Ch august 2008 by Newsline

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EDITOR-IN-CHIEF’S NOTE

Who wants the money?

ne of the great positives of the present worldwide crisis in the aviation business is the hard questions now being asked of the United States as far as foreign ownership of airlines go. Martin Broughton, chairman of British Airways, hit the nail on the head in an unusually hard hitting and frank interview to the Wall Street Journal: “It could be the financial exigencies of the day that finally make for a breakthrough. Any rational director of a US airline should welcome foreign investment, if it’s available.” Mr Broughton went as far as to state: “America is the biggest impediment to relaxing the aviation industry’s ownership and nationality rules. You break the US resistance and you’ve made a big breakthrough on a global scale.” But he was sanguine enough to accept that this breakthrough could come anywhere in five to 20 years. A long time, indeed, in these fast-moving times. And what could be the consequence if, indeed, US policy makers did that? In Mr Broughton’s views, it would make for a few dominant ‘global brands’ and several strong regional and local carriers. He felt that mergers within markets would only see a downsizing and lots of jobs. On the other hand, any inflow of capital would, to put it simply, recapitalise the airline and help take it to the next level. Strangely, for someone who is so passionate about the skies being really open, Mr Broughton feels that the ‘open skies’ policy, between the US and the EU, was a lousy deal really. Naturally, it unshackled the skies between the two continents and dented the BA no end. It had a virtual monopoly out of Heathrow into the US along with American Airlines (BA’s close partner in the US) and United Airlines. The BA Chairman, however, rues the fact that everyone’s got a toehold into Heathrow, but there is little dent in the US market. Another colleague of Mr Broughton, Lufthansa’s Chief Executive Wolfgang Mayrhuber is even more categorical: “This industry shouldn’t

CRUISING HEIGHTS August 2008

be treated like railroads, it should be like car makers or chemical companies operating globally,” he told journalists recently. Despite the negative perception, Mr Mayrhuber has gone ahead and bought 19 per cent in JetBlue and he clearly wants more if only the lawmakers would relent. He is spurred no doubt by the huge success of the Lufthansa-Swiss merger as well as the Air France-KLM marriage. So, is there a story in it for the Indian market? FDI (Foreign Direct Investment) regulations restrict investments to 49 per cent with a caveat: subject to no direct or indirect participation by foreign airlines and sectoral regulations. What it means is that you can have a Bulu Kansagra or a Lakshmi Mittal buy into aviation, but those with domain knowledge — who provide the best opportunity of synergising and energising our carriers — have to sit out and watch the turbulence. Why, even persons of Indian Origin (PIO), can’t invest in the business even if they have the moolah, the urge and the desire to be party to the adventure? The present crisis in the Indian aviation sector is, perhaps, an opportune time for the industry to lobby the government and the ever-receptive Civil Aviation Minister Praful Patel to tweak the FDI regime to one that has parity with the FDI regime in telecom — where the national security aspect is, perhaps, as or more important than aviation. Strangely, there have been no voices from the industry. That is, perhaps, due to reasons: they would like that their debt be financed by shareholders than one or two heavyweight investors who may ask all the ‘right’ questions in the boardroom. Moreover, if some of the players are indeed willing to lobby for the opening up of the sector, there are others who will pull them down. They don’t want someone else to overtake them. In effect, the answer is: Sweat it out, cut corners, cut routes and wait for the worst to pass. So, what do you say to that? Indian skies may be open, but they aren’t necessarily transparent!

Off the cuff

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NASA to tackle flight delays Flying just isn’t what it used to be. Between cancellations, delays, cramped cabins and airline financial woes… passengers are feeling the pinch as the industry faces tough challenges. In fact, the just-released Annual Quality Rating survey gave the US airline industry its worst performance rating in 18 years. According to a report from NASA, its researchers are working with industry and other government agencies to develop new technologies to help improve the national air transportation system. Their research is part of a coordinated effort called NextGen. A group of them recently met in Austin, Texas to share ideas and technical knowledge about the future of air traffic management. NextGen is led by the Joint Planning and Development Office (JPDO), which coordinates the research and development activities of six government agencies including NASA and the Federal Aviation Administration. Its deputy director, Bob Pearce, stressed to the crowd of 220 in Austin that the United States needs to transform aviation and air traffic technologies to keep up with the growth of cargo and passenger air travel. JPDO deputy director Pearce gave researchers one last piece of advice: don’t leave out the users of the transportation system … the passengers. “If as a passenger I can’t get information, if I don’t know what’s happening in the system and it doesn’t seem reliable and predictable to me, I’m going to end up being frustrated,” said Pearce. “I shouldn’t have to be at the airport to figure this out. I should be able to understand what the system is doing and how it’s operating from wherever I am, so I can try to plan my schedule accordingly.”

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FARNBOROUGH RAISES HOPES p22 Boeing and Airbus, the two rival aircraft manufacturers did pretty well at the Farnborough Air Show held in July this year. This was against even their own expectations, although the figures were lower than last year. Now, the mood is upbeat again.

NEWS DIGEST

The Tamil Nadu government is under pressure to modernise Chennai airport, but before anything happens, it has to take care of those whose lands are being acquired. CRUISING HEIGHTS August 2008

SPECIAL REPORT

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Travel agents are up in arms. Reason: airlines — both domestic and international — will be putting an end to their commissions from October 1 this year.

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

CRUISING HEIGHTS Editor-in-Chief

K SRINIVASAN Managing Editor

TIRTHANKAR GHOSH Consulting Editor

R KRISHNAN

CHOCKS OFF CARGO

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While the overall aviation sector in India is looking down and out, the air cargo industry is looking up. So, a number of startups are getting ready to roll.

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You can import everything but not services and that is the writing on the wall. Despite the tall claims, services is where Indian carriers are lacking.

Copy Editor

AALOK SRIVASTAV Copy Desk

BIRENDRA KUMAR Layout Artists

RUCHI SINHA PRADEEP JHA RAVINDER GUSAIN Art Director

BHART BHARDWAJ Co-ordinating Photo Editor

H C TIWARI Subscription

INTERVIEW p16

SNIPPETS

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It seems everyone is vying for the student community travelling internationally, with Air India and Jet Airways already announcing special packages.

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What if you were all dressed up to go to icy Iceland iceland but instead landed on a sunny and warm island in the Mediterranean? A cool Swedish couple, however, decided to make the best of it.

Sr Manager Mktg & Corp Affairs

Many things need to be taken care of before the Mumbai airport can be modernised and expanded well in time for the 2010 games. Frans Bouterse, Head of Airport Planning, MIAL talks about some of them.

BACK PAGE GLOBETROTTING

JAYA SINGH

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Which is the largest airport in the world â&#x20AC;&#x201D; as far as cargo volumes go? Recent rankings have shown that airports in Hongkong and Shanghai are fast taking over in the numbers game.

CRUISING HEIGHTS August 2008

NEETI SRIVASTAVA Gen Manager

RAJIV 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 4

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PERISCOPE

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Nowhere in the world have space allocations charges within airport premises gone up that steeply. The aviation industry needs a survival package for the domestic civil aviation industry. Assocham Civil Aviation Committee Chairman and CEO of Jagson Aviation JAGDISH GUPTA on airport charges in India.

Tough times Online travel agents will feel the heat when customers opt directly for websites of airlines. Many online travel agents will start adding service fee on each booking to cover their costs.

LETTERS TO EDITOR

Travelguru.com CEO ASHWIN DAMERA on the zero commission era in airline bookings.

What’s up, docs? (Cover Story, July ’08) gave a good account of the problems being faced by the airline industry, the world over. Furthermore, the cover story also pointed out the implications arising out of the present state-of-affairs of What’s Up, Docs? the airline industry. The aviation industry is “seeing the bad days” like never before. But this is not the time for the aviation industry to cry over spilt milk. As a matter of fact, it is time for consolidating the losses. The aviation industry is a dynamic industry and if it wants to continue, then it has to employ innovative and out-of-the-box thinking. Prabhu Dayal, Ajmer July 2008

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The aviation sector is bleeding and the losses are mounting by the day. The time has come for determined stakeholders to battle it out and keep their heads above the water

Illustrations: Rajeev Kumar

The air cargo story (Express majors feel the heat, July ’08) could not have appeared at a better time than this. The air cargo industry indeed, is going through a rough time. The ATF hike has left deep imprints on the industry. And it has really got to tighten its socks to pull itself out of this tricky situation. The government should step in to help air cargo operators to wriggle out from this impending crisis. Otherwise, the air cargo industry would never be able to stand on its feet again. I hope, that the government would take immediate measures. Ram Sharan, Lucknow

The column Mallyanomics doesn’t make any sense (July ’08) was a good piece to read. R Krishnan rightly suggested the flaws in the adoption of the LCC model in India. I think the time is ripe that LCCs should make their presence felt on the aviation radar in India. While the aviation industry is going through a rough patch, operating more and more LCCs in India would make more business sense, if the private airline operators take it in the right spirit. They would definitely rein in phenomenal profits in the long run. The Ministry of Civil Aviation should also set an example by itself operating LCCs so that private airline operators also jump into the fray by operating more and more of them. K Krishnan, Chennai All correspondence may be addressed to Editor, Cruising Heights, C-15, Sector 6, Noida 201 301 OR mail to cruisingheights@newsline.in

I am leaving There is not much to comment. The date when I will leave has not been confirmed yet. My assignment is coming to an end. I will not be leaving because of some other jobs. The integration between JetLite and Jet Airways is almost complete, which means that my job is done.

JetLite CEO MAUNU VON Lueders confirming that he has put in his papers to leave.

Nothing final As an airport operator, we will look at all airport opportunities in the world. But there is nothing firmed up in the case of Chicago. GMR Group CFO MADHU TERDAL on the group’s plans to bid for overseas airport projects.

Better check it It is the airlines’ responsibility to check their crew and report to us. The airline doctors who carry out the tests are authorised by us and we also carry out surprise checks to see if the system is working properly. 100 per cent checks are mandatory for all originating flights. DGCA DG KANU GOHAIN on tightening the regulatory system.

It’s deliberate! Goair will continue to be small and lean. It is a deliberate attempt to keep the staff as well as the fleet lean to weather such storms (the most turbulent times in the airline industry). There is no reason for us to keep flying all the routes even during the lean season. GoAir CEO JEH WADIA on the airlines pruning its operations.

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17 people have been killed 36 injured in 66 accidents. 550 motorists have been penalised for speeding.

This translates to one person killed every two days — and all this on the 19-km stretch between Yelahanka and the airport.

Plenty of mail! Lufthansa Cargo has sent a lovely nugget on the load factor of the mail they carry Here are the cold stats: Last year the mail amounted to over a million parcels and packages as well as over four million sacks of mail. In total, they had a weight of 45000 tons. That corresponds to the weight of around 900 pushback tractors The vast majority of the airmail is transported on the high-frequency passenger flights. About 200 postal service companies worldwide rely on the service of Lufthansa Cargo.

COLD STATS

The Bengaluru International Airport is doing just fine, but there are some staggering statistics outside the airport. The police records reveal a staggering loss of life within just the first five weeks of the inauguration of BIAL in Devanahalli:

LOOKING GLASS

“End of the LCC raj... Those were the days, my friend, we thought they’d never end...” It’s critical There will be spectacular casualties in the airline industry over the next 12 months. The financial state of the world is just about the worst I’ve ever known it. It’s getting perilously close to being worse than the 1990s. You have the perfect storm — you’ve not only got the banking crisis and the housing crisis, you’ve got the soaring fuel prices as well. One of the big American carriers will almost definitely go. Virgin Atlantic boss RICHARD BRANSON on the financial meltdown in the aviation business.

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NEWS DIGEST

CHENNAI

HEADACHE

hennai airport modernisation is at last on track, one would believe. But this may not be so if one goes by the murmurings of residents who are outside the land that was acquired for airport modernisation and building of the second runway by the state government. After the courts set aside the stay and allowed the state government to acquire the land for airport expansion, the Public Investment Board cleared the development plan of Chennai airport and work on it is expected to begin by September 2008. This would include expanding the runway, apron and terminal building capacity. In April 2007, government decided that Chennai airport would be developed to international standards by the AAI. The authority had developed a master plan and design of terminals through global architectural design competition. The state government has handed over 130 acres of land to AAI to build the secondary runway. Another 21 acres has been made available by defense ministry. The existing international terminal has a capacity of three million passengers and domestic terminal six million passengers. As part of the expansion plan, a capacity of four million passengers is to be added to the international terminal and the new domestic terminal will have a capacity of 10 million. Construction is expected by late 2010. The total cost of the project is envisaged to be Rs 1,808 crore of which, Rs 1,077 crore will be on domestic terminal and modernisation/expansion of international terminal and upgrading existing domestic and

international terminals. Nearly 80 per cent of the project will be funded through internal sources of AAI and 20 per cent through commercial borrowings. Once upgraded, the newly modernised Chennai airport international terminal will have a peak hour capacity of about 4450 passengers, 109 check in counters, 35 immigration counters for departures, 39 arrival, eight customs counters for departure and 26 for arrival, eight conveyor belts and eight aerobridges. The international terminal will peak in traffic in 2017-18 The domestic passenger terminal will have a peak hour capacity of about 5360 passengers, 99 check in counters, 10 conveyor belts, nine aero bridges and the traffic is expected to peak by 2012-2013. Hopefully, by that time, work on the planned new airport at Sriperumbudur, not far away from the present airport as a crow flies, may begin. Meanwhile, the Tamil Nadu government has classified 126.59 acres of private land identified for acquisition in Kolapakam and Mahapakam into four categories to enable AAI to take up Chennai airport secondary runway project. The state government has also fixed the purchase price of the lands acquired and wants the whole deal done by the end of August’08. Even as these developments acquire quick pace, thousands of residents on the western side of Chennai airport have begun to agitate as AAI has allegedly begun a move to acquire 1069 acres of land for the expansion of the present airport, as against the originally projected 159 acres mentioned above. AAI initially CRUISING HEIGHTS August 2008

Chennai Airport

said it wanted only 150 odd acres for construction of the secondary runway. AAI has told Tamil Nadu government that it required 1069 acres to build a parallel runway as the 159 acres land just being acquired would be only for secondary runway. AAI is in the process of sending notices to home owners, residents in these areas stating their properties would also be acquired. Residents are asking if AAI did not have any plan to build a second parallel runway and nor did it submit a proposal to this effect to PIB which only cleared the 159 acre based secondary runway, why this new round of “harassment.” One resident said that he even had a clarification from AAI planning department through an RTI inquiry that “AAI has applied for clearance to PIB and Ministry of Environment for extension to the secondary runway and not for the construction of a new parallel runway.” But will these protests matter? Perhaps not. It may be recalled that even earlier when residents got a stay from Madras High Court, they said when they built their homes on the 159 acres of land now being acquired, AAI had then issued clarifications to them that their land will not be required for Chennai airport. The opposite happened. As for Tamil Nadu government, can it be seen to be delaying? Of course not, considering that Kochi, Bengaluru and Hyderabad have all brand new airports. Not only that, congestion at Chennai is even forcing many foreign carriers to choose either Hyderabad or Bengaluru.

