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EDITOR-IN-CHIEF’S NOTE

Some introspection, please...

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an there be any redemption for Indian aviation?

Well, if the downturn peters off, as many believe it will in two quarters from now, then there could be less financial anxiety for an industry about to lose close to Rs 8,000 crore this year. But redemption, forget it.

It’s difficult to believe that anyone can be redeemed unless they are willing to look within, and examine the follies they committed, the excesses they indulged in, and the mistakes they made along the way as they came right to the edge of the cliff.

Listening to some of the heavyweights in the airline business last month, it was evident that introspection was the last thing on their minds. If anything, it was everyone bar themselves who was to blame for their woes.

Even a reasonable man like Saroj Dutta, who is a doyen of the airline business in this country, lamented that airports had raised their fees at a time when they should actually be reducing their charges. He rued that the states weren’t sensible enough when it came to taxing aviation fuel. He laughed at the low fares and the general overcapacity that had flooded the market.

He is right — overcapacity is one hell of a problem. And a particularly painful headache for Jet Airways. Well, why did you order all those A330s and 777s, Mr Dutta? At least you are lucky and have managed to lease them out. Everyone hasn’t been so fortunate.

He mentioned the Delhi-Shanghai-San Francisco route, and how it bled so badly that they had to withdraw the service. But do you remember, Mr Dutta, that your own Chairman, the redoubtable Naresh Goyal,

CRUISING HEIGHTS April 2009

pulled out all stops to ensure that the government cleared Chinese cargo airline, Great Wall of China, to fly into India, so that the reciprocal permission for the Shanghai route would find approval with the Chinese authorities? Inspite of their reservations, the government decided to be persuaded by Mr Goyal, and the approval was announced when Manmohan Singh visited China last year. And now, months later, you have dusted and put the service on the backburner.

Jet announced a high-profile collaborative arrangement with Kingfisher Airlines in October last year that was to see two of India’s biggest legacy carriers come together and fight the recession jointly. The sceptics were right when they said the collaboration was a great photo opportunity and nothing more.

Just weeks later, Kingfisher started operations on the London route in direct competition with Jet, and the whole world laughed.

If Messrs Saroj Dutta and Company want people to take them seriously, they need to introspect and acknowledge honestly that they are half the problem.

Avarice is not a Wall Street phenomenon. A large chunk of the problem, be it the SaharaJet deal, the huge order book or the everexpanding route map, was a part of the ‘first mover syndrome’ — an irresistible urge to capture space before the other guy blinked an eyelid. At the end of the day, it translates into avarice — a greed to grab market share, make more money, have the most planes and the most routes.

Introspect, Mr Dutta. Honestly acknowledge that you people too are part of the reason why we have a problem. I have no doubt in my mind, redemption will follow.

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Chat in silence, anyone?

Airline travellers — frequent flyers as well as the infrequent ones — often face a dilemma: where to sit in an airplane?

Reason: while some want to fly in comparative silence, others would like nothing better than to be seated beside a chatterbox, and the third category are those who want a mix of silence and chatting. It does not require rocket science to tell you that if you are lucky you could have a compatible neighbour in the next seat.

Luck by chance or chance by luck, however, is a thing of the past. In this age of the Internet, can solutions be far behind?

There is a company that wants to chuck luck out of a plane’s window. Using passenger data from a wide variety of sources like Facebook, Dopplr and Xing, Satisfly (yes, that’s the name of the website) can assign seats to travellers, according to the Economist, in an “intelligent” way.

Satisfly takes the information from public forums and combines it with the airline’s passenger data — classified broadly under four travelling behaviours: “business networking”, “social networking”, “business alone” and “relax alone” — and sends it through the company’s software. At the end of the process, the ideal seating is produced for a particular flight.

Satisfly also intends to provide an array of social-networking tools, telling flyers which other members of their network are in which cities and when.

As long as Satisfly can find usable data easily enough, it will not be surprising to see other airlines following the lead of Hawaiian Airlines, which started working with the company in November 2008.

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contents

GETTING BETTER AND BETTER p34 A special report on how the country’s two Greenfield airports at Hyderabad and Bengaluru have developed into important hubs for the aviation and the cargo industries in just a year since they started commercial operations.

OFF THE RECORD

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It’s elections once again and LCC pioneer Capt G R Gopinath is contesting from South Bengaluru. A look at all the political stalwarts who held the Civil Aviation portfolio since the Nineties. Plus the new AAI Board meets for the first time.

CRUISING HEIGHTS April 2009

NEWS DIGEST

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The DGCA has got a breather, with the FAA deferring its decision on downgrading the Indian aviation sector from Category 1 to 2. But this might just be the inevitable calm before the storm.

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

CHOCKS OFF

CARGO

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CAPA has estimated that Indian aviation will require about Rs 150,000 crore for airport construction over the next 10 years.

R Krishnan questions how the aviation industry could possibly raise the necessary funds, given the current economic situation.

CRUISING HEIGHTS Editor-in-Chief

K SRINIVASAN Managing Editor TIRTHANKAR GHOSH

Consulting Editor R KRISHNAN

Senior Editor RENU RANGELA

Reporter PUNIT MISHRA

Both the Hyderabad and the Bengaluru international airports are fast evolving into major cargo hubs, seeking to change the face of the country's air cargo industry in line with the futuristic demand potential of the sector.

Design RUCHI SINHA PRADEEP JHA RAVINDER GUSAIN

Photo Editor H C TIWARI

Director RAVI SHARMA

Gen Manager RAJIV SINGH

GM (Business Development)

GLOBETROTTING SPOTLIGHT

TThe Southwest Airlines is caught in a controversy over a revealing picture of a supermodel. Also, the reason why the chief fire officer at Cape Town International Airport had to resign.

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Despite the current economic downturn, the mood at the 7th Routes Asia conference was not all gloomy.

SNIPPETS

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SpiceJet has won the coveted ICWAI award, while Air India is charting the global aviation map in a big way, even as Kingfisher has deferred its Dubai plans. All this and more.

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BACK PAGE

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Here is the story of a man whose business has actually picked up big time following the downturn in the aviation industry.

CRUISING HEIGHTS April 2009

ANUJ SAHNI

Manager (Business Development) SUMIT KUMAR

Subscription JAYA SINGH

Executive Director RENU MITTAL 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 12

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Difficult ‘Go’ing

PERISCOPE

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The journey has been good and difficult…I came in the year when the fuel prices were rocketing, the economic downturn, the unfortunate terror attacks, the exchange rates of dollar to rupee going up from Rs 40-50.

GoAir CEO EDGARDO BADIALI on the completion of a year since taking over the reigns of the operations of the country’s smallest carrier by fleet size.

More of India This has nothing to do with the boycott of Singapore Airlines, or political instability in Thailand. For January 2009, the destination has received 41,859 Indian arrivals, a 9 per cent increase over the same period last year.

LETTERS TO EDITOR

The Praful years (March ’09) was interesting and the insight into the minister’s tenure during the last five years was well worth the read.

The aviation industry has seen paradigm shifts under the able leadership of Praful Patel. He has taken the Indian aviation industry to new heights. As a matter of fact, he is, perhaps, the only minister in the Cabinet who has performed exceedingly well as compared with other ministries. Praful Patel has infused a new lease of life into the Indian aviation industry, thanks to his aggressive policies which he pursued relentlessly. He used his business acumen to great effect while implementing the policies, and did wonders for the Indian aviation industry.

Niti Rai, Udaipur March 2009

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Illustrations: Rajeev Kumar

The story on pilot Sully, ‘Brace for impact!’ (March ’09) was one of the finest stories the magazine has ever featured. He is truly a living legend who has personified flying. In fact, he has set up an example for other pilots to follow. By doing this amazing feat, he has achieved an iconic status in USA. People like him come across once in a lifetime. I am sure his amazing feat will inspire generations of pilots. I am amazed to know that he would not be given pension and that, over the years, he has got only 6 per cent hike. This is really pathetic. I think he makes a perfect presidential candidate for USA. Vidisha Rajput, Lucknow

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The cargo story, Air Cargo carriers slow down (March ’09) underlined some very important things for the air cargo industry in the wake of the global economic downturn.

As a matter of fact, the air cargo industry is reeling under a severe financial crisis, as evident from the story. The major players are finding it tough to muster funds as bad times have fallen on the investors. I, however, think this is just a passing phase and the industry would bounce back once the investments start flowing. The number of air cargo players would definitely rise in the near future as the sector holds great potential.

Vinod Goyal, Jodhpur

Tourism Malaysia Director P MANOHARAN on their decision to increase their presence in India.

Via Singapore In light of the recent economic downturn, we have reviewed our Mumbai services and determined the best option is to operate them via our core hub in Singapore.

Qantas Group General Manager (Sales & Distribution) ROB GURNEY on the Australian carrier’s decision to include a stop at Singapore for flights from India to Sydney and other Australian cities, starting May.

Finally, it’s out!

The travel trade is in very bad shape.

Travel Agents Association of India (TAAI) chief RAJINDER RAI in response to the cut in taxes by the government.

Global ambitions There is still some work to be done on Surat airport. We want to turn it into an international airport by setting up additional runways and cargo facilities.

AAI chairman V P AGRAWAL at the inauguration of the new terminal building of Surat airport.

All correspondence may be addressed to Editor, Cruising Heights, C-15, Sector 6, Noida 201 301 OR mail to cruisingheights@newsline.in

CRUISING HEIGHTS April 2009

Still flying high We expect more than 200 new aircraft will be headed for India in next few years with a possible ten-fold increase of 2,000 new planes in the next 10-15 years.

GMR group chairman GM RAO pointing out that despite the economic downturn there are over 350 aircraft in operation.

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Recession blues in US

round service.

United Airlines expects to reduce its international capacity by 15 per cent during the first quarter. The carrier, which dominates flying from the US to China, has been hurt by a 25 per cent drop in the number of people.

Airlines are also slashing prices for travel within the US. Recently, Southwest Airlines unveiled $39 one-way fares on a host of routes for tickets purchased before March 16.

COLD STATS

Airlines in the US, which, not too long ago, were keen on overseas flights, have been struck by recession blues. These once-lucrative overseas flights are being reduced. Over the last year, demand for overseas flights has dropped 5.3 per cent and a total of 466,000 seats have been cut from non-stop flights headed from the US to foreign destinations.

Delta Air Lines Inc., the world's largest airline, recently announced that it would reduce its international flights by 10 per cent, starting in September. In addition, it is also thinking of a reduction in workforce.

Delta plans to reduce its trans-Atlantic capacity by 11 per cent to 13 per cent and its trans-Pacific flights by 12 per cent to 14 per cent, by exiting markets where it isn't making money, flying smaller planes on some routes, flying less frequently to some cities and even eliminating year-

LOOKING GLASS That’s our Netaji and his last minute speech... He is making use of every minute that he has of the chopper. He knows very well that once he releases the chopper, he will only get another chance after three months — well after the elections!

Connecting India The re-alignment will help passengers connect with the airline’s extensive global network.

Cathay Pacific Airways General Manager-India TOM WRIGHT on the airline’s decision to realign its flights in India by introducing daily non-stop flights between Mumbai and Hong Kong.

All about profits There is a possibility of consolidation in the Indian airline industry next year. But at this point of time, our focus is to make the business profitable.

SpiceJet CEO SANJAY AGRAWAL on the losses suffered by the airline in the December quarter of 2008.

CRUISING HEIGHTS April 2009

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OFF THE RECORD

GREAT BONHOMIE: New AAI Board members; (1) Deepak Parekh (2) Arun Bongirwar (3) Sajjan Jindal (4) Bharat Bhushan and (5) The Board in its full glory.

Big-ticket Board

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he Mini Ratna at the Rajiv Gandhi Bhawan, Airports Authority of India (AAI) held its first full meeting with its brand new members — HDFC CEO Deepak Parekh, architect Hafeez Contractor, industrialist Sajjan Jindal, former Maharashtra

Chief Secretary Arun Bongirwar, and Joint Secretary and Financial Advisor Bharat Bhushan — last month at Delhi’s Ashoka Hotel. It was really a welcome meeting to induct the new members, and have a quick review of the extraordinary work being undertaken by the AAI across the country.

This is perhaps the first time the Board met members being inducted at one go. The only one who wasn’t present at that meeting was Member (Personnel) KK Jha, who was unwell.

After a long time, both Tourism and Civil Aviation have a common financial

F

A town

in heaven

or those of you who don’t know what Dusit Thani means, here’s the lowdown: In the early 1900’s, King Rama VI of Thailand envisioned a wondrous utopian kingdom…He called it Dusit Thani, a ‘town in heaven’. Seizing on that inspiration was founded the Dusit Thani group of luxury hotels.

One of their peppy, avante grade brands is Dusit D2. Now this is arriving in Delhi, to be more specific at the airport where the Bid Group has won a bid to build this luxury property on a close to twoacre property. According to Ankur Bhatia, the idea will be to get the hotel up in the next two years.

Dusit Thani hotel

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A Bhatia

advisor. The last time this happened was when Prashant Kumar Mishra was the JS & FA. AAI Chairman Vijai Prakash Agrawal is now fortunate to have some of the most influential individuals on his team. The grand daddy of them all is of course Deepak Parekh, Chairman of HDFC, whose friendship across the Board is legendary. In the coming months, that should help AAI get things moving faster in the government. With a proactive Chairman and a well-connected Board, the sky is the limit, really.

Interestingly, Accor has won two bids. Two standalone ones to build its flagship Novotel (also available at Hyderabad) and Pullman brand, and another in partnership with InterGlobe Hotels, a joint venture between InterGlobe Enterprises (owners of Indigo) and Accor to develop a chain of hotels under the Ibis brand.

That apart, there are the Lemon Tree and Hyatt winning bids as well. The only one who could be called a ‘Jack in the Box’ is Pattu Keswani of Lemon Tree. This hotel industry veteran and venture capitalbacked entrepreneur has hit the headlines by getting on the Delhi Airport bandwagon. It’s a big deal for them indeed.

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OFF THE RECORD

E

very conference has its own persona, the WTTC (World Travel & Tourism Council), IATA (International Air Transport Association), CANSO (Civil Air Navigation Services Organisation) and Routes was no different. It’s the yellow table cloth that was the ‘leitmotif’ so to speak of this conference. If last year it was DFW (Dallas Forth Worth) that made its presence felt with the blue table cloth, it was the yellow from Copenhagen this year, although DFW promised to wrest it back for the world summit in September in Beijing.

In real terms, though, this is a conference where the bread and butter people (the airports and the airlines) make deals across the table far away from the froth and fury and glitz of the speaker’s table.

This is hard-sell: why is my airport good for you, what goodies and concessions will I offer you, etc.? For airports reeling under severe capacity cuts that airlines have announced, this is a time to try and plug their case.

GMR, that hosted this edition of Routes Asia, used the huge opportunity despite the downturn to plug both Delhi and Hyderabad airports. It helped that the Greenfield airport at Shamshabad which is just over a year old found wondrous acceptance from most overseas delegates. They loved the ambience and the feel of the airport and were ready to acknowledge and accept that India was indeed on the move.

So, are there any favourite moments from the conference? Many indeed, but one shall limit this edition to just two.

The first was an unforgettable quote from Professor Rigas Doganis who is on the board of easyJet as well as GHIAL (GMR Hyderabad International Airport Ltd). Doganis was at one time the CEO of Olympic Airways of Greece and when once asked how it was managing a stateowned airline replied: “There were long periods of crisis managements interspersed with brief periods of catastrophe management!”

The other was the gala dinner at the Airport Novotel hosted by GHIAL. Father and son, G M Rao and Kiran Grandhi, were in their elements and as the old man quipped: “I am happy people like this airport, but wait till Delhi is completed.”

That’s one launch we are eagerly waiting for!

Routes notebook

ALL SMILES: Vignettes of some of the special moments of the 7th Routes Asia conference.

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OFF THE RECORD

Elections 2009, Praful Patel

Arif Mohammed Khan

Ghulam Nabi Azad

C M Ibrahim

Jayanti Natarajan

Rajiv Pratap Rudy

Shahnawaz Hussain

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arecap!

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fter Air Deccan and Deccan by his son, Jyotiraditya, for a third conLogistics, it’s now Deccan secutive time. Scindia Jr is often viewed Zindabad, as far as Garur as a potential Civil Aviation Minister.

Ramaswamy Gopinath is Who knows? Only time will tell. concerned. Well, Captain Next in line as Civil Aviation Minister Gopinath or Gopi, as he is better known, was Ghulam Nabi Azad. The dapper Conis now on the campaign trail as an inde- gress heavyweight replaced Madhavrao pendent candidate from South Bengaluru, Scindia, who resigned on the crash of a taking on the institutional might of BJP’s leased Russian aircraft. No one died in Ananth Kumar, who was Civil Aviation that incident, but Scindia, sick and tired Minister for several years in the mid nineties. When somebody suggested that Gopi had been secretly foisted by Karnataka Chief Minister Dr. B S Yediyurappa to settle scores with his nemesis Ananth Kumar, Gopi roared: “I have no intent of prostituting myself,” he remarked. And this from someone who was a BJP candidate some years back!

For the record, here is a list of all Civil Aviation Ministers beginning WOOING VOTERS: Capt Gopinath’s website votecaptgopi.com 1990, and of what they are doing in this election. The oldest of of the repeated strike threats and go-slow the lot is Arif Mohd Khan. He was the tactics by Indian Airlines pilots, decided Civil Aviation Minister in the VP Singh he had had enough.

Government, that saw the crash of an Azad, who was the Parliamentary A320 outside Bangalore airport. Singh Affairs Minister, took additional charge and Arif grounded the plane for a full of the portfolio and stayed the whole eight months, suspecting that it was no term. He isn’t contesting these elections, good. IA was the launch customer for the but is overseeing the Congress campaign first ever fly-by-wire aircraft in the world. in key states like Karnataka, Orissa and IA never recovered from that blow. Any- Tamil Nadu. He is as friendly with Naresh way, to cut a long story short, it’s been a Goyal as Praful Patel and Sharad Pawar. hopping flight for Arif ever since. He has But no one has ever accused Azad of ‘out travelled all over the park: to the BSP and of turn’ favours. That’s the beauty of the now the BJP. He is contesting from his man. He is the master of the doosra, the traditional seat of Bahraich in Uttar ball that turns the other way without anyPradesh. But he has been out of the Lok one getting to know. Samajh gaye na!

Sabha since 1991.

Azad was replaced by Chand Mahal Arif was succeeded by the late Mad- Ibrahim, who was then the right hand of havrao Scindia, who initiated the open HD Deve Gowda. He is now back in the skies policy that saw the launch of Jet Congress but far off the spotlight. Where Airways, and later Air Sahara. His strong- are you Chand Mahalji? Last heard, he hold of Gwalior is now being contested was roundly abusing Deve Gowda.

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Jayanti Natarajan was a Minister of State at that point in time. She is a member of the Rajya Sabha and can been seen on one or the other talk show each evening. Just surf the idiot box baba!

Azad was replaced by Ananth Kumar, who is now facing the LCC hero from Dakshin Bengaluru. There was plenty of politics in the Ministry when Ananth Kumar was in command, but that requires a separate edition of CH to recollect. And when he moved to Urban Development, he was replaced by that great Lohia chela Sharad Yadav.

Yadav is contesting from Madhepura — a Yadav stronghold from where he once lost to Laloo Yadav — and he is best known for arousing the curiosity of almost everyone at the national level: why is Sharad Yadav at Civil Aviation?

This dhoti clad rustic was a complete misfit, but his socialistic instincts led him to oppose the privatisation of Air India, which he described as part of the family jewels. Former AI Managing Director Michael Mascarenhas was also suspended from the Maharaja during his tenure.

If Yadav was a Bihari by adoption (he actually belongs to Jabalpur in Madhya Pradesh), he was replaced by a bhumiputra in Shahnawaz Hussain. Husain is con-

Ananth Kumar

Sharad Yadav

Jyotiraditya Scindia

testing from Kishenganj on the IndoNepal border. Before beginning his campaign, he paid a visit to the dargah of Khwaja Moinduddin Chishti at Ajmer, and later met BJP Rajasthan president Om Prakash Mathur to seek his ‘shagun’, before launching his election campaign.

According to reports, Hussain believes Mathur’s blessings in the form of a ‘shagun’ are a good luck charm for him. Interestingly, Hussain has his own website: www.shahnawazhussain.com Shahnawaz was followed at Rajiv Gandhi Bhawan by Rajiv Pratap Rudy, now a member of the Rajya Sabha. But he has filed his nomination from Saran, that was ‘Chhapra’ before the delimitation. He faces Rashtriya Janata Dal supremo Laloo Prasad Yadav.

Finally, Praful Patel. Vidarbhavasis tell us that Patel has done an exceptional job of tending to his constituency Bhandara. But he lost by just 2,000 votes last time, thanks to the BSP that garnered a huge number of votes. In the last five years, there is been much that he has done for Gondia, but would that be enough for him to win? Those in the know say he will win a fourth term to the Lower House. We should know two months down the line.

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NEWS DIGEST

Boeing launches engineering

centre in Bengaluru

Question: Where is Boeing’s third research centre located?

Answer:

It’s in India, Bengaluru or Bangalore to be more specfic. This is Boeing’s third advanced research centre outside the US, the others being in Europe and Australia.

The centre would carry out continued collaboration with Indian R&D organisations, including government agencies and private sector R&D providers, universities, and other companies. “Boeing is partnering with the best researchers around the world, who find the best technology solutions for our customers, and we look forward to working with our partners in India on some promising new technologies,” John Tracy, Boeing’s Chief Technology Officer and Senior Vice-President (Engineering, Operations and Technology) told reporters during the course of the inauguration ceremony in the last week of March.

The centre will coordinate the work of more than 1,500 technologists, including 100 advanced technology researchers, from across India, on projects aimed at defining the future of aerospace, said

BOEING IN FAST-FORWARD MODE: (L-R) Dr Dinesh Keskar, President Boeing India; Dr John Tracy, Chief Technology Officer and Senior VP, Boeing; and Dr T Ramasami, Secretary, Department of Science and Technology, at the inauguration of the Boeing Research and Technology — India Centre at Bengaluru.

Boeing officials. “Working with India’s technology leaders helps Boeing assimilate new ideas and innovative processes into its products and programmes. This is also good for India because it helps grow the capabilities of the Indian R&D community to meet the emerging needs in the country,” said Dinesh Keskar, President, Boeing India.

T

he Bombay High Court has stayed a warrant restraining Sahara’s move to attach some movable properties of Jet Airways over the past few weeks. All this is in connection with their dispute over an income tax liability. The Court held that a status quo would be maintained and that the movable properties already attached by Sahara would remain so. The court also ordered Jet Airways to file an undertaking on April 3 that it would not create any third-party interests in any of its assets and properties.

This effectively means that Jet Airways cannot sell JetLite to a third party.

Jet Airways had agreed to buy Sahara Airlines in April 2007 for Rs 1,450 crore. It paid about Rs 900 crore in the same month and started operating

The new centre will add to the collaborative research projects in India, that are already a part of the Boeing programme. Since 2007, Boeing has been working with the Indian Institute of Science (IISc) and Wipro and HCL, as part of the Aerospace Network Research Consortium. The centre will initially have 30 engineers.

Dwarkadas, was that if a tax liability of over Rs 50 crore arose for the period before the filing of the consent terms, the same would have to be borne by Sahara. When a tax liability of Rs 107 crore arose, the Naresh Goyal-promoted airline had paid only Rs 100.50 crore as the first instalment after deducting the tax liability in March last year, to which Sahara Airlines did not raise any objection. However, in March this year, when Jet did the same, Sahara claimed a default of Rs 37 crore. Dwarkadas contended that Jet Airways apprehended attachment of its movable properties, including 40 aircraft that form a part of its schedule, along with the other movable properties and assets.

Watch this space for an update.

Jet-Sahara reality

show turns grim

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it as a low-cost carrier. The remaining Rs 550 crore were to be paid in four equal instalments of Rs 137.50 crore each. One of the clauses in the agreement between the parties, according to Jet’s counsel Janak

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Cochin International Airport

R

emember the story we wrote in the last issue about DGCA issuing an emergency circular to draft technical personnel specialising in CNS and ATC from the state-owned but short-staffed Airports Authority of India. In fact, that one move has given DGCA a three-month breather, till June 2009, before the hawks in the Federal Aviation Administration (FAA) once again descend to take stock of the state of India’s aviation and decide if India should indeed be placed in Category2 airports globally, down from the present Category-1 it is in.

