Ch august 2005 by Newsline

August 2005 Vol II No.5

MERCENARY PILOTS GROUND AI EXPRESS

Rs 60

PLUS O

Mumbai airport deluge

Off the cuff A recent ride on the Delhi Metro left one deep in thought. What if only this modern marvel had been built a good twenty years earlier? Yes, for a full twenty years we were huffing and puffing and thinking whether we should or shouldn't go for a metro. Thank God some good sense prevailed and the metro is now a reality in the capital. A trip in the air-conditioned confines of its coaches (a ride from Krishi Bhawan opposite Parliament to old Delhi took 17 minutes. It can take upto an hour by road) will leave anyone convinced that this is the future of transportation in Delhi. Hopefully, both the domestic and the international airport will be covered by the spur that goes to Dwarka and later to Gurgaon.It will be a huge relief to countless travelers who make the long trip by roads each day. Just looking at Heathrow or Hong Kong and Singapore should convince one of the benefits of such a roadmap. But that's not the point. Just the mere delay in getting the metro off the ground has meant several hundred crores in additional costs thanks to the delay. Its just that Sridharan and his team at DMFRC have done such a first rate job since the timer the project took off that one doesn't look hard at the additional costs incurred. What is required is a time bound movement not just on the spur but also on the entire modernization of the airport. The sooner we can make up our mind, the better it will be for everyone-administrators, operators and, most import, the traveling public.

contents THE BIG DEAL

GREEDY PILOTS

p20

p10

Pilots as mercenaries has now commonplace in the India. The latest casualty is Air India Express that was grounded thanks to greedy pilots.

CRUISING HEIGHTS August 2005

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

If it happens it will be a landmark deal that will set the pace in ground handling nationally. But will the IASATS deal go through? An investigation.

JUICED OUT

p30

Mumbai Airport resembled a huge lake in torrent and the neighboring Juhu Airport was completely submerged in the rains. A special report on the unprecedented havoc.

CRUISING HEIGHTS RENU MITTAL Editor

R. KRISHNAN Cunsulting Editor

DUSHYANT PARASHAR

Creative Director

BHART BHARDWAJ Art Director

KISSA KURSI KA

p17

Who'll be the next CMD of Indian Airlines? The race begins in right earnest.

Off the record

p6 Naresh Goyal goes into overdrive!

Aviation Digest

p36

Qatar Airways dollops for Delhi

Tourism Digest p38 Its boom time for the travel trade

BACK PAGE Rudy is writing a book. Cover Illustration: R Prasad

CRUISING HEIGHTS August 2005

p40

RAJIV K. SINGH

Gen. Manager (Admn) Editorial & Marketing office: D-11, Nizamuddin (East), New Delhi-110 014 Tel: 51825251/50, Fax: 51825250 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 parts without prior permission. the publisher assumes no responsibilty for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. the publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Published and edited by Renu Mittal for and on behalf of Newsline Publications Pvt Ltd. D-11 (basement), Nizamuddin East, New Delhi-110014 and printed by Bhart Bhardwaj at Kaveri print process, 114 Patparganj Industrial Area, Delhi.

PERISCOPE

“

Costly cargo “Exorbitant air cargo rate is one of the main bottlenecks in the export of floriculture "Though India is blessed with favourable climatic conditions for floriculture, our share of exports in the global market was only about 0.5 per cent” KAMAL NATH on why export of flowers is so disappointing

LETTERS TO EDITOR

It is indeed surprising that a chief executive who has sent five successful years at the helm of IA in the most difficult of times can be sent back to his cadre at the end of his term. In Europe or America, Sunil Arora would have been feted for his efforts and probably asked to continue for a second term and keep the good work going. Not so here.Yeh hai mera India! Mohit Ghaziabad

July 2005 Vol II No.3

Rs 60

After five successful years, Sunil Arora hands over the baton to Sushma Chawla at Indian Airlines.

I agree with Mr. Rabindra Seth that more rooms are a must if India has to rack up its share in the tourism pie. But as Mr. Seth would surely agree mere rooms do not make up for a great tourism experience. I cannot think of one Indian site that truly offers an incredible experience for the visitor. Be it clean toilets, curio shops, snack bars or just facilities to stroll around we are no where near the standards in Europe, America or even Thailand and Malaysia. Unless we can turn that around, we truly cannot hope to get them by the droves. Gunjan Raipur

V K VERMA on being elected Vice President of IBF

Fast track

“I will write to the Prime Minister requesting that either a Group of Ministers or Committee of Secretaries be set up so as to quickly resolve this issue. There is need for absolute transparency in the acquisition process as this is a high-value transaction”

PRAFUL PATEL on renegotiating the Airbus deal

They were very good actors All of them whole time directors When it was time to speak They turned out to be pretty meek This could well be the story of the whole time appointments on the board of IA and AI unless, of course, the Ministry gives them their voice and independence to contribute at board meetings. Just look at the other PSUs and you'll know what I mean Sujit Dhanbad All the correspondence may kindly be addressed to Editor, D-11, Nizamuddin East (basement) New Delhi - 110014 OR mail at newslinepublications@rediffmail.com

Shuttle cock CD

“This position in the IBF (International Badminton Federation) would help wider sponsorship and development of the game in India and conduct of the forthcoming Commonwealth Games in Delhi in which badminton is an important sport. "I am grateful to all countries in Asia, Middle East and particularly, China, Korea, Malaysia, Indonesia and Japan for unanimously proposing my name even though India in respect of badminton is well behind them.”

Flying high

RONO DUTTA President, Air Sahara

CRUISING HEIGHTS August 2005

“The launch of the flight (Air Sahara-American Air code share)will have an immense impact on the flying time between India and the US, which will be reduced by between 20-25 per cent. The tie-up between us will benefit the traveller in many other ways including allowing a passenger flying between San Francisco and Bangalore to check in just once.”

COLD STATISTICS

V THULASIDAS, CMD Air India “We hope to expand our market share month by month as we grow and add more routes. I am looking at a third of the inbound and outbound traffic traveling by Air India at the very least.”

Captain Gopinath CEO Air Deccan

“The dearth of pilots in the country is a problem, but one should not be overawed by the situation. Air Deccan, with 200 pilots on its rolls, hopes to add more than 600 pilots over the next five years.”

“We have 43 cabin crew training centers spread across 34 cities in India. By endMarch 2006, the number of such centers in India would be 65. The setting up of each K S KOHLI, Chairman, Frankfinn Instute of air hostess training domestic centre would entail an investment of Rs 40-50 lakh. Also, one centre would be opened in Dubai, while another would be opened in Bahrain.”

LOOKING GLASS

Avian woes “In the last month alone, our Airbus fleet took five bird hits. The airline was also affected when 15 pilots left to join another airline, so foreign pilots were recruited” CAPTAIN GOPINATH on the woes of Air Deccan

CRUISING HEIGHTS August 2005

OFF THE RECORD

Overdrive A

sked to describe the predicament of Jet Airways Chairman Naresh Goyal who is being hedged from all sides, a senior official said that he was like a `car in overdrive`.What he meant was that the millionaire NRI who lives in London and runs an empire in India is zipping all around North Block and South Block getting his act together. The Finance Ministry is looking at some Enforcement irregularities, the Home Ministry is looking at the alleged Al Qaeda links that has halted Jet's desire to fly to the US and generally the ruling UPA (read Congress party) looks at Naresh as a confidant of the Nationalist Congress Party (read Sharad Pawar and Praful Patel).So in a PR mission Naresh is these days trying to curry favor with any Congress politician worth the salt. Watch this column for an update. Last heard a former Indian Airlines Director was lobbying hard for him. The director also happens to be the Chairman of HDFC: Deepak Parekh.

Perfect PR

Sridhar's woes

erfect Relations is in a perfect position in the Ministry of Civil Aviation and Tourism. If reports are to be believed the Delhi based PR Company headed by Dilip Cherain is all set to bag the contract for a make over of the Airport Authority of India (AAI).The agency is apparently being hired after some gentle nudging by the Mantriji.Mantriji in turn was nudged by those who matter in the Congress party. Dilip hit the headlines when he took on the Congress PR contract during the General elections last year. Since then the party has been in overdrive to give Perfect Relations a few good accounts. It seems that AAI is one of the many coming the way of Dilip Cherian.There were also reports that Air India's makeover or at least a part of its image refurbishment will go to Perfect Relations. But that it still to be seen.

ridhar the Chairman and Managing Director of Pawan Hans is a harried man these days. The genial and hugely successful CEO of the country's profitable helicopter company was getting ready to on a tirath yatra to Mansarovar when the Mumbai downpour put paid to all his plans. The worst affected was the Juhu airport where Pawan Hans parks its choppers. The result was that Sridhar lost several of his machines just because the water kept rising and even came into the hangers!This was of course apart from the one that was lost in the Mumbai High fire. The result is that Sridhar is busy these days trying to get the organization back into its fighting fit status and the yatra to the holy river is at stage fifty fifty.

