successful commercial airline. EDS will operate the system and offer its services on a per seat basis and charge Air India for it. The core PSS module will comprise reservations, inventory, ticketing, departure control system, weight and balance, frequent flyer programme, and internet booking engines, including customer-centric functionalities. Without this PSS, Air India cannot even think of joining the Star Alliance on a real-time basis. Additionally, Air India has also issued RFP (Request for Proposal) for what is called “Clean Sheet Exercise”. This helps airlines to know how to deploy aircraft on which sectors, etc. This will help the airline achieve higher network synergies through a comprehensive network rationalisation plan. With PSS on the one side and clean sheet on the other, Air India for the first time in its history or in the combined history with Indian, will have, among others, a proper yield/traffic/revenue, etc, management in place, record of daily performance to enable quick decision-making. Route rationalisation based on such a system and not based on the usual manual committees that take too much time and deliver too little should help H

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Today, Air India has no clue as to how much it earns each day from which sectors, which flights, loads and the entire gamut of running a successful commercial airline. EDS will operate the system and offer its services on a per seat basis and charge Air India for it.

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Classy cuisines served on board has helped Air India to gain popularity.

Air India. The cost-cutting exercise mentioned above with effect from mid-August 2008 may save Air India as much as Rs 1,500 crore in the current fiscal. The PSS and “Clean Sheet Exercise” will be launched next year. Perhaps, any talk of an IPO (Initial Public Offer) will have to wait till then. With fuel prices falling, there is a possibility that even Air India’s fortune may improve; its losses could be contained below the earlier anticipated levels. While what has been listed above deals with administrative expenses, the National Aviation Company of India Limited (NACIL) which operates brand Air India has also listed other cost-cutting measures including in the actual business of flying. These are: To counter the spiralling fuel prices, fuel conservation measures have been adopted by NACIL which include a reduced Cruise Mach Policy for Boeing 747400 and B777 types of aircraft. This reduces fuel burn on the flights. The same is under review for A310 and B737 aircraft. Fuel conservation methods also include reduction in the aircraft empty weight by removing certain non-essential items on board, usage of GPU

(Ground Power Unit) instead of APU (Auxiliary Power Unit), minimising the MEL (Minimum Equipment List) dispatch, reviewing the existing flight planning fuel calculations to cater for the exact fuel requirement, adopting one engine shut down taxi procedures and reduction of contingency fuel for ultra long haul flights. Fuel consumption guarantees which were incorporated in the agreement with Original Equipment Manufacturers (OEMs) would be closely monitored as per the guarantees incorporated in the original agreement. As part of the fuel conservation measures, water wash of the engine processor to improve the engine performance and life of the engine, external cleaning of aircraft to reduce drag has been implemented. NACIL has also signed up with IATA (International Air Transport Association) for conducting a GAP (a computation tool) analysis for fuel efficiency. This analysis is likely to lead to a saving of NACIL’s fuel cost which is around Rs 7,000 crore —the savings on fuel would be around Rs 350 crore. Air India has already initiated serious route restructuring and chopping of certain routes, merger of some oth-

The ‘lend me more’ request has come when Air India made a loss of Rs 2,166 crore in fiscal 2007-08 and is on way to incur even greater losses in the current financial year (2008-09)

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ers etc. This is to ensure that loss-making routes do not burden the airline and make even profitable routes bleed in the overall analysis. As a result of the rationalisation of the schedules both on the domestic and international routes, certain domestic routes have been withdrawn to reduce capacity and international routes combined resulting in an annual savings of Rs 1,000 crore. This saving will translate itself over the next seven to eight months. Return of leased aircraft is also going to cut costs. Old aircraft in the fleet like Boeing 747-300 Combi and A300 B4 are being phased out in order to reduce the average age of the fleet. Till date, 38 of the 111 new aircraft which NACIL had ordered have joined

Los Angeles. Some more routes may also be cut as Air India has often found that on its route, especially the IndiaNairobi-Dar- es-Salaam flight had at passengers times even fewer than the crew at the final disembarkation station. Further the A310 hub-andspoke flights have been replaced by A320 aircraft. Cost-cutting measures have also been introduced on in-flight catering by rationalising the uplift of reading material, withdrawal of certain meal items to reduce wastage of meals, critically reviewing the dry stores items at various locations, reducing the choice of alcoholic drinks and meal services on certain flights. The savings on this is likely to be Rs 75 crore per annum. Even as Air India has taken extreme decisions and positions to cut costs, there is nothing concrete to suggest such seriousness among its management on the revenue side. The usual refrain is that once Air India completely inter-locks with Star Alliance it will be able to get passengers from across continents and also begin to fill its coffers. But this presupposes that it will be able to offer a similar “seamless product” to its passengers who might have flown Star Alliance Member airlines before getting into an Air India flight. May we caution Air India for a moment? The Business Class of Kingfisher Airlines’ A321 on domestic routes has fantastic seats that are comparable to those offered by any world class airline. They recline, there is back support, there is neck support and there is also the very easily adjustable footrest, etc, and also the very comfortable seat pitch. Air India’s A321 on domestic routes has none of these despite the fact that its (Indian earlier) Airbus A321 flying on the same domestic route is even younger. When you fly Indian ( now Air India) you let your feet hang and rest. If this is the product the AI management is talking about, then it could well rest its fleet to save even more on costs. As for food, the same TajSATS provides different types of meals on the two airlines. Perhaps it will be better for Air India to convert its entire domestic operations into an LCC. This will save it even more costs. As a senior bureaucrat in the Rajiv Gandhi Bhawan said, “There is no way you can save the merged Air India and Indian. The wage costs are just too much to allow either a safe landing or comfortable take-off.”

Air India cabin crew at work: the product has to be kept at par with international airlines.

the fleet and as a result the average age of AI’s aircraft has fallen from 14 years in 2007 to less than 10 in 2008. It is planned that with more aircraft joining the fleet in 2008-09, the average age would drop further. It has also been decided not to renew the existing lease of five old aircraft — a Boeing 747- 400 and four Airbus A310s — which will be redelivered after the expiry of the lease term by December 2008. International operations to and from the following stations have been rationalised and restructured: Kuwait, Singapore, Bangkok, Hong Kong, Tokyo, Oman, Bangladesh, UK and Saudi Arabia. Besides, Air India has discontinued — for the present — all its flights to Seoul, Dar-es-Salaam and N

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Slashing costs,

Maharaja style Like major airlines around the world, Air India too has devised its own measures to reduce costs. Here’s how it is being done... o at least offset part of the whopping losses that Air India has to contend with — the amount of losses in 2008-09 could be to the tune of Rs 4,500 crore — the management has decided to enforce salary cuts. In fact, the carrier has planned to reduce the productivitylinked incentives (PLI) of its 34,000strong workforce. That could mean a substantial saving since PLI makes up a large portion of the salaries. Air India reportedly spends more than Rs 3,000 crore per annum and any saving on that account will reflect on the company’s balance sheet. Other than salaries, there are other measures that the Maharaja has worked out. A sneak peek at some of them:

The amount of losses that Air India could face in 2008-09 would be to the tune of Rs 4,500 crore... to tackle the loss, the management has decided to enforce salary cuts.

(EOQ) should be carried out taking into account the time factor required for the procurement/availability of spares. This will end in optimisation of inventory on hand, which would ultimately result in savings in terms of carrying cost of inventory. A realistic assessment has to be carried out before sending any aircraft or engines abroad for repairs and this practice should be avoided to the extent possible. The Board’s approval should invariably be obtained with proper justification for sending any aircraft/engine abroad. Since leasing is an expensive proposition, the deployment of existing owned fleet should be optimised in terms of flying hours, route network, crew availability etc. Wherever leased fleet could be returned to the lessors without incurring breakage cost or with minimum breakage cost and without seriously affecting schedules, the lessors may be approached for return of the aircraft after meeting re-delivery conditions. Operations/GSD/Engineering departments will observe all procedures leading to better fuel efficiencies in their operating procedures, including equipment maintenance and serviceability. They should also formulate innovative measures for fuel conservation and a monthly report of the progress achieved should be submitted to the SBU Head MRO (airframe). The concerned department personnel should also fully cooperate with IATA team which was engaged to recommend on achieving fuel efficiency.

Contractual employment after superannuation in various departments to be reviewed by departmental head and exception made only if absolutely essential and justifiable. All outsourced work such as passenger facilitation, transportation, maintenance of buildings, etc, entailing high cost will be reviewed. All existing contracts would be reviewed afresh on the basis of cost benefit analysis. The procurement of spares required for Aircraft on Ground (AOG) is generally made at list prices. It should be ensured that the benefit arising out of bulk purchases of such spares are also available to such spares p r o c u r e d under AOG conditions. Fresh review of the Economic Order Quantity

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Air India has planned to reduce the productivitylinked incentives (PLI) of its 34,000-strong workforce. That could mean a substantial saving since PLI makes up a large portion of the salaries.

Air India pilots at work: facing a salary cut.

The free use of vehicles which are in the pool, including cars attached to the station managers would be discontinued with immediate effect. No employee would be able to avail of vehicles in the pool unless there is a proper written authorisation given by the competent authority to use the vehicle. All vehicles in the pool would comply with a 25 per cent cut in the fuel expenses and the internal audit would review the situation. All officers or staff travelling within or outside India should return the same day and not avail of hotel accommodation at the station visited unless the trip necessarily involves a night stay which should be duly authorised in writing before departure by the competent authority. All temporary postings should immediately be discontinued and where persons have been posted temporarily at places where permanent positions exist the temporary postings will be converted into permanent postings if justified and a vacancy exists. A status report will be filed by department heads. Foreign tours should be undertaken only for absolutely essential purposes. All foreign tour proposals should henceforth be scrutinised at the functional director level and recommended to the undersigned(except those EDs who report directly), only in respect of critical cases. This also should be restricted to the bare minimum number of persons who are operationally required to travel. Accommodation at overseas stations should as far as possible be at crew hotels where facility of lower room charges is available unless otherwise permitted.

When interline SOD travel is undertaken on domestic and or international sectors where Air India does not operate, it is noticed that 50 per cent business class tickets are being purchased. This should be immediately discontinued and travel should be only in economy class at the lowest fares. Staff On Leave (SOL) tickets â&#x20AC;&#x201D; no refund of PSF will be made with immediate effect. In the present Internet/PC based communication age, expenditure on telex/teleprinter/ fax, etc is unnecessary and expensive. Hence all telex/ teleprinter connections should be surrendered immediately. Usage of tax to be drastically reduced and wherever possible, copies can be scanned and sent as attachments to the e-mail so that fax cost can be curtailed. Office telephone lines should be linked with the leased line available in the reservation system as this will facilitate the routing of all office lines through these lines which will in turn save on STD expenditure. Late sitting/meal allowance for all categories of executives of DGM and above stands abolished with immediate effect. Weekly offs allowance for all categories of executives also stands abolished with immediate effect. Clothing allowance and furniture allowance for all executives of DGM and above stand abolished with immediate effect. Leasing of cars at foreign stations to be restricted only to operational areas and other leases to be surrendered as and when they come up for renewal.

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Air India Chairman Raghu Menon on the airline’s plans for the future and how the carrier is going to tackle the ongoing crisis.

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assumptions for 2008-09, which were based on the average fuel price in 200708. Is it possible for any business to absorb such costs? Unless fuel prices stabilize, and stabilize soon, it is going to be a very difficult year for all Indian carriers.

When do you think Air India will be able to breathe easy and tide over its huge financial crisis? It is true that everyone has been saying that all airlines are suffering. But is it also not true that the suffering of each is on account of different factors. Fuel is a common factor but will solving the fuel problem also solve AI problems? The spiralling cost of ATF over the last one year, particularly the continuous month-over-month increases from April to August 2008, is a global phenomenon that has hit all airlines across the world. Apart from phenomenally increasing operating costs, it has resulted in higher fares, which in turn has affected demand. The International Air Transport Association (IATA) has confirmed a continuing downturn in the aviation industry following a combination of high oil prices and falling traffic demand and has estimated the fuel bill going up by US $ 50 billion to touch about US $186 billion this year. In India, the position is even more acute as the price of fuel here is much higher than in other countries. While there may be other issues affecting the bottomline, there is no doubt that the overwhelming reason for Air India’s financial problem is the galloping expenditure on fuel. This is evident from the fact that our expenditure on fuel rose by Rs.1500 crore in just five months from April to August this year and is fast approaching nearly half of our total operating costs. It has wrecked most of our budget C

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What happened to the Air India request for Rs 2500 crore assistance from the Government of India? Don’t you think if the government could come out in 1997-98 with a huge Rs 5500 crore package to save SAIL, why not Air India? Air India has a very low equity base of Rs 145 crore, particularly in the context of an organization which has a turnover of Rs 16,000 crore and is purchasing aircraft worth Rs 40,000 crore. We have submitted a proposal to the Ministry of Civil Aviation for increasing the paid up capital from Rs.145 crore to Rs.1500 crore, which is the authorized capital. Secondly, we are also seeking assistance in the form of a loan to meet costs related to the merger process. We hope these requests will be considered favourably.

The overwhelming reason for Air India's financial problem is the galloping expenditure on fuel. This is evident from the fact that our expenditure on fuel rose by Rs 1500 crore in just five months from April to August this year and is fast approaching nearly half of our total operating costs. It has wrecked most of our budget assumptions for 2008-09.

Steps to save costs by Air India seem impressive on paper. How are they doing in reality? This is also likely to impact the quality of services in your executive class in the domestic sector and business and first class in the international sector. So what do you do? Do you know Air India’s A321 J class seats do not have even footrests compared to competing Kingfisher. Is this cost-saving? By downgrading the product, do you save costs or send highend revenue paying passengers to the competitor? We are serious and determined about cost-cutting measures. There are several avenues for this without in any way downgrading our product. Our costcutting measures are not in areas of customer service and will not affect our passengers. Our new aircraft on both international and domestic sectors are second to none. For instance, one major initiative taken is to implement fuel conservation and savings measures. We have commissioned the IATA Green Team to conduct a Fuel Efficiency Gap Analysis of our operations and their preliminary study has estimated a potential saving of about US $200 million per year if the recommended changes are introduced. This is being accorded top priority and we have constituted a Steering Committee of core departments to implement the recommendations on a H

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time bound basis. In addition, a large number of steps to reduce administrative costs and wasteful expenditure have been put in place. These are already yielding results. More such measures are being contemplated to cut inefficiencies and save costs.

What do you propose to do with Indian’s Hyderabad facility at CTE? Are you going to modernize it and expand it? There are 11 acres of land and an airport adjacent to it. Can’t you make it one of the world’s best air academies there? The Central Training Establishment (CTE) at Hyderabad is completing 50 years this month. This world class facility is a true centre of excellence in all aspects of aviation and caters not only to Air India but to other operators as well. In April this year, Air India became the first operator in India to be granted the Type Rating Training Organisation (TRTO) approval for CTE by the DGCA. This approval is a matter of pride for Air India and is a reaffirmation of our training capabilities. The recognition as TRTO authorises CTE to conduct pilot endorsement training, refresher/ recurrent training, checks and specialised training for pilots on A310, A320, B737800 and B747-400 aircraft, besides examinations. The TRTO status will help expedite pilot training which in turn will help the airline to meet the increasing requirement of pilots. We have plans to expand and modernize this world-class institution in the near future.

There are talks of Air India again wanting to assess the possibility of buying Airbus A380 super Jumbos and a distant possibility of Boeing 747-8 stretch version of the earlier Jumbo. Will it make sense to even look at these options when there is a crying need to pull back Air India from the throes of a crisis or the crisis itself? No such exercise is underway. A huge capacity induction has taken place in the Indian aviation market, far exceeding demand. Following the fuel crisis, all airlines, including Air India, have resorted to capacity reduction. We have consciously decided to resort to consolidation till the end of next year, after which we hope to give shape to our expansion plans.

A huge capacity induction has taken place in the Indian aviation market, far exceeding demand. Following the fuel crisis, all airlines, including Air India, have resorted to capacity reduction. We have consciously decided to resort to consolidation till the end of next year...

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There is a severe shortage of pilots, which is holding up your schedules. But luckily the cut in schedules has kept the issue at bay. But what is the longterm solution? With the aviation industry having expanded rapidly and new players coming in rapidly, there is an aviationwide shortage of pilots, particularly Commanders. We are facing this primarily on our 777 fleet and 737 fleet of Air India Express. The problem is a difficult one to address. However, we have put our pilot training schedule on a fast track and hope to ease the problem to a significant extent by March 2009.

What is the status of your MROs airframe with Boeing and Airbus and engine with Snecma, GE, etc. Can you tell us about the developments and share your thoughts on that? Air India has huge maintenance infrastructure in Mumbai and Delhi, with 5600 skilled engineers and technicians capable of undertaking maintenance of all aircraft and engines currently in our fleet. The MRO projects with Boeing and

Raghu Menon with GMR’s Kiran Grandhi.

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Airbus are going ahead as planned and negotiations are at concluding stages. We are confident the JVs will be in place very soon. With the aviation industry in the country growing at a rapid pace, the need for world-class MROs has already arisen. Air India has the best maintenance infrastructure and technical expertise in the country, and given our competitive costs compared with those of players outside India, we will emerge as a predominant major MRO company in the region, catering to the entire industry. Is Air India likely to make a huge loss as in fiscal 2007-08? What has been the financial situation in the first half of or first quarter of current fiscal April 2008 to September 2008 (fiscal for whole 2008-09)? All Indian carriers registered losses in 2007-08. The reasons were largely due to factors beyond an airline’s control. Our loss in 2007-08 is likely to be to the tune of about Rs 2000 crore. Given the continuous and massive increases in ATF costs for the first five months of 2008-09, the situation is not very bright in the current fiscal. There has been some southward movement in fuel prices recently and we hope the prices of crude per barrel will stabilise soon in two digits. This will help in rationalising fares and making demand more buoyant. In the meanwhile, we are taking requisite measures to consolidate operations and control losses. How confident are you of repaying on time the loans taken to fund the acquisition of new aircraft? True, neither Air India nor Indian had ever defaulted in the past on its loans. But with the financial sector worldwide taking a serious hit, will it still be possible to raise money from the global market at very comfortable rates? So far, you have raised about US $1.25 billion to fund the purchase of Boeing aircraft for Air India. Can you give the correct figures? What about the Indian requirement of Airbus aircraft? As you have rightly stated, we have never defaulted on our loans in the past and this has stood us in good stead with regard to financing for our current orders of Boeing and Airbus aircraft. Our track record will remain intact. How good has been the process of integration between Air India and Indian? If reports are to be believed, it C

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is virtually two camps down the line. The process of integration is on track. Integration is not an easy task and in all cases of mergers and acquisitions, human integration takes time. We are addressing all aspects of HR integration, but in a measured and sensitive manner. An aspect of merger that we tend to overlook is the repositioning of Air India to exploit its core competencies in various aviation related businesses. The merger has led to the creation of six Strategic Business Units (SBUs) and each of these SBUs will develop and exploit business opportunities that will unfold as the civil aviation industry in India evolves. The process of integration has already yielded gains of about Rs.600 crore in the last 12 months through various

Our loss in 2007-08 is likely to be to the tune of about Rs 2000 crore. Given the continuous and massive increases in ATF costs for the first five months of 2008-09, the situation is not very bright in the current fiscal. There has been some southward movement in fuel prices recently and we hope the prices of crude per barrel will stabilise soon in two digits.

synergy benefits. And what about your integration with Star Alliance? There are reports that it could be delayed. Is that true? We are the first Indian carrier to join an alliance. There are no delays in our joining Star Alliance. Air India will gain immense value when it is inducted into this Alliance, an elite consortium of 21 airlines having over 18,000 flights daily to over 100 countries. The advantages of joining Star Alliance are manifold and our passengers will enjoy a host of benefits, including a worldwide network, common frequent flier programmes, and seamless connections. Air India’s footprint will become worldwide through code shares and commercial cooperation agreements. The process is an elaborate one, with as many as 79 ‘minimum joining requirements’ to be worked on and several requirements to be fulfilled before we are given membership status. We are according high priority to this process and expect to join Star by May 2009. The normal period for completion of formalities is 15-18 months and we are on track. H

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MRO Former Aviation Secretary Ashok Chawla had stated that even though Indian aviation grew three times the GDP growth, it was unlikely that it would grow in a similar fashion in the next 20 years. â&#x20AC;&#x153;It is neither desirable nor possible. This is not only a great opportunity but also a great challenge,â&#x20AC;? he had said.

The growth in the aviation business has been suddenly halted and those who had plans to set up MROs have either shelved or postponed moves, writes R Krishnan. That could mean that the country will see only two or three MROs coming up in the near future.

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he last four years, beginning 2004, saw a virtual doubling of every aviation indices like passenger traffic — both domestic and international — airports expansion and modernisation through PPP Public Private Participation, acquisition of many more narrow and wide-body aircraft, helicopters and general aviation aircraft besides, of course, private jets. Will there be another doubling of all these indices in the next four to five years? That is a million-dollar question as the US economy-triggered slowdown to the world economy has begun to impact the aviation industry. The airlines’ pitch was already queered by sky-rocketing crude prices especially since the last week of May 2008. We have reached such bizarre times where even carrying a normal check-in bag is beginning to be seen by lossmaking airlines as a new source of revenue. Gone are the days when American carriers were well-known for allowing two full-size suit-

cases per passenger. Though world crude prices showed a fall beginning September 2008 to around US $100 per barrel of crude, the goodies offered by mega airlines in the past are rapidly becoming history. Even India’s own cut-abovethe-rest Jet Airways has started talking in terms of charging passengers for carrying check-in luggage. Despite these uncertain trends, when Vijay Mallya’s Kingfisher Airlines launched its Bengaluru-London flight by A330-200 on September 3, 2008, all the competing airlines like BA, Lufthansa, Jet Airways dropped fares by as much as Rs 15,000. While one understood the rationale of foreign airlines dropping fares to meet competition on trunk routes like the India-London one, a decline in fares following a fall in fuel prices (partially) in the domestic sector remains enigmatic. However, airlines feel that the fall in jet fuel prices has not been enough to justify any reduction in domestic fares. Indian carriers (nine scheduled domestic carriers) opened fiscal 2008-09 with a big loss. Against a combined industry loss of Rs 2,500 crore in 2006-07, it is believed that airlines in

Ernst & Young estimated that the Indian MRO industry would receive US $3 billion by 2020. This seems far-fetched, say industry watchers. The Indian MRO is currently valued at over US $200 million annually, which was — before the current slowdown — expected to grow at 15 per cent annually.

Is there gloss in the

engine business? C

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India may have made a loss of Rs 4,500 crore in the year ending March 31, 2008. This trend is continuing and most airlines have hiked fares in the last few months on domestic routes. Air India’s combined losses are estimated at Rs 2,166 crore in 2007-08. Jet Airways has reported some profitable trends of late but still not enough to take it to the comfort sector. SpiceJet is in serious financial crunch, IndiGo has not said anything but it is also feeling the heat. GoAir has cancelled its flights and delayed taking delivery of already-ordered Airbus A320 aircraft. This is also true of other airlines. Paramount is in a complete

the business plans leading to an inevitable hike in fares. As a result, short-haul distances are facing a drop in loads with passengers shifting to train. All this is forcing many airlines to look for alternate sources of revenue other than from flying. Former Aviation Secretary Ashok Chawla had stated that even though Indian aviation grew three times the GDP growth it was unlikely that it would grow in a similar fashion in the next 20 years. “It is neither desirable nor possible. This is not only a great opportunity but also a great challenge,” he had said. All this could mean that India may in the next three to four years witness setting

bind. The new regional carriers after receiving approval have so far stayed away from initiating steps to fly. All this may resemble a scary picture. Some full service carriers that had earlier focussed on special business units like MROs Maintenance Repair and Overhaul. have either shelved plans totally or postponed them indefinitely. GoAir’s planned JV with Singapore Airlines Engineering Company (SIAEC) for a MRO in India has reportedly been scrapped. When India’s domestic traffic was growing at over 35 per cent for the last four years, everyone was thinking in terms of setting up a MRO. That growth rate has now fallen to around 10 per cent in the first six months of 2008. High ATF prices have distorted

up of only two or three MROs. Air India has identified the MRO business as a major revenue source. Before the current slowdown in air traffic, Ernst and Young estimated that the Indian MRO industry would receive US $3 billion by 2020. This seems far-fetched, say industry watchers. The Indian MRO is currently valued at over US $200 million annually, which was — before the current slowdown — expected to grow at 15 per cent annually. The current commercial aircraft fleet with scheduled and non-scheduled as well as regional carriers is more than 365. Many airlines, when the sector began to explode, went to town with the announcement of large number of aircraft orders. IndiGo announced 100 A320 aircraft of

When India’s domestic traffic was growing at over 35 per cent for the last four years, everyone was thinking in terms of setting up a MRO

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which it has received delivery of 19. Spice ordered 36 Boeing 737 NGs (Next Generation) of which it has taken delivery of 16. Both carriers are rethinking if they should rework the delivery schedule. GoAir has virtually painted itself in a corner and is trying to contain its losses by not only postponing delivery of its A320 aircraft but also shutting down stations it was flying to earlier. The Kingfisher and Air Deccan combine has already cut back deliveries. While Vijay Mallya rebranded Air Deccan as Kingfisher Red (a kind of LCC distinct from the full service productdriven principal Kingfisher Airlines), he also reordered fleet delivery schedule of A-320s and is looking for buyers for some of his previously ordered A340-500 which he was planning to use for India-US direct non-stop flights. Airbus Industrie COO John Leahy said on record at the Berlin Air Show that many airlines in India were having second thoughts of inducting already-ordered aircraft, leave alone placing orders for new ones. All this means that the trend expected earlier in terms of aircraft fleet acquisition may not materialise. It is in this context that the remarks of Ashok Chawla that not more than two or three MROs may come up over the next three years has assumed importance. For instance, an airframe MRO to be viable would require 250 aircraft annually to remain in business and these have to be from the Airbus A320 family or the Boeing 737-NG family besides wide-body aircraft. Such an assured or captive aircraft base for more than three MROs of similar sizes seems improbable in India for the next decade. Hence, the suspense over MRO business prospects in India.

An airframe MRO to be viable would require 250 aircraft annually to remain in business and they have to be from the Airbus A320 family or the Boeing 737-NG family besides widebody aircraft. Such an assured or captive aircraft base to more than three MROs of similar size seems improbable in India for the next decade.

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Those which are coming up on are the following: MRO at the new Hyderabad International Airport Limited,Shamsabad, near Hyderabad. This is a 74:26 JV (Joint Venture) between Malaysian Airlines and GMR, promoter and developer of HIAL. Earlier, Lufthansa Technik was the main driver of that MRO holding 74 per cent equity. But after the fuel crisis hit Indian carriers, Lufthansa Technik developed cold fleet and withdrew the MRO project which it had earlier announced with great fanfare including taking the Indian media to Frankfurt to show its state-of-the-art facilities. Malaysian Airlines has already begun work from where Lufthansa Technik dropped its tools. Earlier, it was touted that the HIAL MRO would be the best in Asia and cater to both Airbus and Boeing aircraft airframes. Nearly eight acres of land was earmarked for the MRO and construction is in full swing. Around 400 engineers were reportedly absorbed at this major facility which will have two bay hangars and state-of-the-art workshops involving an investment of over US $20 million. The two parallel lines will cater to the rapidly-growing narrow-body aircraft: Airbus A320 family and Boeing 737 family, including the NGs. In the initial phase, construction on 20,000 square metre facility is already in progress. Later, a third parallel bay will be installed to cater to wide-body aircraft such as A330, A340 and Boeing 777 and Boeing 787 versions. Lufthansa Technik had adopted the modular approach to ensure flexibility to expand its services to customers outside India and augment its product portfolio with additional services.

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The second MRO which is definitely coming up is that of Boeing-Air India JV with a third unnamed partner at the Nagpur SEZ Special Economic Zone. The Boeing-Air India MRO JV will be structured on a 60-40 equity ownership and it is for Boeing to divest some equity from its holdings to induct a third partner wellversed in MRO work. This is a US $100 million project and includes a wide array of services for airframe MRO like the one conceived by Lufthansa Technik. There are a score of MRO companies to whom Boeing is talking and they include ST Aerospace and SIAEC. A third MRO is coming up at Delhi as a joint venture between Air India (earlier started by Indian) and EADS. Jupiter Aviation, owned by Rajeev Chandrasekhar, will in all probability be the third partner in this Delhi-based MRO for Airbus airframe MRO. Under the rules, the JVs may require FIPB clearance and as per Press Note 1 of the Industry Ministry, no foreign partner can have two JVs on the same product unless the Indian partner of the JV which came first gave a NOC (No Objection Certificate) to the foreign partner. To circumvent all this, EADS may

At present the only fullfledged functional MRO is at Mumbai of Air India. This will also be upgraded once the plans of MIAL for complete upgradation and modernisation are in place. Besides, there are Indamer Air Works India at Mumbai, Taneja Aerospace and Varman Aviation at Bangalore (old HAL) airport. These MROs only look after smaller aircraft.