Should that happen, India will join the august company of nations like Guyana, Nauru, Serbia etc. FAA concluded, on March 20, 2009, its five-day reassessment

of DGCA’s safety regulations. In fact, it was to be done in February, but with DGCA under serious pressure, it requested the FAA to postpone its visit to mid-March

Short-lived

breather! promised that credible action would be taken in the next two to three months in the areas where DGCA has shortage, such as operations, airports and air navigation supervision. The newly drafted technical personnel from the AAI will be placed under the DGCA supervision

Naseem Zaidi

Gloom

continues International traffic statistics for February showed a shocking decline in demand and major instability in the aviation industry, even as the International Air Transport Association (IATA) revised its outlook for the global air transport industry.

During February, passenger volumes

14

so that it gets time to restore at least some semblance of order in its house. The circular was part of that order restoration.

The breather was given to DGCA after it submitted its action plan to the visiting FAA team. Fortunately for the DGCA, the ensuing polls came in very handy to get a deferment as, in the absence of a political head with freedom to take action, there was nothing it could do of policy nature. The fear that FAA could downgrade India still remains if the promise to make the Indian skies safe, backed by a strong regulatory mechanism, is not delivered. This is the only way it would be possible for the DGCA to evolve into an autonomous civil aviation authority.

FAA is understood to have accommodated the DGCA, and it took a flexible stand after the DGCA issued the February 2009 circular. FAA has been

fell sharply to 10.1 per cent below 2008 levels (from the -5.6 per cent recorded in January). The 5.9 per cent reduction in capacity — the most aggressive since the crisis began —could not keep pace with the fall in demand, pushing the February load factor down to 69.9 per cent (3.2 percentage points below the same month in the previous year).

February international freight volumes were 22.1 per cent below 2008

CRUISING HEIGHTS April 2009

levels. This is the third consecutive month at more than 20 per cent below previous year levels (-23.2 in January and -22.6 per cent in December).

“Gloom continues. The sharp drop in February passenger traffic shows the broadening scope of the crisis. Freight traffic, which began its decline in June 2008 before passenger markets were hit, has now had three consecutive months in the -22 per cent to -23 per cent range. We may have found a bottom to the freight decline, but the magnitude of the drop means that it will take time to recover,” said Giovanni Bisignani, IATA’s Director General and CEO. The downward revision in IATA aviation outlook coincided with losses of $4.7 billion in 2009. This is significantly worse than IATA’s December forecast for a $2.5 billion loss in 2009, reflecting the rapid deterioration of the global economic

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Fraport – Airport Operations from Austria to Xi’an.

The Company Fraport AG is a leading player in the global airport industry. Following its initial public offering (IPO) Fraport has become the second largest listed airport company in the world, by revenues.

Fraport’s expertise is based on more than 80 years of aviation history at Frunkfurt am Main, Germany. Frankfurt Airport (airport code= FRA) is located about 12 kilometers from downtown Frankfurt. A renowned pioneer for decades, FRA serves as Fraport’s home base and as a showcase for the company’s know-how, technology, products, and services.

With outstanding connectivity to all five continents of the globe, FRA is a intermodal hub with one of the largest catchment areas in the world and direct access to the German high-speed railway network. FRA is strategically situated in the heart of Germany and the European Union. Airlines can profit from high utilization rates and traffic yields.

Range of services The company prides itself in being a leadingedge provider of integrated airport services.

Besides managing FRA, Fraport AG and its subsidiaries provide the full range of plan-

ning, design, operational, commercial and management services for airports around the world. Fraport AG serves as a neutral partner to the world’s major airlines: offering a complete package of aircraft, cargo, passenger and other ground handling services. Outside Ger-many, the company has ground services op-erations in Austria. Other areas of Fraport expertise include cargo and ground handling, real estate development, airport retailing, IT services, intermodal concepts, environmental management, hub management, training, etc.

Fraport worldwide Through investments, joint ventures and management contracts, Fraport in now active on 4 continents. Fraport served some 78.2 million passengers in 2008 and handled 2.1 million metric tons of cargo (airfreight and airmail) at the Group’s airports.

Fraport, which bids for airport management projects worldwide, was awarded a 30-year concession for operating, managing and developing Indira Gandhi Inter-national Airport (IGIA) in India. Together with staterun Airports Authority of India (AAI) Fraport AG has formed “Delhi Inter-national Airport Private Limited (DIAL)”. Fraport is the nominated “Airport Operator” and an Airport Operator Agreement concluded with DIAL-

under which it will be utilizing its extensive airport expertise developed over the past 80 years to assist with the operation, management and development of IGIA. Currently Air India offers three weekly passenger flights and Lufthansa offers daily passenger flights from Frankfurt to New Delhi.

From April, Air India plans to provide daily connections.

Fraport AG Frankfurt Airport Services Worldwide 60547 Frankfurt am Main, Germany E-mail: marketing@fraport.de Internet: www.fraport.com www.airportcity-frankfurt.com Contact: Ansgar Sickert Vijender Sharma Fraport Airport Operations India Pvt. Ltd. Paharpur Business Centre Suite 302 21, Nehru Place New Delhi-110019, India Phone: +91 11 4120 7355 (AS) +91 99 4120 7334 (VS) Fax: + 91 11 4120 7558 Mobile +91 99 10382806 E-mail : ansgar.sickert@fraport.in vijender.sharma@fraport.in

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report against some of the officials/directors of Akbar Travels.

Even the Swagat Seva passenger facilitation services were stopped.

Akbar Travels’ main activity in ground handling was transportation of passengers between the terminal and the aircraft. However, other services offered

by Akbar Travels, like call taxi, passenger reservation etc, have not been affected or restricted by BCAS. Following this, BCAS took away the vehicle passes and passes issued to Akbar Travels staff. The court, however, told BCAS that it had violated the principles of natural

Vijay Kesavan

Whither

natural justice? been given a hearing by BCAS, either before or after the said decision, and before the ground handling work was actually taken away from it.

In late February and early March 2009, services of Akbar Travels at the airports in the country, including three in Kerala, were terminated for security reasons after IB submitted an adverse

conditions. Industry revenues are expected to fall by 12.0 per cent ($62 billion) to $467 billion.

“The state of the airline industry today is grim. Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated even a few months ago. Our loss forecast for

16

justice by not offering an opportunity to Akbar Travels to submit its case, either before or after the passing of the order barring it from offering ground handling services. The court gave BCAS two weeks to consider the matter and then take a fresh decision.

The status continued till the time of going to the Press.

2009 is now $4.7 billion. Combined with an industry debt of $170 billion, the pressure on the industry balance sheet is extreme,” said Bisignani.

Bisignani reminded governments that air transport is a catalyst for economic activity and called for policy changes to help them stimulate economies by playing this role effectively.

“First, air transport needs a tax structure that will help preserve industry jobs and allow air transport to play its role as a catalyst for broad economic activity. Governments must repeal the $6.9 billion in new taxes put on the industry in 2009 to help pay for banking bailouts — despite being branded as G Bisignani

CRUISING HEIGHTS April 2009

Photo: H.C. Tiwari

ven as the implementation of the new Ground Handling policy has been deferred, the Bureau of Civil Aviation Security (BCAS), on the basis of an IB report, discharged Akbar Travels. Akbar Travels is involved in offering a host of airport related services of its ground handling work at airports in Kerala, Chennai and Mumbai.

Akbar Travels, on its part, has appealed to the Mumbai High Court against the BCAS decision. The court, without prejudice to the order and after a perusal of the IB report, said Akbar Travels should indeed have

V P Agrawal

VRS update!

W

e had reported first in our February ‘09 issue that AAI is to offer VRS to its employees coming back from DIAL and MIAL, after the mandatory completion of three years’ compulsory employment with the two private airport developers as part of the OMDA. Come May 2009, those of the AAI employees who have not sought to get absorbed either in DIAL or MIAL will have to report back to AAI for being posted elsewhere or take a VRS. As part of this, AAI came out with a VRS for its employees in Mumbai and Delhi airports who will be displaced as a result of privatisation, or should we say PPPisation? environmental measures,” he said.

“More broadly, governments must replace the mindset of taxing aviation as a luxury or a sin with a strategic approach that recognises and fosters the industry’s critical economic role in connecting people to business and products to markets. Second, airlines need the commercial freedoms to be able to merge or consolidate where it makes business sense — even across national borders,” said Bisignani.

Bisignani also warned that the burden of the crisis requires an industry response.

“This is not just an airline crisis. Efficiency must be a priority for the entire value chain. A 25 per cent reduction in landing charges at Singapore Changi Airport and a 50 per cent reduction at Malaysian Airports are major steps in the right direction. These are model programmes for others to follow,” said Bisignani.

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NEWS DIGEST According to a communication from AAI management, the VRS will be in line with the standard public sector unit format, and will be applicable to employees who have worked with AAI, DGCA, CAD and CPWD for a minimum 15 years.

The VRS will cost the government Rs 1,000 crore and will be shared by DIAL as well as MIAL. The average compensation will be around Rs 25 lakhs to Rs 35 lakhs, depending upon the seniority and the number of years with AAI. The benefits will be 45 days salary for each completed year of service, or salary for the number of months of service left, whichever is less. In addition to this, they will receive certain percentage of basic pay, drawn on the date of VRS, for a period equivalent to the service rendered, or till the notional date of superannuation, or 10 years, or whichever is the least.

The letter said there will be a classification into three categories: Employees above 58 years will receive 100 per cent of their basic pay, For 50 to 58 years it will be 80 per cent, and Below 50 years it will be 60 per cent.

The benefits will be calculated on the basic pay plus DA, and DA for ex-gratia and basic pay, and DA for additional monthly benefit. The VRS will be in addition to the terminal benefits, encashment of unavailed leave, transfer “The priority for airlines around the world is survival — conserving cash and adjusting capacity to match demand.

Airlines will be making some tough decisions to stay afloat as we head for industry losses of $4.7 billion in 2009,” Bisignani added.

The grim situation that prevails in the industry is reflected in both passenger and cargo traffic for February, 2009.

benefits for family and medical facilities as applicable under the Post Retirement Medical Benefit Scheme.

The VRS reportedly covers 4,000 employees of the erstwhile AAI-controlled Delhi and Mumbai airports. The VRS could be opted for by employees who do not wish to relocate to other AAI airports.

As per information on MIAL, only 7 per cent or 185 employees of the 2,285

Mumbai High Court

employees have been absorbed in MIAL. On March 18, these 2,100 employees in MIAL received a circular redeploying them in other AAI-controlled airports.

But the matter has already reached the courts. The Airports Authority Employees Union (AAEU) has gone to Delhi High Court and the Bharatiya Kamgar Sena has appealed to the Mumbai High Court against the so-called redeployment notice and also the VRS. The AAI employees adjustment.

North American carriers recorded a

Passenger traffic The decline in demand for internation

18

al travel outpaced capacity adjustments in all regions.

African carriers saw the largest demand decline (-13.7 per cent), outpacing even the most aggressive capacity cuts (-11.8 per cent ).

Asia-Pacific carriers saw passenger traffic decline by 12.8 per cent, far outstripping the -7.8 per cent capacity

have said that private developers like GMR and GVK are giving them a joining bonus of Rs 80,000 and a considerable hike in salaries as well. But the sarkari babus in AAI want job security and since there is no job guarantee, they have rejected the offers made by DIAL and MIAL. AAEU has told its members that none of them should fill up either the redeployment or VRS forms. MIAL, on the other hand, has stated that it has achieved about 90 per cent of its required staff strength, in terms of hiring, to run the Chhatrapati Shivaji Airport post-May 09, when the OMDA condition expires. MIAL currently has 830 employees in Mumbai airport, which is nearly 90 per cent of its required staff strength. It could hire some more in the coming months.

This is in sharp contrast to the high over-staffing by AAI, which had 2,500 people manning the Mumbai airport when traffic was less and flights were fewer.

AAI, on its part, has now decided to wait for the court order before it expects any response from the over-flowing staff in Mumbai and Delhi.

But Chairman Agrawal had no hesitation in saying, “We will look after the interests of all our employees.”

12.0 per cent drop in demand, also outpacing an aggressive -7.1 per cent capacity adjustment.

Europe’s carriers saw traffic fall in line with the global average at -10.1 per cent.

Latin American carriers most closely matched demand drops (-3.8 per cent) with capacity adjustment (-2.4 per cent).

Middle East carriers bucked the trend of falling demand with an increase of 0.4 per cent in international passenger traffic. But an aggressive capacity increase of 7.3 per cent drove load factors down 4.7 percentage points to 68.1 per cent.

Cargo traffic All cargo markets saw extremely weak CRUISING HEIGHTS April 2009

demand continue as a result of the collapse in international trade in goods and the much lower shipment of components by manufacturers.

Middle Eastern carriers experienced the smallest fall in demand (-4.8 per cent), being the only region to increase capacity (+5.4 per cent).

African carriers had the worst performance with a 30.7 per cent drop in international freight traffic.

Asian carriers — the largest players in cargo — saw demand fall by 24.7 per cent as the region’s high-value exportdependant industries were hard hit.

European and North American carriers saw cargo demand decline 23.1per cent and 21.8 per cent, respectively.

Latin American carriers experienced a demand drop of 22.8 per cent driven by weakening demand for the region’s commodities.

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Jet Airways’ business class

emember the film Krissh, where the hero just flies across from anywhere to anywhere, not just in the remote village of Himachal Pradesh but even in the city state of Singapore. The ongoing recession seems to have given birth to many such Krisshs.

Even a top-of-the-line airline like Singapore Airlines, with its famous KRIS class, is managing less than 30 per cent loads in its First and Business Class. Recently, there was only one passenger in its famous First Class. It seems to suggest that the rest of the passengers, who used to fly KRIS class, have become KRISSH-like heroes.

If this is the plight of SIA then you can well imagine the Indian clone and ‘wannabe SIA’ in Jet Airways, which is not getting more than 20 per cent in its First and Business Class at times. And

Tapping the potential!

20

From flying

KRIS to

flying

KRISSH

Airplane manufacturer Airbus wants to tap the potential in India, but has no plans to set up an aircraft manufacturing facility as it has done in China. Eric Zanin, Vice-President, Head of Business Development and Cooperation, Airbus, said, while addressing the media recently, “As of now, we have no plans to do in India what we have done in China. We will focus on engineering, which is the key in our business as far as India is concerned.”

Dr S Dwarakanath, Airbus' Director, International Cooperation, said, “Over the next 10 years, as part of its globalisation GETTING INDIA FUTURE-READY: Christian Scherer (centre), Executive VP-Head of Airbus Strategy and Future Programmes with Dwarakanath Srinivasan (right), Head of International Cooperation & Country Manager, India and East Asia, and Eric Zanin (left),VicePresident, Head of Business Development, at a recent press conference in Delhi.

CRUISING HEIGHTS April 2009

three years after Richard Branson’s Virgin Atlantic launched its MumbaiLondon flight, the airline has decided to pull out of this route from May 2009.

Virgin, of course, has decided to pull out because of falling yields, but it remains to be seen whether the pull-out by Virgin will by itself push up the fares on this sector. Virgin will, however, continue with its daily DelhiLondon flight. The flight from Mumbai will be restored only when the economy begins to look up, say Virgin people.

When Virgin launched its flight in March 2005, there were four airlines flying from India to the UK — Air India, BA, BMI and Jet Airways. As the times were good, Virgin, like others, increased its three flights-a-week frequency to daily from Mumbai to London. Others also increased frequency to cash in on the Indian aviation boom and 9 per cent GDP growth.

This had its inevitable downward pressure on the fares, which first dropped to Rs 27,000 return from Mumbai to London. BMI pulled out nearly three years ago, and its place has now been filled up

by The King of Good Times — Kingfisher — which connected Mumbai to London, in addition to its Bengaluru-London flights launched in September 2008.

Even as everyone wanted to offer KRIS class-like product, or even better, besides offering comfortable Economy Class, there was this inevitable pressure on fares, which otherwise had everything to do with the falling crude and therefore jet fuel prices.

The situation reached such a state that even BA and Jet began to offer Rs 9,900 air fare to London from Delhi and Mumbai, excluding taxes and other levies.

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One of the major reasons for this fare collapse was the serious bid by Gulf and Middle East carriers, who are now openly advertising in Indian dailies attracting Indian passengers to fly them to the US or anywhere in Europe via their domestic hub — Dubai or Abu Dhabi — depending upon whether you are travelling by Emirates or Etihad. Even Gulf Air and Oman Airways have joined this lucrative race, which has made it not so lucrative for the likes of Virgin, notwithstanding its product differentiator — Premium Economy.

Kingfisher Airlines, which was wanting to connect Bengaluru with Dubai, has postponed the move to July 2009. How can The King of Good Times compete with Emirates, which offers 20 flights a week out of Bengaluru?

Already, SIA, BA and Lufthansa have decided to reduce capacities out of India. Gulf Air is withdrawing its flights from Kolkata to Bahrain. BA has withdrawn its flights to London from the City of Joy. Earlier, it was the thundering mega carriers of the West and the East; now it’s the strike by the Gulf and Middle East carriers that is squeezing the Indian carriers, initially only the state-owned ones, but now also the privately owned ones.

Either way, the attraction is the fastexpanding basket of Indian passengers, who are growing day by day, recession or no recession. And since the Gulf and Middle East carriers are offering a one-stop flight to Europe and the US, Air India has tried to emulate it with its own scissor type operations via Frankfurt to the US. plans, the company is projecting an expenditure of about $1 billion in India, if it finds the right partners

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N

otwithstanding its huge financial problems, the Maharaja has launched, with effect from March 29, 2009 (summer schedule), daily flights to Chicago and Newark from Delhi and Mumbai via Frankfurt (FF), which will be Air India’s newest hub for West-bound flights.

AI chose Frankfurt as it offered better terms and far more efficient connections, including by rail, to passengers wanting to travel to other parts of Europe and also the US. This is the reason why Air India, after a deep long study, dropped the idea of either Munich or Vienna as its hub in Europe.

With a fleet of 153 aircraft, including 45 inducted in the past 18 months, Air India has been gradually expanding its network to connect new destinations in India and abroad.

After the induction of 30 new aircraft between now and March 2010, a total of 75 new aircraft would have joined the fleet out of the order placed for 111 new Boeing and Airbus aircraft in 2005-06.

Buoyed by its new confidence and enhanced product quality, Air India expects its former Indian or desi patrons to come back to it in increasing numbers, instead of patronising Emirates, Etihad

and other European and South East Asian carriers. After launching non-stop flights to the US (New York) from Delhi and Mumbai in the last 20 months or so, Air India has now launched its Scissor flights to Chicago and Newark from Delhi and Mumbai via Frankfurt, with effect from March 29, 2009, or the onset of the new summer schedule.

These flights will leave Delhi and Mumbai at about 1.00 a.m. and reach AI’s new European Hub at Frankfurt at 6.00 a.m. At Frankfurt, passengers flying in from Mumbai wanting to go to Chicago will be transferred to the flight coming from Delhi and bound for Chicago, and passengers coming from Delhi wanting to go to Newark will board the flight coming from Mumbai and onwards to Newark.

This scissor operation will be done quickly, so that it will provide new flying experience and fast connections with just one stop to the US from India. Come June-August 2009, three more Boeing 777200 LRs will join Air India’s existing five such aircraft. Air India will then launch its longest non-stop flight from Delhi to San Francisco.

So far so good, as this effort of Air India will try to match the evacuation pump vacuum technology, if we can use

AI does a

‘one two ka four’

and the right projects.”

Airbus Executive Vice-President (Strategy and Future Programmes) Christian Scherer dubbed India “as one of the fast growing markets in the world”. “We are looking at growing engineering capacity in India as there is immense talent available. We are here not just to utilise the cost base but also invest in research and technology spheres, services sector, training centres and aero-structure design and building, along with the engineering angle,” he said.

He went on point out, “Air traffic worldwide will double every 15 years.

India holds an important place in our growth strategy, with an estimated growth demand of $120 billion in the aircraft sector alone by 2026. Our main focus is to strengthen base in India.”

Elaborating more on the plans,

CRUISING HEIGHTS April 2009

Dwarakanath said the key areas of the strategy in India would be engineering, designing big solutions and ‘design and build’. “We will collaborate with national laboratories like NAL and universities like the IISc and IITs for talent, and are recruiting 400 engineers here in the next three years as compared to the present 100 engineers.”

According to sources, Airbus has planned to switch part of its operations out of Europe and proposed to build up to 20 per cent of aero structures and 30 per cent of engineering sub-contracting offshore by 2020, of which a large chunk would come to India.

Meanwhile, the Airbus engineering centre at Bengaluru is by now developing advanced potential in areas like flight management systems, aero dynamics and digital simulation.

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that phrase, by Gulf and Middle East carriers to take away every segment of Indian passengers originating both inbound and outbound. The Gulf and Middle East carriers have one stopover from each and every one of the 11 points they start from India on to their home base, and then to various destinations in the US and Europe.

Air India is trying to match this facility of Gulf and Middle East carriers from Delhi and Mumbai to fly to Europe, and also the US, via Frankfurt.

But what is not explicable is how Air India can be so excited about attracting passengers from Kochi, Thiruvananthapuram, Chennai, Bengaluru, or say even Kolkata, to get on to the Delhi-FF-Chicago and Mumbai-FF-Newark route. Because what this means is that I take off from Chennai and fly for two-and- a-half hours to Delhi and then to Frankfurt before landing in Chicago. Similarly to Mumbai and onwards to Newark via FF. Can you imagine taking a flight from Kochi to Delhi (solid three-hour flight excluding the two-hour reporting time) and then again stopping over before flying to FF, and again stopping for two hours

It’s all in

before flying to Chicago or to Newark.

What the Gulf carriers offer here is simply unbeatable. You board a flight from Kochi or any of the stations we have mentioned, minus Kolkata, and fly to either Dubai or Abu Dhabi and then onwards to any of the European or US destinations, including the West Coast.

Now what we want to know is what happened to the development of more point-to-point flights by Air India to justify its new fleet acquisitions. When Boeing 787 Dreamliners fly in, they will be able to do most of these flights directly, as they are lighter, more fuelefficient and have lesser pay-load with 250 passengers, as against the 342 seater Boeing 777-300 ER in three class configuration. It takes nearly two years to develop a route. So when the Dreamliner arrives what does Air India propose to do? Maybe it will be a good idea for them to share their thoughts, in case they think it will be worthwhile to do so.

Let’s take even the new scissor flights from Delhi and Mumbai to Chicago and Newark. Delhi’s winter is notorious for its fog. What happens if a Delhi-FF-Chicago flight gets delayed in Delhi itself due to

the name

T

here are hush-hush talks among the top ranks of Air India to revert to the honourable name of Air India Limited, even if it is not possible to restore the fine service standards the Maharaja used to offer long before merger.

At Air India’s Board meeting on March 9, 2009, it was decided that the name of the holding company, National Aviation Company of India Limited,

22

fog or any other reason and hence reaches FF late. That means the flight from Mumbai, which would have arrived on time in FF, would be delayed or detained as the Chicago-bound passengers will have to wait for the Delhi flight.

Similarly, passengers flying from Delhi and wanting to go to Newark will come in late and therefore the flight from Mumbai will have to compulsorily wait for them before proceeding to Newark.

In contrast, none of the Gulf/Middle East-based carriers will have this problem as they will be flying only from their home base. We are sure Air India would have done its homework. We are only pointing out that in case there is delay in one flight, the other will have to be delayed too. Yes Sir, it could be a case of ‘one two ka four.’

Now why is it that Air India did not think of connecting Ahmedabad with Newark, where insiders say 100 per cent load is a sure possibility. Obviously there are other forces that do not want that to happen. After all, the Gulf airlines are openly offering ‘one-stop’ before they fly you to SFO from India.

But Air India says ‘we will do a hopstep-jump’.

needs to be scrapped. It was suggested that the merged entity should instead be renamed Air India Limited.

Before merger, a survey for brand suggested that Air India had a better brand recall value than Indian Airlines, which later became Indian, just like the passengers it carried. After the name NACIL came into vogue, Air Indians, like the Indians, found that they were not really in the glamorous business of flying but like any other sarkari outfit like NALCO or BALCO, and therefore NACIL. According to information available with C RUISING H EIGHTS , papers are being prepared in the Nariman Point Headquarters of Air India to apply for the name Raghu Menon

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Rules?

