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PUBLISHER’S NOTE

Year of the yo yo!

AST December, an expansive Praful Patel predicted that 2006 would be the year of consolidation. He made these remarks in an exclusive interview to this magazine. The hard work to get infrastructure off the ground, he emphasized, was finally happening. The privatization of airports was right on track, the airline business was booming and if there was anything left to be achieved it was to get the regulatory framework in order, give some teeth to the DGCA and generally ensure that the gains of the first year in office were optimized. So how does one look at the last 12 months? Have we indeed consolidated? Have we added the gains achieved or has it been a story of lost opportunities? Perhaps, the best way to answer this question is to look at key issues and how Praful Patel has handled them. AI-IA merger: At an IATA conference in Singapore in March, Praful said the idea was to have a merger. However, when it struck a discordant note back home, he quickly had it clarified that it was only a synergy and not a merger. But before you could say ‘Maharaja’, the whole issue was back as a merger. IA and AI were asked to appoint a committee to go into the issue, presentations were made to the Prime Minister and the Deputy Chairman of the Planning Commission, a group of Ministers was set up, Accenture was appointed to drive the process and merger became the flavour of the day. That the whole thing had been an off-the-cuff adventure was evident from the fact that Indian (Airlines) had to go through an expensive livery change and rechristined Indian and while Air India thankfully had not been named Air Indian, it was also in the middle of a makeover with some gentle suggestions from Mantriji. Jet-Sahara deal: This wasn't, of course, any creation of Praful Patel. Naresh Goyal walked into it with his eyes open. But once he signed the deal, he wanted his friend to help him out with some gentle arm-twisting at the DGCA to allot the slots owned by Jet and to push the Home Minister to let him hop on to the Sahara board.

CRUISING HEIGHTS December 2006

The deal actually occurred when the general perception in the industry was that some sort of consolidation or merger was inevitable. Yet the Ministry that is the arbiter of every woe of the aviation business (or at least that is what it claims to be) kept silent on such complex issues like slots, timings and airport assets instead of formulating a transparent and well-thought policy. The result was a short, but far from sweet, public spat between Naresh and Praful.That the deal fell through finally is another story but there can be no doubting that all the waffling at Rajiv Gandhi Bhawan and a desire to be opaque contributed no less to the disaster that the Jet-Sahara marriage was. The divorce proceedings and alimony are now being settled through arbitration in London. The Airport regulator: Well, the whole thing is in a limbo at the moment and it looks like it will end up coming into effect after Mantriji has resolved most of the issues in favour of GMR, GVK and BIAL with the Airports Authority of India being forced to say, “Yes sir, yes sir, no problem, sir.” In effect till the regulator arrives, Mantriji will be the regulator. New fleet for the two carriers: Full marks to Praful as far as the new fleet for Indian and Air India go. Well, there have been some discordant notes along the way, but that's really history. He pushed through the acquisition programme with a neverbefore-seen zeal at the Civil Aviation Ministry and the fact that both IA and AI got the first of their aircraft before the end of 2006 is a tribute to Praful's bull-headed perseverance. It is another matter that the fruits of the deal will go only to Maharashtra: Boeing's MRO to Nagpur and the Airbus one to Nasik. Consolidation : What consolidation? Cat II Vs Cat III still continues to plague Delhi airport. Passengers are still irritated, Mumbai and Delhi continue to suffer from congestion (Praful's friend, Vijay Mallaya has come up with a new one: Congestion surcharge), there is controversy over the non-metro airports development, the merger still leaves plenty of questions unanswered and we are at the end of the year. Consolidation? Maybe we could call it the year of the yo yo!

Off the cuff

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Slothful waste

A recent study in the United States outlined a well known secret: US airports waste millions of dollars each year by discarding 4,250 tons of aluminum cans and other items that could be recycled, a new report says. The over 24-month long investigation by Natural Resources Defense Council examined recycling efforts at 30 US airports. The report was revealing: it found that the industry threw out 9,000 tons of plastic and enough newspapers and magazines to fill a football field to a depth of more than 230 feet. And the statistics too, was revealing: airlines in the US throw away enough aluminum cans every year to build 58 new 747s. The tragedy is that along with a huge amount of recyclable waste, the industry is throwing away a significant amount of money. What's the status in India? For starters we aren't as bad as the US, but we are nowhere near as good as the European Union. The standards are stringent in mainland Europe and recycling and environmental standards are so high that even the US is alarmed at the EU restrictions. Their latest worry is the tough new laws on aviation emission that is likely to become a standard in the near future. The GMR-led Delhi Airport is likely to plan a huge water conservation movement through an extensive recycling network. That's a good beginning, but we need to build on it.

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contents

GROUND HANDLING RUNS AGROUND p22 The want of a comprehensive Ground Handling policy confronts the country's civil aviation sector. With new airports coming up, there is an urgent need for a clear-cut directive from the government.

TRAVEL & TOURISM

p34

With its visionary president at the helm of its affairs, the Federation of Hotel and Restaurant Associations of India, has chalked out detailed plans to cash in on the tourism boom that is being witnessed in the country. CRUISING HEIGHTS December 2006

GLOBE TROTTING

p14

A report in The Guardian of Britain that new hi-tech passports issued to three million Britons can be hacked, has caused consternation.

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

CRUISING HEIGHTS K. SRINIVASAN Publisher

TIRTHANKAR GHOSH

PERSONALITY p20 NEWS DIGEST

p10

Indian has signed a MoU with French major Snecma Services to set up a maintenance, repair and overhaul (MRO) facility for servicing CFM 56 aircraft engines. The new MRO facility could be set up near Delhi.

The "father of the international civil aviation industry", former ICAO chief Dr. Assad Kotaite was in Delhi to receive the Lifetime Achievement Award from Delhi Tourism. He had some wise words for the sector.

Managing Editor

R. KRISHNAN Consulting Editor

ANAMIKA VERMA Editorial Coordinator

DUSHYANT PARASHAR Creative Director

BHART BHARDWAJ Art Director

RAJIV SINGH Gen. Manager (Admn.)

RENU MITTAL Executive Director

SPOTLIGHT AIRCARGO

p30

The world's aircargo fleet will shift towards more widebodies in the future, according to airplane manufacturers. With growth rising by the day, Boeing and Airbus are looking at the Indian aircargo market closely.

p17

While India and EU signed a Joint Declaration for closer cooperation in civil aviation, Delhi International Airport announced its Master Plan envisaging the design and construction of a new terminal for Delhi Airport.

BACK PAGE

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Bhangra dancers, Civil Aviation Minister Praful Patel, US Ambassador David Mulford and Boeing's Dr Dinesh Keskar along with a host of bigwigs from the country's aviation sector welcomed Air India's first of 68 Boeing jetliners recently. CRUISING HEIGHTS December 2006

Editorial & Marketing office: Newsline Publications Pvt. Ltd. C-15, Sector-6 Nodia-201301 Telfax.: +91-120-4257701-03 All information in CRUISING HEIGHTS is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Published by K. Srinivasan 4C Pocket-IV, Mayur Vihar Phase 1, Delhi 110091 and printed by K. Srinivasan at Nutech Photolithographers, C-74, Okhla Industrial Area, phase-I, New Delhi 110 020 Vol 1 No 7

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Compassionate Indian

PERISCOPE

"We have called for submissions from the employees and the unions as it will be a negotiated wage revision… even though the wage revision was last carried out nearly a decade ago, the airline has been revising the salaries through productivity-linked incentives (PLIs)."

“

Indian CMD VISHWAPATI TRIVEDI on employees’ demand for more wages

LETTERS TO EDITOR

YOUR COVER story on India's aircargo opportunities, Cargo Dreams! (November 2006), was timely. It gave me – and I am certain your other readers too – the opportunity to get a clear picture of the situation. I was not aware that such huge tonnages were being sent out of the country. However, as the cover story mentioned, there is much more scope for growth. If only our infrastructure could keep pace with the massive growth. P Varshneya, New Delhi

YOUR EDITORIAL, Get out of the kitchen! made a lot of sense. Why is it that the government adopts double standards when dealing with the private sector? With a plethora of private airlines in the Indian skies now, perhaps, the government believes that all of them need to be handled with care; hence the open door for new routes. But all this is at the cost of the state-run airlines. When will our ministers learn this lesson? Anil Sood, Mumbai

I APPLAUD your editorial comments in the November 2006 issue of Cruising Heights. Your suggestion (should I put it as recommendation?) to the government to desist from becoming chartered accountants is in the right spirit. Private airlines are certainly not in charity business but want to make money. Why then do airline bosses want the government to bail them out – always? Your point about providing more facilities for the travelling public seems to always take a backseat. Pradeep Bose, Kolkata

Talking point "We want to have a panIndia presence and will bid for modernising airports in the metro and non-metro cities. The dismissal of the case has strengthened our hands and will allow us to go forward without any impediments for creating a world-class airport in Delhi by 2010."

SRINIVASA BOMMIDALA Managing Director of Delhi International Airport Ltd on DIAL's plans

Hindi-Finni bhai, bhai "We want to fly to new destinations here because we believe in the country's strong economic growth and expanding travel market. Besides, Finnish companies have tens of factories and sales offices here and Indian companies have strong ties to European markets."

Finnar Deputy CEO Finnair deputy CEO HENRIK ARLE on their decision to launch flights into India

Indian shortcut to global dreams

I HAVE been a regular reader of Cruising Heights for sometime now and I find your Off the record very interesting. I thought that ministries like Home and Finance held a lot of secrets but was never aware that the Ministry of Civil Aviation or Tourism were equally high-flying with lots of goings-on behind the scenes. K N A Subramanyam, Hyderabad

"We are thrilled to have made the decision to launch the service. It has exceeded expectations on several fronts, be it in revenue generated or the mix of the passengers carried."

All correspondence may be addressed to Editor, C-15, Sector-6, Nodia-201301 OR mail at newslinepublications@rediffmail.com

JAMES J. SUMMERFORD, VicePresident (Europe, Middle East and India), Continental on one year of operations

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lion) TCS will provide Qantas to provide a range of IT applications, transforma-

tion and maintenance services.

The Qantas contract is the largest sin-

gle agreement awarded to an Indian outsourcing company in Australia to date. Under the contract, TCS will provide support and maintenance to all of Qantas' key IT applications for airport operations and commercial systems. Interestingly, rival Satyam Computer Services has also signed a seven-year contract with Qantas. The agreement covers application development and maintenance services for over 150 applications across a wide portfolio of technologies.

COLD STATS

Qantas is the airline in the news. And not just for the $ 11.1 billion takeover of an airline that has an iconic status for most Australians. The takeover by a consortium of international investors has overshadowed a remarkable Indian show at the Australian airline. Indian IT services provider Tata Consultancy Services will soon be the IT face of the Aussie airline. Here are the cold stats: TCS signs a seven-year deal with with Qantas. Value of deal is around A$120 million (US$90 mil-

LOOKING GLASS

A promise is a promise "I would like to assure you that HR issues are a top priority with the government and the board and management of the two companies and any retrenchment of personnel as a result of the merger has been categorically ruled out." Air-India CMD VASUDEVAN THULASIDAS in a letter to the employees on the A-1, Indian merger issue

Have your seat and phone too "Our customers are already making more than 6,000 calls a month from our in-seat phones, so we will be making life easier." Emirates chairman SHEIKH AHMED BIN SAEED AL-MAKTOUM on having phones on aircraft

CRUISING HEIGHTS December 2006

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OFF THE RECORD

Punhani or Verma? SO WHAT'S the status on V K Verma.The continuing saga of AI's Director (commercial) redesignated as the executive director (commercial) till his clearance by the ACC (Appointment Committee of the Cabinet)? The latest news is that Verma has completed 95 per cent of the marathon and all that remains is the remaining five. In effect, clearances at various levels have to revalidated before they are finally put up to the ACC for approval. Which brings us to another question: Is Verma the seniormost officer at AI after CMD V Thulasidas or will that honour go to S Punhani, AI's Director (Finance)? At the moment, Punhani enjoys the absolute confidence of the CMD who trusts him and delegates responsibility to him. Those in favour of Punhani state that as the seniormost director on the board, he will be the automatic choice in case Mr. Thulasidas does indeed demit office -- which is also a million dollar question -- at the end of December. But there are others who believe that it won't be Punhani but Verma who is the seniormost as a director-level officer. Now, what is the rule and how it comes into play are details we are not aware of. But his supporters swear that it could well be Verma. But the best is reserved for a long-time Air India officer who said: "Don't waste your time discussing these names. Mr. Thulasidas is going nowhere." That could well be true, considering the formidable reputation that he enjoys in Delhi and Mumbai.