However, the CFM engines used by Indian are Version 5 while that used by Air India are Version 7. It is not clear if the engine shop will come up in Delhi where Indian had a engine shop or Mumbai where Air India had been overhauling engines not only for its own planes but also those of foreign carriers like Kuwait, Gulf Air, etc during its heydays. GE is also scouting for partners to start a MRO. It has already announced that it will seriously look to participate in a PPP for 35 non-metro airports including the possibility of setting up MROs in any one of them. Air India is also contemplating setting up a MRO for peripherals and parts used in aircraft. Besides these, independent MROs have been planned by others like Airworks, originally operating out of Mumbai airport for the last few decades, with new plans to set up facilities in BIAL and HAMCO at the new HIAL. The Indian domestic MRO market is estimated at US $800 million with a CAGR (compounded annual growth rate) of 10 per cent. The Indian MRO industry may reach the size of US $2 billion by 2015 and US $3 billion by 2020. The new facility of Boeing-Air India should be fully functional by 2010. The importance of a MRO is evident from the fact that nearly 40 per cent of Lufthansa’s revenues come from its MROs world over. At present, the only full-fledged functional MRO is at Mumbai of Air India. This will also be upgraded once the plans of MIAL for complete upgradation and modernisation are in place. Besides, there are Indamer Air Works India at Mumbai, Taneja Aerospace and Varman Aviation at Bangalore (old HAL) airport. These MROs only look after smaller aircraft. It is now learnt that AVIALL Inc., a wholly-owned Boeing subsidiary, is planning to open a business office in new aviation parts and related after-market services in the aerospace industry. Aviall’s India office will be headquartered at NOIDA, SEZ. Another US-based business jet market, Hawker Beechcraft Corporation has opened its first authorized service centre in Delhi in a JV with Interglobe General Aviation, which also owns IndiGo Airlines. A total USD 8 million will be invested in this venture. Two more centres — one in Mumbai and another in southern India — will come up by 2009. Hawker Beechcraft has the maximum number of private business jets flying in India. Besides, the Tatas have entered into equity arrangement with Singapore-based Briley Group, a business jet operator that plans to start aircraft charter and fraction-

include Jupiter Aviation as the third partner in the Delhi MRO. There was also talk of the EADS setting up another JV with Jupiter Aviation in the new Bengaluru International Airport Limited (BIAL). Because of official regulations this is being avoided and instead the trilateral venture as stated above is being firmed up. Besides these airframe MROs, Air India is also contemplating to set up an Engine MRO. GE had made a presentation to Air India about this. Incidentally, GE is supplying engines to all the 50 wide body Boeings being bought by Air India. Besides, Snecma which has a 50:50 joint venture with GE for manufacturing CFM 56 engines is already powering the Airbus A319, A320 and A321 aircraft of Indian besides the Boeing 737-800 of Air India Express. C

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One MRO that is definitely coming up is that of the Boeing-Air India JV with a third unnamed partner at the Nagpur SEZ. This is a US$ 100 million project and includes a wide array of services for Airframe MRO like the one conceived by Lufthansa Technik.

al ownership. B-Jets has announced an order of 50 biz-jets, largely Cessna Citation CJ2s and Hawker Xps. US pioneer in fractional aircraft ownership Net Jets is also looking at India. Interestingly, these developments are taking place when scheduled operators are rethinking on their acquisition plans. There is another company HAMCO (Hyderabad Aircraft Maintenance Company) which has been trying since 2006 to start a MRO. Its efforts were frustrated when it applied to AAI for space in the older Begumpet Airport in Hyderabad. The AAI told the company that it would be allotted space only after it got all approvals from the concerned government agencies. DGCA on the other hand said it could not give approvals to those who did not have space in airports. Further, there is also an archaic rule, aviation industry experts say, of 1930 that states that “non-airlines cannot be given space in any airport”. This is also, perhaps the reasons for many third party MROs finding the entry tough. Moreover, if airport promoters like GMR get into the MRO business it would not only lead to colonisation of space in the airports these entities own, and manage but would also shut out others. For instance, it is still not known if HAMCO ever got space at the new Hyderabad International Airport in Shamsabad. At a recent meeting in Mumbai organised by McGraw Hill publication Aviation Week, it was pointed out that India faced a big challenge. As a net importer of MRO services with 9 to 10 per cent growth in airframe capacity anticipated annually for C

the next few years, India would need to be ready to meet the growing demand and become a net exporter of MRO services. India’s advantage lay in low wage costs of its technical labour force, which is actually going up but nowhere near what it is in other developed markets. The biggest drawback, however, of operating a MRO business in India at the moment is that certain government policies do not offer clarity. Take, for example, the high incidence of tax liability, service tax and import duty on aircraft spares. A white paper presented by Aviation Week to the DGCA noted: India’s regulatory restrictions, statutory requirements and bureaucratic timelines prevent MROs from keeping pace with growth of Indian aviation Training (lack of adequate personnel) and workforce (licensing of engineers, no alignment with international regulations) Access to land (close to airport) Tax liabilities (lack of tax breaks, service tax, value added tax) General aviation and scheduled aviation are treated differently and Control of documents (procedures and work instructions), versions (quality system issues). The relevant CAR(Civil Aviation Rule) implemented by DGCA (Directorate General of Civil Aviation) needs to be totally overhauled and all artificial differences between General Aviation, Military Aviation and Scheduled Airlines should be abolished. One rule should apply for purposes of taxation, according various clearances, etc. H

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FUEL

The taxing

The real volcanic impact of the fastrising ATF prices triggering a fare hike in the domestic skies began to unfold as passenger traffic fell nearly 11 per cent in the first six months of 2008. Then came the major showdown on June 1, 2008, when ATF prices based on very high crude prices (nearly $140 per barrel) were hiked sharply.

business of

fuel

The commercial airline business in the country â&#x20AC;&#x201D; which at one point of time, not too long ago, had taken off â&#x20AC;&#x201D; seems to have been grounded largely due to the prohibitive cost of Aviation Turbine Fuel. Though the government is aware of the consequences, precious little has been done to revive the sector, writes R Krishnan.

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he pricing of Aviation Turbine Fuel (ATF) or Jet Fuel has distorted the Indian aviation industry so badly that it is literally caught in a Catch-22 situation. Should the airlines hike fares, passengers would disappear and should the fares be cut, then the airlines would disappear. It has become a never-ending story of how to balance the loads with yields. While on ground you could fall between the two stools, but this luxury is simply not available in the sky. A rehearsal of sorts was being enacted from 2004-05 which saw a certain accentuation in 2006-07. The phase witnessed the disappearance of India’s first true Low-Cost Carrier (LCC) Air Deccan and its merger into the full service carrier Kingfisher Airlines. Air Sahara’s identity was extinguished and it was renamed JetLite to become a subsidiary of Jet Airways. Moves are on now to merge it with Jet Airways. This was also the phase when LCCs offered low fares resulting in a virtual passenger traffic explosion to as high as 38 per cent annually. However, the fares simply did

not cover the costs even though the loads were very high. When it became excruciatingly painful, even LCCs — leave alone the full service carriers — successively hiked fares adding up to 40 per cent under various garbs, mainly fuel surcharge, and later even base fare. However, the real volcanic impact of the fast-rising ATF prices triggering a fare hike in the domestic skies began to unfold as passenger traffic fell nearly 11 per cent in the first six months of 2008. Then came the major showdown on June 1, 2008, when ATF prices based on very high crude prices (nearly $140 per barrel) were hiked sharply. This dealt such a serious blow to airlines that they took two steps: cut their schedules by 20 per cent and hiked fares disproportionately to make up for the previous ATF price hike as well, claiming it had not been fully neutralised. On September 1, 2008, the public sector oil marketing companies, which continue to have a monopolistic stranglehold on ATF supplies to all airlines in various Indian airports, cut the ATF prices by 16 per cent following a fall in crude prices below US $100 per barrel.

Between the latter part of 2004 and mid2008 there has been a complete reversal of the Indian aviation scenario. At one point of time, India was the new rising star in the world aviation horizon with domestic carriers making news everywhere. Today, they are again in the news for exactly the opposite reasons: they have either cancelled or postponed most delivery slots as the market in India has touched a new low.

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But no domestic carrier has dared to cut fares and there has been no notecable increase in passenger traffic either. Between the latter part of 2004 and mid-2008, there has been a complete reversal of the Indian aviation scenario. Earlier, it was all gung-ho. India was the new rising star in the world aviation scenario with domestic carriers making news everywhere. In many of the air shows abroad, Indian carriers made news with their large orders. Today, they are again in the news for exactly the opposite reasons: they have either cancelled or postponed most delivery slots as the market in India has touched a new low. One could argue that it is wrong for Indian domestic carriers to criticise and

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nies load on the final pricing of ATF besides the central government levies like excise duties, equivalent customs and the mindless rates of sales tax by various state governments on ATF uplift in their respective states have made the end-price prohibitive by any international standards. If the Cathay Pacific, Singapore Airlines, Qantas, etc, of the world were to pay the India-based ATF prices, they would have gone into liquidation long ago. Much before the Ministry of Civil Aviation and its Minister Praful Patel, holding independent charge, voiced concern over the totally distorted ATF prices in October 2007 and sought the abolition of the PSU oil companiesâ&#x20AC;&#x2122; monopoly and their exclusive right to supply ATF in various airports in India, the Naresh Chandra Committee set up by the previous NDA government on reforming the Indian aviation sector had sought abolition of that monopoly. In its two-part report, among other things, it had also recommended a common carrier principle for transporting and delivering ATF to aircraft in airports, opening up the sector to allow private sector refineries to supply ATF to airlines. In this connection both Reliance Industries Limited (RIL) and Essar had made presentations to the committee. Five years have elapsed and we are still nowhere near the abolition of the PSU oil companiesâ&#x20AC;&#x2122; monopoly. Though a beginning has been made in the new Hyderabad International Airport Limited (HIAL) and Bengaluru International Airport Limited (BIAL) where RIL has got the right to supply ATF to airlines, the situation remains very much the same in Delhi and Mumbai even though both are being developed by private sector GMR and GVK, respectively. The long and short of the story is that the PSU stranglehold must end and the government must also remove the uneconomical imposts on the final ATF pricing. There is no point in encouraging and supporting the aviation sector, especially airports both metro and non-metro, if the airlines which are the only users of it were to be killed on the ground due to very high operating costs. No investor will even look at India to develop air-

blame everything on high ATF prices while there were many other factors that also influenced their performance. That could be the case but who can take away the role of ATF considering that it accounts for 45 per cent of Indian carriersâ&#x20AC;&#x2122; operating cost as against less than 20 per cent globally and not more than 15.6 per cent, according to some members of the Association European Airlines (AEA). It may be surprising to know that domestic carriers in India pay 50 per cent more for the ATF uplift compared to foreign-going and foreign airlines for the same uplift from India. All those levies, imposts, taxes, refinery transfer pricing, marketing costs, etc, which the cash-starved PSU oil compa-

The Naresh Chandra Committee report had recommended a common carrier principle for transporting and delivering ATF to aircraft

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ports and already there is a delay in initiating the modernisation and upgrading of 35 non-metro airports as well as Chennai and Kolkata airports. While it is true that the delays so far had nothing to do with ATF, but with ATF taking its toll, by way of severe cuts in the schedules of domestic airlines and the subsequent fall in traffic, the profitability of the airports could be at stake. In all fairness to Praful Patel and his Ministry, they did argue that the “throughput charge” used by PSU oil companies, as the benchmark for initiating the ATF prices which is also used by AAI (Airports Authority of India) while awarding fuel supply contracts, is irrational. The Indian Oil Corporation (IOC) has always quoted high throughput charges to bag the contract and later passed on the extra burden on the airlines. This is because the AAI awarded fuel supply contracts to companies that promise the maximum throughput charge to it. Airlines told the Naresh Chandra Committee then and the Ministry of Civil Aviation now — and even the Prime Minister’s Office (PMO) in June 2008 — that the competition in ATF would bring down end-prices. They have also pushed for oil supply infrastructure to be converted into a common carrier so that more players can enter this business. The Petroleum and Natural Gas Regulatory Board (PNGRB), the statutory regulator for the oil and gas sector, has written to the Ministry of Civil Aviation to free aviation fuelling facilities at airports from the PSU stranglehold by allowing the use of the existing infrastructure by all players, including private companies. Taking a cue from the awards for new airports by the AAI at Hyderabad and Bengaluru for setting up aviation fuelling infrastructure under the common carrier principle or open access, the AAI should also be, simultaneously,

Domestic carriers pay 50 per cent more for the ATF uplift compared to foreigngoing and foreign airlines for the same uplift from India. All those levies, imposts, taxes, etc, which the cash-starved PSU oil companies load on the final pricing of ATF besides the central government levies and the sales tax by various state governments has made the end-price prohibitive by any international standards.

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directed to pursue extension of the similar principle at other airports. Fuelling infrastructure at most airports in India is totally with the PSU oil marketing companies and even if a private oil company secured a contract it was not in a position to deliver fuel to the aircraft as it was unable to find space! The lack of competition is one major reason for very high ATF prices in India apart from the irrational levies/taxes /marketing charges, etc. According to the Federation of Indian Airlines (FIA), a reduction in ATF prices by 60 per cent could lower the operational losses of Indian carriers sharply. While ATF prices account for 40 to 45 per cent of the various carriers’ operational expenses, the price of the very same ATF in India is at least 60 to 70 per cent higher than ATF sold in the international market. Take a look at the ATF pricing in India. It is based on import parity pricing. But strangely, the ATF supplied by Indian oil companies is not imported but made or refined from imported crude oil. Import duty on ATF is 20 per cent but import duty on crude is around five per cent after the government reduced customs duties on crude some months ago to save PSU oil companies from going under. Typically, motor spirit or petrol and ATF sold by PSU oil marketing companies subsidise critical petroleum products like kerosene and LPG besides related items. The oil companies continue to load 20 per cent customs duty on their Refinery Transfer Price (RTP). On this, oil companies load up to 45 per cent towards marketing margins and contingencies on the RTP. The central government levies an excise duty of eight per cent. On the resultant price, the state governments impose sales tax of anywhere between four per cent and 30 per cent. Effectively, this takes the ATF prices in India to

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nearly 70 per cent more than international benchmarks. For foreign airlines and foreign-going Indian carriers, no sales tax is levied by state governments as per an international agreement which is only for foreign airlines. The foreign-going Indian carriers have been added to it as otherwise they would become not only uncompetitive even before take-off from Mumbai or Delhi but also fold up before their first flight. The same logic is, however, not available to domestic carriers and, therefore, they are burdened. It is only recently that the government has allowed ATF to be traded in the Multi Commodity Exchange (MCX) and it also may permit futures. But which domestic carrier would dare to use hedging facilities when ATF prices which rose sharply along with crude prices has now fallen along with crude prices. Since there is no predictable trend for ATF, no one would dare to get into it. And in India, the logic has been completely turned on its head. There is no way people in India will travel across metros in buses. The railways may be making profits but they simply do not have the ability to absorb most air passengers. For instance, when the going was good for the LCCs and ATF prices were low, there was a definite shift from even short haul rail routes to airlines. Once the ATF prices rose and fares skyrocketed, most traffic on short and even medium-haul of airlines simply disappeared. They all went back to the railways, which is in no position to meet the demand. Getting railway tickets not as easy as earlier. So, we have overburdened the railways and starved the airlines simultaneously. When the ATF price dropped on September 1, 2008, no airline even bothered to consider a fare cut. This was because of the previous hikes’ cascading effect on airline finances. These issues were highlighted and a presentation made to Prime Minister Dr Manmohan Singh soon after the major ATF price hike

The Petroleum and Natural Gas Regulatory Board (PNGRB), the statutory regulator for the oil and gas sector, has written to the Ministry of Civil Aviation to free aviation fuelling facilities at airports from the PSU stranglehold by allowing the use of the existing infrastructure by all players, including private companies.

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in June 2008. According to very knowledgeable sources, some in the PMO apparently asked why airlines did not import ATF! The poor fellows did not even know that there is no provision for direct import of ATF under the rules. While almost everything under the sun is allowed to be imported freely under the Open General Licence (OGL), the PSU oil companies have, with their lobby in the government, managed to place ATF on the “Restricted List”. Thus, airlines even though they are actual users, cannot import ATF. As an actual user, the government can only levy countervailing duty. Thus, most other levies, including the inordinately high marketing expenses, RTP and sales tax, may not be loaded on the ATF pricing. There may be issues like importing ATF, storing it, transporting it to various airports, etc. Indeed, there are private refineries in the country which want to do all this. But the PSU oil companies would not let that happen. Just imagine if Indian carriers are allowed to follow the OGL import route based on actual-user principle, what a change it will bring about to the Indian aviation sector? That is not being allowed under the phoney pretext that aviation is a luxury that must be taxed. The state governments, which are earning nearly Rs 5,000 crore from sales tax levied on ATF, are the other big culprits. They want new airports in their state, and new airlines, including many foreign airlines, to connect their cities to make life easy for its people. However, the same state governments feel it is their duty to make life not only tough but even unlivable for the airlines. In the presentation to the Prime Minister, the Ministry of Civil Aviation went to the extent of branding ATF as the “villain of the story”. It pointed out that the contribution of ATF to the operating cost of airlines in India increased to 50 per cent from 35 per cent a year earlier. Globally, the average was between 20 and 25 per cent. ATF in India was not subsidised but used for cross-subsidising and was priced 65 to 70 per cent higher.

There is no point in encouraging and supporting the aviation sector, especially airports both metro and nonmetro, if the airlines which are the only users of it were to be killed on the ground due to very high operating costs

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S P E C I A L Photos: H. C. Tiwari

The smiles hide it all: Soon after ATF prices shot through the roof, Civil Aviation Minister Praful Patel (back to the camera) called a meeting of airlines top brass to discuss ways to tackle the situation. Among those seen in the picture are Vijay Mallya, Jeh Wadia, Naresh Goyal, Rahul Bhatia, Anita Khurana and others.

This was mainly because of the high base price fixed by oil companies. About 40 per cent taxes, levies, marketing costs, etc, are added to the base price of ATF. On an average, state sales tax of 25 per cent is imposed. For instance, the sales tax on ATF in Mumbai in one year alone was hiked from Rs 7,600 per kilolitre to Rs 13,725 per kilolitre or 81 per cent. This, when the Civil Aviation Minister was reported to have said that the traffic in the existing Chattrapati Shivaji airport would saturate earlier than anticipated and, therefore, the Navi Mumbai airport needed to be built immediately. The Prime Minister was told that the impact of high ATF prices had already begun. The first casualty was the withdrawal of connectivity to smaller cities and disappearance of budget travellers. Not only were the LCCs going out of business but the high prices even had an adverse impact on trade, tourism and economy resulting in loss of jobs. The Prime Minister set up a committee under the Chairmanship of Cabinet Secretary K M Chandrashekar and included, among others, the Aviation Secretary, Finance Secretary, the Director-General of Civil Aviation, etc. Significantly, Aviation Secretary Ashok Chawla has been shifted to the Finance Ministry as Secretary, Department of Economic Affairs. Will he be able to deliver justice now after having seen and initiated the problems of the aviG

ation industry before his switch over from Rajiv Gandhi Bhawan to North Block? The government has a very funny rule which says only Turbo-prop and smaller aircraft with less than 70 seat capacity can be given ATF at a uniform sales tax of four per cent as per a decision taken under the central sales tax rules where ATF supplied to smaller aircraft has been redefined as “Declared Goods” and attracts only four per cent sales tax. This was also meant to attract the regional airlines for which a separate policy was announced by the Ministry of Civil Aviation last year. Some of these regional airlines were supposed to start operations in the latter half of 2008. But there is no sign as even with four per cent sales tax, the ATF prices seems to be prohibitive to make any business sense for those wanting to launch regional airlines. The question that arises is: why does the government not extend the “Declared Goods” status to ATF sold to all types/sizes of aircraft? If it wishes it can always keep the General Aviation aircraft out of this which is meant for only rich businessmen and corporate houses which can pay for its executive travel. All this will make sense only if the government at the same time rationalises the excise duty structure on ATF — introducing specific rather than ad-valorem duty. O

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Uncertainty clouds the future R Krishnan

The good times are over and the kings of the good times have now been pushed to a corner. And the common man will have to wait for quite a while before he can start flying again. fter the US-led financial mess has engulfed the free market, including the fringes of India, serious questions are being asked by not just those who always opposed the concept of market over everyone but even those who were hesitant but not anymore. If their charge or confirmation of their suspicion is accepted and we also dump free market, then should we not question the great success claimed by the government that it was because of its efforts that the economy became so hot since it came to power in May 2004? And when anything becomes too hot, it is bound to melt, isn’t it? Yes. That a similar phenomenon has afflicted the Indian aviation sector after nearly four years of literally high flying is there for everyone to see particularly the new class of passengers who were enabled to take a ride in an airplane by Captain Gopinath’s Air Deccan (since extinguished) and other LCCs. So, what do the carrier owners do? While they continue to keep one foot on the door blocking the way for new entrants, they also continue to cry at the same time that it is simply impossible to continue in this business. The concept of cost-cutting they have adopted so far has kept their product offering virtually untouched except for some cosmetic changes. But then is not product-offering a cost guzzler! It is. What can they do when they have to compete with the mega-carriers of the world on international routes and need to seriously differentiate their product from the rest of the crowd in the domestic sector? When the going was fine all waxed eloquent about the success of the Indian aviation story. Some airlines that were startups placed huge orders for new aircraft. And when reality dawned, they not only cancelled — where possible — or postponed taking deliveries of their ordered planes, or switched options or even sought

the route of sale lease back to reduce the financial burden on them. Today, all of them have not only decided to stall or stagger their aircraft deliveries but cut 20 per cent of their schedule in the domestic sector. Air India has done the same on international routes as well. So, we had a cartel earlier which did not want new entrants. Now, we have the same cartel that has stopped flying to many stations they connected during the good times. Significantly, nearly a dozen airlines, which were waiting for the Ministry of Civil Aviation for No Objection Certificates (NOCs) to enable them to start scheduled operations — some on all-India basis while others for regional operations — have gained the green signal. Only some of the regional players were allowed to start airlines and even those with deep pockets were kept out because of fear of unnecessary competition which was masqueraded as lack of infrastructure support. The Ministry of Civil Aviation can always turn back and say, ‘were it not for the decision to keep out the new flock, there would have been a complete bloodbath today in the Indian aviation sector’. Certainly one can accept this reverse logic. But has it not at the same time killed the joy of above-average Indians wanting to fly? Why should anyone invest in expanding the Indian aviation infrastructure in terms of developing airports, ground handling, MRO (Maintenance Repair Overhaul), etc, when the probability of reaching the critical mass remains in doubt? Coming back to the Jets and Kingfishers and to some extent the weeping Air Indians, the situation has become so tough that at least the first two private airlines want to sell part of their equity to fund their survival. Addressing the Annual General Meeting (AGM) of Jet Airways, Chairman Naresh Goyal said he was in talks with well-known international funds to sell up to 10 per cent of his own stake in the

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For the Jets and Kingfishers and to some extent the weeping Air Indians, the situation has become so tough that at least the first two private airlines want to sell part of their equity to fund their survival. C

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company. It may be recalled that Goyal still owns 80 per cent stock of his company and sold 20 per cent through an IPO nearly four years ago when he offered a single Jet Airways share for Rs 1,150. After the repeated onslaught on the stock markets across the world, including India, Jet Airways stock dipped below Rs 400 at Rs 394.70 on the day of the AGM, September 20, 2008 in Mumbai. Naresh Goyal wanted to raise US $400 million (for aircraft acquisition and expansion) for the last two years but kept on postponing the decision because he was not able to get the right price. Today, the stock price has fallen to just about three times what Air Deccan touched during its peak. Notwithstanding the disclosure in the AGM that he was talking to global funds, Naresh Goyal cannot hope to get a deal that could have been better than what he could have got a year ago. Jet top executive Sudheer Raghavan has gone on record to say that Jet may now pause on its foreign expansion plan for some time to take stock. Though their claim earlier that nearly 50 per cent of Jet revenues would come from international operations is coming true, the earnings on the international operations have also not been good so far. Even the domestic sector is causing worry not just to Jet but to others as well. So, at the end of the day it is Naresh Goyal who is looking for a good buyer who can pay sustenance money to keep Jet Airways in the comfort zone. Considering the state of the Indian aviation industry, one does not know how many knights in shining armour are waiting to rescue the ailing airlines. In a lighter vein we can say that Air India wants to convert at least part of the hapless UPA government as its favourite knight to save it from extinction. But the story will be incomplete without reference to Kingfisher Airlines owned by Vijay Mallya, the King of Good Times. Mallya not only bought LCC Air Deccan to get to fly international routes earlier than the mandatory five years but in doing so he also accumulated a lot of unwanted baggage some of which had financial implications that is hurting him now. One hears of different versions of his accumulated losses. Some say it is about Rs 2,500 crore while others have stretched it to an incredible Rs 4,000 crore. Whatever the level of his accumulated losses, they are quite high by Indian standards and unless it was owned by the Government of India like Air India, the elbow room to manoeuvre has become difficult as Kingfisher is realising now. It is not going the whole hog as it had planned

earlier to connect various international stations from India. While it is staggering that, it is also delaying the deliveries of new Airbus aircraft. The carrier has postponed taking delivery of around 10 A320s and it is also looking for buyers to take some of its A340-500 which were to originally fly India-US non-stop. To top it all, Vijay Mallya wants his Airbus A380 sooner than even Airbus Industrie can deliver to capture some important markets like India-UK and India-US at one go instead of suffering pain in instalments. While Mallya rejected news of his wanting to place US $400 million worth unquoted Kingfisher stake to PEs like TPG Capital, the fact that he also wants to raise cheap finances or preferably debt in the global financial market has not been denied. Indeed, it is an even tougher battle for him since he is yet to connect even one-fourth the number of foreign stations that his arch rival Naresh Goyal has done since Jet started flying abroad in 2005. And international routes typically take nearly a year to develop and till then you have to suffer losses. So, the near term prospect for Mallya is no rosier than for Naresh Goyal. One thing is sure: whether they connect more stations abroad or not, the fact that they will continue to fly abroad to look for finance to keep their airlines airborne will not be denied by themselves. The outlook then — inbound or outbound — will continue to remain in the realm of uncertainty. With their valuations falling sharply, their task of raising funds cheap has become tougher with every cent’s rise in fuel prices. They will have to decide if these are, indeed, Good Times. (Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com) T

Vijay Mallya wants his Airbus A380 sooner than even Airbus Industrie can deliver, to capture some important markets like India-UK and India-US at one go instead of suffering pain in instalments. 0

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Pending implementation of the policy, a number of user-clients have expressed serious apprehension over the new Ground Handling policy. Take, for instance, the cargo movers Blue Dart and XPS of the Transport Corporation of India (TCI). These logistic companies say the new policy would reduce their efficiency.

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GROUND HANDLING Would the new Ground Handling policy that comes into effect from January 1, 2009 ease the situation at our metro and other airports? R Krishnan finds out that the costing of Ground Handling has been the main issue of contention for airlines and cargo and logistics companies.

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n just over two months from now, on January 1, 2009, the new Ground Handling policy for six metro airports — Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bengaluru —and 35 nonmetro airports will become operational. Following this, all self-handling by domestic airlines will be barred in metro airports and foreign carriers will also not be allowed to do self-handling. A similar policy also governs the nonmetro airports. Tenders were already issued by promoters/developers of the new Hyderabad and Bengaluru international airports, finalised and implemented. (GMR’s Delhi International

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Airport Limited (DIAL) has also invited bids and is reported to have received around two dozen responses that are being evaluated). HIAL (Hyderabad International Airport Limited) and BIAL (Bengaluru International Airport Limited) had appointed two new Ground Handling agents each for the two airports earlier in 2008. The bidding process for Mumbai International Airport Limited (MIAL) will also be initiated shortly. Kolkata and Chennai airports are being modernised by the state-owned Airports Authority of India (AAI). The AAI is finalising the parties with whom it will partner to provide Ground Handling services besides

SriLankan Airlines undertakes its own Ground Handling Services (GHS) at four airports in India handling cargo and baggage, security, cabin cleaning and aircraft push back operations ‘among others’ for its flights out of Chennai, Coimbatore, Goa and Trichy. The carrier claims this has increased its level of customer service and significantly cut the costs incurred in Ground Handling operations.

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Air India-SATS tie-up for six metros s we go to the press, we have been told that Air India has finally decided to tie up with Singapore Airport Terminal Services (SATS) to provide ground handling or ground support services in all the six metro airports in the country. It may be recalled that Air India and SATS entered into a 60:40 JV (joint venture) to provide ground handling services in Bengaluru International Airport Limited (BIAL) which was opened to public in May 2008. The same JV got into a different holding pattern of Air India with 51 per cent and SATS with 49 per cent to offer Ground Handling services at the GMR promoted and developed new Hyderabad International Airport Limited (HIAL) that was opened to the public in March 2008. Even as Air India had finalised and implemented these two JVs, it floated tenders for setting Ground Handling JVs in numerous other airports, including the four main metros — Delhi, Mumbai, Kolkata and Chennai — besides other non-metros. The proposed JVs were to be on the basis of 50:50 holdings by each partner. After going through the exercise and bids, Air India has finally chosen SATS as its partner to provide Ground Handling at virtually all airports; i.e. on all-India basis. The Air India management has already sent its decision to the Ministry of Civil Aviation to accord necessary “official approval”. A significant aspect of the JV will be that even those that were set up

prior to the new request to the Ministry will have a clause that will ensure an “equalisation of equity” say 50-50 over a seven-year lifespan of the JV so that Air India and SATS become equal partners. By ensuring 50:50 holdings, at least it has been ensured that the new JV company that will provide Ground handling services at various airports in the country, primarily in the six metros will become a non-government company. Since technically it is not majorityowned by Air India, all the associated problems that confront governmentowned companies bringing with it the breathing over the neck by the likes of CVC, CAG, MOCA, etc will cease — hopefully. The JV can then truly work as a professional company as one sees it doing the job in Changi, Singapore. But looking back it was indeed a tragic waste of time and energy to have denied Indian Airlines to set up the same JV with the same SATS in 2003-04. Had it happened then it would have been working in full gear today. Even if the merger had taken place as scheduled in August 2007, it would have made no difference to that JV because the name Indian would have been replaced by Air India. After all, the National Aviation Company of India Limited (NACIL) took over the assets and liabilities of both Air India and Indian. Air India is only a brand that has been retained as it was always deemed to be the country’s flag carrier.

the JV (Joint Venture) led by Air India. Incidentally, Air India is currently evaluating the list of invited parties with whom it will tie up to provide Ground Handling Services (GHS) in Delhi, Mumbai and other airports. Air India has already tied up with SATS (Singapore Airport Terminal Services) to provide Ground Handling Services in Hyderabad and Bengaluru airports. While MenziesBobba provide services in Hyderabad, a JV of Globe Ground (JV between Lufthansa and Bird Group) is providing Ground Handling services in Bengaluru. The combined investment of Air India JV is nearly Rs 100 crore; so is the investment of other GH service providers. Their C

contract for Hyderabad and Bengaluru is for seven years. As per the new policy issued in the latter half of 2007, there will be three parties to provide these services. They are: (i) Air India-led JV; (ii) A JV which wins the bid to provide Ground Handling in the metro airports; and, (iii) a JV promoted by the developer of the airport itself. As for the AAI (Airports Authority of India) led nonmetro airports, it will be the AAI-led JV and another led by Air India. The Ground Handing job would include basic activities: passenger handling, ramp handling, loading and unloading of cargo at airports, etc. Pending implementation of the policy, a number of user-clients have expressed serious apprehension over the new policy. Take, for instance, the cargo movers Blue Dart and XPS of the Transport Corporation of India (TCI). These logistic companies say, the new policy would reduce their effiO

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ciency: “Currently airlines either outsource the Ground Handling work or undertake it on their own. So, it is easy to communicate. Once the new policy comes into play, the Ground Handling agency appointed would report directly to the AAI or the airport operator and the client seeking Ground Handling services will have no control whatsoever,” a spokesperson commented. Soon after the new GH (Ground Handling) policy was announced and gazetted, the Government of India announced a new FDI (Forign Direct Investment) policy for GH services which provides for 74 per cent FDI in GH services on the automatic route, subject to sectoral regulations and security clearances. NRIs would, however, be allowed 100 per cent investment through the automatic route. The National Aviation Company of India Limited (NACIL), the principal company of brand Air India floated a tender calling for bids “by invitation” only to form a JV to provide GH services at Delhi and Mumbai and other airports in future. The bids were called for in March 2008 and were due in April 2008 and are now being evaluated by Air India’s ground support division, one of the six separate Special Business Units (SBU) under NACIL. A few of the requirements listed in the tender included that the companies that bid for the job have a minimum experience of not less than 10 years, provide GH services in not less than five major airports, have not less than 15 client airlines and handle not less than 15,000 flights annually at any single airport. For instance, Air India itself handles 36,000 and 32,000 flights annually at Mumbai and Delhi, respectively. Air India has 580 and

When the GMR Hyderabad International Airport opened in March 2008, there were protests by private carriers like SpiceJet, IndiGo, etc at the exorbitant rates charged by the Ground Handling service providers. It was then stated that the Ground Handling-JVs had an agreement with the promoter GMR to share 25 per cent of their revenue earned from Ground Handling.