What rules?

A

son of a certain pilot commander of Air India is being sought to be hoisted on Air India directly as first officer in Boeing 777 aircraft. The said candidate has done the mandatory 200 hours CPL, and also done about 75 hours of simulator training on 777 simulator.

But he has no real time practical experience of flying a 777.

Normally, Air India, in its advertisement for such first officers, insists on 200 hours CPL and 500 hours jet flying experience. How is it that Air India bosses are now trying to change the tune to favour a flunky of their own, and much against AI’s own rules? It is understood that pressure is even being brought from the previous CEOs on the present CEO. On the other hand, Air India also recently advertised for recruiting 40 trainee pilots. In anticipation of this, at least 165 of its cabin crew, at different

change. The necessary papers have to be submitted to the Department of Company Affairs in the Ministry of Corporate Affairs, as also the Company Law Board (to deal with any objection from debtors or creditors).

When the two state-owned airlines merged, neither the name of Air India Limited nor Indian Airlines were extinguished. They remained in a corner.

But while naming the merged entity as NACIL, it was decided the brand name will be Air India. But NACIL, by its very name, brought with it the unwanted antibrand baggage of subsidy, sloth etc. So, more than a year after the merger, the Brand is becoming the Company.

Air India was the chosen brand as 78 per cent of those surveyed had voted in its favour. The name change and application to Company Law Board is also necessary

times over the last 14 months, took study leave and went abroad to get 200 hours CPL experience, which is a necessary condition to get in as trainees.

This has brewed a new storm in Air

A Boeing 777 simulator

India, since it is only the CMD, under Air India service rules, who is empowered to grant study leave.

However, in the instant case, a certain ED in the Personnel Department chose to give permission to ensure better IR.

in order to reword the contracts and Constitution to give mandatory comfort to the creditors.

There are also rumors that renaming of the airline as Air India Limited could mean some new divestment moves, or at least hiving off of some facilities, should the same UPA ministerial combination return. However, one hears that some in the NDA say that should they come back to power, they will unscramble the merged entity and restore Indian also.

Yet another reason for the proposed name changed, say some, is the sweet-talking in progress with Star Alliance, which, it is

CRUISING HEIGHTS April 2009

Air India rules do not permit entertainment of any applicant for trainee pilot’s job if the candidate is over 35 years. The relevant DGCA rule says it should not be more than 40 years for a pilot’s job. Air India management however, to cajole its cabin crew, exempted those above 35 but below 40 from its own rule.

As for how Air India met the cabin crew requirement when a large complement went on study leave, though at different times, the answer lies in the high additional allowances to the leftover cabin crew.

Strangely, never in the past did Air India issue any internal circular to fill pilot vacancy. Even this rule was given a goby and internal candidates were called in.

Nothing wrong here. But the issue is, what happens if the highly unionised cabin crew, on becoming pilots, insist on seniority from their date of joining as cabin crew, and also demand all benefits with effect from that date.

When one can change the name of Air India three times in three years, one can certainly expect bountiful benefits in an otherwise drought-stricken airline!

being said, is under threat of slipping out of Maharaja’s hold. Rumors suggest that Lufthansa, which was over-eager to offer Air India a hub facility in Frankfurt, wanted Jet Airways to be a member of the Star Alliance from India. With some decisive say in the Star Alliance Board, it actually began to work in that direction.

It helped to have no political authority at the Centre. It’s a different matter that even if the authority were there, it would have helped Jet more than Air India. These issues could blow up as major agenda issues for the new government if another replaces the present incumbent, even if it be part of the same ruling alliance.

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But where IS THE

R Krishnan

MONEY?

M

y good friend Kapil Kaul, who single-handedly made CAPA the brand that it is today (and heads their India and Middle East operations), has always been talking of huge investment, appropriate regulatory policies and minimum bureaucratic and political hassle in doing aviation business in India. I must admit here the words “bureaucratic and political” are my own and not that of Kaul. But what is in a dish if it does not have the necessary spice?

CAPA has estimated that Indian aviation will require about Rs 150,000 crore for airport construction over the next 10 years 24

SHRINKING DEMAND: Most airports being expanded today will have no business tomorrow if the present trend of airlines not being able to expand capacity continues.

At a recent infrastructure meet in Delhi, Kapil Kaul, who is CAPA’s CEO, said that without these ingredients it will be difficult to get the Indian aviation infrastructure going. In my view, it was about to get going when the US sub-prime crisis-led slowdown went on to become one of the worst global recessions ever. Consequently, making or even finding money became scarcer than ever before. Should it become a deflation, then even the players may disappear, like the money they were looking for.

That such prospects are indeed faced by CRUISING HEIGHTS April 2009

India is evident from a sharp fall in inflation rates, without the food prices going down, and the real possibility of inflation turning negative in the next month or so. It will become a guessing game among various players, suppliers, consumers etc.

The first casualty could be the disappearance of demand, and hence it would make investors even more wary and eventually cause them to disappear. Hope that God is kind to India and does not lead us to that. But what can God do,

should the people of India decide to elect a Pizza-like polity that is sliced in such proportion that no part fits into another? Should that happen, it will bring in more hassles, and not ease any of the fears being expressed now.

CAPA has estimated that Indian aviation will require about Rs 150,000 crore for airport construction over the next 10 years. Another Rs 400,000 crore would have to be invested in aircraft fleet augmentation in the next 10 years. So CAPA is talking of, say, $110 billion over the next 12 years to meet India’s aviation needs.

This sounds like a document from the Planning Commission in the past (and occasionally the present!). With the kind of deficits we are encoun-

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tering in India, and the goodbye we have bid to the Fiscal Responsibility and Budgetary Management Act (FRBM), there is no way the next government can spend unendingly, without seriously harming the economic health of India.

So where will the money come from? Perhaps a beginning will have to be made by stirring the existing market. In my view, what the aviation sector needs is more passengers driven by lower fares, rather than fewer passengers led by higher fares, to ensure higher yields. This way, some airlines can make money but never be able to expand capacity, and therefore most airports being expanded will have no business tomorrow.

I am sure you don’t want this to happen either. Therefore, the business of yield etc. has meaning in a booming economy, where very high GDP growth rapidly translates into higher and higher purchasing power. When it does not, you simply cannot invent or imagine higher purchasing power.

I also wonder what will happen if the Leftoriented Third Front members get a say in the Government of India, even if dominated by a tired old Congress. As it is, things are getting pushed back. Earlier, it was widely believed that India will have 1,000 scheduled aircraft by 2015. Now it has been pushed to 2020. Obviously, this will give breathing space to many planners, dreamers, policy makers etc.

As for the present, CAPA felt the full-service carrier models were not relevant beyond India’s six metro airports of Delhi, Mumbai, Chennai, Kolkata, Bengaluru and Hyderabad. While it recommended further capacity reduction in the fullservice carrier space, it wanted the LCCs to hold on to capacity and increase the utilisation of the existing assets.

So what does this mean? No need for any world class airports beyond Chennai and Kolkata, and other non-metros can certainly experiment with low-cost terminals as well, to stimulate the market in these bad times. The implication which I have suggested is not a necessary outcome of CAPA study or even implied by it. I have made

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this point in order to put in perspective yet another study of AAI, which says there is no need for any LCC airports in India besides Delhi, which is soon going to be a multi-terminal one.

After a team of senior AAI officials toured Singapore and Malaysian airports and looked at the LCC terminals, the babus came to the conclusion that LCC terminal concept will not work in India except for Delhi, which, as I said, is going to have multiple terminals by the time Commonwealth Games hit off in March 2010. On the contrary, AAI, which is involved in modernising and upgrading 35 non-metro airports, claimed that it cut costs at the upcoming airports by 30 per cent in order to become more costeffective than private operators.

I am sure you must have read in the columns of this magazine as to how MIAL is managing Mumbai airport with half the staff strength than what AAI was doing and is doing in other airports. This is not a reflection on AAI, but on the inevitability of a system that is rocked often by bureaucratic and political whims of the powers of the day. As a beginning, AAI has managed to reduce the cost of Goa airport’s integrated terminal from Rs 400 crore to Rs 330 crore by reducing its size amidst reduced number of flyers.

Now why should AAI plan for the present

(recession) and suffer during the days of boom as India witnessed just a year ago? Recession is bound to bottom out and economies will again soar in the next three years. Should we then again get into land acquisition and a new set of political and local problems, and repeat the same mistake?

At the end of the day, we have an incorrigible and never-say-die optimist in CAPA, which is always wanting to look for money when it is not there, and an AAI which wants to always plan big

and execute small.

(Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.)

CRUISING HEIGHTS April 2009

What the aviation sector needs is more passengers driven by lower fares, rather than fewer passengers led by higher fares, to ensure higher yields 25

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SPOTLIGHT

Rooting for

confidence and growth The current downturn notwithstanding, the 7th Routes Asia conference did succeed in drawing a lot of attention from the aviation industry, and came out with concrete suggestions for airlines and airports to tide over the crisis, reports R Krishnan.

H

onestly, the 7th Routes Asia conference, at Hyderabad from March 29 to 31, 2009 did not shake the aviation world as much as one would have expected it to. While India was emerging as the darling of the entire world airline industry — including aircraft makers, engine manufacturers, MRO specialists, PE investors and Aviation academies — the global economic slowdown came to turn things upside down in a way that not even the worst of pessimists could have expected. The slowdown managed to suck almost every aviation enthusiast out of business, like a vacuum cleaner sucking in dust.

Nevertheless, the event, sponsored by GMR to showcase their year-old GMR Hyderabad International Airport Limited, managed to attract some 350-odd participants — from airlines to airports and technical experts — except for the finance guys who have become virtually endangered, or rather extinct, species, following the economic slowdown. For journalists, the speeches were the usual kind that one gets to hear at any aviation meet, except that this time, the refrain of all the speeches was gloomy, reflecting the environment both

26

Vignettes from the Routes Asia conference at Hyderabad

The high point of the three-day conference, however, was the opportunity it provided, in terms of one-to-one meetings and networking, for both the airport and airline representatives CRUISING HEIGHTS April 2009

within and outside the country.

The high point of the three-day conference, however, was the opportunity it provided, in terms of one-to-one meetings and networking, for both the airport and airline representatives. It also helped prepare the ground for the Fifteenth Annual World Routes Conference to be held in Beijing from September 13 to 15, 2009. In one sense, the Hyderabad meet was important as it saw the announcement of Routes Development Group’s (RDG) Airport Marketing Awards, which earlier used to be announced only at the global event. It was indeed a great moment for G M Rao, Chairman of the GMR Group, and his son Kiran G Krandhi to receive the ‘best airport award’ for the Hyderabad International Airport Limited or the Rajiv Gandhi International Airport.

The meet was split between two days of debate and discussion, alongside the one-to-one meetings that continued all through the conference. The sessions — three in all

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on the first day — opened with an incisive comment from Ian Lowden, Managing Director, RDG Solutions, who said, “We have not had this kind of recession. I have gone through four recessions but this one is completely different. It is for the first time we are seeing a recession in a completely deregulated environment. Yes, it is a challenge and one needs to formulate rational policies to make a difference.”

With such opening remarks, one expected gloom and doom to descend immediately on the venue. But that was not entirely the case. For instance, Vijay Poonoosamy, Vice President International Affairs for Etihad Airways, remained bullish about his airline. Launched in November 2003 by the Government of Abu Dhabi, Etihad started with three weekly services to Beruit, Amman and Damascus. Later, it connected India and also launched its longhaul intercontinental service to Melbourne.

Today, in just over five years, Etihad has 51 international destinations and is the fastest growing airline in the world. With 7,500 employees representing 120 countries, it has both wide and narrow bodied aircraft, with an average age of three years.

Notwithstanding all these rosy develop-

ments and history, Etihad also is feeling the pinch of the downturn. As Poonoosamy said, the year 2009 will indeed be a tough one for all, even though “we will not cut back any customer amenity or safety”. He expressed the confidence that Etihad will grow in a measured and sustained manner, with passenger traffic growing by 15 per cent to 7 million, with a seat factor of 77 per cent, in 2009. Its revenues will rise from $2 billion in the previous year to $3 billion in 2009, he added.

“To achieve all this, it will be extremely necessary for us to develop routes. This in turn would require intelligent interface, which is necessary for delivering successful destination marketing. Abu Dhabi, on its part, was preparing to invest $250 billion over time to attract 2.7 million annual visitors, which could go up to 7.5 million annually by 2030. By then, Abu Dhabi will have 80,000 rooms,” said Poonoosamy.

In his presentation and response, Gordon Bevan, Principal Consultant ASM, noted that India’s desire to get 5 million more tourists by 2010 would mean 13,700 new daily tourists arrivals, or 40 new Boeing 747 flights to Indian cities. As for Singapore, which had planned to get 17 million tourists into the island nation by 2015 from the present 11 million, it meant 16,500 new tourist arrivals daily, or 120 new daily A320 flights? China, which projected a 7 per cent growth in tourist arrivals annually, would see 9,400 new tourists arrival daily or 62 new A320 flights daily into various Chinese destinations.

Bevan remarked, however, that all these developments were mutually exclusive.

Notwithstanding all the rosy developments and history, Etihad also is feeling the pinch of the downturn CRUISING HEIGHTS April 2009

Destination marketing was an important tool for routes development and it necessarily involved engagement of airlines with the national tourism organisations. There is phenomenal competition and all countries, airlines and national tourism organisations were after the same tourist dollars.

“However, we have recession now, and when good times return not all visitors will come back. The travel policy during slowdown is usually downgraded by most corporations and after recession they don’t restore it immediately with the onset of good times. So, where will these new travellers come from?” Bevan asked.

“Hence, he suggested, airlines will have to hunt for these passengers along with the national tourism organisations. “If you have an ambitious tourism target then you need an air access strategy,” as he put it.

When CRUISING HEIGHTS asked ministry officials if they ever organised meetings with various international carriers to bring in more tourists, as part of the bilateral agreements, the response was: “Yes, we do, but these are not always successful.” In the earlier days, Tourism and Civil Aviation used to be under one ministry, but no longer. The Aviation Ministry has now become a body for clearing airline applications, and the Tourism Ministry a standalone enterprise for tourists.

D Ravindran, Vice President, Planning and Strategic Initiatives of GMR Hyderabad Airport, said he was basically marketing his destination.

India had a huge untapped travel and tour related potential, and of the entire Indian middle class population, only a very small segment was actually travelling.

The Greenfield airport at Hyderabad developed by GMR, and the Brownfield expansion of Delhi airport, again by GMR, would put the company in an envious position. The two airports will place GMR in a unique position where it will be handling 30 per cent of India’s passenger and cargo traffic. “We want to stimulate demand across sectors for tourism, VFR and business travellers,” said Ravindran.

“During the downturn, the business travellers’ traffic gets hit, and it is very slow in coming back when good times return.

Hence, GMR is planning to work with corporates. Hyderabad has always been a traditional feeder to Middle East and it is currently in the process of establishing an anchor airline. Incidentally, GHIAL is talking to IndiGo and Jet to move part of their aircraft fleet for parking to Hyderabad.

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SPOTLIGHT Once the new aerospace park comes up in Hyderabad, the airport will truly be a national hub,” he added.

Dermot Davitt, Deputy Publisher of The Moodie Report — an online airport retail publication — said the trinity of Airport, Concessionaire and Brand-owners has to come together to sit and discuss issues.

Apart from engaging the traveller, they also have to be conscious of the fact that airport retailers have to compete with high-street markets. “Hence what, where and how they sell will have to be made appealing, and they will also have to set new benchmarks.

They will have to think of new ideas. Brussels airport has the best selection of topclass wine. Moscow airport has a DVD Cinema facility. It has been noticed in Moscow that passengers come three hours before scheduled departure time to see the DVD movie of their choice while enjoying a glass of beer or vodka and some eats. Larnaca airport at Cyprus has a lucky draw everyday.

Munich airport has a cosmetics institute to provide the best services to air travellers.”

According to Joe Lopano of Dallas Fort Worth airport, the facilities they offer — comfort zones for food and retail, seven runways for airlines, airport city — at their 18,000 acre airport have made it very popular. Another 6,000 acres still remain to be developed as part of the airport city, he said.

The airport has made a fortune from changing the way the parking is done, as also its food and beverage, retail etc.

“What we did was to constantly reduce the aeronautical cost and increase the nonaeronautical cost instead. For instance, we opened a new Terminal D, not with the intent of accommodating new passengers but only to provide additional space for a variety of food and beverage outlets. People waiting to catch a flight preferred to explore these new outlets for F&B. The airport sales, consequently, of F&B jumped by 18 percent. Luckily, an oil and gas company discovered huge gas reserves under our airport, which got us a bonus of $185 million, along with $50 million in gas revenue annually,” he revealed.

Wilco Sweijen of Amsterdam’s Schipol airport said that non-aeronautical revenues were the airport’s mainstay. In 2008, the airport handled 47.4 million passengers — a slight fall compared to the previous year —and 1.6 million tonnes of cargo. It is the third largest cargo airport in the world. Over 90 airlines fly from Schipol to 230 destinations, with 428,300 aircraft movement annually. It is the 5th largest airport in Europe.

“The new Schipol airport, developed few years ago, has excellent multi-modal connectivity and everything that is needed by a discerning passenger. Our signages are

28

clear and our mission is `Be Happy’ and meet the demands of the travellers and visitors. We have 11,000 square meters of shopping in the airport area, and all these shops open 90 minutes before the first flight.

Sometimes, even the city dwellers use it.”

Following this falling traffic and revenue trend, the Dutch Government has now decided to abolish this ticket tax, which will once again help in raising the tarrif into and out of Schipol. It has also been decided by the airport that its aero charges will be lowered to attract more airlines and make Schipol Europe’s preferred destination.

Marcel Hungebuehler, CEO of BIAL, raised the very important cause and effect issue of whether affluence resulted in air traffic or air traffic resulted in affluence. He concluded that both the statements were true, as air travel indeed catalysed economic activity. India, in the last few years, has been seeing a great growth story.

“We, at BIAL, offer solutions to opera-

The travel policy during slowdown is usually downgraded by most corporations and after recession they don't restore it immediately tors, and unlike other airports, our model is based on outsourcing, based on transparent partnership of various airport activities. As for the passenger profile, Bengaluru International Airport has 80 per cent domestic and 20 per cent international traffic. We have the same infrastructure and terminal, and while the domestic operations are conducted during the day, international operations take place at night. So we use the same infrastructure, and this has resulted in cutting cost susbstantially. The airport has a land bank of 4,000 acres, and less than 2,000 acres has been used so far. The plans include building of a new parallel runway, an airport city and new terminal to cater to a total passenger handling capacity of 40 million annually,” said Hungerbuehler.

CRUISING HEIGHTS April 2009

Even as these airport representatives talked about their airports and ways to make more money, it was left to Sudheer Raghavan, CCO of Jet Airways, to assert rather strongly that airlines indeed were in serious trouble. He told the airport participants that he would bring them down to earth with the sad story of airlines in India, as also elsewhere.

“The unprecedented lifestyle changes and growing GDP enticed airlines to buy and deploy capacity which is far in excess of what is needed, especially during a slowdown when travellers, along with investors, have virtually disappeared. Airlines made huge investments, which now seem like hasty decisions. India, which accounts for 2 per cent of the global travel, accounts for 30 per cent of the world’s aviation losses,” he pointed out.

He went on to say: “It is scary.

Unless there is restructuring, reorganisation and biting of the bullets there is no way out. We have to ask ourselves if we are doing anything right. Yes, I welcome the argument that airports should find more money in non-aeronautical activity than in aeronautical.”

Urging GMR Hyderabad to recover money in the next five years, Raghavan said, “You are killing the golden goose. Even older airports have begun to charge 1,000 times more as they have installed cutes.”

On the second day of the conference, which had its famous Leaders Forum, some interesting points were made. Inaugurating the conference, Secretary Civil Aviation, Madhavan Nambiar emphasised the need for all to work closely and urgently to consolidate the existing markets and develop new markets in order to ensure longterm survival.

“India witnessed an almost fiveyear long rally, with aviation growing by 25 per cent annually. We have spent $4.5 billon on the airport sector between 2004 and 2009. The total number of passengers carried rose to 71.4 million in 2004, which rose further to 101.2 million in 2008. We expected that it will rise to 200 millon by 2010, once the new projects under execution are in place. As for airlines, there is excess capacity on metro routes but the non-metro routes are under-served,” said Nambiar.

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SPOTLIGHT At the Leaders Forum, Director General of Civil Aviation (DGCA), Dr SNA Zaidi started off with an opening qualifying remark. “Whatever I am saying is in my personal capacity and not official.” Since the topic was ‘How much more liberalisation?’ Dr Zaidi said liberalisation indeed brings benefits and there is ample evidence of it. “Look at the number of pair routes. While there was liberalisation in Asia it was the rear-end that seemed worrisome. Against a global average of 32 per cent in terms of pair routes, the Asian average was only 5.2 per cent.”

Responding to a suggestion of more liberalisation, Dr Zaidi said, “We are talking of open skies and in Stage I we are dealing with frequency, capacity, slots, etc. The high fuel prices had impacted the global airline industry, and when fuel prices subsided, the traffic also subsided. Therefore, airlines are looking at Stage II, which means structural transformation through more international capital flow, and this means a complete relook at issues of ownership and nationality.

Hence, we need to liberalise more and stimulate demand.”

Vijay Poonoosamy agreed and said there should be no half way to liberalisation. GMR HIAL CEO PS Nair agreed that there should be more liberalisation and the current slowdown should not derail liberalisation.

Dr Zaidi agreed that it was a difficult area to decide, especially when it came to liberalisation of ownership and capital flow issues. “No real breakthrough in liberalisation is possible without addressing these issues. It will be possible to do that when people, states and countries begin to look at the crucial nationality clause. When we have liberalised the ownership/nationality issues governing investment in telecom, banking, automobile sector etc., and have also granted them virtual full freedom to set up industry anywhere, what is so special about the aviation sector? Why not give the same commercial freedom to the aviation industry, subject to regulation of those countries,” he remarked.

“I have heard, in the last few months that our airlines are facing serious liquidity crisis. What we need to do is address the liquidity issue and encourage capital flow, including cross-border flows. In this context, addressing the ownership and control issues becomes very significant,” he added.

When asked why anyone would invest at a time when there is a serious financial crisis engulfing the airline industry, Dr Zai-

30

di said the government should provide the enabling criterion. “Besides, there are also a number of airlines that are making profits.

Several of them can show interest. We should not be hesitant in looking at this option if it makes commercial sense.”

Prashant Sukul, Joint Secretary in the Ministry of Civil Aviation, said his only observation was that there should be a serious pause on granting of any more bilateral rights to airlines. As for allowing capital flows and related issue, Sukul, who joined the ministry just two months ago, largely preferred to keep his counsel to himself.

An important disclosure at the conference on Day 2 was by PP Singh, COO of Air India Express, who said that Air India Express, the low-cost arm of Air India, was making profits. It was flying out of 18 destinations from within India, including deeper hinterlands, to 13 international destinations. In terms of costs, its costs were nearly 23 per cent lower than that of Air India, the reason being that Air India Express paid much less to its contractual pilots, engineers and cabin crew, compared to what they got in Air India. Singh also said it charged slightly higher fare for connecting passengers from hinterland to international destinations, though he did not specify the difference.

In contrast, SpiceJet CEO Sanjay Agrawal noted that even his LCC cost 23 to 25 per cent lower to operate flights, compared to full-service carriers, and SpiceJet would break even perhaps in the fiscal beginning April 2009.

Madhavan Nambiar emphasised the need for all to work closely and urgently to consolidate the existing markets and develop new markets CRUISING HEIGHTS April 2009

Another important observation of Day 2 was that of Saroj Datta of Jet Airways, who said the airline industry in India was in serious trouble and could not afford any more hike in aeronautical and other charges.

“Yes, the industry was facing serious excess capacity which needs to be addressed. Jet had already leased out nine aircraft and could lease out more to cut costs and balance revenues. “For the first time,” Jet Airways’ Datta admitted, “the current problem is of our own making and we went overboard and ordered large number of aircraft thinking that the economic environment would continue to grow friendly. However, all this changed and the slowdown reversed not just the hopes but also the forecast.”