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NEWS DIGEST

POLITICS AND AIRPORTS

olitics and obstructionism have never been away from public or private sector projects. And if it is an infrastructure project like airport built either independently by a PSU or in PPP mode, the problems multiply as one finds it happening in the new Bengaluru International Airport Limited (BIAL) and the proposed Chennai airport by AAI. We don’t know if what is happening today is mere posturing or will it indeed lead unnecessary cessation of work. After the BJP government took over in Karnataka, the State Minister for IT and Biotechnology, Katta Subramanya Naidu, who is in charge of Bangalore North, expressed displeasure at the kind or lack of amenities available at BIAL. He charged that no seating arrangement, for people waiting to receive passengers and even for police and other staff were available, He specifically charged there were very few toilets. Naidu thundered “in the context of poor facilities at BIAL and the distance between the airport and city, it is time HAL airport is reopened for passenger aircraft.” The minister’s provocation was the allegation against the airport management made by a former minister and now a member of opposition DK Shivakumar. Obviously, the minister would not want to let go an opportunity like this, considering that the airport work was done during the former chief minister HD Kumaraswamy’s time, disregard of the fact that BJP shared power with him but was left in the lurch when its turn to rule came. The minister has stated that Karnataka government is a partner in the international airport and therefore has the right to demand adequate facilities for passengers and others. A legislative committee has been constituted at the instance of the vociferous demand by Shivakumar on the floor of the assembly. There is certainly some truth in what the minister said, should you consider yourself as a person coming to BIAL to receive your close relative — say child or wife or elderly parents who may not be able to travel back to the city on their own. It costs a neat Rs 650 for a visit to the city from the airport if you are residing in the Malleswaram area, which is very near where Meridian and Grand Ashok Hotel

Bengaluru International Airport and (below) the facade of the airport

and the golf course is situated. But if you are in the area near the old HAL airport or say Leela Hotel, then the call taxi would charge anywhere between Rs 750 and Rs 800 one way. And since you have to take a taxi from home to receive your near and dear ones, you will end up paying any where between Rs 1,200 and Rs 1,500. Not just this. Many of our journalist colleagues have written that much has been made of the travel time from the city to BIAL. They have said it takes only 70 to 80 minutes. But what they have failed to mention is, from which point in the city. The airport is about 45 kilometers from Meridian Hotel on the Bellary Highway. Except for a small stretch, the highway is very fine. But when you are on the other side of

Montek Singh Ahluwalia

Isher Judge Ahluwalia

Bengaluru, negotiating through the absolutely messy city traffic can make even the most liberated soul mad. It took us about 50 minutes to reach the

CRUISING HEIGHTS August 2008

airport from Malleswaram on a Saturday morning when there was no traffic. But when one drove from the airport to Maratahally, the distance took nearly 120 minutes. It depends upon what you are looking at — half empty or half full bottle! Another interesting aspect of the airport is that most flights stop at the tarmac and ferry passengers by buses operated by the contracted Ground Handling Agents: Ground Global or Air India — SATS. You don’t see even one private airline bus which you see in all other airports. The Ministry of Civil Aviation has also drawn the attention of the BIAL management to upgrade facilities to meet rising traffic to Bengaluru. A highlight of the airport was on August 3, 2008 when Deputy Chairman Planning Commission, Montek Singh Ahluwalia and his wife Isher Judge Ahluwalia took a complete round of the BIAL terminal before emplaning a Kingfisher/ Deccan flight to Hyderabad. Montek seemed quite impressed.

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NEWS DIGEST

SHRINKING AND EXPANDING

INFRASTRUCTURE NEWS

hile every foreign airline, including Air India, is cutting flights to several foreign stations, India as a destination continues to be attractive. This is irrespective of the fact that Indian public and privately owned airlines have reduced frequencies and also withdrawn from stations in the domestic sector, which they were overzealously connecting till the fuel price hike forced them to ground their flight frequencies. Every foreign carrier which has slashed services to other parts of the world is actually wanting to increase their frequency to India. Be it the SIA, Lufthansa, BA, Emirates, Etihad, etc. In the very near future, RAK airline from Ras-al-Khaimah, Air Asia have planned to fly or expand their services to India. Garuda from Indonesia is also planning to fly into India soon. Even Sama from Saudi Arabia will be arriving in India shortly. In contrast, our own Air India is contemplating seriously to cut many services to save an estimated Rs 600 crore. For instance, Air

India is cutting the India-UK-US sector and instead will fly terminator flights between India and UK and India and the US direct or non-stop. Air India will stop flying London-New York, a virtual grandfather right it got in the early 1961. Air

Second PHHL helicopter for Lakshadweep Pawan Hans is providing a second chopper for the Lakshadweep Administration’s emergency requirement, including, maintenance of law and order and inter-island services for five years. The helicopter will be stationed at Kavaratti. Over the years, maritime activity in the region has increased and Lakshadweep has developed as a major maritime area. Distress calls are often received from ships and crafts for emergency rescue operations. The existing helicopter is not sufficient to attend to such emergency rescue operations from distressed maritime crafts, as it is usually under deployment for other commitments. The second helicopter will be a Dauphin N3 helicopter at the existing lease rates of PHHL and will be provided for a period of five years initially, which may be extended beyond that period, if required.

Bids for north-east regional air carrier As many as three airlines, including, Air India subsidiary Alliance Air, have bid for a government tender to operate

India also wants to withdraw from Osaka, Seoul and some African stations. What is of greater significance is that even as more foreign airlines are reaching out to India, Air India is signing off from stations which these foreign airlines will

a dedicated regional air carrier for the north-eastern states. “Three airlines have participated in the tender for the regional airline,” Minister for Development for the North-eastern region, Mani Shankar Aiyer told the media. Other than Alliance Air, two other companies, Universal Empire and Ace Airlines, have submitted Mani Shankar Aiyer offers to set up the new airline. Under terms of the contract, the new dedicated regional airline will be expected to start operations by the end of the year. The winning bidder will also be eligible for subsidies from the North Eastern Council. Guwahati will be the hub of the regional airline. Currently, the region boasts of 11 operational airports, including Dibrugarh, Tezpur, Jorhat, Silchar, Dimapur, Imphal, Agartala, Aizawl and Bagdogra. Another 12 new airports are expected to become operational by the end of 2008. At least 25 new airports are expected to come up over the period of the 11th Five Year Plan. By the end of 2009, the Ministry for Development for the North-eastern region (DoNER) visualises as many as 400 flights connecting the region every month.

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connect from various points in India. What does it mean? Is there no fuel price hike in India or is it that the international air traffic from India continues to expand and in the process is more than enough to offset the fuel price hike? While fuel price rise in the international sector has not reflected so much on actual fare hike, continued buoyancy of Indian travellers wanting to fly abroad has not waned. This business of withdrawing from certain sectors and trying to recover revenues from other over-crowded sectors can only spell greater disaster for Air India. Apart from all the carriers in the Gulf, like Emirates, Etihad, Air Arabia, Gulf Air, RAK etc, India’s own Jet Airways and JetLite have started services to Dubai, a cash cow from Air India and Indian Airlines in the good old days. Soon, Kingfisher will also join the party. So, what we might see is, while on the one hand there will be voluntary withdrawal or cut of routes, on the other, some airlines may be forced out of these sectors. A crowded Indian airspace even forced BMI to withdraw from India. Will similar thing happen in the India-Gulf and India-South East Asia sector? The situation has become so bad that Kingfisher Airlines, which had even unveiled plans to fly direct India-US (Bengaluru-San Francisco) has now decided to abandon it. It had also bought five Airbus A340-500s for

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the long haul-non-stop flights. The latest we have heard is that Kingfisher has sold two of its A340-500s to Eric Air, a new start-up in Nigeria. This airline has deep pockets according to industry sources. Coming back to the Indian international traffic, DGCA figures show that during April-June 2008, international traffic continued to grow rapidly. It was as high as 20 per cent in Kochi. Chennai recorded an increase of 13.3 per cent in international traffic and Delhi registered a rise of eight per cent. On the other hand, domestic traffic actually fell compared to last year. The declining airline market has forced many domestic carriers to go back to their roots. Recall those days of apex fare and desh-videsh? Jet Airways has once again introduced 21-day advance apex fare while Air India already has a seven-day advance purchase scheme, besides the spot fare and Desh-VideshDesh scheme to encourage its passengers to record points and use them on domestic-international sector. After the LCCs arrived, even full service carriers began offering fare cut and in the process, it was only the full fare paying passengers who gained mileage points as part of the FFP. With airlines themselves reducing the frequency of their flights following the fall in frequency of passengers repeating their flights, something new had to be invented. But instead

Industry slump grounds career of trainee pilots As airlines cut back on expansion plans and battle lower occupancy and rising costs, the roughly 1500 trainee pilots awaiting jobs opportunities in India have virtually been grounded. Pilots were in great demand just a year ago and a trained one could easily fetch a starting monthly package of Rs 2.5 lakh onwards with some additional perks. However, rising fuel prices have changed the entire scenario. To fight the slump, the aviation industry is cutting costs with a vengeance. It has virtually stopped fresh appointments to control its wage bill, which is the second highest operating cost after fuel. Airlines have delayed delivery of 50-60 new aircraft this year. This fleet would have absorbed around 1000 additional pilots, but the looming bleak scenario in the industry may not help these fresh pilots get job offers. Shortage of skilled crew had resulted in a steep rise in the salaries of pilots as growth in the aviation industry took off in the past four years (between 2003 to 2007). A pilot’s salary varied from Rs 2.5 lakh to Rs 8

of new, the airlines are seemingly falling on old ideas. In a situation like this, Jet Airways has come out with surprisingly pleasing results. For first quarter April-June 2008, Jet Airways recorded net profits of Rs143 crore against Rs 30.88 crore in the same period of 2007. In keeping with the current market trend, where international traffic out of India is gaining on a comparative basis and domestic traffic falling, Jet Airways’ domestic operations accounted for 52 per cent ( Rs1,409 crore) of its total revenue compared to 72 per cent in the first quarter of April-June 2007. Its international operations rose to 48 per cent in Q1 ‘08 compared to 24 per cent share in Q1 ‘07. The total income from international operations was higher by 46 per cent at Rs 2,899 crore. However, Jet’s 100 per cent subsidiary JetLite continued to make losses and its Q1 ‘08 net loss was Rs 134 crore (against a net loss of Rs 106 crore in Q1 ‘07). Reduction in capacities and increase in fares or surcharge have improved the situation for Jet as for other carriers. May be, this means that fare hike and cut in services have actually resulted in higher or improved yields in the domestic sector. Is it not some kind of irony that the cut in domestic sector frequencies may actually be helping few domestic carriers. But then, it is not that rosy for other

lakh depending on the experience. Demand exceeded supply till last year and every fresher was recruited by the new airlines. But now airlines are fighting cost increase by utilising their current manpower. The current crisis in aviation has led to a mismatch of demand and supply creating a glut in the market. A huge surplus in the number of pilots is expected and will keep the market bleak for the next two years. As the demand for pilots dips, training academies are also feeling the impact. It costs approximately Rs 16 to Rs 25 lakh to churn out a fresh pilot with a mandatory flying experience of 200-hours and an additional 25-hours of multi-engine rating. While demand for fresh pilots has come down drastically in recent times, serving pilots still draw huge salaries and are the highest paid in the airline hierarchy.

California ‘Prince’ dupes aspiring pilots More than 100 Indian students in California have been left high and dry after a flying school in which they enrolled virtually shut shop leaving behind debts all round. The students, who shelled out about $40,000 each in the hope of finding jobs as pilots in India’s booming civil aviation industry, were evicted from their accommodation after officials in Merced County — where the school is located — pleaded their inability to continue water and electricity supplies to the building unless the school settled outstanding utility bills. In addition to the Indians, the school has a sprinkling of Japanese, Sri Lankans and Americans, who are in the same boat. “Prince” Singh, whose real name is Manpreet Singh, has

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NEWS DIGEST carriers. For instance, SpiceJet has decided to freeze its fleet strength at 15 in 2008 and rase it to 16 in 2009 as against the original plan to have 23 Boeing aircraft. Spice has begun to look for airlines that may take its aircraft on lease, for example, new upcoming Air Nepal in Nepal. It is also looking at others in Europe. What a strange situation that one year ago no aircraft was available for love, money or lease. Today none wants them on lease etc, unless it is an exchange of old aircraft for a brand new fuel efficient aircraft. According to UK based Official Airline Guide (OAG), an international aviation data firm, global airlines will be offering seven per cent or 59 million seats less in the last quarter (October, November, December) of 2008. The cut has been severest in the US which is almost equal to one-third of the original size. Asia is also seeing a 13 per cent fall in capacity which according to OAG is a three year setback to growth. Obviously this will have a serious impact on the airport finances, both in terms of would be investors wanting to look at new airport or expansion of existing airport and also airport operators like GMR etc. For instance, GMR is already finding that its forecast revenue stream in the Delhi International Airport has gone awry and that it may record Rs 30 crore less in revenues during current fiscal 2008-09.