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340 motorised equipment in these two airports, maintenance and other facilities spread over 30,000 square metre and 25,000 square metre, manpower of 38,00 and 29,00 and handle 26 and 20 airlines, respectively, in the airports of these two cities. So, it is possible that the same SATS may tie up with Air India or the latter may choose an entirely new partner. What is interesting to note is that the new tender floated by Air India, and currently under evaluation, clearly states that the JV will be a 50:50 venture and the two partners will rotate the CEO’s post and will have three members each on the board of the company that will be formed once the selection process is finalised. The concession would be for a period of 10 years or whatever is stipulated by the AAI — whichever is less. In contrast, the JV formed between Air India and SATS (Singapore Airport Terminal Services) for Bengaluru International Airport was 60:40 with 60 in favour of Air India and 40 in favour of SATS. For Hyderabad International Airport, the Air India-SATS is reportedly 51:49 venture. Holding 51 per cent and above by Air India or a majority has a different connotation as it would mean applicability of CVC (Central Vigilance Commission), Comptroller and Auditor General of India (CAG) regulations, which will not be so if its holding was below 51 per cent in the said JV. The Union Government has formally approved the modernisation of Kolkata and Chennai airports by the AAI. The same GH principle will apply in these airports as well. A year ago, the AAI as an advance action, floated tenders to provide GH services in 35 non-metro airports (26 to

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start with) and received 18 responses. For these non-metro airports, the AAI issued a separate gazette notification. As for Kolkata and Chennai airports, even though the AAI is modernising these, the GH services job will be governed by the gazette notification issued by the DGCA which separated the six metro airports — Delhi, Mumbai, Kolkata, Chennai, Bengaluru and Hyderabad — from 35 non-metro airports. Air India has taken advance action by floating bids and evaluating them now. As for AAI bids, at least four bids have been received for Kolkata and Chennai airports. The parties are Menzies, Swissport, SATS and Dnata. Air India last year earned Rs 1,000 crore from GH services. As on date, SriLankan Airlines undertakes its own GH services at four airports in India. SriLankan handles cargo and baggage, security, cabin cleaning and aircraft push back operations among others for its flights out of Chennai, Coimbatore, Goa and Trichy. SriLankan operates 100 flights a week to India of which 33 fly to these four cities. The carrier claims this has increased its level of customer service and significantly cut the costs incurred in GH operations. The costing of GH has been the main issue of contention for the airlines and cargo and logistics companies following the transition to the new restrictive policy of allowing only three handlers in metro airports and no self-handling after January 2009. When the GMR HIAL opened in March 2008, there were protests by private carriers like SpiceJet, IndiGo, etc at the exorbitant rates charged by the GH service providers. It was then stated that the GH-JVs had an agreement with the promoter GMR to share 25 per cent of their revenue earned from GH. After the protest and the intervention of the Ministry of Civil Aviation, a new agreement was entered into between GMR and the two JVs —AI-SATS and MenziesBobba — by which they were to share only five per cent of their revenue with GMR. Domestic carriers have complained that an outsourced GH service compared to selfhandling was more than twice or thrice their original rate. Air India in its tender for forming new JV for Delhi and Mumbai and other airports has also stated that the JV will have to share part of the revenue with the airport developer.

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The clients making use of the GH services have complained that it will increase their operation costs. XPS states that it now pays the handler a service fee for undertaking the work and thus increasing the costs which was not the case when they were self-handling or using their own parties. Earlier, it said, they could pay once every 15 days for the consignment. Now, one has to pay on cash-and-carry basis which increases the cash requirement. XPS expects that escalating GH costs would contribute 10 to 15 per cent rise in the total cost of transporting cargo by air over the next four years. Blue Dart noted that the new policy would increase the turnaround time of its aircraft. Presently, its own trained team ensures that turnaround happens in 30 minutes flat but common GH service providers will take much longer as they will have to attend to other customer airline/cargo airline as well. Private carriers in the country have complained that the government’s decision to not allow self-handling will increase their costs by four to seven times. It will specially impact the low-cost carriers, which believe in quick turnaround and for this reason only they don’t even carry eatables, a hallmark of legacy carriers like Jet Airways, Kingfisher and Air India. Therefore, the additional cost will be passed on to

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customer-passengers. For instance, Kochi airport used to charge for GH services (provided by Air India all these years and even now) Rs 70,000 per flight, which after negotiations was reduced to Rs 35,000 per flight. Had they been doing self-handling, these airlines said they would have done it for around Rs 7,000 per flight. Now these airlines are insisting that as a compromise formula, they be allowed to at least provide GH services in the terminal side of the airport. The back-end GH services may be handled after the terminal to the aircraft and vice versa may be done by the JV of Air India, AAI and the successful bidder JV. This way by providing in-terminal GH services, the airlines will be able to carry on their face-to-face interaction with their passengers and thus differentiate their product vis-a-vis other competing airlines on the domestic sector. According to an International Air

According to an International Air Transport Association (IATA) report of last year, India's airport charges are the second highest among Asian and Gulf airports and next only to Hong Kong. IATA noted (quoting July 2007 figures) that international flights pay 33 per cent more than domestic flights at the same airport in India even as airports of other countries refrain from imposing differential tariff.

in KLIA. The business model of international airports are so structured that nonaeronautical revenues subsidise the aeronautical charges. The IATA said that India was imposing excessive over-flight charges at its seven profitable airports to cross-subsidise non-profitable airports. The International Civil Aviation Organisation (ICAO) charges that India’s tariffs were not compliant with its rules. However, with progressive privatisation of existing airports, this differential may go. But what one has seen is that it has become worse: airlines complain as developers in Delhi and Mumbai have to raise huge amounts to modernise the airports with Ground Handling providing one of the regular sources of revenue. Perhaps, once Kolkata and Chennai airport also get modernised by the AAI, a true picture would emerge for the metro airports at least. Airbus Industrie COO, John Leahy has stated that the combined losses of all airlines in the current calendar year could be as high as US $40 billion. He has stated that “India is among the weakest airlines market and the carriers, there are likely to cancel or delay plane contracts over the next 12 months.” It may be pointed out here that Air India has already put in cold storage its plans to acquire another 150 aircraft beginning 2012. Kingfisher Airlines has actually begun to cut back even deliveries of firm orders placed earlier and it is also looking for customers to buy its slots. In fiscal 2007-08, Air India reported a loss of Rs 2,166 crore — its highest ever in history. Jet Airways also made a huge loss. Air Deccan incurred a loss of Rs 832 crore. The less said about GoAir, Spice, IndiGo, etc the better. The current fiscal (2008-09) is going to be the worst in India’s as well as the aviation history of other countries. This will impact investment in airport infrastructure. In the first round of airline liberalisation in India in 1993-94, many came in and the infrastructure got stretched. After many of them died leaving only Jet and Sahara, there were “reportedly” excess parking bays and flight slots available. After the second round of airline liberalisation from 2003, the race for space at airports and flight slots again became very competitive. This coincided with the government policy to modernise and expand airport infrastructure. But should the latest round of bad news continue, it could once again spell a lull period and may literally lead to flight of capital to other infrastructure areas like roads, bridges, urban renewal, etc.

Transport Association (IATA) report of last year, India’s airport charges are the second highest among Asian and Gulf airports and next only to Hong Kong. IATA noted (quoting July 2007 figures) that international flights pay 33 per cent more than domestic flights at the same airport in India, even as airports of other countries refrain from imposing differential tariff. Airport charges include landing, navigational, route, facilitation and parking charges. For instance, as per statistics for mid-2007, while KLIA (Kuala Lumpur International Airport) would charge US $203 for handling an A320 for a three-hour turnaround, an Indian airport would charge four times more at US $1060 for the same facility. A long haul flight of a Boeing 777 would have airlines paying US $2,331 in India against US $753 C

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The Indian low-cost dream Capt G R Gopinath

The low-cost model can never die. It is not just about cutting costs but about innovations, extreme efficiency and high asset utilisation. What is most important is that the model stimulates market demand by targeting an inclusive consumer base.

he aviation industry like other businesses has been impacted by the global oil crisis and strong inflationary trends. What is ironic, however, are the obituaries lamenting the end of the “LCC era” in Indian aviation. If anything, it is the low-cost model in any business, not the high-end or luxury model which is advantageously positioned and poised to withstand inflationary pressures and economic crisis that precipitate from time to time. The situation in the country has been challenging for airlines in the last few years on account of the most expensive ATF (Aviation Turbine Fuel) in the world which makes up 40-45 per cent of ticket costs as compared to 35 per cent which is the global standard. This, coupled with the poor and expensive infrastructure, leads to high fuel wastage and diminished asset utilisation. The present day scenario in the aviation industry is undoubtedly tough for everyone but it’s particularly tougher for Full Service Airlines (FSA) despite adopt-

ing multiple cost-cutting measures. In other businesses too, whether it is retail, automobiles or the telecom industry it is the low-cost product-service mix which is rising to the challenge, winning customers while the premium brands bear the brunt. Be it Nano or Reliance Infocom or Pantaloon’s Big Bazaar it is the enterprise which brings cost and asset efficiency and compete through innovations and cutting edge technology to the last rupee, that succeed in passing on the benefit to the consumer, expanding the consumer reach and yet having a relatively healthier bottom line The low-cost business model is not just about cutting costs by saving some fuel or a few overhead expenses; fundamentally, the low-cost model is all about innovations, extreme efficiency, very high asset utilisation and stimulating market demand by targeting an inclusive consumer base. The basic philosophy is not very different from that of a self-service Udupi restaurant in stark contrast to a fullservice air-conditioned restaurant. While a

T The government should stop judging the civil aviation industry purely in terms of sales tax and central tax returns. C

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plush five-star hotel can charge much more per customer than a simple Udupi, it will lose out on turnaround and footfalls compared to a standalone Udupi restaurant where a customer can’t linger beyond his/her meal. It is not to say which business model is superior rather that the low-cost model, by positioning the product and service for a larger consumer base stretches the utility of manpower and resources at its disposal ensuring higher asset utilisation and efficiency through unrelenting innovation which brings down the cost base. A low-cost airline works to achieve high-density seating (by flying 180 passengers in a single-class configuration on an Airbus 320 aircraft while a Full Service Airlines (FSA) offers 145 seats on the same aircraft), lower ticket distribution costs (2030 per cent lower than full-service airlines) through intensive technology interface with the end-consumer eliminating the need for travel agents and expensive GDS systems and by tapping avenues for ancillary revenue (for example, sale of food or travel insurance, etc) which incidentally converts costs into revenue. The obvious implication is that when a business wants to cater to the bottom of the consumer pyramid, the business model would perforce render itself to a “self service” niche. The low-cost model eliminates the need for frills and middlemen ensuring not just increased consumer access, higher aircraft utilisation and quick turnaround (based on innovations and intensive technology engagement) but also a lower cost base for the business resulting in lower fares for the consumer. In the long run, while low-cost airlines can strengthen their cost efficiency in various ways, full service airlines can’t because their business model does not allow that. In the aviation industry, like in the

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hotel industry, perishable inventory is managed through a combination of revenue, yields and loads. It’s the optimisation of these three factors, which helps to fill planes with passengers and realise higher revenues. In 2002, a Delhi-Bangalore air ticket on all existing legacy airlines — Jet, Sahara or Indian Airlines, for example, cost around Rs 12,000. When Deccan was launched in 2003, we needed to realise Rs 4,000 per seat at 80 per cent occupancy to make a profit. Our pricing policy was to offer initial bookings beginning at Re one up to Rs 10,000 through the ‘Book early, pay less” mechanism. At the time the consumer shift was not complete because of excess capacity in the industry and we fell short of Rs 400 per seat (approximately) for reaching break even but in the process we succeeded in achieving high load factors, which continually drove up the market demand for air travel. Even today, despite oil prices having gone up four times and salaries and other expenditure having increased three times, low-cost airlines such as Deccan or Spicejet offer fares on average at Rs 6,500 - Rs 6,800 and need to achieve an average of only Rs 1,000 - Rs 1,500 additional on each seat at 80 per cent occupancy levels to make profit. It is no surprise that even in the face of an economic slowdown the low-cost airline model continues to be highly competitive and viable. While airlines are grappling with escalating fuel costs and losses they have unfortunately put themselves in a vicious cycle by resorting to fare hikes and cutting capacity, which has further brought down occupancy creating the classic “Hobson’s Choice.” The move has not helped airlines combat fuel prices or contain the red ink on their balance sheets. The real impact, however, is visible in the entry-level fares

It’s time policy-makers acknowledged the intangible and collateral benefits of a robust civil aviation industry in promoting equitable growth opportunities. C

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of low-cost airlines which are now barely distinguishable from that of full service airlines. If a Jet Airways economy ticket and a SpiceJet ticket on the same sector are both priced at Rs 2,900 the obvious consumer shift will be in favour of FSA Economy Class. The paradox in the situation is that both LCCs and FSAs are trying to achieve revenues through higher fares albeit lower loads. Reducing aircraft capacity is the easier choice for airlines as compared to stimulating the market. The flipside of this option is increased costs and reduced passenger carriage. The implication is serious and far-reaching for the industry. If the market base does not expand, airlines will ultimately have to resort to cannibalising on each other’s consumer base, which will impede the growth and sustainability of the entire industry. While it is true that the government will also have to play an active role in bailing the aviation industry out of the present crisis, airlines can’t afford to sit back and wait to be hand-held. Inflationary pressures brought on by a global oil crisis or recessions have been recurring since the 1970s. Great companies such as Toyota, Dell, Wal-Mart, Ryan Air have consistently overcome the challenges by increasing their productivity, being relentlessly innovative and staying ahead of the technology curve. At Dell Inc productivity is a strategic weapon: the company constantly improves productivity levels by three per cent on an average every year. Ryan Air, Europe’s largest low-cost airline, has been enjoying the highest net margin of 20-22 per cent, for the last few years. Its average revenue per seat is €39 while the average revenue per seat for British Airways is €247. Clearly, the airline with the lowest revenue per seat has the highest margin, and is the world’s most profitable airline. The American retail giant Wal-Mart is a classic example: 55 years ago Sam Walton had adopted the low- cost model to transform his ‘Mom and Pop’ store into the biggest business in the world. Today, Wal-Mart’s annual net profit ($ 35 bn in 2006-07) is larger than the turnover of some of the biggest companies in the Fortune 500 list, including Intel. This says something for the efficacy and universality of a cost-efficient and inclusive business model. That said, although the next 1-2 years may be turbulent for Indian aviation, airlines should not take the easier option of hiking fares and cutting operations as that will prove counter-productive. Charging higher fares is a double-edged sword that will not only make people shy away from air travel, bringing down airline loads further and leading to C

From our files: Air Deccan made air travel easy for the common Indian.

higher losses but will also shrink the consumer base in the long run. Under the circumstances, airlines have no choice but to ride the storm. They will need to work on their culture and core competencies to proactively reduce costs and drive up efficiency. The way forward for the aviation industry should be to focus on increased occupancy, which will help cushion the impact of rising costs by driving up volumes to offset the cost margin that needs to be realised per seat. If the aviation industry is to recover from the present nadir it is absolutely critical that airlines focus on increased occupancy and continue stimulating market demand. The government should stop judging the civil aviation industry purely in terms of sales tax and central tax returns. It’s time policy-makers acknowledged the intangible and collateral benefits of a robust civil aviation industry in promoting equitable growth opportunities and protecting the country against the pitfalls of a dual economy. Civil aviation is the bulwark of a progressive economy and should be recognised for its immeasurable contribution in helping build a physically and emotionally integrated society. ATF prices in India are 60 per cent higher than global prices, Indian airports are inefficient leading to wastages but are expensive and monopolistic, and there are as yet no low-cost terminals or alternate low-cost airports anywhere in the country. Clearly, the need of the hour is for the government to join hands with the civil aviation industry, which is in deep crisis, and other stakeholders to make civil aviation an integral part of India’s economic planning and growth. (The writer founded Air Deccan that later merged with Kingfisher Airlines. He is the pioneer of the low-cost model in the country and is now ready to start an integrated cargo business). T

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The way forward for the aviation industry should be to focus on increased occupancy, which will help cushion the impact of rising costs by driving up volumes to offset the cost margin that needs to be realised per seat. 0

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DELHI AIRPORT hen the third runway at Delhi's Indira Gandhi International airport (DIAL) was inaugurated at a cracking function some two-and-a half months ago, it wasn’t the runway that made news. It was the stray dog that managed to scamper

onto the runway minutes before an Air India 777 was to land on the newly-laid 4430 m runway - one of the longest in Asia built to Code F standards. The runway is capable of handling new generation large aircraft such as the Airbus A380 and is equipped with CAT IIIB Instrument Landing System (ILS) at both ends allowing compatible aircraft to land

Battling against — sometimes — insurmountable odds, the GMR group is going ahead with its plans to make the refurbished and upgraded Delhi International Airport 'an experience' that any traveller would like to cherish. The magic could start happening in 18 months from now. Keep watching this space…

Sweating for the

Delhi experience!

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“We will be in the premiership!” Gavin Mckechnie, Head of Commercial, on the exciting future. ust because something works in Heathrow or Schipol or in Changi doesn’t mean the same will work in Delhi. So, for me that’s the exciting part of it. Also because the airports are in, what I would call, a rudimentary stage. If you look at the passenger terminal buildings we have just got now even the new ones at Hyderabad and Bengaluru are really nice, really good but I think there’s so much more we can still do in both of these airports. What we have got here which the customer offer as they go through the Passenger Terminal Building (PTB) is pretty basic. So, the opportunity for us to make it better is just immense. I think in Bengaluru, we can probably make some room to move some of their retail to get some more space because it’s crushed up very much against the gate and in Hyderabad it’s a kind of dissipated — maybe there’s a little bit more density. So there are a few things you can do to make it a little bit different but that doesn't take away from the fact those are huge leaps forward from what was originally here. And if you look at what’s here in Delhi at the moment, it’s improved a heck of a lot in the last five months but the leap we are going to make when

even when the visibility is as low as 50 m. Bit it was the stray dog that ran away with the honours. This is just one of the sundry bits of bad press that the GMR group-led Delhi International Airport Ltd (DIAL) has faced in the two years since it took over the operation of the airport. The highlight was, of course, the face-off between Civil Aviation Minister Praful Patel and Planning Commission ViceChairman Montek Singh Ahluwalia - a consequence of Ahluwalia going to see off a friend one fine morning and howling that the airport was below par. He called a meeting with GMR officials and an angry Patel reacted stating that the airport was in the making and asking for patience. Patriarch G M Rao is baffled at the slew of negative reporting. “We have C

we open T-1D - it’s going to be quite a significant leap and when we open T-3 its going to be a quantum leap in what we are going to provide for the customer. I think most people take Changi as the benchmark. If you look at Bengaluru and Hyderabad they have moved away from top of division four to the top of the Indian League. We (Delhi) will be top of the premiership. We will be top of the best. We will be out there with the Changis and whatever. We may not be there bang straightaway but we’ll create and refine as we go further on, but we will be up in that top premiership. We will be in the top league and then we will gradually move up to the top league. So, we will be up there with the Changis, the Incheons, the KLs, the Heathrows in terms of the passenger experience and the offer that's available to them.

We will be top of the best. We will be out there with the Changis and whatever. We may not be there bang straightaway but we’ll create and refine as we go further on.

completely cleaned the international terminal. We are building a new terminal (1D) that was not part of the original agreement only to make for a better passenger experience, but people have to realize that sometimes there can be inconviniences because we are working to recreate while running an airport.” Things have considerably cooled down at the international section of the airport since Terminal 2 was completely altered and refurbished with CUTE, easy access to the gates, larger immigration counters and enhanced F&B and duty free opportunities some months back. The real test, though, will come when the fog descends this winter and the flights stack up creating a huge mess within and outside the airport. We’ll have to wait a few months to see how well they are prepared and how they cope with it. H

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“Dynamic and real-time” Andrew Harrison, COO-Operations, on the control mechanism that will operate at T3. hen I started the Hyderabad project, the AOCC (Airport Operations Control Centre) was simply defined as the control centre and it was an empty room. Nobody knew what it would do, how it would work, what should be its functions, what should be the equipment that goes in there, who would supply it and how we would train our people to operate it. So, I thought of a blank sheet as the room and even basics such as which way they would face. The concept was that you have this glass area and they look out of the window to control all the activity. But, of course, you have only limited field of vision, so that’s not the solution; the solution is technology. So, the AOCC

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Harrison (right) with Praful Patel and G M Rao.

IGI’s AOCC.

you saw in Hyderabad is a mini version of what you will see in Delhi. How big will the AOCC be in Delhi? Well, it depends on two things. One, primarily how much automation do we have in Delhi? In T-3 (the new terminal that will be ready in 2010), the level of automation will be higher than what we have in Hyderabad. So, when a light system

goes out, an escalator switches off or trips for any reason, they will receive an automatic response — what we call the Building Automated System (BAS) and that helps us to manage with one person instead of three. Second, we have a much larger area to monitor and survey than Hyderabad has, so naturally there will be more people. The total strength of Hyderabad AOCC is about 56 people in all. Here, in Delhi, we are expecting it to be a total of about 90 - 110 people. Well, the current AOCC at any given time has about seven people in it. For the new AOCC, which will cover the whole of T-3 I will expect that at any one time we may have something like 25-35 people in it because I am also looking for some efficiency. Just because we have gone up in scale and size doesn’t mean that people multiply. (On the airside) The AOCC decides which parking bay to assign the aircraft and we have a communication tool that goes out to the ATC to let them know what is the plan for the day. It’s a very dynamic plan because it changes if there are delays or changes in aircraft. In many other airports, in different parts of the world, we have what we call an apron control which speaks to the pilots to guide them to their parking positions but in India the current rules don’t permit that and in fairness it’s not really necessary. It’s better to limit the number of communication. Yes, essentially you have an aerodrome controller and the tower controller that guides the aircraft for landing, then he asks him to switch over to the ground frequency and the ground controller then tells him, ’Okay. Exit. You are now on taxiway Charlie. Your parking bay is 51.’ The ground controller is in the tower, we give it (the parking bay) to them in advance. He has the screen and he can

say, ’Okay for this SpiceJet at 12. This is his parking bay.’ This work is very much aeronautical because what we do is look at resource allocation. We look at what should be the parking bays for best efficiency. It’s absolutely dynamic. I had a suggestion for Dubai (Airports Authority) when I was talking to them in a meeting. You will find Emirates staff walking through the duty-free shouting for destinations…I never hear them shout for New York passengers or Toronto passengers, why? Because we are bigger shoppers than passengers to those destinations. So, logically why don’t you park the aircraft nearer to the duty free shops? I guarantee you check this anytime you fly through Dubai if you are in a Hyderabad or a Delhi flight you will be either in Gate 1, 2 or 3 or Gate number 57 or 58 — always at the ends. I said to Emirates: ’if we are providing you with more income, why don’t you park us next to the dutyfree shops because then we will spend longer time there and we have a shorter distance to get to the aircraft and so we are not going to delay you.’ Well, they gave many reasons for why that happens. I understand, but in fairness I don’t understand their product as well as they do so there might be very valid reasons why that’s not done. But from an airport operator’s perspective, it seems to be a logical thing to do and this is the type of dynamic management that we would like to get ourselves into particularly when we get into T-3. I will give you another very good example. Munich has an airports operations control centre. They work with Lufthansa to check how many passengers are coming on this inbound flight from Vienna who are transferring to Delhi. If the number is very high, what they will do is park the Vienna flight next to the Delhi flight and then they park an x-ray van in between the two flights so the bags come off there through the x-ray van onto the next flight…very dynamic, real time dynamic and what that allows them to do is reduce the minimum connecting time.

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Designed in consultation with Mott McDonald, a leading management, engineering and development consultancy and HOK, world renowned airport architects, Terminal 3 would feature more than 75 aerobridges and 20 remote parking bays for passenger embarkation and disembarkation. It is targeted that 90 per cent of all passenger traffic at T-3 would be handled via aerobridges, of which nine of these aerobridges would be compatible for the Airbus A380.

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But that’s something DIAL’s affable head of media, Arun Arora, points out, isn’t too much of a bother. “We are constantly evaluating every possibility and preparing for it. His colleague and DIAL’s resident director, Narayan Rao meanwhile isn’t even thinking about the fog or its consequences on the airport. For him, it’s a life and death issue to keep the wheels moving at the gargantuan construction site T-4, the new integrated terminal that is coming up adjacent to the new runway and the present Terminal 2. “It’s a very tough deadline, but we have an agreement and we have to honour it,” he says. That’s something that worries B S Shantaraju, DIAL’s CEO (Development) and he is there shuttling between Udaan Bhawan, DIAL’s headquarters near the domestic terminal, and the two major construction sites each morning. And when he is in Delhi, Kiran Kumar Grandhi, the patriarch’s younger son, holds impromptu meetings that stretch late into the night to review operations to ensure that they can open just months before the Commonwealth Games in Delhi in 2010. By then, the Metro would seamlessly transfer you to the airport from downtown Delhi in under 35 minutes and you will be spoilt for choices on how to get to the airport. Take the link road that zips straight into the terminal, the tube or luxury coaches from the city. But that’s still two years away. “Actually I can guarantee you that N

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our objective is that by 2011- 2012 Delhi must be one of the top 10 airports in the world. Also, we want to make Delhi a choice for people. Today, nobody picks Delhi as a choice as a stopover en-route from A to B. For that people pick Dubai, people pick Changi, people pick Kuala Lumpur. I want them to pick Delhi. I want them to say I am going to connect through Delhi,” says Andrew Harrison, the Chief Operating Officer (Operations) who has moved to Delhi after a long stint at Hyderabad. Designed in consultation with Mott McDonald, a leading management, engineering and development consultancy and HOK, world renowned airport architects, Terminal 3 would feature more than 75 aerobridges and 20 remote parking bays for passenger embarkation and disembarkation. It is targeted that 90 per cent of all passenger traffic at T-3 would be handled via aerobridges, of which nine of these aerobridges would be compatible for the Airbus A380. O

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The refurbished check-in counters at Terminal 2.

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The total capital expenditure programme of the first phase till year 2010 is estimated at about Rs 8,900 crore. This is expected to be funded by debt and equity in the ratio of 1:25:1 comprising equity of about Rs 3,950 crore and debt of Rs 4,940 crore. The rupee component of the debt amounts to Rs 3,650 crore and ECB component of US $300 million has been raised. The deal has been syndicated by ICICI Bank Ltd. In many cases, both Delhi and Mumbai, particularly Delhi, haven’t had it easy. They had to contend with the formidable reserves of the Airports Authority of India (AAI) employees who viewed the modernisation more as privatisation of their crown jewels. They didn’t like it and there has been much opposition. Neither was their cause helped by a series of eerie accidents that have plagued Delhi airport. One employee of Air Deccan died in a mysterious hit-and-run in the airside, a senior politician narrowly missed being injured by a hit and another employee was also killed in an accident. Critics claim that it is “poor management”, DIAL refutes that charge. Their argument is that traffic has grown exponentially since they took over and they have managed the transfer with great responsibility. The bad press continued when a couple of months back a bus killed a passenger outside the terminal. DIAL was blamed but as Arun Arora said: “we have no control over that area, we don’t control that traffic.” If all that wasn’t enough, there was talk in-between of a spanking new airport in Behenji’s Greater Noida. Mayawati wanted an airport and the centre was doing a double-take to offer her own. GMR threatened to go court, but fortunately for them Mayawati moved away from the UPA and Praful Patel when asked about Jewar (Greater

Both Delhi and Mumbai, particularly Delhi, haven’t had it easy. They had to contend with the formidable reserves of the Airports Authority of India (AAI) employees who viewed the modernisation more as privatisation of their crown jewels. They didn’t like it and there has been much opposition. Neither was their cause helped by a series of eerie accidents that have plagued Delhi airport.

Noida) innocently asks, “Where is it?” There were also issues raised about the manner in which the real estate (over 250 acres) was being leveraged. As a consequence, the issue went round and round from proposition one to proposition two to a final consensus where the core objective from many points of view was that “GMR shouldn’t run away with the moolah”. G M Rao laughs at such assessments: “we want a world class airport and we have sunk in a lot of money. The objective is an airport we can be proud of, making profits, yes. But that’s secondary.” No wonder his head of commercial, Gavin Mckechnie calls it the Delhi experience: “we will definitely give you an experience that will be second to none but it will be a Delhi experience. Our people have been to Changi, Heathrow (to look at T-5), Macau, Hong Kong, Beijing… they are looking at everything that’s a brand mover and compare and say, ‘Let’s bring it back’. I tell them we want people to know they are in India, they are in Delhi, but for all the right reasons. You can be in the middle of the airport and you are looking and saying, ‘Where am I? I could be anywhere you know…’ There are few iconic airports… you think, oh yes! I understand I am in Charles De Gaulle because its got a big glass roof or whatever …we want people to have the Delhi experience.” And to it adds Harrison who believes Delhi will be the hub that everyone yearns for: a significant number of people are actually happy with a stopover for two reasons. One, it breaks up the journey into two; and, second it gives them an opportunity to experience something different through that journey. Another 18 months for the experience to unfold. Not too far in the future really! O

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Bruno Frentzel, Senior Vice President, Application Services on SITA in India and its commitment towards development of Indian Aviation.

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: Please briefly outline SITA’s recent, current and future strategies for India.