Prof Rigas Doganis, who moderated the Leaders Forum meet and who is also on the board of GMR HIAL and non-executive director of easyJet, said lowering cost made a lot of difference. In this context, he said both easyJet and Ryanair made profits even today. While easyJet had reduced its cost to 40 per cent of what it generally cost a legacy carrier to operate, Ryanair costs were 60 per cent lower. Ryanair had actually connected all such places where legacy carriers had never been.

To conclude, Secretary Civil Aviation Madhavan Nambiar made a very important observation in his opening remarks. He said while there was excess capacity on metro routes, the non-metro routes were under served.

Strangely, this point about Indian aviation was not considered by any of the Indian speakers in the Leaders Forum.

One of the legacy carrier representatives only spoke of excess capacity and the mistake airline promoters had made. But none, be it Jet or Air India Express or SpiceJet, whose CEOs and top officials were present at the Routes Asia conference, had dared to consider the observation made by Nambiar.

If there is excess capacity on metro routes, then why not divert part of it to the non-metro routes. Perhaps Indian airline promoters were earlier fattened so much on metro routes that there is not much fat left on it. Their failure to connect the non-metros in these times, speaks volumes of why they do not want to take risk, when risk is the first necessary condition to do business,

whether on land or in the sky.

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SPECIAL FOCUS

“SITA committed to play critical role” Bruno Frentzel, Senior Vice President, Application Services on SITA in India and its commitment towards development of Indian Aviation.

Q A

: How do you see the current round of downturn in the world aviation industry? What are your views on Indian aviation sector? : 2008 was a roller coaster ride not only for aviation but for almost all the industry.

Aviation sector battled oil prices as they rose to US$147 in July’08. According to IATA, the year 2008 ended with passenger traffic up 1.8% and cargo down 4%. In December of 2008, passenger traffic dropped 4.6% and cargo saw a 22.6% decline. The only precedent is in the Great Depression of 30s.

According to IATA, airlines lost US$8 billion in 2008 and IATA expects further US$2.5 billion loss this year.

The Indian aviation sector was not very different from rest of the world in 2008.

Domestic passenger growth has declined to negative 1.94% during the period January to October, 2008 as compare to growth of 46.5% and 32.5% in the full calendar years 2006 and 2007 respectively. The aviation sector was first greatly affected due to rise in fuel prices. India is among the most expensive places in the world to buy aviation turbine fuel (ATF). The Government of India took a proactive approach in tackling with the issue by abolishing Customs duty on the import of ATF. The State Governments have been persuaded to reduce the sales tax on ATF. The result of this approach can be seen in moderation of the prices of air tickets since the middle of January '09.

It is estimated that Indian GDP will still grow at 5%-6% this year. Indian Government’s spending on infrastructure and in aviation in particular has been great impetus for growth of the Indian Aviation sector. Greenfield airports have come up in Hyderabad and Bangalore.

Delhi and Mumbai airports are being modernized. A lot of nonmetro airports are being developed to world-class standard.

I am very optimistic about air transport opportunities in India and am sure India will overcome the turbulent times very soon.

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

India has been identified as an emerging business destination within SITA, where we are directly investing heavily through an 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.

It gives me immense pleasure to share with you that SITA, for over half a century now, besides its operations in 220 countries, 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 organizations. The journey has been very enriching and gives each of us in SITA, a great sense of pride. SITA has all along been providing its communication and application services to almost all airlines operating in India.

On the airports front, 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. Of late we have also been awarded the CUTE project at the 13 non-metro airports by AAI which is currently under execution. In the govt. 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 modernization of the Air traffic management space in India with the introduction of advanced applications like DATIS, CPDLC, ADS-B, etc. With many greenfield airport projects in the offing, SITA in India is poised to play a critical role in development/modernization of these airports as MSI (Master System Integrator). We are committed to support the growth in air transport here in India right across the spectrum.

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 CRUISING HEIGHTS April 2009

excellence and enabling airport operators and airlines to weather the storm. The biggest challenge with the Aviation sector in India is to optimize their resources - manpower, aircraft utilization and revenue. IT applications will surely become an enabler in this endeavor.IT is an integral part of the aviation industry and helps in making the business more competitive, profitable and customer friendly.

What are the new technologies which you think will help Indian airports in achieving their goal of becoming world class?

I am impressed with the fast pace of change overall in Indian Aviation. I have been coming to India for a long time and have witnessed many positive changes myself but more can be done.A technology like CUSS (Common Use Self Service) will be a great tool to decongest the airports; this will empower customers to get their boarding passes from places like Malls, Hotels and Railway & Bus stations. This will reduce traffic pressure on airport check-in counters. Common USE Terminal Equipment (CUTE) is well embedded in Indian airports; both passengers and Airlines have gained through CUTE technology. RFID (radio frequency identification) technology when more affordable in the future, can bring substantial benefits to the air transport community in the form of cost reductions, improvements in productivity, customer services and safety. RFID offers the potential of improvement in the processing of bags at the airport (RFID readers read more reliably than bar code readers). This will also allow systems at any airport to identify immediately and automatically a mishandled piece of baggage, collect handling instructions from the airline responsible for the bag and route it to its correct destination. Similar benefits and more are expected from handling cargo and containers, or the management of other assets used at the airport or within an aircraft. Groundto-air radio telecommunications & air-to-air communications services will see huge IT penetration in India.India will witness more usage of the Internet and mobile phones to make travel cost-effective. Direct selling through Internet and mobile will help airline cut costs on agency commissions. IT is the backbone of the aviation business. Technology in flight is a key differentiator; extended applications like videoon-demand, phone-on-demand and Internet access will become value added services in long haul flights.

How many times have you been to India and what are your personal impressions?

India is a great democracy with vibrant people.

The Indian talent pool has been a driving force for global IT growth. I like the Indian food and loved eating biryani in Hyderabad. I always look forward to my visit to India with lot of excitement.

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On the threshold

OF A NEW

GROWTH ERA

Kapil Kaul

Kapil Kaul has closely watched the Indian aviation industry transform, under the leadership of Praful Patel, from an unorganised sector into one that is critical to the Indian economy. And the current scenario notwithstanding, he is extremely optimistic about the future of the industry.

T

The key figure responsible for making the aviation industry in India relevant has been Civil Aviation Minister Praful Patel 32

he aviation business in India has been transformed over the last five years — from an over-regulated and poorly managed sector to one that is open, investment-friendly and strategically important for the development of the Indian economy. The scale and structure of the industry has changed dramatically, and we are on the threshold of a sustainable and long-term growth phase from 2010 onwards.

This next phase in the development of Indian aviation will drive significant investment across the air transport value chain, generating employment and contributing positively to the socio-economic development of India. I acknowledge that this is a very bold prediction to make, given the current state of the industry, but I strongly believe that this short-term correction is important for the long-term viability of the sector. Yes, we have to respond with policy reform and infrastructure development, and airlines have to restructure urgently, but we are moving closer to a profitable growth trajectory, which will commence from 2010.

The key figure responsible for making the aviation industry in India relevant, and for driving these changes with passion and commitment, has been Civil Aviation Minister Praful Patel. His tenure has been gamechanging in many ways, and the benefits of his vision and leadership will deliver results from 2010 onwards.

However, after setting a blistering pace during the first half of his term, I feel that we lost some momentum in the last couple of years, during which period, more could have been achieved. The first three years of Mr Patel’s tenure were remarkable, and the speed and direction of change were unlike anything that HIGHLIGHTS OF THE PRAFUL ERA: Non-metro airports like Goa assumed significance. Minister Patel at the foundation stone-laying ceremony of the new intergrated terminal at Goa.

CRUISING HEIGHTS April 2009

India has seen before.

Genuine deregulation of the domestic skies, liberal bilateral agreements with all key markets (including open skies with the US), modernisation of Delhi / Mumbai airports, fleet purchase orders, merger of the national carriers (allowing domestic airlines to fly overseas), open skies in cargo — all these, along with many other initiatives, created a solid platform for further growth, and for the development of a worldclass aviation industry in India. This initial burst ideally needed to be strengthened by further reforms and policy initiatives. Instead, the pace slackened and several important issues were left

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BILATERALS AND MORE: Joint Secretary, Ministry of Civil Aviation, R K Singh and the FAA Administrator, Marion Blakey, exchanging signed documents of Memorandum of Agreement (MoA).

unaddressed. In particular, these included the New Civil Aviation Policy, FDI changes facilitating the entry of foreign airline investment into India, abolition of the 5-year/20-aircraft rule to allow more private airlines to fly international, delays in setting up the Airports Economic Regulatory Authority (AERA) and the cityside development of non-metro airports, postponement of the ground handling policy, besides under-investment in ARM and CNS (Air Traffic Management and Communications, Navigation, Surveillance) infrastructure.

Under-resourcing of the Directorate General Civil Aviation (DGCA) resulted in India receiving a warning that it could be downgraded by the US to a Category 2 nation, due to deficiencies in the safety oversight mechanism. Also, more attention should have been given to addressing the fundamental viability of the airline sector. The process of engaging

CREATING A MAMMOTH CARRIER: Praful Patel announces the merger of Air India and Indian at a press conference.

the Finance Ministry and state governments to remove sales tax on Air Turbine Fuel (ATF) commenced only when oil touched $147 a barrel. It was too late for such a major concession to be given to the airlines.

The last few months under Mr Patel’s administration were overshadowed by the near fiscal demise of the airline sector due to various external factors, but his response was extremely positive. He managed to convince the oil companies to provide a six-month moratorium to the airlines for clearance of outstanding payments and to introduce a fortnightly revision of ATF prices, allowing the decline in prices to feed through quicker. This helped the airlines to a large extent.

Further, he requested the PM to address the problems faced by the airline sector, and a Committee of Secretaries was constituted to understand the issues of the aviation sector. I am sure that this will be helpful for the next administration in solving various problems if it is seriously pursued. Besides, Mr Patel has done much to raise the profile and the importance of the aviation industry within government circles and the wider business sector — a feature which should not be underestimated.

It is easy to be critical in hindsight, and we all take this liberty generously. And it is true that the disappointment of the last couple of years is, in large part, driven by the expectations set by the first three years, which were genuinely historic in their impact on the industry. The political environment can make it difficult for such momentum to be sustained.

Needless to say, Mr Patel has contributed immensely to Indian aviation. His vision to create an industry that the country could be proud of was visible and genuine, his enthusiasm highly infectious, and his charismatic leadership was a real differentiator. History will judge Mr Patel as one of the key figures responsible for unleashing the potential of Indian aviation and setting it on its long-term

path of growth and expansion.

(Kapil Kaul is CEO-South Asia, Centre for Asia Pacific Aviation (CAPA). He can be contacted at kk@capa.com.)

CRUISING HEIGHTS April 2009

Mr Patel’s vision to make aviation into an industry that the country could be proud of was visible and genuine 33

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COVER STORY

FIRST AMONG

FIRSTS

The new Hyderabad international airport has emerged as a jewel in the Indian aviation industry crown, with its glossy exteriors and spanking interiors. An exclusive report.

G

MR, the new jewel in the horizon amongst the infrastructure giants in India, has done it. We don’t know how much money their first mega brand — Rajiv Gandhi International Airport — or what is technolegally known as the GMR Hyderabad International Airport Limited (GHIAL) — has made in the first year of its maiden operations since it was opened on March 23, 2008. But a visit to the airport, 34 kilometers from the city centre, that includes a 7-km ride from the entrance boundary wall of the airport right into the passenger terminal building, shows many smiling faces, be it the airline staff, airline crew, passengers, retailers or anyone connected directly or indirectly with the new Hyderabad airport.

PM Nair, CEO of RGIA, recounted five significant milestones the new airport, built on PPP model, had achieved.

First, RGIA was given 4.41 out of 5 marks by the Airports Council International

(ACI) survey, thus earning it a place in the top ten international airports worldwide.

Second, it is the first airport in Asia to have got high environmental-engineering rating from the US Green Building Council and was bracketed with the other topper, Boston airport, for the top honours.

Third, Indian Concrete Institute - AP nominated RGIA as the winner of Outstanding Concrete Structure of AP 2008.

Fourth, GMR Varalakshmi Foundation (the CSR arm of the company) received the Orbis award for doing excellent work in resettlement and rehabilitation of people displaced by the construction of the airport.

Fifth, RGIA got the ‘best infrastructure built in India’ award from CNBC-TV 18.

But in real terms, the most significant milestone, if one may be permitted to call it that, is the almost complete acceptance by the travelling public of the spanking new facility. No one talks anymore about the long haul to Shamsabad, or the distance from the city (34 kms), it’s simply that they like what they’ve got. “Unless you are hit

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by a traffic tornado, it takes you about 40 minutes into Shamsabad, and the airport itself is a sheer pleasure. I love transiting through Hyderabad,” said Veena Gupta, a regular commuter to the city. Nair couldn’t have agreed more.

By March 2010, the first phase upgradation of Delhi International Airport Limited (Indira Gandhi International Airport) will be completed and GMR hopes it will have two shining beacons in the South and the North of India. These two airports, as on date, already account for 30 per cent of all-India air traffic.

So, are they making money in this downturn? Is it time to be an optimist, or bear with the doom and gloom predictions?

Nair’s colleague and Head of Commercial Operations, A Vishwanath smiles, turns coy and states: “Sorry, I cannot disclose anything about financial issues,” and takes refuge in the fact that they are the subsidiary of a listed company, whose first job is to inform the stock exchanges. It’s like a Minister saying that policy pronouncements can be done only in the House because Parliament is supreme.

But he offers a few nuggets of information: “I can only say that, as of now, 70 per cent of the revenue is aero-related and 30 per cent non-aero. Our strategy is to reverse it to 50-50 first, and then to 30 per cent aero revenues and 70 per cent nonaero revenues. In the case of duty-free

BROTHER IN ARMS: The entrance to the Bengaluru International Airport terminal presents a serene look. The Bengaluru Airport, opened around the same time as the Hyderabad Airport, and also celebrates a year of operation.

shopping, 60 per cent revenue is coming from those flying in and 40 per cent from those flying out. We want to increase the passenger spend from $4.5 per passenger to $7 per passenger.”

For the record, as on March 31, there were in all 230 flight movements comprising 115 landings and 115 take-offs. Compared to 6.9 million passengers who arrived/took off from Begumpet Airport in 2007-08, the first year of RGIA recorded 6.5 million passengers in 2008-09. The drop was mainly due to the economic slowdown, though there was no drop in the international traffic. Internal studies by the airport have revealed that 55 per cent of the foreign-bound traffic is to the Gulf, of which 25 per cent is flow-through. The important carriers are Emirates and Qatar, while Etihad will begin operations from June 2009. More than 50 per cent of the passengers go to Dubai or through Dubai.

Nearly 47 per cent go to the US and Europe, and a mere 18 per cent to Singapore and Malaysia.

So you have a spanking clean airport, passenger-friendly, with fun

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COVER STORY

‘The Aerotropolis is on steam’ only for VVIP flights, defence and ownerused corporate jets and aircraft. Two consecutive surveys by ACI have shown that Hyderabad Airport has indeed achieved global standards and received 4.41 marks out of 5 by ACI.

A year after the airport started commercial operations, PS Nair, CEO, RGIA, shares his experience so far with HIAL, and his plans for the future.

On his experience with HIAL It has been a fulfilling experience for each one of us involved in the setting up of this grand airport. We began commercial operations on March 23, 2008, and as we look back, we are satisfied that the systems have stabilised in no time, and there have been no cancellation of any flight and no significant delay of flights in the first full year of HIAL’s operations. I don’t want to say anything in comparison, but since you asked, I can only remind you of the confusion that marked the opening of the new terminal at Heathrow, the glitches in Bangkok’s new Suvarnabhoomi airport, or even earlier, when KLIA was opened to public operations. We have done well and God has been extra kind to us.

To pre-empt any confusion at the time of the formal commercial opening in March 2008, we had, six months prior to that date, handed over the airport for ORAT exercise (Operational Ready Airport Terminal). We recruited thousands of

shopping. But what’s the USP? Talk to some of the airline staffers, and they highlight several firsts that they think will be replicated down the line at other airports.

The highlight is the “Sleep and Slumber” room for transit passengers, who can use the facility from anywhere between four hours and 24 hours. They pay Rs 600 for 4 hours and up to Rs 4,000 for 24 hours, and are given all the facilities that they could get in a hotel. But generally it is meant for four hours only.

Song Hoi See, CEO of the Hong Kong headquartered Plaza Premium Lounge, that is operating these transit facilities, is delighted at the response.

“The feedback has been excellent for both our lounges and the transit room,” he said during a brief conversation.

While the 28 rooms (equipped with TV, internet, attached bathroom) are already seeing a 70 per cent occupancy, what has been an even bigger hit is the four convenient pay-and-shower facilities for hop-in—hop-out travellers who arrive in the morning, want to get fresh and ready for their meeting and return

36

dummy or proxy passengers, cargo etc., and put them through the entire procedure of checking-in and all associated activities.

Such dedicated effort helped us in ensuring a smooth transition of the airport from the old Begumpet airport inside the city to the new Rajiv Gandhi International Airport at Shamsabad.

On comparisons with the old airport Maybe some people have a sense of nostalgia about it. But people are now talking of only RGIA and refer to Begumpet as only the old airport, without evening mentioning its name. That airport is now used

Talk to some of the airline staffers, and they highlight several firsts that they think will be replicated down the line at other airports CRUISING HEIGHTS April 2009

On the proposed Aerotropolis Well, it may be spread over 1,000 acres and it is an entirely different vertical of GMR group. The urban infrastructure aspect of GMR is dealing with it. Yes, I agree there is a slowdown today, but they are taking everything into account and firming up plans in a very judicious way to ensure the viability, saleability and economy of the project. CPG of Singapore has been engaged, and it has prepared the design and plan of the Aerotropolis, which is almost finalised.

As for the ground-breaking ceremony, I cannot be sure. I don’t know, except for the fact that the airport city project plan and design is in a very advanced stage.

On the possibility of revisiting UDF Let me answer you this way. UDF, in any case, was implemented after due diligence by the Ministry of Civil Aviation, in the

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absence of a formal regulator, who will now be the Airport Economic Regulatory Authority (AERA). And once AERA is put in place, with its Chairman and Members, it will take up various issues, including the UDF, currently being charged from each departing domestic passenger at the rate of Rs 375 and each departing international passenger at over Rs. 1,000. Regarding your question on whether we are registering 16 per cent return on investment, let me say very categorically that we have not got 16 per cent return in our operations of HIAL so far.

On working in the private sector Well, in the PSU, it is largely procedureoriented and, at the end of it all, there is the Triple Cs — CVC, CAG and CBI. In retrospect, let me tell you, I should have been in the private sector. In any case, it was my dream that I should contribute in my own humble way and share the pride with all.

On competition with Bengaluru and Chennai Till date, in India, we did not truly have a world-class airport. Now BIAL has come up, and so has our airport at Hyderabad.

Now that this trend has begun, it will be for the airlines to take the call on who gives a better competitive advantage. As for how one can divert traffic, say from either Bengaluru or Chennai, I can only say these

issues are largely governed by connectivity, which we are aiming to provide.

We want to make Hyderabad a hub for all the converging areas and move people from smaller airports to Hyderabad, including from places like Hubli or Raipur etc.

We are going to build a budget hotel in the airport and are also thinking in terms of holiday/pilgrim tourism packages. If airlines can do it, why can’t we? It could be our own HIAL holiday packages.

On the impact of the economic slowdown I must admit that the economic slowdown has also hit us. At any airport, advertisements are a huge source of revenue. In a slowdown, most corporates first axe their ad expenditure, and so we have this problem as this expected revenue stream is not flowing the way it should. Apart from advertisement, the other non-aero streams of revenue include retail, duty- free, shops, car parking, slumbers, lounges, rentals, licence fee, space rentals etc. As per OMDA, we could have hiked the aeronautical charges by 38 per cent but we did not, in deference to the wishes of the airlines, who have also been hit by the slowdown. But the Ministry of Civil Aviation has approved a 10 per cent hike, which we have not implemented so far. Maybe we will look at it shortly.

There are still plenty of things that need tweaking before a world-class airport can become a powerful destination in the region CRUISING HEIGHTS April 2009

TOP OF THE LINE: Hyderabad’s duty-free boasts of classy brands.

straight to the airport, shower and catch their flight back.

Interestingly, even a full-service carrier like Jet Airways has chosen to send its executive class passengers to the pay lounges being run by Plaza Premium. “They have an arrangement,” said an insider. These lounges are premium products targeted at LCC passengers who don’t mind paying for some privacy and a comfortable ambience.

But there are still plenty of things that need tweaking before a world-class airport can become a powerful destination in the region. For starters, tourism can be a powerful driver. But visitors to the single-most important locale in the region, the Lord Venkatreshwara Shrine in Tirupathi, prefer the Chennai gateway because it is nearer to the temple town. Nair, however, is hoping to reverse it with an integrated holiday package, on which the airport team is working.

Realising that the quirky cyclical nature of the airline business can be one hell of a downer for the fortunes of the company, GHIAL is working systematically to get in the aertropolis, the MRO and sundry other facilities on stream as quickly as possible. Several announcements are expected in the next few months, as the work to reverse the perennial woes of a lopsided aero versus non-aero revenue structure that is skewed entirely in favour of the nonaero business.

Even as one will move towards the eventual first phase-end 20 million traffic capacity, the airport will already

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COVER STORY

‘Something for everyone’ A Viswanath, Chief Commercial Officer, RGIA, is a satisfied man today, as he looks back at the one year of commercial operations of GHIAL. Excerpts: On airport connectivity Prior to our starting commercial operations in March 2008, there was a lot of apprehension. The worst of it all was whether the passengers to the new RGIA would ever be able to reach the airport before two to two-and-a-half hours. Now ask anyone. At best it takes 42 minutes and at worst, it may not take more than 65 minutes if there is acute traffic in the centre of the city, which could make it difficult to come out on the highway.

But even a random survey will tell you that it takes not more than 50 minutes to reach the inside of the passenger terminal from the city.

There are four approaches to the airport from different parts of the city, depending upon where you are living or staying. The state government has done an excellent job in providing connectivity, and once the PV Narasimha Rao Elevated Expressway is in place, it will be really a joy ride for anyone to come to the airport.

A passenger distribution shows that 15 per cent of them come via the Eastern Ring Road, 20 per cent the middle road, 40 per cent from the PV Expressway direction and 25 per cent from the IT corridor or the Hi-tech city.

Yes, people have forgotten the old airport. All the early talk, that it would take three to four hours to reach the new airport, has been disproved. In fact, one can actually reach one’s flying destination within that time.

On transportation problems HIAL has pressed into service special airport express buses that start from five important points in the city and reach airport non-stop. Earlier, we were losing Rs 50 lakhs each month on this service, in which per passenger fare was Rs 90.

Now we have changed the buses and instead put into operation special buses made by Ashok Leyland, which are not only air-conditioned but are equipped with flight information monitors, GPS, enough space for luggage, etc., and will

38

soon have Wi-Fi. The charges are Rs 120 per person from High Court to Charminar and Rs 150 from Secunderabad.

Many non-passengers have begun to use this bus for sightseeing.

The bus service is available every half an hour during non-peak times, and every 15 minutes during peak time. The peak times are between 10 p.m. and 5 a.m. for international passengers, and between 7a.m. and 10 a.m., and again between 4 p.m. and 10 p.m., for domestic passengers.

Compared to Rs 700 charged by Radio Taxis to provide personalised travel, the buses operated by RGIA charge only Rs 120 or Rs 150 with luggage. In all, seven Radio Taxi companies have been given licence. With two of these companies, the airport has entered into an agreement so that the taxis can come up to the ramp. As for those who cannot come up, there is a shuttle service available to and from the taxi stand. We have solved all transportation problems and addressed the demand of every cost-conscious passenger.

On Retail and F&B services The Retail and F&B have been really liked by the passengers, and there is something for every kind of passenger.

We have coffee ranging from Rs 10 to Rs 90. We are, in fact, not just catering to the passengers but also groups of those 15 or 20 people who, in typical Hyderabadi style, come to see them off. For them, just below the entrance terminal, coffee is sold at Rs 10 per cup. We are soon going to have a food court near the car park, and have already tied up with MTR, a Chinese cousine specialist and a Mumbai-type Chowpati chaatwala.

The entire F&B contract has been awarded to HMS, a global Singaporebased company. HMS has developed the complete F&B spread in the airport.

Soon there will be an `Idly factory’, where you will be able to get five types of idly for Rs 75 per plate.

Our retail section is doing very well.