OFF THE RECORD

Taking charge

lowly but surely Seemanto Roy, the younger son of Sahara Czar Subroto Roy is taking charge of Air Sahara. Noimnated as the executive points person for the aviation operations of the company, Roy Jr, if reports are to be believed, is talking less and focusing more on understanding the business and learning the ropes. That's surely a good sign. Discounting fears that the company was in bad shape, one key executive said that after its recent agreements with British Airways, the company had shown robust growth in the peak summer months and they intend to follow up their UK,USA tie up with more such operations to other stations as well. But where else are they keen to fly? Just wait for the announcement, said the insider.

Joining Kingfisher

hy did Nigel Harwood suddenly leave Airbus Industries and join Kingfisher Air ? Those in the know state that Harwood was upset at the manner in which he had been treated by some of his colleagues at the French behemoth and found a convenient shoulder to cry in the form of Vijay Mallaya.But that seems far from true considering that Harwood, upbeat and feisty as ever till his last day in Airbus. If anything, his friends state he was in a bit of a roller coaster ride with almost 70 airbus

Queuing up

hy is it that potential candidate are queuing up outside the official residence of Satish Sharma for his blessings. We mean some of the potential candidates for the top job at Indian Airlines. Now we don’t know how Satish can help in all this. The interviews are being held by the PESB they shortlist the applicants and clearly Captain Sharma has no role to play. Or is it that they just want to seek his ‘blessing s’ just in case they make the grade. One doesn't know. But one certainly knows that some of the hopefuls have made a beeline to tell him that they are applying.

CRUISING HEIGHTS August 2005

aircraft having been ordered at the Paris air show by domestic Indian operators excluding Indian Airlines. He was reportedly excited at the prospects of heading an Indian operation and found Mallaya and the Kingfisher experience cool and laid back and much to his suiting. Perhaps the truth lies somewhere in between these two differing perspectives. Let's put it this way: Harwood was comfortable in Airbus Industries, he feels even more comfortable at Kingfisher Air. After all the boss likes him!

dummy 1.qxd

1/29/2008

1:26 PM

Page 1

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

I have

sure your next stay is with us.

the simplest taste.

FOR FURTHER INFORMATION

I am only satisfied

and reservations call

with the best.

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

You

can

also

enjoy

the

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

ABU DHABI BALI

AHMEDABADB

CAIRO

HONG KONG

DUBAI JAKARTA

JAIPUR JEDDAH KOVALAM PHUKET SINGAPORE TOKYO

MERIDIEN NEW DELHI

www.lemeridien.com

BATES/D/LM/193

LCC

WARS W

hat can the Maharaja do? After successfully launching the Low Cost Carrier Air India Express on April 29, 2005 with three leased Boeing 737-800s the carrierâ&#x20AC;&#x2122;s morale touched a new high. Soon it touched a new low but more about it later. Around the same time Air India also readied one of its three leased Boeing 777-200s to launch the Delhi-Amritsar-BirminghamToronto flight on May 15, 2005 thus reviving the long suspended India-Canada operations. A month later Air India revived its Kolkata-London flight with another Boeing 777-200. Early July 2005, Air India started flights to Singapore, Kuala Lumpur, Hong Kong and Seoul from Mumbai. It had

Air India Express is going through a difficult growth path. Just months after its debut, its lost pilots to poaching and faces the danger of other low cost carriers arriving in Kerala.Will the Maharaja's LCC be able to face the challenge? R Krishnan reports. planned to start direct Mumbai-San Francisco flights from winter of 2005. Leasing remains the preferred option till such time the government okayed Maharajaâ&#x20AC;&#x2122;s plan to acquire 50 Boeing wide-body 777 and 787 variants and 18 Boeing 737800 narrow bodied for Air India Express. With pilot shortage constraining every air-

CRUISING HEIGHTS August 2005

WAITING TO FLY: AI Express that was launched with much fanfare in April this year has been hit by the mercenary attitude of pilots.

line in India, Air India also recruited foreign pilots on contract besides looking at other operators in India especially for its low cost operations. When Air India Express started operations in April 2005 with a formal flagging off ceremony in Kerala by Civil Aviation Minister Praful Patel of a flight to the Gulf, the mood was indeed upbeat. Air India Express unlike mother Air India recruited pilots on contract. What was described as “poaching” by other airlines if pilots changed their employer was somehow missed in the case of Air India Express. Our story begins here. About ten pilots of whom eight were commanders occupying the crucial left seat and two co-pilots quit Air Sahara to join Air India Express. This forced Sahara to ground some of its operations while ensuring Air India Express was air borne. The mood of Sahara was down and that of Air India Express up. Today the mood of Air India is down while that of Air Sahara is up for precisely the same reason. However, the latest from aviation industry sources suggest that it is not really up at Air Sahara now. The grapevine has it that when Air Sahara pilots left for Air India it was on acceptable pay package with prospects of seeing the world as eventually they would get a chance to fly medium to long haul jets in future when Air India management allowed them to graduate

With pilot shortage constraining every airline in India, Air India also recruited foreign pilots on contract besides looking at other domestic operators for its low cost operations. CRUISING HEIGHTS August 2005

to wide body aircraft operations. But what happened in between is not known. Anyway they are back in Air Sahara and the problem began in right earnest. At the time of resignation from Sahara they enjoyed certain seniority in the private carrier. When they rejoined Air Sahara they got hikes of Rs 50,000 to Rs One Lakh and also retained their seniority. Those who remained loyal to Sahara welcomed the hike but resented the reward of seniority to them who first went to Maharaja and then returned to their original base. Does it mean it is now trouble for Sahara? God knows who will poach this time. The Chairman of Spice Jet Siddanth Sharma said in Delhi recently that his airline employed 70 per cent expatriate pilots, 20 per cent drawn from the forces and the remaining 10 per cent just poached. With every domestic carrier planning to expand their fleet, it is evident that pilots —poached or otherwise— that would determine the future of scheduled carriers in India. Air India Express which operates international routes with a few domestic routes as well will also have to contend with the same logic as has been highlighted by the new route Sahara-Air India Express-Sahara ! Surprisingly the Indian carriers are not only facing pilot shortage but even the availability of leased aircraft - both narrow and

HOLDING TIGHT: Air Sahara caught in the pilot poaching menace has decided to tighten regulation to hold on to its cockpit crew.

Fighting back

IR SAHARA â&#x20AC;&#x201D;till such time it has resolved the issue of pilot shortage-- is planning to hire expat pilots. Its CEO Rono Dutta stated his airline was spending between Rs 20 lakhs and Rs 40 lakhs on training pilots and getting them certified. Therefore they cannot quit without serving the notice period and paying the training charges. This private carrier was contemplating legal action on the deserters. Even Indian Airlines secures a watertight bond from its pilots on whom it spends money for training and certification. In the case of Air Sahara, its pilots simply walked out and joined Air India Express. After finding the going not to their liking they returned to Air Sahara thus putting Air India Express schedules in jeopardy. They had done it once when they left Air Sahara in the first place. Now Air India is seeking to file legal charges against them. Incidentally, Air India that owns Air India Express has written to DGCA seeking to

cancel the CPL (commercial pilot's license) of those 12 pilots who left Sahara and joined the Maharaja and left it to go back to Sahara. Air India has argued that action should be taken against them in public interest. The question is was not public interest breached when they left the private carrier to join the public sector carrier? Air India and Alliance Air (Indian Airline's wholly owned subsidiary) together face a shortage of 158 pilots of which the former accounts for 118 pilots and the latter 40 pilots. According to Civil Aviation Minister Praful Patel the government, to overcome shortage of pilots, has planned to increase the capacity of IGRUA (Indira Gandhi Rashtriya Uran Academy) to 100 from the present 60. Also, it plans to reduce the total flying requirement for CPL from 250 hours to 200 hours and increase the age of pilots who can operate flights from 60 to 61 years. The pilot shortage has even scared the Indian Air Force which has now decided that it will not entertain any application from its flying force to seek pre-mature retirement. As most of them who want to leave are in the rank of Wing Commander and Group Captain who also serve as instructors, IAF has decided to take a tough stand on the issue.