BETAAL AGAIN!

o, what will happen to the massive programme for modernising 35 non-metro airports by AAI in PPP mode? So long as the left was with UPA, it managed to stall machinations of those in the Planning Commission and Ministry of Civil Aviation and made it clear that only AAI will be responsible for building, maintaining and managing the airport terminals in these non-metro airports. As for the private sector, they were to be only across the city side road for developing car parking, hotels and other facilities. Instead of arms length, AAI managed to get a “road’s length” between itself, its terminal and the private part of PPP. This was evident from the suspension of any decision on the already tendered job for Udaipur and Amritsar. Now that the Left is off UPA’s back, will Praful Patel oblige? May be,

May be not. At the height of the fight between Ministry of Civil Aviation (MoCA) and Planning Commission’s first ever DIAL and later, over nonmetro airports by AAI, many contentious issues came out in the open. MoCA on non-metro accused the Planning Commission officials of having changed the minutes of the meet-

been described in the local media as the husband of Reny Kozman, Vice-President of the American School of Aviation. The school’s website displays logos of Air India, Indian, Jet Airways, IndiGo, Spicejet and Kingfisher Airlines, among others, giving the impression that these airlines in India have an association with the American School of Aviation. But the fine print, which is often not read by unsuspecting potential students or their parents, has a disclaimer that the display of these trademarks “does not imply any affiliation with these airlines nor implies that graduation from the American School of Aviation guarantees employment by these airlines.”

Aviation slump squeezes AAI’s revenues

Rajiv Gandhi Bhawan

Closure of its airports in Hyderabad and Bangalore, coupled with slowdown in the aviation sector, has made the Airports Authority of India (AAI) jittery over revenue collection in financial 2008-09. In 2007-08, it collected Rs 4,000 crore and now the authority feels that even meeting this figure would be good enough in this turbulent year, when record oil prices have put a question mark on airlines’ survival and pulled down growth rate of domestic passenger traffic. Airport developers’ revenues come from two main areas — aircraft movement and passenger fees — both of which have drastically fallen and are likely to impact their bottomlines. Private developers like GMR and GVK are also impacted by this slowdown. While they were entitled to raise airport charges by 10 percent this year, the aviation ministry has not allowed that

so far because of airlines’ poor health. What makes AAI’s case worse is that Hyderabad and Bangalore have got private airports, so stopping the revenue stream from these two projects worth Rs 3,400 crore have to be implemented this fiscal as part of the Rs 12,500 crore to be spent on building infrastructure during the 11th Five Year Plan. Unlike private developers, the government has not allowed AAI to charge user development fees (UDF) from passengers to part fund new infrastructure projects. The cloud over earnings has already forced Airports Authority of India to scale down some projects, especially those planned in smaller cities. For instance, Vijaywada is getting a longer runway that can allow an Airbus to operate from there but the new terminal building has been put on hold. A temporary

CRUISING HEIGHTS August 2008

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1. IN HAPPIER TIMES: Sonia Gandhi, UPA Chairperson with Union ministers and Left leaders at a function, on the comple tion of four years of the UPA government, in New Delhi on May 22, 2008. 2. FROM OUR FILES: Civil Aviation Minister Praful Patel addressing the gathering at the foundation stone-laying ceremony for the new integrated terminal building at Madurai Airport in Madurai, on April 26, 2008. Union Minister for Shipping, Road Transport and Highways, T R Baalu and Tamil Nadu Chief Minister M Karunanidhi are also seen.

ing of the Inter-Ministerial Group (IMG). It was even clarified by MoCA that only AAI will be responsible for the terminal work and management in

the PPP for non-metro airports. It now appears that the Betaal has again climbed the tree (or should we say ATC Towers) as forces are now

structure could be made instead of the proposed terminal.

Mangalore airport tops satisfaction survey Customers have ranked Mangalore and Jammu airports high among the 25 domestic airports in the country in a customer satisfaction survey conducted recently. Spectrum Planning (India) Ltd (SPIL) conducted the survey for the Airport Authority of India (AAI) in February and March this year. Both Mangalore and Jammu airports secured 86 per cent satisfaction score in the survey. According to the survey, the overall customer satisfaction index (CSI) of Mangalore Airport at Bajpe is rising. The satisfaction score in the first round was 75 per cent, it shot up to 82 per cent in the second and 86 per cent in the third round.The survey covered aspects such as quality of food, car parking facility,

Mangalore Airport

once again assembling to deliver a lethal blow on AAI and its dreams to build operate and own the terminals in non-metro airports.

shopping facility, behaviour of staff, general comfort, adequacy of seating arrangement, general aesthetics of airport, cleanliness, illumination, phone and banking facilities and so on.

Global Vectra to start shuttle services Global Vectra Helicorp Ltd (GVHL), intends to venture into helicopter shuttle services between airports and cities to ferry commuters wishing to avoid choked roads. The company has plans to start the full-fledged services from the airports of Mumbai, Bangalore, Mysore and Kolkata by the end of current fiscal. It will start the test ferry service from Kolkata airport in the next quarter. The fare is likely to vary from Rs 4,000-5,000 per trip according to the distance. Global Vectra Helicorp has purchased two Bell 412 helicopters for $15 million and has submitted papers to the government to obtain necessary clearance to start the service. The company will either build its own helipad in the cities or will use the existing private helipads on a rental basis. It is also discussing leasing of helicopters with various companies that include US-based Bell Helicopter Textron. Its fleet strength of 22 makes Global Vectra one of the countryâ&#x20AC;&#x2122;s largest helicorp service providers. Its main base is located at Juhu, Mumbai, and it has a presence in Bhubaneshwar, Vishakhapatnam, Rajamundry and Pondicherry. Analyst said demand for private air services is expected to grow 50 per cent a year as rising car ownership and a lack of investment in infrastructure adds to gridlock in Indiaâ&#x20AC;&#x2122;s cities.

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GLOBETROTTING

AT A GLANCE

Hallelujah, brothers

Faking an airline READERS OF THE Philadelphia Inquirer and Philadelphia Daily News opened their papers a month back to see ads for a new airline called Derrie-Air, which purportedly charges passengers according to their weight. But the new carrier will never get off the ground. It was a one-day advertising campaign about a fake airline by Philadelphia

Media Holdings, the papers’ owner, and Gyro ad agency. The ads direct readers to the Web site h t t p : / / w w w. f l y d e r r i e air.com. Philadelphia Media Holdings spokesman Jay Devine said the goal is to “demonstrate the power of our brands in generating awareness and generating traffic for our advertisers, and put a smile on people’s faces.”

IT SEEMED LIKE an almost literal answer to their prayers. When two New Zealand pilots ran out of fuel in a microlight airplane, they offered prayers and were able to make an emergency landing in a field — coming to rest right next to a sign reading, “Jesus is Lord”. “Grant Stubbs and Owen Wilson, both from the town of Blenheim on the country’s South Island, were flying up the sloping valley of

God wants me to fly!

Funny and not so

funny! O

ffbeat airline promotions hit a critical mass, delivering a clear message: In contrast to many airline chiefs who say their business is not fun anymore, marketing executives appear to be having a pretty good time churning out unusual promotions. After Northwest announced its “Elvis Fares” for flights to Memphis on Jan 8, American responded by offering a $20 discount to people who showed up at the airport in Elvis garb. United Airlines offered a free first-class upgrade to anyone who could sing all the words to “Jailhouse Rock”. Here are a few other oddities:

USAir has offered to give funeral directors a free domestic round-trip ticket if they use the airline to ship 30 bodies to their funeral homes. American hooked up with a brokerage firm last fall to offer investors one frequent-flier mile for every $10 invested. Continental held a stock-picking contest, giving passengers a fictional brokerage account of $10,000 to invest in up to 10 stocks listed on the New York Stock Exchange. The investor with the best-performing portfolio during 30 days won six months of unlimited domestic travel in first or business class.

CRUISING HEIGHTS August 2008

17 PEOPLE, including four women and a child, slept for several days outside the Mwalimu Nyerere International Airport in Dar es Salaam for the past four days hoping to fly abroad including Iran, without passports or air tickets. Astounded airport officials and other travellers watched in disbelief as the group, complete with luggage and believed to be from a shadowy religious sect, prayed for a miracle to fly to “other countries where God

wants us to go and preach”. “We have no passports or air tickets but just our bibles. God sent us here to go and spread his word and we are waiting to go as he wishes. We will fly to different destinations,” one of them said!

Broadway in the air TORONTO-BASED GuestLogix Inc, the leading provider of on-board retail systems to the passenger travel industry has now announced plans to launch an on-board Broadway ticketing service on flights to the New York City area. The companies expect this first-of-its-kind ticketing service to go live on-board a major North American airline by late summer 2008.

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Wrong address A SWEDISH couple who arranged a vacation to Reykjavik, Iceland, online, discovered at the airport that they had mistakenly reserved for Rijeka, Croatia. Ake and Majne Johannesson decided to go with the flow and took off for the Mediterranean with suitcases full of warm clothes. They have been staying at

Njivice, a resort on the island of Krk, where the temperature are pushing 90 degrees, a good bit hotter than in Iceland, where even in summer the mercury often stays in the 50s and 60s.

Illustrations by Rajeev Kumar

Pelorus Sound when the engine spluttered, coughed and died. After Wilson glided the powerless craft to a landing on the grassy strip, the pair noticed they were beside a 20-foot-tall sign that read, “Jesus is Lord — The Bible”. “When we saw that, we started laughing,” Stubbs said. Nearby residents provided them with gas to fly the home-built plane back to base.

airport one morning. Authorities have not determined the cause of death or released the passenger’s name.

Those ain’t no cowboys THOSE HORSEBACK riders you may spot at George Bush Intercontinental aren’t simply out for fun. In a unique approach to airport security, a group of volunteers known as the Airport Rangers has been patrolling airport grounds since 2003. About 500 active riders roam the 10000-acre perimeter to alert airport officials of any suspicious or illegal activities. The volunteers also clear trails of debris and other foreign objects. Volunteers must provide their own horse and must undergo a background check

Carbon tricks AIR CANADA now offers a carbon offset programme for corporate clients. An extension of the carrier’s partnership with carbon management group Zerofootprint for individual passenger offsets, the new “customised solution” enables companies “to upload travel data, select a percentage of travel to offset, purchase offsets online, and have the ability to access and review their past transactions.”

A car is no plane A 20-YEAR-OLD MAN was arrested on charges that he broke into a small general aviation airport and attempted to fill up his car’s gas tank with aviation fuel. “It’s really stupid. Put aviation gas in your car and it’s so heavily leaded that eventually your valves warp and you’ll end up with some very expensive repairs,” said a policeman and added, “Sometimes these people have the notion that since it’s racing fuel it’ll make their car go faster.”

That’s eerie FLIGHT ATTENDANTS found a woman’s body in the restroom of a Delta Airlines plane that landed in Atlanta. The crew noticed the restroom was occupied on the final approach to the

Smoker’s haven QANTAS’ DECISION to re-introduce duty free cigarettes for sale onboard has caused a storm in the medical community. The Australian Medical Association (AMA) says it will urge the airline to stop inflight tobacco sales on international routes. Qantas resumed onboard sales of cigarettes this month after nearly a decade’s absence, citing customer demand as the reason.

Dirty romping A PILOT'S Nighttime romp in the woods with a flight attendant has ended with both suspended and under arrest. The two were at a diner before they apparently decided to take a walk, police said. They told the officer they wanted to go do it in the woods, essentially. Things went awry when people who live in the neighborhood summoned police around 9:30 pm, saying they had seen a naked man and an intoxicated woman. A helicopter with heatseeking equipment was called in, and Bradford was discovered hiding behind a shed shortly before midnight. His only attire was a pair of flipflops and a wristwatch.

Rowdy maidens TWO WOMEN could face a year in jail and a £20,000 bill after a drunken rampage aboard a plane in which one of them tried to open the cabin door at 30000 ft. The pilot was forced to make an emergency landing in Germany after the pair, aged 26 and 27, lashed out at stewards who refused to serve them more alcohol. Terrified passengers watched as the women, who had been drinking heavily and smoking in the cabin toilet, shouted abuse at cabin crew. The flight landed in Frankfurt where the two were arrested and questioned by police before being released to return to the UK.

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INTERVIEW

â&#x20AC;&#x153;WE NEED RUNWAY Frans Bouterse, Head of Airport Planning, Mumbai International Airport Pvt Ltd (MIAL) talks about how he plans to tackle the various challenges on the way to modernise the Mumbai airport, before 2010.

Q A

: When we talk of airport planning, what is your area of operations? : Development. It is the master plan of the airport and the long-term airport development based on traffic forecasts, type of traffic we would have in this airport, the type of infrastructure we would need and when we would need it to cater to that traffic. What about the land occupied by AI and IA, now NACIL? Is it all coming back to you? No it is not all coming back to us. We have definitely asked for our land. It is our land; the lease on it has expired for years. So there is really no legal basis for them to continue there. But they have an airline to run. It is a legacy and you know how these things go. It is not so easy to get these things back. When is Air India going to vacate the premises at the airport? We have indicated in the master plan what we need to do to make this airport new. Nobody will deny this plan, even AI know that that is the way. They know we need the taxiways and it will help them as well. The good thing is that the facilities that need to be cleared are the ones that are not the most difficult to be cleared. There are shops, godowns and they are not like the hangars itself. It is a bit of a give-and-take. In

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D TO OPTIMISE THE

Y CAPACITY” the end, it is for AI to decide what do really need in Mumbai. What about the engine shop? The good thing is we don't need to move it. It's too expensive (to move).