Bzzz.zzz.zzzz AS USUAL the names have started doing the rounds. Who will be the next Secretary, Civil Aviation when Ajay Prasad retires from service on January 31,2007? Lots of names are doing the rounds but what's the point of mentioning them. When K Roy Paul retired some two-and-a-half years back, no one could predict that it would be Prasad who would move from South Block to Rajiv Gandhi Bhawan. In any case the grapevine is that Mantriji has an assignment in mind for his favourite officer. ARUN MISHRA will soon move from his position as Director in the Cabinet Secretariat to his new job as Joint Secretary at Rajiv Gandhi Bhawan. A

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Great honour V P AGGARWAL has taken over the new Member (Planning) at the Airports Authority of India and Inderjit Singh has moved over as the new ED (Planning). Both are dyed-in-the-wool veterans of the airline business and Aggarwal must hold some record for the number of years he has served in the North-East.To top it he is the youngest member on the AAI Board. Close on the heels of their coming into the top decision making fold comes news that the AAI has won against stiff global bidding to develop the main airport at Nigeria. That goes to show that given the opportunity and the freedom, AAI can compete with the very best. But a wag at Rajiv Gandhi Bhawan couldn't resist himself. Said he: "Praful Patel is the happiest person at the development. Now, he can outsource the AAI's expertise to Africa." A direct translation would read: "Thank God, now they can be busy elsewhere so that the GMRs and the GVKs can run airports in India.â&#x20AC;? Samajh Gaye Na!

favourite of Cabinet Secretary B.K. Chaturvedi, Mishra, a 1984 West Bengal cadre officer is viewed as an outstanding civil servant. By the time this appears in print, the formalities of Mishra's appointment could well be over and he could be at his perch in RGB. GUESS WHO is attracting the largest number of aviation professionals at the moment. IndiGo, if one has to go by the industry view. But things could change very soon if the interest in general aviation perks up. Several industrial houses are importing their own jets and some are contemplating a fleet. And they are looking at hiring seasoned professionals on the verge of superannuating from the

Gohain as regulator THERE IS little doubt that Kanu Gohain is one of Praful Patel's favourite officers. The Director General of the DGCA wields the stick like a rapier each time he is asked to: be it the AAI, the private airlines or the airport operators, Gohain brooks no nonsense when it comes to the Minister's diktat. So what happens when the good man finishes him term sometime in the middle of 2007? There are several possibilities. For one, Gohain could well be the airport regulator now that time seems to be passing Ajay Prasad (not that he can't make it to the job even after superannuating). In fact, Gohain could be Mantriji's choice. In any case, there are some who are speculating that the DGCA is already undertaking the task of regulating airports and it could well be redesignated as a regulator in which case Gohain will go up to the age of 62. But all this is the realm of possibilities at the moment. Watch this space for an update.

national carriers. Air India's Director (engineering) has moved to Reliance and his counterpart at Indian, Babu Peter has joined Cochin Airport. FORMER MEMBER (planning) at the Airports Authority of India A.K. Mishra, who retired just the other month, may soon get a new job as a consultant if the grapevine at RGB is to be believed. Apparently, Mishra has impressed the powers that be enough, so they are keen to reward him with a consultancy. Mishra should be

CRUISING HEIGHTS December 2006

pleased. Loyalty has its rewards. RAGHU MENON is back at the Civil Aviation Ministry as the Additional Secretary and Financial Advisor. This is his main charge and what it means is that he will call the shots in the Ministry. Ajay Prasad isn't very pleased about that. But how does it matter? He is going in two months. The point is Praful Patel has a great liking for Menon who was a JS in the Ministry when aircraft acquisition was its peak a year-and-a-half back.

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OFF THE RECORD

What are you crowing about?

T THE media conference that DIAL (Delhi International Airport Ltd) held to announce their spectacular plans for the Indira Gandhi International Airport, it was evident that all wasn't well between all the promoters. And the first indication came when Srinivas Bom idilla told one questioner that the clearance was still to come and there were some clarifications from the Ministry that they had sent in their reply to. So what does one infer under the circumstances? That the formal green signal had not yet been given. Then, why the tearing hurry to make the announcement? In fact, the press conference scheduled for a lunchtime announcement was later moved to 3.00 pm to accommodate the other high-profile event of the day: Praful Patel receiving the first of the 68 aircraft from Boeing for Air India at the very same Palam airport. Much worse, when Srinivas Bommidala, GMR's son-in-law and the karta dharta (Managing Director) of DIAL brought forth his other partners in the venture, he had Fraport and the Malaysians (Eraman) on the stage with him to take a bow. But, bless your soul; the Airports Authority top brass was nowhere to be seen. This when they were the 26 per cent stakeholders in the project and deserved a justifiable spot on the main table. And that's what they say is the problem with GMR as far as Delhi goes. And it's not something that only the AAI complains

about; it's something that rankles officials in the Ministry of Civil Aviation. As one of them said: "How can Mr Bommidala address the Minister as Prafulbhai in meeting after meeting? He may have a relationship with Praful Patel outside the Ministry, that's a separate issue. Why bring it into the conference room at Rajiv Gandhi Bhawan?" Clearly, though, DIAL and Mr Bommidala don't care. Or else they would well have not just waited for the Ministry to grant them permission. And would have made sure that Mr. K Ramalingam send in his representative to the meeting. The tragedy is that the Ministry is actually unmoved at all this arrogance. The other day, the top brass from DIAL met with the Minister and took up issues with him directly without ever-even mentioning it to the AAI. For starters, they want the Group of Ministers to be an umbrella outfit that will resolve all their woes including the issues with the Ministry of Defence.Officals sagely nodded their heads as if it was the best piece of advise they had received in a long, long time. Good, these issues are long-pending and need to be resolved, but hadn't they taken these points when the AAI repeatedly pleaded with them? Also, will this committee take up issues with the Raksha Mantralaya on the problems that the AAI faces with the Navy in Goa or with the Air Force in scores of airports across India? Humility, Mr Srinivas Bommidala, humility. Even more so when one is down and out like the AAI.You never know when they will bounce back?

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NEWS DIGEST

Air IndiaAlteon tie up for simulators AIR INDIA has signed an agreement with Alteon, a wholly owned subsidiary of Boeing company that is the world's first global training company, offering flight and maintenance training in the 100+ seat aircraft category, to have a Boeing 737NG simulator delivered to the national carrier's Mumbai facility. According to Air India, the simulator will be installed and certified by the end of January 2007. A press release issued by the airline said "by providing solutions in Mumbai instead of having the pilots and crew travel to other training centres, Air India can save both time and money". In the course of delivery of the widebody 777s and later the Dreamliner 787, Air India will also receive from Alteon the simulator for Boeing 777 by November 2007 and a Boeing 787 simulator by early 2008. Air India expects the installation of new simulators will also open up opportunities for training pilots of other airlines as well when it rents out simulator time.

Virgin methods of conservation

Indian plans its own MRO INDIAN AIRLINES has signed a memorandum of understanding with French major Snecma Services to set up a maintenance, repair and overhaul (MRO) facility for servicing CFM 56 aircraft engines. The new MRO facility could be set up near Delhi and would initially be able to handle 40 engines a year. The numbers could go up to 100 engines annually. Indian has chosen CFM engines to power its 43 new Airbus aircraft comprising 10 of A 319, four A 320s and 20 A 321s. Interestingly, its 30 owned A 320s and 18 leased A 320s are powered by IAE's V 2500 engines, which incidentally also powers the A 320s belonging to Air Deccan and Kingfisher with some variations in terms of de-rating of the engines. When one mentions 43 new Airbus aircraft of Indian, it means 86 engines (as they are all twin engine planes). The thumb rule is for every four engines, there is one spare engine. In the case of Indian it will be not less than 21 spare engines. However, Air India is also buying 18 Boeing 737-800s, which will be powered by CFM 56 engines. This means Air India will also have 36 CFM engines to power its 18 Boeing 737NG aircraft plus another nine spare CFM engines based on the ratio explained above. Thus, in the next five years -- by that time all the aircraft of both Indian and Air India will be delivered -- the MRO of Indian-Snecma may have captive engines totaling 152, good for decent business. In the proposed JV, Indian will hold 49 per cent equity while Snecma will have control of 51 per cent. It is rather strange that when Indian had earlier planned to have its own MRO and had signed a MoU with Singapore Airlines Engineering Company (SIAEC), it held the controlling 51 per cent equity and balance 49 per cent was allotted to SIAEC. At that time the charge against Indian Airlines was that it did not go through the proper procedure of a choice based on offers invited from various engine specialists. Now, we find that the government has blessed Indian's new JV under more unfavourable terms and that too, without bids.

VIRGIN Atlantic is adopting new techniques to save fuel. It has decided to tow its Boeing 747-400 aircraft to the take-off area in London airports during the months of December 2006 and January 2007.This could save Virgin up to two tonnes of fuel per flight. The aircraft will be towed to Heathrow and Gatwick runways to cut fuel burning. Richard Branson's Virgin hopes to reduce the time engines run before taking off by about 10 minutes. Virgin Atlantic is working with BAA and National Air Traffic Services during the trial with a longer run-out expected in the first quarter of 2007. Virgin is also holding talks with international airports in San Francisco, LA and JFK about the timing of similar trials.

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Sahara, Jet's new battleground is a London court

IATA joins hands with Kale for e-freight

AIR SAHARA has filed a Rs 2000 crore claim against Jet Airways for non-completion of their January 2006 agreement. The claim has been filed in London with the three-member arbitration panel headed by British judge Lord Stein. The final order is likely to be issued

Young blood by March 2007. Air Sahara's claim is based on the cash losses and depreciation in its value as a result of the US $ 200 million buyout deal falling through. Jet has named Justice S P Bharucha, former Chief Justice of India, as its arbitrator while Air Sahara has named former Supreme Court Judge B P Jeevan Reddy. As per sources, Sahara's first prayer is to direct Jet to honour the share purchase agreement, which it says exists and is binding. However, instead of Rs 2300 crore value

agreed to earlier by both the airlines, Sahara has now hiked its claim to Rs 3020 crore plus interest payable from January 18, 2006, the day the merger deal was signed between the two private airlines. Jet, on the other hand, has asked the arbitrator to direct Sahara to return Rs 500 crore paid as advance.

MORE than 50 years after the foundation of the Lufthansa Pilot School, the 350th class of Lufthansa student pilots has started on the demanding course of training, which will turn them into commercial pilots. There are 24 young men and women from Germany, Austria and Switzerland will go back to school for two years in Bremen and Phoenix/Arizona and complete their flight training like the 6,000-odd graduates of the Flying School before them. The share of female trainees in the classes is currently 15 per cent -- with a rising trend. In any case, the number of students enrolling at the Flying School reflects the favourable situation for a career in the cockpit. In 2007, Lufthansa plans to take on 240 new pilot students. Even in the currently developing boom phase for the cockpit, Lufthansa continues to rely on its tried and tested system of a demanding selection, solid basic training and ongoing cockpit training. Meanwhile in India, women are slowly gaining prominence in what was initially a man's domain. The country had 15 women pilots at the turn of the century but today the figure is 137 as against 1,300 men. The airline that has attracted the most number of women pilots is Air Deccan, which has more than 40 women pilots. According to Air Deccan MD Capt. G R Gopinath, the women pilots are passionate about flying, committed and highly disciplined. While a number of women pilots from the Indian Air Force are joining commercial airlines, there are others too. One of the main reasons for women to take up flying is the independence the career gives them. To top it all, the icing on the cake are the attractive remuneration and the thrill of the unknown. Encouraged by the trend, Indus Aviation has decided to start a pilot academy in Bangalore, with special emphasis on women. The academy will start by early 2007, according to Ravi Kota, who has set up the institution.

CRUISING HEIGHTS December 2006

KALE Consultants, a leading provider of software solutions and outsourced services to the travel and transportation industry, and IATA have announced that they will together work to promote e-freight in India. Kale will act as the nodal agency to coordinate activities required to implement e-freight in India. IATA efreight is one of five global initiatives being undertaken under the 'Simplify the Business' programme. Kale, as a SIB partner, will be supporting IATA in this endeavour and will work with IATA to help bring India to a paper-free environment. At a news conference in Delhi, Mr Aleks Popovich, Global Head of Cargo, IATA said: "India is a vibrant and rapidly growing economy with an expanding air cargo business. However, there are many barriers that India needs to overcome before it can truly be considered efreight compliant. With the collaboration of Kale, IATA hopes to speed India's journey towards e-freight compliance". Kale Consultants CEO and Managing Director, Mr Vipul Jain, said his firm would attempt to deliver the solution in the shortest possible time. Kale Consultants has also a BPO catering to the travel and transportation industry. It recently offered a complete cargo solution to Indian Airlines. Kale has three offshore delivery centres in India, two BPO service centres in India and two international offices in the US and UK.

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NEWS DIGEST

Eurofly flies in and pulls Alitalia down further

OW does it matter if BMI withdraws from India and leaves only BA and Virgin Atlantic from UK to ferry Indians from Bharat to other parts of Europe. Starting January 15, 2007, Rome will only be seven-anda-half hours from Delhi when the new Italian carrier Eurofly begins direct flights between the two capital cities. According to Armando Brunini, Executive Vice President, Eurofly, the airline will operate the route using brand new A 330 aircraft with a seat configuration of 256 seats in economy and 26 seats in business class. The catering on board will be a mix of Italian and Indian. The inaugural return fare has been fixed at Rs 20,000 plus taxes. The annual growth in traffic between the two countries is estimated at 25 per cent and the new direct flights are expected to stimulate the market to yield at least 10 per cent additional growth annually. The annual estimated traffic between India and Italy or more specifically Rome is about 1.5 lakh travellers. Eurofly is a leisure airline catering mainly to the tourism segment, mostly long haul. In the beginning, at least 50 per cent of the traffic outbound from India on Eurofly flights are expected to

(Left to right) Armando Brunini, Executive Vice President, Commercial Eurofly, Paolo Trichilo, Deputy Chief of Mission, Embassy of Italy and Mario Media, Marketing & Business Development Director, Eurofly

go beyond Italy. With the entry of the new airline, the future of Alitalia, once an established brand name in India, may go down further. Already, Air France and KLM are reportedly under pressure to commit a merger with Alitalia, which has been ailing for some time. Initial talks of takeover or merger plunged shares of Air France and KLM while that of Alitalia rose sharply. Sig-

nificantly, the leftist Italian Prime Minister, Mr Romano Prodi, challenged Air France and KLM in an interview to French daily Le Figaro that they should clarify their stand. He questioned: "Does it want to create a big European air transport group in which Italy has also its place or simply grab the Italian air transport market which is very big and very rich?"