About ten pilots quit Air Sahara to join Air India Express. This forced Sahara to ground some of its operations while ensuring AI Express was air borne. 12

CRUISING HEIGHTS August 2005

wide body. For example both Sahara and Jet Airways despite being allowed to fly on the international routes are unable to take advantage due to non-availability of wide body aircraft for love or money. The same scenario also confronts the official domestic carrier Indian Airlines. Only recently, the Secretary, Civil Aviation Mr. Ajay Prasad said that his ministry is planning to increase the number of recruits for training in the Indira Gandhi Rashtriya Uran Academy (IGRUA) to nearly 100 per year. Till such time it becomes a reality, the shortage of pilots will continue to fuel the poaching virus. Having said that, lets turn again to the future of Air India Express which largely also depends on southern clouds for its harvest. First, Kerala government wanted to start its own airline to ferry malayalis between Kerala and Gulf. But when it

PRAFUL PATEL: The Minister for Civil Aviation expressed ``worry ` at the ground of the 737-800s and promised to find some long term solution.

V THULISIDAS: AI's Chairman lamented the attitude of pilots and said that their behaviour was bringing a bad name to the whole industry.

became evident that permission may not be granted, Kerala government has now decided to queer the pitch completely. The state chief minister Oommen Chandy told the state assembly that his government has requested the center to permit Air Arabia a Sharja based low cost carrier to operate between the Gulf and the God’s Own Country. On July 26, 2005 he told the assembly that steps needed to be taken to mitigate the travel problems of Keralites living in the Gulf. He said Air India’s budget flight service failed to achieve desired result and has therefore taken up the issue with Ministry of Civil Aviation to allow Air Arabia to fill in the gap. At the same time he said Kerala had not yet given up the idea of its own airline. Air India Chairman V.Thulasidas underscored that resignation of ten pilots from AI Express leading to some flight cancellation from Delhi and Mumbai would cause great incovenience to the workers. The entire argument advanced by various players seems to suggest that rising fuel cost had no impact on their operations. Such a view will only hurt them in the near future. One would like to quote the recent case of Jet Star Asia, the international budget arm of Qantas’ decision to merge with Valuair, a Singapore based discount carrier. Jet Star is 49 per cent owned by Qantas and 19 per cent by Temasek Holdings official investment arm of Singapore government. Valuair is owned among others by a former executive of SIA and Malaysia listed cruise operator Star Cruises. The merged entity is likely to be called “Orange Air” and Qantas is proposing to invest 60 million dollars in the merged new avatar Orange. Valuair, one of three budget carriers in the region is facing intense competition and the prospects of 16 other LCCs adding more destinations or planning to start operations has knocked seriously the bottom-line of Valuair. Jet fuel (which we call here as Aviation Turbine Fuel) prices have surged 46

AJAY PRASAD: The Civil Aviation Secretary said that training more pilots was the answer. Recruits to the Indra Gandhi Uran Academy are being increased.

Surprisingly the Indian carriers are not only facing pilot shortage but even the availability of leased aircraft both narrow and wide body. CRUISING HEIGHTS August 2005

per cent already this year. With no prospects of jet fuel prices easing, even the richer countries have begun to restrategise their airline operations. Civil Aviation Minister Praful Patel believes that LCCs are there to stay and will feed the expansion of the air market in the foreseeable future. In India the market has almost exploded in the last one year. It is inevitable that more airlines will soon be joining the party. But where will they look for the human resources that will help this industry move to the next stage of evolution. And how will they contend with the rising price structure of ATF? “These are serious issues that we are concerned about. We are looking at options and examining various aspects of the problem. We hope to find some common ground that will help all operators, “said Patel who added that he was also talking to other ministries to rationalize many other issues like sales tax. The question is where does it leave Air India Express which has international operations like those mentioned earlier. How will Air India manage its 18 aircraft fleet? Air India Express has already started contemplating a change. For instance, Thulasidas has gone on record to state that customers of Air India Express have expressed a desire to fly club class on the routes it is operating to Gulf now and later to South East Asia. After all, competing carriers are offering the best. Budget carriers from Gulf can afford low fuel prices but Air India and other Indian carriers cannot despite facility of uplifting fuel at international prices without paying sales tax from India. As per Air India Express plan, the carrier wants to include at least Eight Executive Class seats in its otherwise single class configuration with 180 seats in its Boeing 737-800. Indonesia based Lion Air, an LCC, has just ordered purchase of 60 Boeing 737s of different versions. It already offers Executive class in its flights. Does this mean we are now reaching a new ■ maxim - LCC of high cost variety.

INTERVIEW

We hope to end this year with a profit

Indian Airlines Acting Chairperson Sushma Chawla is reticent and low profile. She is categorical that the company's performance should speak for itself and in real that should be the bottom line. As Deputy Managing Director in charge of the key finance portfolio, Sushma had a key role in helping improve IA's bottom line. She has ruthless pruned spending and helped rationalize costs across the company. The lady who has spent close to 30 years at IA is one of the front-runners for the top job at the public sector carrier. The post was advertised recently and it is believed that she is top of the potential shortlist. But she isin't inclined to discuss this issue. In a rare interview she agreed to answer a few written questions and supplementaries. Some excerpts.

Q: What sort of financial results are you expecting this year? A:Sustained cost control measures coupled with increased passengercarriage have also helped IA record an estimated profit of Rs.28.45 crorein the first quarter of the current financial year (2005-06) as well. Theairline had posted a net profit of Rs. 5.95 crore during the same periodlast year. The estimated profit posted for quarter one is the highest inthe last few years. Significantly enough, these results have been achievedin the face of increasing prices of ATF, which continues to account for a

Q: How did IA manage to report a net profit in 2004-05? A: Indian Airlines has estimated a prvisional net profit of Rs.17.5crore in the year 2004-05, for the second year in succession. Earlier inthe year 2003-04, the airline had achieved a net profit of Rs.44.17 crore.The positive results have been achieved mainly due to increased passengercarriage, strict cost control measures, improved on - time performance, increased utilisation of aircraft and various marketing initiatives andproduct upgrade measures undertaken by the company.

CRUISING HEIGHTS August 2005

PUBLISHER’S NOTE large part of the airline's expenditure. The expenditure on account of ATF accounted for 68% of the overall 16.7% increase in the expenditure this quarter. The airline hopes to end this fiscal also with profit.

economy measures in the year 2003-04 amounted to around of Rs.190 crore during the year on account of reduction in overtime, freeze on recruitment, fuel tankering, rationalization of menus and catering upliftment and inventory management etc.

Q: Is it possible to cut costs further and what was the extent of cost cutting in last fiscal and the areas where it was cut? A: IA exercises comprehensive budgetary control and strict monitoring of expenditure as a matter of company policy. A high-level cost control committee identifies areas amenable to cost control, makes recommendations and reviews progress on a continuous basis across all vital areas. Some of the areas that have been identified for cost control and economy of expenses are as follows: • Strict control over Aircraft Material Consumed and better Inventory Management. • Monitoring Non - Budgetary Expenditure. • Efficient Manpower Management & Redeployment of staff and curtailment of excessive manpoer through VRS • Efficient Aircraft Utilization. • Outsourcing of Services, which do not form part of the core businessof the Company. • Reduction in Overtime, Weekly off Days, Holidays etc. The saving from various cost control /

Q: Compared to the total operations, how much does the foreign particularly gulf and South East Asia account for in profitability? A: Out of IA's total operations, nearly 40% account for foreign destinations, in the Gulf and South East Asia. Q: What is the cost of wages as a percentage of IA's total expenditure? If it is much higher than Jet which has a higher market share why should the pay packets in IA be higher? A: The cost of wages accounts for nearly 22% of IA's total expenditures. It is not comparable to the other players in the sense that most of the activities, are carried out in-house in comparison to private players, where the majority of activities are outsourced. Q: Will IA's foray into medium and long haul route actually help IA financially? A: Surely IA's foray into medium and long haul routes will help IA financially.

CRUISING HEIGHTS Please accept my subscription for 6/12 issues of CRUSING HEIGHTS Name Address

Payment

Cash

Cheque/DDNo.