Isn’t it interesting that here is an airline within the airport premises with a lease that’s expired and you have slums that have no legal basis to be there. What do you do with them? We don’t have a choice. But what we need to do first is to optimise the runway capacity of the airport. Now that means that your runway capacity in the end determines your airport capacity. Now, the Mumbai airport has a land issue so our options are rather limited. In the past we have studied parallel runway options, that can only happen if we are allowed to move out of the city. If you look at the existing runway system, which is an intersecting

Map of the Mumbai Airport system, there is more capacity in that system than we are trying to get out of it. The trick of the trade is to reduce the runway occupancy time. First you need rapid exit ways to get the aircraft off the runway while it is at high speed. Rapid exitways in parallel runways are easier, but when you have a cross runway, how do they work? Same. They are on an individual runway basis, the aircraft lands and you get it out of the area as quickly as possible. The fact that we have a crossing runway system is not all that bad, because in a parallel runway system it is only very efficient if it is separated by 1000 metres. We don’t have that, we can’t build that. But if you have a closed parallel system, it works. Are you suggesting it is better? If you think about it, yes! Because the missed approach procedures will be different. So, what we are doing now is for air-

craft to land at (runway) 27 and takeoff from (runway) 14 every morning for four hours. So, the aircraft can line up on 14 and stand ready, one lands on 27 and the nose wheel comes down at the crossing, so it is still on the runway, but while it is there, you have the clearance to begin your takeoff run. So by the time the aircraft that’s landed has reached the rapid exit, the other one is already crossing the intersection. There is quite some potential in this. But there would be a limit even to this potential. What is the number of aircraft movements you can have with this system? 32 is the declared capacity, but in peak hours we do more, touch 40. This includes general aviation. Helicopter movements are actually interfering slightly with the operations, but we try to work on that. The important thing is not just that the aircraft can exit from the runway quickly, but also that the aircraft can make an entry

CRUISING HEIGHTS August 2008

“

The trick of the trade is to reduce the runway occupancy time. First you need rapid exit ways to get the aircraft off the runway while it is at high speed

“

What about that area? We are not targeting the engine shop at the moment. Air India is an airline that has different types of aircraft in its fleet. I don't know for what reason. That's not very efficient. I think only Lufthansa is close to them in the number of different types of aircraft. So, for all these aircraft you need different facilities. So, you have four or five different test houses for engines. But if you look at the masterplan, everything has to go. But if you ask whether we are putting all our energies to get it tomorrow, we have to be rational in terms of what are those things we can do right now to achieve better capacity.

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INTERVIEW airlines and defence facility...

the

What do you do? Talk to these guys. Some facilities we have in our own hands. Some we cannot do without, so we need to build and open that facility first before we shift them. The ATC, for example, needs to be built afresh. We have looked at five-six sites in the domestic side of the airport.

An view of Mumbai Airport

into the runway quickly from the right location. Now, the rapid exit alone is not enough, we also need a parallel taxiway. Once it is off the runway, it needs a route back to the terminal. At this point, we don’t have the parallel taxiways, we have one parallel taxiway from the main runway and the crossing runway has one small section in the south.

“

We know this airport is constrained, but we know that this airport will get the largest aircraft like the A380

“

So, what is the way out? Build parallel taxiways everywhere. We have one and a half taxiways; we will have four parallel taxiways — to all sides of all runways. The good thing about that is that around the two runways in all directions you will have the rapid exitways. What happens is that in normal circumstances, we use our runway 27 approach and we have our two rapid exits, very nice. However, if we have a different wind, we need to use a different runway, but we don’t have the rapid exits. We have to make sure that both our runways have the same capacity. Your airline flight schedule does not change and it banks upon the fact that you have 32 movements. But, if you need to change your runway because of winds or maintenance then what happens? You cannot say

your flight schedule today is different. And here comes the problem, at certain locations, particularly for our crossing runway and also for the main runway, we cannot build the parallel taxiway for the full length because there are many, many facilities in the way. The geometry of the runway or taxiway system is something over which we do not have any influence whatsoever; it is based on international ICAO standards. We know this airport is constrained, but we know that this airport will get the largest aircraft like the A380. We have airlines already talking to us, wanting to come to this airport with that aircraft. Who are the ones talking to you about the A380? Emirates, yes. British is talking to us about it, Lufthansa are in talks, Singapore, not directly, but they are definitely looking at it. Anyway, it doesn’t matter which aircraft comes in, we have to be ready for it. Can you have the A380 right now? We can have it right now, but here we go... you just make the runway centreline and take everything within that line, there you find an AI facility, another IA facility, then the Jet Airways facility, all hangars of the private

CRUISING HEIGHTS August 2008

Will you be able to finish all this work by the end of the first phase of modernisation in March 2010? We know that it would not be easy. The thing is that you know these obstacles are there. So you do a top-down approach. Imagine this is the airport I want and you see if you can create steps to get to that airport without closing down the operations and catering for the growth. So, if you cannot find that route that leads to that airport, then it is pointless to chance that. So what you do is go top down and bottom up and end up somewhere in between. And you conclude that this is what we need and for these facilities we need this land use to be changed and for these facilities to be moved. Where can we move these facilities, can we find a spot somewhere else in the airport? What is the best location? What if it was a Greenfield, where would it have been? May be you can find that location, maybe you cannot find it. Maybe, you find that this facility should not even be in Mumbai, because you can do it anywhere on the planet. For example, aircraft base maintenance, like MRO. I mean an aircraft has wings; you can fly it to another place. Obviously, it is not so simple, because a legacy carrier has all its work force in Mumbai. You can’t just say all right, pack up and go to Nagpur. But at the end of the day you have to rationalise your space.

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COLUMN/CHOCKS OFF

Service in the sky Airline ads promise the earth but their services leave a lot to be asked for. Indian carriers would do well to run a check on what they boast of and what they deliver.

R Krishnan

Once inside the aircraft, class does not matter much except for the service. A senior executive of SIA puts it aptly: “You can import everything but not service. That you will have to do yourself” 20

N THE LAST FOUR WEEKS I had to undertake air travel for some urgent reason and one of them was for business-cum-personal reasons. I travelled by three different airlines and in one of them — well known for its good times — by business class. Once inside the aircraft, class does not matter much except for the service on board. A senior executive of Singapore Airlines (SIA) known for its world class service, puts it aptly: “You can import everything but not service. That you will have to do yourself.” How true! My initial journey was from Delhi to Mumbai and I chose Air India (or my good old Indian Airlines). The economy fare of IA or AI was at least Rs 1,200 more than the nearest and best LCC, IndiGo. This was not the normal fare but the so-called Spot Fare. Being an FFP member, I asked for front economy row seat at the time of booking but was told I should try my luck at the airport. So, I reached the airport at least 70 minutes before the 17:00 departure time and asked for the front row seat. I was told it was not available and that I should be satisfied with an aisle seat (which I always prefer) at the back. I requested the person at the counter not to place me on the wing seat. Since it was an Airbus A321, it had a different seat configuration than an A320. When all were seated, I found the front three economy rows empty except for the first row of economy where there were two passengers, one on either side of the aisle. I was told the front seats were always reserved for the elderly/ medical cases or those partially immobile. What they did not say was that in the past such seats were reserved for jet-setting politicians who now had a much bigger choice, including who to order. The load in the A 321 carrying around 185 passengers comprising 20 business class and rest economy was only half. It was a brand new aircraft and the journey was pleasant except for the fact that Air India made a very bad move by denying a front seat to its own FFP member and that too in an aircraft which was not even half full. My return journey was equally pleasant but by LCC IndiGo. When I made my booking a day before the journey (I paid Rs 1,200 less than the Indian fare), I asked for the front row seat. Expecting the privately-owned Indigo to be more responsive than its PSU competitor, I was disappointed. The computer showed all front seven rows full and I got only the eighth row right side aisle seat. The next day, I reached Mumbai airport at least 100 minutes early to board the 11:35 am IndiGo flight to Delhi. I asked if I could get the front seat, I CRUISING HEIGHTS August 2008

was told they were not available. Instead, they “upgraded” me from row eight to row for which I accepted. When the aircraft doors closed, I saw only two passengers, one each on either side of the front row aisle seats. Rows two and three were empty and behind me were a group of NRIs including America Born Bharatiya Desis with at least five children ranging from five to say 13. All those rows of blocked seat in the front which the IndiGo computer showed on the screen now seemed like some kind of computer games. They disappeared as you switched to the real time flight which was so light that the American born desi children slept on the rows of empty seat. In fact, I saw at least two kids with seat belts on lying flat on the three seats as the aircraft landed in Delhi, The air hostesses made no effort to ask them to sit. One of the kids was actually sleeping and when the aircraft landed she woke up only to ask her mother if the aircraft had actually touched the ground. The above suggests that airlines load factors have fallen upon bad times. Despite this, they are not bothered if a revenue-paying passenger wants nothing out of the way: a seat in the front in an otherwise empty aircraft. My experience on the Kingfisher flight from Delhi to Bangalore and Chennai to Bangalore was even more interesting. When the Kingfisher A321 took off from Delhi, it was already 75 minutes late due to no fault of the airline. The reason: congestion. There were three pretty faces on board attending to the 12 business class passengers and I was sitting on the fourth row aisle seat. The usual courtesy of giving the Menu card and addressing us by our names happened and I excused myself to the toilet where I had to wait for another to come out. When I returned, every passenger on the business class had

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a spotless white cloth spread across the table and on it was a glass of juice and nuts as the first course of the menu. I returned to my seat and waited for about 14 minutes and none of those girls came to see whether I had been served juice or not. I then pressed the calling bell and one of them came to say sorry. She also offered an excuse: I had not been served since one of the three hostesses was busy serving the pilot. I pointed out to the hostesses that they were also supposed to serve a revenue-paying passenger and with three cabin attendants and only about 13 passengers, that should not be difficult. They said, “Sorry”. All this happened soon after the video dropped down and a proud Vijay Mallya flashing on the screen said, “I have told my cabin attendants who I have personally selected to look after you as if you are my personal guests.” Now, I did not know whether I was a host or a guest. I asked for the complaint form. The cabin attendants were, by then, scared and tried to avoid me. A little later, the in-charge came and said, “Sorry, sir, she is only a trainee and will improve.” I said, I had no problem but also mentioned that they should not tell me that they were all busy serving the captain and that none of them had time to serve a paying passenger. Much before all this happened, the cabin attendant, after giving the menu and addressing us by our names, took our order. I asked for some veggie noodles. The fellow passenger on my left, occupying the window seat, asked for a chicken sandwich and the other two passengers (my friends) in the aisle and window seat of the same row, asked for same veggie noodles and veggie sandwich. When the service began for the main course, the cabin attendant proudly brought a plate of sandwich to the passenger sitting on my side’s window seat. He was about to eat it, when his co-passenger told him that he had ordered a veggie sandwich and that he had been given a chicken instead, which incidentally was to be given to the passenger sitting on my left. The passenger thanked his “good times” for not burying his teeth into chicken sandwich. I called the in-charge again and told her about the mistake. Had the passenger taken a bite of the non-veggie sandwich, who could have saved him? She apologised profusely even as I told her that I was not on a factfinding mission but only to see if the service was equal to that of SIA. On my return journey from Chennai to Delhi, the four of us who had flown on the Delhi - Bengaluru flight, occupied our business class seats on either side of the second row of the A320 aircraft waiting to take off from Chennai airport. The doors were closed on time and we started rolling. Before all that, the usual exercise commenced. We were given the menu, personally addressed by name and orders taken. I ordered for veggie kabab and the same veggie sandwich. A Japanese or South Korean was the last passenger to occupy seat 1D in the business class. 1F was empty. He had not been given the menu card. So, when the cabin attendant (this time only two) asked the gentleman what would he prefer, he had no idea. Blinking, he asked what was

(Top) THE SMILE SAYS IT ALL: Service that can create loyalty comes from the kind that the Singapore Airlines offers; and, (previous page, bottom) Kingfisher’s hostesses in red.

available. The air hostess realised her mistake and rushed to get the menu card. This was totally avoidable but the pretty red tight skirt-clad girls had their focus elsewhere. Soon, the main course service began. This time, the hostess royally held out the veggie kababs to my veggie sandwich friend. I told her I had ordered the kabab and he had asked for veggie sandwich. She went back only to return with the correct order. After some time, when the main course was over, passengers occupying the front row wanted coffee and the hostess came out with coffee. She came to us and others and gave us the coffee. The menu card had an asterisk: “We sincerely apologise if the eatable you want is not available.” It was a four course meal starting with juice and nuts, main course, dessert and coffee/espresso. By offering coffee to all the passengers, the hostess made it appear as if desserts were not available. I had my coffee too. But when a passenger asked for ice cream he was promptly given one. When I saw this, I asked the hostess why she had not served desserts and had instead had jumped to coffee. Her reply was stunning: “Sir, you should ask for dessert!” But, I thought, guests are not supposed to ask! They are offered and given all that is available. On our Delhi-Bangalore leg, the cabin attendants were careful to follow the itemised menu. But while flying to Delhi from Chennai, it was ask if you want. I am sure you will not disagree with me that it will take a few years before Indian carriers — be it the good times or anyone else (forget Air India and Indian) — can match up to SIA. You can import everything but not service and good times. By the way the food on board Kingfisher was absolutely fantastic. It was really the good times for me. (Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com) CRUISING HEIGHTS August 2008

It will take a few years before Indian carriers — be it the good times or anyone else (forget Air India and Indian) — can match up to SIA. You can import everything but not service and good times 21

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Despite the downturn, Farnborough brought a fair amount of business for Boeing and Airbus. The two managed to secure 444 firm orders worth $62 bn, with a bulk of the orders coming from the Gulf nations.