No more A 380 cancellations for Airbus

HERE IS good news from Airbus Industrie. After repeated delays to its dream project A 380, the Toulouse-based European consortium's parent, EADS, has announced that there have been no further cancellation of the superjumbo after Fedex Corp scrapped its booking in November 2006. Fedex had cancelled its order for 10 units of the freighter version of the A 380s. Even as it maintains this stand, Thai Airways has reportedly sought a fine for the delay in A 380 delivery. According to Thai Airways President Apinan Sunanaseri, Thai had booked six 555-seat A 380s, but the deliveries have been postponed by 22 months from the original date in 2009. The first three aircraft are now scheduled for delivery in early 2011. He, however, ruled out any cancellation in the immediate future and said it would depend on the negotiations Thai was having with Airbus. Airbus Industrie will reach the break-even point in the A 380 programme with the delivery of super jumbo number 420. Even as it faces problems on A 380, the EADS board has approved the launch of Airbus A 350 XWB programme, which the company thinks will be a clear winner in the medium-capacity ultra long range segment. In the intervening period, the planemaker has decided to boost its best-selling A 320 line of aircraft to 36 per month by December 2008 from the present level of 30 to meet

demands. The production will rise to 32 planes per month in January 2007, and then to 34 in March 2008 before hitting 36 per month by the end of the year 2008. What needs to be guarded against is the fact major airlines are now placing orders for advanced aluminium alloys, titanium, new composite materials and electronic systems. However, to answer that Airbus says it was working on the A 350 XWB. Even Boeing has not used composites so extensively for narrow body 737 NGs as it is planning to use in the 787s.

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India provides Lufthansa with good times

UFTHANSA has launched its first ever non-stop service between Kolkata and Frankfurt from December 2, 2006. The German carrier will fly thrice a week between the two cities. India is the only country in Lufthansa's Asia Pacific network to be served through six gateways: Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Kolkata. The airline now operates 45 flights weekly between India and Germany. Historically, Kolkata was the first destination in India from where Lufthansa began its operations on November 1, 1959. According to Thierry Antinori, Lufthansa's Executive Vice President, Marketing and Sales and Member of the Executive Board of the carrier, Asia-Pacific accounted for 20 per

(Right)Thierry Antinori,Lufthansa's Executive Vice President

cent of Lufthansa's global revenues and India contributed 18 to 20 per cent of that. As a market in the region, India ranked second after Japan. Nearly 60 per cent of passengers travelling between India and Germany were people of Indian origin and 40 per cent travelling out of India were onwards to the US from Frankfurt. On the India-Frankfurt share, the airlines' market share was higher than its capacity share.

Hike in FDI for civil aviation

OVERNMENT of India is seriously considering to hike the FDI component in the category of non-scheduled airlines, cargo operation, helicopter services and sea-plane operations to 74 per cent. However, there will be no change in the 49 per cent foreign equity cap on domestic private airlines, according to Minister of Civil Aviation, Mr Praful Patel. While he hinted at the possible hike in FDI in the mentioned categories at the recently held two-day EU-India aviation summit, the clarity on 74 per cent came over the next 10 days on December 5, 2006 when he told the first IATA Cargo in Emerging Markets Series India 2006 conference in New Delhi. Mr Patel predicted that over the next five to ten years, 500 aircraft would be

dedicated to national and international cargo. Much of the multiplier effect will come from the burgeoning Indian retail sector, which of late has attracted biggies like Bhartis, Reliance, Wal Mart, Tatas, AV Birla Group, etc. In fact, Reliance Industries which recently launched its first retail store under the name Reliance Retail in Hyderabad has not only invested thousands of crores in this business but is also proposing to buy at least 12 Airbus A 320 type or Boeing 737-800 type freighter version to connect its retail outlets, warehouses and ensure just-in-time deliveries mainly of highly perishable items. Reliance Retail has already appointed Mr V K Mehra, former Director Engineering of Air India to look after the fleet of aircraft it is proposing to acquire.

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GLOBE TROTTING

Big Brother might be watching but â&#x20AC;Ś A REPORT in The Guardian has caused more than its share of raised eyebrows. The newsitem mentioned how the new hi-tech passports, which have been issued to three million Britons, could easily be cracked. With the help of a computer expert, journalist Steve Boggan deconstructed the life of an airline passenger simply by using information he got from a boarding-pass stub that had thrown into a dustbin. By using the passenger's British Airways frequent-flyer number and buying a ticket in his name on the airline's website, they were able to access his personal data, passport number, date of birth and nationality. Based on this information, using publicly available databases, they found out where he lived, his profession, all his academic qualifications and even how much his house was worth. In short, the passenger's identity was stolen. Apparently, these new, ultra-secure passports, incorporating tiny microchips to store the holder's details and a digital description of their physical features (known as biometrics) were supposed to make identity theft more difficult. Today, however, the three million such passports that have been issued do not look so secure. The introduction of these new passports became a necessity after the 9/11 attack on the World Trade Centre, in which fake passports were used. The US had then decided that foreign citizens who presented themselves at its borders had to have more secure "machine-readable" identity documents. It told 27 countries that participated in a visa

waiver programme that citizens with passports issued recently needed to have micro-chipped biometric passports or would have to apply for a US visa. Among those 27 countries are the major EU members, UK and other friendly nations rang-

ing from Andorra and Iceland to Singapore, Japan and Brunei. The standards for the new passports were set by the International Civil Aviation Organisation (ICAO) in 2003 and adopted by the waiver countries and the US. The ICAO recommended that passports should contain facial biometrics, though countries could introduce fingerprints at a later date. All these would be stored on a Radio Frequency Identification ( R F I D ) microchip, which can be accessed from a short distance using radio waves. Now, however, it seems that even such hi-tech innovations can be outsmarted. What next?

No necking, we are airline passengers A CALIFORNIA couple is facing federal charges after allegedly refusing to stop "overt sexual activity" on a flight to Raleigh. Carl Warren Persing of Lakewood and Dawn Elizabeth Sewell of Huntington Beach, California, were indicted on charges of interfering with flight crew members during their Southwest Airlines flight from Los Angeles. According to court documents, flight attendants saw Persing and Sewell kissing, embracing and "acting in a manner that made other passengers uncomfortable" while the plane stopped at Phoenix. A flight atten-

Alitalia's flight attendants will wear trousers ALITALIA'S female flight attendants will be allowed to swap their traditional skirts for trousers, breaking with half a century of rigid dress code at Italy's flagship carrier. Following negotiations with unions, Alitalia has offered the new option, according to Rosanna Ruscito, a representative of the Fit-Cisl union and a flight attendant herself. "We spend our working days travelling from one airport to the other, with great weather differences, snow and freezing temperatures, only wearing a little skirt," she said. "If I go to a warm country, then I prefer the skirt, but if I go to Chicago, Moscow or New York, I want to be free to choose to wear pants" in the winter. Ruscito said Alitalia had so far not allowed its female crew members to wear trousers because it wanted to project "an image of femininity." Alitalia flight attendants are considered icons of Italian beauty and style, and top fashion designers have been enlisted over the years to create their prim jackets and skirts. Ruscito, who had not seen the trousers, said she expected they would be the same sober dark blue color as the skirts. She pointed out that other international airlines allowed their flight attendants to wear trousers.

CRUISING HEIGHTS December 2006

dant asked them to stop. They obeyed initially but resumed during the flight from Phoenix to Raleigh. When the flight attendant again requested them to stop, Persing allegedly told the flight attendant: "I'm going to give you one warning to get out of my face." Persing and Sewell continued the verbal harassment after a flight attendant refused to serve Persing alcohol, according to court documents. Law enforcement officials were waiting for the couple when they arrived at Raleigh-Durham International Airport.

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Live near an airport? No problem

Airport no venue for porn show

A RADICALLY redesigned passenger jet could alleviate a complaint of people who live near major airports: the deafening sound of planes taking off and landing. A team of 40 researchers from Cambridge University and the Massachusetts Institute of Technology have spent three years working on a wide, streamlined jet. The "silent jet," which from outside an airport would sound about as noisy as a washing machine or other household appliance, would carry 215 passengers and could be in the air by 2030. The breakthrough could bring a welcome change to aviation, industry experts believe. Reducing noise in recent years has been a focus of makers of planes, such as Boeing Co and Airbus, and jet engines, including General Electric Co, United Technologies Corp and Rolls-Royce Plc. While their efforts have mainly involved tweaks to existing technologies, the MIT-Cambridge team set out to redesign the plane from the ground up, with a focus on quiet. Instead of the tube-and-wing model common today, the Silent Jet is a flying wing, evoking current "stealth" military aircraft. It lacks the central vertical stabiliser common at the tail of current passenger jets and instead uses a pair of stabilisers at the wingtips. The proposed plane has a 222-foot wingspan and is 144 feet long from nose to tail, comparable in size to a Boeing 767. The design allows the plane to remain in the air at slower speeds, which would allow it to cruise in for a landing more quietly. The plane does not use wing flaps, which are common on today's passenger jets and create much of the landing noise.

THIS one really takes the cake. Close to two years after waiting passengers at the Indira Gandhi International Airport were shocked to see a pornographic film air on a television set there, the vice-president of a video channel and a cable TV operator were formally charged in the case. Additional Chief Metropolitan Magistrate Kamini Lau framed charges against Col. Shukla (Retd), the vice-president of Trinity Channel, which allegedly aired the film, and the cable operator who allegedly beamed the channel for the January 7, 2005, incident. "There is no reason why the vicepresident of Trinity Channel, who as per record was prima facie aware of the nonsense being run

on his channel, should be discharged. More so when the material on record prima facie shows this was done only with an intent to increase viewership," said Lau. Aired at 12.30 a.m. on a TV set at Terminal-II of the airport, the film ran for 15-20 minutes and displayed the logo 'Trinity Channel', according to witnesses. The airport manager on duty captured the offensive film on CCTV cameras and immediately filed an FIR against the channel for showing a pornographic film.

Landing aircraft in foggy or inclement weather will be a song AN INDIAN aeronautical engineer has invented a device that accurately measures the distance between an aircraft and the runway in adverse weather conditions like fogs, thus enabling pilots to make safer landings. The instrument, built by Joseph Pichamuthu who was formerly with the National Aerospace Laboratories, helps a pilot make a safe landing even when the aircraft is directly facing the sun. Existing instruments use manual assessment of the meteorological optical range (MOR) to deduce the distance between the aircraft and the runway. Pichamuthu's device incorporates the effects of anisotropic atmospheric brightness to quantify the reduction in visibility of objects viewed in directions of high brightness. The current practice of ignoring directional effects could result in reports of unduly high values of MOR and thus of runway visual range, which could prove dangerous for a pilot landing an aircraft, said Pichamuthu, now a professor of electronics and communication engineering at Sir M Visvesvaraya Institute of Technology in Bangalore. The device would prove helpful to pilots particularly during exigencies, when they have little time to modify the aircraft's flight path. During research, Pichamuthu's device was tested at the Indira Gandhi International Airport, which experiences foggy conditions and a high degree of sunlight frequently. The MOR values were assessed with the manual method used at the airport and with Pichamuthu's device, which was found to make more realistic assessments. CRUISING HEIGHTS December 2006

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SPOTLIGHT

India, EU all set to finalise

HORIZONTAL AGREEMENT The Joint Declaration signed by the Minister of Civil Aviation Praful Patel and EU Vice-President Jacques Barrot seeks to lay the foundation for closer cooperation in a range of areas of civil aviation. “ Since 1990, seats available between EU and India has increased by nearly 200 per cent. Forecasts suggest that EU-India air traffic will increase by 7 per cent, per year. over the next 15 years.” — Jacques Barrot

“On a 10-year horizon, overall passenger traffic cannot but grow by 25% annually. Infrastructure has to see a quantum jump. We are mindful we cannot do it all ourselves. We need to do it holding hands.” – Praful Patel

T WAS a top-drawer event with big ticket CEOs from Europe and India converging at Delhi's Maurya Sheraton for the two-day Indo-EU Aviation summit. Europe, already reeling under the delays to the flawed A 380 programme, wants to lose no opportunity to institutionalize aviation cooperation between the two regions. As a first significant step, the two sides agreed to restore legal certainty to all the bilateral air services agreements between India and EU Member States. Therefore, it was agreed that a 'horizontal agreement' would be finalized as a matter of priority. To that effect, Praful Patel will travel to Cologne in April/May 2007. The aim of the "horizontal agreement" will be to amend cer-

Civil Aviation Minister Praful Patel at the EU-India Aviation Summit with European Commission Vice-President for Transport, Jacques Barrot

CRUISING HEIGHTS December 2006

tain provisions in the bilateral agreements thereby bringing these into conformity with community law thus restoring legal certainty to these agreements and the operators flying under them. Secondly, building on the very successful results achieved under the 19992006 "EU-India Civil Aviation Co-operation Project``, Messers Patel and European Commission Vice-President for Transport, Jacques Barrot agreed to prepare a Joint Action Plan (JAP) that will set out the key priorities for strengthening future technical and technological cooperation. This JAP and a new technical cooperation programme that will start in 2007(and to be finalized as a matter of priority) will be important instruments in tak-

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SPOTLIGHT

Ankur Bhatia at the summit seminar

ing forward the wide range of areas of mutual interest of industry, regulators and the wider public of both sides, as identified during the aviation summit. It will cover aviation safety (including strengthening the cooperation with the European Air Safety Agency (EASA), security, airport infrastructure, air traffic management, environmental policy, economic regulation, training and industrial cooperation. Whatever be the contents of the joint declaration, the need for greater flexibility at the EU level was seriously underlined by the Commercial Director of Air India, Mr V.K.Verma who argued that while airlines from EU could use multiple entry and exit points in India, the same wasn't holding good for Indian carriers when they desired to enter and exit from Ajay Prasad (right)with summit delegates

Livewire R.K: The livewire but low profile JS at the Civil Aviation Ministry R K Singh was the pointsperson for the EU-India summit. He was ably assisted by Bharati Das from the DGCA.Singh was clear that he wanted a summit that "would be substantive". In other words, not just the atmospherics but

The need for greater flexibility at the EU level was seriously underlined by Air Indiaâ&#x20AC;&#x2122;s Mr V.K.Verma who argued that while airlines from EU could use multiple entry and exit points in India, the same wasn't holding good for Indian carriers. the debate and discussions had to be of a high order. No wonder, the speakers were all top drawers. Blunt Brady: Air Deccan COO Warwick Brady has one thing in common with his boss, Captain Gopinath: an ability to be blunt without being hurtful. As he