Drawn on Cheques/DDs should be drawn in favour of ‘NEWSLINE PUBLICATION PVT. LTD.’ Send your subscription to D-11, NIZAMUDDIN (EAST), New Delhi - 110 014

CRUISING HEIGHTS August 2005

PER ISSUE ONLY

60/-

COVER STORY

A Deal in lim bo! Why has the Ministry of Civil Aviation held up the Joint Venture between Indian Airlines and Singapore Airline Transport Services (SATS)? There are no clear answers to the question. Ministry officials state that the deal will indeed go through, but after the new civil aviation policy is announced. Is it as simple as that or is there more to it than meets the eye.R KRISHNAN reports.

Considering that IA operated 50,000 flights a year and another 10,000 flights were being operated annually through these airports, it made perfect business sense to give the green signal to the JV.

nion Civil Aviation Minister Praful Patel said on March 1, 2005 that the government is planning to hive off ground handling and engineering wings of the state owned carriers - Indian Airlines and Air India - into joint ventures with foreign firms that could include airlines. According to a news item published in a Kolkata daily Praful said â&#x20AC;&#x153;the proposal has been cleared and the process is likely to be completed and made operational by the end of fiscal 2005 or March 31, 2005â&#x20AC;?. While that deadline expired more than four months ago, there is no indication of a forward movement on the JVs. This raises an important question of whether the government is indeed serious about what it is saying or wanting to do. In early 2003 when NDA was in power, the then Union Cabinet decided that only the state owned Indian Airlines, Air India and Airports Authority of India will be allowed to offer ground handling services in various Indian airports both domestic and international. In an enabling provision, the Cabinet noted that for security reason only these three organizations would be allowed to form JVs with foreign companies which had the expertise and experience. This set off huge protests from private carriers like Jet Airways and Air Sahara who argued that the decision will render jobless thousands of its workers who are performing these functions. Later it was agreed that the private carriers would be allowed to handle their own flights. In other words ground handling for in-house operations ! Following this, ground handling companies belonging to Lufthansa, Singapore Airlines, Swiss International etc began discussions with the two Indian carriers. SIA's ground handling organization Singapore Airport Terminal Services (SATS) first began discussions with Air India for a possible JV. However, the Maharaja decided to opt for Lufthansa and even signed an MOU. Consequently, SATS initiated discussions with Indian Airlines and the two signed an MOU in October 2003. Since then the discussions between IA and SATS have reached an advanced stage with IA board formally approving the formation of a ground handling JV while Lufthansa abandoned its planned JV with Air India noting that the productivity of maharaja's workforce was far below international standards and as such the formation of the JV would not make much sense.

COVER STORY

Considering that IA operated 50,000 flights a year and another 10,000 flights were being operated annually through these airports, it made perfect business sense to give the green signal to the JV.

HEAVY LOADS: IA has steadily built up a formidable reputation for its cargo operations and if the ground handing tie up goes through it will only accelerate growth in this key area of operations. Till such time Air India went on a separate track, there was no problem. IA's JV with SATS meanwhile proceeded smoothly after agreement was reached on most of the contentious issues. The JVâ&#x20AC;&#x201D; 51 per cent for IA and 49 per cent SATSâ&#x20AC;&#x201D; was to be set up as a separate business unit offering its services to other airlines in the region. In fact SATS has similar JVs and strategic alliances in 14 airports in the Asia Pacific region. If IA had to upgrade its ground handling services it would require an additional fresh investment of Rs 180 crore to change just the 20 year old ground handling equipment. It would also require new processes to effectively function should it desire to come up to the levels of world class airports in terms of providing efficient and seamless ground handling facilities to passengers and airlines. According to the project report of IA-SATS JV the annual saving for the official domestic carrier would be Rs 67 crore. The JV was to set up ground handling facilities at Delhi, Mumbai, Kolkata, Hyderabad, Chennai, Thiruvananthapuram, Bangalore, Goa and Kozhikode. Considering that IA operated 50,000 flights a year and another 10,000 flights were being operated annually through these airports, it made perfect business sense to give the green signal to the JV. But for some strange reason, there has been serious resistance to its formation from not only the bureaucracy but also strangely from a section of the top brass at Air India. While this was surprising, it was no surprise that the leading private carrier of the day, Jet Airways, which in its public statements had

If IA had to upgrade its ground handling services it would require an additional fresh investment of Rs 180 crore to change just the 20 year old ground handling equipment. CRUISING HEIGHTS August 2005

repeatedly spoken off setting up similar JV for ground handling, was not excited about the IA-SATS bonhomie. According to sources after getting the international routes that it wanted, it is now all set for changing the cabinet laid ground rules from self-handling to handling all others apart from self! After having allowed so many airlines the green signal to begin operations with several others in the queue for the nod, the government has not created the necessary infrastructure particularly in the area of ground handling. The facilities needed at airports aside from the runway and aviation related infrastructure - include transportation in the tarmac area, service vehicles, cargo handling vehicles, baggage conveyor belts, check-in, apron handling and other passenger amenities. The hallmark of an efficient airport is great networking between various terminals with an efficient baggage retrieval system being the icing on the cake. SATS is offering its services in Changi airport in Singapore where more than 79 airlines operate more than 3927 flights each week connecting 177 cities in the world. In 2004, Changi airport received a record 30.4 million passengers representing a year on year growth of 23 per cent in passenger traffic. It handled a record 1.78 million tonnes of cargo. It may be pointed out here that in a small city-state like Singapore, the Changi Airport has three ground handling agencies offering its services. These are SATS, Changi International Airport Services and Swissport which commenced its operations only in March 2005. Swissport was issued the third ground handling license to foster greater competition. What is happening in India is perhaps the exact opposite: bleed competition to death through inordinately delay in clearances so that favourites can get what they want.

Waiting for the policy

Praful Patel is categorical that the IA-SATs deal is not being derailed. `` We are not just busy with a single issue in the Ministry. There are scores of issues that occupy our attention, IA-SATs is just one of the many. But you can be assured that we have no intention to stop IA from getting into the ground serves operation. It's just that we want to take a holistic view and the new civil aviation policy will help us do that. It's just a matter of a few weeks. `` But why should the deal be held up for the new aviation policy? Apparently the new policy is expected to throw open the entire field to everyone-the public sector behemoths as well as the private carriers. What in effect that would mean is that Jet Air or Air Sahara will be on the same footing as say Indian Airlines or the AAI which have been empowered by the government's own decision to go a head with their options in ground handling. As and when that happens, it is evident that the private players will make a beeline for the same companies that IA and AI have approached for their own collaborative agreements. If the IA-SATS agreement does not go through till the time the policy is enunciated then clearly Singapore Aviation Transport Services are absolutely free to look for a new collaboration under the new guidelines once they are announced. Insiders in IA who had worked hard to push the deal are non-committal on what will happen to the deal. Some of them believe that the core competency of the airline is really running a top quality aviation company and in the wake of the stiff competition would it be wise to go for this collaboration and expand their basket? Many of them had pushed the deal when it was first crafted but seemed to have developed second thoughts of late. There are others, though, who believe that if IA has to really be a mean player in

We want to take a holistic view and the new civil aviation policy will help us do that

the aviation scene then there is no option but to go for a bouquet of world-class services that includes ground handling. At Rajiv Gandhi Bhawan there is sceptism about the whole project. But there are not clear answers to why IA or AAI shouldn't be allowed ground handling and why should the private players be also allowed to join the field. There is also a sneaking suspicion in many quarters that the old warhorse, Naresh Goyal is very very keen to get into the business and he could be causing some problems to the deal. When he went to the markets earlier this year, Goyal announced in his prospectus that Jet intends to get into ground handling. That option could be available to him very soon when the new policy is unveiled. And he could then be flying in 737-800s to Singapore for a tete a tete with SATS for the deal that IA has been trying so hard to Q win.