Air India’s “Jammu and Kashmir” was showcased at the air show. Photo shows the latest Boeing 777-300 ER in the airline’s fleet landing at Farnborough. Photos in this section: Courtesy Airbus, Boeing and Bombardier

Y THE TIME THE Farnborough Airshow ended, Airbus had announced orders for 256 aircraft, valued at US$40.5 billion. These transactions include firm orders for 247 aircraft and nine commitments. In contrast, Boeing announced firm orders for 197 planes worth $23.6 billion, but many of these were already in its backlog and only 65 were new. But compared to the doomsday predictions before the start of the show, the orders were big numbers indeed! Two mega deals helped Airbus forge ahead: DAE Capital, the aircraft leasing and finance division of Dubai Aerospace Enterprise (DAE) placed a 100 aircraft order valued at $12.6 billion, comprising the purchase of 30 Airbus A350-900 and 70 Airbus A320 aircraft. Neighbouring Abu Dhabi’s Etihad placed the world’s largest aircraft order worth $43 billion for a 100 aircraft order comprising 10 A380s, 20 A320s, and 25 A350 XWBs. The airline also placed options for a further 10 A380s and 45 Airbus planes. Etihad’s firm orders with Boeing totalled $9 billion and included 35 787 Dreamliners and 10 777s with options for a further 50 aircraft. FlyDubai, the new low cost airline from Dubai, also announced a historic order for 54 Next-Generation 737-800 aircraft from Boeing. The order is valued at approximately $4bn at today’s list prices. The deal comprises a firm order for 50 aircraft from Boeing and a separate leasing agreement with Babcock & Brown Aircraft Management for a further four Boeing 737-800s. Other firm aircraft order announcements made during the show include the following: Aeroflot for five A321s; Asiana for 30 A350 XWBs; US based lessor, Aviation Capital Group (ACG) for 23 Airbus A320 Family aircraft; Saudia for eight A330-300s; Synergy Aerospace for 10 A350-800s; and Tunisair for 10 A320s, three A330-200s, and three A350-800s. In contrast, Boeing announced firm orders for 197 planes worth $23.6 billion, but many of these were already in its backlog and only 65 were new. This brings the tally so far this year to 542 planes, including an additional two orders to undisclosed buyers announced separately. But the Air China deal, along with two others from Etihad Airways and Malaysia Airways, were already on Boeing’s books — attributed to unidentified buyers. Removing those from the tally, Boeing’s deals at the world’s biggest air show drop to just $5.6 billion. Air China’s announcement on its

NOT AS BAD AS EXPECTED CRUISING HEIGHTS August 2008

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NOT AS BAD AS EXPECTED CRUISING HEIGHTS August 2008

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website that it plans to buy 15 777s and 30 737s from Boeing, has a list value of $6.3 billion. Not surprisingly, Airbus’ chief salesman John Leahy was characteristically cocky. He said the deals at the show defied the “doom and gloom” that many industry watchers had expected to be at the core of this year’s show. “We think it ended up pretty well,” Leahy told journalists adding that Airbus viewed the practice of placing orders on the books before confirming buyers as “quite silly”. The fact is getting the correct figure at the end of an air show can be arduous. Scores of ‘on camera’ deals have actually been crafted long before in the backrooms. These orders exist with at least Boeing as “undisclosed buyers.” Boeing favours this practice as it allows it to report its own performance, without forcing customers to display their hand before they are ready. But Etihad CEO James was sanguine. He said: “If you think we are bucking the trend then, the whole Middle East is doing the same.” But the fact, is it was an

Orders and more

JULY 14

Etihad ordered 25 Airbus wide-

body A350 aircraft, 10 A380 superjumbos and 20 single-aisle A320 planes. (Total: US$11 billion). Boeing too got orders from Etihad: 35 Boeing 787 Dreamliners and 10 Boeing 777s. (Total: US$9.4 billion). FlyDubai ordered Boeing for 50 single-aisle 737s (Total: US$4 billion). The LCC FlyDubai also took four 737s from lessor Babcock & Brown. Saudi Arabian Airlines ordered

HERE WE COME: (extreme left) Guy C Hachey, President and Chief Operating Officer, Bombardier Aerospace announcing the launch of the CSeries family of aircraft at Farnborough.

ANOTHER FOR THE AIRBUS’ BOOKS: Asiana Airlines ordered 30 Airbus A350 aircraft at the Farnborough Air Show.

eight 295-seater twin-engine Airbus A330300s. (Total: US$1.6 billion). Embraer too got orders for 22 of its 190 aircraft and options on 20 more: Aeromexico ordered 12 of the 190 aircraft and took 15 options; Saudi low-cost carrier ordered five 190 aircraft; and Niki Lauda’s Niki ordered five 190 aircraft with five options.

JULY 15

Dubai Aerospace Enterprise (DAE)

confirmed an order for 30 A350-900

CRUISING HEIGHTS August 2008

Emirates (and FlyDubai) versus Etihad competition at the show with Qatar providing a few dollops of cream on top. That apart, this year’s Farnborough was really an event that was completely obsessed with ‘green.’ Virtually everyone was speaking about spurring the industry’s shift to cleaner flying with a summit on sustainable aviation` being the high point. Not surprisingly, there was plenty of blow hot and blow cold at the event: there was a conciliatory and defensive posture on global warming and a pledge to make more flying fuel-efficient but anger at a European Union emissions trading scheme they see as unfair to European carriers (governments are set to impose carbon-emissions quotas on aviation that will essentially impose pollution taxes on airlines, beginning in 2012). Boeing’s special environmental display at the Farnborough Air Show resembled an airy art installation. A spiralling walkway led into the windowless interior of the central exhibition space, where a white floor accentuated the brightly coloured and translucent displays. Ethereal music, liquid and soothing, played softly in the ear. And catching the eye, along one wall, stood five large tanks of swirling, aerated water, in successively deepening shades of green from light lime to dark forest. Pond scum has never looked so beautiful nor been displayed with such reverence. The first tank contained a concentration of 0.1 per cent algae; the fifth tank was 0.5 per cent. Boeing wants the world to cultivate this stuff on a vast scale and extract plant oil from it. It is believed to make extremely good jet fuel. Boeing is pushing so-called “second-generation biofuels” as a potential power source for jets that could transform the environmental impact of aviation. The first generation of biofuels — made from corn, soybeans or palm oil — has recently come under attack for contributing to rising food prices and deforestation. Billboards showed the outline of a giant Airbus A380 double-decker jet, cut from a green leaf. The 550-seat superjumbo planes and 70 A320 aircraft. (Total: US $12.6 billion). Tunisair said it had signed a contract for three Airbus A350-800s, three A330200s and 10 A320s. (Total: US $1.94 billion). Airbus said Aviation Capital Group ordered 23 A320 planes. (Total: US$1.7 billion). Sukhoi signed an agreement to sell 24 of its Superjet planes to Russian leasing firm Avialeasing. (Total: US $630 million).

Maharaja at Farnborough

or Air India, it was time to display its newest Boeing 777-300ER (Extended Range) airplane. The aircraft arrived ahead of the opening of the Farnborough International Airshow. The 777-300ER was on display during the air show, highlighting its new livery, interior and passenger amenities. The 777-300ER is the 10th 777 delivered to Air India from its December 2005 order of 68 Boeing jetliners. The aircraft, named “Jammu and Kashmir” in keeping with the Maharaja’s tradition of naming its 777s after the various states of India, has a threeclass configuration, including four first-class, 35 executive class and 303 economy seats. The airline will operate the 777-300ER on its India to United States via London route. Air India, India’s national flagship carrier, in July 2007 became the first India-based airline to operate nonstop flights from India to the United States with its first 777-200LR (Longer Range) Worldliner airplane.

airplane is super-efficient in terms of fuel used per passenger. GE Aviation promoted its new engine design with messages on footprints painted on the ground — calling it a “leap forward” in fuel burn with a smaller carbon footprint. On the Page Three side of the show, one had Bombardier Learjet pilots and Formula One racing star, Lewis Hamilton exhibiting an exhilarating display of speed and performance. As airshow spectators looked on, Hamilton rocketed along the TAG Farnborough runway in his Vodafone McLaren Mercedes race car while the Learjet 60 XR jet sped through the air just 200 feet overhead. The big event kicked off the flying display at the show. Other high points included Bombardier formally launched its CSeries family of single-aisle airliners on the eve of the show. Nigerian airline Arik ordered seven Boeing 737 single-aisle jets and announced intentions to buy four 747-8s. Aeroflot ordered five A321s. (Total: US$450 million). Qatar Airways signed a memorandum of understanding for six Airbus A321 aircraft, made up of four firm orders and two options.

JULY 16

Korea’s Asiana Airlines ordered 30

Airbus A350 XWB planes, with options

HAND IN HAND: Jet Airways Chief Naresh Goyal (third from left, standing) with Air India’s Jitendra Bhargava and two Air India hostesses photographed at the Farnborough Air Show. In the foreground (left, sitting) is Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive of Emirates Airline and Group.

Pratt & Whitney revealed a full-scale

BIG ONE: Boeing’s 747-400 Large Cargo Freighter (LCF) being modified by Evergreen Aviation Technologies Corporation at their facility in Taipei, Taiwan. Progress about the airplane was reported at the Farnborough Air Show.

on another 10 (Total: US$7 billion). Malaysia Airlines ordered 35 Boeing 737-800 single-aisle planes. (Total: US$2.6 billion). Aviation Capital Group would buy 15 Boeing 737 (Total: US$934 million). Russian planemaker Sukhoi received a US $600 million order for 20 Superjet 100 planes from an undisclosed customer. It also announced an agreement with AMA Group for five Superjet 100 planes. (Total: US$150 million).

CRUISING HEIGHTS August 2008

model of its new geared turbofan (GTF) engine and announced that this will be marketed as the PurePower PW1000G. CFM International partners Snecma and General Electric announced that they are to develop an all-new engine under the working title Leap-X (for leading edge aviation propulsion) that promises 16 per cent more fuel efficiency than the existing CFM56 series. Superjet International — the joint venture between Russia’s Sukhoi and Italy’s Alenia-took its backlog of orders for the new Superjet 100 regional airline into triple figures, with three new agreements announced at Farnborough. Mitsubishi displayed a cabin mockup of its 86 to 96 passenger MRJ90 regional jet. This aircraft is due to make its first flight in 2011.

JULY 17

Synergy Aerospace signed a con-

tract for 10 Airbus A350-800s. (Total: US$2 billion) Synergy is the main shareholder of Avianca and SAM in Colombia, Oceanair in Brazil and VIP in Ecuador. Alis Aerolinee Italiane signed a MoU for five Airbus A330-200 freighter aircraft, plus three options. Boeing announced a deal with Air China for 15 777-300ER airliners and 30 737-800 narrowbodies.

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Orders and more

JULY 14

Etihad ordered 25 Airbus wide-

HERE WE COME: (extreme left) Guy C Hachey, President and Chief Operating Officer, Bombardier Aerospace announcing the launch of the CSeries family of aircraft at Farnborough.

ANOTHER FOR THE AIRBUS’ BOOKS: Asiana Airlines ordered 30 Airbus A350 aircraft at the Farnborough Air Show.

JULY 15

Dubai Aerospace Enterprise (DAE)

confirmed an order for 30 A350-900

CRUISING HEIGHTS August 2008

Maharaja at Farnborough

JULY 16

Korea’s Asiana Airlines ordered 30

Airbus A350 XWB planes, with options

Pratt & Whitney revealed a full-scale

CRUISING HEIGHTS August 2008

JULY 17

Synergy Aerospace signed a con-

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H C Tiwari

SPECIAL REPORT

Battling for commissions Travel agents are up in arms. Reason: airlines — both domestic and international — will be putting an end to their commissions from October 1 this year.

ARELY A MONTH AGO, the country read reports on the “Gandhigiri (a direct lift from the Bollywood hit, Lage Raho Munnabhai)” of travel agents. Agents sent around a 100 boxes of samosas to Jet Airways,’ Vice-president (Sales), Sonu Kriplani. They were upset about the decision by domestic airlines to end the five per cent commission on air tickets sold by them. The samosa boxes accompanied a letter which said that the agents were preparing themselves for a new line of business — selling samosas — after their travel agencies closed down, thanks to the end of the five per cent commission. This is one fight that has been continuing for a long time and would probably end on October 1 this year when domestic and international airlines stop handing out commissions to travel agents. Pitted against each other are the airlines on one side and on the other, travel agents. The fight: the

Travel agents’ bodies estimate that the nocommission move would send more than 8000 agents out of jobs. Airlines maintain that the nocommission regime is nothing new CRUISING HEIGHTS August 2008

commission cake. While the carriers want to put an end to commissions on airline tickets, the travel agents argue that the move would see an end to the travel agency business. Both the sides have irrefutable arguments. The travel agents’ bodies — Travel Agents Association of India (TAAI), Travel Agents Federation of India (TAFI), Indian Association of Travel Operators (IATO) and Association of Domestic Tour Operators of India (ADTOI), among others — estimate that the no-commission move would send more than 8000 of their members out of jobs. Their reason: almost 80 per cent of airline tickets are sold by them. On the other hand, airlines maintain that the nocommission regime is nothing new. It was in force in the US and Europe. To top it all, in these days of rising prices and falling yields, the move would be a part of the costcutting exercise most carriers are going through. In India, Ernst and Young had projected that if the zero commission