CRUISING HEIGHTS December 2006

AAI Chairman Ramalingam chaired a key session

EU member-nations. Even within the same city, access to a better and easier airport was invariably denied. It is these sort of issues that the EU will have to resolve if it indeed it wants greater flexibility and presence in the Indian aviation market. And it is not just a question of aircraft being brought by the country's private and public serctor that will be benchmarks; the European defence consortiums are active in India with the likes of Thales, EADS and British Aero-

spoke at the conclave he took a few digs at the government and the public sector carriers and smiled gently at V Thulasidas who was in the chair. But was that hush hush conversation with the Jet COO Wolfgang Prock-Schauer in between meetings? CAPA's Kapil: Kapil Kaul must win an award for saying the same thing again and again elegantly. It was the same spiel again at this meeting: aviation in India is gung-ho as far the next decade is con-

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DGCAâ&#x20AC;&#x2122;s Kanu Gohain speaking on safety in the Indian skies

space lobbying intensely for a share in the pie. Perhaps, the best example of this would be the effort that EADS is putting into getting its act in India together. Their CEO, Tom Enders, was in India just the other month and flew into Delhi and Bangalore on a business promotion visit and wanted to make sure that the Airbus and ATR lock on the Indian market was secure. What is, perhaps, most worrying from the European perspective is the fallout of the across-the-board open skies policy that the EU and the US are likely to sign in the next few months. That, observers believe, will completely change the landscape of the aviation business. One fear is that consolidation will be the key driver: many airlines will disappear and many bigger ones What is Kiran Rao smiling about ? Ask his fellow Airbuswalla Ajay Mehra or Jet Airwayâ&#x20AC;&#x2122;s P K Sinha who is making a point.

cerned. Kapil infact is so excited at the possibility that he is holding an investor's conference in the US in the next couple of months. But about the EU or is that out of the CAPA orbit? Classy presentation: Air India's V K Verma made what was, perhaps, the best

What is, perhaps, most worrying from the European perspective is the fallout of the across-the-board open skies policy that the EU and the US are likely to sign in the next few months. presentation from the Indian side. He had his facts on his finger tips, argued his points well and was right when he said that the opening of the skies was a huge step, but the last years have exceeded in every way that remarkable milestone. Trivedi's presence: Indian CMD

CRUISING HEIGHTS December 2006

will emerge. No one wants to predict who would be the winners or, for that matter, the losers. But everyone wants to protect their turf, guard their terrority and prepare for an uncertain future. The Asia Pacific is a key driver under the circumstances. All the three A 380 launch customers are from the region: Singapore Airlines, Qantas and Emirates. It is no wonder then that the summit saw some top quality participation. Everyone wants to fast track and institutionalise the framework of cooperation so that the uncertainties of globalisation can be absorbed through such bilateral arrange ments. Vishwapati Trivedi did not make a speech at the conclave nor did he make a presentation. But he did sign the MRO deal with Snecma on day two of the conclave and brought some cheer both the EU delegates and the media at large. Finally, there was some real fodder to chew on.

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PERSONALITY

Progress in aviation enthuses

DR. ASSAD KOTAITE The former ICAO chief had nothing but praise for the country's aviation industry when he came to receive the Lifetime Achievement Award presented by Delhi Tourism recently.

HEN a personality like former International Civil Aviation Organisation (ICAO) chief Dr. Assad Kotaite comes visiting, everyone connected with the sector stands up to listen. The "father of the international civil aviation industry" as Dr Kotaite is known, was in the capital to receive the Lifetime Achievement Award from Delhi Tourism. Delhi Tourism chose Dr. Kotaite for the award for his initiative in freeing the skies across national boundaries for the benefit of the common man. The award was presented by Mr S.K. Mishra, Chairman, INTACH, former Principal Secretary to Prime Minister of India and also Civil Aviation Secretary. The others who were at the award ceremony included Mr.P V.Jaikrishnan, former Secretary, Civil Aviation, Mr Arvind Kaul, Former Chief Secretary, Himachal Pradesh, Mr Amitabh Kant, Joint Secretary, Ministry of Tourism, Mr Subhash Goyal, President, IATO, Mr O.P.Jain, President, INTACH, Delhi Chapter, Mr

Vijay Madan, Principal Secretary (Tourism.) Delhi and Mr Sanat Kaul, Chairman and Managing Director, Delhi Tourism. Prior to the award ceremony, at a seminar on Aviation and Development in India, a number of experts from aviation and other concerned areas, took part. Speaking about the advances made by India, Dr Kotaite said that "the coming era will be very exciting and challenging for the global aviation sector in terms of mounting air transport pressures especially from emerging economies. It would require preparedness on a large-scale in tandem with adoption of state-of-the-art technological applications to ensure a mechanism, which could be as error-free as possible." Later, Dr. Kotaite elaborated on a whole lot issues confronting the Indian aviation sector. As one who has been visiting the country since 1963, Dr Kotaite was well aware of the Indian situation. A great admirer of Indian democracy, he said he was astounded about the progress the country had made. Especially remark-

Dr Kotaite said that "the coming era will be very exciting and challenging for the global aviation sector in terms of mounting air transport pressures especially from emerging economies. It would require preparedness on a large-scale." Dr Assad Kotaite receives the lifetime Achievement Award from Mr S.K. Mishra

CRUISING HEIGHTS December 2006

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able was the economic turnaround which Dr Kotaite believes has made the Indian aviation sector so active. "India is an emerging economy and the air transport is growing rapidly in the country. The rate of percentage increase in air transport here is much higher than the global average," he said. The infrastructure bottlenecks that continue to dog India will, of course, have a bearing on the growth of all sectors in the country and the aviation sector was no exception. However, Dr. Kotaite was confident that India would pull through. "India," he said, "was conscious about high growth possibilities and responsibilities of creating suitable infrastructure in the aviation sector." That was why the government was working to revamp the infrastructure at 35 airports to equip them for international traffic. But Dr Kotaite at the seminar on Aviation and Development in India

Mr Sanat Kaul welcoming Dr Kotaite

"India is an emerging economy and the air transport is growing rapidly in the country. The rate of percentage increase in air transport here is much higher than the global average," said Dr Assad Kotaite. CRUISING HEIGHTS December 2006

the increasing presence of private players in almost all sections of the Indian aviation industry, could lead to hurdles. The only way out, according to Dr. Kotaite, would be the separation of regulators and service providers. That would pave the way for a hurdle-free aviation sector in the future. Dr Kotaite also spoke about his project of strengthening the security mechanism in the global aviation sector. Things were moving as far as the security audit programme was concerned, he said. "We will be completing the security audit of 189 nations by the end of 2007 with the exception of a few countries which ICAO could not visit because of security reasons," he said. As for India, he had nothing but a whole lot of praise: "ICAO has audited the safety and the security and India responded positively to the technical report which was submitted." India and ICAO, he pointed out, had formulated an action plan, which incidentally had already been implemented. Dr Kotaite was careful to mention that the entire global aviation industry should follow uniform standards in security if desirable results have to be achieved. "Security in the ICAO policy is global. It is like a chain. The strong parts of the chain can be affected negatively by weaker parts of the chain. Therefore, a well-coordinated global system is required where standards are at the same level," he advised.

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Four years in the making, but there still seems to be no end to the confusion regarding a comprehensive Ground Handling policy. With Greenfield airports coming and Delhi and Mumbai airports being upgraded, there is an urgent need to finalise one with clear-cut rules.

here is complete confusion regarding the proposed Ground Handling (GH) policy, which has been in the making for nearly four years now. While the common refrain all around is that an all-inclusive comprehensive GH policy is on the anvil, Civil Aviation Minister Praful Patel has been announcing regularly that a new GH policy will be announced soon after critical inputs are received from concerned departments. It remains to be seen if the GH policy will be a standalone policy or form part of the much-awaited Civil Aviation Policy. But if one goes by recent developments it seems unlikely that the GH policy would either be standalone or form part of a civil aviation policy, which appears to be an even more distant pie in the sky. Mr Praful Patel, in an article for the website, India Infoline on August 4, 2006, had said that airports in India have been conferred infrastructure status and FDI norms for them had been

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COVER STORY

liberalized allowing up to 100 per cent foreign investment in Greenfield airports through the automatic approval route. This would provide impetus to aviation infrastructure. To encourage competition, the government is seeking to promote airport development through three routes: 100 per cent Government-owned, PPP model and 100 per cent privately-owned. To ensure a level playing field, the government is working towards regulation of tariffs of aeronautical services, protection of reasonable interest of users, etc, through the constitution of the Airport Economic Regulatory Authority (AERA). A Parliamentary legislation to establish AERA is expected to be passed in December 2006. Earlier, Mr Patel told Economic Times in June 2006, that he favoured a GH model based on the principle of Standardisation, Specialisation and Automation. Only a few players would be allowed to undertake these activities at six metro airports; these players could be Air India, Indian (Airlines), Airports Authority of India (AAI) or the respective airport developer of the respective metro airport and another independent agency selected through competitive bidding. This was virtually a repeat of what he had mentioned in November 2005 to financial dailies in India. He had then said that the Ministry of Civil Aviation would restrict the num-

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The fact that ministerial and official observation on GH policy had created more confusion became evident with the floatation of tenders at Hyderabad and Bangalore. CRUISING HEIGHTS December 2006

ber of GH agencies to four at each airport. The new policy would bar airlines both domestic and foreign from carrying out even self-handling. The only exception to this rule would be Air India and Indian (Airlines), which in addition to self-handling would also provide third party ground handling. Besides, private handler Cambatta Aviation would be allowed to provide GH services at select airports till the new policy was announced. Ground Handling, incidentally, refers to all its aspects: passenger, ramp, cargo, loading and unloading from the aircraft and aircraft handling. On October 6, 2006, a pink daily quoted Mr Praful Patel saying that a comprehensive GH policy was in the offing and the resources of Air India and Indian would be pooled to set up an independent facility. The fact that ministerial and official observation on GH policy had created more confusion than it sought to clear became evident with the floatation of tenders inviting GH agents by the developers of the new airport at Hyderabad and earlier by those for the new airport at Bangalore. Even as the Ministry of Civil Aviation and the Minister were making off-thecuff remarks, the Ministry of Home Affairs, which is in charge of intelligence and security agencies, reiterated its usual security-related objection and sought a bar

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Ground handlingâ&#x20AC;&#x2122;s many shades T

he GH market in India is over Rs 1100 crore. Of this, Rs 570 crore is accounted for by Air India and Rs 350 crore by Indian Airlines. Cambatta Aviation and the other franchisees of AAI, which are largely involved at the level of warehousing, share the balance. GH depends on the volume of operations and at present the operations in four metros Delhi, Mumbai, Chennai and Kolkata and the two newer metros, Hyderabad and Bangalore -- account for 85 per cent of the GH business in India. Even without the new airports being opened and existing ones being upgraded, the GH business is growing 30 per cent annually. Indian Airlines provides GH services in 54 locations in the country for third-parties besides handling charters at 16 airports. The locations/airports include Delhi, Amritsar, Mumbai, Ahmedabad, Goa, Nagpur, Kolkata, Gaya, Chennai, Trichy, Hyderabad, Bangalore, Trivandrum, Calicut, Lucknow, Jaipur and Varanasi. Indian Airlines is also providing exclusive GH services to Kingfisher at Guwahati, Dibrugarh, Bagdogra and Agartala. Air India has largely concentrated GH activities at Delhi, Mumbai, Chennai, Bangalore and to a smaller extent in Hyderabad and Ahmedabad. In the last two centres, the carrier is setting up additional facilities. In Kochi, Air India has a JV with Cochin International Airport Limited (the first privately promoted and run airport in India). Air India is also providing GH services independently at Trivandrum. While the six metros Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore - account for 85 per cent of the GH business in India, the business is also rapidly growing in Ahemdabad, Goa, Amritsar and Trivandrum. The Cargo part of GH - that is loading and unloading -- does not account for more than 6 per cent of the total business. Including warehousing, the business rises to 12 per cent. Cabin cleaning accounts for 6 per cent, passenger handling 20 per cent and security another 10 per cent. Ramp handling takes the major share, accounting for 52 per cent. In the new tender floated by Hyderabad International Airport Limited (HIAL), the entire job of security is vested

with the airport developer GHIAL and is not under the purview of GH work expected to be executed by the prospective winning bidder. The earlier impression that private airlines both domestic and foreign - would not be allowed to provide GH has been moth-balled, though not formally or de jure yet. The security clause that prevented foreign airlines from investing in domestic private airlines and also in the GH business has been pared partially and foreign airlines are well on their way to participating in the business in consortium with non-airline Indian GH business entities. The HIAL tender states that the non-airline Indian GH entity has to have a minimum of three years experience; a clause that was non-existent in the Bangalore International Airport Limited (BIAL) tender. This means only Cambatta would qualify for the bid! It seems impossible now to predict with certainty as to what shape and form the GH policy would finally acquire. If one goes by the reported attitude of Mr Albert Brunner, CEO, Bangalore International Airport Limited (BIAL) that he was not in favour of re-tendering the bids, it seems likely that the Indian aviation scene may also end up like the telecom industry where litigation would become the order of the day. CRUISING HEIGHTS December 2006

GH and other related services account for approximately 6 per cent of Air India's revenues. Air India provides ground handling for its own operations and other carriers. The GH provided by the carrier includes passenger handling, ramp handling, cargo handling, security, flight dispatch, technical handling and cabin cleaning. The Ground Services Department of Air India has 5800 employees, 46 customers, and services about 52,000 flights per year. The number of flights handled for other carriers per year is 28,000 while selfhandling accounts for the remaining 24,000. Air India has an estimated 55per cent share of the ground handling market in India. Air India also has an exclusive GH contract for ten years at Cochin International Airport Limited, the first private airport in India. The Bangalore International Airport Limited (BIAL) had invited tenders for providing GH services earlier in 2006. In April 2006, it was confronted with the dilemma of choosing the winning bidders without the government putting in place a new GH policy. As a result, the choice of GH providers got delayed. But when the Government did not announce the new policy and has till date not done so, BIAL went ahead and announced the winning GH service provider bidder in August 2006. The original bid document did not

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COVER STORY specifically mention that BIAL, the new airport developer in Bangalore, wanted the bidders to apply as consortiums though it was stated that consortiums would be preferred. When the announcements came, the winners were two consortiums: one, a JV between Air India with SATS and, the other, Ground Global (a subsidiary of Lufthansa India which itself is a subsidiary of Lufthansa AG) and Delhi-based Bird Company. In an interview to The Hindu on May 18, 2006, BIAL CEO Mr Brunner said as the proposed new airport at Bangalore was privately owned, BIAL was not bound to follow the policy, which as of date restricts GH activity to AAI, AI and IA. He said: "This policy has been imposed on us." Since BIAL proposes to start operations in April 2008, it felt it could not withhold the announcement of new GH services providers. In fact, the absence of a partner and, therefore, a consortium was the reason for Indian Airlines failing in the bidding process. Air India, on the other hand, teamed up with SATS and won the bid as a consortium. In a significant remark, Mr Brunner stated that BIAL would not re-tender the contract after the new Civil Aviation Policy was announced as many global majors in GH had already taken part in the bidding process. Strangely, as an afterthought, BIAL stated that nothing of what it had done in announcing the winning bidders for GH in the new Bangalore airport would be in conflict with the new GH or Civil Aviation Policy as and when it was announced. The Karnataka Government owns 13 per cent of BIAL while 40 per cent is owned by Siemens Project Ventures, 17 per cent by L&T, 17 per cent by Zurich Airport and 13 per cent by AAI. The final concession agreement between BIAL and the consortium of Air India-SATS and Ground Global-Bird and Company may be signed soon. It remains to be seen how in the event of a conflict, the situation would be resolved or alternatively how the two winners would be accommodated in the new policy. What is of interest is that till now, the Government of India has barred the entry of foreign airlines directly or indirectly and private Indian players in GH activity. In BIAL, two private firms, a subsidiary of a foreign airline and another a private Indian firm have joined hands to win the bid. This is in conflict with the existing GH policy. In fact, Globe Ground has been allowed to do self-handling at Chennai airport; till now unheard of by any foreign airline subsidiary. Thus, we have a policy in the making.