We found from our surveys that many of the LCC passengers preferred to shop at the airport, and their share is rising slowly viz a viz the full-service passengers.

CRUISING HEIGHTS April 2009

have, before that, an all-air frame MRO to be followed by an engine and components MRO, aviation academy, pilot training institute, etc. These will be part of the already earmarked and declared Aerospace Park SEZ. On the other side of the present airport operating facility will be the multi-product SEZ. Taking the two phases — with each providing 20 million passenger handling facility — the aerospace park SEZ and multi-product SEZ, there will still be a 1,000-acre land bank available, which the GMR group would develop as an Aerotropolis. CH understands that the Aerotropolis will have a multi-speciality Hospital with an attached hotel (there is already airport hotel — Novotel) to exclusively cater to medical tourists. A charter facility being developed at RGIA could be ready on time to also receive medical tourists arriving on charter flights. There is talk

CLEAN, GREEN: A tree-lined avenue welcomes travellers to the airport.

that RGIA will tie up with the pioneer of corporate hospital culture in India — Apollo Hospital — to run this new airport hospital. Incidentally, the promoter of Apollo, Dr Pratap Reddy also hails from Andhra Pradesh, like GMR. And like Grandhi Malikarjun Rao, Prathap Reddy is himself something of a legend.

It’s the sort of spirit that GM Rao and Kiran Grandhi want to exude throughout the vast Shamsabad expanse. As Rao states: “I want a world- class experience from start to finish. Nothing but the best for the people who come here.” His son nods in agreement, and top executives like Nair and Vishwanath assure you that they are already on their way to achieving that.

We should know a few years down

the line.

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COVER STORY

Bangalored —

FAR FROM IT Bengaluru International Airport has been more sinned against than it has sinned — at least as far as the passenger services go. Always at the receiving end of barbs, BIAL has, to some extent, been a victim of circumstances. But its past has not put brakes on its present or future: it is moving ahead and creating benchmarks for the aviation industry, as Tirthankar Ghosh found out.

A

s Marcel Hungerbuehler, Bengaluru International Airport Limited’s (BIAL) CEO, looks out of his huge office window overlooking the hardly a yearold airport that he was so instrumental in creating, he cannot but be proud of his achievement. The airport, which started operations on May 24, 2008, was conceived almost 18 years ago, but built in a record 36 months, and today functions as efficiently as any airport in the developed world.

Even so, it continues to be troubled

For the moment, the airport would see very little physical expansion

First among airports C

redit must be given where it is due, and the Bengaluru International Airport scores high on several counts.

The first CEO, Albert Brunner, was a pioneer of sorts, having initiated the first public-private partnership (PPP) model for development of airports in India. He spearheaded a new approach to airport operations when he introduced the concept of the Airport Operations Control Center (AOCC).

One of the first of its kind in any of the country’s airports — in fact, Hyderabad too has such a facility — the AOCC ensures smooth and efficient airport operations. Based on the ground floor of the main terminal, the AOCC is the nerve centre of the airport, from

40

which the collaborative decision-making process is facilitated.

This is where representatives of all the various stakeholder organisations operating at the airport, including airlines, ground handlers, cargo handlers, flight catering, fuel suppliers, security, immigration, customs, ATC and the airport operator, are stationed.

Functions like coordination with all partners, planning and allocation of resources and dissemination of information takes place here. The set-up encourages and enables automatic and seamless sharing of information. The AOCC is crucial in operational recovery in times of disruption and delays. It helps enhanced predictability, resulting in better planning and real-time overview of operations,

CRUISING HEIGHTS April 2009

by criticism. The barbs, aimed from all conceivable quarters, do not upset an old hand in the aviation industry as Hungerbuehler is: he held top positions with Swissair and Swissport before coming to BIAL in 2006. Instead, he looks at the brighter side. “Where in the world would you get such a huge amount of land for expansion?” he asked. “It is not possible in Europe…”

He followed it up with: “Bengaluru, in my opinion, should be very happy that such an amount of land has been used for expansion.” “Here,” he said, pointing to the vast stretches of land beyond the airport, “you have something to plan long-term.” Have you flown to the old airport, he asked. “There is nothing to do there anymore. It is already surrounded, with the city housing on one side and industrial development on the other side,” he said. As if answering all the critics of the new airport, the CEO said, “So, long-term thinking is very important…”

Expansion, capacity utilisation and facilities are words that mean a lot to Hungerbuehler and BIAL Chief Operating Officer Hari Marar. Always at the receiving end of queries — from journalists, high-level Airports Authority of India (AAI) committee members looking into the airport’s passenger handling capacity, and politicians — both must be tired of trotting out figures to show that the situation had not gone out of hand, and that the airport is capable of handling more than 12 million passengers a year till 2012, despite the severe finanresulting in enhanced quality of decisionmaking — quick, accurate and taken by the correct partner.

Another first among airports is the connection by an offsite Air Turbine Fuel (ATF) pipeline meeting international quality standards. A 33-km underground pipeline connects the airport’s fuel farm concessionaire Indian Oil Skytanking

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cial constraints it is going through.

The airport is bleeding every month, and now with the downturn and a slowdown in domestic traffic, the losses have been totalling more than Rs 22-23 crore per month, apart from the unpaid dues of more than Rs 40 crore from airlines.

According to senior officers at BIAL, the consortium which had put up the airport did not expect a return on investment in the first year but had hoped that with their demand to levy User Development Fee (UDF), it would rake in Rs 1,000 crore a year.

In fact, the former BIAL CEO Albert Brunner (who moved out in the beginning of this year) had even gone on record to say that the airport had to stop all development work because it could not charge UDF. The government’s recent decision to allow BIAL to charge Rs 260 per passenger from January 16, 2009 should lessen the losses — but only marginally.

BIAL had demanded Rs 675 as UDF from each domestic traveller.

So, for the moment, the airport would see very little physical expansion.

Perhaps, that will provide enough fodder for its critics to start shooting barbs again. Indeed, why are people not satisfied with the airport?

Perhaps travellers, used to a short, hop-skip and jump to the old HAL airport within the city, could not stomach the long ride. Also, the initial days were embarrassing, to say the least, for the new airport. The airport looked swanky from the outside. Inside, it was hardly bells and whistles. Regular travellers Limited (IOSL). The pipeline, running from Devanagonthi to the airport fuel farm, has a capacity to pump over 156,000 litres of ATF per hour.

Among the other firsts are: the single-man refuelling on the apron and the enhanced communication system — E-Konfer. The latter is a web-based emergency alert and group communication system developed exclusively for BIAL, and acts as the backbone for all secondary communication at the airport. Inbuilt with technologically advanced features, such as group audio and text message broadcasting and conferencing, E-Konfer provides the vital tools that the duty staff at the airport requires to alert concerned teams of developing situations without loss of time.

WORLD CLASS: (Top, above) The entrance of the Bengaluru International Airport and the comfortable seating area; and (below, left) the AOCC.

Airports worldwide are almost always measured on the kind of passenger services they provide. And what does that involve?

Basically, the overall ambience, the services to the passenger, and the associated processes CRUISING HEIGHTS April 2009

complained about no place in the business class lounges, aerobridges not working, wi-fi going off and unclean lavatories. To top it all, the immigration and customs counters were cramped and the baggage carousels took a long time to start or deliver the bags. Today, the stand-alone check-in kiosks, the 53 check-in counters and the 2,500-vehicle car park are indeed an improvement. But the distance to the airport has not been lessened, even with the new and improved road.

There are others, like the 21-member Joint House Committee (JHC) headed by the state’s BJP MLA Hemachandra Sagar, who believe that the glittering steel and glass structure and the area around it needs a complete makeover.

But BIAL does not agree — primarily because it is going to cost around Rs 1,000 crore. According to reports, the committee was of the opinion that the airport was functional but looked as if it had been built in a hurry. The members, who visited the airport, complained that it was inferior when compared to other airports in the country or abroad.

The two top airport functionaries, Hungerbuehler and Marar, said that while many did not seem to be happy with the airport when it started — perhaps the 40-odd km from the city was off-putting —the situation was totally different from those early days. Said Marar, “To be quite honest, if you ask the people who are involved in the airport itself — whether it’s the airlines or the partners who we work with, or even the various agencies that work here — I don’t think there is a single negative sentiment there. Only positive senti-

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‘Our process efficiency is very, very high’ Marcel Hungerbuehler, CEO, and Hari Marar, CEO, BIAL, told Tirthankar Ghosh that the airport is nowhere near saturation point and that all the agencies involved in the operation of the airport have been doing their jobs to near perfection, utilising the existing resources efficiently.

On airport services

Marcel Hungerbuehler: I meet a lot of people, and we like to get a feedback from the people (who use the airport). The experiences of the passengers at the airport...what does it involve?

Basically, you look at the overall ambience, you look for the passenger, and then all the processes…We did a survey in January and the results were very, very high. Worldwide you work on a scale of 1

Marcel Hungerbuehler

ments (about the airport) exist.”

However, as for the people in general and the negative sentiments in the city of Bengaluru, Marar said, “It can probably be attributed to the fact that the people’s expectations were to see an airport that was very large in size and grandiose in scale.”

That was not what the BIAL authorities had started with. “Our principal aim was to create an efficient airport: an airport that could cater to today’s needs and the needs for the next few years.”

With that in the background, the BIAL planners put into shape a model that’s easily scaleable. “So that, as the traffic grows and the need expands, we can scale our airport to meet those demands in a seamless manner,” said Marar.

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to 5; 5 being the best. But if you ever come to four, then that is an absolutely fantastic result. We should reach 3.5 in three years.

Marcel Hungerbuehler: (One way of knowing if we have reached saturation point is) You can measure the time… from the time you arrive at the airport till you are in the aircraft. That is most important. What is the occupancy today? Overall, whether you are speaking about each hour or the peak hour, you have to just make an average over a year: (for us) it is near about 58-60 per cent of occupancy. I have worked in many, many airports in the world and I have never seen so few passengers in the terminal.

That’s the truth.

Hari Marar: If I can be straight forward — if the existing utilisation of the airport was close to capacity, the first outcome would be directly on operational parameters. We have seen, over the last few months, that our average punctuality for aircraft is 77 per cent, within 15 minutes departure time, which is the normal standard time used the world over; and of the remaining 23 per cent of the delays, 85 per cent were attributable to incoming delays.

So, process efficiency is very, very high. If you look at the last 19 days (March 1 to 19), our punctuality has been averaging 90 per cent, which is incredible, and of the remaining 10 per cent of delays that we have had, over 80 per cent are due to incoming delays.

Our punctuality is as high as 98 per cent. We have 2 per cent delay at the airport on account of processes, and that

itself is an indicator of the fact that they couldn’t meet the capacity that we have got. Second, baggage handling: We have zero lost baggage claims at our airport.

Third, customer experience has been awesome, of a very high order.

Marcel Hungerbuehler: We want to be absolutely prepared to make the expansion (aimed) at the airlines and passengers needs. That is very important. But what is also very clear is that you cannot build a terminal (just because you have the place and plans to expand)… it is not possible because somebody has to finance it. You have to build something that fits the needs of the passengers, and that fits the needs of the airlines; and it has to be affordable. It is very important (to find out) what the airlines actually need and what the passenger needs.

We make a daily report where we have everything exactly measured. So, for example, now we have 140 total departing flights per day. That’s just departures. By the way, normally an airline measures on-time performance within three minutes, but our tolerance is just zero. Nintey per cent of the flights departed on time. Many things could go wrong. (There can be) checking delays, boarding delays (but) most of all is security delays. I experienced a two-hour delay at the old airport once.

What you must remember is that a delay is costly for an airline. It is a big issue here in India that airlines cannot plan because there are no slots available. An airline has to be able to plan a schedule where you use your aircraft at a maximum from morning till evening. Ideally, you should be

The state-of-theart Rs 2,500 crore airport has witnessed steady growth since it became operational

On his part, Hungerbuehler explained that basics have to be taken into consideration before evaluating any airport. Always on the lookout for a feedback on the airport, the CEO meets a lot of passengers regularly. His constant refrain to them: “How do you like the airport?” Most of them, said the CEO, were delighted with the airport and its facilities.

He then went on to point out that airports worldwide are almost always measured on the kind of passenger services they provide. And what does that involve? “Basically, you look at the overall ambience, you look for the services to the passenger, and then all the processes associated with him. How long is the waiting time, how profes-

On the airport reaching saturation point

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able to plan a 40-45 minutes ground time.

Now, of course what happens is that on every leg you add half an hour or forty minutes delay. By the end of the evening…it is a huge cost to the airline. So it’s very important that the infrastructure is well-managed, so that the airline can achieve a huge amount of savings.

Hari Marar: When we feel that in any particular processing area, the actual utilisation is coming close to capacity the first solution is not to add capacity immediately because that adds to cost. It must be seen that that capacity is utilised efficiently. And therefore, to see that the processes can be modified or technology intervention can be brought in, to improve the utilisation of the existing resources to the maximum extent possible before you add additional resources. From that point of view, we have succeeded to a large extent. First of all, we don’t operate the agencies in the airport, they operate independently. We have a very collaborative environment here, which is replicated at the Airport Operations Control Center. All these put together operate the airport. That means we are able to align efforts in such a smooth manner that we are able to utilise our existing resources much more efficiently.

On the processes at the airport

Hari Marar: I’ll give you an example of processes used efficiently. I was reading an article about Incheon Airport in Korea, which is considered to be one of the best airports in the world today, and they have revealed what their objectives are for the next year in terms of processes at their airport. I was delighted to find that their objective for process time or check-in for security etc. is actually twice the time that is taken at our airport. They are able to sional is the service, how is the shopping facility, what sort of food and beverage is available, etc.?”

To gauge the service provided to passengers, BIAL has started a survey in January this year and, as an ecstatic Hungerbuehler and Marar put it, “The results were very, very high.” As Hungerbuehler explained, “For the last 12 months (that ended in March 2009), we will have 8.8 million passengers per year. For 2009, the plan is nine million passengers. From there on, we plan 7 per cent increase, approximately, on the international side and 5 to 5.7 per cent average increase on the domestic side.”

The state-of-the-art Rs 2,500 crore airport hoped to witness steady growth since it became operational. Bengaluru

achieve total security in 15 minutes. Our average processing time, measured during peak hours, is 4½ minutes.

Marcel Hungerbuehler: You can observe and look at evidence… you must make sure all the processes are valued.

You must make sure about the baggage feeding rate, which we measure every single time, everyday. We measure points of check-in, the security checks, etc. You won’t find that anywhere in the world. In Zurich airport, in peak hour time, you have to wait 15 minutes…

On comparison with Hyderabad

Hari Marar: If you ask me about Hyderabad airport, I think it’s a very nice airport. It looks very beautiful, is maintained well, it looks clean. It is a fun airport.

But you can’t compare the two airports (Bengaluru and Hyderabad). The design concept is different. Our design concept had a very fundamental philosophy behind it: this airport should provide very simple practical processes, which is short walking distances; easy connectivity and transfers between domestic and international, international and domestic, domestic and domestic. The passenger convenience was clearly the focus… the terminal is compact, yet the handling capacity is there.

first to have an open access fuel farm. The airline is free to choose the fuel supplier, as long as the fuel supplier has the licence to sell fuel. Before this, the whole thing was a monopoly: that meant the one who controlled the fuel farm provided the fuel. …I think most significant achievement of the AOCC (see box) is the fact we were able to achieve operational stability in such a relatively short time and it was because we had a collaborative environment right from day one. We started actually operating the AOCC before the airport opened. One month before the airport opened, we would pretend as if flights were touching down here and we were actually operating. We would assign a stand, the ground handler would go to the stand, and we would pretend an aircraft was coming in.

On service deliveries

Hari Marar: In terms of approach, as an airport operator, we believe that we do not want to be involved in any of the service delivery ourselves. In any aviation service, we always have experts to do the job and there is always competition provided there by the airlines and customers. So, it is a natural system of checks and balances to ensure that the quality is (maintained).

Marcel Hungerbuehler: We are the

BIAL was building for the future. That would include an interim terminal, which would be inter-connected with the present one CRUISING HEIGHTS April 2009

Hari Marar

airport — the old HAL airport — once recorded the third highest number of passengers in the country. When BIAL opened on May 24, 2008, it took over 10.1 million annual passenger traffic from the HAL airport. So phenomenal was the traffic growth — from just four million in 2005 to over 10.1 million in 2007 — that BIAL had to make two unscheduled expansions in the first phase of the project in 2006-07. That was the move that hiked the project cost from the original Rs 1,400 crore to Rs 2,500 crore.

Today, it handles 280 flights a day — a far cry from 310 flights a day it had started with. The fault does not lie with the airport; it’s the effect of the downturn. While a number of domestic carri-

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COVER STORY ers have reduced flights, some new international airlines have started operations: Tiger Airways, Oman Air, Dragon Air, Air Mauritius and Kingfisher (international flights).

In addition, some carriers like the Emirates have enhanced the number of flights. Sometime ago, Emirates had just one daily flight; today, it has three daily flights. BIAL is proud of the fact that unlike the old airport, which could handle only two international aircraft at a time, it takes care of six — and sometimes seven — flights at a time.

The slowdown, courtesy the downturn, has provided the airport authorities time to go over their expansion plans again. These plans, incidentally, have always been there, since the airport’s blueprints were drawn up. Today, they are being given another critical look.

Said Hungerbuehler, “It is very important for us to renew our Master Plan. We want to expand the apron. At the moment, we have parking space for 42 Category C aircraft. We have prepared the ground in front of the cargo building on the airside. So the first thing we will do is expand the apron, and hopefully we will be able to do this in 2009.” That will ensure more night parking space, and will certainly be utilised by airlines. Marar pointed out that there was no capacity available in Mumbai. BIAL had 42 aircraft stands and it was adding 24 more.

Both agreed that the demand was not there at present, but BIAL was building for the future. That would include an interim terminal, which would be interconnected with the present one. Then there is the big project: Phase Two. So, in five years the terminal with an extension will be completed. And, as the CEO said, “By that time, we have to have the planning for the second runway, the inter-connection with the runway and the second terminal ready.”

As Hungerbuehler points out to the empty expanses of land the airport has — the present buildings are just one phase of the Master Plan — he has in mind the final master plan, which, if all goes well, would be completed in a span of the next 10 to 15 years. Around October last year, BIAL had hoped to take up a mezzanine expansion. A larger Rs 3,500-crore Phase 2 expansion was supposed to have started in the beginning of 2009 with the second terminal, of course subject to clearance from the BIAL board. But all that is now a thing of the past.

As of now, BIAL is going through the motions of taking a hard look at its own economic situation, and also weigh-

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State-of-the-art facilities at Bengaluru International Airport have ensured steady growth.

The planning and execution apart, Bengaluru’s status as a city of the future would not be able to boost the airport and turn it into a hub for the country CRUISING HEIGHTS April 2009

ing its options on the future. Though the slowdown in passenger traffic has come to it as a blessing in disguise, the airport city project or aerotropolis, which was meant to boost BIAL’s revenues, is going at a slow pace.

One of the major developments within the airport city is the establishment of a five star hotel — within walking distance from the terminal building — and the Oberoi Group has started work.

Comprising 321 rooms, large conference facilities, restaurants and a world- class spa, the hotel is being put up by a consortium, consisting of Larsen & Toubro and the Oberoi Group, at an investment of Rs 250 crores.

The completion of certain sections of the airport would also see a rise in the number of passengers handled. But after 2010 — when the BIAL chiefs hope the economy will pick up — the growth rate would go back to around 12 per cent.

The planning and execution apart, Bengaluru’s status as a city of the future would not be able to boost the airport and turn it into a hub for the country, and one that is a must for globalisation.

Hungerbuehler, the airport veteran, said that the country had missed the bus. At best, Bengaluru would be a regional hub and nothing more.

“Twenty years ago, India would have been in a very good position to be a real hub. But today, the big hubs are Dubai, Singapore, Hong Kong, Bangkok... We would like this to be a real hub because the smaller destinations — like Bengaluru — are

also good connections.”

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The Hyderabad International Airport is on its way to develop as a global cargo and transshipment hub at par with that in Singapore or Dubai.

Tirthankar Ghosh takes a look at the quantum and pace of the development work that is in progress at this highly sophisticated and well-maintained airport.

Striving to set

international

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T

he spit and polish of GHIAL’s (GMR Hyderabad International Airport Ltd.) terminal has certainly rubbed off on the cargo set-up. The cargo facilities at the airport speak of efficiency and nimbleness. It is no wonder then that shippers and freight forwarders that CRUISING HEIGHTS spoke to were content not only with the cargo facilities available but also with those who were managing it.

The cargo set-up began around the same time that the airport opened its doors to the public a year ago. Since then, GHIAL’s management has endeavoured to woo carriers — both passenger and freight — to its aprons. The efforts are paying off.

As far as cargo is concerned, the airport will see a scheduled Lufthansa MD-11 freighter landing every Tuesday for business at Hyderabad.

First, the facilities. The international air cargo complex spans an area of 10 acres, of which three acres have been apportioned for cargo processing and storage area. Of the total area of 14,330 sq m, the international air cargo complex would have 6,610 sq m and the domestic air cargo complex would have 4,346 sq m. There is dedicated parking space for 24 trucks, 96 cars and 120+ two-wheelers. Managed by a joint venture between GHIAL and the UK-based Menzies, the cargo section is a hi-tech facility capable of handling a lakh tonnes annually.

Operated with Hermes, an IT application that is used by a number of major

The facilities at any airport might be world-class, but if it is not efficient, there would be no takers. So, the cargo authorities have embarked on a two-pronged strategy to hardsell the airport to the world

airports around the world, the cargo terminal has been able to make its warehouse management — from the acceptance of cargo for export till it is put into a plane — efficient.

The facilities at any airport might be world-class, but if it is not efficient, there would be no takers. So, the cargo authorities have embarked on a two-pronged strategy to hard-sell the airport to the world: one, promote its infrastructure and, two, promote the potential of the city. For the moment, Hyderabad is placed sixth or seventh in terms of cargo throughput, with more exports out of the city than imports.

Said Dilip Rane, a cargo veteran and Associate Vice-President, Cargo, GHIAL: “We are selling the airport facilities to carriers and showcasing the terminal to the industry. We also have to influence freight forwarders, shippers and consignees about the airport. For a carrier, it has to make economical sense to fly freighters into an airport. If exports or imports from the airport are not large enough, carriers would shy away from the airport, however beautiful the airport is or however good the cargo terminal may be.”

The move to position Hyderabad as a global cargo hub — in fact, the GHIAL management has been finalising blueprints — stems from the fact that the city has a distinct geographical advantage: not only is it connected to other airports in the country, it also connects the East with the West. In fact, it is at the centre of the important aviation hubs of Singapore and

Unit Load Device Area at Cargo complex Hyderabad.

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“Just four minutes to clear a freighter” If there are two characteristics that can define the administration at the Air Cargo Complex in Hyderabad airport, they are nimbleness and efficiency. Dilip Rane (Associate Vice-President, Cargo, GHIAL) pointed out that the Cargo Centre would one day boost Hyderabad’s potential to be another Singapore or Dubai.

On why carriers, shippers and

consignees prefer Hyderabad Our airport is based on the PPP (public-private partnership) model, and our approach to customers is different. Recently, somebody came from Cathay Pacific with a request. They wanted to operate an unscheduled freighter on March 31 — a Jumbo 747 — to Hyderabad.

It would come from Paris to Hyderabad and fly on to Hong Kong. The manager was with me and he said, what would have taken him four or five days in Chennai took just four minutes to decide.

The process of clearing a cargo freighter — formalities involved for the aircraft to come and discharge its goods — took him, as he said, just four minutes. That is how we work.

On why international carriers

would start using Hyderabad.

Most of the airlines we spoke to were satisfied with exports but imports are dismal. Today, exports are 80-85 per cent, while imports only amount to 10-15 per cent of total cargo throughputs. So, especially for carriers from Europe, to come all the way more or less empty is not feasible. They can’t recover the cost of operations.

Basically, those who are capacity operators will be attracted to come here. Today, we have only belly cargo. There are no scheduled freighter operators as of now, but from April 7, we will have Lufthansa flying in on a weekly basis — every Tuesday, a MD-11. They used to have Frank-

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furt-Mumbai-Bangkok-SharjahFrankfurt flights. They are rerouting the flight via Hyderabad: It will be Frankfurt-MumbaiHyderabad-Sharjah-Frankfurt.

They know they can transship cargo via Hyderabad now.