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Onliners get a handle to move up

ven as the travel trade goes through a churning — all commissions from domestic and international airlines will stop from October 1 this year — leaving many confused about the next course of action, online travel portals or online travel agencies (OTAs) have started to look at the good times. Inflation and high air ticket prices notwithstanding, travel portals are optimistic about the growth of their business in the next year. Top portal Makemytrip.com believes that business could go up by 15 — 20 per cent in the coming 18 months. Many in the online travel sector feel that they will be able to rake in 40 to 50 per cent of the domestic aviation business from the present 25 per cent. Keyur Joshi, COO and co-founder, Makemytrip.com has gone on record to say that the OTAs would be able to achieve two years’ growth in just a year’s time. Online portals have been attracting quite a number of travellers. According to PhoCusWright, a travel industry research firm, we spent around $2 billion last year to book tickets online. The total Indian travel market is around $14 billion of which 14 per cent has shifted to online agencies. PhoCusWright points out that the online spend would go up to $6 billion by the end of 2010. When all this is translated into revenue (the online agencies only get commissions for the airtickets booked) for the OTAs like Makemytrip, Cleartrip, Travelguru and Yatra, it would add up to about $80 million and though it is nowhere by global standards (the world’s largest online travel agency Expedia Inc earned $2.67 billion in revenues and $296 million in net profit last year), the market is ready to take off. However what is of special impor-

tance is the fact that online travel portals too would be affected by the stoppage of commissions but the blow will not be as lethal as it will be for small and medium travel agents. The portals would offset the no-commission regime by offering cheaper and attractive travel packages. And OTAs are not going to lose the opportunity. OTAs received a commission of five per cent on the basic fare of each air ticket they sold. When basic fares of a number of lowcost airlines were pegged between Rs 0 to Rs 99, one can easily understand the kind of money OTAs have been making. To add to their shrinking revenues, OTAs have to pay two per cent of the entire fare (including surcharge) to the credit card companies that facilitate the online transactions. For well over two years now, OTAs have had to grapple with low commissions. Airline ticket prices — both national and international — had been going down and portals like Cleartrip, Makemytrip and others have had to ramp up the non-airline business like hotel bookings, car rentals, cruises and holiday package tours. Tavelguru, for example, gets most of its revenues from hotel bookings and holiday packages and not from

CRUISING HEIGHTS August 2008

airline tickets. Even the top OTA, Makemytrip had a large share of its revenue — almost 95 per cent — coming from airline bookings. That was two years ago. Today, that business has gone down to around 30 per cent only while the nonairline bit has increased to 70 per cent. According to Deep Kalra, Makemytrip CEO, the low fares have pushed margins to the lowest possible. Hence, the need to diversify to non-airline sectors: hotels offer a margin of 15 to 20 per cent for bookings. The other factor that has attracted OTAs to hotel bookings is the fact that these provide the opportunity to increase customer loyalty. Portals can offer preview of rooms and services and once a customer is hooked, there is no reason for him to migrate to another website. That is not so with airline bookings and often customers have been known to move from portal to portal and decide on the one that dishes out the lowest fares.

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regime was ushered in, the airline industry would save around Rs 1,000-1,500 crore in 2008-2009. Indeed, it would give the industry a leg up, considering the fact that it is bleeding heavily: the country’s airlines lost around Rs 4,280 crore in 2007-08. The figure is expected to go to double this year, thanks to fuel costs. In addition, the high ticket prices and the inflation has seen passenger traffic dwindling: in June this year, the figure was three per cent less than what it was in the same month in 2007. Other than the loss of business or jobs, travel agents have figured out their revenue losses due to the no-commission move to be around Rs 800-850 crore. Of the total international and domestic airline ticket business amounting to Rs 34,000 crore, around 85 per cent is done by travel agents. That works out to Rs 28,000 crore worth of airline tickets sold in the country. There are others among travel agents who point out that they offer extra services by handling bookings and enquiries from places, which are not easily accessible to airlines, like Sholapur, Ghaziabad, Haridwar or Rishikesh, according to Praveen Chugh, who heads TAFI. Naturally, with so much at stake, the travel agents would not give up without a fight. TAAI and TAFI — the two bodies represent about 80 per cent of the around 2600 accredited members of the International Air Travel Association (IATA) — have joined hands to take on the airlines for what they consider as “unfair”. TAAI President, C Venkateshwara Prasad mentioned: “We have a compelling case, and hope that the airlines will see reason.” The two associations have, accordingly, approached the Directorate General of Civil Aviation (DGCA), and demanded that the travel agents be given higher commissions on ticket sales. They took the move following an order from the Karnataka high court in December 2007. TAFI had approached the court after airlines decided to lower the commissions for travel agents from nine per cent to seven per cent and later to five per

(Left-right) C Venkateshwara Prasad, President, TAAI; Praveen Chugh, President, Travel Agents Federation of India; and, Deep Kalra, Founder & CEO, Makemytrip.

Ernst and Young has projected that if the zero commission regime was ushered in, the airline industry would save around Rs 1,0001,500 crore in 2008-2009. Indeed, it would give the industry a leg up considering the fact that it is bleeding heavily CRUISING HEIGHTS August 2008

cent. The court had said that the DGCA was the final authority to settle the issue. On its part, the airlines — at least some of them — would not like to bend down. Jet Airways, for example, has decided not to give in. Its Chief Commercial Officer, Sudheer Raghavan was quoted as saying that the no-commission regime was an international practice and “we are following what most airlines globally are doing.” Travel agents, however, feel that the losses by airlines will be higher this year simply because they will not have the incentive to market a particular carrier. In the war, however, it will be the smaller agents who will suffer the most. The ones with larger volumes of business might not be affected because most get a bonus percentage over commissions from airlines. There are others who feel that the nocommission regime is inevitable and the sooner our travel agents realise this, the better it will be for them. Stuart Crighton, COO and founder of Cleartrip.com, was quoted as saying, “The scrapping of commission is not new. Many countries like US and Europe have already resorted to it. When that happened, half of the travel agent industry was wiped out. However, the other half professionalised itself into specialised services.” With commissions gone, the travel agencies would become more specialised and offer complex travel planning. And with India becoming one of the hottest tourist destinations in the world, perhaps, the no-commission raj would certainly have a salutary effect. Diversification a la OTAs could be one way out. Like Makemytrip or Travelguru, which have shifted focus to non-airline businesses, travel agents too could go out of the five per cent air ticket margin and go in for the 15-20 per cent hotel bookings margins. Which way will the airlines go? At the time of filing this report — in early August — the situation was at a flashpoint with travel agents deciding to stop sales of tickets for a full day.

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H.C.Tiwari

AIR CARGO

Air cargo gains ground DESPITE GRIM FORECAST The hiccups that the aviation industry has been going through has not put a dampener on domestic players in the air cargo industry. While a number have decided to start air cargo operations, other players like CONCOR, are ramping up infrastructure plans, reports Tirthankar Ghosh.

F THERE WAS ANY doubt about the slowdown in the economy, Boeingâ&#x20AC;&#x2122;s Dr Dinesh Keskar, senior vice president, Sales, emphasised it further when he pointed out that India would need only 24 freighters in 2008-27. This was the same figure Boeing had projected last year.

NO COMPETITION: (Above) Air India plane being loaded. Though Air India has shelved its Nagpur plans, the carrier would like to go big in the air cargo sector in future.

CRUISING HEIGHTS August 2008

Dr Keskar recently released the 2008 Current Market Outlook (CMO) for India. Boeing, incidentally, has not raised the number of freighters from the projections it had done last year. That is not so with passenger planes: the number has increased from 887 (2007-2016) to 977

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International slowdown

he International Air on-year decline for June Transport Associatraffic. Latin American airlines tion (IATA) recently recorded the largest conreleased international traftraction (12.7 per cent) as fic data for June 2008 that the region's cargo sector showed a continued slowcontinues to re-structure ing of demand growth for its capacity. air transport. Air cargo European carriers saw reduced by 0.8 per cent freight demand growth compared to June ’07. fall to 0.7 per cent in June Giovanni Bisignani, from 1.4 per cent in May. Director General and CEO Giovanni Bisignani, General and North American carriers of IATA put it straight: Director CEO of IATA also saw freight demand “The global economic turgrowth slow to 4.0 per cent in June bulence clearly shows in the 0.8 per from 4.6 per cent in May. cent drop in freight volumes compared Middle Eastern carriers delivered to last year. Although the passenger the strongest performance with demand grew by 3.8 per cent, this is the 12.1 per cent growth (up slightly slowest growth that we have seen since from the 10.7 per cent recorded in the industry was hit by the SARS crisis May). in 2003. With consumer and business African airlines recorded a 1.9 per confidence falling and sky-high oil cent year-on-year decline in June. prices, the situation will get a lot Echoing what many airline CEOs worse,” he predicted. have been saying, Bisignani said, “The IATA figures pointed out: International freight traffic airline sector is in trouble. Losses this declined by 0.8 per cent in June. year could reach US$6.1 billion, more This is the first decline seen since than wiping out the US$5.6 billion that May 2005 and follows several airlines made in 2007. Falling demand months of falling manufacturing and rising costs are re-shaping the sector confidence indicators. industry,” said Bisignani. To survive Asia Pacific airlines led the conthe crisis, the IATA chief said urgent traction with a 4.8 per cent yearaction was needed.

(2008-2027). This, despite taking into account the hike in fuel costs, the slow growth of the world economy, the negligible growth in passenger traffic, etc. According to Dr Keskar, “Boeing’s market outlook is rooted not only in these near-term realities, but also recognises the nature of a long-term forecast.” Boeing also took into account the fact that the country’s GDP would grow more than six per cent. However, Dr Keskar also said that Boeing may “revise the cargo projections upwards in future. But certainly not in large numbers.” The Boeing sales chief said that India would not need large freighters like the B777 or B747. He had his reasons: “The reason is simple that India is ordering more commercial passenger airplanes. These planes will be adding more cargo carrying capacity in its belly space… A Boeing 777 version can carry up to 20 tonnes of cargo,” he pointed out. It is not only Boeing that has predicted

“Boeing’s market outlook is rooted not only in these near-term realities, but also recognises the nature of a longterm forecast” — Dr Dinesh Keskar Senior Vice President, Sales, Boeing CRUISING HEIGHTS August 2008

growth. Airbus too has pointed out that India would require 1100 aircraft in the next 25 years; thereby reinforcing the fact that the country’s economy is strong. The forecasts have only emphasised that the aviation industry in the country is going through a temporary lull. In fact, the air cargo sector could well see the entrance of a number of players who are keen to go ahead with their plans. There is, for example, Capt G R Gopinath, who is planning to start a separate cargo airline company, Deccan Cargo and has plans to acquire a large version of a freighter from Airbus. Air India has plans too. Though its plans to go abroad in a big way are on hold for the moment, the carrier wants to get more freighters, preferably larger versions. In fact, its present lot of freighters has been leased to Gati. An official from the carrier pointed out that though the passenger planes had belly space for cargo, it could not be utilised in a proper way. Taking more cargo in the belly space would not only upset turnaround schedules but create logistics issues. So, putting a dedicated freighter to ferry cargo would be more

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AIR CARGO

H.C.Tiwari

AMBITIOUS: Jet Airways and Spicejet planes — both want to earn from cargo — at Delhi airport.

profitable, he said. Among the others who have not yet scaled down their plans or put them on hold are the Hyderabad-based Flyington Freig-hters, which would like to get at least six cargo planes to start its international cargo operations. Waiting in the wings is Jet Airways, Kingfisher and even low-cost carrier GoAir. In fact, low cost carrier SpiceJet has already outlined plans to start its cargo operations from Guwahati and Bagdogra airport. With that, the number of destinations covered by the airline’s cargo operations would go up to 11. SpiceJet’s Chief Commercial Officer, Samyukth Sridharan recently said that the carrier was aggressively looking at the cargo business and have put in place the necessary infrastructure. Undeterred by the high prices or the competition, the Container Corporation of India (CONCOR), the government-run corporation, which only specialised in running container specials from Indian port cities to different destinations in the country, has chalked out plans to go global. Its first venture in the field would be the setting up of airfreight stations. The move by CONCOR will see a major diversification by the company: the first will be its step into the aircargo sector and second, it will become a multimodal logistics services provider. An upbeat Rakesh Mehrotra, Managing Director, outlined the growth plans. CONCOR, he pointed out, provides customs clearance and other related facilities at most of its inland container depots (ICDs). So, the foray into the aircargo seg-

“We want to set up air freight stations at 15-20 of our ICDs. These would provide a whole range of services: from bonded warehousing, palletisation as well as custom clearance and other formalities that is usual for the air cargo business” — Rakesh Mehrotra Managing Director, CONCOR CRUISING HEIGHTS August 2008

ment would be a natural extension. In fact, CONCOR has air cargo complexes in Bangalore and Nasik (in western India) airports. “We want to set up air freight stations at 15-20 of our ICDs. These would provide a whole range of services: from bonded warehousing, palletisation as well as custom clearance and other formalities that is usual for the air cargo business.” CONCOR started scouting around for an alliance partner sometime ago. The alliance, Mehrotra informed, would later be converted into a joint venture. The timing, of course, would depend on how fast the business picked up. “We have invited expressions of interest from a number of people and we have developed business plans with three of them. We are now evaluating which partners we should go with,” he said. Work on transforming the ICDs to airfreight stations would begin by the end of this year. Mehrotra also said that these stations would be smaller than the setups in Nasik and Bangalore airports. CONCOR would not be investing too much since the basic infrastructure exists at these ICDs. All it has to do is ramp up its services. As the business grows, said Mr Mehrotra, CONCOR would even “set up greenfield air-freight stations.” CONCOR has ambitious plans for its global foray. Mr Mehrotra said: “We will start a terminal at Nepal.” This will be in addition to the one which is scheduled to start in Bangladesh and Pakistan soon. The CONCOR story started in 1988 with its container trains service. As a government organisation, it was one of the first to promote exports from the country with its terminals at different destinations. It started its operations by taking over seven ICDs from the Indian Railways and has now grown to a network of 57 terminals. As Mehrotra put it, CONCOR has “brought the ports to the hinterlands. We hope that whatever be the growth in the logistics business, we would still be the dominant player providing infrastructure and trade support to the exim (export and import) and domestic markets. Over the last few years, the organisation has diversified with the air freight station business as its latest move. Its first step was in the port sector, where it took the joint venture route. It now has two operating ports and is on the lookout for more such opportunities. Unfazed by the competition, CONCOR achieved a growth rate of 16 per cent in export-import and 21 per cent in the domestic business. Last year it handled 2.5 million TEUs (twenty feet equivalent units) and this year it expects to cross three million TEUs.