There is the existing policy that specifically bars private players from providing GH services, particularly foreign players. There is speculation -- even the Minister himself has been saying -- that up to four players would be allowed for GH at each airport. The minister has even gone on to comment that the resources of both Air India and Indian Airlines would be pooled to provide GH services. This even as Air India has separately tied up with SATS to provide GH services. The issue of GH activity has assumed an altogether different connotation after the new Hyderabad International Airport Limited being developed by GMR, which is also developing the Delhi International Airport, floated tenders inviting bids from prospective parties. GMR Hyderabad International Airport Limited (GHIAL) invited RFP on September 29, 2006 to

select Ground Handling agents for the proposed new Hyderabad airport at Samshabad. According to the first RFP of September 2006, there were to be two categories of GH service providers. Under Category One - Independent 3rd Party GH Service Provider - one of the GH concessions would be offered to an international ground handling service provider, which would meet the eligibility requirements. The international ground handling service provider would be required to form a JV or a consortium with an Indian ground handling company for submitting the tender according to the various clauses of the tender document. It would also be mandatory that the Indian ground handling company should be a non-airline Ground Handling Service Provider. Under Category Two--Airlines 3rd Party Ground Handling Service Provider-the second ground handling concession would be offered to Indian national carriers (Air India or Indian Airlines) in consortium with international third party ground handling service providers or a foreign airline, currently operating at Hyderabad airport in consortium with an Indian CRUISING HEIGHTS December 2006

ground handling agency. The second selected tenderer would also be allowed to offer GH services to airlines in addition to rights of self-handling of their own flights. The winning bidder has to give a Peformance Guarantee in the form of an unconditional bank guarantee in favour of GHIAL for Rs 400 million or Rs 40 crore. Besides, the lead member of the consortium or the joint venture and the one who has the primary responsibility for developing and implementing the GH facilities and provision of GH services, shall in no event contribute less than 40 per cent of the equity in the operator. Within a few days in the first week of October 2006, however, GHIAL circulated an amendment to its original September 2006 RFP. According to the amendment, in Category One, GHIAL noted that the tenderer shall be the lead member in the consortium/joint venture and hold no less than 51 per cent of equity in the consortium/joint venture till the end of the concession period. Even Category Two was split into two parts : The second ground handling concession would be offered to Indian national carriers (Air India or Indian Airlines) in consortium with international third party ground handling service providers or the Ground Handling subsidiary of a foreign airline or a foreign airline or its ground handling subsidiary company in consortium with an Indian ground handling agency. The second selected tenderer would also be allowed to offer Ground Handling Services to airlines in addition to the rights of self-handling of their own flights. It was stated that the tenderer shall be the lead member in the consortium/joint venture and hold no less than 51 per cent of equity in the consortium/joint venture till the end of the Concession period. While Air India had already formed a consortium/joint venture with SATS when it bid successfully for the BIAL GH tender, Indian Airlines was forced to look for a JV partner to bid for the HIAL GH tender as it was mandatory under the new tender norms. While Bangalore only mentioned that a consortium would be preferable, and also reflected in the choice of bidders, the clause has been made mandatory in the HIAL bid for GH. Indian Airlines is scouting around for JV/Consortium partners. Will players like Service Air, Fraport, Menzies, SATS etc. oblige? At least in the case of SATS, the MoU with Air India specifically states that they can jointly bid for more airports besides BIAL, which is already in their bag. Meanwhile, Indian has even hosted the RFP on its website.

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First, Set The Benchmarks Right

ven as Indian Airlines was desperately trying to remain in the race, R K Singh, Joint Secretary, Ministry of Civil Aviation called Air India Chairman and Managing Director V.Thulasidas and Indian Airlines Chairman and Managing Director Vishwapati Trivedi to Rajiv Gandhi Bhawan on October 25, 2006 to resolve the GH issue, specifically with reference to GMR's Hyderabad International Airport Limited (GHIAL). In the absence of a partner, Indian Airlines lost out in the race to appoint a GH agent in BIAL. As for Hyderabad, Indian has historically been providing GH at the Begumpet airport. However, when GHIAL floated a tender and later amended it, Indian Airlines lost out. It was told that it should choose a foreign non-airline GH partner. Accordingly Indian Airlines invited partners through a bid hosted on its website. On the first closing day, when there was no response, the time was extended. Meanwhile, Air India, which had tied up with SATS for BIAL and with the provision to repeat the JV in

on private players, particularly foreign companies from providing GH services at Indian airports. This was a repeat of what the Ministry of Home Affairs stated in 2003 when Prime Minister Atal Bihari Vajpayee was at the helm of the BJP-led NDA government. After the initiation of economic reforms 15 years ago by the then Congress government headed by the late P.V.Narasimha Rao and then Finance Minister Dr Manmohan Singh (now Prime Minister of the UPA government), private air taxi operators were allowed to operate in India on a non-scheduled basis. In 1994, the Congress government allowed the conversion of air taxi operations into fullscale scheduled domestic operations -subject to conditions. It is a result of this conversion that airlines like Jet Airways and Air Sahara came into being and are now full-fledged airlines flying even on foreign routes. After the Congress lost the general elections in June 1996, the United Front came to power. For almost two years -- June 1996 to April 1998 -- the aviation business in the country became restrictive. Till that time, the rule on foreign airlines owning stakes in a private Indian domestic carrier was vague. Incidentally, it was during those days that the Tatas wanted to start a domestic airline. The United Front government through a Cabinet decision changed the rules and barred equity participation by foreign airlines either directly or indirectly in an Indian private domestic carrier. While the ban remains till date, the reason why it has been mentioned here would illustrate the similarity with the rules governing the GH business in India today. Strangely, it was also during the United Front government in 1996-97 that the then Civil Aviation

other airports, sought to replicate it in the HIAL GH tender. But it was Indian Airlines, which was told to team up with a new foreign non-airline partner. Rajiv Gandhi Bhawan, which had earlier snapped the Indian Airlines tie-up with SATS and allowed Air India to partner SATS, now wants to play safe. It has now decided that Air India and Indian Airlines should set up a JV to provide GH services at HIAL as this would raise the chances of winning the bid at Delhi International Airport Limited (DIAL), which is also being developed by GMR. Does that mean SATS will tie up with others? If the amended tender of HIAL for GH allows foreign airlines and foreign non-airline partners, why then the bar on domestic private airlines? Further, if foreign airlines can be allowed to provide GH in domestic airports notwithstanding the so-called security bogey raised by the Ministry of Home Affairs, why ban foreign airlines from holding equity in private domestic Indian carriers, which are seriously in need of both money and expertise?

If foreign airlines can be allowed to provide GH in domestic airports notwithstanding the so-called security bogey, why ban foreign airlines from holding equity in private domestic Indian carriers? CRUISING HEIGHTS December 2006

Ministry had sought a public debate on formulating a new Civil Aviation Policy. In fact, it is still being debated 10 years later. In April 1998, when the BJP-led NDA government came to power, the situation went to the other extreme: there were moves to privatize the state-owned Air India and Indian Airlines. In its second innings beginning October 1999, a revamped BJP-led NDA not only pursued the privatization process seriously (although it later failed to do so) but wanted foreign and private participation in the GH business. It invited bids to privatize Air India and Indian Airlines and allow new players in the GH business. It initiated steps to modernize metro airports first in Delhi and Mumbai, to be followed later by Chennai and Kolkata with private sector participation from both domestic and foreign quarters. In fact, it had set the FDI holding limit at 74 per cent, which was

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brought down to 49 per cent by the succeeding UPA government in November 2004. Even as the NDA government initiated steps in 2000 to involve private parties in the GH business by floating an international tender, it began to have second thoughts after the terrorist attack on the World Trade Tower in New York in September 2001. Among those who submitted bids for the Indian GH business included Dubai-based DNATA. Later, the NDA government scrapped the tender and sought a ban on private parties providing GH services at Indian airports. In July 2003 (10 months before the NDA lost the Lok Sabha polls in May 2004), the Union Cabinet and the Cabinet Committee on Security passed a resolution banning private sector participation in the GH business in Indian airports. The Cabinet also decided that only state-owned Airports Authority of India (AAI), Air India and Indian Airlines would be allowed to provide GH services. Even self-handling by private airlines like Jet Airways and Air Sahara was banned and the future role of private player Cambatta Airlines kept in suspense. This led to protest from Jet and Sahara who managed to get the government to agree to self-handling. Despite the opposition, the BJP-led NDA government did not relent on its Cabinet decision and the job of providing GH services remains confined to AAI, Air India and Indian Airlines. The Union Cabinet in July 2003 also decided that AAI, AI and IA should be allowed to form separate subsidiaries in which each should hold majority equity not less than 51 per cent leaving the balance to be held by private parties including foreign parties. As a consequence of this July 2003 cabinet decision, Indian Airlines signed a MoU to form a JV with Singapore Airport Terminal Services (SATS). But even two years of detailed discussions, negotiations, due diligence, saw the JV failing to take off because of reservations expressed by the Ministry of Civil Aviation. It was for the first time that the UPA government referred to the formulation of a new policy for GH under a new Civil Aviation Policy. As a result, all the negotiations that Indian Airlines had with SATS came to nought. The JV met a premature death. Meanwhile, Air India signed a MoU after its Board passed a special resolution to set up a JV with Lufthansa to provide GH services and also an MRO. But Lufthansa broke away stating that Air India's engineering department did not have the necessary expertise and its employees had low productivity. This was despite the fact that Air India had formed a separate company --

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Way back in 2003, the Ministry of Home Affairs initiated a drive to keep out private players -- both domestic and foreign -- from GH activities. The same Ministry of Home Affairs in September 2006 informed the Government of India and the Ministry of Civil Aviation of the dangers of allowing private domestic and foreign players into the GH business. CRUISING HEIGHTS December 2006

Air India Air Transport Services Limited - to take the JV forward. The Cabinet of the BJP-led NDA government had even fixed the authorized capital of the subsidiary company of AAI, AI and IA at Rs 100 crore each, in which each was to hold a minimum of 51 per cent. Way back in 2003, the Ministry of Home Affairs initiated a drive to keep out private players -- both domestic and foreign -- from GH activities. The same Ministry of Home Affairs in September 2006 informed the Government of India and the Ministry of Civil Aviation of the dangers of allowing private domestic and foreign players into the GH business. This has now provoked the present Ministry of Civil Aviation to state that a final decision on GH would be taken after the conclusion of the debate within the Government of India. It must be mentioned here that any policy decision taken by the Government of the day, based on the resolution passed by the Union Cabinet can be scrapped, replaced, rescinded or changed only by another resolution of the Union Cabinet. What this means is that while ruling parties may come and go, the government of the day and decisions taken by the Union Cabinet of the day can be changed only by another resolution of the Union Cabinet be it of the same government or the succeeding one. In this case, while the BJP-led NDA government's cabinet resolution restricted the number of GH players to three -- AAI, AI and IA -- it can now only be changed in terms of number of players/type of players by only another new cabinet resolution. It is precisely for this reason, we now often hear the Ministry of Civil Aviation and Minister Praful Patel himself talking in terms of seeking a fresh Union Cabinet approval to change the existing GH policy and/or formulate a new Civil Aviation Policy.

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AIRCARGO

Widebodies to dominate Indian

FREIGHTER MARKET The world's aircargo fleet will shift towards more widebodies in the future, according to airplane manufacturers. A close look at the goings-on in the airfreighter industry.