Lufthansa has seen that the export market is good. The aircraft which flies into Mumbai comes with imports. Previously, the same aircraft used to go to Bangkok. The Mumbai to Bangkok sector hardly took any cargo. There was, perhaps, only a small amount of pharma goods. Thailand was hardly importing anything from India.

There could be some imports to Hyderabad but a majority would go to Mumbai. Once word about transshipment spreads, which Lufthansa is aware of, then they can bring cargo destined for Bengaluru or Chennai and discharge it at Hyderabad.

We would have liked at least one airline to be anchored here. We don’t have any anchor airline now.

Comparison with Bengaluru Bengaluru airport has a large catchment area. Exports out of Bengaluru are much higher than Hyderabad. That is why they have two handling companies there.

Here in Hyderabad, we have only one: a JV — GMR and Menzies — for warehouse terminal handling.

CRUISING HEIGHTS April 2009

The facilities at the airport are such a hit with the cargo agents that most of the warehouses and offices at the Cargo Satellite Building have already been sold out.

Dubai airports. However, the city’s proximity to Nagpur (a six-hour drive), where a multi-modal cargo hub is being put up, has made the situation more competitive.

Said Rane: “We are working on the project that would transform Hyderabad into a transshipment hub. We already have Customs permission to transship cargo in and out of Hyderabad. That means a freighter could come in from London to Hyderabad with cargo destined for Chennai or Vizag.” The cargo would be taken down at Hyderabad and sent by surface transport to any of the destinations.

He pointed out that the carriers would choose Hyderabad “because some of them have been finding it difficult to fly cargo to Chennai or Bengaluru due to lack of capacity. We have capacity available in Hyderabad because there is not much of import coming in.”

This is what the airport authorities, under the leadership of Rane, are highlighting to carriers to bring in transshipment cargo. The hub, however, is still, as Rane mentioned, at a “nascent stage”. It will be quite a while before anything happens on the ground. “The Board has given its consent for the transshipment hub,” informed Rane, “and now we are collecting feasibility reports from various consultants. Once we finalise that — and that will take another three months — we will take off.”

To woo potential customers, Rane went on to add, “We are also projecting Hyderabad as a better metro than Nagpur

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Top of the line facilities

C

— in terms of facilities available in the city, like education, entertainment, etc.”

Other than the proposed transshipment hub, the cargo complex’s Centre for Perishable Cargo (CPC) — in fact, still in its infancy — is one of the few in the country that has earned the praise of shippers. Today, it has a capacity of handling 38 tonnes of perishable goods, like fruits, vegetables and flowers. In addition, it has a further 8 tonnes freezer capacity, which can be used for pharma products or vaccines.

Over the next three or four years, the airport is building infrastructure that will enable it to handle 13,000 tonnes per annum of perishable cargo under Phase-I (up to 2011) and 25,000 tonnes per year under Phase-II (2013-14). The investment for the first phase has been capped at Rs 40 crore, with a subsidy of Rs 20 crore being provided by the Agricultural and Processed Food Products Export Development Authority (Apeda).

The airport has done a thorough study of the export potential of perishable goods. With around 10.5 million tonnes of fruits and vegetables being produced a year in Andhra Pradesh, the CPC could well handle around 5,000 tonnes in the immediate future. Incidentally, while a lot of fresh fruits and vegetables are exported regularly to the Gulf countries, there is potential of sending around 1,000 tonnes annually of day-old chicks, eggs and livestock products from the city. In addition, the CPC would also be able to serve the pharmaceutical sector with imports and exports totalling about 3,000 tonnes per year.

Today, the Air Cargo Complex has a

ommissioned on March 23, 2008, the Air Cargo Complex at Rajiv Gandhi International Airport is one of the leading cargo complexes in the country that has implemented the concept of an Integrated Cargo Facility, housing both domestic and international facilities under one roof. The complex has dedicated cargo apron facilities, both for handling regular and freighter operations.

Some of the features at the cargo complex include: Spacious processing and storage and handling facilities for domestic (outbound, inbound, including courier) and international (export, import, transshipment) cargo; Separate cold storage facilities for domestic and international (export and import) cargo; Special handling facilities for precious, hazardous and perishable cargo; Exclusive storage facilities for valuable, vulnerable and dangerous consignments; Customs examination area facilities; Adequate dock leveller facility at the truck dock area to handle any

With its world-class infrastructure, the Hyderabad International Airport is clearly seeking to set benchmarks. Its ambition is to strive for the same status that Dubai, Singapore or Hong Kong has CRUISING HEIGHTS April 2009

Huge Pharma exports are handled by the spacious Cold Storage facility at Hyderabad Air Cargo Complex. Solar plates are another major exports commodity which is handled at the complex.

type of vehicle; Exclusive office area, distinct from cargo processing/storage area; and, EDI system with provision for interfacing arrangements with regulatory, facilitating and other user agencies.

Keeping an eye on the future, the airport authorities have been working on a Cargo Logistics Centre. Once completed, freighter operators, freight forwarders, cargo agencies and other regulatory and facilitating agencies will have the necessary infrastructure for developing their business.

capacity to handle 1,00,000 tonnes a year.

In the event of a surge in cargo volumes, there are provisions of linear expansion of the warehouses. Bringing in around 15-20 per cent of the revenue for the airport, the cargo section hopes to handle around 55-56,000 tonnes a year. Rane hoped that the cargo section would handle around 74-75,000 tonnes in 2009-2010. “By 201213, we plan to go up to 100,000 tonnes, when everything will be in place — the transshipment hub, the CPC, etc.,” he said.

With its world-class infrastructure, the Hyderabad International Airport is clearly seeking to set benchmarks. In fact, it is not merely a comparison with Nagpur that Hyderabad is looking forward to. Its ambition is to strive for the same status that Dubai, Singapore or Hong Kong has.

An enthusiastic Rane emphasised that “we want to embark upon a project very soon, replicating either Dubai or Singapore in Hyderabad. Look at Dubai and Singapore: they do not produce anything; goods are produced elsewhere in the world but transshipped via these points.”

The concentration, therefore in the coming years, would be to ensure that the Special Economic Zones near the airport start

functioning.

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Creating waves…

BUT NOT ENOUGH TO RIDE ON! Is it a futuristic facility that will change the face of the air cargo industry in the country? Or, is it just a transit warehouse of sorts, nowhere near the prevailing international standards?

Tirthankar Ghosh reports on the debate that is marring Bengaluru International Airport Limited’s newly set up Cargo Village.

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hree months is hardly time enough for a Cargo Village to send the cargo community into raptures. More so with recession putting the brakes. But then, Bengaluru International Airport Limited’s Cargo Village, claimed to be the first of its kind in the country, has indeed managed to create waves.

Scheduled to open its doors to 120 freight forwarders and 80 custom house agents, the finishing touches were still being put at the time of this issue of CRUISING HEIGHTS going to the press. BIAL expects the offices to be occupied by May 2009. The Cargo Village had been inaugurated in December 2008 by members of the executive management of BIAL and

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“After almost a year of operation, we are delighted we have come so far, but we have to stabilise,” said CEO Marcel Hungerbuehler CRUISING HEIGHTS April 2009

executive office members of ACAAI (Air Cargo Agents Association of India) and BCHAAL (Bangalore Custom House Agents Association Limited).

Marcel Hungerbuehler, CEO, and Hari Marar, COO, BIAL, took pains to point out that cargo development was a key focus of BIAL’s core business strategy. “After almost a year of operation, we are delighted we have come so far, but we have to stabilise,” said the CEO. He emphasised, “We have to continue to work with all these (freight forwarders, airlines, etc) people, which is very important. Also, we have high plans for relatively low-cost efficiency.”

With the Cargo Village, BIAL would be able to further enhance existing cargo operations for Bengaluru. It is impressive on all counts. Spread over 11 acres of land area with adequate provision for future expansion, the facility, located near the cargo terminals, could be expected to strengthen Bengaluru’s position as a trade and commercial hub, while ensuring faster clearances of import and export consignments from the cargo terminals at the airport.

Completed over a period of more than 10 months, the Cargo Village has been built with an investment of Rs 12 crore. To be managed by the cargo associations, it will

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also accommodate parking of nearly 80 trucks and a large number of motorbikes and two-wheelers. Essential facilities at the warehouses, such as banks, conference rooms, training rooms, business centre, help desk, staff canteen, etc., should make it a truly advanced facility.

The airport has witnessed both a quantitative increase in terms of export facility area, and qualitative improvement in terms of storage and handling capabilities, to promote the outflow of goods. The facility will generate employment opportunities and create a better working environment for its occupants.

The airport’s current facilities include two operational cargo terminals: built and operated by Menzies Aviation Bobba Pvt Ltd and Air India SATS Joint Venture consortium. The former has an initial capacity to handle 150,000 metric tonnes of cargo, while the latter has a two-floor warehouse with a capacity of 200,000 metric tonnes.

Till today, the airport has handled 70,905 tonnes of cargo. Together, they have the capacity to handle twice Bengaluru’s current annual cargo requirement, which stands at 170,000 tonnes.

Indeed, BIAL has been pushing ahead to get the most out of the airport. Said Hungerbuehler, “We did a lot of planning with a very renowned planning company…

It is very important you always renew your entire master plan so that it works well. Our one priority is to expand the apron.”

Future projections apart, the Cargo Village, for reasons, has not been able to impress the city’s major freight forwarders.

Shesh Kulkarni, President of UTi Worldwide, and a prominent member of the Bangalore Air Cargo Club (BACC), believed

The Air India-SATS cargo terminal at Bengaluru.

“ This is not a cargo village. (There is) No bonding environment.

Where are the places where you can bring the dollies and fill the pallets?

— Sesh Kulkarni President, UTi Worldwide

“

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that the cargo facilities left a lot to be desired. For him, “When you talk of BIAL, you talk of Zurich airport, you talk about an international consortium. That (international feeling) is not there (at the cargo facilities). It is not effective and there are lots of problems, big-time problems.”

Brushing away the hype, a number of freight forwarders that CRUISING HEIGHTS spoke to said that the Cargo Village hardly deserved its name. “To call it a cargo village is a misnomer. At best, it is a transit warehouse for the forwarding community in the proximity of the international airport.

That is the only USP the place has,” said Kulkarni. “This is not a cargo village.

(There is) No bonding environment. Where are the places where you can bring the dollies and fill the pallets? All those things are not there. I don’t think you can remotely call this a cargo village; yes you can call it a cluster for forwarders…” he said.

A fellow forwarder and President of the Bangalore Air Cargo Club, Nirmal Sandhu, was equally forthright: “The entire freight forwarding community is not at all satisfied with the current infrastructure — the sheds — that has being provided by BIAL.” Terming the 200-odd office/warehouses as old-fashioned sheds, with no privacy and security, Sandhu, who is Director of one of the largest forwarding organisations in the country, Wilson Sandhu Logistics (I) Ltd, said that “it was a very risky issue and needs to be addressed. Moreover, the distance from the so-called Cargo Village to the terminal is a couple of kilometers, which will definitely delay the process of filing with the customs to complete the processes.”

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To top it all, it is not very futuristic.

Freight forwarders said that there was a lot of “quick-fixing” going on. The whole complex should have had something to look forward to. Acknowledging that the recession was taking its toll on the market, with costs going through the roof and revenues dropping constantly, it would have been worthwhile if BIAL invested in something that would have complemented its business model. For Kulkarni, what BIAL has done is thrown away money. He is certain that not many from the freight forwarding community have come forward to lease the office-warehouse spaces. “It should have actually sold as hot cakes, but it has not,” he said.

The 200-odd offices and warehouses for freight forwarders have been termed as “horse stables”. Pointing out that working out of those offices/warehouses would be “absolutely inhuman”, Sesh Kulkarni said, “I can’t believe that this is a Greenfield project and they can get it so badly wrong.”

On his part, Hari Marar, COO, BIAL, was quite clear: “We called both the associations (from ACAAI and BCHAAL) and they represent 90 per cent of the cargo clearing work. Between these two associations, they came forward with clear specifications and requirements as to how the Cargo Village should be built, what areas

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The interior of one of the cargo terminals at Bengaluru.

ACAAI and BCHAAL came forward with clear specifications and requirements as to how the Cargo Village should be built, what areas are required, what facilities need to be provided — everything was discussed, said BIAL CRUISING HEIGHTS April 2009

are required, how should we partition, what facilities need to be provided, sewage, water, electricity, power, the telephone connection — everything was discussed in detail and we just delivered exactly as they wanted.”

True, said Sandhu. ACAAI and BCHAAL may have been consulted. “But do they make up the freight forwarding community? What about the major multinationals who are not part of the two organisations like Schenker, UTi Worldwide, etc.?” asked Sandhu. “None of the leading freight forwarders have been consulted about the Cargo Village. As President of the Air Cargo Club, I should have been asked.

There was no intimation. Nor were suggestions taken while the construction was going on,” he said.

It may be pointed out that soon after the airport started functioning, the air cargo fraternity in the city had protested at the lack of facilities. At that time, many had even toyed with the idea of boycotting the airport and sending their goods to the airports at Mumbai, Chennai or even Coimbatore. BIAL had then called the freight forwarders to sort out the issue.

As Kulkarni put it, “Bringing the whole industry together and opening a channel to work in, that is what they (representatives of ACAAI and BCHAAL) did. I don’t think

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ACAAI actually knew what was being produced. When people went there, they just couldn’t believe it; the reaction was one of awe, as if you were hit by some kind of lightning or something,” said Kulkarni.

Laying the onus at the door of the authorities for their lack of vision, freight forwarders believe that BIAL, to begin with, got off the wrong foot. Ideally, the authorities should have “engaged with next-door GMR or GVK”. The freight forwarding community pointed out that in the first stage, the BIAL authorities had promised a lot. But when the actual work began, “they (BIAL) missed the whole cargo thing. The best thing would have been to sort out the problems in the first place.”

Around four or five weeks ago, the stakeholders went to the Cargo Village site, hoping they would get to see something genuinely different. Most came back disappointed and went into a shell. And then, said Kulkarni, BIAL quoted a price for the office-warehouse space, “which looked ridiculously unbelievable”. Soon enough, the takers for these office spaces pointed out that, in these times of recession, the prices BIAL was asking were too high.

“So, we just backed off,” said one freight forwarder, who did not want to be named.

It was then that BIAL came back with a new price. As Marcel put it: “The most important thing is that the whole thing costs (almost) nothing…I mean it’s the lowest, lowest possible rate you could imagine: Rs 25 only.” Marar supplemented that to say, “We are charging office space at Rs 25 per sq meter and the warehouse at Rs 20 per sq meter. And that includes everything: electricity, water, telephone lines, etc.”

Even so, there don’t seem to be too many takers. Most of the top freight forwarders have their offices near the airport. and they do not see the new facilities attractive enough to warrant a move. UTi, for example, will not move. “This was my office when the old airport was functioning and I’m still sitting here,” said Kulkarni.

“My whole operation runs from here and I know of so many people who are right here and have not moved. Indeed, some people have moved, but it is a very small percentage. And the ones who have moved have put their operations on a very small scale.

We did not feel the need to move, and we are one of the largest freight forwarders from Bengaluru. We just did not see the rationale and the logic behind moving. We thought we could control it and deliver it better from here. Going to the airport would affect our productivity. We will be spending money but there would be no satisfaction. There has to be some feel-good factor for something which you do. But that would be missing.”

The Menzies Bobba cargo terminal at BIAL seen from the cityside.

“ Since the entire freight forwarding community has been going through tough times and everyone is concentrating on the markets, there is little room for the freight community to take up such responsibilities — Nirmal Sandhu President, Bangalore Air Cargo Club

“

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As for the management of the Cargo Village being done by representatives of the freight forwarding community, ACAAI representatives questioned how it could be done. “We can’t collect money on behalf of BIAL. To top it all, what competency, or for that matter expertise, do we have to run a facility like this?” they asked.

On his part, Air Cargo Club President Sandhu said that “since the entire freight forwarding community has been going through tough times due to the economic slowdown and everyone is concentrating on the markets, there is little room for the freight community to take up such responsibilities.”

According to Kulkarni, “One of the important things is that we must put some significant planning and detailing into our working, which at this point of time is missing. Much of our work that is seen around deals only with today’s issues; they do not cater to future. Indian industry i.e. the forwarding community, the airline community and shippers and importers and, above all, the government, has to take into cognizance that we cannot constantly be grumbling on issues. We must create an infrastructure which is futuristic. Until we see that reflected in our airports we have a long way to go.”

Bengaluru’s commerce is finally going to get some relief on the air cargo front. In the last few years, India, and Bengaluru in particular, have arrived on the world stage.

Air cargo has become an integral part of our daily lives. From cell phones to car parts to computers, from garments to gold, from food to flowers, a wide variety of products are carried by air.

Given the high value of the products shipped out of the city, Bengaluru has always had a demand for air cargo.

According to some estimates, more than 50 per cent of the city’s total industrial output is sent by air, with the Customs Department collecting almost Rs 3,000 crore a year in duties.

There are internal projections of at least 40 per cent growth in the first year itself, and both Menzies and AISATS need to start thinking about expansion almost right away, to keep

abreast of demand.

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CARGO JOTTINGS

Gati ends tie-up with AI GATI recently informed, in a rather cut-and-dry memo, that it had terminated its wet lease of five Boeing 737-200 cargo freighters with Air India. “Consequently, the freighters leased

by Air India have also been withdrawn with immediate effect.

However, the strategic alliance with Air India is being continued as usual, without affecting air cargo movement business,” Gati said in a statement.

Gati had signed a joint venture pact with Air India Cargo to take on domestic aviation cargo major Blue Dart Express, owned

by DHL India, a unit of the German postal services giant Deutsche Post. The Gati-Air India first flight took off on November 14, 2007 on the Delhi-MumbaiBengaluru-Delhi sector.

The agreement with Air India lasted barely a year. Industry experts, who we spoke to following the news of the termination of the wet lease, pointed out that Gati had been finding it

very tough to maintain loads. In their last financial results, declared in December 2008, Gati declared that its air freighter business was bleeding the company. In the half year that ended in December 2008, the results showed that the logistics major had lost Rs 16 crore on the air freighter business. It was all due to the load factor, coupled with the recessionary trend.

The company sought to take preventive action by shifting surface cargo to air. That, however, did not contribute to the organic growth of the air cargo business. At that time, the management had said that they were taking “remedial action” — in other words, they were getting out of the business. Industry pundits maintain that Gati’s decision to enter the air cargo business was wrongly timed.

Gati’s air freight saga would have done well. In addition to the connectivity that Air India would have provided, Gati, with its penetration, would have brought about a revolutionary change in the express cargo segment by providing end-to-end connectivity.

In fact, Mahendra Agarwal, Gati’s Managing Director, Chief Executive Officer and Director, had mentioned, during the announcement of the tie-up with Air India, that the business model had been created to cater to the upcoming global cargo hub at Nagpur. He had mentioned that the partnership with Air India was expected to take Gati’s business from the then $115 million to more than $250 million within two years. Gati had also planned to invest $100 million in the next three years — that is till June 2009 — to set up Express Distribution Centres (EDC) and in re-engineering of technology and network.

FROM OUR FILES: Civil Aviation Minister Praful Patel flagging off the Gati-Air India partnership and the first freighter in November 2007. On his right (in a light suit) is Mahendra Agarwal, MD & CEO of Gati. The others in the photo are Anita Khurana of Air India Cargo (behind Agarwal), V Thulasidas, the then Chairman of Air India, and K L Chugh, Chairman of Gati.

DHL provides logistics support to fashion DHL was appointed as the official express and logistics partner for Lakmé India Fashion Week 2009 (March 27-31) in Mumbai.

This follows another successful year of partnership with IMG Fashion across 10 countries spanning four continents.

As a leading logistics service provider for the fashion business, DHL will use these events to strengthen its business penetration with the fashion, apparel and retail industries. India is among the top five countries that accounts for almost 23 per cent of the global apparel market, and DHL Express, along with Blue Dart in India, has an estimated 48 per cent shipment market share in the apparel and textile industry.

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Craig Grossgart, Country Manager, DHL Express - India, said that the country was a key manufacturing and distribution base for the fashion industry. Competition required rapid response to market demands, and DHL, on its part, enabled customers to get the newest trends and orders to the market quickly.

Meanwhile, DHL achieved yet another milestone for the ocean freight business by launching its direct Less than Container Load (LCL) Service from Ludhiana to Nhava Sheva.

Prior to the launch of the service, all LCLs were being routed via New Delhi. This initiative will connect Ludhiana within the DHL global network from Nhava Sheva, considerably reducing the transit time and multiple handling of cargo. The first Import

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Console box from Nhava Sheva arrived at ICD Tughlakabad, Delhi on March 19. The weekly fixed service is between Nhava Sheva and ICD Tughlakabad, with DHL Global Forwarding having dedicated space within the ICD. According to Christoph Remund, Chief Executive Officer, DHL Lemuir Logistics Pvt. Ltd, the first outbound LCL consolidation connecting Ludhiana to Nhava Sheva demonstrates DHL’s compelling logistics value. He went on to point out that DHL had simplified the ocean freight organisational structure, while strengthening its management team. It has also strengthened its relationship with ocean carriers and customers, and even increased the service offering for both FCL (Full Container Load) and LCL traffic.

J M Baxi selects Kale’s FMS KALE Consultants Ltd, solutions provider to Airline, Logistics and Travel (ALT) industry, announced that J M Baxi & Co., one of the country’s leading maritime logistics providers, has chosen Kale’s FMS — Freight Management Solution. The solution will encompass various functions of freight forwarding and third party logistics, including Sales and Customer Relationship Management, Multimodal Exports and Imports Management, International Trade Documentation, Tracking and Integration with third-party applications.

With a national network of over 55 offices at both major and minor ports on the East and West coast of India, J M Baxi is today the largest professionally managed maritime logistics service provider in the country.

Sumeet Nadkar, Head — Logistics SBU, Kale Consultants Ltd. said that J M Baxi’s large and global scope of operations, and their high degree of IT knowhow, is a definite endorsement of Kale’s system. “Our solution will help J M Baxi in offering flexible logistics to their customers, starting from planning to final delivery of goods.

The solution will automate manual processes and will help J M Baxi in reducing human errors and optimising operational costs.”

Emirates SkyCargo goes bullish in 2009 EMIRATES Airline recently unveiled plans to hike the number of flights across its network by 14 per cent in 2009, increasing cargo capacity by 17 per cent. In recent months, Emirates SkyCargo has increased capacity from its Dubai hub to India to more than 2,500 tonnes a week. In the next 12 months, Emirates SkyCargo will take delivery of two new state-of-the-art Boeing 777 freighters, the largest twin-engine aircraft in the world. In fact, the carrier's first Boeing 777 freighter arrived in Dubai recently after completing its inaugural commercial flight from Hong Kong.

The carrier took delivery of the new-generation freighter at Boeing’s Everett, Washington facility. From there, it went directly to Hong Kong, still one of the carrier’s most robust routes, where it was loaded with cargo bound for Dubai and beyond. The Boeing 777F, with its range and environmental

Emirates SkyCargo’s new Boeing 777F touches down at Dubai International Airport.

advantages over other freighters in the market, will play an integral role in Emirates’ freighter fleet. It boasts the longest range capability of all twin engine jets, able to fly non-stop between Dubai and major cargo centres, such as Frankfurt and Hong Kong, with a full 103-tonne payload.

Emirates currently have a fleet of 129 wide-bodied aircraft, including Ram Menen, Emirates’ eight freighters. By the end of the 2008- Divisional Senior Vice 09 financial year (ending March 31, President Cargo.

2009), that figure will stand at 132, including one Boeing 777 freighter. The carrier will welcome another Boeing 777 freighter in fiscal 2009-10.

Ram Menen, Emirates Divisional Senior Vice President Cargo, said: “The last two years have not been easy for the air cargo industry, but we hope to see some stability return in the coming months. For Emirates SkyCargo, 2009 will be a year of consolidation. Emirates have opted for these brand new, superefficient aircraft to ensure we are best placed to serve the industry’s requirements in the long term.”

Meanwhile, Emirates SkyCargo has taken the coveted top spot in the annual Air Cargo Excellence survey, moving up two spots from last year, and beating cargo heavyweights Lufthansa and Singapore Airlines, which finished second and third, respectively. The survey, conducted by the US-based Air Cargo World, asks customers of the airlines to evaluate each carrier in four categories — value, IT, customer service and performance.