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

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

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

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

2, 3 & 4 Bedrooms Appartments with highend specifications

Development of IT SEZ at Sector 144

IVRCL INFRASTRUCTURES & PROJECTS LIMITED

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

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AIR CARGO/SNIPPETS FedEx in energy-saving mode ALL OVER THE WORLD, carriers are cutting costs in a number of ways. Global express company FedEx recently announced the launch of its inaugural revenue flight using a B757 freighter — one which will save the company a lot of revenue. The route involved is between two points in the USA: Memphis International Airport (MEM) and Ronald Reagan Washington National Airport (DCA), eight times per week. According to David Bronczek, FedEx Express president and CEO, the introduction of the B757 freighter would immediately expand the reach and capacity in the mid-Atlantic region and enhance the access Fedex customers have in the global marketplace. FedEx also added that in addition to David Bronczek customer benefits, the introduction of the B757 into its fleet “continues the company’s commitment to growth in an efficient, environmentally-conscious way.” The B757 is known for its improved fuel efficiency and reduced noise levels, and will be phased in over time as the less fuel-efficient B727 aircraft are retired from service. FedEx said the introduction of the B757 model into the company’s fleet also offered measurable cost benefits for the company during a period of unprecedented energy prices. The aircraft had significantly improved fuel-burn efficiencies, cutting greenhouse gas emissions and reducing fuel consumption by up to 36 per cent while providing 20 per cent more capacity per flight, when compared to the B727 it was replacing.

Aryan Cargo all set for October launch AMONG THE half-a-dozen-odd aircargo startups, the one that is all set to start services is Aryan Cargo Express Pvt Ltd. It has decided to start global operations by October this year. The carrier will start with a Boeing 747-400 freighter,

which is in the final stages of assembly at Seattle in the US. Aryan has been permitted to lease two Boeing 747-400F aircraft. The carrier will fly international routes connecting cities like Tashkent, Amsterdam and Shanghai from New Delhi. The airline will be fed by cargo forwarding and handling firms that include Malaysia’s Abda Aviation Sdn BHd and Düsseldorf, Mukut Pathak Germany-based Leisure Cargo GmbH. Aryan’s Managing Director Mukut Pathak is upbeat and said that in a situation where the industry is down and yields are under pressure, especially across Atlantic and across Pacific, due to the American economic slowdown, the air cargo segment was growing in Asia.

Qatar Cargo’s VP Cargo VIKRAM SINGH has joined the Cargo Department of Qatar Airways as Vice President, Cargo, Sales. Singh has 15 years of airline experience in various roles in the Middle East, Europe and Indian Subcontinent out of which he has spent a significant part at KLM. Qatar Airways Cargo has gained a reputation in the world transportation market as specialising in ‘Airport to Airport’ service delivering cargo to a growing list of Vikram Singh international destinations. The passenger and cargo hub of Doha is at the crossroads of East and West, connecting the markets of Europe to the Middle East, the Far East, Indian subcontinent, Africa and Australia. Doha International Airport and its cargo warehouse are operated by Qatar Aviation, sister company to Qatar Airways Cargo. The impact of that relationship has impacted transit times that are arguably among the fastest in the business, just 90 minutes in many cases.

More freighters for India Post INDIA POST will be inducting four more freighters by the end of this year. The move will enhance the Speed Post services to 15 major cities. The department has started talks with the government to ensure that leased aircraft could be pressed into service by the year-end, according to India Post Chief General Manager (Operations) M S Bali. India Post launched its first aircraft on August 29 2007, for its services in the North-

east with Guwahati as the centre. The aircraft, a Boeing with a 15-tonne load capacity, carries Speed Post, mails and parcels. With the induction of more freighters, the new service will see the cities of Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore on India Post's airmap. According to the postal department, the services will help to ramp up the quantum of mail by over 30 per cent.

CRUISING HEIGHTS August 2008

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DOMESTIC AIRLINES All women crew flight CAPT CHAMELI KROTTAPALLI has become the first lady Commander of Air India Express, the international budget carrier of Air India. Air India Express, in recognition of this achievement has scheduled an All Women Crew flight on July 27, 2008, with her in Command of the cockpit. The flight IX-662/661 flew on the Chennai-Singapore-Chennai sector. Capt Krottapalli joined Air India Express in November 2004. The other crew members of the flight are Capt Amrit Namdhari, Co-pilot and Cabin Crew S Banu, P Bhutia, S Divya and Binal Valand. The airline has a total of 76 pilots of which six are lady pilots. CONFIDENT SMILES: The all women crew poses for the camera on the special flight scheduled to recognise the first lady Commander of Air India Express, on July 27, 2008.

Air India courts students AIR INDIA is offering special extra baggage allowance for students travelling to the West, Far East and South East Asian countries on Air India flights till October 31, 2008, with a view to promote student travel. To avail the special offer, students should be in possession of student visa. Students travelling on Air India services to Frankfurt/ Paris/ London/ Birmingham or via Frankfurt/ Paris/ London to interior points in UK/ Europe can avail additional free baggage allowance of 20 kgs, i.e. total 40 kgs. Students travelling to Singapore/ China/ New Zealand on Air India/ Indian Airlines flights will be allowed to carry a total free baggage of 40 kgs in their outbound journeys. Students travelling on one-way tickets to Australia on Air India flights can avail a free baggage allowance of 40 kgs plus extra baggage allowance of 10 kgs, i.e., total 50 kgs. Students travelling from India to gateway points in USA can carry one additional piece weighing 23 kgs on Air India flights, i.e., total free baggage allowance of 69 kgs for three pieces. This is applicable for travel commencing on or before 31st March 2009. Free tickets bonanza for Air India fliers: FOR THE next four months, Air India fliers can look forward to attractive returns on their travel. The airline has introduced a new scheme called the ‘Desh Videsh Desh’ by which passengers can earn points and redeem them for free tickets or upgrades by travelling on the combined domestic and international network of the new Air India. The offer is on till November 25, 2008. The scheme is open to passengers travelling on a revenue ticket in any fare class on AI and IC domestic and international flights.

Special package for students JET AIRWAYS has announced a special promotional package for students flying to its destinations in the United States, Canada, United Kingdom, Europe or Asia. Jet Airways special promotional package is valid for outbound travel on or before October

31, 2008. Existing as well as new students will receive a whole host of benefits including excess baggage allowance, special fares and a chance to earn 1000 Bonus JPMiles. Students availing of this offer will be allowed to carry an extra piece of baggage, with each piece not exceeding 23 kilos, on flights to the US, Canada, UK and Europe; and an additional 10 kilos on flights to Asia (Shanghai, Hong Kong, Singapore, Kuala Lumpur and Bangkok), on Jet Airways’ online destinations. Jet announces new flights: JET AIRWAYS has now connected Pune with direct services to Hyderabad, Nagpur and Ahmedabad. The flight from Pune to Hyderabad and Ahmedabad will be a daily direct flight whereas flights between Pune and Nagpur will operate six days a week, with the exception of Saturdays.

Ariel view of Pune

New “Buy on Board” meal offer from Jetlite JETLITE, Jet Airways’ wholly-owned full economy subsidiary airline, has unveiled its new menu plan on all its domestic services, effective August 8, 2008. In a bid to offer its passengers the freedom to customise meal choices, passengers on-board a JetLite flight will now be able to ‘Buy On Board’ a range of ready to eat snack-meals (sandwiches, savouries, Rolls etc), as also a selection of beverages. All food items will be hygienically packed and served by the airline’s warm and friendly cabin crew. Passengers may make

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their meal choices and purchase the same against cash payments. JetLite also offers its passengers an exciting in-flight shopping experience through a shop onboard programme branded ‘Litedeals’. Under this programme, passengers are entitled to a “Scratch & Win” offer which will give them an opportunity to win free gifts, when they take any of the airline’s domestic flights. While the Litedeals programme is currently limited to the 14 Airports having Litedeals counters, efforts are on to extend this scheme to all the airports JetLite currently flies to. Special fares introduced: Jet Lite has announced the introduction of Apex-21, special advance purchase fares for pas-

sengers travelling in Economy Class on several of the airline’s domestic routes. These fares are available for purchase within India, effective August 1, 2008, and reservations can be made through Jet Lite and Jet Airways’ offices and travel agents. Bookings for these fares must be made at least 21 days prior to departure date of the first segment. In case of cancellations, the basic fare is non refundable. However, the applicable tax component is refundable. Jet Airways, with the acquisition of Jet Lite, today has a combined fleet strength of 109 aircraft and offers a schedule of over 526 flights daily.

Uniglobe and Amadeus launch Complete Access AMADEUS, THE GLOBAL technology partner to the travel industry and Uniglobe Travel (South Asia), the largest single-brand travel franchise company, recently announced the successful roll-out of a specialised integrated booking solution, Complete Access Online. The solution developed with Amadeus, empowers travel agencies to offer enhanced online and offline travel services to corporate as well as individual customers. The booking solution is integrated with Amadeus’ application programming inter- Ankur Bhatia face (API) which facilitates dynamic availability of fares and online booking. With this deployment, Uniglobe franchisees will now have a fully-integrated online and offline business travel service to its customers. It will also offer a one-stop shop for providing the best available rates and most updated travel information on air tickets and hotel reservations to its customers around the clock. Commenting on the integrated offering, Ankur Bhatia, Managing Director, Amadeus India said, “As corporate travel witnesses exponential growth, technology is increasingly becoming an indispensable tool for enabling travel managers to better plan and manage a company’s travel requirements. In order to address this latent need, Amadeus is continuously investing in creating new benchmarks in travel technology that simplify the travel process while adding overall efficiencies. Our solutions are geared to offer the best deals including fares and flight availability while offering more choices of the best airlines, hotels and car rental companies. Therefore, Uniglobe agencies can now offer their customers the most competitive deals from a single integrated platform.”

VICTORS OF AN ERA GONE BY: Air India felicitated the 1983 World Cup winning team last month. The team members travelled by Air India for the celebration at Lord's in London. Photo shows Sunil Gavaskar along with Kapil Dev and other members cutting a cake before the team’s departure for London from Delhi. Looking on is Air India's Jitendra Bhargava.

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INTERNATIONAL Emirates unveils London’s newest landmark EMIRATES AIRLINE unveiled a new landmark for London, a giant model of an Airbus A380 at the gateway to Heathrow Airport. The 45-tonne world record contender was unveiled this morning at the Emirates roundabout by the airline’s President Tim Clark.

puram, and with the launch of direct services to Kozhikode, travellers from across the world can fly to Kerala 24 times a week.

Srilankan increases flights to the Gulf SRILANKAN AIRLINES is closely supporting initiatives by the Government of Sri Lanka to spark a boom in Middle Eastern tourism to the country, by adding more weekly flights to the region. With this initiative, SriLankan will have 37 weekly connections to nine cities in the Middle East — Abu Dhabi, Dubai, Bahrain, Doha, Muscat, Dammam, Riyadh, Jeddah and Kuwait. Additional flights are to three cities — Doha, which increases from the present four flights up to six; Bahrain, which goes from five to seven; and Dammam, which will have three flights, up from the present two. The Government has identified the Middle East as one of the four major thrust markets to Sri Lanka, and has launched a series of marketing campaigns to raise awareness of the island’s attractions. There has been an 80 per cent increase in Middle Eastern tourist arrivals during the first quarter of 2008. The airline’s new packages include ‘Kids Go Free’ which encouraged family vacations by offering free packages to children under 12 when their parents bought packages; and ‘Island Breaks’ which promoted short stopover holidays in Sri Lanka among travellers transiting Colombo to other leisure destinations.

Malaysia Airlines’ first A330 refurbished aircraft POWER ADVERTISING: Tim Clark, President of Emirates Airline, unveils a plaque to mark the installation of the Emirates’ A380 model with the Mayor of Hillingdon, Councillor Brian Crowe.

The completion of the giant A380 replica is the culmination of an ambitious 18-month project to place the Dubai-based carrier at the gateway to the world’s busiest international airport, and at one of the most prestigious advertising sites in the UK. The one third-scale model was flown in ten component parts to Heathrow on July 5. Since then, specialist teams have been working around the clock to launch Emirates’ “first” A380. The replica was built by US-based Penwal, at its manufacturing base in California, over a six month period, using plans provided by the A380’s manufacturer Airbus, in Toulouse. It was then transported by giant truck to Ontario Airport in Los Angeles where it was flown to Heathrow aboard a massive Antonov cargo plane, organised by the Emirates SkyCargo team. A special mechanical ramp was flown into London from Germany to offload the plane as it was too heavy for the Antonov’s winch crane. The wing section of the plane required a police escort as it was driven from Heathrow to the roundabout site. The world’s leading aviation museum, The Smithsonian Air and Space Museum in Washington DC, has stated it is the largest known aircraft model in existence. A world record submission is currently with Guinness World Records. Emirates introduces flights to Kozhikode: Emirates Airlines’ first flight to Kozhikode, EK 562, touched KERALA down to a warm welcome at Calicut International Airport in July. Emirates will operate six flights a week to Kozhikode. Kozhikode This is Emirates’ third gateway in Kerala and its tenth in India, which advances the airline’s India presence to 125 flights per week — the highest frequency operated by an international carrier serving India. The Dubai-based airline currently operates flights to Cochin and Thiruvanantha-

THE FIRST A330-300 aircraft, from the fleet of 11 A330-300 and three A330-200 in Malaysia Airlines’ fleet, that underwent the cabin refurbishment programme, commenced flight operations in the last week of July. Under this initiative, both the Airbus A330300 and A330-200 aircraft are refurbished with new seat covers,

REDEFINING COMFORT: The LCD screens installed in the economy class of the refurbished A330-300 of Malaysia Airlines.

carpet and unpleated curtains, coupled with fresh and vibrant colours, which aesthetically match the whole cabin and improve its overall ambience. Seat cushion and arm caps will be replaced with a new material designed to enhance the seat comfort level. The upgrade also involves the galleys and lavatory flooring with new vinyl designs and better quality material to improve the overall cabin condition. An additional feature introduced in the A330-300 aircraft is the installation of LCD screens. The 15-inch dropdown retractable LCD screens are installed at every fourth seat row in the economy class zone of the aircraft. In addition, two units of this equipment are mounted at the bulkhead of the aircraft.