HE pressures of rising ATF costs have not dampened the air cargo industry. News of this optimism has come from none other than both aircraft majors : US Boeing and the European Airbus Industrie. In its Current Market Outlook (CMO) 2006, Boeing Company for instance, has predicted that the global air cargo market will continue its growth patterns of the past few years. It has gone on to forecast that there would be a strong 20-year growth. Based on this study, it can easily be assumed that the growth pattern will lead to a doubling of the world freighter fleet to 3,563 from 1,789 airplanes, both numbers slightly up from the previous forecast. This growth – keeping in mind the expected airplane retirements of 1,209 airplanes – will result in a total of 2,983 airplanes added to the freighter fleet by 2025, according to the annual CMO. In a statement issued from Seattle recently, Jim Edgar, regional director, Cargo Marketing for Asia at Boeing, said that the relatively stable total fleet numbers over the past five years were a bit misleading since strong deliveries had been offset by a roughly equal number of retirements. He was quick to point out that "rising fuel prices apply replacement pressure on older inefficient fleets, contributing to unprecedented freighter interest while we experience minimal negative impact upon traffic levels". Most of these additions, according to the Outlook – nearly 62 per cent – would be in the widebody category (medium widebody plus large freighters). Widebody freighters with a capacity of 40 tons (1 ton =1.016 tonne) or more will increase in share from 50 per cent of the current fleet to 64 per cent of the 2025 fleet. Consequently, there will be an increase in the overall average freighter airplane payload. These findings were consistent with the forecasts done earlier. "The total number of airplanes in the

freighter fleet forecast is only slightly higher than last year's totals," said Edgar. "However, the move to large freighters is already taking hold as the 2005 fleet was only 50 per cent standard-body freighters, versus 53 per cent for the same segment in 2004." Edgar also said that the underlying trend towards accelerated widebody growth, encompassing such airplanes as

CRUISING HEIGHTS December 2006

the 747-freighter family and the 777freighter, was masked by the retirement of older standard-body freighters. Standard-body freighters have been defined in the forecast as having less than 50 tons capacity and the body width of single-aisle passenger airplanes. The share of these freighters will decrease to 36 per cent from 50 per cent over the next two

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decades. In many cases, operators such as express carriers preferred medium widebodies as a replacement for retiring standard-body freighters. Freighters, as a share of the global jetliner fleet, will remain at about 10 per cent during the forecast period, and by 2025, freighters of all sizes would provide more than half of the world's total air cargo capacity, a slight increase from the present totals and consistent with last year's forecast. Three-quarters of the freighter fleet additions would come from modified passenger and combi airplanes. The remaining airplanes entering the fleet, about 766, would be new-production freighters. Although new airplanes would make up a minority of the total world freighter fleet, they dominate the large-size category (widebody freighters of more than 80 tons capacity) with many airlines preferring their technical advantages, reliability, and fuel efficiency. The value of all new freighters would total US$169 bn. In 2005, Boeing received a record 113

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Above : The Airbus A-380 and (below, left) Boeingâ&#x20AC;&#x2122;s freighter version of the Dreamliner, the Dreamlifter

Boeing recently said that the development of the 747 Large Cargo Freighter was proceeding according to plan and the modified freighters would be ready to support final assembly of the first Boeing 787 Dreamliners in 2007. CRUISING HEIGHTS December 2006

firm orders for production and converted freighters and brought to market two new production freighters: the 777F and 7478F. Currently, Boeing provides more than 90 per cent of the world's freighter capacity. This percentage is expected to remain stable, owing to the preference for larger Boeing production and converted airplanes. Boeing offers a complete family of production freighter airplanes, including 747-8F, 747-400F, 777F, 767F and 737700C (convertible). In addition, Boeing offers Boeing Converted Freighters (BCF) - 747-400BCF or 767-300BCF, as well as an MD-11 Freighter conversion programme and 757-200 and 767-200 Special Freighters through proprietary data licensees. Boeing recently said that the development of the 747 Large Cargo Freighter was proceeding according to plan and the modified freighters would be ready to support final assembly of the first Boeing 787 Dreamliners in 2007. "We have a top-notch team of engineers working to design what will be one of the most unique airplanes flying," said 787 Vice President of Manufacturing and Quality, Scott Strode. "This kind of modification is an engineer's dream. It's an extremely challenging project, and it's essential to the success of the Dreamliner." Boeing had earlier announced that the critical "swing zone" of the freighter, the part of the Large Cargo Freighter's aft fuselage that opens to allow loading and unloading of the 787's large composite structures, was being designed in partnership with Gamesa Aeronautica of Spain. Gamesa is the first Spanish supplier supporting the Dreamliner programme. Engineers at the Boeing Design Center in Moscow are helping design the

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AIRCARGO freighter's enlarged upper fuselage and rear fuselage, as well as the main cargo deck floor and "transition zone" that marries the new structure to the existing airplane structure. The expanded girth of the Large Cargo Freighter will hold three times the cargo by volume of the 747-400 freighters flying today. The design supplier for the pressure bulkhead that joins the cockpit area to the fuselage would be named after contracts were finalized. No design changes were necessary to the freighter's wings, and Boeing engineers would extend the airplane's vertical fin by five feet to aid the pilots' control during flight. The Large Cargo Freighter team achieved firm configuration of the airplane in October this year. Once the

Airbus has predicted an increase in worldwide freight tonne kilometres by six per cent annually until 2025.

A-I and Indian get set for aircargo THE aircargo scenario appears promising enough for India. To let the sector develo further, the government has planned to allow 74 per cent foreign direct investment (FDI) in airfreight raising it from the current 49 per cent. The government is serious abut opening up the sector comprehensively, Civil Aviation Minister Praful Patel said recently. The minister has gone on record to say that India would need around 500 dedicated cargo aircraft during the next few years. His forecast is based on a domestic air traffic growth of 50 per cent and an international growth of 25 per cent. These figures were not going to slow down in the next ten years and an average 25 per cent growth rate was sustainable over the next decade, Mr Patel had said. The other factor on the Indian scenario that portends good tidings for the airfreighter manufacturers is that post-merger, Indian (Airlines) and Air-India (AI) would integrate the cargo operations. This would not only generate a combined turnover of around Rs 1,000 crore but also provide the unified company a reach across domestic and international markets. By mid-2007 both the carriers have planned to have at least six dedicated cargo freighters, with at least two of them deployed on international routes. In fact, AI has planned to lease extra belly space in other international carriers and freighters to augment its existing cargo capacity. Currently, Indian has a cargo belly space of around 1,000 tonnes a day, and generates business of around Rs 300 crore annually. This will go up by a furnter 150 tonnes by mid-2007. By the middle of next year, Indian would have its fleet of Boeing 737-200 aircraft - now being operated by Alliance Air -- transformed into freighter aircraft. With Nagpur being developed as cargo hub, Indian plans to fly the four freighter aircraft from Delhi, Mumbai, Kolkata and Chennai to the new hub.

CRUISING HEIGHTS December 2006

detailed design work is completed, the components will largely be provided by current 747 suppliers, Strode said. Those parts would then be shipped to Taipei, where the airplanes will be modified by Evergreen Aviation Technologies Corporation (EGAT), a joint venture between EVA Air and General Electric, and part of Taiwan 's Evergreen Group. In its most recent global market forecast, Airbus has predicted an increase in worldwide freight tonne kilometres by six per cent annually until 2025. This forecast generates a need for 3,580 freighter deliveries (mostly conversions), of which 800, or 22 per cent, will be factory-built freighters. Airbus expects that most freight will be moved in 2025 on lanes from China to the US, from China to Europe and within China. Domestic air express within China and India will also rise sharply in the upcoming 20 years. Airbus forecasts a general market need of 22,700 new freighter and passenger aircraft valued at US$2.6 trillion for the period until 2025. This represents an increase of some 5,400 aircraft compared with the previous forecast. The forecast creates an average delivery close to 1,100 passenger aircraft per year, up from around 800 two years ago. The European aircraft manufac-

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The mother of all aircargo transporters

(Above) Airbusâ&#x20AC;&#x2122; Beluga : Mother of all freighters

As per IATA estimates, India's international air cargo business is expected to grow 8.2 percent annually over the next three years. Globally, 50 percent of all cargo is carried in the underbelly of passenger aircraft and remaining through dedicated freighters.

turer also forecast an increasing demand for new more fuel-efficient airliners, to help address airline operating costs as well as environmental concerns. Without surprise, Airbus forecasts a high demand for very large aircraft as well. It predicts a demand for 1,660 aircraft valued at $503 billion. To conclude, Airbus also forecasts a demand for some 400 aircraft over 120 tonne of payload in the very large freighter category. As per IATA estimates, India's international air cargo business is expected to grow 8.2 per cent annually over the next three years. Globally, 50 per cent of all cargo is carried in the underbelly of passenger aircraft and remaining through dedicated freighters. Aleks Popovich, global head of cargo, at IATA, notes international carriers flying into India recognise this opportunity and are aggressively marketing themselves. "Indian and A-I complementing each other in the market will be good for Indian cargo industry," he added. Many feel that the retail boom in the country will see renewed demand for air cargo. The modernisation programme of metro and non-metro airports is also expected to streamline cargo handling processes in the country. (With inputs from the official Boeing and Airbus websites)

CRUISING HEIGHTS December 2006

THE A-380's delay has brought about changes in the plans of major airlines, especially those dealing with cargo. Of course, the delay has also dealt a major blow to Airbus. However, there is one plane that Airbus can be justifiably proud of - the Beluga -- and one that could change the manner in which superheavy cargo is transported and delivered. Airbus developed the Beluga as a successor to the Super Guppy, initially for Airbus' own manufacturing needs. Currently, Airbus uses four or five Beluga aircraft for transporting large assembled sections of the fuselage and wings of aircraft. The fifth Beluga serves as a back up for Airbus and is also offered to fulfill transport services in the market outside Airbus. In order to serve the additional market, Airbus Industrie created the subsidiary airline company Airbus Transport International (ATI) in 1996. ATI is based at Toulouse in France next to the Airbus production facilities. There are no current plans to sell the Beluga aircraft and there are not yet plans for the production of a sixth Beluga. The A300-600ST, derived from the A300-600R, entered service in January 1996. By 1998 when the fourth Beluga entered service, ATI had gained the experience and expertise in daily operation of outsize cargo transportation in an international environment for outsize load transport services to be offered to outside companies. The fifth Beluga entered service in the year 2000. The Beluga has been used to transport space station elements, helicopters, works of art, humanitarian aid and, in July 2003, a number of vintage aircraft to an airshow in Wisconsin, USA, where it remained on static display. Recent transport missions carried out by the Beluga include the delivery of the Eutelsat W3A satellite, built by EADS Astrium, to the Baikonur Cosmodrome launch site in Kazakhstan in February 2004, and the airlift of the vertical tail plane for the first Airbus A380 from Hamburg, Germany, to the Airbus final assembly hall in Toulouse, France.

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TRAVEL & TOURISM NOTES

Hospitality sector seeks

INFRASTRUCTURE STATUS With a visionary president at the helm of its affairs, the Federation of Hotel and Restaurant Associations of India, has chalked out detailed plans to cash in on the tourism boom that is being witnessed in the country, as Tirthankar Ghosh found out.

NDIA is everywhere: in the world's heart and mind. Those words came from the country's minister of tourism and culture, Mrs Ambika Soni, at a recent meet. With such a lot of interest in the country, it is no wonder that India's tourism and hospitality sector is witnessing a boom. The surge in traveller arrivals saw 2005 as the best year till date for the tourism sector: foreign visitor arrivals reached a record 3.92 million, resulting in international tourism receipts of US$ 5.7 billion. As travellers rush to India, the demand for rooms, across segments, has skyrocketed. Hotels in the luxury and business traveller segment are recording nearly 100 per cent occupancy, spiralling tariffs, and a strain on capacity and manpower. Anticipating this demand, around 10,856 hotel rooms in Delhi, 9,318 rooms in Mumbai, 7,794 rooms in Bangalore and 7,408 rooms in Hyderabad are expected to be added by 2011, according to estimates by global hotel and hospitality consulting firm, HVS International. While shortage

"The tourists who are ignorant of these unplanned bandhs are stranded due to this uncivilised behaviour and the government must – by way of legislation – rescue them for free movement on these days," said Rajesh Mishra. CRUISING HEIGHTS December 2006

of rooms in hotels is one side of the boom story, the other is infrastructure – or rather the lack of it. It is in such circumstances that Mr Rajesh Mishra has taken over as President of the Federation of Hotel and Restaurant Associations of India (FHRAI). Forthright to the point of being blunt, Mr Mishra is also a visionary. In a brief tete-a-tete with Cruising Heights after taking charge, the President said that the association would urge the government to declare tourism as an essential service. That would be at the top of his agenda. Upbeat about the growth of the country's economy, which was moving at a robust rate and the literacy rate of the population also improving, Mr Mishra emphasized that it was time to create a civil society by ensuring that unplanned bandhs and political hartals without prior notice were abolished from the country. "The tourists who are ignorant of these unplanned bandhs are stranded due to this uncivilised behaviour and the government must – by way of legislation – rescue these tourists for free movement on these days," he added. Such initiatives by the government were necessary for the future growth of the hospitality industry. Today, he pointed out, "The future of the hospitality business is really bright with the robust 8 per cent growth in our economy. In some sectors," he said, "the growth has gone up to 9 and 10 per cent. The economy is opening up to global business and restrictions have been removed following the policy of pragmatic liberalisation". As a result, not only are more tourists coming from abroad but domestic tourism too, is going up at a very fast rate. He was quick to point out, however, that "this growth must be in tune with the facilities from all sectors of the hospitality industry, viz. increase in number of rooms, boost in the number of

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flights and trains as well as improvement in the road network of the country. Multinational corporations and foreign investors operating in India have been doing well in their Indian operations but the only complaint they have is about the infrastructure â&#x20AC;&#x201C; especially the conditions of roads and highways, as well as power and port facilities". What then was the way out? "The only way out is for the government and the private sector to join hands to overcome these problems facing the growth of the Indian economy," said Mr Mishra. The FHRAI President will have an able coordinator in Mr. Kamal Sharma, the federation's Secretary-General. In fact, Mr Sharma has his work cut out. As he pointed out, the priority issues that he wished to tackle as the association's newly elected Secretary-General included a host of issues ranging "from infrastructure to taxation, excise duty and many more. I am also going to bring about a healthy relationship between small and big hotels and restaurants," said Mr Sharma. Mere upgradation of infrastructure would not bring about a change, said the FHRAI chief. The government has to take some pro-active measures otherwise the industry would languish. Among these measures, the foremost was the granting of infrastructure status to the hotel and hospitality sector. "The major problems restricting the growth of the hospitality industry," Mr Mishra pointed out, were "the grant of industry status under the Industries (Development & Regulation) Act, 1951. There is a necessity to amend the Central Act," Mr Mishra emphasized, "and include hotels as an industry under the Act. This would help hoteliers to avail of the benefit of electricity at industrial rates as well as take help of other benefits

Mere upgradation of infrastructure would not bring about a change, said the FHRAI chief. The government has to take some proactive measures otherwise the industry would languish.