ADVANTAGE IA: One great advantage that IA has is its network and its fleet of Airbus 320s.Most private airlines operates the 737s that has a cargo constraint. A larger network is a bigger revenue for ground handling. Notwithstanding the importance of ground handling and the way things are happening in well known international airports, the story of IA-SATS makes sad reading. After 18 months of serious negotiations on various issues including the re-deployment of IA's ground handling personnel, there is no light at the end of the tunnel. In early March 2005, IA board met to approve the formation of IA-SATS JV. This was a prerequisite before the cabinet note could be moved to obtain all approvals for the JV to take off. On May 11, at the Parliamentary Consultative Committee meeting of the Ministry of Civil Aviation, Rajya Sabha member and promoter of Kingfisher Dr Vijay Mallya sought to know the status of the long pending proposal for a JV between Indian Airlines and SATS. According to the minutes of the action taken report of that consultative committee meeting circulated on July 11, 2005 meeting of the next consultative committee the Civil Aviation Ministry said the following: “In March 2003 the government had decided that ground handling services at domestic airports will be performed only by three government agencies - Indian Airlines, Air India and Airports Authority of India. The government also allowed these three

Jet Airways, has in its public statements repeatedly spoken off setting up similar JV for ground handling, was not excited about the IASATS bonhomie. CRUISING HEIGHTS August 2005

assigned agencies to form JVs after obtaining security clearance from the government with foreign private players to reap the benefits of their expertise and experience. Indian Airlines is therefore working out JV arrangements with SATS, Singapore to tap the huge market potential. Detailed meetings were held with SATS in the month of June 2005 for updating financial projections and to discuss JV agreement drafts for taking the collaboration forward.Cabinet approval for formation of a subsidiary of IAL for ground handling services is being separately obtained. In order to give due focus to increasing ground handling business, Indian Airlines Board in its 65th meeting held on March 27, 2005 decided to establish a wholly owned subsidiary company, IAL Airport Services Ltd (IALASL) to carry out complete ground handling comprising Terminal handling, Ramp handling, Security, Operational flight plan filing and incidental work, Cargo handling etc. Necessary Government approvals for “operationalisation of the company are being obtained.” Strangely, number of things happened in between which seemed to have been glossed over by the Civil Aviation Ministry and not shared with the members of the Consultative Committee. For instance, at a board meeting held three weeks before the March 27, 2005 IA Board meet which approved the setting up of wholly owned subsidiary, the representatives of the Ministry and Air India raised certain issues. Air India Chairman and Managing Director V.Thulasidas while absenting himself from that Board meet sent a letter approved by Civil Aviation Ministry demanding to know

COVER STORY as to why Indian Airlines did not invite Expression of Interest from various prospective JV partners before it finalized the deal with SATS. At the Board meet, IA was grilled for allegedly violating the CVC norms in not inviting EOI. The then CMD of IA, Mr. Sunil Arora along with the Additional Secretary and Financial Advisor in the Ministry of Civil Aviation met the CVC Mr. P.Shankar. The CVC was handed over the letter of from the AI Chairman with a request to know if the procedure followed by IA was violative of CVC guidelines. After about ten days, CVC wrote back to IA Board that there was absolutely no violation of any of its guideline in the decision not to invite EOI. After all Mr. Shankar knew more of such process having himself been earlier Secretary, Ministry of Petroleum. For instance, leading PSUs like ONGC, ONGC Videsh, IOC, OIL have all been signing JVs with many foreign oil companies to prospect for oil in various parts of the world. Just a few days back ONGC publicly signed an MOU with L.N.Mittal a London based NRI and steel king of the world to prospect for oil in the CIS countries because of his contacts in Kazakhstan where he owns a steel mill. Surprisingly, L.M.Mittal has no experience in either oil exploration or transporting such energy variants. In contrast, SATS is a leading global ground handling agency with rich experience. Therefore no wonder the CVC wrote back stating that there was no wrong doing or any violation of its guideline when IA signed SATS as its JV partner for the proposed ground handling venture. Further CVC said it would be left to the IA Board to decide as to how it should go about. But what Air India failed to inform the CVC was

It may be pointed out here that in a small city-state like Singapore, the Changi Airport has three ground handling agencies offering its services.

A SCENE OF THE PAST: Such baggage clearance will become a thing of the past. Inbound or outbound-there will be a greater fluency of operations

its own MOU with Lufthansa to not only provide ground handling services but even engineering facilities. When Lufthansa failed to fall for Air India and withdrew stating the Maharaja's workers productivity was just about 25 per cent of international norms, Air India in reverse swing told the Ministry that if Indian Airlines was allowed to go ahead with SATS JV it would spell disaster for the Maharaja. It therefore alternatively wanted that Air India should also be made a party to the JV which has been declined by SATS. After all SATS first approached Air India and after it was rejected as a suitor it went to Indian Airlines and spent 20 critical months in settling various issues before the IA Board took its crucial decision on March 27, 2005 as stated in the action taken report containing the minutes of the May 11 Parliamentary Consultative Committee meeting. But that wasn't the end of the story. The Ministry directed Indian Airlines to refer the issue to the Solicitor General. While CVC is a constitutional body with only Parliament having the power to impeach it, the Solicitor General's office did not have the status or should we say status far lower than a constitutional body like CVC. The Solicitor General in a long response — after going through all the papers — told the Ministry of Civil Aviation in unequivocal terms that Indian Airlines had not violated any procedure and was perfectly right in concluding a JV with SATS for a Ground Handling unit. Four months have elapsed since Indian Airlines Board decided to set up the JV on March 27, 2005 but no pro-active action has been initiated by the Government to take the process forward. The motto of the story is “Divided We ■ Stand and United We Fall”.

SPECIAL REPORT

CRUISING HEIGHTS August 2005

Water water everywhere

In all these years, Mumbai airport has never been closed to traffic. It finally happened in July end when the deluge in the city left the airport flooded and flights had to be cancelled for a good 48 hours. There was all round criticism of the Civil Aviation Ministry that has put modernization on the fast track, but failed to look at issues that concern day to day operations at our airports. The AAI was also on the mat for its performance. An inside report by K Srinivasan on what really went wrong.

WATER WORLD: A Panoramic view of Chatrapati Shivaji International terminal two days after the deluge that flooded Mumbai. CRUISING HEIGHTS August 2005

t was sometime last year, soon after he took over Civil Aviation Minister, that Praful Patel gently arm twisted the Airport Authority of India (AAI) to allow two nallas to run through the perimeter of Mumbai Airport. For years AAI had said no to the proposal fearing an overflow of the sewage and water on to the runway in case of poor maintanence.It had been a long standing bone of contention between them and the BMC (Bombay Municipal Corporation).But Patel said they had to do it and they finally acquiesced. The results of that nalla link through the airport came home with horrific conse-

quences in July when Mumbai experienced unprecedented rains for close to 48 hours. The Mithi river that runs just beyond the airport (it’s a travesty to call it a river. That was finished long back. Its actually a poison heap of garbage, waste made worse by the water that trickles in) was choked. The nallas got completely choked and the result was that for almost a whole day Santa Cruz airport (now called Chatrapati Shivaji terminal) looked like a vast pond with garbage and muck floating in the water. Like the rest of Mumbai, the airport too was shut. What made it worse for the AAI was the fact that the terminal is located in one of the lowest lying areas in the city—the Santa Cruz-Ville Parle area-that was inundated within hours of the marathon downpour. To make matters worse, the authorities couldn’t even think of finding ways to get the water off the park for everything around the airport was already inundated.Infact,the slum shanties on one side, the choked nallis on the other only made matters worse-everything was flowing into the airport runway and the open taxiway areas. “We were aware of what was going to happen once the deluge started. But there was nothing we could do. The Mithi River is a sewage dump for years and the slumbs on the slopes have only blocked all the drainpipes around the airport. That’s one reason we didn’t want the nalla to go through the airport, “ said one top AAI official in Mumbai who declined to be named. He added that all the while, as the water level rose, they saw with alarm key landing equipment getting inundated.” Slowly the disaster unfolded in front of our eyes, but we could do nothing,” said the officer. It was much worse at the old Juhu airport which is even lower lying than the main ter-

A TOTAL LOSS: The scene out the old airport at Juhu where the damage was much greater. The AAI suffered huge loses as did Pawan Hans which used the airport as its main operational base.