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Cathay Pacific celebrates in Chennai CATHAY PACIFIC AIRWAYS celebrated the launch of its latest destination and the conclusion of its recent rapid expansion of services to India, with 20 more flights being added to make a total of 28 per week. The airline’s Chief Operating Officer, John Slosar officiated at

celebration hosted by Dragonair Chief Executive Officer Kenny Tang. Among those present were Indian government officials and representatives from India’s travel industry. Dragonair launched the new daily service between Hong Kong and Bengaluru on July 1 and is the only airline offering nonstop flights between two of the most dynamic and forwardlooking cities in Asia. Speaking at the gala event that marked Dragonair’s beginning of passenger services in India, Mr Tang said: “We are delighted to see ties between India and Hong Kong being moved to a new level with the start of our flights. I am sure the travellers of Bengaluru and southern India will soon become familiar with the Dragonair brand.”

Michael palin celebrates Change for Good

CELEBRATING DOWN SOUTH: Dinesh Kumar, Airport Director, Airports Authority of India (second from right), Adit Atal, Vice President, Spencers Travel Services Ltd (first from left), Cathay Pacific Chief Operating Officer John Slosar (Second from left), and General Manager Middle East, India, Africa and Pakistan, Tom Wright (First from right), perform a traditional Indian lamp-lighting ceremony at the event held in Chennai to mark Cathay Pacific’s expansion of services to India.

FORMER MONTY PYTHON STAR and world traveller Michael Palin took the wraps off a British Airways plane carrying a special logo to mark £25 million raised by its passengers for UNICEF. UNICEF and British Airways have worked together on the Change for Good programme for 14 years, raising money to transform the lives of some of the world’s most vulnerable children. The money raised has made a huge difference to the lives of hundreds of thousands of children in over 50 countries that UNICEF works in around the world, thanks to small change

the inaugural celebration for the launch of flights to Chennai, attended by more than 300 guests in the southern Indian city. Guest of honour at the event were Dinesh Kumar, Airport Director, Airports Authority of India, and Adit Atal, Vice President, Spencers Travel Services Ltd. Cathay Pacific launched its four-times-weekly service to Chennai on June 2, connecting passengers from around the world to one of India’s most important industrial and commercial centres.

Dragonair launches Bengaluru service Dragonair celebrated the recent launch of its service to and from Bengaluru (Bangalore) at a special gala event in the southern Indian city last night. More than 300 guests attended the

Lufthansa starts Pune-Frankfurt non-stop

FIRST NON-STOP CONNECTION BETWEEN PUNE AND EUROPE: Werner Heesen (middle) with Deepak Biswas (right) from Lufthansa pose during the launch of Lufthansa’s new non-stop services between Pune and Frankfurt. The Airbus A319 offers a total of 48 seats in an all-business class configuration.

ALL FOR A NOBLE CAUSE: Michael Palin looks out the window of British Airways plane carrying a special logo to mark £25 million raised by its passengers for UNICEF.

donated by customers travelling onboard British Airways flights. The first country to benefit from monies raised through the programme was Tanzania, where Change for Good money was used to fund water and sanitation projects at a time when the country was experiencing severe drought. Amongst the work that took place was the building of a new water pump, benefitting over 7500 villagers, 170 local volunteer staff and 400 students at Mubondo secondary school. In recent years, UNICEF work funded by Change for Good has included an HIV and AIDS prevention project in schools across Ghana and outreach projects for street children in Cairo, offering them proper meals, a basic education and somewhere to play. Change for Good money is also vital in helping UNICEF’s work in emergencies. Earlier this year, in response to the humanitarian crisis in Myanmar (Burma), £300,000 was donated to UNICEF’s emergency relief efforts, helping to provide life-saving supplies such as water purification tablets, drugs, essential medicines and tarpaulins to children left homeless.

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TRAVEL & TOURISM Ginger launched in Delhi IRCTC (The Indian Railway Catering & Tourism Corporation Limited) and Roots Corporation Limited (RCL) launched India’s first Ginger Rail Yatri Niwas.

GO now features accommodation options from Travelguru, one of India’s leading hotel networks, Inasra, a fast-growing Chennaibased hotel aggregator, and Hostelworld, an international hostels aggregator. These strategic tie-ups make iXiGO one of India’s biggest hotel search engines, featuring over 6400 properties in more than 400 cities and towns across India, comparing prices from 40 hotel booking websites. This feature will give online accommodation seekers a range of options ranging from hostels to serviced apartments and luxury resorts — all available on one page. In addition to the enhanced inventory base, iXiGO has entered into partnerships with HolidayIQ and OKTataByeBye.

WelcomHeritage honoured

A WELCOME ADDITION: India’s first Ginger Yatri Niwas stands amidst the hustle and bustle of Ajmeri gate side of New Delhi’s Railway Station.

Ginger Rail Yatri Niwas, New Delhi, stands tall at the Ajmeri Gate side of the New Delhi Railway Station in new earthly hues and shiny warm reds. This hotel was originally built in 1988 as part of Indian Railways’ efforts to offer hotel rooms to the railway passengers at reasonable prices. A guest at the hotel now has a choice of well fitted orange and blue theme rooms with LCD TVs, posturepedic mattresses, anti-allergy pillows, tropical duvets, Smart Bev Tea Coffee Maker, complimentary bottles of water and an access card to enter the room. The hotel also offers a gymnasium and a meeting room for the convenience of its guests. Additionally, it will offer 24 x 7 restaurant that will offer an array of food from across India and different parts of the world. A bookstore for catering to a traveller’s intellectual appetite and a Travel Desk for their local site seeing and travel needs are also being made available as a part of offering. There will further be a 24 × 7 medical store.

Mahindra Travel portal gets IATA certification CLUB MAHINDRA.TRAVEL, (CMT), the travel division of Mahindra Holidays and Resorts India Ltd, has earned the distinction of receiving the IATA accreditation from July. The recently launched Club Mahindra.Travel serves as a complete travel planner for members, thus making their holiday experience memorable. Club Mahindra.Travel is registered under Mahindra Holidays & Resorts India Ltd and will trade as Club Mahindra.Travel (CMT). The CMT portal, certified by IATA for its complete travel planning service is fully equipped to assist the needs of its growing membership base, right from accommodation to air tickets, hotel bookings, international packages, cruises, etc. The service also takes care of documentation like visa processing, foreign exchange and travel insurance. CMT headquarters is in Chennai with branches extending across Mumbai, Bangalore, Hyderabad and Ahmedabad.

iXiGO.com unveils India’s biggest Hotel IXIGO.COM, unveiled its new and improved hotel search engine with tools for searching from an expansive range of accommodation options across India aided by reviews from multiple sites. iXi-

SUNIL SIKKA, WelcomHeritage’s Head of Marketing and Business Development, and Operations Head, Sanjeev Nayar, were recently recognised with special awards. Sunil Sikka, was honoured by PATWA — the Pacific Area Travel Writers Association — with the 2008 International Young Achiever’s Award in Marketing, at a ceremony in Berlin. Sanjeev Nayar, till recently General Manager of Noor Us Sabah Palace, received MPTourism’s best heritage hotel award on behalf of the hotel, along with the new GM Ajay Bharti. The award was presented to WelcomHeritage Noor-Us-Sabah Palace, Bhopal, by the Madhya Pradesh Tourism Minister, Shri Tuko Ji Rao Pawar.

Madhukar Kher joins Le Passage as GM MADHUKAR KHER has joined Le Passage to India as General Manager, Contracting (Aviation — Inbound), and will be responsible for contracting and monitoring of spend on airlines for the Inbound Division. He brings with him 18 years of work experience in Sales and Marketing and Business Development. He has worked with Jet Airways, and Sahara Airlines. Madhukar Kher Prior to joining Le Passage, he was DGM Vendor Management (Airlines and Hotels) with Kuoni Destination Management.

Claridges amongst the world’s best THE CLARIDGES, New Delhi has been voted as one of the best hotels in the world by the annual Institutional Investor magazine’s survey of 2008. The Institutional Investor magazine, a premier financial publication based in the United Kingdom, undertakes annual rankings of hotels from across the globe. The 25th annual survey by the magazine lists The Claridges, New Delhi as one of

EXCELLENCE AWARDED: The plush interiors of Claridges at New Delhi

the best hotels in Asia & the Pacific, amongst a total of 100 hotels from across the globe. The magazine’s annual ranking of hotels, polled from its worldwide subscription base has been an eagerly anticipated event. To compile the ranking, Institutional Investor surveyed senior executives in the financial services industry and got them to rate hotels they had visited recently.

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Thomas Cook launches rail bookings TCIL (Thomas Cook (India) Limited), has launched Indian Railway reserved ticket booking facilities on its portal www.thomascook.in — the only travel solutions portal that offers this facility at present. The primary objective of the portal is to offer a complete range of travel options to the customers, thereby strengthening Thomas Cook’s position as the primary travel services provider in the market. Amitabh Pandey, President and Head — E-Business said, “We are extremely happy to add this functionality, in collaboration with IRCTC, to the bouquet of offerings on our portal. It validates our claim to be the complete travel portal in India.”

Ezeego1.com brings first Hindi online travel site Ezeego1.com, the online travel meta search site, is opening a new window for the vast Hindi speaking travel market with the launch of hindi.ezeego1.com. Customers comfortable with Hindi can now book their domestic tickets in the language of their choice and can avail of fantastic deals in the domestic market. Unveiling the new vertical at a press conference, Neelu Singh, COO, Ezeego1.com said, “there is a huge market in North India that is comfortable with both Hindi and English though they would prefer doing business in Hindi. We have designed this site especially for them.” The entire booking process right up to the payment option is in Hindi. This new initiative is a pilot project and it would open up large untapped markets especially in the Tier II cities such as Jaipur, Chandigarh, Ludhiana, Jallandar, Kanpur, Lucknow, Bhopal, and Indore. Singh adds, “We have also designed a marketing and com-

REACHING OUT TO NORTH INDIANS IN THEIR MOTHER TONGUE: COO of Ezeeego1.com, Neelu Singh at the launch of hindi.ezeego1.com

munications strategy to coincide with the launch. The aim is to create awareness and explain to the customers the booking process in a simplified manner.” The site would gradually introduce many more products, such as holidays, insurance, cruises and hotel bookings in Hindi too. In the next 18 months we would have all our products that can be booked in Hindi. The total active internet users in the country stood at 32 million as of January 2008. Recent government study indicates that there are more than three million broadband connections in India and 40 per cent of this market is in the Tier II cities.

Macau hosts first Indian wedding in a ‘grand’ way Macau served as the graceful venue for organising the first traditional Indian wedding of Sidhartha Mutha and Niyati Karia on July 10, 2008. What makes Macau a dream wedding destination? Macau is centrally located in Asia. It boasts of world-class infrastructure, luxurious hotel accommodation, heritage sites, nightlife, spas, golf and many more attractions. Macau is positioning itself as a brand new destination for organising weddings, which is why the couple was suggested to visit and explore Macau as a possible wedding destination. The Macau Government Tourist Office (MGTO) added even more magnificence and flare to the event. A scout band was specially arranged by

the MGTO, and a horse was presented at the Grand entrance of the hotel premises. Performers dressed in ancient Indian armour and Indian dancers were in the forefront. Five hundred special guests were invited, who travelled all the way through chartered flights and ferries. Master chefs at the resort, together with a team of 50 chefs from India, worked under the guidance of famous India caterer and prepared delectable gourmet and homemade classics. Guests were treated to a combination of traditional wedding ceremonial presentations entwined with the vibrant entertainment and performances by leading Bollywood artist Rodney.

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Memphis airport

Topping the charts

he latest Air Cargo World list of the world’s largest cargo airports, compiled from numbers from Airports Council International and the airports, shows Memphis International — home to FedEx — is still at No one in the world. A very close second is Hong Kong airport, it is getting closer and closer to Memphis. Hong Kong’s growth was better than Memphis’ last year and it was even ahead in the first few months of 2008. The Chinese outpost could soon overtake Memphis. The Alaska gateway of Anchorage — a transit stop for East-West traffic — continues to be at number three spot and all signs point to further growth in cargo volume at this Alaska gateway. Seoul’s Incheon International airport remains at No four but it faces huge competition from China, one

of its top `to and fro` destinations. At No five overall is Chinese airport-

Seoul Incheon International Airport

CRUISING HEIGHTS August 2008

Shanghai. It is the top cargo story of the year with a 15.5 per cent growth. But two airports in Southern China — Guangzhou grew 6.4 per cent last year and nearby Shenzhen was up 10.1 percent. But that’s just a beginning. FedEx’s hub at Guangzhou has been under construction and UPS has announced that it will move its intraAsia hub to Shenzhen. A disturbing trend is the continued decline in cargo volume at many US gateways. Cargo volume at New York’s John F Kennedy and Newark airports declined last year by 2.8 per cent and 2.7 per cent, respectively. Cargo volume also declined at Chicago O’Hare, Oakland and Dallas/ Ft Worth. For the record, Dubai is number 11 on the list and India continues to impress with its growth in cargo, inspite of infrastructure constraints.

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