: India has been identified as emerging business destination within SITA, where we are directly investing heavily through increase in manpower and presence and indirectly through partners. SITA’s current and future strategies are aligned with our commitment to play a critical role in the development of the Indian aviation sector. SITA’s presence in India for the last four decades is testimony to our commitment to extend best-in-class IT solutions and services to airports, airlines and government in India where we have been witnessing exponential business growth. SITA has been actively involved with the air transport community in India by being a trusted partner to airlines, airports and the many related air transport organisations. The journey has been very enriching and gives each of us in SITA a great sense of profound pride. SITA has all along been providing Communication and application services to almost all airlines operating in India. SITA has pioneered almost all airport IT system automation in India namely in areas of Common User Terminal Equipment (CUTE), Common Use Self Service (CUSS) Kiosks, Baggage Reconciliation System (BRS), Airport Management System (AMS) etc. at various Indian airports of Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Cochin etc. We have also been awarded the CUTE project at the 13 non-metro airports by the AAI which is currently under execution. In the government solutions domain, recently SITA has had the distinction of providing our Advance Passenger Information System (APIS) services to

more than 50 international and domestic airlines operating in India to ensure their compliance to the Indian government APIS requirement. SITA also sees huge potential in the modernisation of air traffic management space in India with the introduction of advanced applications like DATIS, CPDLC, ADS-B, etc. In the backdrop of several greenfield airport projects in the offing, SITA in India is poised to play a critical role in development/modernisation of these airports as MSI (Master System Integrator). How will SITA’s other solutions for airports like MIAL help them in becoming more intelligent and profitable? I am really glad that you have used the real value proposition of IT for airports, i.e. intelligence and profitability. By the way, for the first time an Indian airport, Mumbai International Airport Limited (MIAL), will be included in SITA’s annual Passenger Self-Service Survey which is fastbecoming the bellwether survey for tracking customer satisfaction with the efforts of the world’s leading airports to exploit IT to process more passengers, eliminate congestion and maximize limited resources. Mumbai is just one of the seven airports worldwide which will feature in the survey. The inclusion of India’s largest airport — over 25 million passengers last year — was made possible by the introduction of the country's first modern Airport Management System (AMS) last year, followed this year by significant new investment in the airport’s check-in platform and the decision to introduce self-service kiosks. In agreement with all the operating airlines at Mumbai International Airport, SITA is deploying its airport connect open technology across 120 check-in counters at the airport and 100 CUSS (Common-Use Self-Service) check-in kiosks at Domestic and International airports, which will include 40 located in prominent Mumbai hotels for International and domestic passengers or travelers. Airport Connect Open is SITA’s next generation passenger processing solution which enables airports and airlines to access their proprietary and CUTE (Common-Use terminal Equipment) applications on the same platform in a shared, totally secure environment. Multiple airlines can share the same facility allowing maximum use of gate and counter resources. MIAL and SITA relationship is strong and focused towards building (as you said) not only intelligent and profitable airport but also the airport of the future. What will be the benefits of the Airport Management System? SITA’s AMS (Airport Management Solutions), integrate the airport's key functions and O

operations to ensure more efficient and cost effective airport management. Its adoption is a shift from reliance on manual systems to IT-driven automation and enables end-to-end management of airport resources in real-time. It provides the means for airports to more effectively utilise resources and reduce costs while improving efficiency and passenger throughput. This is critical for today’s airports that are focused on streamlining operations, simplifying passenger travel, and empowering employees with information, while continuing to contain costs and increase efficiency. The complex and varied business processes of an airport are all handled by this comprehensive suite including tracking of aircraft movements, billing calculations for services rendered, reporting and distributing information, and managing the airport's extensive resources from a strategic planning level down to day-today operations. The AMS deliver benefits to airports, airlines and passengers. Airports derive value through building profitable businesses and increasing revenues, without being slowed down by cumbersome IT systems and manual processes. The AMS suite helps in reducing congestion while moving passengers and freight more efficiently through existing facilities, thereby avoiding the cost for new terminals. In addition, automated tracking of movements ensures correct data for operations, billing, and statistics. How will Airlines and Passenger be benefited by AMS? Airlines and passengers also benefit from the AMS suite, as it helps to reduce the impact of unexpected events on the day of operation, while distributing real-time, updated information to all airport stakeholders. Airlines save money from reduced delays resulting from ineffective resource allocations, and passengers enjoy a more stress-free, satisfying travel experience. What is the AMS global footprint? SITA’s AMS has helped over 40 global airport customers such as Johannesburg, Durban, Capetown, Cancun, Seattle and Perth which use the full solutions suite. Mumbai International Airport signed last year for the implementation of SITA’s Airport Management Solutions, making it the first airport in the Indian subcontinent to have this world class solution; What is the role of IT in this era of economic downturn and cost pressures? IT has played a pivotal role reducing the cost of operations in the air transport industry; this is all the more relevant in the era of high aviation fuel costs and a time of global economic uncertainty. Within India, IT will be used at airports not only with the objective of reducing costs but also to extend competitive advantages through process excellence and enabling airport operators and airlines to weather the storm. 8

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tâ&#x20AC;&#x2122;s a sight that sears your memory; each time you swoop down to land in Mumbai you literally fly into a jungle of jhuggies along the slope and the hillocks across the Santa Cruz airport now called Chatrapathi Shivaji International Airport (CSIA). In four years time, much of these tenements would have been relocatedin 60 acres of land at Kurla (and elsewhere in Mumbai), an industrial

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suburb where the great industrialist of yore, the Walchands, once produced one of India's two cars: the Fiat. It is a project that the GVK (acronym for 72year-old G V Krishna Reddy, patriarch of the Rs 40,000-crore strong GVK group with a finger in infrastructure, real estate, airports, power, bio sciences and what have you) group now runs under a company called MIAL (Mumbai International Airport Limited) and manages CSIA ! Confusing?

Once completed, the Chatrapathi Shivaji International Airport will make history. The GVK group, which has been entrusted is braving all odds to create a beauty that will be world class.

Last year, the airport handled over 26 million passengers and with a projected annual growth rate of 18 to 19 per cent over the next four years, Mumbai airport will receive nearly 50 million passengers by 2012.

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Well, nomenclature is a piece of when you consider the odds stacked on the ground for the airport developer. “We happened to come to the airport as a bidder only twice for about two hours each time and on one occasion we were taken around the airside in a vehicle that is nothing as far as understanding anything about this project goes. We realised the magnitude of the issues once we took over,” said Sanjay Reddy, the 43-year-old Managing Director at MIAL and ViceChairman of the GVK group. Last year, the airport handled over 26 million passengers and with a projected annual growth rate of 18 to 19 per cent over the next four years, Mumbai airport will receive nearly 50 million passengers by 2012. Whatever be the effort, in another five years, the airport will be brimming to capacity and find it impossible to handle any additional traffic. But that isn't something that fazes Sanjay and Co. For the moment their core focus is on getting the job done: modern terminal, great passenger experience, exciting shopping and dining and, most of all, world class airside operations. In many ways, this world class operation will hinge on a key arrangement that the company has entered into with Housing Development & Infrastructure Ltd (HDIL). The Mumbai-based company has signed an agreement with MIAL for slum rehabilitation and development of 276 acres around the airport. Under the deal, HDIL will be responsible for clearing the encroachments and handing over the area to MIAL for development. The process is to be completed within 48 months. HDIL is among the big ticket players involved in Mumbai’s slum rehabilitation scheme. But reports are that it will be a good 30 months before the first slum is shifted. In real terms what it means is that even phase one of the rehabilitation package only begins in late 2010. What does it mean for the airport? Well, a continuation of the congestion in the air and in the ground, really. For the period from April to July 2008, CSIA recorded an average of 650 flight movements per day and an average circling time of 45 minutes. The freed-up land was expected to help clear the runways faster with the construction of four parallel taxiways (against one now) and 11 rapid exit taxiways (currently two). But as many in MIAL accept, at least they are in control of the land issue. They know what needs to be freed up, what needs to be relocated and what has to be ‘densified’ (see interview) and they can plan accordingly. It’s nothing compared to the complex and intricate exercise

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INTERVIEW

“AT THE END OF THE DAY WE HAVE A DREAM:

WE WANT TO DELIVER

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THE BEST S Reddy, GVK's man on the spot in Mumbai on the problems he faced and how he is overcoming them 114

Q: A:

Looking back how would you assess the last two years?

When we won this project, we had no experience in airports and we had no idea what we were getting into. We just knew that it who is not going to be easy, it's going to be difficult, and challenging but certainly not impossible. We were not very clear as to what the challenges were and how we would address them. When the real work started, one realised that the project was much more challenging…there were so many differences in what we assumed as part of the bid and what the reality was. The first six to nine months went just to identify the issues. A simple thing -- we didn't have a survey of the land and boundaries of the airport marked clearly from a legal point of view. The only boundary which we had was the wall for the air side. So, we had to fix all that and ensure that all that is properly done took a long time All that is now a thing of the past… All that is over. Now we have come to a stage where about 80 to 90 per cent of C R U I S I N G

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problems that we envisaged are resolved and the problems just to put in different buckets are, land-ownership issues, issues relating to contract (that have expired and people refuse to leave), issues relating to various unions and labour issues. The land issues still continue to bog you? Often, when we go to the authorities with our problems, they say you only have one issue: land. That's the point. The only issue about Mumbai airport is land. This is the most constrained airport in the world. There is no other airport with this much traffic with so little land with the intention of going to 40 million passengers. I would say at least 30 to 50 per cent of my time goes in only trying to see how we can recover our land. We have gone from agency to agency…there are atleast ten different agencies we are dealing with and with each agency we have been working for the last two years and I would say we have been successful. Out of all those agencies about 50 per cent we have brought to a stage of finalising MoUs. The second part is, of course, slum rehabilitation Yes, what about slum rehabilitation?

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We have given a four-year contract to HDI. That's 276 acres of land and the airport will get back 211 acres while some part of it they will retain to develop. What else is there apart from land? The other area which I think is very important is stakeholder management whether it's in Immigration, Customs, CISF, police, various other agencies… A lot of them had to be shifted out of existing buildings. For example, we had about 35-40,000 square feet of Customs offices within the terminal building and the terminal building was going to be demolished. it took us one-and-a-half year to eventually get the Customs offices out of there and give them what they wanted -- a whole building in Sahar which we leased out at Rs 200 a square foot, furnished it and gave it to them. They are happy, we are happy... What is your roadmap for the next 12 months? First and foremost, we have to finish all the existing facilities. A lot of work in the domestic terminals is finished. The international terminal is going through a bit of a problem primarily because we are in the middle of the upgradation. We are also improving the efficiency of the domestic terminals by building six new aerobridges which is under construction right now. It's called Terminal 1C and it will also connect both the terminals. That will also make the terminal operations and airside operations much more efficient-- except in peak hours and maybe for little more than peak you may not even need buses to bring in people. The third is: we are going to start construction of the actual new integrated terminal, which will start early next year because even for us to start that we have to demolish Terminal 2A. We have managed, as per our plan, to shut down Terminal 2A in August and we started demolishing in September. To shift out Customs, Immigration, 40 airlines out of their offices from there (to Terminal 2B), I think it was really a challenging task for us. The demolition will finish by the end of the year and then we start construction of the new terminal. Unlike Delhi, Bangalore and Hyderabad, you do not have the advantage of a land bank. You can't do many of the things they can: a MRO or cargo. Clearly you revenues will have to come from the nonaeronautical side. Yes, that is certainly the only thing which is in our control. Aeronautical is obviously not in our control to the extent that it depends on the city and on various other C

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factors. For example, the traffic is now going down now… I told my people during meetings, 'Don't worry about it, don't even look at it'. That's not something you can control. We can only control nonaeronautical revenue, we can control our costs. So, our focus was to provide the best possible service on the aeronautical side and now focus on the non-aeronautical and real estate. We have a good idea about what we want to do with it and we are just in the process of detailing it out.

You now have the confidence to look at other projects?

We are looking at Prague, we are looking at Russia but we also want to tread cautiously.These projects are complex, large… With large investments we want to be very careful.We don't want to make a mistake because you know you have one project which is problematic. ..We see India as a huge opportunity infrastructure-wise. This is the right time to invest because you know you are not that much under pressure and from a PPP perspective you would be able to get such projects at a more reasonable basis not like what it was ayear ago when people were bidding crazy numbers.

There is no light at the end of the tunnel for Navi Mumbai. In five years you will be saturated and facing a lot of flak… You are absolutely right. Sometimes, you can see a running train coming at you but you can't do much about it. It's something akin to that. We have no control over it, nor are we responsible for it. As as a company, we have been saying at every forum that this is a constrained airport. Believe it or not, there will be a time when we can't handle any more and when that time comes we will not be responsible to handle more because we can't. But you haven't done enough to push it. No, it's not true. At every forum we have been saying: please get the second airport off the ground. It is not for me personally or for GVK. It is an issue for Mumbai city because after we hit a bottleneck it will become more and more difficult to get into Mumbai. You will start seeing people not wanting to come to Mumbai to do business. Slowly business will move out. I think the government is pushing hard (to get the project off the ground). CIDCO is pushing hard. There are some challenges with the site and even after it is awarded it is going to take time because it is a very complex site… So this has been a huge learning curve… This project is really a fantastic opportunity for our company. At the end of the day we have a dream: we want to deliver the best. Today, it's much clearer as to what kind of an organisation can deliver this. Earlier, there were mismatches in terms of expectations and competencies because we tried to bring in the best from the world. At one point we had people of 15 nationalities who were working with us and and now we have only three-four people from other parts of the world. We have good consultants. But We have our people so I think now things are a a lot more calmer than what they were one year ago. We are much more at peace with what we have to do. But we have a lot of challenges on a daily basis. H

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underway right now to break down the existing terminal, build another, relocate offices and continue with operations. First and foremost, MIAL has to wrap up the polishing of the existing facilities. While the domestic terminals are more or less done, the international section is going through a bit of a problem primarily because of the upgradation and renovation that is likely to end in December. But the most complex

An artist’s impression of the proposed new integrated terminal at Mumbai.

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task is really the building of the six new aero-bridges which is under construction right now in a terminal that’s 1C and it will connect both (IA and IB) terminals The commercial and marketing guys will finally come into their own with the refurbished opening of the international terminal. “The architecture of the inherited building has its constraints, but we have still lined up plenty of action,” says Siddarth Sahgal, the General Manager (Retail) at MIAL The duty-free operations by DFS will occupy over 2000 square metres and the food court by HMSHost will be spread over 1800 square metres. This 18000 square metres (with 350 seats and a six- cuisine fare) operation will offer international cuisine — solid fare that will include Chinese, Italian and Continental and, of course, the typical fast food. But don’t expect the high-end fine dining experience

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elieve it or not, two rivers — Ulwe and the Gadhi — will have to change course and an island called Waghivli will have to be reclaimed to construct the new Mumbai airport (Navi Mumbai International Airport). Three other rivers — Kasadi, Kalundri and Taloja — that flow through the region would need embankments. Maharashtra's City and Industrial Development Corporation (Cidco) that is driving the project has asked Central Water and Power Research Station (CWPRS) to study how five rivers, including the Ulwe and the Gadhi, and the Panvel Creek that flow in the region can affect the airport. The report is expected in the next few months. While the Ulwe flows right through the 1140 hectares site earmarked for the airport, the others are in the vicinity. Waghivli gets submerged partially during heavy rains. The island will have to be reclaimed and levelled. Environment rules, though, are a major roadblock. The Union Ministry of Environment and Forests had initially said ‘no’ to the proposal earlier this year. Chief Minister Vilasrao Deshmukh then wrote to Prime Minister Manmohan Singh arguing his case. The main obstacle for the airport lies in the 1991 Coastal Regulation

MIAL has to wrap up the polishing of the existing facilities. While the domestic terminals are more or less done, the international section is going through a bit of a problem

Zone (CRZ) notification, which bans construction in CRZ areas. The current norms are as per the CRZ and a small portion of land for the airport — about 150 out of the 2,000 hectares — has mangroves and falls under CRZ-I. Airfield activities are not allowed in this zone. The result was that the Centre issued a new directive, under the draft notification of the Coastal Zone Management Authority, which exempted airports. The notification clears a major hindrance in the airport development project. But the final draft is yet to be designed. However, the Ministry of Environment and Forests has given its 'in-principle' approval to the construction of the second international airport in June. That was one issue resolved, but in the state itself Cidco will violate the Maharashtra (Urban Areas) Protection and Preservation of Trees Act, 1975, if the project goes ahead as it is. Environmentalists are raising hell about mangroves but Cidco officials have repeatedly said that they are guaranteeing replanting the lost mangroves to make up for the environment. Meanwhile, Cidco has appointed a US-based firm as consultant to draw up the global bid document and a detailed project report.

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that you get at many internal gateways. That will have to wait till the integrated terminal comes up sometime in 2010. But the present experience will be a huge liftup from the standard fare that the travelling public has experienced so far. But the real piece de resistance will be the iffa bar, a franchise of Wizcraft which owns the iffa brand. This 3850 sq ft is clearly inspired by Planet Hollywood. This Planet Bollywood will be full of memorabilia from the film fraternity and hopefully a favourite watering hole for passengers. Sahgal is gung-ho about the success of the commercial side of the airport business and cites an interesting story to illustrate his point: “There was a special Royal Salute collector's bottle for US $ 550. One thought this wouldn’t move. Believe me it sold and there was demand for more of those. It gives me the confidence that there are plenty with spending power. The question is: Do we have anything for them?” Sahgal and his team, including the man who is believed to be the mover and shaker at MIAL, Rajiv Jain, are moving to slowly but surely consolidate the commerce-end, leaving the airside to airport head Phillip Cash and his team. As Sahgal says they are open and flexible, “be it rental or revenue share” among the brands that have signed up or are in the process include Raymonds and India Today, Odyssey, Café Coffee Day, Hot Dog, Café Ritazza and also an outlet of Stop & Go from the Shopper’s Stop stable. There are global brands like Bvlgari, Armani and Croma. The problem with the retail as Sahgal explained was the construction of the property: “40 per cent of the space is nonaeronautical. Of this 40 per cent is ready

The biggest hit as far as passengers are concerned is the Reflexology section at the Terminal IB. Sharmilee, a TV professional from Chennai, wrote on her blog : “So if you head to Mumbai, please go early and take my word, you will probably have one of the best reflexology sessions ever at the Wellness Centre at Mumbai airport.”

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and the rest requires some tweaking.” Not being able to drastically change things, what the MIAL team has done is offer the shopping experience into zones where you wade into outlets bunched in some order. The division is simple: 60 per cent retail, 40 per cent F&B. But the biggest hit as far as passengers are concerned is the Reflexology section at the Terminal IB. Sharmilee, a TV professional from Chennai, wrote on her blog : “So if you head to Mumbai, please go early and take my word, you will probably have one of the best reflexology sessions ever at the Wellness Centre at Mumbai airport.” This has enthused the commercial department so much that they are now planning to have a complete spa at the airport. For the moment, though, the real sweat is the complex task of breaking down the international terminal bit by bit even as it continues to operate. “That’s the hardest part. To live in your home and refurbish it,” said one senior MIAL official who declined to be quoted by name. But he reaffirmed that their real success will lie in how well they are able to manage this gargantuan task of getting the terminal going piece by piece even as they see increasing number of passengers demanding a better experience every time. The construction of T2 and the construction of a dedicated link from the Western Express Highway to T2 at Sahar where the T2 will come up will prove how resilient the GVK team is. There is now an unified team at the top (see interview) and the tremors of last year when there were over a dozen nationalities working on the project under COO Rudy Vercelli. Vercelli was Chief Operating Officer at Mumbai International Airport since 2006 and has since moved to the Abu Dhabi airport company. But his departure hasn’t really shaken things up. As Sanjay Reddy states they are now “calm and confident.” That is, perhaps, the only way forward when there is chaos all around and you are trying to craft a beautiful thing amidst all the cacophony. O

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HYDERABAD AIRPORT Nine years back when Chandrababu Naidu floated global tenders for a modern new airport in what was then famously called Cyberabad, thanks to the then Andhra Pradesh CM’s obsessive desire to be the country’s Silicon Valley, GMR was one of the nine who put in a bid and one of the three finally short-listed.

Hyderabad’s Rajiv Gandhi International Airport has everything that a world traveler can ask for. It is classy and people-friendly. K Srinivasan and R Krishnan take a look at the new airport. randhi Mallikarjun Rao (GMR) has a gleam in his eyes. He is now on the fast inner lane and the Rajiv Gandhi International Airport is the icing on the cake: a state-of-the-art Greenfield airport in one of India’s fastest growing cities, Hyderabad. It has catapulted this son of a farmer from Rajam in Srikakulam district into a big-ticket infrastructure developer and a man to watch in the coming decade. And he says in a matter-of-fact tone: "A dozen of my assets will be commissioned by March next year." Apart from the 5000acre plus Rajiv Gandhi International Airport at Shamshabad on the outskirts of Hyderabad and the Indira Gandhi International Airport at Delhi, the assets include power plants in Uttaranchal, UP, Nepal and Orissa. Add to that four toll roads totalling over 300 km in Andhra Pradesh, Tamil Nadu and Haryana and you have a measure of the man and the distance he has travelled in 15 short years. Nine years back when Chandrababu Naidu floated global tenders for a modern new airport in what was then famously called Cyberabad, thanks to the then Andhra Pradesh CM’s obsessive desire to be the country’s Silicon Valley, GMR was one of the nine who put in a bid and one of

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the three finally short-listed. Believe it or not, he came up with the lowest bid but had one hell of a time convincing Naidu that they were the right buys for the job. He simply didn’t buy GMR’s curriculum vitae: son of a farmer, jute mill owner, banker and now an entrepreneur running a power plant on a barge. How was this bloke going to put together a state-of-the-art airport? Earlier, getting a global partner who could help them implement the project had been one hell of a problem. So, off went Grandhi Mallikarjun Rao to Kuala Lumpur, enlisted the support of Sammy Velu (President, Malaysian Indian Congress) and tried to get Malaysian Airports Holdings, Berhad — which created the spanking KLIA (Kuala Lumpur International Airport) — to join him as a partner in the venture. To cut a long story short, GMR brought Malaysian Airports on board, persuaded Velu to look at the work they had undertaken in Karnataka and trust them to deliver a world-class airport. Finally, on May 31, 2001, Andhra Pradesh — after

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The new terminal can cater to 12 million passengers and can be expanded to handle 20 million passengers. In keeping with the global practice of expanding without dislocating all future growth, the airport is planned in a modular fashion. This will see passengerhandling capacity increase from 12 million to 16 million and further to 20 million.

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Naidu had his officers recced the barge — selected the GMR-MAHB consortium as the preferred bidder for the Hyderabad International Airport Project. On March 14, 2008 when HIAL — now named Rajiv Gandhi International Airport — was formally declared open, it was the first instance of a major project where the start-to-finish schedule was completed with the same set of dignitaries in attendance: UPA Chairperson Sonia C

Gandhi, Civil Aviation Minister Praful Patel and AP Chief Minister Rajashekhar Reddy. In exactly three years, the airport was ready for operation. The only irony being that the man who had started it all, Chandrababu Naidu, was in another part of the city protesting that the airport had no mention of his father-in-law, the late N T Rama Rao, who has a terminal named after him at the old Begumpet Airport. For the record, GMR Hyderabad InterH

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“We want a smooth operation” Kiran Grandhi on the airport and his plans to run it have no anxieties about the airport, it is only about running a smooth operation. I do not wish to talk about the other controversies but from 2000 onwards we have regularly been communicating about the project. If one is so much interested in connectivity, then the process (of building the road) should have started two years back. How will we make money? It will be a challenge no doubt about that. We will unroll our plans by and by. Our first focus or stage one is to provide efficient and competitive facilities and services way above what is available at present. When one does that, one provides value for oneself as well as the people one serves. Now, in that I can define what does it mean for airlines and what does it mean for the passengers. Let’s take the airlines first: We are bringing in international best practices for cargo, ground handling, and even the fuel farm. For example, you have multiple choices for ground handling. You have got an open access fuel system-today, the access is just to two or three PSUs. Now, we can talk to everyone. The negotiating power moves from service provider to airlines. You are getting a runway system that is the longest in the country, fully compliant for all aircraft including the A380 and that is as good, if not better than anything else in the world. Today, Indian aircraft are going to places like Singapore and Dubai for maintenance and major repairs. So we’re setting up a maintenance hub at this airport although that will take some time. Now look at what is in store for the passengers: The passenger terminal has everything that gives one the out-ofthe-ordinary feeling. Right from the point of alighting, it is completely passenger friendly. They simply hand over their baggage and check in. No x-ray, no long queues. The shopping, food and duty

free areas will provide them with world class choices and options. They will seamlessly connect to their aircraft through state-of-the-art gates and aero bridges. For arriving passengers, we have made the provision of Volvo buses at affordable costs. Departing passengers too, will have the option of using these buses from the city. We will have 700 Radio Taxis parked at the airport. In the terminal building, we have ensured that there will be no echo of the announcements and they will be made and heard where needed by the relevant passengers. Already, a few airlines have come forward to start operations to and from the new airport. These include British Airways, which wanted to commence operations from October, and Gulf Air, which plans to start operations in June. There were also requests from airlines to make Hyderabad, a cargo hub. As of now, there is no UDF for domestic passengers, but we will review it at a later stage. We are sensitive to customers and stakeholders’ requirements and that is why we have decided not to increase landing, parking charges and passengers service fees. The traffic to Hyderabad has increased by leaps and bounds over the years. When we bid for the airport, it was four million for 2008. Hyderabad can no more be termed a regional hub: the city has now become an international hub. We can also claim some credit for this. Our participation in events like ’Routes’, has given airlines an opportunity to look at the competitive advantage of this airport. We will also be holding ’Routes’ Asia 2009. I can visualise a whole new city coming up around the airport. That will really be a mark of our success. There will be businesses peripheral to the aviation industry that will spring up all around and naturally, it will bring in housing colonies, schools and other infrastructure. (Kiran Grandhi spoke exclusively to R Krishnan and K Srinivasan.)

I Our first focus or stage one is to provide efficient and competitive facilities and services way above what is available at present. When one does that, one provides value for oneself as well as the people one serves.

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national Airport (GHIAL) is a joint venture promoted by GMR Infrastructure (63 per cent), Airports Authority of India (13 per cent), Andhra Pradesh government (13 per cent) and Malaysian Airports Holdings, Berhad (11 per cent). GHIAL has the mandate to build, own and operate the airport for 60 years. The first phase ended with the commencement of operations at the airport in March 2008. “We have an expenditure of Rs 2,478 crore on the project so far,” said Rajgopal Swami, the soft spoken Chief Financial Officer of GHIAL and the man who drives the future business vision of the company, and added: “The groundbreaking ceremony took place on September 1, 2005. In just under 31 months, we have readied the project. When we bid, the traffic was five million per year at the old Begumpet airport that rose to seven mil-

There are plans for a separate LCC terminal. But that is part of Plan C—when the airport expands from Plan B (20 million to 40 million passengers).

port business, Swami or the rest, and one phrase that resonates time and again is: “We are a reasonable and responsible airport developer.” They cite the decision not to impose the User Development Fee (UDF) on domestic passengers but departing international passengers as an example of their approach to be inclusive and care for all stakeholders. The passenger mix at Hyderabad is 70 per cent domestic and 30 per cent international. But the decision did come after the initial brouhaha over the fee. Swami says that all parking and landing fees will be the same as at Begumpet and that they will respect “all historicity of rights“ that airlines enjoyed at Begumpet. In order words, parking slots, take off and landing schedules, hangars, etc. What about separate terminal for LCCs? There are plans for a separate LCC terminal. But that is part of Plan C—when the airport expands from Plan B (20 million to 40 million passengers). But Swami does admit that “various regulations including that of IATA state that you cannot discriminate between people when offering the same facility” have always been kept in mind. Therefore, for the moment, they use the same terminal and pay the same charges. In effect, there will be UDF (User Development Fee) on LCC if going international. In other words, if Air India Express and Kingfisher Red take off overseas from Hyderabad, one-fourth of the ticket cost (on a HyderabadDubai/Bangkok flight) could well be airport tax! While passengers may not agree at the steep UDF, there is little doubt that the airport is world class. Used to below-par service standards at other airports, there is bound to be a sense of shock and awe at Shamshabad. As the patriarch explained during a conversation: “Shamshabad is the first airport in India to go for LEED Certificate for incorporating green design elements. It is a non-polluting airport and passengers will breathe fresh. Boston in the US was the first to get this excruciatingly tough certification and certainly no airport in India can boast of it.” COWI a/s of Denmark, Aviaplan of Norway and STUP from Mumbai provided the global leadership in preparing the master plan and engineering designs and the airport has been designed by Hong Kong-based architects Winston Shu and Gumund Stokke. There were dozens of visits to Bangkok by GMR and his team to look at Suvarnabhoomi that was commissioned last year. “We learnt from Bangkok and made our strategies accordingly,” he said. “Our debt-equity ratio is 2.1:1 say 40 per cent equity and 60 per cent debt. We

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lion the next year. But by March 2007, we were told by the government to plan for 12 million passengers handling capacity.” The new terminal can, therefore, cater to 12 million passengers and can be expanded to handle 20 million passengers. In keeping with the global practice of expanding without dislocating all future growth, the airport is planned in a modular fashion. This will see passenger-handling capacity increase from 12 million to 16 million and further to 20 million. “However, at the current rate of passenger capacity growth, we may have to start new construction by 2010 as the terminal we have built and are inaugurating on March 16, 2008 will be able to take in capacity only till 2010-11,” said Swami. Talk across the board to the patriarch, his son Kiran Grandhi who heads the airC

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and international. Not surprisingly, the first interest is from the Gulf. The traffic distribution is roughly: 30 per cent to US and 30 per cent Middle East and the rest balanced between South East Asia, Australia and Europe. Emirates already has eight flights a week from Hyderabad to Dubai. Air India mounts over a dozen and there are plans for more. Hyderabad has an average of 12 daily international flights from 11 airlines, including Lufthansa. And there are exciting times ahead: Gulf Air and British Airways are planning about four and five flights, respectively, each week, Etihad is likely to commence operations later this year and Jet has indicated that it would be increasing flights to Singapore. No surprise that SIA is also keen to increase its flights. Sev-

There are exciting times ahead: Gulf Air and British Airways are planning about four and five flights, respectively, each week

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have not decided on IPO and not thought of it either,” said younger son Kiran Grandhi who is the CEO of the airport business and oversees both the Hyderabad and Delhi projects. But he fobs off questions on the mantra that will take them towards profitability. “Now you are asking us for our business secrets,” he says and smiles. One area that is no longer a secret is the group’s desire to enhance non-aero operations. Currently, the revenue from air operations make up three-quarters of the GHIAL’s total revenue. Hence, the need to reverse the ratio, primarily to offset the crisis the ATF prices have created. In fact, the Hyderabad airport is trying to the best practices adopted by Memphis Airport in USA, which gets a large portion of its revenues from nonaero operations. However, a windfall has come GHIAL’s way, thanks largely to the cheaper ATF available at the airport. Apparently, more than a hundred flights have been landing everyday to refuel. The sales tax on ATF ranges from 20 to 35 per cent across various states but in Andhra Pradesh, it is only four per cent. An airline can save at least Rs 3.3 to Rs 3.8 lakh for an A320 and Rs 80,00090,000 for an ATR plane. The existing capacity of the fuel farm is 13,500 kilolitre and to fuel the increasing demand, GMR plans to double the capacity. The pricing advantage has worked in Hyderabad’s favour with airlines opting for overnight parking and having their flights originate from the city. Another area that could bring the airport “revenues“ is its plan to trade in carbon credits. However, that could take another six months since the airport has to first register with the United Nations Framework Convention on Climate Change, or UNFCCC, for carbon credit trading. On its part, the management is feverishly working to enhance connectivity from the city. So, more flights: domestic

The revenue from air operations make up three-quarters of the GHIAL’s total revenue. Hence, the need to reverse the ratio, primarily to offset the crisis the ATF prices have created. In fact, the Hyderabad airport is trying to the best practices adopted by Memphis Airport in USA, which gets a large portion of its revenues from non-aero operations.