CAUGHT IN THE MUD: On day two when the airport reopened, an AI jumbo overshot the runway and brought operations to a grinding halt again.

minal. The water started creeping into the hangars and the AAI staff quarters. There was nothing that could be done. the downpour was continuing unabted.With every drain pipe flooded and choked the water made its way to the open spaces-the vast open airport was just the right place.” We had a huge problem on our hand. There was severe pressure to get the main airport operational. The Bombay high fire only added to our woes, “ said one officer. The worst hit at Juhe was Pawan Hans that lost a helicopter at the Bombay High fire and several in the airport flooding. “ Juhu is our key operational base in Mumbai. I can only say that the floods have impacted us. I am yet not in a position to go into details. “said Pawan Hans CMD Sridhar. AAI Chairman K Ramalingam arrived in the city to oversee operations. “ It was tough, the instruments were out of operations thanks to the water logging and there was no stopping the rains. But ONGC Chairman Subir Raha had to land in Mumbai and we made sure he arrived safe at 4 am in the morning, “

“It was a mircale” Q: What was the reason for the flooding of Mumbai Airport? There is a feeling that there was laxity on the part of Airport Authority of India? A: The fury of the monsoon over Mumbai has been so severe this year that whole of Mumbai city was inundated causing enormous damage to life and property. Clearly, Mumbai airport area -Santa Cruz is a part of the city— obviously could not have been an exception. to nature’s fury. One has to acknowledge that the airport was flooded. The main problem at the Airport was the water drainage from the nallas running through the airport could not be an effective because of the outlets maintained by the BMC (Bombay Municipal Corporation) got chocked. Also, it is important to note that the Mitti River has become shallow because of continuous dumping of malba (waste material and garbage) on it. Moreover, Mumbai Airport being close to the sea, the high tide also aggravated the situation. This in short is how the Airport got flooded. There is absolutely no question of any laxity on the part of AAI. Q: Why were no preventive measures put in place to meet such a contingency? A: At a coastal Airport like Mumbai, we undertake rigorous pre-monsoon preparations which include cleaning of the drains (nallas) running through the airport to ensure free flow of water. Despite, our best of efforts, the rains played havoc at the Airport. But don’t forget, it rained and rained and Mumbai had seen nothing like this in a 100 years. At the same time you must appreciate the strength of AAI that in a little over 24 hours time the airport was back in operation. This was nothing short of miracle. You will also recall that during the Tsunami while the whole world was struggling to fight the disaster, the AAI technical personnel went beyond the call of their duties to help the naval authorities to make the devastated Port Blair airfield operational in record of time. We always do have contingency plan to deal with emergencies. But to talk of such plan to deal with calamity, I am afraid, would be too much. Q: What has been the loss to the AAI in this episode of flooding? A: Well, loss will work out to be enormous if you take into account everything. Beside the loss on account of traffic revenue if one computes, the losses in respect of properties, equipments, machinery and men-hour, it is huge. In monetary terms it will run into crores(according to a rough estimate the loss is believed to be in the vicinity of Rs 100 crores and does not take into account the loss to other organizations like scheduled carriers or the Pawan Hans) Q: Could you please elaborate on the loss

WET HANGAR: Even the hangars couldn't escape the wrath of the rain Gods.

We learn with each exoerience.And this calamity has taught us how to keep ourselves better prepared for such eventualities,howsoever rare they maybe. and how do you hope to recoup it? A: A number of electrical installations such as sub-stations, electrical distribution network, generators etc. were totally lost during the floods. While some of these equipment can be repaired, most of them need replacement. Also the communication, navigation and surveillance equipment such as Instrument Landing System (ILS), VOR, DME which were in the air field were totally rendered unserviceable and beyond repair. These equipments need to be replaced. The equipments HF(high frequency) transmitters, NDB installed at the transmitting station totally submerged under flood and were damaged. Spare units from other airports were brought installed and the CNS facilities were commissioned. Also units such as UPS (power supply systems) for radars and other navigational units were completely damaged which need replacement. Q: What is the controversy over the runaway and the Air India accident? Pilots are saying the grip was poor on the runaway. Is it true? A: There were many comments from various quarters on runway conditions. You may recall on that day as many as 85 flights domestic as well as international including Jumbo Jets operated on the same runway where the Air India incident took place. A number of flights operated on the previous day as well. This is I only to confirm that the runway was fit and safe for aircraft operations. After the incident AAI carried out runway friction testing and I am glad to inform you that computer readout of the tests give clean chit to the runway performances. Rou-

tine checks of runway friction are carried out with runway friction test equipment (Vehicle) that is available at Mumbai. Due to floods this vehicle which was positioned at Juhu became unserviceable and another vehicle from Ahmedabad was brought in for carrying out the test. We had to carry out the test just to satisfy pilots that all was well with the runway and the grip was absolutely normal for landing . Q: How big is the loss to the Juhu Airport? How will you recoup it? A: The communication equipments, computers and other machinery at the Airport got badly damaged due to flooding. Besides these, all furniture and office records, E&M Workshop at Juhu Airport were totally submerged and damaged. Since there was heavy flood, most of the hangars were flooded resulting in damage of the smaller fixed wing aircraft, helicopters, equipments and other materials inside the hangars and office building Besides, the staff quarters were badly damaged. Employees lost a lot of their belongings thanks to the flooding.. Q: What are the reasons learnt from the Incident. A: We learn with each experience. And this calamity has taught us how to keep ourselves better prepared for such eventualities, howsoever rare they may be. In future we will take extra precautionary measures for pre-monsoon preparation in Mumbai. We also intend housing our expensive equipments at safe and elevated places. Finally, I would like to sumup saying that since we cannot change nature but we can certainly change our attitude ■ towards it.

CAUGHT IN THE DELUGE: A lone chopper at Juhu airport where the water came in a torrent thanks to the low lying nature of the area. said Ramalingam. But through the night he led the team removing key equipment for repairs. “ On two occasions the staff returned frightened because they found snakes in the rooms where the equipment was kept. I had to persuade them to come back with me to complete the job. Fortunately the snakes went off by then, “ said Ramalingam. Perhaps where the AAI erred was in not keeping key equipment like the ILS etc in elevated positions so that they were protected at all times from the fury of nature.” You can say we erred, but such rains haven’t happened in a hundred years. One prepares for eventualities, but not of this magnitutude,” said the Chairman and added: “ but we have now taking stock of the events and are preparing a blueprint that will help us maintain all airports at the same level through and through.” Civil Aviation Minister Praful Patel accepted that the loss to the AAI was in crores (infact the figure is believed to be around Rs 100 crores) but complimented the Authority for having restored operations within 48 hours. “ Why even the PM was full of prose for their work. They have done an exceptional job, “said Patel. But it was a nervous Rajiv Gandhi Bhawan that waited for the AAI to restart operations at Mumbai so that the PM could land in the city. “ The SPG checked till the last moment on the operational situation at Mumbai. They were prepared to call off the trip till the end. But we consistently told them that there was no problem for the VVIP flight to land.Infact, the only system at fault was the ILS and even that was in operation by the time the PM’s Boeing landed,” said one official. Do all these positives mean that the AAI

It portends serious trouble. The 165 shops on the Jetty Bazar, the nucleus of this settlement, have still not recovered from the vicious blows of December 26. The market appears like CRUISING HEIGHTS August 2005

has not erred? Perhaps it has in a few key areas: • Inventory: considering the severe hit they took in Mumbai, they need to keep a close watch on their inventory and stocks and spares. Key equipment must be replaceable immediately. • Cleaning: One is not referring to the nallis and the drains but to the location of their equipment. One officer said that it is opened only at those times when either equipment has to be replaced or repaired. No wonder snakes were found there. There must a regular laid down procedure for such cleaning operations. • Relocation: Key equipment must be moved to a higher location. The AAI says it is already working on that procedure. • Remove the nalla from the premises: This is easier said than done. The nalla arrived there in the first place because of political pressure. It is unlikely that it will be allowed to be closed. It can cause drainage problems again and again. • Set up a crisis management unit in house that can deal effectively with the media and airlines. There was a distinct lack of information during the 48 hours. No one knew if the airport was open, shut or on the way to being opened. Forget the ordinary passengers, airlines were clueless (To be fair to the AAI, the pilots who declined to operator from the airport talking of a slippery runway were actually adding to the pressure. They wanted the easy way out by shifting blame to the AAI) Praful Patel is candid enough to admit that each experience is a learning curve. And this one has been o different. “AAI has emerged much stronger. It will put systems in place that will ensure such events never reoccur.”■

AVIATION DIGEST

Swissport selected to trial new Airbus A380 tow tractor at Zurich Airport SWISSPORT INTERNATIONAL, is currently conducting trials of an aircraft tow tractor that has been specially developed to handle the new Airbus A380 aircraft . The 800-horsepower tractor, which is manufactured by the Goldhofer company, is being assessed for its performance and compatibility in Swissport`s day-to-day operations at Zurich Airport. Swissport is one of the world`s first ground handlers to conduct such extensive in-service trials of the new towing vehicle. While there are currently no plans by any air carrier to operate Airbus A380s to Zurich.