Mr. Rajesh Mishra (extreme rights) with other members of the FHRAI team at his first press conference

CRUISING HEIGHTS December 2006

applicable to industries." In fact, the President also mentioned that the federation would "present a prebudget memorandum to the government very soon with a request to reduce the Service Tax rate and also urge the removal of the fringe benefit tax on travelling and conveyance, telephone charges and car charges immediately in the interest of the growth of the economy and the hospitality sector." The President also spoke about the long-awaited infrastructure status to hospitality industry under section 80IA of the Income Tax Act. "That was the need of the hour. The move would allow ten years tax holiday as in the case of infrastructure project like power, road and telecommunications, etc. If this infrastructure status is granted to hotels, more budget hotels would come up in smaller cities and the dream of developing rural India will come true," said Mr Mishra. In fact, several operators have been able to penetrate the smaller cities and villages of the country as they have been granted such status. Similarly, this status if granted to the hotel and hospitality industry will give a big boost to the hospitality industry. The other point, he mentioned was that an uniform taxation policy must be followed by all state Governments and Union Territories for VAT, Luxury Tax, Entertainment Tax and State Excise Duty. "We are one of the highest taxed sectors in the country," Mr Mishra said. "There are many more issues but if these problems are looked at by the government, there would be massive growth in the hospitality industry," he promised. On his part, Mr Mishra was acutely aware of the fact that India was slowly becoming unaffordable for foreigners as well as Indians. He specifically mentioned that the cost of hotel rooms were going up by the day with hoteliers charging whatever they wanted. "We are perturbed about India becoming costlier by the day for foreigners as well as for Indians as hotel room tariffs have gone up tremendously," he said. "We are concerned about this development and are discussing with our fellow-hoteliers to come out with a concrete solution on this and reduce the tariff of the hotel rooms immediately. If this is done more tourists will go to other cheaper destinations in the near future and that will be a permanent loss for all of us." These handicaps notwithstanding, Mr Mishra a strong votary of the Public Private Participation (PPP) model, would like to see more budget hotels coming up to reduce the shortage of rooms that the country is going through. Cruising Heights also asked Mr Mishra about the

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Secretary-General of the FHRAI, Mr Kamal Sharma would provide more than able assistance to President Rajesh Mishra to " ensure more participation from the industry for the association where members would take the initiative and suggest better service practicesâ&#x20AC;?.

Mr. Rajesh Mishra with top FHRAI members and (above) Mr. Kamal Sharma, Secretary-General, FHRAI

coming Commonwealth Games in 2010 and the opportunities that it would bring to the hospitality industry, specially in the capital and surrounding areas. He said, "The hotel and restaurant industry and other allied sectors will be able to cash in on the Commonwealth Games, 2010. The government's tourism ministry has already identified several plots of land to set up hotels and the process of allotment is already on. If the land can be allotted immediately, hotels would come up by 2009 positively and the shortage of rooms for such a big event can be minimised to a great scale. However, the government must encourage Public Private Partnership (PPP) model for setting up of hotels, restaurants and food plazas at the earliest." Other than bringing about changes in the way the government looked at the hotel and hospitality industry, Mr Rajesh Mishra has also chalked out plans to set the FHRAI in order. A hotelier with great vision, Mr Mishra has chalked out a blueprint for the technological upgradation of all FHRAI operations and its website and enhance them to international standards. He said that he would create a data bank and bring out statistical data related to the hospitality sector - which would be provided by the members of FHRAI and the industry at large -- and place it with the government for mutual benefit. In addition, Mr Mishra and his officebearers at the federation also emphasised on taking the FHRAI Institute of Hospitality Management to a new threshold. "The quality of education and its administration

CRUISING HEIGHTS December 2006

will further be streamlined," said Mr Mishra. He also pointed out that the All India Technical Education Council must encourage Section 25 companies to set up Hotel Institute in the country with foreign collaborators and Government should plan to develop the cities infrastructure in a planned and systematic manner. "It was a pity," he said, "that in the country no institution had infrastructure as a subject. In fact, it was only recently that the Indian Institute of Management in Ahmedabad had introduced infrastructure as a subject". While Mr Mishra has a clear blueprint of the course of action that he wished to take in the coming months, Mr Kamal Sharma would provide more than able assistance to him to " ensure more participation from the industry for the association where members would take the initiative and suggest better service practices. " Mr Sharma also mentioned that the Federation had entered into an agreement with TAFI on the code of practices that would be adhered to by both organisations.â&#x20AC;? This," he said, was one of the "key steps taken in the recently concluded FHRAI Annual Convention in Chandigarh". Such initiatives, he said, would address the transparent working of the federation towards making collective and constructive efforts in making the FHRAI a truly international entity. Mr Sharma also went to point out that "the hospitality industry is large and therefore there is bound to be a lot of friction. These will be challenges for me. At the same time," he pointed out, "these challenges will inspire me to work better for the industry as well. I see individualistic vision as a core hindrance in achieving federation's objective. We need to overcome it. Members of FHRAI have to stand united to achieve success that we have been aiming at," he said.

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INDIAN NEWS CVC addresses executives : Pratyush Sinha, Central Vigilance Commissioner visited the Indian Airlines headquarters, in Delhi, recently in connection with the Vigilance Awareness Week and addressed the senior executives of the airline. He allayed the general feeling of public servants about the role of CVC, which, he said, was not of witch-hunting. The role of the vigilance commission is not to judge an issue in hindsight, but to examine it in the light of the facts available to decision maker at the time when the decision was taken. He advised that on issues of commercial and business interest, an organisation should first lay down realistic norms and then adhere to them with full transparency. There may, at times, arise a requirement for some deviation, but then the reasons for such deviation need to be properly justified and recorded before a decision is taken. Transparency and following the norms would take care of everything. The Government's intention is not to stand in the way of the process of decision-making, but to ensure transparency and that laid down norms have been properly followed. He called upon the senior executives to follow these in right earnest. Chairman and Managing Director Vishwapati Trivedi, who welcomed the commissioner on behalf of the airline, thanked him for the enlightening views. Launches Platinum Credit Card: The state-owned airline recently launched the exclusive Indian Platinum Credit Card MasterCard, loaded with premium features from ICICI Bank and operating on MasterCard Worldwide's advanced platform. In the pilot phase of the launch, the card will be primarily targeted at the senior-level officials from the government, who are frequent and loyal travelers of the airline. It is envisaged the card will also be made available to high mile frequent flyers in future. Issued by invitation only, the Indian Platinum Credit Card MasterCard offers a generous 20 per cent cash back on airline tickets purchased at full fare levels, together with convenient

options of buying tickets at any Indian Airlines offices as well as round-the-clock 'Dial-a-Ticket' facility. The special card features include privileged access to lounges at domestic and international airports, access to exclusive golf clubs across the world through special tie-ups and waiver of fuel surcharge across all petrol pumps in India.

JET NEWS Offers free chauffeur service for Premiere passengers : The airline is offering a complimentary chauffeur-driven car pick-up or drop-off in London. This complimentary service can be availed by Premiere class passengers (booked on qualifying fares) for a

distance of up to 50 driven miles from/to London Heathrow, Terminal 3. Passengers departing from India can even book cars at check-in. Passengers with confirmed car bookings would be met on arrival at London Heathrow Terminal 3, outside the baggage collection centre with a Jet Airways branded name board. Passengers departing London, Heathrow will be picked up from their departure address within 50 miles of Terminal 3 and check in at the exclusive kerb-side 'Park Avenue' counters. Premiere passengers will also enjoy "Fast Track' facilities both on arrival and departure at Terminal 3, London Heathrow.

GO AIR NEWS

AIR SAHARA NEWS

Turns One: GoAir has completed one year of operations in November, and has more than four per cent of the market share and flown a million passengers. The airline is now set to expand its operations, flights and fleet with an aim to garner a ten per cent market share in the coming year of operations. From a start-up having one aircraft and six flights a day, it had seven aircraft and 61 flights in November 2006. GoAir was the first to offer free seats through its online booking service, www.goair.in, where passengers could avail of a free flight ticket, exclusive of taxes, by simply checking the website. The GoAir challenge was another innovation where passengers were challenged to find a lower fare on the same route within the same time belt and were offered a refund of twice the difference between fares and their cancellation fees. Introduces new routes to Ahmedabad, Delhi and Hyderabad; takes delivery of seventh aircraft: The carrier has announced the commencement of its new routes daily ex Chennai to Ahmedabad and Hyderabad and Hyderabad-Delhi. This route expansion comes on the back of GoAir taking delivery of its seventh aircraft. The carrier now operates to 13 cities with 61 flights.

New flights take off AIR SAHARA has further expanded its network by adding Male (Maldives), its fourth international destination, to its network. The airline will offer a daily return flight from New Delhi to Male, via Colombo. Air Sahara will also be the only airline to launch a direct flight between Delhi and Colombo. This is in addition to the already existent daily Delhi-Colombo flight via Chennai. With the addition of this flight : the airline has become the largest Indian carrier in Colombo (in terms of number of flights) For the convenience of passengers, the carrier is offering attractive fares and convenient timings. The stand-alone fare for Delhi-Colombo-Delhi is Rs 12000 and the fare for Delhi-Male-Delhi is Rs 17000, which are the lowest fares being offered by any airline.

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Jet Airways has also announced a companion free offer for Club Premiere passengers on the Delhi-Bangkok-Delhi sector until March 31, 2007. Additionally, there is a special fare for a family of four travelling together in Economy Class on this sector. In addition to the service and amenities that the airline has for its domestic and international operations, Jet will offer added value on these new routes. Authentic Thai cuisine served by in-flight crew of Thai nationality and especially selected Thai audio/video in-flight entertainment will be some of the key additional features.

KINGFISHER NEWS

Jet connects Kolkata, Delhi with Bangkok JET AIRWAYS will start direct daily flights from Delhi and Kolkata to Bangkok, its 50th destination, from January 23, 2007. The carrier will operate these flights with a brand new Boeing 737-800 aircraft with winglets, which will be inducted into the fleet next month, taking the fleet size to 59. This is the first time that the airline will operate inaugural flights between two metro cities in India and an international destination on the same day. The Delhi - Bangkok flight will not only link the two capital cities but also offer convenient early morning connections to Bangkok and onwards to other cities in the ASEAN Region. Kolkata will serve as the gateway to the Buddhist destinations in the eastern Region of India. The early morning arrival into Kolkata from Bangkok would also provide convenient connections to other cities in India that are served by the carrier. As part of its inaugural offer, Jet Airways has introduced a special return airfare of Rs 6,500 on the Kolkata-BangkokKolkata sector for a two month period while economy class fares start at Rs 13,500 on the Delhi-Bangkok-Delhi sector. The return airfare for Club Premiere for the Delhi-Bangkok sector ranges from Rs 28,500 to Rs 38,000 while on the Kolkata-Bangkok sector it is between Rs 18,500 and Rs 26,000. These fares are exclusive of taxes.

Takes delivery of first India-based A321s : The Mumbai-based carrier has taken delivery of four A321 single-aisle aircraft. Its first A321 was delivered in late October 2006, in Hamburg, Germany. The deliveries make Kingfisher Airlines the A321's launch operator for an India-based carrier. All the aircraft are powered by International Aero Engines. So far the airline has ordered a total of 43 A320 family aircraft. The A320 family has the widest single-aisle fuselage on the market and features the most modern and complete fly-by-wire technology available on any single-aisle aircraft. Launches 58 new daily flights: The airline has launched 58 new flights across 15 new routes, connecting nine cities across the length and breadth of India. The cities between which new services have commenced are Varanasi, Pune, Bangalore, Coimbatore, Chennai, Ahmedabad, Nagpur, Jammu and Hyderabad. The launch of these new routes takes the number of daily flights operated by the airline to 130 flights connecting 23 destinations.

INDIGO NEWS IndiGo takes delivery of its fifth A320: India's newest low-fare domestic carrier recently took delivery of its fifth brand new Airbus A320 aircraft from Airbus Industrie in Toulouse, France. It is operating this aircraft for its daily services from Mumbai to Jaipur with a same-aircraft contining to Delhi and back, and daily round-trip service from Delhi to Goa. IndiGo, reportedly, will have six airplanes by the end of 2006 and an additional nine next year, taking the fleet size to 15 by the end of 2007. It will serve Delhi , Bangalore, Chennai, Guwahati, Imphal, Hyderabad, Kolkata, Mumbai, Nagpur, Pune, Vadodara, Jaipur and Goa with its first five aircraft. The airline proposes to serve approximately 30 Indian cities by 2010, with a fleet of approximately 40 A320s.

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INTERNATIONAL AIRLINES SINGAPORE AIRLINES NEWS Introduces self-service check-in : The carrier has introduced auto check-in machines at the airport and two-dimensional (2D) bar-coded boarding passes. The new services, along with the entire suite of online services available at singaporeair.com, offer customers more check-in options while reducing the time spent at the airport.