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eral new players like Tiger Airways, Virgin, Cathay Pacific, China Airlines and others are looking at Hyderabad as key to their Southern operations. “Payload issues at Begumpet forced several airlines to shelve plans for Hyderabad, but that’s changed with this airport," said Swami. Helping them would be the establishment of a new five-star hotel. Novotel has officially launched the Novotel Hyderabad Airport property near the airport. The property which is five minutes from the airport is the second Novotel property in Hyderabad and in India. Built over five acres, the hotel offers 305 rooms consisting of 11 suites, 53 premier rooms and 241 superior rooms. That apart, Lufthansa Technik and GMR have an MoU to set up a most modO

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While the MRO is some way away — at least 12 to 15 months — the airport isn’t counting on just more flights to boost the bottom line. The internal assessment is that it hopes to make up for most of the Rs 2,478 crore spent on the first phase of development through non-flying operations such as ground handling fees, hotel, aviation fuel and advertising.

READY FOR TAKE-OFF: (Third from left) Chief Minister Rajashekhar Reddy, Praful Patel and G. M. Rao on the day of the first trial run of the Hyderabad International Airport

ern airframe MRO at GHIAL. It will cater to both Airbus and Boeing narrow body aircraft to start with. The area earmarked for the MRO on the south east of the airport is being levelled now. While the MRO is some way away — at least 12 to 15 months — the airport isn’t counting on just more flights to boost the bottom line. The internal assessment is that it hopes to make up for most of the Rs 2,478 crore spent on the first phase of development through non-flying operations such as ground handling fees, hotel, aviation fuel and advertising. At the moment, annual revenues at Begumpet are viewed in the region of Rs 200-250 crore. This excludes the airport charges such as landing, parking and route navigation charges that accrue to the AAI. They are working to boost these revenue streams. Considering the world class duty free, the extensive shopping arcade and the spanking new Novotel hotel in the complex, it would be no surprise if the figures doubled and tripled in the next two years. After all, passenger figures have been revised four times in the last eight years and is likely to double again in two years. Are they overreaching themselves? There are always imponderables, but if the homework that GMR has done in the last few years is anything to go by, they should be able to bite the bullet. As the group chairman explains, they saw the Delhi modernisation bid as a one in a lifetime chance. “We worked for two years on the Delhi airport proposal with the determination to win the bid. The focus was on improving the financials and identifying the obstacles.” They set

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up core teams to visit sundry airports and chew in the details bit by bit. It is a process that was honed first in Hyderabad. From a single jute mill in 1978, GMR today has revenues of over Rs 2,000 crore and over 2000 employees. As they grow at a scorching pace, the group is rejigging its priorities and disengaging slowly from hands-on approach. As Kiran Grandhi said: “Beginning April, I should be 15 days in Delhi.” The role, as they visualise it, is to offer strategic vision, government interface and back-up support. His father remembers the early days nostalgically —acquiring 5400 acres in Shamshabad, resettling over 1000 families and the steeplechase at every turn. But he does acknowledge that the group’s airports business is far from mature and evolving and developing. In other words, the patriarch and his son will continue to attend to the day-to-day affairs for some time to come. And when will he put up his feet and relax? Perhaps, G M Rao has been asked this question many times and he told one interviewer: “I’ll know we’ve reached this point when something happens in the business and no one bothers me. Other people will take care of it, so I can go on a long vacation and nothing happens.” Maybe take a flight to Shamshabad and drive to Rajam — the place where it all began and where he spends most of his money to bring some light into the lives of people who have been less fortunate than him. (This is an updated version of the story that appeared in the March 2008 issue of CRUISING HEIGHTS.) O

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A surefire help in emergency R K Tyagi

The year 2008 is being celebrated as Helicopter Year in India. It was the vision of Minister of Civil Aviation Praful Patel that this year be earmarked for this celebration. hen we talk of our country we say with pride that India today is on a solid growth path. There are lots of investments and developments taking place in infrastructure activities like power, telecom and air transport. The country aims to achieve a growth of about 8.2 per cent plus in terms of GDP(Gross Domestic Product) and people say that by 2015 India will emerge as the third largest economy in the world with 14.3 per cent share of the global economy. That means India will emerge as the third pole of the world economy. While these are the growth potentials, so are the challenges. When we talk of our country we say that 60 per cent of the land mass is prone to earthquakes and another eight per cent to cyclones, also some 68 per cent landmass is susceptible to droughts and 40 million hectares of land gets affected by floods,

almost, every year. We have 1,72,000 km of roads and that accounts for more than 80,000 deaths in road accidents every year â&#x20AC;&#x201D; 40 per cent of these occur by the roadsides. In fact, India with one per cent of the vehicle population of the world accounts for 10 per cent of the road accidents. Then, there are man-made situations, which need emergency evacuations. Thanks to advancements in gerontology, the number of senior citizens is also increasing, thereby, putting demands on medical transportations. These are some of the emerging challenges. When we talk of emergency evacuations in the country today, we find that, in fact, the major role is played by the three forces â&#x20AC;&#x201D; Air Force, Army and Navy, alongwith the Indian Coast Guard. There are certain additional positive steps that have been undertaken by Deccan Aviation in association with Apollo Hospitals, Jaya Clinic, Chennai, and CTC Bangalore.

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An effective ambulance cover should comprise affordability of services, creation of world class hospitals and matured helicopter operations. C

An ambulance helicopter from the Tokyo Fire Department rushes to an accident site.

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ONGC (Oil and Natural Gas Commission) also makes use of emergency evacuation helicopter services â&#x20AC;&#x201D; handled exclusively by Pawan Hans. In fact, December 27, 2007 was a red-letter day in Indian helicopter industry when the first fully dedicated medical evacuation helicopter was offered in the services of ONGC. In the USA, the number of helicopters dedicated only for emergency evacuations is 792 (against a total strength of 184 helicopters in India). Half of them are used for accident cases and the rest for inter-hospital transfers. Sixty per cent of the missions take place in the daytime. Japan, for example, started in the year 2000 with three helicopters and today has more than 14 helicopter bases. In the year 2007 alone, these helicopters handled more than 5200 medical evacuation missions. Three things are needed if we want to provide an effective ambulance cover in India: Affordability of the services Creation of world class hospitals Matured helicopter operations. Helicopter operation costs about Rs one-two lakh. How do other countries handle this cost issue? In fact, in the USA when they were talking about air ambulance in 1969 the federal government provided funding to the states and three helicopters were acquired. Then they roped in insurance agencies and pointed out that air travel be part of insurance coverage. Most of the expenses today in the USA for such kind of evacuations are borne by the insurance services. We can have another funding mechanism through our Navratnas like ONGC, NTPC(National Thermal Power Corporation) and BHEL(Bharat Heavy Electricals Limited) which spend five per cent of their profit towards corporate social responsibilities. These Navratnas operate in almost every state of the country. Perhaps a portion of this money can be given to the helicopter industry for creation of air ambulance capabilities in the country. The Ministry of Health has come up with a plan where they will spend 700 crores of rupees for creating more than 100 trauma care centres along the golden quadrilaterals. If we want to really have effective coverage on the highways, then, at least five per cent of this money of Rs 700 crore should be utilised to deploy helicopters on these highways. Affordability and world class hospitals apart, the third driving factor needed is a mature helicopter operation. C

In the 90s, the USA had the highest number of crashes of air ambulances. Reason: air ambulance flying is much more tricky and challenging than normal flying. But they learnt the lesson. They created separate air corridors and had emergency ATC (Air Traffic Control) procedures. Even they are thinking of modifications in procedures where single engine helicopter will be used more extensively for medical evacuations. Finally, when you lift patients from remote places you have to find a place to land. We have to create heliports in our country. We have a Ministry that is alive to this need and it is, in fact, because of the initiative of the Ministry of Civil

131 Doctors shifting a patient in an air ambulance in Australia.

Aviation that a lot of heliport activities are taking place in the country Today. The Delhi government has already allocated Rs one crore for one helipad in every district in Delhi and many state governments are also earmarking funds for creation of helipads. The Ministry is making special efforts to create heliports in Delhi and Mumbai. Delhi will be hosting the Commonwealth games 2010 on 12 sites spread over 60 km. More than a million guests are expected. The capital will be showcasing India's progress in infrastructure and quality of life. It is with this objective in mind that the Ministry has taken up with the DDA (Delhi Development Authority) to establish the first fully automated heliport of the country at Rohini before the games begain. An air ambulance service is not just about business, it is about passion and pain. It is about performance and glory and also about honour and hard work and, above all, it is a noble service towards mankind. (The author is the Chairman and Managing Director of the public sector Pawan Hans Corporation Ltd. This column is an abridged version of the speech he delivered recently at a conference to discuss emergency medical services.) T

In the 90s, the USA had the highest number of air ambulance crashes. They learnt their lesson and created separate air corridors and emergency ATC procedures. 0

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BENGALURU AIRPORT Those who have been using Bengaluru international airport seem to be happy.The airport boasts of a 71,000 sq ft terminal building, 53 checkin-counters and 18 kiosks and a capacity to handle 341 flights a day.

Spanking new, but unhappy

faces all around The Bengaluru International Airport has had a troubled beginning. Its start was delayed, thanks to a number of reasons and now there are fears that its capacity will be saturated by the end of this year.

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Inside the Bengaluru International Airport

arely a month ago, on September 1, 2008 to be exact, the Bengaluru International Airport Limited (BIAL) completed 100 days of commercial operations. The airport had by then seen 2.42 million passengers, 29446 aircraft movements, and the handling of 44357 metric tones of cargo besides a 30 per cent increase in international airlines and air freight carriers flying into the city. The growth, despite the downturn in the economy and route rationalization by many airlines, has been encouraging. Those who have been using the airport seem to be happy. The airport boasts of a 71,000 sq ft terminal building, 53 check-in-counters and 18 kiosks and a capacity to handle 341 flights a day. According to a customer survey conducted by the airport in July this year, Albert Brunner, CEO, BIAL, was quoted as saying â&#x20AC;&#x153;Whereas we had several teething problems in the first few weeks, the

situation has improved very fast. The passengers have indicated a high level of satisfaction with the new airport. They have specially been appreciative of the check-in procedures, courtesy of airport staff and the overall ambience of the airportâ&#x20AC;?. The airport has had a troubled start. Its operations were delayed with politics and politicians playing a major role. To top it all, the DGCA identified 59 safety irregularities in BIAL. Barely a week after it started, a petition was filed by Bangalore City Connect, a citizens' advocacy group, which contested the government's 2004 commitment to BIAL to close down the city's old airport. Another objection was that the new airport was small. However, it did get ready. While connectivity between the city and the airport has improved, BIAL has also seen the launch of the first intra-city helicopter services by Deccan Aviation and Global Vectra Helicorp Limited, for the convenience of the corporate traveller. To top it all, the number of restrooms has increased H

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by 70 per cent at the airport. As for airlines, in the last few months, four new international carriers, Dragon Air, Tiger Airways, Oman Air and Air Mauritius have started flying from the city taking the number of international carriers from Bangalore to 14 — the highest in South India. Despite the growth, there is a distinct feeling in official as well as private circles that the airport is running out of steam. Karnataka chief minister B S Yediyurappa pointed out that the airport was “shoddy compared to other airports”. He then went on to say, “I will not allow such things. We need an airport of international standards.” Has all this made Albert Brunner a happy man? To the CEO's credit must go one fact: he has stuck it out, flown through plenty of turbulence and managed to continue without major structural damage. Overcoming the hostility of the political establishment, a lackadaisical and completely out-of-sync state administration and the resignation of Bangalore International Airport Ltd Chairman H. R. Narayana Murthy wasn't easy. But he has done it. Those who have seen the new airport have often pointed out that it is modern, functional and has accounted for every major innovation that airports of its size need to incorporate. Comparing it with Hyderabad, one observer who has seen both said: “Hyderabad is flamboyant, artistic and gargantuan in its vision; Bangalore is slowly putting the blocks together.” Modernity is one factor but is the airport future-ready? In a recent article, a columnist writing about airports around the country mentioned that the scale and capacity of any airport indicated how future-ready the city was. If the current terminals one passed through had capacity to handle at least one-and-a-half times the current level of traffic during peak times, the city with the airport rated well. By that count, however, one can only repeat what is being feared: Bengaluru international airport is already bursting at its seams. Barely two months after it started functioning, the state government set up a joint legislature committee to inquire into allegations that Bengaluru International Airport (BIA) was not a world-class airport. The committee is supposed to find out whether the BIAL had violated terms of the original agreement with the state government; if the airport’s C

quality matched with international airports in other countries; if BIAL was extracting huge sums of money from airport users and if allegations that BIAL had misused land allotted to it. The Karnataka legislators’ panel, in fact, came down heavily on the facilities as at the airport by comparing it to a factory shed. The legislators were not the only ones complaining. In fact, with the prospects of passenger and aircraft congestion already staring it in the face, Civil Aviation Minister Praful Patel went on record to say that he agreed with the Karnataka chief minister and had asked BIAL to start work on enhancing capacity. The airport, reportedly, has already reached saturation figures and may overshoot its rated capacity this year. It may end up handling about 12 million passengers after one year of operations and may have to handle 18 million passengers by 2011.

To BIAL CEO Albert Brunner’s credit must go one fact: he has stuck it out, flown through plenty of turbulence and managed to continue without major structural damage. Overcoming the hostility of the political establishment, a lackadaisical and completely out-of-sync state administration and the resignation of Bengaluru International Airport Ltd Chairman H R Narayana Murthy wasn’t easy. But he has done it.

The minister said he had asked BIAL to “double the terminal capacity in three years” by constructing a “mirror terminal”, besides increasing capacity in the short term by extending the existing terminal. This could be achieved over the next eight months. According to Patel, “The airport should be bigger. There is need to double the capacity in three years. In the interim, they should increase the capacity on the other side of the terminal so that they can handle more passengers. Unlike Hyderabad, Bangalore has space constraints in the present airport and this should be addressed immediately''. On its part, BIAL has started work. Albert Brunner had at one point of time said that BIAL would consider constructing a low cost terminal besides a second terminal and a second runway that it has already planned. That terminal was likely to have a capacity of 12 million and would cater to low cost airlines and could come up by 2009-end. H

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An IATA vision of India Giovanni Bisignani

The crisis in the international aviation industry has had its impact on India. The Indian aviation dream — once riding on the boom — could well turn out to be a nightmare. In the circumstances, India must adopt a leadership role and address the issues with quick decisions based on global standards. t the time of my last visit to India in 2005, the global industry was struggling with losses of US $4.1 billion. All eyes were on the country: a rising industry star with new carriers, US $12 billion in new aircraft orders, liberalised policies and high speed growth. But even India’s robust development cannot resist the downward pressure of the perfect storm that is rocking the industry.

food and energy costs are eating into disposable incomes. So, cutting fares to fill seats is not working. Meanwhile, growth slowed from 33 per cent in 2007 to 7.5 per cent in the first half of this year and went negative in the last two months. The global crisis is hitting India hard. While the established airlines are working to match capacity to demand, some start-up airlines continue to expand rapidly. The bottomline is bleeding. India will post the largest losses outside the US: potentially US $1.5 billion this year. Airlines are starting to take some tough medicine. Domestic capacity growth will

A Global crisis

The global economic slowdown and high oil prices have plunged the industry into crisis. Airlines will lose US $5.2 billion this year, and a further US $4.1 billion next year. The oil price is the villain. The 2008 fuel bill will be US $186 billion. That’s a US $50 billion increase in just one year. For perspective, in 2002, the entire fuel bill was US $40 billion. Oil prices came down from their mid-summer peaks. That was good news for costs but bad news for revenues as the drop was fuelled by weak economies. Then we had a shock this week when oil spiked to US $130. It has dropped again, but the situation is clearly volatile. And demand is already falling. Global international passenger growth in July was 1.9 per cent compared to 7.3 per cent in 2007. And freight traffic declined by 1.9 per cent. The situation is bleak.

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The global crisis is hitting India hard. While the established airlines are working to match capacity to demand, some start-up airlines India today continue to On my last visit, I made it clear that expand rapidly. India’s aviation dream — built on market The bottomline liberalisation and new aircraft orders — could become a nightmare. Certain issues is bleeding. needed to be handled correctly: improvIndia will post ing infrastructure, matching capacity the largest growth to demand, harmonising to international standards and building a losses outside competitive cost structure. the US: None of this has happened and today potentially US the situation is in a mess. India’s airlines expanded quickly taking advantage of $1.5 billion new opportunities. But targeting market this year. share put the bottomline at risk. Rising C

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stop by the end of the year. Aircraft orders are being deferred and we have seen some consolidation. Among the consolidations, the historic merging of Air India and Indian Airlines was the biggest and most important. Now, effective implementation to achieve efficiencies is the challenge. The next months are critical. The industry is sick. I had to suspend over 25 airlines from our settlement systems because they went bust. Many of these were because they were fighting to grow traffic instead of profits. This is not the time to grab market share. Action on external issues is also required to bring the industry back to health. Let me highlight three: reducing costs, improving infrastructure and following global standards.

Indian airlines of their competitiveness. Subsidising some fuel products — diesel and gasoline, for example — distorts the price of jet fuel. So, the base price for jet fuel in India is higher with supplier margins as high as 20 per cent. And on top of that, the central government adds excise duties, the airport operators charge throughput fees and the states impose sales taxes as high as 30 per cent for domestic operations. This costly structure cannot support a competitive industry. I see some progress. Eliminating taxation on international ATF brought India in line with the Chicago Convention. Now the airlines need to be paid back the US $34 million wrongly collected between 1994 and 2001. Reducing custom duties in June was also positive. Two additional important domestic tax measures must be taken — removing excise taxes and implementing a four per cent standard state tax for domestic fuel — in line with the Ministry of Civil Aviation recommendations. Service tax: Then there is the issue of service tax. India imposes this tax on premium class tickets, overflight, landing and airport charges. Taxing overflight charges breaches India’s international obligations under the Chicago Convention. Imposing it on premium class tickets and landing charges is contrary to ICAO (International Civil Aviation Organisation) Council Resolution 8632, which calls for a reduction in such taxes. India is a long-standing member on the ICAO Council. Not following ICAO policies is disappointing and an embarrassment. Infrastructure costs: India’s infrastructure costs are also an issue. Airport and air traffic managements are monopolies that must be regulated in line with ICAO policies. These policies call for charges to be transparent, non-discriminatory and based on a cost-recovery model. India does not measure up. There is no transparency in the cost base for either airport or air traffic control. Our best estimate is that there is a 20 per cent overcollection for air traffic control. Establishing the Airport Economic Regulatory Authority (AERA) with the expanded scope of fuel-related charges could be the solution. Its mission must be aligned with ICAO policies and it needs enough teeth to provide effective incentives to improve service quality and efficiency. The AERA’s timing is important for two reasons. First, the current industry crisis makes cost-efficiency a matter of survival. And longer-term, with the increase in public-private partnerships, a regulator is needed to prevent abuse of monopoly position. I hope that the AERA bill will be passed without dilution later

Reducing costs

Fuel: It’s the biggest factor impacting profitability. While fuel is 36 per cent of average industry costs, it is up to 50 per cent for some Indian carriers. India is among the most expensive places on the planet to buy Aviation Turbine Fuel (ATF). In August, a kilolitre of ATF cost Rs 73,600 in Mumbai. In Singapore it was Rs 46,500. That 58 per cent differential is robbing

(Left to right) Ankur Bhatia, Past Chairman, CII Delhi State Council, IATA CEO Giovanni Bisignani, Jet Airways CEO Wolfgang Prock Schauer and Rajesh Menon at the the Confederation of Indian Industry (CII) and the Asia Pacific Aviation Media Association interaction with the IATA chief in Delhi.

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Infrastructure investments are urgently needed. Delhi is improving… greenfield projects like Bengaluru and Hyderabad are helping…but these are not complete solutions. They will soon be at capacity. Longterm solutions that think much bigger are required. 0

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this. If the discussion to separate air traffic control from the Airports Authority of India (AAI) proceeds with proper airline consultation, this could be a step forward.

Safety

The last of the paper tickets being presented to the IATA chief.

On safety, governments and industry have harmonised to global standards. The results are impressive. Air is the safest way to travel. Our membership is committed to global standards. That is why all 230 IATA airlines are committed to the IATA Operational Safety Audit (IOSA) as a condition of IATA membership. We are working hard to bring all our members on board. But airlines that don’t make the standard by the end of the year will be out of IATA. Air India and Jet are on the IOSA registry. I encourage India to join the growing list of over 20 governments incorporating the IOSA global standard into their national safety oversight programmes.

this year. Then, we must not waste any time in setting up the Authority as a real regulator with teeth, not like the phantom regulator we have in the UK.

Infrastructure investments

138 Despite India's investments in modern fuel-efficient aircraft…emi ssions are growing. IATA's fourpillar strategy on climate change is a comprehensiv e approach: invest in technology; operate aircraft effectively; build efficient infrastructure; and, use positive economic measures. C

While sounding the alarm bell on costs, infrastructure investments are urgently needed. Delhi is improving. A new runwill soon provide extra capacity as will the new terminal in 2010. By 2026, Delhi should be able to handle 100 million passengers. Greenfield projects like Bengaluru and Hyderabad are helping as are upgrades in Chennai, Kolkata and others. But these are not complete solutions. They will soon be at capacity. Long-term solutions that think much bigger are required. Mumbai is a good example. The situation is critical. Today, its terminal handles 24 million passengers a year. That is twice what it was designed for. Plans to increase capacity to 40 million by 2012 with an expanded terminal will only just meet expected demand. But its crossrunways configuration limits movements to 35-40 per hour. And there is no possibility to build parallel runways. The greenfield site under consideration with a phase one capacity of 10 million might provide relief, but it is not a serious solution. We need an airport that can adequately serve the financial capital of the world’s second-most populous nation. That means thinking much, much bigger. We must use the breathing space of the current downturn to engage the airlines and plan in the 100 million range like Delhi, Seoul, Hong Kong, Dubai, Beijing and other important cities. Air traffic management also desperately needs an upgrade. Delays have recently reduced not because of new investment but because of the drop in traffic. On the airlines side, millions have been invested in modern avionics for ADS-B (Area Navigation and Datalink). But the infrastructure is not taking advantage of U

Security On security, India has taken a major diversion from global standards. I was very disappointed to see the Indian Government mandate non-standard data transmission requirements for Advance Passenger Information (API). Airlines have spent millions to adapt their systems to UNEDIFACT (United Nations/Electronic Data Interchange for Administration, Commerce, and Transport). This system is used by every other country with API programmes. India’s go-it-alone decision is an added cost burden for an industry that cannot afford it. India’s unique standard

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provides no additional security benefit. And it limits the ability of the government to share information with other jurisdictions. This is a serious flaw for India’s API at a time when increased cooperation is needed. This must change.

Second, India must be a strong voice for a global solution on economic measures. Europe is pushing ahead with a unilateral approach to emissions trading. It is illegal. What right does Europe have to charge an Indian carrier flying over Canada on its way to the US from Europe? And it will introduce market distortions… I hope that India will be a strong voice to follow the Kyoto vision of a global solution on environment-coordinated through ICAO. As a member of the GIACC (Group on International Aviation and Climate Change), the ICAO group that is spearheading efforts, India is in a unique position to support a positive result.

Environment The closer that India moves towards global standards, the stronger its global voice will be, including on the environment… one of our most important issues. Aviation is responsible for two per cent of CO2. Like all industries, we are being asked to reduce the level. Despite India’s investments in modern fuel-efficient aircraft, strong growth as you catch up with the rest of the world means that India’s aviation emissions are growing. IATA’s four-pillar strategy on climate change is a comprehensive approach: Invest in technolog; Operate aircraft effectively; Build efficient infrastructure; and, use positive economic measures. IATA’s vision is to achieve carbon-neutral growth on the way to a carbon-free future. I see two specific ways for India to help. First, by joining our efforts to reduce emissions by optimising routes, improving procedures and using best practice in fuel management… our work optimising procedures in three Indian airports achieved annual savings of US $23 million and 67 tonnes of CO2. Much more can and must be done. For example, saving a minute on each of India’s two million domestic flights would reduce emissions by at least 2,00,000 tonnes and save US $67 million in operating costs.

Liberalisation India must also be a strong voice for greater commercial freedoms. Civil Aviation Minister Praful Patel’s liberalisation of India’s domestic and international markets created tremendous new opportunities although pressure on the infrastructure still demands urgent solutions. And the expansion of airlines led to a process of consolidation building stronger carriers. But we must not lose sight of one important fact: aviation is making India a better place by connecting business to global markets, expanding tourism and creating jobs…now we must look beyond India’s borders. The 60-year old bilateral system must change so that the airlines that facilitated the global village can enjoy its benefits.

India must also be a strong voice for greater commercial freedom. Civil Aviation Minister PrafulPatel’s liberalisation of India's domestic and international markets created tremendous new opportunities although pressure on the infrastructure still demands urgent solutions.

IATA and India Asia is the future of aviation in 2010. Intra-Asia traffic will be our largest single market. Within Asia, IATA is investing heavily in India. IATA’s presence goes back to 1996, when we launched our BSP — the settlement system between travel agents and airlines. Today, it handles US $6.3 billion in India and we plan to bring cargo on board in 2009.

Indian leadership India has an important industry leadership role to play. Europe and America are our industry’s history. Asia is our future. India’s enormous size and tremendous potential give it natural leadership potential on policy and infrastructure issues. I am an India optimist. India is not just a great potential market. This great country has a natural leadership role to play. But it can only achieve this by addressing the issues of today’s crisis with quick decisions based on global standards. (The author is Director General and CEO of the International Air Transport Association (IATA) and the article is excerpted from a speech he delivered in Delhi recently.)

A luncheon in honour of Giovanni Bisignani

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Wanted: Cargo-ready airports Keshav Tanna

Making a strong case for the aircargo sector, the writer points out that while on one hand privatisation of airports may have brought about significant changes — many of them worthwhile — on the other hand, it has increased costs for shippers and freight forwarders. hile it is a well - known fact that the Indian air cargo market is growing in double digit figures, it is no secret that it has its share of

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A major impediment is the erratic working of the ICEGATE Customs EDI portal. Over the years there has been no serious investment in this field and the system is just not able to take the backbreaking load of increased export/import shipments. C

impediments. The Indian skies have opened up but on the ground the realities are quite different. Capacity has multiplied and infrastructure has come under immense pressure. To address this situation, the Ministry of Civil Aviation chose the road to privatise Indian airports. Today, Delhi, Mumbai, Bengaluru and Hyderabad airports are witnessing this change. There is no doubt that a price has to be paid for better facilities, but seeing the current trend, one is left to ponder: were government monopolies better than un-regulated private operators? Today, our ACAAI (Air Cargo Agents Assosiation of India) members, for example, pay, perhaps, five times the amount they used to for renting office/warehouse premises within these private airports. A number of these airports have no facilities at all for our members as yet — not even on their blueprints! The recently-introduced re-segregation charge levied by Delhi International Airport Ltd (DIAL) upon our members, is a glaring example of leaving the trade at the mercy of the private operators. The proposed AERA (Airport Economic Regulatory Authority) Bill is a positive development to address such situations and the ACAAI has given its recommendations to the Ministry to give due importance to air cargo. Another major impediment is the erratic working of the ICEGATE (Indian Custom and Excise Gateway) — Customs EDI portal. Over the years there has been no serious investment in this field and the system is just not able to take the backbreaking load of increased export/import U

shipments. The system is far too slow and downtimes are high. This is almost always before weekends and holidays and our members are under immense pressure on whether or not shipments will move? We understand from the Ministry of Commerce that funds have been finally sanctioned to upgrade the system. The question we want to ask is: when? While on the whole, the Customs department has continued to be progressive in its approach towards trade facilitation, it cannot be understood why Customs procedures throughout India cannot be standardised? It is, after all, one country! This could be contentious, but the ground realities speak for themselves. To address these and many other issues, the ACAAI has put forward various proposals through the Civil Aviation Core Group (CACG ) which is chaired by the Civil Aviation Minister. These include the need for bonded forwarders terminals cargo village concept security issues training and user-friendly aviation policies. The world is coming to India. The question is: are we ready? (The author is President, Air Cargo Agents Association of India.) T

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Civil Aviation Minister Praful Patel has often gone on record to say that the country lags behind in air cargo and that steps have to be taken to improve the situation

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FedEx freighters at the Memphis hub: Could India replicate the model?