Qatar Airways dollops for Delhi TO CELEBRATE the launch of Qatar Airways’ new scheduled flights to New Delhi, the airline is offering a two-fold incentive to members of its frequent flyer programme, Privilege Club. Privilege Club members can earn double Qmiles for the first full month of the new service. In addition, members will receive a 50 per cent discount on mileage redemption for travel on

European Commission defends air passenger rights the Delhi route for a limited one-month period. The redemption benefits mean Privilege Club members, who normally need to redeem 20,000 Qmiles for an Economy seat, will only have to use up 10,000 Qmiles.In Business Class, the full redemption award is reduced from 25,000 Qmiles to 12,500 Qmiles after the discount. All the figures are based on travel during low season. Qatar Airways is operating seven flights a week non-stop between Doha, the airline’s operational hub and capital of the State of Qatar, and New Delhi, from July 14.The route is being operated with an Airbus A320 in a two-class configuration of 12 seats in Business and 132 in Economy. Qatar Airways currently operates 19 scheduled flights a week between Doha and four Indian destinations - Cochin, Thiruvananthapuram, Hyderabad and Mumbai. This summer, the airline has increased capacity to India with 11 additional flights a week taking the number of services to 30 across five Indian cities, including Delhi.

THE EUROPEAN COMMISSION has just launched infringement proceedings against Austria, Belgium, Italy, Luxembourg, Malta and Sweden for failure to meet all their obligations under the Regulation which entered into force on 17 February 2005 and affords air passengers greater protection in the event of denied boarding, flight cancellation or long delays. The Commission is thereby showing its determination to guarantee fair treatment for passengers in all the Member States and commitment to promoting the benefits of EU membership. "I am determined to ensure that the new passenger rights are respected" said VicePresident Jacques Barrot, responsible for transport. "All the Member States must have effective penalties which can be applied to airlines which do not meet their obligations."

El Al creates new record

HE FIRST of a total of six dedicated EL AL flights to carry North Americans immigrating to Israel flew from JFK Airport in July New York, simultaneous to the first ever such flight from Pearson Airport in Toronto, Canada. This occasion marked the largest arrival of North Americans in one day in Israel’s history of immigration. These two flights were the first of six dedicated EL AL jumbo jets to bring a total of nearly 3,200 North Americans to Israel in 2005, with the assistance of Nefesh B’Nefesh, an organization dedicated to revitalizing North American immigration to Israel by removing or minimizing the financial, professional, logistical and social obstacles of Aliyah. The organization works in close cooperation with the Jewish Agency for Israel.

Baggage woes: Men are impatient, women are worried AS THE British public begins jetting off for their summer holidays, innovative travel service flymycase.com, which send holidaymakers luggage ahead, has discovered how stressful a supposedly relaxing break can be. Waiting for luggage at the baggage counter topped the poll of stressful experiences at the airport, while other findings uncovered the travel gripes at the heart of a jet-set nation: • Men worry more about the long queue at check-in than anything else on holiday, while a third of women admitted to stressing most about whether their luggage would be lost • 45% of people have experienced lost or delayed luggage (increasing to 57% in the 55 plus age bracket)

• 1 in 5 people have experienced lost luggage and almost 1 in 3 damaged luggage • Two thirds of respondents cited the nervy wait at the baggage counter as the most frustrating part of their holiday • Men carry the most expensive luggage • The average value of a holiday suitcase`s contents is £250 - £500 (40% of respondents) • 1 in 10 people have had to part with extra cash because their luggage exceeded the maximum weight limit set by an airport • Respondents aged 16 - 24 carry the heaviest luggage, with 16 percent having to pay an excess luggage charge

From Jules Verne to 2005 TRANSPORT HAS always been the lifeblood of the travel industry - and what better time to celebrate this vital relationship than in the year that marks the centenary of the death of one of the world’s great authors and travel visionaries,” says World Tourism Organization (WTO) Secretary-General Francesco Frangialli in his message for World Tourism Day 2005. World Tourism Day is celebrated worldwide each year on 27 September, commemorating the adoption of the WTO Statutes in 1970. The main purpose of World Tourism Day is to foster awareness among the international community regarding the importance of tourism and its social, cultural, political and economic values. The WTO Secretary-General issues a message each year to mark the occasion. “Most of Jules Verne’s fantasies have yet to come to fruition. But by the time he died in 1905 his

words had fired the imagination of avid readers and potential travellers right around the globe,” Mr. Frangialli wrote in this year’s message. Perhaps it is no coincidence that the two transport inventions that are now recognized as the main instigators of modern tourism - the car and the airplane - both made their appearance on the world stage shortly before Verne’s death. Passenger transport has come a long way since the first economical air services began 70 years ago - through early jet airliners to the Boeing 747 Jumbo, to Concorde and soon the arrival of the biggest airliner ever, the double-decker Airbus A380. More and more people are travelling around the world: In 1950 it was twenty million, last year 760 million, and by 2020 it is expected that the number of international travellers will exceed 1.6 billion a year.

IACA angry at `D` tax The International Air Carrier Association reiterated its call for Finance Ministers to abort what it called the ` demagogic initiative `of development tax on airline tickets. IACA Director General, Sylviane Lust commented: “The impact of this tax on the travel market is substantially underestimated by all parties. Price is amongst the determining factors in demand, in particular for passengers of leisure airlines whose holiday represents the single largest purchase per year. Therefore any increase in ticket prices will negatively affect European demand. CRUISING HEIGHTS August 2005

IACA continues to recognise the importance of a genuine and structural development policy, but believes it is fundamentally unacceptable to use air travellers as a source of development funding. We are therefore calling upon the Finance Ministers of all EU Member States to abort this irrational initiative. Baggage woes: Men are impatient, women are worried As the British public begins jetting off for their summer holidays, innovative travel service flymycase.com, which send holidaymakers luggage ahead, has discovered how stressful a supposedly relaxing break can be. Waiting for luggage at the baggage counter topped the poll of stressful experiences at the airport, while other findings uncovered the travel gripes at the heart of a jet-set nation: * Men worry more about the long queue at checkin than anything else on holiday, while a third of women admitted to stressing most about whether their luggage would be lost * 45% of people have experienced lost or delayed luggage (increasing to 57% in the 55 plus age bracket)

TOURISM DIGEST

AT A GLANCE

A paperless future A TRAVEL AGENCY in Glasgow has become one of the first travel agencies in the UK to take advantage of updated IATA regulations, completely ditching paper airline tickets in one of its locations in favour of e-tickets, the electronic replacement. IATA`s `Simplifying the Business` strategy calls for the withdrawal of all paper tickets from travel agents around the world by the end of 2007. The organisation has updated its regulations governing ticketing locations to encourage agencies down the e-ticketing path.

Using the Internet-based MySabre booking product, the agency is able to issue e-tickets for the 36 airlines that support UK e-ticketing in Sabre, and the resulting data is reported automatically to the UK BSP (Billing and Settlement Plan). MySabre first appeared in British travel agencies late last year and has been responsible for a number of new business wins since. It is a combination of technology from Sabre Holdings and Yahoo! and combines traditional products bookable in the Sabre GDS, such as airlines,

Tourism continues

Olympics win worth £2 billion to British tourism THE BENEFIT to the UK’s Tourism industry of winning the Olympic bid will be massive, in the years before and after 2012. The Tourism Society, the national network of more than 1,000 tourism professionals, congratulated all involved in the London 2012 bid for their extraordinary achievement in winning the Olympic games for the country. The Tourism Society believes that all competitors, officials, sponsors, media and supporters who attend the Games at venues throughout the UK will be ‘tourists’. Britain’s tourism industry is cock a hoop with joy at the announcement that the 2012 Olympic and Paralympic Games will be held in London, proclaiming it the biggest ever opportunity for UK tourism.