Dnata Cargo goes all chocolatey for Mother’s Day MOTHERS in the UAE celebrated their special day with more chocolate than ever before, after Dnata Cargo handled its largest single shipment of the sweet treat. A whopping 115 tonnes of chocolate, with a value of AED 1.3 million, was flown into Dubai on a special B747 charter from East London in South Dnata Cargo staff with one of the thermal blanAfrica sometime ago. kets used to protect the 115 tonnes of chocoJean Pierre De late brought into Dubai from South Africa on a Pauw, Divisional Sen- chartered B747. Pictured are: (from left) Yousif Ibrahim Al Mulla, Cargo Supervisor; Bobby ior Vice President, Ninan, Terminal Services Manager; Khalid Dnata Cargo, said: Hussain, Mohammad Shareef and Samuel “We may be experi- Masila Muema, Cargo Supervisors. encing an economic downturn, but seeing a company importing a plane load of chocolates indicates that people in the UAE still have a strong desire to celebrate when they can.”

Because of the already soaring daytime temperatures in Dubai, Dnata Cargo wrapped the delicate cargo in thermal blankets for its journey from the aircraft to the terminal. “Chocolate is very sensitive to heat, so it was vital that Dnata Cargo ensured as consistent a temperature as possible during the offloading of the cargo from the aircraft and subsequent transfer to the cargo terminal,” explained Jean Pierre.

“Thanks to our special thermal blankets, we can be confident that it won’t be the chocolate that will be melting on Mother’s Day,” he added.

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AT A GLANCE

All over poor firefighting skills

Fees for not flying!

LOOKS like this story is made in India! The chief fire officer at Cape Town International Airport has resigned over what he feels is lack of adequate firefighting training for his staff. Two-thirds of the 62 firefighters stationed at Cape Town International Airport are “poorly trained” and have little or no general firefighting experience. Only 15 per cent are fully experienced and have a professional

TO tackle its financial crisis, American Airlines is set to start charging fees from those who don’t even fly, according to a spoof story from The Onion. The paper, famous for publishing nonsensical stories, targeted the American in a new story with the headline “American Airlines Now Charging Fees To Non-Passengers.” The story went on to say: “Cash-strapped American Airlines announced a new series of fees this week that will apply to all customers not cur-

aviation qualification. The fire chief felt the firefighters were poorly trained and were unlikely to be able to response appropriately in case of a major airport emergency.

The airport fire service is privately owned and is run by the Airports Company of South Africa (Acsa), which claims it has “sufficiently qualified staff able to respond to any aviation incident”.

Now where have you heard that before?

Wanted: 999 nudes

‘Promoting’ bad morals?

A

huge picture of Israeli supermodel Bar Refaeli, lying seductively in a revealing white bikini, has evoked angry protests from passengers flying on a new Southwest Airlines flight. The passengers find it ‘soft porn’ and offensive to families travelling on the plane. The model, currently dating actor Leonardo DiCaprio, is pictured along the length of the Boeing 737 as part of a promotional deal with Sports Illustrated.

The airline’s corporate blog has, since the new plane of the US-based airline was unveiled recently, been flooded with criticism from passengers com-

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plaining about having to board an aircraft “covered in pornography”. Many passengers find the promotion to be in bad taste and amoral, and some have gone so far as to call for a boycott of the airline.

This is not the first time the low-cost airline is embroiled in controversy. In 2007, a Southwest Airlines employee allegedly ordered a passenger off a flight for wearing a revealing outfit. The passenger claimed she was only wearing a snug-fitting white top with a scoop neck that stopped just short of showing cleavage. Southwest later apologised to the passenger and launched a fare sale that included “miniskirt prices”.

CRUISING HEIGHTS April 2009

999 nudes wanted for an airline stunt. So says the email. But is it true? Is this email actually from Aer Lingus, or from some rival?

Or is it a stunt?

This email which came to Timesonline Travel said a “major airline player wants 999 people to take off their clothes to publicise the launch of an airline in the UK.” “You won’t be completely naked — you’ll be given something small to wear over your private parts,” it added, without naming the airline but giving the link to the website http://www.999 nudes.com. It went on to say that those taking part will receive two free tickets to one of eight European destinations from Gatwick.

Interestingly, Aer Lingus does launch routes to eight European destinations, from Gatwick, in April. Also the website is now

closed for new entrants. It says: Thanks for showing an interest in this stunt. We have now closed the entry form to any new submissions. Be sure to check out the stunts in your local papers or online. Above this message is a place for you to type your email id and check if you are of the selected nudes!

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Flight crew held over cocaine haul

Welcome Bigwigs THIS is about Lehman Brothers CEO Dick Fuld’s public effort to fly commercial. In January, a New York paper reported how Fuld and his wife, Kathy, fumbled with the JetBlue automated check-in kiosk. The incident set the ball rolling for a “Welcome Bigwigs” campaign, a handy manual for flying commercial for executives who are used to private, luxury transportation. JetBlue now plans to introduce instructional videos for bewildered executives, getting them accustomed to flying with other people and showing them how not to scare others away.

Sorry Ma’m!

HONG Kong’s Cathay Pacific Airways has apologised to a customer for release of a video, showing her tantrum over missing a flight, on YouTube.com. The tantrum was recorded by an airline employee on a mobile phone camera. The airline claimed in a statement that the employee who filmed the video had been disciplined, but that another person posted the footage on YouTube, a video-sharing Web site.

The three-minute video shows a woman wailing, throwing herself on the floor, banging on an airport counter and trying to barge through a closed boarding gate at the Hong Kong International Airport, after missing a flight. “They have no compassion. The plane hasn’t even left, and they’ve shut the gate. They’re crazy! They’re crazy!” the woman shouted. The video has been viewed several million times, evoking thousands of reactions.

The woman and her husband were later given upgrades to Business Class on their next flight as a “gesture of goodwill,” an airline spokesperson said.

Guns in kids’ luggage FOR those who talk of the poor security environment in the subcontinent, here is something from Down under: The checkin luggage of two boys, aged 11 and 14, was allegedly found packed with pistols, knives and other weapons. Police seized two pistols, 3,000 rounds of ammunition and knives from bags in a holding bay at Cairns airport from the luggage of the boys,

IN the second such incident in a month, 15 airline flight crew members have been arrested after cocaine was found in baggage. The South African Airways employees were detained after 5kg of the drug — worth about £250,000 — was discovered in a bag on a flight from Johannesburg. The crew members were arrested after UK Border Agency officers made

the discovery at Heathrow airport. South African Airways were unavailable for comment.

Illustrations by Rajeev Kumar

rently flying, scheduled to fly, or even thinking about flying aboard the commercial carrier.” And the fees to be charged were a $25 tax on citizens travelling with any other airline, as well as a mandatory $30 surcharge for passengers who decide to just stay home for the holidays instead.

who flew in from Western Australia, raising questions about the effectiveness of airport security in Western Australia. The boys had travelled unaccompanied across the country on a flight operated by Qantas and were suspected to have stolen the weapons.

Man jumps out of taxiing airliner A 26-year-old passenger ran to the front of a taxiing plane, opened a door and slid down to the tarmac before being detained. This happened with American Airlines.

The man in question was among 87 passengers on the flight. He was not injured but was detained and was rushed for ‘psychological evaluation’.

‘Red Noses’ on British Airways There were Red Noses on the ground and in the air at British Airways in support of Comic Relief’s Red Nose Day on March 13. Staff were encouraged to ‘Do Something Funny for Money’, by wearing Red Noses. The airline also painted Red Noses on a long-haul Boeing 747, and two short-haul Airbus aircraft.

The airline asked all eagle-eyed photographers to send their uploaded pictures of the British Airways Red-Nose planes in flight to its Twitter page.

Comic Relief spends all the money raised through Red Nose Day to give extremely poor, vulnerable and disadvantaged people in the UK and Africa a helping hand to turn their lives around.

Fishy business FISH aren’t usually shipped in coffins, but somebody at US Airways seemed to have got it all wrong. Flight attendants on the airline did something really strange indeed.

They flew a corpse to a pet store in lieu of the fish it was supposed to receive. The store in Philadelphia had been expecting some tropical fish. Instead, they got the corpse of a 65-year-old man. And the fish? Probably left to die at the airport. And all an airline spokesman had to say was that they were ‘deeply sorry’.

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DOMESTIC AIRLINES Pune (via Delhi). Mumbai has been now directly connected to Coimbatore by a daily return flight, and Delhi now has a convenient morning departure to Pune.

AI takes off to Chicago SpiceJet wins ICWAI award SPICEJET has won the coveted ICWAI award for excellence in Cost Management, becoming one of three companies from the private sector to win the accolade. The award was presented by the Ministry of Corporate Affairs, Government of India, recently.

Nandan Mimani, Vice President Finance and Financial Controller, represented the company at the awards ceremony.

A distinguished jury comprising eminent people from industry, academia and administration selected the winners on the basis of better practices for resource management, efficient utilisation of capacity and working capital, quality augmentation programme and R&D efforts, and precise information on performance.

Introduces new on-board menu: SpiceJet has announced the launch of a brand new menu for on board sale on all its 115 flights. On offer will be a special sandwich of the day from an exciting selection of three brand new types of sandwiches in vegetarian and nonvegetarian options.

The sandwiches are made of oven fresh white bread, with each portion weighing 180 The all-new menu from SpiceJet. grams. On board prices for vegetarian sandwiches are Rs 80 and non-vegetarian sandwiches are Rs 100. The sandwiches are attractively packed in well-designed food graded paper boxes.

Enters consolidation talks with GoAir: SpiceJet Ltd is in talks with the Wadia group-owned GoAir for either a merger or to acquire a controlling stake. Reports citing sources said SpiceJet Chief Executive Sanjay Agrawal met GoAir Managing Director Jeh Wadia to discuss a deal.

In February, Agrawal had said SpiceJet would look at buying opportunities and expects consolidation in the Indian airline industry over the next two years.

GoAir currently flies to smaller Indian cities such as Jaipur, Ahmedabad and Kochi, and has applied for slots to several more.

Announces summer schedule: SpiceJet has announced its new schedule for summer of 2009, effective March 29. The daily departures will go up from 115 to 119 for a fleet strength of 19 aircraft. The schedule offers new connections, better connectivity and resumed services.

Ahmedabad will now be directly connected to Bengaluru by a daily round trip. This is in addition to the existing connection to Bengaluru (via Mumbai). Ahmedabad also gets a very convenient evening flight to Mumbai and onwards to Chennai.

Pune will now be connected to Kolkata with a daily return ex-

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IN a major initiative towards strengthening its global network, Air India has restructured its operations to the US and Europe, and made Frankfurt its operational hub. Air India's daily direct flights from Delhi to Frankfurt and Chicago have started from March 29, with Flight AI127 operating with brand new 777-300ER aircraft, having a configuration of 4 seats in First class, 35 seats in Business Class and 303 seats in Economy Class.

In addition to operating the flight with new start-ofthe-art aircraft, having flat beds in First and Executive AI's brand new aircraft takes off.

Class, sky buffet and personal video system in all classes, Air India is also offering a host of other attractive benefits, including Companion Free Scheme, Spouse Free Scheme, additional baggage allowance of 10 kgs in each class for Frankfurt/London, double mileage points, onward connections within Europe and the US. To fly non-stop Delhi-San Francisco: Air India is also set to launch a non-stop Delhi-San Francisco flight later this year, after inducting three new Boeing 777LR aircraft between JuneAugust 2009.

Beginning autumn, Air India will start flying between New Delhi and San Francisco — the longest non-stop flight between India and the US by any carrier. The longest Air India flight currently operates between Mumbai and New York.

Air India is inducting seven Boeing Co.-made long-haul aircraft to its fleet of 154 this year, and plans to start several other flights using Frankfurt airport as its European hub from end-March.

The date for starting the San Francisco service has not been decided but it will be only after August, Air India’s executive director Jitender Bhargava said.

To phase out old A-320s: The first batch of Indian Airlines’ controversial “fly by wire” Airbus A-320s, inducted into the fleet in 1989, are soon going to be phased out. Unlike private carriers that have deferred deliveries of new planes and also cancelled few orders, Air India will acquire 111 new planes worth Rs 42,000 crore, as per schedule, but has decided to phase out more planes than earlier envisaged.

Of the ordered 111 new planes, 45 have already joined the fleet.

Along with them, the national carrier has a fleet of 153 planes, of which 50 are leased. The earlier plan was to return most of the leased planes but now, after owning A-320s, AI is also beginning to sell its own planes.

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AI Express to fly to Salalah AIR India Express, the no-frills airline of Air India, has begun direct flights from the Thiruvananthapuram international airport to Salalah on Fridays.

A release from Air India said the introductory fare on the Thiruvananthapuram-Salalah sector was Rs 7,035, inclusive of all taxes.

Kingfisher defers Dubai plan OWING to the economic slowdown and the declining air fares, Kingfisher Airlines has deferred its plans to fly to Dubai until June-July. The airline was all set to connect Bengaluru to Dubai beginning March 7.

At present, return ticket prices to Dubai cost Rs 15,000-16,000, a 20-25 per cent drop from normal times. On the capacity front, Emirates alone operates 20 flights per week out of Bengaluru.

Jetlite launches daily Kozhikode-Mumbai service JETLITE has launched a new daily service on the MumbaiKozhikode-Mumbai sectors. The new daily Mumbai-KozhikodeMumbai flights will be operated by JetLite’s all-economy Boeing 737 series aircraft.

JetLite, as part of its inaugural offer on the KozhikodeMumbai- Kozhikode sectors, introduced attractive fares of Rs 1 plus taxes for bookings 30 days prior to travel, Rs 500 plus taxes for bookings made 20 days prior to travel and Rs 750 plus taxes

for bookings made 10 days prior to travel.

Commenting on the launch of the new services, Wolfgang Prock-Schauer, CEO, Jet Airways said, “With the Kozhikode sector registering impressive growth in passenger traffic, the new services will cater to the domestic demand on this route, while ensuring seamless connections to and from North America, Europe Asia and the Gulf for international travellers from Southern India.”

Jet may lease out more aircraft JET Airways is considering leasing out more of its aircraft to foreign airlines. The airline has already decided to extend by two years the tenure of the wet-leases to Turkish Airlines and Gulf Air. According to an airline spokesman, at the end of the six-month wet lease agreement for three B777-300ERs with Turkish Airlines, the aircraft will switch to a 25-month dry lease agreement.

In the case of Gulf Air, a 36-month dry lease agreement will follow the six-month wet lease agreement for four B777-400ERs. Jet Airways, which operates three uber-luxury Boeing 777300ERs on international routes, will add one more by July. Two of these operate on the Mumbai-London (Heathrow) route and one more on Delhi-London route, while another will be used on a rotation basis.

Introduces Mumbai-Lucknow flight: Meanwhile, Jet has announced the introduction of a flight on the Mumbai- Lucknow route. The airline will use a Boeing 737 aircraft to fly on this

Jet's new flight has a Premiere class.

route, a Jet Airways statement said, adding that it will have a dual class configuration — Economy and Premiere.

“With the growing demand for a premium air service between Mumbai and Lucknow, we are confident that Jet Airways’ new flight on this sector will prove popular with passengers,” company’s CEO Wolfgang Prock-Schauer said.

GoAir expands network IN a major expansion drive, GoAir is adding a total of four more aircraft this year, is looking to hire pilots and cabin crew, and adding new routes from April. GoAir has announced the addition of three new major destinations, with 226 new weekly routes and the induction of two brand new A320 aircraft by June 2009.

With the addition of Amritsar, Bengaluru and Chandigarh routes, GoAir will expand its services further into South and North India, taking the total number of major destinations served by the airline to 11. In addition to the new routes, the airline has also added new connections, taking the total number of weekly flights serviced by GoAir to 474. With the induction of the new aircraft, the total number of aircraft in its fleet will go up to eight

by June 2009.

In an effort to become more competitive, the airline is also coming out with zero promotion fares on its new routes, making it the most competitive airline in the sectors. The Bengaluru route will now provide the customers with the ease of flying direct morning and evening to Mumbai.

A little over a year CEO Edgardo Badiali and General Manager after taking over the Carolina Bajaj at a press conference. reigns of GoAir's operations, the country’s smallest carrier by fleet size, its Chief Executive Officer Edgardo Badiali said that the journey for him has been “good and difficult". However, he said he was “confident” of growth and turnaround in the airline as all is going according to plan, which was to remain small during the difficult phase and then restart again.

BJETS enters MoU with Global Vectra BJETS, a charter jet operator, has entered into a long-term memorandum of understanding (MoU) with Global Vectra Helicorp Ltd to provide end-to-end private travel solutions to its customers.

The agreement, according to company officials, will help customers reach more destinations within the country as helicopters can land in places where fixed wings aircraft cannot.

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INTERNATIONAL AIRLINES Cathay realigns flight schedules CATHAY Pacific has realigned its flights in India by introducing daily non-stop flights between Mumbai and Hong Kong. It has also introduced Bangkok as a new destination from Delhi with daily non-stop flights.

Cathay Pacific Airways General Manager-India Tom Wright said the decisions were expected to benefit the air travellers in the Asia-Pacific region. The re-alignment will help passengers con-

nect with the airline’s extensive global network.

The airline currently offers double daily services from Delhi to Hong Kong and 10 weekly flights from Mumbai to Hong Kong.

Air Arabia flies to Goa AIR Arabia has announced the launch of its service to Goa beginning April 16, 2009.

Round-trip flights will operate three times per week between Dabolim International Airport in Goa and Air Arabia’s hub in Sharjah. Upon commencing service, Air Arabia will be the only UAE-based international carrier to offer direct flights to Goa from the UAE. The LCC will fly to Goa on Tuesdays, Thursdays and Saturdays.

Singapore Airlines announces freebies IN view of the prolonged boycott by travel agents in India, Singapore Airlines Ltd and the island nation are now directly approaching passengers and tourists with promotional fares and freebies.

Singapore Airlines, the world’s largest carrier by market value, is offering discounts on tickets booked online. The Singapore Tourism Board (STB) has announced an India-specific promotional scheme.

“STB has dedicated up to $500,000 (Rs 1.65 crore) worth of free air tickets to be won before the closing date of 31st May,” the Board said in a statement.

SOTC, a unit of travel firm Kuoni Travel (India) Pvt. Reaching out to passengers.

Ltd, has announced packages starting at Rs 22,950 for a three-night stay at Singapore. This includes return airfare and city tours, as well as free tickets to tourist spots for the first 100 customers.

Travel agents started the boycott late last year after several airlines, led by the National Aviation Co. of India Ltd, which runs Air India, stopped paying them a 5 per cent commission on tickets sold.

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Extends TCS contract: Singapore Airlines has extended its IT Services contract with Tata Consultancy Services by three years. Under the agreement, TCS will continue to manage a significant portion of Singapore Airlines’ IT systems — from passenger reservations to flight operations.

The travel and transportation sector generated four per cent of TCS’ overall revenues of $5.7 billion in fiscal 2008.

British Airways’ special fare to London BRITISH Airways announced a promotional scheme offering a basic fare of Rs 9,990 for London from major Indian cities, instead of the usual basic fare of about Rs 22,000. The special basic fare was available from New Delhi, Mumbai, Chennai, Hyderabad and Bengaluru, British Airways said in a statement.

This, however, did not include the taxes, fees and surcharges, which add up to about Rs 18,000, taking the total fare to Rs 27,990. The offer is valid for travel till April 12 in the economy class section and will be available for limited seats only, the statement added. Trying to fill up seats.

Virgin Atlantic to suspend Mumbai operations FORCED by the economic slowdown and excess capacity, Sir Richard Branson’s Virgin Atlantic Airways has suspended its Mumbai-London operations from May. This is the fourth international airline in the last year alone to stop operations from the city.

“We have decided to temporarily suspend operations to Mumbai with effect from May 4.

We are suspending this service until rational conditions re-emerge and it can resume service on this important route,” confirmed Neha Lidder Ganju, Senior Marketing Manager-India, Virgin Atlantic Airways.

Virgin Atlantic has stated that while it performed satisfactorily in its first three years, the overall traffic between Heathrow and Mumbai fell 18 per cent last year. In addition, there was an “irrational level” of capacity on the route.

Finnair to stop Mumbai flights FINNISH airline Finnair has decided to temporarily suspend its flights to Mumbai between May and mid-October. It has cited unfavourable economic conditions for the move. It also cited overcapacity on Mumbai-Europe routes.

“The overcapacity has driven airfare levels radically down and cost level has not declined respectively. Market conditions for the entire summer period look bleak,” Petteri Kostermaa, Finnair’s vice president of route strategy and traffic planning, said in a statement.

The company said its flights to New Delhi would continue as normal during the summer period.

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Qatar Airways to expand India operations DOHA-based Qatar Airways plans to expand its operations in India with new routes. “The expansion in India will see new routes of Goa and Amritsar coming under our fold,” the company said in a statement.

The two new routes boost Qatar Airways’ Indian capacity from 9 to 11 destinations, it said.

Qatar Airways’ robust expansion is continuing undeterred by the current economic climate, Chief Executive Officer Akbar Al Baker said. “India has been, and remains, one of our most important destinations and we are pleased to be strengthening economic and cultural ties with one of the world’s fastest growing economies,” he added.

Unveils India-Houston corridor: Qatar Airways has launched its first new route of 2009 with scheduled flights to Houston — the airline’s third US gateway city. Daily non-stop services between the airline's Doha hub and Houston will constitute the airline’s longest route, and one of the longest non-stop flights in the world, operating with brand new state-of-the-art Boeing 777200 Long Range aircraft.

Addressing media, Qatar Airways Regional Manager India, Naveen Chawla said: “Qatar Airways’ India operations are among the most successful in our international network, having virtually doubled capacity between India and Qatar over the past three years.”

Business Class passengers would be able to enjoy comfortable and spacious seats offering a pitch of up to 78 inches with each of the 42 seats converting into 180degree fully flat beds.

In Economy Class, Qatar Airways’ Naveen Chawla seat space is above the industry average with a pitch of up to 34 inches offering significant leg room. Both Business and Economy class cabins feature in-seat PC power supply and touch screen inflight entertainment.

SA Airways promotes golf SOUTH Africa Airways has joined the support team of The Business Today Honda Pro-Am of Champions 2009, that earmarks the 14th edition of one of the most prestigious events on the Professional Golfers’ Association of India (PGTI) Tour.

Sponsored by Honda, the tournament will receive the support of ITC Welcomgroup, who don the mantle of Associate Sponsors, South African Airways & Sun International (Prize Sponsors), UB Group (Official Liquor), Cleveland Golf (Equipment Partner), Ethos Summit (Official Time keeper & Prize Sponsor), Fitness First (Official Fitness Partner) and Golf Digest (Official Golf magazine).

The event is being managed by Globosport - company.

Tauseef Khan, Acting Regional Manager, South East Asia, South Africa Airways said “We at South African Airways are keen to promote South Africa as a premier golfing destination and our association with BT Honda third year in a row is affirmation of our commitment to the game.”

available through the Amadeus system will be the same, and under the same conditions, as that offered through any indirect or direct channel, distribution provider or website.

“We believe that Emirates’ choice to offer agents unhindered access to their content will help agents immeasurably as they continue to service travellers in key growth areas such as Australia, Europe and the Middle East,” said Philippe Chérèque, Executive Vice President, Commercial, Amadeus. “Offering efficient access to content will help airlines make more sales,” he added.

Takes next step in online innovation: Emirates has taken the next step in online innovation by launching Mobile Emirates.com — a convenient new facility for customers accessing the Emirates website from their mobile devices.

Travellers who access Emirates.com from a mobile browser (on their phone or PDA) will be automatically redirected to the mobile version of the airline’s website. The facility is compatible with over 3,000 devices and allows customers to interact with Emirates from almost anywhere in the world.

The mobile site integrates many of the most popular features Keith Longstaff, Divisional Senior Vice and functionality pres- (L-R) President, Commercial Operations ent on Emirates.com, Worldwide, Emirates and Philippe all formatted for Chérèque, Executive Vice President, mobile use. Visitors to Commercial, Amadeus. the site may: check-in online up to 24 hours before departure; select a favourite seat or request a special meal; eligible passengers can book chauffeur-drive; search for the latest Emirates special fares to over 100 destinations worldwide; check real-time flight status and view global timetables.

Air Asia makes history AIRASIA recently celebrated the inaugural London (Stansted)Kuala Lumpur flight, making history by being the first low-cost, long-haul service connecting the UK to Asia.