Now, dedicated cargo

Airports With the Civil Aviation Ministry deciding to establish all-cargo airports around the country, stakeholders in the aircargo sector are looking forward to an encouraging growth. Growth in aircargo, after all, symbolises a booming economy.

ong considered the unattractive child of the aviation sector, air cargo has suddenly acquired a status it could not have dreamnt of a few years ago. Today, with

the economy booming, air cargo is on a high. The Civil Aviation Ministryâ&#x20AC;&#x2122;s proposal to frame a policy for the development of airports exclusively for cargo operations has indeed come as a welcome measure for the industry. If and

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Study on aircargo ndia’s Ministry of Civil Aviation seems to have woken up at last. In a move that is certain to have longterm implications, it has decided to conduct a study on the aircargo sector in the country with the object of ensuring a seamless flow of cargo at airports and reduce dwell time at cargo terminals. In addition, a long-term policy on aircargo is also being worked out at the topmost levels. The feeling in the Ministry is that cargo has not been given the place of importance it deserves. In the official files, air cargo despite the infrastructure bottlenecks surpassed the targets at major airports during 2004 -2007. The government had fixed the target for cargo growth at these airports at 8,87,910 tonnes, 94,8,200 tonnes, 10,13,040 tonnes and 12,99,520 tonnes for 2004-05, 200506, 2006-07 and 2007-08, respectively. The actual achievement during these years was 10,02,720 tonnes, 10,94,840 tonnes, 11,91,520 tonnes and 12,06,180 tonnes, respectively. In the next five years, the

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At Delhi's Indira Gandhi International Airport, infrastructure development like air conditioned public waiting halls, the Truck Dock Area of the Centre for Perishable Cargo (CPC), the modification of cargo terminal with facility to maintain ambient temperature, etc. have been completed.

when such airports are established, the air cargo sector would receive the muchneeded boost that it has been hankering for a long time. Civil Aviation Minister Praful Patel has often gone on record to say that the country lags behind in air cargo and that steps have to be taken to improve the situation. He has indicated that the government is looking at liberalising the air cargo sector and has raised the foreign direct investment limit from 49 per cent to 74 per cent. There is also a move to allow foreign airlines to pick up minority stakes in dedicated cargo operators. With the development of these allcargo airports scheduled to attract substantial private investment in the cargo segment, the Civil Aviation Ministry has already started identifying the requirements of the different sectors — from perishable goods to the FMCG (Fast Moving Consumer Goods) segment — for the formulation of the policy. These airports will, of

Kolkata Airport aircargo terminal

sector is expected to grow at 9.1 per cent annually with 2006 - 07 as base year. There was, therefore, a need for a comprehensive policy on aircargo. The proposed policy, therefore, would be a document which would take stock of the procedures involved in the

course, be in addition to Nagpur — which is being developed as a cargo hub — and established in the country’s major business centres. Under the new policy on cargo, a Centre for Perishable Cargo (CPC) would be established, which would ensure movement of perishable cargo at the airports. Coupled with the plans to set up cold storage chains at major airports, these centres would go a long way in enhancing the flow of fruits, vegetables, flowers, etc to the rest of the world. Air cargo within the country is primarily handled by Air India (previously Indian) and Jet Airways with DHL, Blue Dart Express and First Flight taking up express delivery. Low-cost airlines like Air Deccan, GoAir and SpiceJet have been showing interest in air cargo services. Deccan’s Captain G R Gopinath, for example, feels that modern agriculture, trade and industry would underscore the necessity of air cargo/ freight services. Capt. Gopinath told CRUISING HEIGHTS: “We are actively strategising to

Under the new policy on cargo, Centres for Perishable Cargo would be established, which would ensure movement of perishable cargo at the airports

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sector and lay down the ground rules. As for the special study, the government has, in fact, approached Pricewater houseCoopers (PwC) to undertake the detailed study and submit a report in two months’ time. According to sources in the Civil Aviation Ministry, the PwC’s report will be in two parts: the first part would suggest measures to remove infrastructure bottlenecks; and, the second would provide the growth projection for 2020. It is an acknowledged fact that the sector was still a neglected area even though it generated 30 per cent revenue for the airport operator. Looking at the reasons, it is not difficult to guess which is the top priority: dwell time at major airports. In fact, dwell time at Indian airports is higher when compared to cargo hubs in nearby Singapore, Thailand or even Dubai. One of the subjects that the aircargo policy would deal with — and, incidentally, one which has been on the wish-list of most of the stakeholders in the sector — is the creation of cargo villages for the growth of the domestic air cargo industry. A cargo village will be a begin low cost cargo operations with the conviction that transporting apples from Kashmir to Chennai at the lowest possible cost would give a much needed boost to our primary economy. The process for floating a new subsidiary dedicated to air cargo services has begun with the approval of the Company Board”. One could expect the aircargo operations of the low-cost carrier to start in the next few months. The cargo move by Air Deccan would utilise its fleet to the maximum. “Given our huge network and operating bases,” Capt Gopinath said, “the cargo operations would be a natural offshoot. Our company has 40 planes flying to 60 centres and eight operating bases spread across the country”. It is not merely Air Deccan, which is interested. There are many waiting in the wings to start dedicated cargo services. The figures are encouraging enough: air cargo in India has nearly tripled from 4.9 lakh tonnes in 2000-01 to over 14 lakh tonnes in 2004-05. The government, on its part, has started taking the right steps for the improvement of the air cargo trade. At Delhi’s Indira Gandhi International Airport, infrastructure development like air conditioned public waiting halls, the Truck Dock Area of the CPC, the C

bonded area, preferably near the airport, where all air cargo consignments will be scanned and cleared before being transferred to the airport. In addition, the aircargo policy would also take into account the implementation of electronic data interchange (EDI) at airports for faster clearance of cargo consignments. The technology would go a long way in reducing the time taken to clear cargo: 10-12 hours for export and 24 hours for import from a few days. That is takes now. The EDI is indeed a sore point. Now that the government has decided to bring changes in the aircargo setup, the situation should change. Snehal Parikh, an advisor at the ACAAI and one of the members in its thinktank, said that “ACAAI should be involved at the planning stage in the development of various Indian airports, as this would go a long way in bringing about a user-friendly product”. The government on its part has accepted the suggestion and invited the ACAAI to be part of the Airports Authority of India’s airport development projects — at the Chennai and Kolkata airports — going on.

The growth opportunities in air cargo have fuelled airlines to look away from the metros and at greenfield airports like Bengaluru and Hyderabad to tap the huge potential. Not too long ago, Vasudevan Thulasidas,the then chairman and managing director, Air India, had mentioned that “aviation cargo has huge potential which needs to be tapped. ..”

modification of cargo terminal with facility to maintain ambient temperature, etc has been completed. Even at Amritsar airport, the construction of a modern air cargo terminal and a temporary CPC have been commissioned. And at Kolkata airport, PhaseI of Integrated Cargo Terminal for export operation at a cost of Rs 49.66 crore has been commissioned. Web-based EDI in export cargo processing has been implemented on 100 per cent basis at Delhi, Mumbai, Kolkata and Chennai airports. The Cargo Service Centre has been permitted to operate reefer dollies for moving perishable cargo loaded in the container from the CPC to the aircraft bay without levy of any additional charge on airlines or the trade. With the right mix of infrastructure, investment and geography, local economies would get a big lift from air cargo. Take the case of a virtually nondescript village called Obetz in Ohio, USA. Not long ago, there were only houses and farms. However, in the past few years, the “bedroom community” of Obetz has been transformed. Warehouses and industrial parks have sprung up in the fields. Behind this explosive economic growth is air cargo or more specifically, the rejuvenation of Rickenbacker Airport, a H

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Logistics to the fore recent report prepared by top international real estate consultant and property management company Cushman & Wakefield’s Indian arm has brought cheers to the domestic logistics industry. Reason: C&W has predicted that come 2015, the logistics industry in the country will be earning around $385 billion with a growth rate of 15-20 per cent annually. The report, Logistics Industry — Real Estate’s New Powerhouse, has taken stock of the realty market in the metro cities and assessed the opportunities for logistics. The findings, however, are not surprising since C&W has concluded that the country’s financial capital, Mumbai, will remain the most preferred location for the logistics industry for the next half-a-dozen years. The report also mentions that “established” locations like Delhi, Chennai, Kolkata and Hyderabad would see good growth too. The reason why these cities are attractive is their rail and road connectivity. To top it all, the cities are also witnessing investment in infrastructure, massive expansion in the organised retail trade, establishment of new manufacturing hubs and Special Economic Zones (SEZs — many are functioning and a number them have been planned in the next few years). While Mumbai will see seven or eight logistics parks on around 600 acres of land with an investment of approxi-

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The Nagpur hub will come up on time but also the government must move fast for setting up the all-cargo airports. Perhaps, we could look at Dubai's example. From a simple trading post it has become a sophisticated international city and it is all due to cargo.

former military base into an all-cargo airport. Such all-cargo airports have started mushrooming all over the US. Analysts have also found a word — “aerotropolis” — to describe the cities that have suddenly come into the spotlight

Construction work at Nagpur cargo hub

mately $200 million coming up in the future, the city will not be the only one to see such growth. The C&W report points out that the country will see 110 logistics parks, spread over 3500 acres and built at an estimated cost of $1 billion, start functioning by 2012. These parks will together have about 45 million sq ft of warehousing space. The eastern metropolis of Kolkata, for example, has been given permission to construct ten SEZs while Hyderabad will develop five logistics parks, spread out over 220 acres on about 10 million sq ft of warehouse space by 2012. Chennai, which is second in the country in terms of handling container cargo, has become a major car exporting hub and to accommodate the car manufacturing industry’s needs, the city would because of these cargo airports. The recent development in and around airports stems from growth in the air cargo industry, brought on by larger airplanes, “just-in-time” delivery and e-commerce. As the economy has become more

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see six logistics parks, spread over 240 acres along with the three Free Trade Warehouse Zones, spread over 900 acres. Though the new Bengaluru International Airport has been facing teething problems, its proximity to Chennai and Kochi in Kerala will ensure its continued growth. The reasons for the optimism stems from the fact that in addition to the manufacturing of garments and textiles, the city has now become a biotechnology hub. According to plans, four logistics parks, spread across 140 acres, will be developed by 2012. According to Cushman & Wakefield India, some cities, which did not figure as logisitics centres, would see a growth. These would be the many Tier-2 and Tier-3 cities that â&#x20AC;&#x153;offer good connectivity to multiple markets and will witness increased activity from logistics players, providing a thrust to the real estate marketâ&#x20AC;?. As for the other cities that the C&W report points out, there are a number of them. Among them are Bangalore, Indore, Jamshedpur, Ahmedabad and Ambala. Among the emerging hubs will be Nagpur, Vishakhapatnam and Gurgaon (in close proximity of the international airport at Delhi). Though these cities lack in infrastructure at the moment, they stand out in terms of their geographic location and access to manufacturing clusters. Nagpur, the report points out, has emerged as the ideal location for hub-and-spoke distribution due to its location. global, companies are manufacturing, storing and distributing goods at cost-efficient points around the world, and using planes to tie up all those facets together. For airports, which profit from landing fees, air cargo is big business. But the effects of the air cargo economy go far beyond airport boundaries. Often, air cargo draws industries such as goods distribution, logistics and light manufacturing. The Obetz story began sometime in 1979, when it was decided to revive the old military base and C

A FedEx employee unloading packets for delivery

For airports, which profit from landing fees, air cargo is big business. But the effects of the air cargo economy go far beyond airport boundaries. Often, air cargo draws industries such as goods distribution, logistics and light manufacturing.

invite the air cargo industry. More than $72 million was spent on the airport from 1981 to 91. The investment started paying off in 1985, when Flying Tiger, a major international air forwarder, chose Rickenbacker as a hub. Subsequently, Flying Tiger, was bought over by FedEx and there was a slump. But since then, things have improved. Today, the 5000 acre airport is one of the largest publicly owned all-cargo airport in the world. To top it all, the airport has spawned 13 industrial parks and of course thousands of jobs. Not surprisingly, many other areas in the US started looking at proposals to develop similar all-cargo airports. This is despite the fact that most air cargo comes through the countryâ&#x20AC;&#x2122;s largest passenger airports: Hartsfield in Atlanta, JFK in New York and DallasFort Worth. Take the case of Memphis. As the headquarters of FedEx, Memphis has attracted industries, all intent on sending their products out in the shortest possible time. A few features are necessary for the air cargo industry and these are long runways and good road and railway connections. However, the other factors for successful air cargo are extremely area specific. For example, a city needs

As the economy becomes global, companies are manufacturing, storing and distributing goods at costefficient points around the world S

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to be located in the path where cargo is going. Goods, say cargo forwarders, fly around the world just like rivers. One cannot have a giant air cargo centre located on the upper branch of a river stream. Cities also need to be located near interstate highways, because the air cargo and road transportation industries are so closely connected. However, there are a few drawbacks that have to be kept in mind. Maintenance and construction are needed almost constantly to keep up with cargo demand. Cargo flights occur mainly during the night, and residents are not too keen on hearing the noise from loud planes landing and taking off almost everyday.

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structure had to become a priority area. He pointed out that there were as many as 55 airlines operating out of India. To top it all, many more had shown interest to start services to the country. In such a situation, he said, issues of infrastructure had to be addressed first. It is time then for all-cargo airports to become a reality. The country, in fact, possesses all the necessary ingredients to become an international super cargo power. It is in such circumstances that the government decided to establish the world class cargo hub in Nagpur. The Nagpur hub will come up on time but the government must move fast for setting up other all-cargo

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From our files: An Indian Airlines plane being loaded

It is time for all-cargo airports to become a reality. The country, in fact, possesses all the necessary ingredients to become an international super cargo power. It is in such circumstances that the government has decided to establish the world class cargo hub in Nagpur.

Whatever the drawback, the growth opportunities in air cargo have also fuelled airlines to look away from the metros and at greenfield airports like Bengaluru and Hyderabad to tap the huge potential. Not too long ago, Vasudevan Thulasidas, Chairman and Managing Director, Air India, had mentioned that “aviation cargo has huge potential which needs to be tapped. Airport infrastructure will work in the right direction”. Vijay Kondath, Former President of the Air Cargo Agents Association of India (ACAAI), was clear that infraN

airports as well. Perhaps, we could look at Dubai’s example. From a simple trading post it has become a sophisticated international city and it is all due to cargo. Today, the city-state’s cargo facilities handle more than 20 freighters a day. To top it all, Dubai airport sees a fully laden Boeing 747 turnaround in 90 minutes. The country possesses Dubai-like ideal locations. With world class infrastructure and convenient connections to major trade routes, these all-cargo airports would strengthen India’s position as a global cargo hub. O

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Establish India as a regional hub Tulsi Mirchandaney

India is ideally positioned to become a regional hub. Before others steal a march over us, it is time to display foresight and a long-term vision — like so many countries have done in establishing and nurturing business centres which have transformed the economy of the countries they are in — and get into a new growth phase to establish a regional hub. he origins of India’s and Blue Dart Aviation’s dedicated aviation network for express deliveries (and India’s first domestic freighter operations) go back to 1996, when the company determined that it could no longer rely on uncertain belly capacity of passenger airlines that operated to passenger schedules and baggage demands. Express packages were typically small in size, large in numbers, and urgent in nature, where reliability of delivery within a short time window differentiated the product offering from all other modes of transportation, and formed the basis of the business model. The product fulfilled a need, and volume growths at a steady 3035 per cent for over a decade outgrew the passenger airline support infrastructure — ushering in India’s first express airline. By a strange coincidence, airmail was the genesis of commercial aviation, both in India and the USA — almost as if small packages possess a proclivity towards their own space and a natural affinity for proprietary air transportation! Nevertheless, it was a bold step to

inject over 80 tonnes of capacity per night in an untested market, and before liberalisation reached the inflection point that produced the amazing results it did in later years. The market responded positively: the move unleashed a latent demand, and the rest, as they say, is history! The success of express operations lies in service excellence, the ability to consistently offer end-to-end solutions through a single window and via an integrated network to an individual customer. The aviation component is just one element in this vast network of infrastructure, technology and people, but an important one. It provides the infrastructure and capacity to move large volumes at high speed over a large expanse, and connect important commercial hubs. Control over the entire process that is time-constrained and time-bound, is key. Unlike pure cargo operations, express operations have very specific needs and require development of proprietary operating procedures, which an express cargo airline alone is in the best position to implement. Any inability to self-handle would fragment the service and render it ineffective, destroying the

T 148 The success of express operations lies in service excellence, the ability to consistently offer end-toend solutions through a single window and via an integrated network to an individual customer. The aviation component is just one element in this vast network of infrastructure, technology and people, but an important one. C

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very foundation on which the service has been created. Blue Dart Aviation established its own ground handling and maintenance capability since inception, investing in its own assets, in order to exercise just such a control. Air express worldwide has undergone rapid expansion, with growths overtaking the scheduled freight, charter and mail segments. It has established dominance in the US domestic market, growing from a 3.2 per cent market share in 1975 to a dominant 60.5 per cent in three decades. Similar trends have been witnessed in Europe, where it accounts for over half the market share. Typically, the aviation network is an intrinsic part of the system, and 81 per cent of the world’s freighters are utilised by express operators. This is significant, in view of the fact that 42 per cent of the world air cargo capacity is offered in the bellyholds of passenger airlines. In effect, this means that bellyhold capacity is not the preferred option for commerce and trade, the primary users, regardless of the fact that it comes at lower costs. The main reason is because users are increasingly looking at a spectrum of distribution solutions that the air express service provider offers, rather than a fragmented series of pure transportation and related services. Though the USA is a more mature economy and has a two decade lead over India, it is an obvious comparison for domestic growths because of the country’s wide geography, the long distances and diverse terrain that are conducive to air express distribution, similar to India’s. Growth trends in India have also followed comparable paths. It is interesting to note that Airbus forecasts domestic markets around the world is likely to almost triple over the next 20 years, primarily driven by the express freight demand in China. Airbus also forecasts express growths of 17.1 per cent for India till 2025, following the course of China’s, though driven by different products. India has the added advantage of a large, consuming population, and the economic activity would be a catalyst. The choice of transportation is linked to the value of goods, security and speed, and we have a ground infrastructure that is still far from ideal. All these factors bode well for air connectivity in India. However, the larger opportunity for India is the establishment of a regional hub. Cargo has been and is perceived by both passenger airlines and most airports from the singular, narrow viewpoint of short-term revenues. Perhaps, its role in facilitating trade and business, and thereC

fore having a major impact on the economic development of the region is not immediately apparent. There are a few exceptions of governments and airports that have displayed foresight, had a long-term vision and setup bustling centres of commerce that are now reaping the benefits. The new growth phase for India can be achieved by transforming ourselves into a major regional hub. We are ideally positioned to stake our claim to this position before it is too late. We have a unique geographical location, ideally positioned between Asia and Europe. Our economy is driven by domestic consumption. Unlike most other hubs, we have the power to consume and not just transship commodities through our airports. We have a well-developed domestic air network and a large number of airports to service a wide geography. The growth in the Tier II and Tier III cities is an opportunity. We have a strong manufacturing base. The Free Trade Agreement with SAARC (South Asian Association for Regional Cooperation) gives us an opportunity to consolidate movement into and out of the SAARC region. The proposed FTA with the ASEAN (Association & South East Asian Nations) members is expected to boost bilateral trade from the current estimated US$ 38 billion to around US$ 50 billion by 2010. More importantly, we can learn from the success of other hubs and adapt them to our unique situation. Successful hubs like Singapore and Frankfurt airport have registered steady growths despite the various crises like the Gulf War, 9-11 and SARS (Severe Acute Respiratory Syndrome), amongst others. Two significant catchment areas with important industries at close proximity are Navi Mumbai and Chennai: both important airports and seaports, offering rail and road connectivity. And, regardless of whether we manufacture for export or domestic consumption, or whether we import for re-export or domestic distribution, there will be a requirement for air connectivity. In the end, it is a collective will, a shared vision between the government, regulators, operators, service providers and users, with a focus on stringent timelines, that will help propel us to our destination together as partners in progress. (The writer is Managing Director, Blue Dart Aviation Ltd). T

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We can learn from the success of other hubs and adapt them to our unique situation. Successful hubs like Singapore and Frankfurt airport have registered steady growths despite the various crises like the Gulf War, 9-11 and SARS, amongst others. 0

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Establish India as a regional hub Tulsi Mirchandaney

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AIRCARGO

Up, despite the pressures

pushing it down 150

The fact that aircargo has grown — more than railways or shipping — over the last few years, has not spurred the concerned stakeholders into action. If the country has to move ahead towards globalisation, the situation on ground zero has to change fast.

Cargo planes in parking bays at Indira Gandhi International Airport: Still a long way to go.

n a rapidly shrinking world, the country’s aircargo sector has progressed admirably. Its functional significance has magnified. On its part, the industry has woken up to the call of competition, and has enhanced its efficiency to provide organised and speedy delivery of cargo to every corner of the world. Despite the obstacles that the sector had had to overcome last year, it galloped ahead well past traditional favourites — railways and shipping — to take the biggest bite in freight traffic. A study done by the Associated Chambers of Commerce and

Industry of India (ASSOCHAM), ‘Changing Pattern of Cargo Traffic in India’ 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 and railways during the 2005-07 period. However, that growth has not been reflected in aircraft manufacturer Boeing’s 2008 Current Market Outlook (CMO) as far as cargo is concerned. The company’s Senior Vice-president, sales, Dr Dinesh Keskar was optimistic, however, about

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passenger planes. The country, he said, would need 977 passenger planes between 2008 and 2027, up from 887 (in the 2007-2016 projections). As for freighters: Boeing forecast that India would need 24 freighters in 2008-27 (in fact, this was the same figure that Dr Keskar had come up with last year). That only points to one fact: that the country’s aircargo is on a steady course — neither going up nor going down. Dr Keskar also pointed out that “Boeing’s market outlook is rooted not only in nearterm realities (like the fuel hike, etc), we also recognise the nature of a long-term forecast”and went on to add that Boeing could “revise the cargo projections upwards in the future. But certainly not in large numbers”. The Boeing sales chief also pointed out that the country would not need large freighters like the B777 or B747 because “India is ordering more commercial passenger airplanes. These planes will be adding more cargo carrying capacity in its belly space…a Boeing 777 version can carry up to 20 tonnes of cargo,” he said. If Boeing’s projections are any indication, the country’s aircargo sector has a long way to go. Whether it is infrastructure or the lack of a will to do something, air cargo has always remained in the background. This fact was emphasised by the Air Cargo Agents

Association of India (ACAAI), the topmost national body of the aircargo sector. In its country report presented at the 35th Executive Council Meeting of the Federation of Asia Pacific Air Cargo Associations (FAPAA) in Tokyo in April this year, the ACAAI mentioned that “the skies have indeed opened up for the Indian Air Cargo Industry, but the ground realities still prove major impediments to its sustained growth.” Time and again, industry stalwarts have pointed out that infrastructure — or rather the lack of it — is the main obstacle. CRUISING HEIGHTS talked to an old aircargo hand, Tushar Jani. A pioneer in the country’s express sector, Jani is saddened by the lack of progress in the sector. The powers — that-be — in the government or in the private sector — did not want to focus on air cargo, he said. Even in the new airports — at Hyderabad and Bengaluru — the infrastructure bottlenecks continue. “Air cargo has no priority… there is no forwardthinking on the part of the government. The planning,”he said, “is of low quality. In fact, the government does not seem to have future plans for the air cargo industry and worse, it does not want to take the air cargo industry into the planning process.” The same sentiments are echoed in seminars and meetings organised by ACAAI. The organisation’s VicePresident J Krishnan has been highlighting the problems faced by the forwarding community at almost every forum. “The growth of cargo is the fastest in Chennai among Indian airports. The airport,”he said, “is currently averaging about 10500 tonnes export and 10000 tonnes import every month.”However, he lamented that “infrastructure has failed to keep pace”. According to him — and he is not alone — the problem started with the privatisation process. At least in Chennai, Krishnan felt, the dithering over the privatisation/modernisation efforts has left the international airport in what he termed as the “pause mode, as far as cargo infrastructure is concerned, for the last six

Dr Dinesh Keskar, Boeing's Senior Vice-President, Sales, pointed out that the country would not need large freighters like the B777 or B747 because “India is ordering more commercial passenger airplanes. These planes will be adding more cargo carrying capacity in its belly space…A Boeing 777 version can carry up to 20 tonnes of cargo”.

Boeing’s 2008 Current Market Outlook forecast points out that India would need 24 freighters in 2008-27 — the same figure as last year. That points to one fact: the country's aircargo is on a steady course — neither going up nor going down

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The Indian Logistics sector contributes approximately 13 per cent to India’s GDP, but ironically, its expenditure also corresponds to 13 per cent of the country’s GDP compared to less than 10 per cent of GDP in developed countries, mainly due to inefficiencies in the system. A major setback is the lack of full-fledged Infrastructure on the ground: whether it is by way of roads, space, equipment, documentation and procedures, systems and automation processes, etc. These are not only inadequate but also unable to cope with the growing needs of this industry.

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Northern Region and Regional Manager — Logistics, Lufthansa (Cargo Division), opined that the basic problem was the excessive documentation and this despite the whole cargo system being in EDI mode. “We hardly see any respite. The document flow keeps everyone busy and sometimes we really have to divert from our core business of service to meet this requirement. So, it’s not just infrastructurerelated issues but those driven by processes as well that are a problem,”Jain pointed out. Lufthansa has been handling close to 100000 tonnes of cargo per year and a large amount is from imports. In the country’s financial capital, Mumbai, a master plan had been unveiled for the Chhatrapati Shivaji International Airport (CSIA), soon after the airport was handed over

Tushar Jani, a pioneer in the country's express sector, is saddened by the lack of progress in infrastructure The powersthat-be did not want to focus on air cargo, he said

Due to regulatory restrictions and timeconsuming procedures

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years”. “Now we understand from reliable sources that the new Rs 1,800 crore airport modernisation will concentrate heavily on the passenger side,”Krishnan lamented. In effect, then, cargo is virtually a non-mover: a situation it has been in for the last 15 years. “The blueprint for the export/import terminals was drawn up nearly 15 years ago. The growth was to be in four stages. However, this has not been fully completed,” recounted Krishnan. Chennai’s litany of woes is unending, “The woes of Chennai do not rest with infrastructure deficiency alone. Severe equipment and manpower shortages intensify the difficulties,”he added. According to Krishnan, Chennai is the only metro airport where it takes the custodian a minimum of 36-48 hours to complete the receiving and data entry process of import cargo. Aggravating the situation is the shed on the export side. “That shed has been with the custodian, Air India, and though there was an order to demolish it years ago since it was beyond repairs, it still stands today and is used as the holding area for export cargo processing and palletising; every year the rains damage the cargo stored there,” Krishnan said. The primary cause for not demolishing the building is the tussle between the Airports Authority of India(AAI) and Air India over the shifting of the export handling area. The issue has apparently reached the Ministry for a solution and yet there are no answers. The damage to cargo containers also results in pilferage. Krishnan believes that there is no way out of the morass because “the policy of outsourcing manpower to the lowest bidder which is being followed currently, ensures a disconnect between the physical number of personnel deployed and accounted for. Hence, complaints by users are seldom rectified. Are things different elsewhere? Hardly. Delhi, for example, faces major problems— and this after the airport was handed over to GMR. There is not much of a problem with the airport per se but with the facilities provided by the cargo custodians and the customs department. Vipan Jain, Chairman, the Board of Airline Representatives’ (BAR), Cargo Committee —

Growing, and how…

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Growing, and how… such as excessive physical examination of cargo by customs, the average clearance time is in excess of 36 hours.

to private player GVK. The plan had been designed to expand and upgrade the infrastructure at CSIA to cater to one million tonnes of cargo annually. It encapsulated a blueprint for a major transformation of the airport by 2010. In less than two years, CSIA has successfully built and upgraded several aeronauticalside infrastructures to accommodate the high rise in aircraft movement as well as passenger and cargo traffic. Raajeev A Bhatnagar, Regional Vicepresident, Indian Sub-Continent, UTI, and one of the top users of CSIA, said that Mumbai handled approximately 13,000 tonnes of air exports and around 15,000 tonnes of imports per month in 2007. “When you look at the number for the current year, it is 16,000 tonnes a month for exports and 19,000 tonnes for imports per month, on an average. It is evident from the numbers, that there is growth for both exports and imports,”he said. Among freight forwarders, the feeling is that the growth could have been more if the hindrances did not exist. With no provision for expansion of the airport and a 15 per cent year-on-year growth, one is definitely approaching a situation of bottleC

EDI processes of key players in the logistics sector are distinct and thus fragmented. There is no standardised procedure by which all players can log into, enabling seamless processes of documentation.

Trained manpower, which is also a support infrastructure the aircargo sector, is greatly lacking. No longer do cargo agents provide airport-toairport services, but also end-to-end solutions, all of which require systems trained personnel.

necks, Bhatnagar cautioned. However, he was quick to point out that it would be wrong to say that the problems had increased because the airport had been taken over by private players. He was categorical in stating, however, that although the process of privatisation had started, the impact in terms of value additions, more facilities, efficient handling and cost and space optimisation was nowhere in sight. One of the reasons he cited was that more attention was being paid to upgrade and expand the passenger terminal. Incidentally, the Mumbai International Airport Limited has plans to double the cargo movement to one million (10 lakh) tonnes annually, in the next two years. The move is significant, because an overhaul of the entire electronic data interchange (EDI) system to make it at par with cargo operations of international airports has been undertaken. In the country’s newest Greenfield airport, Bengaluru, the situation is improving — but only just. Said Shesh Kulkarni, president of UT Worldwide, and a prominent member of the Bangalore Air Cargo Club (BACC), “At this point of time, H

The software and hardware capabilities available to the customs department are not up to the mark.

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the Bangalore airport is working smoothly though we are still waiting for the offices and warehouses which were to be provided by BIAL but these are not ready yet… once they are, things should ease up significantly.” That was not the case in March this year. Just before the Bengaluru International Airport Ltd (BIAL) was to start, freight forwarders like Kulkarni got a shock. The services at the brand new airport were “pre-historic”and forwarders almost decided to stop using it. In fact, many of them started looking for alternative options to send their consignments to Hyderabad, Chennai, Coimbatore and even Mumbai simply because they felt that BIAL would not be able to handle cargo loads to international destinations.

ready. The National Highway No 7, the main connecting road was — and still remains — an overcrowded one. To top it all, the other worry for the air cargo industry is that BIAL will levy higher charges for cargo than what they were paying at the old HAL airport. In such a situation, operators feel that they would be left with no other alternative but to go to other airports. Said Kulkarni, “Our biggest challenge is that none of the forwarders have warehousing facilities in BIAL. Once BIAL is ready with this facility, it will ease things significantly.”In fact, the incomplete air cargo warehouse at the airport has been causing a lot of worry for freight forwarders as no goods are safe there. The air cargo agents and customs house agents too are an unhappy lot with the lack of space as well as the minimum facilities at the cargo warehouses. The warehouses which were being put up by Air India - SATS Cargo Handling Ltd. are incomplete. In such a situation, in the absence of infrastructure, how could the customs department declare the premises as bonded customs warehouses, ask freight forwarders. To rub salt into their wounds, they have been told that they will have to pay at least Rs 200 a sq ft (for rent and facilities like phone, computer connection) for the temporary space — till the Two views of the Bengaluru Airport cargo terminal building. cargo village is ready. Kulkarni had mentioned at that time Till the infrastructure was in place, that “we do not have any doubts about the “vehicles piling up at the new airport”is a abilities of BIAL handling cargo from April big problem. Indeed, as Kulkarni pointed 1 (the proposed date of the opening of the out, “It is not a good sign. However, BIAL airport).” What he and the others were authorities have definitely eased the apprehensive about was whether BIAL situation,”he said. would be able to efficiently handle cargo The story is slightly different at Hyderfrom that date since there were many grey abad (GMR Hyderabad International areas including the roads, parking areas Airport Ltd), with the cargo infrastructure for cargo trucks, etc. improving now that a new perishable carThe air cargo industry in the city had go centre has opened. Viswanath Attaluri, pointed these shortcomings to BIAL and Chief Commercial Officer of GHIAL, told the members of BACC had held regular CRUISING HEIGHTS. “The perishable centre talks with the authorities. “We had been is designed to handle 13,000 tonnes of perseeking meetings with BIAL, in fact, the ishable cargo annually in the first phase of freight community has been very actively development, up to 2011. The capacity will involved with all the stakeholders: the be raised to 25,000 tonnes a year in the secBangalore Air Cargo Club (BACC), the ond phase, in 2013-14. According to him, Bangalore Customs House Agents “Infrastructure is the key to economic Association Ltd (BCHAAL) and also the development and we are confident that Air Cargo Agents Association of India our proposed CPC at Hyderabad will give (ACAAI), including customs and we had a great boost to the movement of perishhoped for a few minimum surprises. ”This ables and will boost the horticulture activity of Andhra Pradesh and South didn’t happen. The demand for connectivity hardly India in particular.” Bengaluru, Delhi, Chennai or Mumbai: found any listeners. The road which connects the airport to the city is not yet finding solutions would not be an easy

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Just before the Bengaluru International Airport Ltd (BIAL) was to start, freight forwarders got a shock. The services at the brand new airport were “pre-historic”and forwarders almost decided to stop using it.

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“Our clients are looking for more efficient and economic ways of getting cargo at minimum exposure and compromise on security and damage to goods. We need our infrastructure to match world standards. This would bring in efficiency and effective control on cost,” said Sesh Kulkarni, President of UT Worldwide.