CRUISING HEIGHTS August 2005

HERE HAS shown a continuation of the overall positive trend of 2004, with international tourist arrivals growing on average by eight per cent in the first four months, according to the recently released June edition of the WTO World Tourism Barometer. Although the excellent pace of growth of 2004 was expected to slow down gradually, for the moment rates are very similar to those seen in the second half of 2004, a year in which international tourist arrivals grew by more than 10% to an all-time record of 763 million. The first few months thus indicate that 2005 is shaping up as a year of continued recovery from the various shocks felt in the 2001-2003 period. Pent-up demand continues to be released as consumer confidence is on the upswing again and the fear factor has faded. A factor that should not be overlooked in this recovery is the stimulating effect of “tempting” offers made available by online travel services including low-cost airlines. Positive results are estimated over the first four months of 2005 for all regions, ranging from 5 percent for Europe to 17 percent for the Middle East. Growth rates registered in the second half of 2004 are being very well maintained in 2005.The current pace of growth is inevitably slower than that recorded over the full year of 2004, as this was a very atypical year. 2005 results were particularly strong in Africa (+12%) and in the Americas (+11%). Africa was the only region to exceed the trend of 2004. Due to the improvement of results in the SubSaharan part of the region, overall results for the first four months are some four points up on last year.

car hire, hotels, cruise and rail, with content from the Internet and third-party suppliers. MySabre makes all booking and destination information available in one place. This includes published and private fares, and means agents don't have to open numerous applications, switching from window to window to make a booking. This ETL offering for travel agencies is just one portion of Sabre Holdings` comprehensive e-ticketing solution. In May the company`s airline technology business, Sabre Airline Solutions, introduced an electronic ticketing product for airlines in support of IATA`s eticketing drive. Electronic Ticket Essentials is based on `open` tech-

nology that allows it to communicate with any airline`s own IT system. It enables an airline to distribute electronic tickets through travel agents, `interline` electronic tickets for e ticketing among multiple carriers, and check in passengers with electronic tickets. Sabre Airline Solutions also provides SabreSonic Ticket, a stateof-the-art e-ticketing module for airlines that eliminates the need for them to build costly systems for electronic ticket distribution and database maintenance. Using this component, airlines can connect to a universal electronic ticketing hub for cost-effective, efficient connectivity to e ticketing partner airlines.

Beijing hotels say no to disposals DISPOSABLE TOOTHBRUSHES, toothpastes and slippers, which used to be symbols of convenience and comfort in luxury hotels, will be phased out in Beijing’s star-rated hotels in a bid to save resources. Beijing’s 141 star-rated hotels have jointly announced they would reduce the daily

commodities provided in guest rooms and wash quilt covers, pillowslips, bath gowns according to guest’s requirement. These measures have been taken to advocate the concept of ‘green consumption’ to prepare for a ‘green’ Olympics in 2008.Beijing has 100,000 guest rooms with about 140,000 to 150,000 beds, and if 60 percent of them were occupied annually, there would be at least 100,000 toothbrushes to dispose everyday, which would cause big environmental pressure because they are hard to decompose, Xu said. Beijing Jianguo Group has 480 hotels under its name, and they consume 21 tons of water and washing chemicals every day. Reducing the laundry frequency will save a great deal of resources though at the starting stage of reducing commodity supplies; these hotels have received quite a few complaints.

The lion city turns forty The lion city turns forty Singapore is celebrating its 40th Birthday on 9 August 2005 with festivals, carnivals and concerts for visitors and Singaporeans to enjoy. August’s ‘Celebrate Singapore’ month includes the following events: Carnival Marina (August 6 - 14 August)’Celebrate Singapore’ opens with Carnival Marina, a massive playground for all ages, with a wide array of exciting activities and experiences ranging from concerts by the Bay and family rides, to military shows. Fireworks Festival (August 6, 8, 9, 14) Four nights of spectacular fireworks displays, accompanied by inspiring music, will wow audiences. The stunning displays, produced by teams from Singapore, France

and Portugal will be the largest ever seen in Singapore. Best of all, they will be open to the public free of charge. National Day Parade at Padang (August 9)The annual National Day Parade is being held at the historic and nostalgic location of Padang, the same venue as the first National Day Parade in 1966. On this special anniversary the theme is ‘40 Years of Nation Building’ and Singaporeans and visitors alike can enjoy an evening of show, parade and fun.

CRUISING HEIGHTS August 2005

Americans splurge plenty on spas IN AN effort to measure spa performance, Coyle Hospitality Group surveyed 2110 people, representing consumers throughout the United States. The survey covered a variety of service related issues from how many treatments are booked per visit and key enjoyment/disappointment factors to treatments requested and where spa products are purchased. The survey participators were mostly female (1899) and between 18 and 61+ years of age, with the majority of respondents in the 30-40 age category (723). Interesting findings include: - Most responses showing that on average people visit the following spa categories 1-5 times in the last year: • Day Spa (57%) • Resort/Hotel Spa (57%) • Salon (38%) • Destination Spa (22%) • Club Spa (21%) The top three reasons why people would visit a salon or spa if they are not frequent spa-goers: • Gift Certificate (989) • Coupon/Discount (792) • Gathering with Friends (557) Respondents answered that they utilized the following services at least once over the past year: * Hair Services (1890) * Nail Services (1633) * Massage services (1604)

BACK PAGE

Modi Fantasy IF AMERICAN can create a Disneyworld, why can't we do better? But what Gujarat Chief Minister Narendra Modi is dreaming of is not a Disneyworld in Gujarat but a theme park that encapsulates the Indian freedom movement or the theme of Incredible India in one single park. Modi is determined to put the park in place as his legacy for a vibrant Gujarat. He has already turned the Navratri festivities into a multi purpose celebration that encapsulates travel, tourism, business promotion and trade. Now he wants to go one further with infrastructure. But one must give credit to Modi for turning the moribund Navratri celebrations in Ahmedabad into a glitzy happening event that's hugely publicized and widely reported. And also visited by large numbers of fellow Gujjus apart from others.

Writing a book Rajiv Pratap Rudy no longer appears on chat shows waxing eloquent about the open skies policy or what he has done for civil aviation in India. Its now over a year since Praful Patel took over and in this one year the transformation has been dramatic. So, in a sense, sound bytes from the past are actually history. So Rudy is no more in front of the cameras. When last heard, the former Mantriji was seriously thinking of writing a treatise on his years at Rajiv Gandhi Bhawan.Now what all that would include one doesn't know, but we hear it will have a chapter on his face off with Indian Airlines and one on the embarrassment in Goa.Remember the huge bill that he and his family had to pay for their Goa new year merry making when the news broke in the mainline dailies and the Airport Authority of India (AAI) that was asked to pick the tab ducked for cover. Book your copy it should make for great reading.

Helping tourism Three cheers to Sanjiy Bharagava and Seher.India's number one cultural ambassador who has created waves with shows like Ananaya and Guru Manyo Granth in the capital was in London last month with Dilli Haat at the Trafalgar square. But that's where this story really begins. He later took Priti Patel and Madhavi Mudgal to Rome where they performed in the heart of the city to a rapturous reception from the citizens. By a strange quirk of good fate, External Affairs Minister Natwar Singh was in Rome at the same time and he was bowled over by the show. He has since asked Sanjeev to look at doing more such shows abroad to promote Indian culture and tourism. â&#x20AC;&#x153;The reception at Rome was simply astonishing am now looking at creating a great indian brandâ&#x20AC;? said Bhargava.

Two in one If you have seen these two fellas remember they will be in the news for the next two months. One of them is busy promoting cruises in a big way these days and the other wants a better deal for his fraternity. Both are hugely networked in the government and their own industry and have formidable political skills. Both are past masters in the tourism business and have a credible track record of their own. `` Aree bhai kya Karen,zindagi nikal gai tourism promote karte karte,``said Subhash Goyal candidly.Mayal is more circumspect and low key. He isin't as easy going with the netas as Subhash is. But is unequivocal in his defense of the rights of his brethern. A contrasting duo that together can make or mar the tourist scene in this country. No wonder anyone worth his or her salt in tourism and civil aviation listen when Messers Goyal and Mayal call. They matter. CRUISING HEIGHTS August 2005

Blunt Talk Civil Aviation Secretary Ajay Prasad doesn't mince words when it comes to the crunch. If anything he is blunt and to the point. At his presentation on managing growth in civil aviation for the foundation for aviation and sustainable tourism, Prasad made a lucid and precise speech on the ills that afflict Indian Aviation and how they can be resolved. He accepted that there were targets to be met at every turn and they only way out was to expand and grow-be it training more pilots, creating better infrastructure or preparing for the flash floods situation at Mumbai airport. And like his boss Praful Patel, Prasad is willing to make course correction. Without that option there really can be no growth.