The new service, initially operating five direct flights per week, provides guests with access via AirAsia’s Kuala Lumpur international hub to 64 destinations, such as Bangkok, Phuket, Singapore, Ho Chi Minh City and Bali, for as little as £10, and on to Australia for under £100. The flight, operated by AirAsia’s associate, AirAsia X, is a major step in AirAsia realising its European aspirations, and strengthens Kuala Lumpur as the regional aviation hub and gateway to Asia.

Emirates provides access to full content AMADEUS has signed a five-year worldwide agreement with Emirates to ensure travel agents have access to the airline’s full range of content.

The full range of Emirates’ fares, schedules and inventory made

Air Asia begins inaugural historic flight.

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TRAVEL & TOURISM New look for an old landmark THE Claridges, New Delhi, is all set to don a new look. This landmark of Lutyen’s Delhi since the 1950s is all set to undergo extensive refurbishment of its lobby and guest rooms.

The refurbishment will be carried over a period of six months, from April to September 2009, at a cost Rs 7.5 crore.

Designed by reputed Interior Designer Sita Nanda, the rooms will be done up in hues of white and cream with wooden flooring, and equipped with all modern facilities, including a 40- inch LCD television. The mock-up room is already in place and the refur-

programme, Earth Hour 2009, beginning this month end.

On March 28, all Six Sensesbranded properties and spas located worldwide participated in the event organised by the World Wildlife Fund (WWF).

Apart from turning off the lights, each Six Senses resort and spa has created programmes offering guests innovative experiences to enjoy during Earth Hour. These include activities such as romantic candlelit dinners and educational group discussions, star-gazing, group meditation classes, spa treatments etc.

Earth Hour is a global movement in which tens of millions of people around the world come together to demonstrate their concern about climate change by turning off their lights for one hour. The lights-out initiative has grown significantly over the past two years.

Soneva Kiri introduces Intelligent Luxury bishment of 80 guest rooms will be carried out in a phased manner starting April.

According to Peter J Leitgeb, President & CEO, The Claridges Hotels & Resorts, “The proposed refurbishment is a part of the phased repositioning exercise of The Claridges, New Delhi, which began a year back. Taking it forward, we are refurbishing certain parts of the hotel, aimed at delighting our guests with a charming boutique hospitality experience.”

The hotel is located amid lush and tranquil surroundings in the heart of the city, and is within close proximity of the business district, ministries, diplomatic missions, shopping and cultural centers and historical landmarks.

Renaissance Mumbai joins Earth Hour PLEDGING participation in the Earth Hour movement, Renaissance Mumbai Hotel and Convention Centre joined a global movement to help conserve energy on March 28, 2009. The movement is aimed at spreading awareness of the dire consequences of Global Warming.

Earth Hour is one of the biggest Climate Change initiatives that strive to reduce the Global Warming levels, a phenomenon which is slowly but significantly damaging the world. Supporting this initiative, which has now gained impetus worldwide, Renaissance Mumbai Hotel and Convention Centre, along with the Marriott Executive Apartments, switched off all the lights at their property for an entire hour on March 28.

Plans Baisakhi celebrations: The hotel, meanwhile, has planned some exciting, vibrant and colourful events for Baisakhi.

These include authentic Punjabi delicacies and Bhangra dances from April 2 to April 14, 2009 at Nawab Saheb.

Fulfilling environment responsibility AS a mark of its commitment to environmental responsibility, Six Senses Resorts & Spa joined the global environmental awareness

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LOCATED on the island of Kood, to the south-east of the Gulf of Thailand and around 160 nautical miles from Bangkok, the setting for Soneva Kiri — an extraordinary resort — definitely falls into the category of remote.

Previously, the journey to this resort would have taken more than three hours from the capital, by air and sea, but with the introduction of Soneva Kiri’s own 8-seat, specially fitted, luxurious Cessna Grand Caravan, the flight time is less than one hour from Bangkok’s Suvarnabhumi Airport to Soneva Kiri’s private airstrip on a tiny adjoining island.

The transfer to Soneva Kiri takes just five minutes in a stylish Aqua Sense speed boat, created to reflect the elegant days of private boating.

Dnata celebrates first birthday WITH a trio of top class hotels joining its expanding portfolio, Luxury Hotels by Dnata had reason enough to celebrate its first birthday this month.

The expansion is a sign of the growing success of the division, which provides targeted sales, marketing and PR solutions to high-end hotels aiming to increase their business from the Middle East.

The Beach House in the Maldives, The Grand Hotel du Lac in Switzerland and Le Royal Hotel in Beirut are the latest five star additions to the exciting portfolio.

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Le Royal Hotel Beirut.

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Unwind at the Dune

Visit Finland’s India workshop a hit

TUCKED in 35 acres of pristine beach along the Bay of Bengal, and very close to the erstwhile French colony Puducherry, The Dune eco beach resort and Veda Spa, offers a ‘Special Summer at the Dune’. The Dune offers an excellent get-away for this summer as a venue for exchange of ideas, a place to learn about people, ecology, wildlife, nutrition, health, water preservation, local cultures, et al.

The Dune — eco village is a premium and prestigious longstay destination on the coast of Tamil Nadu, and is one of the finest resorts and spas, providing an ‘out of the world’ experience with its aesthetic and eco-friendly bungalows, suites and rooms.

Its two gourmet restaurants offer a complete organic treat (most of the ingredients are cultivated organically at the in-house farm).

VISIT Finland-Finpro India has announced a whopping increase of 28.9 per cent in overnight stays in the year 2008 as compared to 2007. The 2008 figure (January-December) stood at 63,912 against 49,598 in 2007.

This was announced by Papori Bharati, who further said that the India Workshop — Fascinating Finland, as a result of this encouraging trend, saw over 12 suppliers and Regional Tourist Boards joining together for this promotion. The three-city workshop (Delhi /Mumbai /Bengaluru), held from March 3 to 6, was led by Arto Asikainen, Asia Head-Visit Finland, who expressed satisfaction with the way the India market has responded to Visit Finland marketing activities.

He mentioned that India’s reasonably stable economic performance till date has attracted worldwide attention. This year, Finland plans to conduct travel agents frontliners’ workshops, study visits by media and agents, as well as MICE organisers.

ITQ to also distribute Galileo GDS in Lanka TRAVELPORT GDS has extended its successful Galileo distribution agreement with InterGlobe Technology Quotient (ITQ), its established distributor in India, to also distribute the Galileo GDS in Sri Lanka. The new agreement came into effect on March 1, 2009.

ITQ has represented Galileo in India since 1994, supporting more than 4,000 travel subscribers, with 11,900 touch points spread into 333 cities in India. It has extensive associations with airlines across the region, and has pioneered a range of technology solutions for its travel agency partners, including Refund Tracking, Galileo Alerts, Dynamic E-ticketing and Travel Insurance.

ITQ’s Sri Lankan operations will continue to be serviced by the existing team, therefore ensuring continuity of service and business for all of its 150 travel agency subscribers.

ITQ replaces Emirates as Galileo’s distributor in Sri Lanka following the expiry of its contract.

Bonus nights at Emirates Hotels & Resorts

Amadeus is MakeMyTrip.com partner

THE introduction of the KL Monorail and KL Hop-On Hop-Off one day unlimited ride package has made sightseeing around Kuala Lumpur easier. The promotion makes it convenient for tourists to access the many major tourist spots in Kuala Lumpur in just one day.

For just RM20 per person (adult or child), pass-holders can enjoy unlimited travel around Kuala Lumpur in any single day on two modes of transportation — the KL Hop-On Hop-Off (KL HOHO) bus and the KL Monorail train. With the ticket, tourists can hop on and off the bus and monorail, as and when they wish.

Additionally, with the F1 Grand Prix celebrations’ starting with the Malaysia GP Sale (MGP), on from February 28 to April 5, 2009, a special KL HopOn-Hop-Off bus promotion enables visitors to tour the city at their convenience and get a discount of RM8 upon presenting a shopping receipt worth a minimum of RM50 from participating malls around town. This special ticket is to be purchased inside the bus only.

MAKEMYTRIP.COM, the leading OTA and amongst the top three travel companies in India, will be fully powered by Amadeus. For the website’s customers, this will mean more choices as well as an enhanced online shopping experience.

Following the success of this partnership, MakeMyTrip.com decided to move its domestic airline (L-R) Ankur Bhatia, MD Amadeus India and booking engine onto the Keyur Joshi, Co-founder and CCO, MMT Amadeus platform as well.

The resulting synergies in domestic and international operations will lead to lowering of operational costs for the travel portal.

The website will operate using Amadeus Web Services 2.0.

Amadeus Master Pricer, a cutting-edge low fare search tool, will help customers to quickly and easily find options that suit their travel needs and budget. In addition, Amadeus provides a dedicated 24x7 service team in India, which is backed up regionally by an Asia Pacific support structure, thereby ensuring faster turnaround and seamless support to the end consumer.

THIS is a special promotion offer from the globally popular Emirates Hotels & Resorts. Well-known for its awardwinning, conservation-based resorts, five-star city hotels, world-class spas and fully-serviced upmarket apartment properties, it is offering bonus nights and a special promotion of 15 per cent discount on all published rates.

At Al Maha, guests can stay for two nights and receive a complimentary third night. At The Harbour Hotel & Residence and Green Lakes Serviced Apartments, guests can stay for three nights and receive a complimentary fourth night. The offers are valid till September 17, 2009.

Unlimited fun at Kuala Lumpur

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SNIPPETS Record fields expected RECORD fields are expected to contest the five events at the Great Ocean Road Marathon and Festival of Distance Running over the weekend of May 1617. Entries, which close on May 4, are up 25 per cent on this time last year. It is likely that numbers will reach 3,000 for the first time since the marathon festival was launched on to the Australian athletics calendar in 2005.

It’s duty free in Jamaica A paradise for avid shoppers, Jamaica is a haven for duty free shopping. With unique selections of branded merchandise, wide assortment of designs, goods available at duty-free savings vary from jewellery to precious stones, branded perfumes, watches, crystal, leather goods and liquor.

One may find attractive items as take-away tokens, which include gems and stones like Amethyst, Smoky Topaz, diverse range of Jade, Ruby stones carved beautifully on gold settings, available at an attractive price.

Exclusive to Jamaica are high-

quality woven crafts, available in Montego Bay’s craft market, or along the street from smaller merchants. Baskets, purses, hats, and other finely handcrafted items are available in a wide variety of colours, but the most commonly found will be the three bright Rastafarian colours, yellow, green, and red, that just shout “Jamaica.”

Stage set for next edition of IITM The latest edition of 'India International Travel Mart’ — India’s premier travel and tourism exhibition — will begin in Bengaluru from July 18, 2009. It will culminate in Cochin on February 22, 2010, after traveling through Chennai, Mumbai, Pune and Hyderabad. With this year's edition of IITM, Travel Media Networks completes 10 years of creating business opportunities for the Hospitality, Travel and Tourism industry from India and abroad.

This year’s edition of the exhibition is expected to attract more than 400 participants from over 20 countries and 25 Indian states, the visitor profile being on a B2B and B2C format.

Some of the ‘National Tourist Offices’ that participated in the 2008 editions of IITM included India Tourism, Tourism Ireland, Switzerland Tourism, Dubai Tourism, Egypt Tourism, Iran Tourism, Tourism Authority of Thailand, Tourism Malaysia, Singapore Tourism Board, Indonesia Tourism, etc.

Some of the international players who were represented at the IITM Events included Cosmos & Globus, Star Cruises, Europe Incoming & Taj Tours-UK, Iscra-Italy, Sri Lankan, Ace Incentives -Greece, Royal Caribbean Cruises, Athens Marriott, Kuoni Holidays among others.

Pride Hotels India signs deal with eRevMax Experience luxury with Outrigger Serenity THE absolute beachfront Outrigger Serenity Terraces Resort in Phuket, which opened on April 2, has launched a “Luxury Experience Package” for couples.

The Luxury Experience includes two nights’ accommodation, daily a-la-carte breakfast in the Turquoise restaurant, a three-course set lunch or dinner, upgrade to the next room category (subject to availability), a bottle of wine on arrival, and late check-out.

At the resort, guests can arrange to explore neighbouring islands, be pampered in the Well Being Centre, or simply soak in the stunning views from Phuket’s newest serene escape.

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PRIDE Hotels India has found eRevMax’s RTChannelManager to be the perfect solution for their online inventory distribution management. The channel management tool from RateTiger is already proven in Europe and the US, and is now becoming recognised in India.

“RateTiger is an intelligent tool to help hotel chain revenue managers, who are handling online distribution, to effectively distribute inventory, as well as maintain rate parity across various online hotel channels. This eventually decides how effectively you sell on the web. With the growth of online business, this becomes an indispensable tool to ensure that you handle all channels effectively, and monitor your competitors pricing thoroughly,” says Tridib Ghosh, GMSales & Marketing, Pride Hotels India.

“We are delighted that Pride Hotels India has selected RTChannelManager Pro to manage their online portfolio. With their properties located in various Indian locations, they will be able to make the most of the available online demand. I am sure they will now be able to further impact their bottom line results,” says Reuel Ghosh, Founder & CEO, eRevMax. Pride Hotels India, located in Pune, Nagpur, Ahmedabad and Chennai, stand for luxury, extravagance, sophistication and impeccable service.

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Metropolitan’s ‘Journey Through Europe’ THE Metropolitan Hotel, in conjunction with Maxim magazine, hosted its annual wine festival at the hotel’s Eden Court.

The poolside setting was an ideal platform for wine lovers and newbies alike, to taste and share their views on various grape varietals and wines.

Various stalls, offering a range of fine wines chosen from the best vineyards of France, Italy, Germany and Spain, took the invitees on a virtual “Journey through Europe”.

Many wine connoisseurs, enthusiasts, expats and the beautiful from the Capital mingled together, sipping everything from France’s St. Emillion Grand Reserve and Beaujolais Villages to Spain’s Mediterranean 2004 and Italian Barberesco and Pinot Grigios Vipul Gupta, Executive Director The Metropolitan Hotel, while welcoming the guests said: “The appeal of wine, as against traditional drinks like whisky, gin, vodka or rum, is a result of a complex combination of factors: The young urban professionals are more health conscious, and are well aware of the

(L-R) Atul Wassan, Vipul Gupta, Shikhar, Anup Kutty, Bunty.

importance that it will make to their career growth. The fact that today’s consumer is also travelling more, is continuously being exposed to international cuisine and trends, together with the greater availability of products in the market, contributes to newer and greater choices.”

“Good wine and food has always been an integral part of being the complete man, so it’s only obvious that a brand like Maxim, which pretty much defines the new urban Indian man, would be an integral part of this venture by The Metropolitan Hotel,” said Anup Kutty, Editor-in-Chief, Maxim, India.

(R-L) Kazue Khurana, Committee member, Japanese Women Association (JWA) with a friend at the Great Wine festival.

(L-R) Sameer Vohra, Monisha Gupta, Ruchi Vohra, Vipul Gupta, Ridhi & Jitty Shroff.

Keys Hotels gets interactive KEYS Hotels, the brand from the Berggruen Hotels Private Limited stable, a hotel venture backed by New Yorkbased Berggruen Holdings Inc, has launched its new customer-focused, interactive website www.keyshotels.com.

This interactive, user-friendly website has been designed keeping in mind the new age traveller, looking for a quick and hassle-free hotel booking process.

Sanjay Sethi, CEO & MD, Keys Hotels, says, “With Keys Hotels, we have always attempted to redefine the hospitality experience for travellers, therefore a quick and hassle-free booking process is the first step towards it.”

Berggruen Hotels launched their brand of mid-market Keys Hotels in India in January 2007. Thirty-eight hotels are planned in the next five years in India, with simultaneous push in other emerging markets around the globe.

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For a memorable stay at The Oberoi Oberoi Hotels & Resorts has come out with a plethora of exciting offers at its various properties across the country. The ‘Oberoi Exotic Vacations’ package, includes a two-night accommodation and breakfast daily for two persons and return transfers from the nearest airport or railway station. While The Oberoi Amarvilas in Agra brings the pleasure of staying in the backdrop of the Taj Mahal, The Oberoi Udaivilas at

WelcomHeritage chain expanded WELCOMHERITAGE, a joint venture with ITC Ltd and His Highness of Jodhpur, has expanded further with the addition of three more properties. The properties are located near Hampi in Karnataka, within the city of Jaipur in Rajasthan and close to Nainital at Uttarakhand.

The first is the regal Shivavilas Palace at Sandur, 40 km from Hampi — the seat of the Vijaynagar Kingdom in Karnataka. At Jaipur, the haveli in the hamlet of Sirsi, offers the real village experience in a true village ambience. The third is WelcomHeritage Naukuchiatal Resort, located 30 km from Nainital and a new project on the banks of the Naukuchiatal Lake.

According to WelcomHeritage President Rakesh Mathur, “We have been keen to enhance our presence in the South of India, and

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Udaipur and The Oberoi Rajvilas in Jaipur make a stay in these historic places a royal experience to remember.

At The Oberoi Vanyavilas, the luxury jungle resort adjacent to the Ranthambhore National Park, one can combine the exhilaration of jungle adventure with the luxury of elegantly appointed and spacious tents. The ‘Himalayan Vacations’ offer provides the ideal opportunity to plan a memorable vacation at The Oberoi Cecil and Wildflower Hall, Shimla, in the Himalayas.

with the addition of the Shivavilas Palace, we can now count two royal palaces in the state of Karnataka.

WelcomeHeritage has an array of properties, numbering more than 60, spread across 19 states in India.

Vintage Macallan on sale IN response to an increasing demand, the greatest range of Vintage Macallan is being offered for sale for the first time. The whisky is being offered in a choice of either bottles or miniatures to make purchase as accessible as possible.

The Macallan 1947 is the latest vintage to join the Fine & Rare range and is the result of a buy-back from a private collector.

So you can now drink to India’s Independence in 1947 with a whisky of the same year.

The last of the rarest, oldest and most expensive bottles in the collection, distilled in 1926 and bottled in 1986, of which only 40 were ever produced, was sold for a record £36,000 in 2005.

The Macallan has been recently ranked ‘best malt in the world’ by industry bible Whisky, and is the most respected and revered whisky in the world.

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Trident Holidays come in a package TRIDENT Hotels has come out with an exciting ‘Trident Holidays’ package, offering you and your family a comfortable and fun-filled holiday at an exceptional value, with a room for children at half-price.

With price starting at Rs. 12,000 (taxes extras) for a two-night stay, the package includes accommodation for two persons and breakfast daily.

Valid until April 15, 2009, the package is available at the Trident hotels in Agra, Jaipur, Udaipur, Bhubaneshwar and Cochin.

Trident’s 5-star hotels at Mumbai, Gurgaon and Chennai have also launched weekend packages. With prices starting from Rs. 17,000 (taxes extra) for a 2-night stay for two persons, these packages are valid for stay on Friday and Saturday, and include accommodation for two persons for two nights on double occupancy, daily breakfast for two persons and an additional room for up to two children (below 12 years) at a discount of 50 per cent.

Selim is new Egypt Tourism director MAGDI Selim has been appointed the Director of Egyptian Tourism Authority India. He took over the reigns of the office on March 1, 2009, from Samy Mahmoud, who has now been promoted as the Under Secretary, Head of the International Promotion Sector, Egyptian Tourism Authority, Cairo.

“I feel extremely privileged to take over the

office from him and I am amazed at the similarities between Egypt and India. Both share a rich tradition in hospitality and heritage and have synergistic cultural values. I am pleased to work with my Indian counterparts who have made me feel so much at home here in India,” said the new director.

Magdi joined the ETA in 1984 in the Public Tourist Relation Department. In his 24-year stint with the ETA, including posting at Canada, he has become an undisputed expert in tourism sector and has gained vast experience in media, marketing, tourist counseling and international tourism.

Chef Zhou Bai Yan joins Claridges ZHOU Bai Yan has joined The Claridges Hotels & Resorts as Master Chinese Chef. He comes with over 17 years of experience in preparing authentic Chinese cuisine. In his new capacity, Chef Zhou will be responsible for the menu planning and operations of the Chinese kitchen at The Claridges, New Delhi, and The Claridges, Surajkund.

Chef Zhou’s culinary career spans some of Chef Zhou Bai Yan the finest restaurants in India and abroad. His culinary repertoire includes the famous Cantonese, Sichuan, Hunan and authentic Beijing food. Chef Zhou has won accolades in several international oriental cookery competitions. His last assignment was with Mainland China, Mumbai.

New director at JW Marriott, Mumbai FAIEK EL Saadani has joined JW Marriott Mumbai as Director of Food and Beverages. His association with Marriott Group began with his appointment as Banquet Manager at JW Marriott, Dubai, in 2003.

As F&B director, Faiek will oversee all food and beverage operations at banquets, all the restaurants of the hotel, lounge and room services, audio visuals, catering, as well as culinary. He will play a pivotal role in the decision-making process with the Faiek EL Saadani

executive and management team. His portfolio will also include managing and executing all financial AOS and GSS plans for food and beverages department, along with supervising the capital expenditure budget. He will also guide and train the food and beverage associates.

New appointments at Ten Hotels ORUGANTI Murali Manohar has joined Ten Hotels as Chief Technical Officer.

Manohar is a qualified Marine Engineer and has spent the last 19 years in the Hospitality Industry. Prior to joining Ten Hotels, Manohar has worked with leading hotels, including Hyatt Regency, Grand Hyatt, Imperial Delhi and The Oberoi’s, Murali Manohar where he spent over seven years as Director of Engineering.

Meanwhile, Justin Dingle has taken over as Chief, Culinary Officer at Ten Hotels.

Thirty-eight-year-old Justin was born in Australia and is 38 years old. He has worked as Executive Chef, with Aman Resorts, The Hilton at Bali and The Taj Maldives, amongst others.

Justin is an accomplished leader and Justin Dingle has trained under several globally renowned chefs, including Michelin-rated star chefs, before joining Ten Hotels.

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Plane ahoy!

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for people like Hill to repossess planes and bring them back to his clients, mostly banks that specialise in aircraft loans.

By the time Hill gets involved, a borrower is typically 60 days behind on payments. And then, it’s not so easy to track the planes. Though armed with a small staff, Hill says he does all the research, tracking, tracing, repossessing and flying himself, and hires others to perform on-site tasks like repairs.

For Hill, the job can be as simple as showing up, talking to the owner and flying the plane away. But in many other cases, owners do not return calls, do not acknowledge letters and, sometimes, disconnect their phone lines.

About one in four defaulters agree to make payments current, he said. In such instances, Hill leaves empty-handed and charges his clients only out-of-pocket expenses for his efforts.

In others, he takes charge of the plane but

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Courtesy New York Times

t’s a different breed of recovery agents.

And there aren’t too many of this kind.

Ken Hill is a rare breed indeed. He is an airplane repo man in the United States, and one of the best and busiest in the business, especially now when economy is sinking and the general aviation industry is suffering.

Carrying just a few basic tools — a propeller lock, a portable radio, hand-held GPS device and a fanny pack stuffed with hundreds of keys, he is always on the move.

Ken Hill’s last business trip took him through eight US states in January and netted him 12 planes. His current one is a 30- to 45day trip for 27 more planes, his biggest ever.

A career plane dealer and licensed pilot, Hill, 66, estimates that he has repossessed hundreds of aircraft since his first propellerpowered Piper Cherokee 180 in 1969.

Friends call him the Grim Reaper — an image he often relishes but at times detests.

In good times or bad, owning a plane is a costly affair, what with maintenance, hangar, fuel, catering and insurance costs, apart from the purchase price. Though many owners help pay these bills by chartering their airplanes, the current economic scenario has shrunk demand. Hence a growing demand

(Below) Foreclosing on a plane, then flying It away; (Above) Ken Hill photographing a Piper Meridian he seized in January. Hill, 66, has repossessed hundreds of planes since his first in 1969.

does not fly it off until the plane has a clean bill of health from a mechanic, a process that is more complicated if the logbooks cannot be found. Once the plane is airworthy and secure, Hill will have it appraised, then check with the US Federal Airport Authority (FAA) for outstanding liens and sell it for the bank. On any given day in recent weeks, he has had at least a dozen planes advertised on

his Web site.

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RNI NO. DELENG/2006/16897 Posting Dt. 3-4/04/09 Reg. No. DL(E) 20/5294/2009-11