The Hyderabad Airport’s ATC Tower with the Technical Building and the cargo terminal.

task. Said Mumbai’s Raajeev A Bhatnagar, “Our clients are looking for more efficient and economic ways of getting cargo at minimum exposure and compromise on security and damage to goods. We need our infrastructure to match world standards: where cargo agents are allowed to build pallets, so that cargo can be handed over to the carrier which is ready for carriage. This would bring in efficiency and effective control on cost. Our system,”he emphasised, “should be more flexible than what it is now.” Flexibility can only come when the support system is strong. Said Tushar Jani, “As for solutions, till the Bureau of Civil Aviation Security allows forwarders to stuff goods in warehouses or off-site as is the worldwide practice, we will make no headway. Also, till such time that bonded warehouses are established at airports — a move that will decongest airports — things will remain very much the same. In short, till dwell time — 8 -10 days — is reduced nothing much will happen.” Chennai’s Krishnan also expressed similar sentiments and pointed out that the solutions have to be three-pronged: short, medium and long term. The shortterm solution is to ensure activation of a freight station. This would ensure that the congestion is eased and the blame game between the ramp handler/custodian and airlines is put to rest. The medium-term solution should focus around encouraging agents’ bonded terminals at off-

airport locations where units can be built and delivered for dispatch. The long-term solution is to visualise a freight city offering a comprehensive range of services to all types of users small, medium or large importers/ exporters. Above all,”said Krishnan, “airport management must withdraw from cargo storage and delivery which is not their area of core competence.” Vipan Jain believe that some semblance of improvement would be seen only if the following were worked out: Ensure that SLU (Shipper Loaded Units) both for exports and imports are promoted. Provision of either agent bonded warehouses (which can be shared if required) or space to 3 - 4 major airlines should be allocated. Need to create common EDI platform: one window for all queries. Today, everyone tries to pass the buck to one another. Regular workshops comprising all relevant industry players to meet and understand problems It is to address these issues that, according to Keshav Tanna, the ACAAI has been submitting various proposals through the Civil Aviation Core Group (CACG) that is chaired by the Civil Aviation Minister. These include the need for Bonded forwarders’ terminals; cargo villages; training and, lastly, userfriendly aviation policies. Is anyone listening?

ACAAI has submitted proposals, which include the need for Bonded forwarders’ terminals, etc.

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Air cargo industry on information highway As in all other sectors, IT will play a crucial role in the aircargo business. It will improve service levels and add significant visibility in the air cargo supply chain. However, a lot of work still needs to be done before the country becomes e-freight compliant.

Vipul Jain

ndia has the largest growing middle class in the world with an ever-increasing spending power. This is fuelling the demand for rapid transport by air of luxury goods such as technology and fashion items, as well as traditional cargo such as foodstuffs, pharmaceuticals, and books. With the Indian Planning Commission predicting that air cargo will grow at a rate of 11.5 per cent until 2011-2012, and with India spending about 13 per cent of its GDP on logistics — there is an increasing demand that needs to be met. Clearly cargo has become one of the key components of India’s economic growth. In fact the Airports Authority of India (AAI), has calculated that cargo carried by air in India, although weighing less than one per cent of the total cargo exported, accounts for 35 per cent of the total value of exports. This expansion in air freight demand in the country has resulted in a significant increase in the number of cargofocused airlines. Even those traditional airlines that had previously regarded cargo as little more that a means to supplement passenger revenue, have now recognised the importance of air cargo and are working overtime to grow the cargo business to meet this new business landscape. These carriers have recognised that cargo — being less susceptible to external events like 9/11, avian flu and SARS (Severe Acute Respiratory Syundrome) — can hedge the business against passenger traffic fluctuations. Air cargo can really make the difference between success or failure for an airline. While the market conditions all point to exponential growth in the air cargo industry in India, there are still a number of key concerns that need to be addressed, such as inadequate Information Technology (IT) adoption, lack of skilled resources, complex domestic

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Traditional airlines that had previously regarded cargo as little more that a means to supplement passenger revenue have now recognised the importance of aircargo. C

regulations, security and safety standards, local customs procedures and infrastructure constraints. There is an urgent need to ensure better cargo handling facilities, which in turn would mean enhanced levels of importation, especially of capital goods and highvalue items. The primary initiative to address these concerns is the adoption of computerisation across the value chain. Other initiatives in this direction include the setting up of the cargo hub in Nagpur and the development of cargo-related infrastructures. The Government has already embarked on significant efforts to secure foreign investment for improving infrastructure and other facilities within the Indian aviation industry. Government policies such as deregulation, Open Skies, and increasing the FDI limit from 49 per cent to 74 per cent, will prove favourable for the growth of air cargo. Airports also represent a country’s window to the world. This is where passengers form their first impressions of a country. Airports need to be integrated T

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with other modes of transport like rail and road, enabling seamless transportation to all parts of the country. It is imperative that our procedures improve and facilities grow to encash the predicted industry growth for betterment of the Indian economy. Infrastructure relating to cargo handling like satellite freight cities with multi-modal transport, cargo terminals, cold storage, automatic storage and retrieval systems, mechanised transportation of cargo, computerisation and automation, etc will have to be set up on a top priority basis. The air cargo industry growth holds out a different challenge to key stakeholders like cargo carriers, ground handling agents, freight forwarders and customs, in terms of inadequate infrastructure, non-standardised processes and inability to provide real-time consignment status to meet customer expectations. The air cargo supply chain in its present state is inefficient, slow and expensive, not only for its various small and medium participants, but also for the middle class consumers, who end up bearing extra service charges on each and every commodity purchased. The good news is that the Government has come up with specific air cargo policies that talk about speedy handling of cargo, setting up of cargo villages and development of EDI systems to link all stakeholders in the trade. However, implementation of these policies is a mammoth task and to execute them successfully it is crucial to deploy the combined strength of government bodies, stakeholders, industry bodies like IATA (Inernational Air Transport Association) and solution providers with the necessary domain expertise. IT will play a crucial role in the successful implementation of this policy by improving service levels and adding significant visibility in the air cargo supply chain. For example, in many centres of air cargo excellence around the world EDI (Electronic Data Interchange) community systems have contributed significantly by linking all the stakeholders and enhancing transparency. Similar computerisation initiatives in India would definitely bring in much needed efficiency in air cargo operations in India. Unfortunately, the situation at most airports in India is that air cargo IT solutions are either obsolete or non-existent. Those that do exist are disparate and do little more than provide automated support for manual processes. They offer little in the way of management information, provide no alignment to strategy, C

and fail to provide support for business optimisation. Added to this, there is lack of collaboration of cargo value chain partners and system integration. The net result is inefficient and ineffective airport management. The poor state of technology systems in the air cargo business within the country, coupled with the rapid expansion of the air cargo logistics industry, has led to the emergence of a new breed of IT solution providers, such as Kale Consultants, that are forward-looking, responsive to industry changes and domain savvy. They have brought to the table advancements in IT, enabling the airlines and airports to take advantage of next generation systems which provide better technology, superior functionality and augmented delivery options. They support e-business initiatives, offer new and innovative communication methods, support both traditional air waybills and airmail, have sophisticated MIS systems, and provide easy ways to manage and optimise the space and yield on the aircraft and in the warehouse. This new breed of IT solution providers are also working with key industry bodies like IATA to promote positive change in the industry. In the forefront of this is the e-freight initiative which aims to elminate paper from the logistic chain. To move this initiative along in India, Kale Consultants is working with IATA to bring about a well managed implementation. There is no doubt that the need for e-freight exists. An IATA study has shown that there can be up to 38 pieces of documentation accompanying a shipment. This manifests itself in excessive costs due to delays, data inconsistencies, and excessive administration resulting in industry losses to the tune of $1.2bn a year. On top of this, the logistics players have to bear negative environmental as well as economic consequences. T

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The good news is that the Government has come up with specific air cargo policies that talk about speedy handling of cargo, setting up of cargo villages and development of EDI systems to link all stakeholders in the trade. 0

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Even though there is much to do both legislatively and through systems implementation the mood of the industry players is definitely positive towards the adoption of e-freight. C

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So, the need to transform and adopt e-freight is apparent. Within India there is a lot to do. In a recent survey conducted by IATA, only 52 out of 209 countries passed a high level assessment of whether they were likely to be ready to move towards e-freight compliance. Unfortunately, India failed to pass this assessment, and has to complete a number of steps to ensure compliance. The main obstacle is that India has not ratified the treaties (Montreal Protocol No 4 or Montreal Convention 1999) that would recognise electronic data or e-docs as having the same legal status as paper documents and contracts Even though there is much to do both legislatively and through systems implementation the mood of the industry players is definitely positive towards the adoption of e-freight â&#x20AC;&#x201D; no one doubts the potential benefits it can bring. India being very much a â&#x20AC;&#x2DC;paper-based economyâ&#x20AC;&#x2122; will take a long time to change. The industry has an enormous number of small freight forwarders who operate on a shoestring budget. For them, working with paper is often cheaper than having to invest in the necessary tools and technical infrastructure to bring about e-freight. This is where technology companies like Kale are already providing solutions that take away the need to invest in capital expenditure from small business players. For example, by providing a community portal, companies like Kale would be able to provide a technological framework, that can support electronic data or e-waybills that operate purely on a pay-as-you-use basis. Such solutions suit the small to medium forwarders since they do not need to worry U

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about IT, and their operational expenditure is linked entirely to the scale of their business. Other requirements for e-freight in India, such as technical compliance, and e-customs appear to be heading in the right direction. Once the government gives a legal status to electronic data and e-documents, it will enormously assist the air cargo industry in reducing costs, increasing productivity and improving overall efficiency. As a solution provider, Kale has worked with large number of airlines, freight forwarders and ground handlers worldwide. Its experience with these industry players and associations like IATA enables it to bring best practices to air cargo community. It is easy to sense that in India many logistics players are hungry to grab a piece of the India air cargo dividend, and they recognise the need to adopt new solutions to make this a reality. Without doubt, the next 10 years will see incredible growth in the air cargo business in India. Competition from other countries in the region is fierce, and there will be many companies that will not survive the fierce pace of growth and change. There is still a long way to go before the Indian industry can claim to match or exceed global standards for excellence, but the potential and willingness to succeed is there. There is no doubt that the seeds have been sown for a successful future in the industry and those that grasp the opportunities today will surely be the winners of tomorrow. (The writer is CEO and Managing Director, Kale Consultants Ltd). T

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A freighter taxiing at Delhi airport.

Waiting in the wings There is an urgent need for creating world class aircargo connectivity not only between cities and industrial hubs but also between rural India and the urban metropolis. It is no wonder then that established carriers and even new entrepreneurs are jumping on the bandwagon to set up aircargo carriers. aptain Gorur Ramaswamy Gopinath refuses to sit quiet. The pioneering spirit in him is seeing him behind a new venture: integrated logistics company.

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Named Deccan Air Cargo and Logistics, Gopi as he is fondly known, took off to a flying start when he sent off the first of three A 310s — leased from Air India — to EADS’ Dresden facility for conversion into a freighter. When it is fully operational, Deccan T

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Cargo would have nine or 10 planes. The pioneer of low-cost air travel in India, Gopi has been working on his US $200 million cargo venture for the last two years. A firm believer of lowcost domestic cargo services, this time around he has got the timing perfect: aircargo traffic from and within India has been growing steadily. According to a report by Ernst and Young, domestic and international air cargo traffic has grown at a CAGR of 12.6 per cent and 13 per cent, respectively, during financial years 2002-07. An Airports Authority of India (AAI) report underscores the E&Y report and points out that domestic freight traffic

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Containers to airfreight stations rom a company which only ran container specials from Indian port cities to different destination in the country — freight trains with containers — CONCOR (Container Corporation of India) has plans to go global and its first venture in that field would be the setting up of airfreight stations. For a conservative organisation like CONCOR, which is owned by the government, the move will see a major diversification by the company. First, it will see the company entering into the aircargo sector and second, it will be the first step to its becoming a multimodal logistics services provider.

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Captain G R Gopinath (left) at the MoU signing ceremony with Maharashtra Airports Development Company managing director R C Sinha at Nagpur. Among those present at the ceremony were Civil Aviation Minister Praful Patel, Minister for New and Renewable Energy Vilas Muttemwar and Maharashtra Chief Minister Vilasrao Deshmukh. Capt. Gopi’s Deccan Cargo Pvt Ltd signed the MoU with MADC to set up a state-of-art cargo facility at Nagpur.

showed an increase of 8.1 per cent in the April-December, 2007-08 period, as compared to freight traffic handled during the same period last year. Domestic freight traffic increased to 423.43 tonnes this year as compared to 391.83 tonnes, moved during the period of April-December 2006. Gopi has a clear vision about what he would like to achieve. He puts it rather matter of factly: “We are convinced that transporting apples from Kashmir to Chennai at the lowest possible cost will give a much-needed boost to our (India’s) primary economy.” However, transporting fresh produce was not the only reason to start the cargo services. The idea of a cargo airline came into Gopi’s mind when he experienced how long it took for airplane spares to reach from one destination to another. His cargo outfit will ensure that “we deliver goods from one place to another in 24 hours”, he said. Deccan Cargo is scheduled to start operations on metro and non-metro G

An upbeat Rakesh Mehrotra, Managing Director, outlined the growth plans. CONCOR, he pointed out, provides customs clearance and other related facilities at most of its inland container depots (ICDs). So, the foray into the aircargo segment would be a natural extension. In fact, CONCOR has air cargo complexes in Bangalore and Nasik (in western India) airports. “We want to set up air freight stations at 15-20 of our ICDs. These would provide a whole range of services: from bonded warehousing, palletisation as well as custom clearance and other formalities that is usual for the air cargo business.” CONCOR started scouting around

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for an alliance partner sometime ago. The alliance, Mr Mehrotra informed, would later be converted into a joint venture. The timing, of course, would depend on how fast the business picked up. “We have invited expressions of interest from a number of people and we have developed business plans with three of them. We are now evaluating which partners we should go with,” he said. Work on transforming the ICDs to airfreight stations would begin by the end of this year. Mr Mehrotra also said that these stations would be smaller than the setups in Nasik and Bangalore airports. CONCOR would not be investing too much since the basic infrastructure exists at these ICDs. All it has to do is ramp up its services. As the business grows, said Mr Mehrotra, CONCOR would even “set up greenfield air-freight stations.” CONCOR has ambitious plans for its global foray. Mehrotra said: “We will start a terminal at Nepal.” This will be in addition to the one which is scheduled to start in Bangladesh and Pakistan soon. The CONCOR story started in 1988 with its container trains service. As a government organisation, it was the one of the first to promote exports from the country with its terminals at different destinations. It started its operations by taking over seven ICDs from the Indian Railways and has now grown to a network of 57 terminals. As Mehrotra put it, CONCOR has “brought the ports to the hinterlands. We hope that whatever be the growth in the logistics business, we would still be the dominant player providing infrastructure and trade support to the exim (export and import) and domestic markets.” Over the last few years, the organisation has diversified with the air freight station business as its latest move. Its first step was in the port sector, where it took the joint venture route. It now has two operating ports and is on the lookout for more such opportunities. Unfazed by the competition, CONCOR achieved a growth rate of 16 per cent in export-import and 21 per cent in the domestic business. Last year it handled 2.5 million TEUs (twenty feet equivalent units) and this year it expects to cross three million TEUs.

routes once the converted freighter flies into the country sometime at the end of the year. While freighters and aircargo would form the core of the company, Capt Gopi was quick to point out that it would be much more than that. As an integrated logistics company, Deccan Cargo and Logistics would link highways and ports and set up airport warehousing facilities and regional logistics hubs. The idea would be to connect those places that are still not connected by air. Undeterred by the competition — there could well be at least halfa-dozen new home-grown aircargo carriers starting operations in the country — Capt Gopinath believes that there is enough space in the Indian market for an efficient multi-modal logistics operator. And that is what Deccan Cargo will be: an end-to -end express logistics service provider delivering cargo to the doorstep of the customer. Till the first flight takes off, Gopi has been busy strengthening his network. He has already got some of the top people in the industry in his venture. Leading the team is former FedEx employee Jude Fonseca. In addition, he has attracted a number of private players who are willing to fund his venture. Among the other newcomers are those who have not been troubled by the infrastructural problems at the airports or the high fuel prices. Neither have these factors forced entrepreneurs to scale down their plans or put them on hold. Take the example of Delhi-based Capt Mukut Pathak and his Aryan Cargo Express (ACE). Talking to C RUISING HEIGHTS , Capt Pathak said, “Today India has about 400 million people in the middle income group. This figure is likely to touch 550 million by 2015 as India turns into a major manufacturing base.” The retail boom in the country, he added, is yet to arrive and when that does, it will spurt the demand for movement of cargo by air. “ACE is entering a segment of the air cargo industry that does not have any Indiabased operator. We are more international oriented than domestic,” he said. As an afterthought, he commented: “We will be competing with the real big boys of this game like FEDEX, DHL and UPS.” Pathak’s ACE has worked out a plan to fly with a combination of A310/300-600Fs and MD11Fs. Along with his partner, promoter Rishiraj Singh Dungarpur, he has signed the H

Gopi has a clear vision about what he would like to achieve. He puts it rather matter-offactly: “We are convinced that transporting apples from Kashmir to Chennai at the lowest possible cost will give a much-needed boost to our (India’s) primary economy.” However, transporting fresh produce was not the only reason to start the cargo services. The idea of a cargo airline came into Gopi’s mind when he experienced how long it took for airplane spares to reach from one destination to another. His cargo outfit will ensure that “we deliver goods from one place to another in 24 hours”.

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QuickJet would like to be known as a merchant air cargo carrier which is keen to open up capacity to all players in the market. The carrier ’s CEO Natesan Ramesh believes that QuickJet will achieve what the low-cost carriers did in the Indian market. “Like the low-cost carriers, we are trying to open the cargo space,” he said. Undeterred by the competition, Ramesh said, “We believe that the market is sufficiently underserved.” Naturally, whether it is express or plain air cargo, all newcomers hope to take a major bite of the pie. Also waiting in the wings are Jet Airways, Kingfisher and even low-cost

India Post gung-ho on freighters he lack of infrastructure in the aviation sector in India had not dimmed the enthusiasm of the country’s domestic express majors. In fact, most of them have managed to keep their heads well above the water. However, with the fuel price hike, the situation seems to have taken a turn for the worse. Yields have gone down and operating costs have suddenly gone up leading many small courier companies to even think of closing down business. To add to their problems, the government’s postal services has decided to heat up the market by inducting four more freighter aircraft by the end of this year. Simply put, India Post wants to strengthen its

speed post services — for which it will use freighters — to around 15 major cities in the country. India Post has, in fact, not hiked its tariff like the private courier services which have raised rates from eight to 20 per cent. This has made India Post’s speed post services cheaper by at least 30 per cent. While private couriers charge around US $20 for a 500 gm packet from India to the US, India Post’s rate is a mere US $15. The cheap rates, according to Post officials, would bring in more volumes. Hence the need for expanding its Speed Post services to more cities. India Post’s freighter story started way back in August last year when it leased an Air India freighter for dedicated postal service to the land-locked

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lease for two MD11s from Skyholding. “We plan to launch with three leased aircraft and grow to 12 aircraft within 14 months to acquire network stability and realise the full potential of our network. We do not foresee much of a problem at airports because we will operate at night within the Indian airspace and during the day, we will vacate this airspace for international flights.” There is also the Bangalore-based start-up aircargo player, QuickJet. Promoted by leading logistics company and a pioneer in the express courier sector, AFL Private Limited, and Singapore’s Cardinal Aviation,

Delhi-based Capt Mukut Pathak and his Aryan Cargo Express (ACE) believe that “India has about 400 million people in the middle income group. This figure is likely to touch 550 million by 2015 as India turns into a major manufacturing base”. The retail boom in the country is yet to arrive and when that does, it will spurt the demand for movement of cargo by air.

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carrier GoAir. In fact, low cost carrier SpiceJet would like to enhance cargo operations to Guwahati and Bagdogra. With that, the number of destinations covered by the airline’s cargo operations will go up to 11. SpiceJet’s Chief Commercial Officer, Samyukth Sridharan recently said that the carrier was aggressively looking at the cargo business and has put in place the necessary infrastructure. The latest buzz is that big-time realtor in Northern California, Sunil Suri, has plans to set up a cargo airline. He has got an office in Delhi and his cargo company — Menlo Airways — has planned to lease a eight north-eastern states of the country with Guwahati, the capital of Assam state (well known for its tea gardens) as the centre. The aircraft with its 15-tonne load capacity has been ferrying Speed Post packets and parcels. It was a move that brought the staid, old Post and Telegraph department to the jet age in one swift more. Over the last six months or so, the service has not only become a virtual lifeline for the north-eastern states but also gained enough popularity to warrant more freighters. According to M S Bali, India Post’s Chief General Manager (Operations), there was always a plan to induct more freighters. He pointed out, that negotiations were on with Air India to lease four of its Boeings. He also mentioned that if there were hitches in the lease with AI, India Post would approach others leasing agencies. If the lease with Air India does go through, it will be good for the carrier since the postal department would be utilising the freighters for eight hours only: sometime at night to early morning. The planes will be available for cargo services by Air India during the day. Air India has seven Boeings which it has been leasing out and if once they are put into service by India Post, Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore would be covered. Express majors like Blue Dart or DHL do not seem to be worried about the moves by India Post. For them, the low cost is hardly a factor. Instead, their officials pointed out, customers were looking for reliability, safety and transit time: features which were not the high points of India Post, a government organisation.

Boeing 757 from Northwest. However, the enthusiasm among the newcomers and some of the old hands has not rubbed off on a number of others. Take the case of Flyington Freighters, the cargo company launched by T Venkatram Reddy’s Deccan Holdings. Way back in mid2006, the carrier placed orders with Boeing for four widebody 777 aircraft. It was followed up in January 2007 with an order for six Airbus A330-200F freighters — the first cargo airline to order the planes. The planes are scheduled to start flying into the country at the end of 2009. With no domestic operations, Flyington has planned operations with Hyderabad as the base to destinations in S E Asia, China, Middle East and Europe. However, even before it could start it has developed hiccups. It recently lost its Austria-born CEO Robert Strodel, who has joined the Moscow-based Air Bridge Cargo Airlines (ABC). That, apparently, has put the owner of Flyington on his backfoot. On the other hand, the ATF crisis and the whopping losses the aviation sector has been going through have seen a number of the country’s domestic carriers on a pruning spree. As a result, Air India has had to keep its cargo plans on hold. Not too long ago, Air India’s Director Commercial & SBU Head Cargo, Ms Anita Khurana was upbeat. The losses incurred from diminishing passenger traffic would be offset by cargo, she emphasised. The card up her sleeve was the launching of the carrier’s domestic cargo service from July 1. To begin with, the service, with Nagpur in the centre of the country as its hub, would have connected six major destinations: Delhi, Kolkata, Chennai, Mumbai, Bangalore and Hyderabad. Anita Khurana’s cargo planes would have taken off like they did around 45 years ago. At that time, the postal department’s night air mail service was in operation and Nagpur was the base where the post bags were exchanged. Air India had, in fact, sent four Boeing 737s for conversion. Each of them with a payload capacity of 12 to 15 tonnes, have returned home to start duties. All of Air India’s domestic cargo flights would have been operated six days a week, barring Mondays, and completed at night with the first one flying in to Nagpur from Kolkata at around 0200 hrs. Twenty minutes later H

Bangalore-based start-up aircargo player QuickJet would like to be known as a merchant air cargo carrier which is keen to open up capacity to all players in the market. CEO Natesan Ramesh believes that QuickJet will achieve what the low-cost carriers did in the Indian market. “Like the low-cost carriers, we are trying to open the cargo space,” he said.

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Air India’s plans for freighter operations (2009-2016

Form Nagpur to the world

Air India’s Director Cargo, Anita Khurana had plans to launch the carrier’s domestic cargo service from July 1 this year. To begin with, the service, with Nagpur in the centre of the country as its hub, would have connected six major destinations: Delhi, Kolkata, Chennai, Mumbai, Bangalore and Hyderabad. But the high fuel costs, among other factors, has put a spanner in the plans.

the Mumbai flight would land followed by the one from Delhi. The last flight would have been one which would start from Chennai and touch Bangalore and Hyderabad before reaching Nagpur. At the hub, the shipments would be exchanged and the flights would return to their original destinations. Now, with the Air India and Indian merger, Khurana has been wanting to boost domestic and international operations too. Air India has, in fact, been offering shippers capacity of 1300 tons/day on its network. She told C RUISING H EIGHTS : “The annual international freight movement into and out of India is more than a million tons and has grown at a CAGR of 13.7 per cent during the period 2003-07 and 2006-07.” This, according to forecasts, would grow at a CAGR of over 11.5 per cent from 2007-08 to 2011-12. The demand for Air India’s services has seen it being awarded the ‘Emerging Cargo Airline of the Year.’ An upbeat Khurana said, “AI’s ranking has jumped from ninth position in September ‘07 to Number One in March ‘08, for exports ex-Delhi.” In such cir-

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cumstances, Air India had enhanced its requirement from its present six freighters (two Airbus 310s and four Boeing 737s) to more freighters. In addition, Khurana has been pushing ahead for more technology and that would include not only booking and tracking on the net but also EDI (Electronic Data Interchange) connectivity and implementation of bar-coding and a pallet tracking system. All these moves would have fallen into place when Air India would start its hub operations at Nagpur for both domestic and international operations. She pointed out: “Nagpur being centrally located would provide excellent scope for the further movement of goods to every nook and corner of the country, either by air or any other logistics mode (road and rail).” Now that the plans are on hold, Ms Khurana’s plans to go global has received a setback. She had planned that between 2009 and 2016, Nagpur would become the link for Air India, between 13 domestic cargo destinations and 15 stations abroad from the present Mumbai/ Bangalore/ Chennai to Dammam and Frankfurt (see chart).

G R Gopinath has been working on his US $200 million cargo venture for the last two years. A firm believer of lowcost domestic cargo services, this time around he has got him timing perfect

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IVRCL, a Rs 3,000 crore group, is a name to reckon with in infrastructure, construction and real estate sectors in the country. IVR Prime Urban Developers Limited is a 100 per cent subsidiary of IVRCL and has successfully completed the prestigious Hill Ridge Township at Gatchi Bowli, Hyderabad. Many other projects are in various stages of implementation at Bangalore, Chennai, Hyderabad and Pune.

IVRCL Infrastructures & Projects Limited is making a foray into Noida in a big way with grand plans, both in residential as well as SEZ sectors:

Beautiful modern townships at 118, 119 and 121 Sectors of Noida

Residential blocks with world class modern amenities, including Gymnasiums, Club House and sports facilities

2, 3 & 4 Bedrooms Appartments with highend specifications

Development of IT SEZ at Sector 144

IVRCL INFRASTRUCTURES & PROJECTS LIMITED

Corporate Office : 8-2-596, 4th Floor, IVRCL Towers, Road No. 10, Banjara Hills, Hyderabad - 500 034 Ph.: +91-40-2335 2961 / 2962 / 2963 Fax: +91-40-2335 4482 e-mail: info@ivrinfra.com Delhi Regional Office : P2, Ist Floor, Green Park Ext., New Delhi-110016 , Ph.: 011-41001049

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Airport modernisation: Is there a mantra? Gurcharan Bhatutra

As the country marches towards globalisation, there are many who advocate that our airports should match those in China or the USA. However, before we rush in to ugrade/ modernise our existing airports, we must take stock whether such moves would help air transport in the country. ndia has more than 450 airports. Many of these so-called airports include non-operational airports and landing strips capable of handling only a general aviation aircraft or a helicopter. The Airports Authority of India (AAI) handles all the scheduled air traffic from 65-70 airports. Of these, 45 airports account for 99 per cent of air traffic while the top 30 airports covering all the state capitals account for 95 per cent of traffic. The prime mode of transport, in India, is road followed by rail. Only one per cent use is air transport, 84 per cent people use road and the balance 15 per cent people use rail. Some experts quoting the number of airports operating in the USA, China and some other countries have been suggesting that India match these numbers. Another suggestion is to upgrade and modernise all these airports. More than 100 airports managed by AAI have been making losses since inception. These so-called advisors who have been suggesting upgradation of all these airports should also compare the volume of traffic handled at foreign airports and Indian airports. India should carefully assess its own needs in a realistic manner rather than blindly copying others? The Government proposes to spend Rs 40,000 crore (US $9300 million) for the airport sector. This is the first time airports have got that kind of attention and allocation of funds. The AAI has listed 35 nonmetro airports for modernisation in Phase I and another 13 airports in Phase II. These 48 airports along with five airports in the private sector, namely, Mumbai, Delhi, Bengaluru, Hyderabad and Cochin cover all state capitals, important tourist and industrial towns. The AAI has plans to develop the operational facilities at the 48 airports while the cityside development is proposed to be funded through Public-

Private Participation. The government has also made special allocation of funds to improve the airport system in the NorthEastern states. All airports have runways, taxiways, aprons, terminal, etc. However, they differ in size and quality of service provided by them. The size really does not matter. There could be a small international airport capable of handling only smaller aircraft. In contrast, there could be a large domestic airport capable of handling B-747s or A380s. The volume of traffic handled, or it will handle in the near future, should primarily decide the size of an airport. Again there could be an inefficient international airport and an efficient domestic airport. This is where each airport has to be different from the other and market itself. Till recently, airports in India were managed by the government or the public sector. Their development plans were largely based on political considerations and commercial viability was never an issue. In the early 90s, it was decided to upgrade 18 airports where Indian Airlines wanted to fly the A320 from. Available passenger traffic or load was not the consideration. The public sector airlines were no better than the airports when it came to their commercial viability. Coming back to airports, passenger terminals normally have been getting better attention in comparison to operational facilities. Little attention was paid to improve the ground operational infrastructure at Mumbai and Delhi airports. This, ultimately, has resulted in delay of arrivals and departures at these airports. Another reason for congestion over these airports has been the clearance of more flights than the system can handle. As mentioned earlier, commercial viability has never been a consideration. Take the case of Salem airport. It was developed

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More than 100 airports managed by AAI have been making losses since inception. The advisors who have been suggesting upgradation of all these airports should also compare the volume of traffic handled at foreign airports and Indian airports. C

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with great fanfare but is lying idle. The same is the case with Pathankot airport. To top it all, there is still talk of 450 airports. Sometime ago, a proposal was cleared by the state government to develop a B747 airport at Hasan in Karnataka in preference to the new Bengaluru airport. Fortunately that proposal was dropped. Airports must identify themselves with the market or the catchment areas they serve. They should not only understand their customers but also their needs. The needs of business travellers could be different from leisure travellers. Similarly, expectations of international passengers could be different from domestic passengers. An airport serving LCC (Low-Cost Carriers) could be drastically different from an airport serving full cost carriers. I recall when I joined the Civil Aviation Department in the late sixties, the Central Public Works Department (CPWD) used to look after airport infrastructure. In those days, nobody talked of airport users or customers. At Khajuraho airport, a terminal for 35-40 seater aircraft was opened. By then Indian Airlines had switched over to B737 bringing in more than 100 passengers. By the 80s, the International Airports Authority of India (IAAI) could establish a formal system of consultation with the airlines. There were regular discussions on development plans of the four international airports with the IATA. Rather, airlines used to tell airports what facilities they would need while development plans of domestic airports were discussed with Indian Airlines. Of late these consultations have stopped. Now, there are 16 international airports, five of them in the private sector. It is, therefore, necessary to reestablish that system of formal discussions with IATA. In the case of domestic airports, discussions with domestic carriers can be carried out over airport development/ modernisation plans. Let the airlines suggest priorities. This will help us to develop useful facilities. For that a neutral body like the Foundation for Aviation and Sustainable Tourism (FAST) can act as a facilitator. As per the IATA, the financial health of the airlines is bad. The rising Air Turbine Fuel (ATS) prices are further pushing them into a deeper crisis: 26 airlines have already gone bust and more may join that group. Therefore, consultations with airport users and airlines in particular are all the more necessary in view of the prevailing health of our airlines. In the long run, airports recover their costs from the airlines. According to the IATA, airport charges in India are high in comparison to our neighbours and should be lowered. C

Such consultations with airlines will help the airports to work in a cost-effective manner and also win their customersâ&#x20AC;&#x2122; confidence. To my mind, a modern airport is one that allows smooth flow of traffic, be it aircraft or passenger or cargo. It has well laid out runways and taxiways with more capacity than demand, facilitating safe, orderly and efficient movement of aircraft. The well-spaced terminals equipped with latest facilities and desired concessions should allow efficient flow of passengers making them comfortable. The city side connectivity should allow hassle -free approach to the terminals. The airport should also have good parking arrangement and efficient public transport. It is not advisable to modernise all airports to the level of Delhi and Mumbai. Perhaps, we can limit the modernisation to the 14 other international airports. The second group targeted for modernisation could be another 30 airports serving state capitals, important industrial, commercial and tourist destinations. These airports can work as satellite airports and should be developed as per their traffic potential. The third group could consist of 25-30 airports capable of handling 40-50 seater aircraft. These airports may not be commercially viable and could be placed in the category of public utilities and their development should be funded by the government. The remaining airports could be prepared to handle general aviation aircraft and helicopters and should not be called airports. These facilities could then be classified as landing strips. (The writer is the Director, General, Foundation for Aviation and Sustainable Tourism, and Chairman, Air Transport & Tourism Advisors). T

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DOMESTIC AIRLINES Jet is now ‘one of the top 10’

With the introduction of these new services, business travellers will now enjoy the convenience of same day return between two cities. Jet chief Naresh Goyal honoured: Chairman of Jet Airways, Naresh Goyal, has been honoured with the Business Person of the Year award at the prestigious UK Trade and Investment India Business Awards 2008. The award ceremony took place in Mumbai on September 9, 2008. This distinction was conferred upon the Jet chief for his significant contribution to India-UK business relations and for making the UK a strategic and pivotal destination in Jet Jet Airways chief Naresh Goel receiving the Airways aggressive award from British High Commissioner Sir international expan- Richard Stagg. sion plans. Accepting the award from British High Commissioner Sir Richard Stagg, Goyal said that his carrier was committed to redefining the international travel experience with “our acclaimed inflight product and service standards. The UK was our first long-haul venture and continues to be popular with our international travellers, for both business and leisure.” The UK Trade and Investment India Business Awards are a recognition and celebration of the UK-Indo business partnership, specifically in terms of inward investment, collaborative business partnership, entrepreneurship and innovation.

JET AIRWAYS was recently voted one of the Top 10 Airlines in the world. The carrier bagged seventh place in the poll of the world’s best airlines and the fifth in the business class category for its Herringbone-configured Première product; and sixth in the cabin services category. The Best in Travel Poll 2008 recognises the best in the industry and acknowledges their services and products to the tourism and airline industry. The results of the poll were voted by the international readers of SmartTravelAsia.com, a regional online travel magazine, through May to July 2008. The voters, with about 60 per cent in Asia, 20 per cent in Europe and UK and 20 per cent in USA and North America, took 15.5 annual air trips on average. Jet’s daily flights to Muscat from Thiruvananthapuram: The maiden flight from Thiruvananthapuram to Muscat took off with a full complement of passengers, on-board its state-ofthe-art, internationally-configured Boeing 737-800 aircraft with a two-class configuration: Première and Economy. With the launch of this new flight, the airline now has three daily services to Muscat from Thiruvananthapuram, Kochi and Mumbai in India. Pune - Bengaluru starts again: Jet has re-introduced its daily operations on the Pune-Bengaluru-Pune sectors, becoming the “only“ airline to offer its passengers a same day return service between the two cities. With the launch of these new, daily flights, Jet has offered passengers an early morning departure from Pune and arrival in Bengaluru. The airline will also operate the last direct service out of Bengaluru to Pune, offering business travellers a full day to complete their work and return home, without the bother of an overnight stay. New daily flights from Hyderabad to Visakhapatnam, Goa and Pune: Jet introduced its inaugural services on these sectors with its new, state-of-the-art ATR 72-500 aircraft.

(From left) Jayesh Ranjan, IAS, Managing Director, Andhra Pradesh Tourism Development Corporation inaugurating, the Hyderabad-Visakhapatnam flight. Also seen in the picture are Girish Nair, Area General Manager- Karnataka & Andhra Pradesh along with his team; John Crizzle, Area Manager-Andhra Pradesh, Jet Airways greets Raveen Pinto, General Manager- Marketing, GMR Airport, at the inaugural ceremony of the Hyderabad-Pune flight; and, K V Brahmananda Reddy, Special Secretary, Infrastructure & Investment Department & Managing Director, Andhra Pradesh Aviation Corporation Ltd., lighting the lamp to inaugurate the Hyderabad-Goa flight.

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SpiceJet ranked among Top 10 Budget Airlines

Indigo introduces few flights

SPICEJET has been ranked amongst the top 10 budget airlines in Asia by Smart Travel Asia magazine based on a survey, “Best in Travel Poll”, on the low-cost carriers. Through this survey, Smart Travel Asia has recognised the leading “aspirational” brands that offer useful indicators of business and leisure travel preferences at the upper end of the market. SpiceJet has clearly made its mark with an ability to deliver reliable schedules, competent service, also extensive route network and access. Smart Travel Asia is the one of the leading online travel magazines in Asia. SmartTravelAsia.com 2008 “Best in

INDIGO, the award-winning low-fare domestic airline that is redefining airline quality standards in India, has announced the expansion of its route network, with the introduction of four new fights from September 14, 2008 onwards. The new flights will operate between Pune and Chennai, with an onward connection to Kolkata. With the launch of these new services, IndiGo will operate 99 daily flights connecting 17 destinations. IndiGo will introduce non-stop round trip service between Pune and Chennai, Bruce Ashby, CEO, IndiGo as well as additional flights between Chennai and Kolkata and between Kolkata and Pune via Chennai. Speaking on the launch of new and additional services, Bruce Ashby, CEO of IndiGo said: “We are pleased to announce these services, which provide additional ways for our customers to travel across our route network.”

A Spicejet aircraft

Travel Poll” is all about a distillation of the readers’ perceptions and favourite travel brands. The survey has run for three key months, May-July 2008 and the voting is based on substantial hands-on travel experience, word-ofmouth at dinnertime chats, as well as an idea of the brand drawn from advertising and editorial exposure in the media, a great deal of this online. Recently, SpiceJet had also won “CIO 100 award” from CIO magazine for its technological innovations in aviation industry. Its technology platform allows for safe transaction of business and is a core support function of all the key processes of the company Spiceroute makes an appearance again: SpiceJet has appointed Ink Publishing to produce its inflight magazine, Spiceroute, which was reintroduced on all SpiceJet flights from October 2008. Samyukth Sridharan, Chief Commercial Officer, SpiceJet, said: “We are thrilled to be offering our passengers a world class magazine onboard all flights. Spiceroute will add an extra dimension to the passenger experience and enhance their overall enjoyment onboard.” Jeffrey O’Rourke, Chief Executive of Ink Publishing, said that the “airline’s route network covers many popular destinations for both local and international business and leisure travellers - creating an amazing media platform, which will appeal to a wide variety of advertisers. In addition to its European, Middle Eastern, Australian and American portfolio, Ink now publishes a dozen magazines in Asia — from India to the Philippines and from China to Indonesia.” New flights from SpiceJet: SpiceJet has introduced new flights enhancing connectivity on its existing network. The new flights will now offer additional connections between key cities like Delhi, Hyderabad, Chennai, Pune and Coimbatore on a daily basis, thus providing a wider choice to travellers at very convenient timings.

Air India signs financing arrangement AIR INDIA recently inked a US$ 550 mn financing arrangement with the US Exim Bank in Washington for financing three 777s and five 737-800 aircraft. The agreement was signed between Raghu Menon, Chairman and Managing Director of Air India and James Lambright, Chairman of the US Exim Bank. This facility would be financed by Standard Chartered Bank with a guarantee from the US Exim Bank and has been raised at rates sub libor. The guarantee of the US Exim Bank is in turn guaranteed by a guarantee from the Government of India. The commercial portion of 15 per cent is being financed out of a term loan from IDBI Bank for Rs 285 cr. Speaking on the occasion, Raghu Menon said that the “induction of these modern aircraft into our fleet would be a major step forward in making Air India a truly global airline through significant expansion of our international network.” With this, the total amount of facility raised by Air India for acquisition of 25 Boeing aircraft is US$ 1.750 bn. The remaining 43 aircraft are also proposed to be financed through the support of the US Exim bank.

Raghu Menon, Chairman and Managing Director, Air India

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INTERNATIONAL Qantas takes delivery of A380 AUSTRALIA’s flagship airline, Qantas, has received the first of 20 Airbus A380s on order, at a ceremony in Toulouse, France. The Rolls-Royce powered aircraft was handed over to Qantas Chief Executive Officer, Geoff Dixon, and Qantas CEODesignate, Alan Joyce by Tom Enders, Airbus President and CEO, and John Leahy, Airbus Chief Operating Officer Customers. Qantas was the first customer to conclude the signing of a contract for the A380. In November 2000, it ordered 12 A380s, marking the first time in the airline’s long history it had ordered Airbus aircraft. Qantas later increased its order for A380s to 20, and is now the second largest customer for the world’s most modern aircraft. Qantas’ A380 cabin was created by internationally renowned designer Marc Newson. Typically, the A380 seats 525 passengers in three classes however, Qantas’ cabin is extra spacious with 450 seats (14 First, 72 Business, 32 Premium Economy and 332 Economy). Qantas’ first commercial A380 services will be launched on October 20 from Melbourne to Los Angeles, and on October 24 from Sydney to Los Angeles. Later Qantas will also fly the A380 to Singapore and London.

Qantas A380 flying over Sydney

British Airways woos with low London fares

Airways and BAA are moving the second phase of their long-haul flights into Terminal 5. Flights from Mumbai will move to Terminal 5 in addition to Bangalore that moved in the earlier phases. Customers with flights departing from the satellite terminal will be able to go directly to Terminal 5B after they have passed through ticket presentation and security and enjoy the lounge facilities. The Terminal 5B Galleries Club lounge, open to customers traveling in First, Club World or Club Europe cabins, plus Gold and Silver Executive Club members, includes: The Silver Bar, Wine Gallery, Work and Entertainment Zones, Elemis Travel Spa, Shower Suite and Kids Zone.

BRITISH AIRWAYS has announced a low fare to London from India this festive season. Starting at Rs 9990, plus taxes, fees and surcharges, the fare is valid on flights to London from Delhi, Mumbai, Kolkata, Chennai, and Bangalore. In the World Traveller cabin, everything comes with comfort in mind, from ergonomically

Singapore Airlines to reduce fuel surcharges SINGAPORE AIRLINES will reduce fuel surcharges for tickets for travel on short and medium-haul flights, following a recent easing of jet fuel prices. When the surcharges were introduced, Singapore Airlines undertook to keep their application under ongoing review, and to make adjustments in response to sustained changes in the price of jet fuel. There will be four tiers of surcharges, from the existing three, to differentiate between medium and longerhaul flights. Collections from the fuel surcharges will still only provide partial relief from the increased expenditure on jet fuel, which remain at historically high levels despite the recent correction.

designed seats with lumbar support, to your own seat back video screen and a wide choice of the latest family movies and TV entertainment. BA wins at Conde Nast Traveller Awards 2008: Conde Nast Traveller awarded British Airways the title of 'Best Business Airline’. A spokesperson from British Airways commented, “We’re delighted to have won best business airline at the Conde Nast Traveller Awards. The magazine is a bible in the travel world and the awards mean all the more because they’re voted for by the readers.” Terminal 5 galleries lounge opens: British Airways recently opened its sixth Terminal 5—the ’Galleries’ lounge in the terminal’s satellite B building. British C

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New flights from Emirates SKYWARDS, the frequent flyer programme of Emirates, recently introduced a new update to its programme that offered members the ease of using their Skywards Miles to upgrade eligible Emirates flights online with just a few clicks. When accessed at Emirates.com, members can now benefit from the convenience of 24-hour access and a choice of nine different languages to complete their upgrade. When customers upgrade using the Skywards Miles booking facility, they will gain all of the benefits of travelling in the higher class. This includes additional baggage allowance, lounge access and chauffeur drive (where applicable, and must be requested 48 hours prior to departure). Emirates SkyCargo has new VP: Abbas A Haji has joined the Emirates SkyCargo team in Dubai as Vice President Cargo Commercial Development, reporting directly to Ram Menen, Divisional Senior Vice President, Cargo. In his new role, Abbas is responsible for driving the development of Emirates SkyCargo’s “Priority” portfolio, including Courier, Express and Mail. The three Priority products experienced an average of 30 per cent growth in the 2007-08 financial year and are on track to achieve further growth this year. Abbas joined the Emirates Group in 1977, working for Dnata Cargo. Over the last 30 years, he has held a variety of management positions within the group includAbbas A Haji ing at Dnata Airport Services, the Dnata/Safiran project in Tehran, Dnata ground handling Doha, Gerry's Dnata in Karachi, Emirates Manager Iran and Area Manager Bahrain. Emirates and Sabre ink ‘Global Airline Distribution Agreement’: Emirates recently signed a 10-year global airline distribution agreement with world-leading travel distribu-

HH Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group (right), signed a 10-year global airline distribution agreement with Sam Gilliland, CEO of Sabre Holding.

tion provider Sabre Travel Network. The agreement was signed by Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group, and Sam Gilliland, CEO of Sabre Holdings. Effective immediately, the agreement provides Sabre-connected travel agencies and corporations around the world with easy and efficient access to Emirates' full content fares C

for the next 10 years through the Sabre global distribution system (GDS). Emirates offers complimentary stay at Atlantis: Emirates Airline has unveiled an exciting new offer in partnership with the fabulous Atlantis, the flagship resort and water park recently opened on Dubai's Palm Jumeirah. Passengers flying Emirates Airline's First Class or Business Class to or via Dubai over the coming months will receive a complimentary stay in this magical hotel and enjoy its incredible world of aquatic wonders. The offer includes unlimited access during their stay at Atlantis to the amazing water playground Aquaventure, featuring thrilling water rides as well as The Lost Chambers, a maze of underground tunnels offering fascinating underwater views.

SriLankan commended by India THE GOVERNMENT OF INDIA has commended SriLankan Airlines for its handling of Indian VVIP flights during the recent South Asian Association for Regional Cooperation (SAARC) Summit in Colombo. The gathering of Presidents and Prime Ministers of the eight-nation SAARC involved hundreds of senior government officials from India, Pakistan, Nepal, Maldives, Bangladesh, Bhutan, and Sri Lanka, amidst tight security. SriLankan Airlines provides ground handling facilities for all airlines and private aircraft at Colombo's Bandaranaike International Airport. Following the summit, the Indian High Commission in Colombo wrote to SriLankan Airlines, commending its "excellent arrangements and other assistance to the Indian delegation". The airline was also sent a gift of a designer watch autographed by Indian Prime Minister Manmohan Singh. The performance of Sri Lanka's National Carrier also drew praise from Air India, which carried the Indian VVIPs to Colombo.

Lufthansa’s culinary journey through France IN SEPTEMBER and October, Lufthansa invites its ‘First and Business Class passengers’ on a culinary journey through the realm of haute cuisine. For eight weeks, Lufthansa Star Chef Alfred Friedrich will be offering passengers on long-haul flights from Germany, a modern take on FrenchMediterranean delicacies. Alfred Friedrich originally hails from Austria. After a period as chef de cuisine at the Residenz Heinz Winkler restaurant in Aschau in the Chiemgau region of Upper Bavaria, he moved to Frankfurt, becoming chef de cuisine at Zarges, a gourmet establishment in the famous, restaurant-lined street known as “in der Fressgass.” Lufthansa takes equity share in Brussels Airlines: Wolfgang Mayrhuber and SN Airholding Chairman Eitienne Davignon have signed an agreement, which initially envisages a strategic stake in SN Airholding SA/NV and, in a second step, the full integration of the Belgian carrier Lufthansa Star Chef in the Lufthansa Group. Alfred Friedrich O

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Bell Helicopter to showcase civil choppers BELL HELICOPTERS is participating in India Aviation 2008 and will showcase some of its latest helicopter models. Ideally suited for emergency medical services, news coverage, fire-fighting, law enforcement and tourism, Bell helicopters can operate in varied weather conditions. The company will also explore possibilities of sourcing parts and spares from Indian suppliers, thus giving a boost to the domestic aeronautics industry. Bell has over 51 per cent market share in India. It will deliver its hundredth helicopter in Octoberâ&#x20AC;&#x2122;08. Bell provides customer service facilities in India through two very capable organisations: Airwork India and Deccan Aviation. It also trains the customer pilots and engineers at its customer training academy in Fort Worth. Helicopters have matured from unstable, vibrating contraptions that could barely lift itself off the ground sixty years ago into sophisticated machines of extraordinary flying capability today. They are now able to hover, fly forward, backward and sideward, and perC

Bell Helicopters (clockwise from left) at work: The AH -1W takes off from an aircraft carrier; the MV-22 on deployment in a war zone; and, the Bell 47 and 429.

form other desirable maneuvers required. Founded in July,1935 as Bell Aircraft Corporation by Lawrence Dale Bell, Bell Helicopters Textron is an American helicopter and tilt rotor manufacturer headquartered in Fort Worth, Texas. Bell Helicopters has additional plants in Amarillo, Texas and Mirabel, Canada. Bell continues to set the pace for the industry and expand the scope of vertical lift. It is an industry leader with unmatched recognition. Bell Helicopter invented the tilt rotor aircraft. This unique aircraft lifts off vertically, then flies like an airplane with twice the speed, three times the payload and five times the range of traditional helicopters. Bell Helicopters was the first to obtain certification for a commercial helicopter. Bell has delivered more than 35000 aircraft to customers around the world. S

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Maldivian takes to IBS MALDIVIAN has gone live with IBS’ new-generation Passenger Service System (PSS), aiRES in the Software as a Service (SaaS) mode. The solution will help the airline manage its passenger reservations, inventory control, fares and ticketing, and departure control functions. Maldivian has chosen IBS’ solution for its cost-effectiveness, optimum fit, short implementation time and flexible features that include web distribution, GDS, and credit card payment gateways. Through its open architecture, aiRES will enable Maldivian to broaden its customer service offering by integrating it with its distribution channels.

SAS joins leaders in search of new fuels SAS Scandinavian Airlines has, with other leading air carriers, Boeing and Honeywell’s UOP, a refining technology developer, established a group to accelerate the development and commercialisation of sustainable new aviation fuels. With support and advice from the world’s leading environmental organisations, the World Wildlife Fund (WWF) and Natural Resources Defense Council (NRDC), the Sustainable Aviation Fuel Users Group makes commercial aviation the first global transportation sector to voluntarily drive verifiable sustainability practices into its fuel supply chain. The group’s charter is to enable the commercial use of renewable fuel sources that can reduce greenhouse gas emissions, while lessening commercial aviation’s exposure to oil price volatility and dependence on fossil fuels.

Airlines supporting the sustainable fuels initiative include Air France, Air New Zealand, All Nippon Airways, Cargolux, Continental Airlines, Gulf Air, Japan Airlines, KLM, SAS Scandinavian Airlines and Virgin Atlantic Airways. Collectively, they account for more than 15 per cent of commercial jet fuel use.

Egyptair’s new flight Responding to requests from various travel agents, Egyptair recently announced an increase in the frequency of direct flights to Cairo. With increasing demand for seats, a new flight will be added effective from October 27, 2008, which will operate on Tuesdays/Wednesdays on the same route —

Cairo — Mumbai — Kuala Lumpur — Mumbai — Cairo besides the three flights which are presently operating. The carrier offers immediate connections with a short transit period in Cairo to Europe, America, Africa and UK.

173 Bahrain set to become key aviation maintenance hub THE KINGDOM of Bahrain is now also setting its eyes raise the profile of the kingdom as a key aviation hub in on becoming a key aircraft maintenance hub in the the region. “Our engagement with the national airline, region. Gulf Air, is a natural partnership aimed at significantly In support of this aim, Bahrain's national carrier Gulf contributing towards the growth and development of Air signed an agreement with Bahrain Real Estate Com- Bahrain.” Osama Al Ali CEO of the Bahrain Airport pany (Edamah) to build a multi-million dollar world-class hangar at the Bahrain International Airport as part of the airline's growth and expansion strategy. The agreement was signed on behalf of Gulf Air by Chief Executive Officer Björn Näf and Edamah CEO Ma’amoon Al Moayyed. Edamah has already identified an international firm specialised in building hangars to design and construct the complex, which is slated for com- Gulf Air hangar signing: (Left-right) Bahrain Real Estate Company CEO Ma'amoon Al Moayyed, Gulf Air CEO Näf and Bahrain Airport Company CEO Dr Osama Al Ali at the signing ceremony to set up a world class pletion in 2011. Con- Björn hangar for Bahrain’s national carrier Gulf Air. struction will begin next year and once completed, the facility will be able to Company, said the growth and expansion of the nationaccommodate three modern wide-body aircraft at any al carrier will be a boon for the nation that has already time. established itself as the leading financial centre in the Edamah CEO Al Moayyed agreed saying this would Middle East.

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TRAVEL & TOURISM Sydney welcomes Indian tourists

on to revolutionise the hospitality sector, introducing it to the concept of boutique hotels. In her capacity as President, HAI (Hotel Association of India), she has been working closely with key industry players, tourism ministry and other relevant industry bodies representing the concerns of hospitality sector in India.

TOURISM NEW SOUTH WALES Chairman Les Cassar, and Group Manager, International Marketing, Carmel Beattie, were in India to strengthen relationships with tourism and business partners and encourage more Indian visitor arrivals to Sydney and its surrounding areas. Cassar and Beattie highlighted the importance of the

ITC Mughal Agra wins ‘Best City Spa’ award THE AGRA-BASED ITC Mughal’s General Manager, Anil Chadha, received the Tatler's Best City Spa Award when the hotel's new creation, Kaya Kalp — The Royal Spa, for having won the first prize. The spa won the award, under the category of City Slickers, beating eight other famous names. Kaya Kalp — The Royal Spa, launched as recently as May 2008, is the only winner from India this year and finds a place, in the prestigious Tatler Spa Guide for 2008 — featuring 101 of the best spas of the world. Located in Agra, Kaya Kalp — The Royal Spa, offers a living experience of the opulent lifestyle of the Mughal Dynasty, through India’s only Mughal Hamam. With the spa experience spread over 99,000 sq feet, it is also the largest spa in the country and combines Mughal architec-

(L-R): Seiw Hoon Tan, Les Cassar, Carmel Beattie of Tourism New South Wales addressing the press conference.

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Indian travel market, and showcased Sydney and New South Wales tourist attractions during their time in Delhi. They also visited Mumbai and Hyderabad. The delegation pointed out that Sydney was the gateway to living, studying, working and holidaying in Australia. Sydney and the surrounding regions of New South Wales offered exceptional experiences to suit the tastes of Indian travellers. “We are very excited with the growth in the Indian market in recent times. India is one of our most important markets with great potential to further grow,” Beattie, said. Accompanying the two was Siew Hoon Tan, Regional Director, South Asia, Tourism New South Wales who said that “Tourism New South Wales will continue to focus on the primary markets of Delhi and Mumbai in Northern and Western India followed by other metros and mini metros. The target segments primarily include families, honeymooners and MICE during the peak holiday season.”

Priya Paul awarded Zee Astitva award 2008 PRIYA PAUL, Chairperson, Apeejay Surendra Park Hotels, has been awarded Zee Astitva Award for Excellence in Business. A joint collaboration of Mumbai-based Archana Trust and Zee, the Zee Astitva award recognises and honours dynamic Indian women achievers across various fields that have made significant contributions to the growth of society at large. Paul received the award at a ceremony held in Mumbai sometime ago. Priya Paul has contributed significantly to the hospitality industry in the past two decades. Having joined as marketing manager at The Park, Priya Paul, Chairperson, Apeejay Surendra Park Hotels New Delhi, in 1988, she went C

Pomegranate Room at the ITC Mughal’s Kaya Kalp—The Royal Spa

tural features and design as well as indigenous traditional treatments. The theme of the pomegranate — a fruit, said to have been brought into India by the first Mughal Emperor, Babar, pervades the interiors in the form of a lietmotif — running dramatically across the white floor as an inlay in red engineered stone. S

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Gwangju Kimchi Festival awaits Indians GET READY to relish the local gastronomical specialities of Korea at the annual Kimchi Festival to be held in Gwangju city from October 15 to October 19, 2008. Korea is wellknown for its culinary diversity and inimitable charm for the connoisseurs. Gwangju has been hosting the Gwangju Kimchi Festival every year to promote the excellent quality of traditional Korean Kimchi to the world and commercialise Kimchi as a tourist product. Visitors can taste close to 160 Kimchi varieties all unique due to their nuances in flavour and types of ingredients used. Kimchis are also gaining popularity for their nutritional value and disease prevention effect.

Catering to the needs of the modern and technically savvy global traveller, the website offers a stimulated interactive online experience of the country’s diverse attractions, accommodation and indulgences, as sought by the visitors before they arrive. The website is also powered with

Malaysia calls for Borneo ‘Marathon’ WHAT BETTER venue to test yourself than under the shadow of the imposing Mount Kinabalu at the Borneo International Marathon, scheduled for October 12, 2008? Held in the beautiful ‘Rainforest city’ of Kota Kinabalu in East Malaysia’s northernmost state of Sabah, the race, which is the only marathon to be held in Borneo, promises to offer not only a fantastic race venue, but also a memorable holiday for all the participants and the tourists. The much-awaited race has some of the most beautiful race routes in the world-taking runners along the Kota Kinabalu's picturesque coastline. About 500 participants have confirmed participation out of which over 200 are international participants from Kenya and New Zealand. Both experienced and novice runners would be participating in the 400m and 800m race categories. Also, part of

The Hon Edmund Bartlett formally launching the website.

key features including improved functionality, updated content, quicker response time, GPS tracking of favourite spots and Google Maps.

Six Senses Hideaway Samui awarded SIX SENSES Hideaway Samui achieved the near perfect score of 96.45, and more than one full point ahead of its nearest contender. Not only did ‘Six Senses Hideaway Samui’ walk away with the ultimate award it was also top in the Best Overseas Hotels category. Referring to the voting readers, Conde Nast Traveller stated: “Every one of you who stayed there raved about its sophisticated ambience/décor (93.75), environmental friendliness (97.50), lovely location (97) and extensive leisure facilities (96.25).” ‘Six Senses Hideaway Samui’ follows in the footsteps of the group's flagship property, Soneva Fushi, which was also awarded The Best in the World in 2002.

Runners at Borneo International Marathon.

the marathon will be intellectually disabled athletes in both the half marathon category and 10 km run, giving them equal opportunity to showcase their potential, develop physical fitness and to provide the ultimate test of character and endurance as well as international exposure.

Jamaica Tourism unveils new improved website TARGETING the 21st century global traveller and strengthening Jamaica’s brand presence online, the Jamaica Tourist Board unveiled its innovatively refurbished website ‘Visit Jamaica.com’ featuring a fresh look with a focus on Jamaica’s tourism product offerings that goes from Roadside to Ritzy. The new website ‘VisitJamaica.com’ was globally unveiled by the country's Minister of Tourism Edmund Bartlett and Director of Tourism Basil Smith via webcast live from Kingston in different markets. C

The Central Pool at Six Senses Hideaway Samui.

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Getting them on board “Employees across all sections should be made to feel part of the (merger) process. We will renegotiate with the worker unions, the terms and conditions of employment, so that employee productivity goes up and expenditure is reduced.”

THEY SAID IN 07-08

The steering committee would consist of people whose opinions are needed to clear proposals, but such a process would significantly reduce the processing time for a new airport to come up.

Air India Chairman RAGHU MENON on the merger process.

Here’s my prediction “Aggressive consolidation is inevitable. There will be exits, strategic alliances, airlines will have to work out how to share resources and rationalise route networks so carriers complement each other rather than compete.”

Civil Aviation Minister PRAFUL PATEL on the committee that will oversee new airport approvals.

Full steam ahead Upgradation and modernisation work will be as per the new growth figures. By 2010, we will upgrade the communication and navigation systems and complete 35 non-metro airports. The modernisation in Chennai and Kolkata will also be completed by then. This will be just phase one of the airport revamp programme.

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CAPA India CEO KAPIL KAUL on what happens next in the aviation business.

What’s the point Had infrastructure been in place, we would have launched our regional airline for the north immediately. Now, the airline should take wings in 2009. There’s no point having a 30-minute flight from some city to Delhi and then hover at IGI for about an hour.

Airports Authority of India (AAI) Chairman K. RAMALINGAM on the road map ahead.

Angrezi matters The other problem area is the lackadaisical approach among some pilots in the usage of the standard phrases in the cockpit. Aircrash investigations in the past have pointed out the need to adhere to these standard words.

Bird Group’s Executive Director, ANKUR BHATIA on their plans for an airline.

What’s the fuss about?

DGCA DG KANU GOHAIN on the poor English of many expat pilots.

“Even the city's business community too wanted a separate airport with better facilities for commercial operations and when such an airport is ready, they want the old one to be retained.”

Diamonds are forever At present, even a small investment by AAI requires approval from the Cabinet Committee on Economic Affairs (CCEA). Once AAI gets the mini ratna status it would have to get approval of its board only for capex of up to Rs 500 crore.

BIAL CEO ALBERT BRUNNER on the two-airport controversy in Bengaluru.

Whopping costs

Airports Authority of India (AAI) Chairman S RAMALINGAM on the advantages of mini ratna status for AAI

“Today we are all living on oxygen. Everyone is now realising that everyone will go bust if we cannot make our ends meet.”

Nowhere in the world have space allocation charges within airport premises gone up that steeply. The aviation industry needs a survival package for the domestic civil aviation industry.

Jet Airways Chairman NARESH GOYAL on the crisis afflicting the airline industry.

Assocham Civil Aviation Committee Chairman and CEO of Jagson Aviation JAGDISH GUPTA on airport charges in India.

Gasping for breath

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Airspace Management

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