Singapore Airlines customers can bypass the queues and check themselves in at any of the 14 auto check-in counters available at Singapore Changi Airport's Terminal 2. Using their e-ticket number, the airline's KrisFlyer card or the credit card used to purchase the tickets, customers can go to any of the machines to check-in, pick their choice seats and collect their boarding passes. Following this, customers need only proceed to select counters in the same area to have their travel documents verified and to drop off their bags. Easy-to-follow instructions will lead customers through each step of the check-in process. The airline's service staff will also be on hand to assist customer. The check-in machines are expected to reduce waiting time at the airport. Passengers will be able to check-in using the machine up to 48 hours prior to the flight departure time for all Singapore Airlines flights departing from Singapore, with the exception of

flights to the United States. Flights to the United States have special check-in requirements. The auto check-in machines feature displays in eight languages: English, Mandarin, Malay, Tamil, Hindi, Japanese, Korean and German. They are located at Rows 5 (Business Class) and 9 (Economy Class) at Terminal 2. Using 2-D barcode technology, Singapore Airlines customers can also complete the entire check-in process online in the comfort of their home or office. All customers have to do is to go to check-in for their flights, select their preferred seats and print out the boarding passes. This service is available from 48 to two hours prior to the flight departure time for all Singapore Airlines flights departing from Singapore, with the exception of flights to the United States, which have special requirements. Other departure cities will be progressively added. Selects Rolls Royce Trent 700 Engines to Power A330-300 fleet: The airline has selected the Rolls-Royce Trent 700 engine to power 19 Airbus A330-300s, scheduled for delivery between 2009 and 2011. The aircraft will be delivered new, on operating leases from Airbus. Under the terms of the leases, Singapore Airlines had a choice from among the three makes of engines available for the aircraft. The selection was made following the technical assessments of the engines and evaluation of offers from all the three manufacturers. Singapore Airlines signed a Letter of Intent with Rolls Royce to provide engines, spares and maintenance under a TotalCare Services Agreement. Rolls Royce will be responsible for the provision of off-wing maintenance, repair and overhaul of engines, as well as spare engine support. The engines will be repaired and overhauled at Singapore Aero Engine Services Limited (SAESL)-a Joint Venture company, owned by SIA Engineering Company Limited and Rolls Royce.

VIGGIN NEWS Special Christmas menu VIRGIN ATLANTIC has developed a new menu specialising in British produce for its upper class passengers onboard flights originating from the UK for 2007. The initiative will launch this month, complete with a two-week menu of traditional British Christmas food over the festive season. The concept of introducing seasonal specials will be a feature throughout 2007. Starters will include dishes such as broccoli and Hartington Creamery Stilton soup. Main courses range from traditional beef hotpot served with roasted winter vegetables to a creamy fish pie with Taw Valley or Davidstow cheddar cheese mash topping served with creamed leeks and carrots. Desserts that will feature on the menu will be a festive rhubarb trifle and a Bramley apple and blackberry crumble served with custard. The Freedom menu offers a wide selection of light bites, main meals and snacks that can be ordered at any time during the flight allowing the passenger to eat what they want when they want. This service is designed to be as flexible as possible to suit the passenger's every need. There is also a specialist cocktail service onboard selected flights, where a Bombay Sapphire mixologist offers a choice of cocktails for passengers at the onboard bar in the upper class cabin.

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LUFTHANSA NEWS Named Official Carrier of the International Handball Federation: While Germany is hosting the 2007 Men's World Championship, Lufthansa has been appointed Official Carrier at the World Championship and Official Partner of the German Handball National Team. The partnership was sealed in Frankfurt by the signing of an agreement between Lufthansa Executive Vice President Marketing and Sales, Thierry Antinori, and the Presi-

cine, the participating doctors will receive a one-off welcome bonus of 5,000 miles when embarking on their first Lufthansa flight. Additional advantages are the opportunity to participate in flight travel medical events and conventions, useful information about the first-aid equipment of the Lufthansa fleet, as well as firstaid courses in small groups. Anyone who, as a doctor, indicates his Miles & More number when reserving a flight, will appear together with the specific field of medicine on the crew's passenger list. Thus, in an emergency the purser can discreetly approach the doctor and ask him for help. The announcement "Is there a doctor on board?" and the possible unrest that it can cause can thus be avoided and help can be given more quickly. Experience shows that in more than 80 per cent of cases a doctor is to be found among the passengers.

KLM to invest in global fleet upgrade and cabin interior

dent of the International Handball Federation IHF, Dr Hassan Moustafa. The Men's Handball World Championship is being staged in Germany from 19 January to 4 February 2007. Taking part are 24 teams at twelve venues. The partnership between Lufthansa and the IHF is scheduled to last initially up to the end of the international competition. Should it be successful, the cooperation will eventually be extended. Special offer for doctors : To help with medical emergencies on board even more effectively and faster, Lufthansa is encouraging doctors, in particular, to participate in the frequent flyer programme, Miles & More. When registering, doctors can provide details of their specific field of medicine : anasthetist, gynaecologist, general practitioner, internal specialist/cardiologist, neurologist/psychiatrist or others. After Lufthansa's Medical Service has checked the registration, including the licence to practise medi-

DURING the coming two years, KLM Royal Dutch Airlines will invest more than 100 million euros in the replacement, renewal and upgrading of exteriors and interiors aboard the KLM and KLM cityhopper fleet globally. The entire KLM fleet will be fitted with a fresher, more modern interior. Lighting as well as the colour and design of carpets, curtains and partitions have been carefully coordinated. Key aspects of seating comfort will be improved. New seats will be installed aboard the Boeing 737-800 and 900 fleets, and in World Business Class (WBC) aboard Boeing 747-400 and subsequently the MD-11. The interior and exterior of KLM cityhopper's 18 Fokker 100s, 21 Fokker 70s, and 14 Fokker 50s will be fully revamped. The aircraft will be fitted with new interiors (carpets and curtains) and the exterior will be repainted to match the livery of the KLM fleet. In addition, all of its Fokker 100s have already been equipped with more modern air-conditioning systems, allowing the cabin climate to be better adjusted to passengers' wishes.

Cathay Pacific code-shares with Dragonair CATHAY PACIFIC Airways has announced a new code-share arrangement with Dragonair that will bring significant benefits for passengers travelling to and from a number of key regional destinations. The new arrangement-the first time for the two carriers to code-share-is the latest initiative to result from the integration of Cathay Pacific and Dragonair that has already resulted in a number of developments to benefit passengers and the Hong Kong aviation hub as a whole. The code-share applies to seven cities in total and is effective on flights to Shanghai, Beijing, Xiamen, Tokyo and Kota Kinabalu from 1 December 2006. The code-share will also apply to two new Dragonair destinations: Phuket, which launched on December 15, and Busan (subject to government approval), where flights begin on CRUISING HEIGHTS December 2006

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SNIPPETS 19 January 2007. All the codeshare flights will carry both the "CX" and "KA" codes. The code-share will extend the Cathay Pacific network by three destinations-Kota Kinabalu, Phuket and Busan-to 105 and give passengers more choice on the routes on which both carriers operate.

Emirates teams up with Apple EMIRATES has teamed up with computer pioneer Apple to offer seamless iPod integration with its in-flight entertainment systems. The Dubai-based airline's passengers, who already enjoy more than 600 channels of in-flight entertainment on its award-winning ICE system, are to soon have one of the world's first on-board iPod integrations, enabling them to use portable devices to enjoy their own choice of music and videos, including full-length feature films, on their seat-back screens. The new digital media destination has been announced after Emirates revealed it would be the world's first airline to offer its passengers in-flight mobile phone use across its entire fleet. Emi-

and options for 120 more. In December 2005, easyJet exercised 20 of these rights. With this announcement of 52 firm orders and 75 options, easyJet has a total of 192 firm commitments and 123 options.

Egyptian Airlines sign up to IOSA THE Egyptian Government has confirmed that all carriers registered in Egypt will incorporate the IATA Operational Safety Audit (IOSA) into their safety oversight programmes by the end of 2006. As part of this initiative, all new applicants for an Air Operating Certificate (AOC) in Egypt must successfully complete an IOSA Registration prior to commencing operation. Existing airlines on the Egyptian registry will also be required to undergo an IOSA re-audit every two years. The International Air Transport Association (IATA) has also recognised and honoured the Egyptian Government for its leadership in promoting safety by incorporating the IATA Operational Safety Audit (IOSA) into its national aviation safety programmes.

Galileoâ&#x20AC;&#x2122;s exclusive agreement with Lao Airlines GALILEO Asia, a global distribution services (GDS) provider and subsidiary of Travelport, announced the signing of an exclu-

Gulf Air to host WACRA Conference

rates' integrated iPod seat connection is scheduled for introduction from mid-2007. It will also provide a constant power source to ensure that passengers' iPods are charged for the duration of their flights. The in-flight iPod offerings will be integrated by Panasonic Avionics Corporation and will provide passengers with outstanding sound and seat-back video quality.

GULF AIR has won the pitch to host the next Worldwide Airlines Customer Relations Association (WACRA) Conference in Bahrain, to be held in November next. WACRA is an international body of airline customer relations professionals from the worldwide airline industry, and the annual conference of the body is hosted by one of its member airlines in their respective countries. Gulf Air, which played host to the WACRA conference earlier, in 1998, was voted to host the event again at its recently held conference in San Francisco amid competition among over 50 member airlines. Representatives from more than 60 global and regional airlines are expected to attend the conference, where industry experts drawn from governments, international and industry associations, legal firms specialising in air transport issues, regulatory agencies, as well as consumer rights and issues, will address conference sessions and conduct workshops.

Easyjet orders A319 aircraft UK-BASED low-cost carrier easyJet has signed a firm contract with Airbus for an additional 52 Airbus A319s, taking its total orders for the type to 192. The order propels easyJet to one of Air-

bus' biggest customers worldwide. In addition, easyJet has also taken an option on another 75 A319s. In keeping with easyJet's existing Airbus A319 fleet, the new aircraft will seat 156 passengers in an all-economy layout. easyJet signed a groundbreaking transaction for 240 aircraft in December 2002. This comprised a firm contract for 120 A319s,

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TRAVEL $ TOURISM NEWS Le Passage to India sets up ICE LE PASSAGE to India Tours and Travels (LPTI) has set up a new Division-ICE-for Integrated Conferences and Events Management, based in Mumbai and headed by Navin Rizvi. He has several years of experience in managing national and international conferences. A support unit has also been set up in New Delhi. The objective of this division is to develop the growing conference market and service it with their expertise. It will provide complete framework with specific attention to venue planning, financial control, event marketing, secretarial and staff assistance, registration of delegates and their lodging, catering and social events. ICE will extend their activity not only to the Indian subcontinent but also across the globe, where they will use the

expertise of TUI, world's largest Travel & Tourism conglomerate, with which Le Passage To India Tours and Travels has entered into a joint venture agreement last year.

Transaero and Malaysia Airlines sign agreement

sive agreement with Lao Airlines, the national air carrier of Laos. Under the terms of this exclusive, three-year agreement, Galileo-connected travel agents will have full access to the airline's domestic fares and associated inventory. In addition, Lao Airlines will make available to Galileo all fares, reservation booking classes, associated inventory and any other data that Lao Airlines provides on all its flights, both domestic and international, through any other distribution channel, including its own reservation system. Another important benefit of the Galileo-Lao Airlines link-up is Lao's agreement to develop and implement its electronic ticketing capabilities using the Galileo system before doing so with any other GDS.

EFFECTIVE January 2007, Malaysia Airlines and Transaero Airlines will operate direct air services between Kuala Lumpur and Moscow, made possible through a codeshare arrangement between the two airlines. Malaysia Airlines' Commercial Director, Dato' Abdul Rashid Khan, and Transaero Airlines Deputy Director General, Dmitry Stoliarov, signed this agreement on behalf of the two airlines at Malaysia Airlines' headquarters in Subang, Malaysia. Through this partnership, Transaero Airlines will initially offer eight scheduled flights from 2 January 2007 till 17 March 2007 between Moscow Domodedovo Airport and KL International Airport (KLIA) using a 230-seater Boeing 767-300 aircraft. Air tickets for this route are offered through Malaysia Airlines appointed general sales agent in Russia and through ABDA Aviation Sdn Bhd, Transaero Airlines' General Sales Agent in Malaysia. With this partnership, Transaero Airlines will strive to expand its international presence by leveraging on Malaysia Airlines' network beyond Kuala Lumpur into Southeast Asia and Australia/New Zealand. Likewise, Malaysia Airlines will provide direct air link between Malaysia and the Russian capital through this code-share partnership as well as market interlines travel between Moscow and other Russian cities.

Signs Full Content Distribution Agreement with Gulf Air : The provider also announced a renewed five-year, full content distribution agreement with Gulf Air. Through the agreement, all of Gulf Air's fares and inventory will be available to all users of the Galileo system, including Galileo-connected travel agencies, corporate customers and Travelport online agencies booking through Galileo. CRUISING HEIGHTS December 2006

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new flying steed

T was well worth the celebration, the Bhangra dancers and the presence of bigwigs. Yes, Cruising Heights is talking about the arrival of Air-India's first of its planned order of 68 Boeing jetliners at the Indira Gandhi International Airport. The Boeing Next Generation 737-800 Commercial Jetliner was formally accepted in the fleet by Mr Praful Patel, Union Minister of State for Civil Aviation (Independent charge), the US Ambassador to India, Mr David Mulford, senior Air India, Boeing, Indian air force officials among many others. The digitally designed Boeing 737-800 jetliner is part of the largest commercial airplane order in India's civil aviation history placed by Air India in December 2005. The brand new aircraft will be joining the existing fleet of B 737-800's of Air-India Express, the low-cost airline subsidiary of Air India. Speaking at the occasion Mr V. Thulasidas, AI's Chairman and Managing

Director, said that the "arrival of the Boeing Next Generation 737-800 is a significant landmark for Air India and is befitting that it coincides with the 75 year celebrations of Air India's service. The 737's reliability, low operating costs and passenger comfort will provide value for both the airline and its customers. The induction of this and future aircraft into our fleet will support our mission of providing convenient routes at the most affordable prices to our passengers." To top it all, the aircraft sports eyecatching designs of the Gateway of India and the India Gate on two sides of its tail. The jet has come at the most opportune moment for Air India. The airline is all set to soar to new heights once the merger with Indian (Airlines) is achieved by March 2007 and aims to become one of the largest and top five carriers in Asia. The delivery of the second B737-800 is expected by the third week of December, followed by three more aircraft in January 2007. For Boeing, the day marked another great milestone in the company's partnership with Air India as it embarked on its strategic fleet renewal and expansion plan," said Dr. Dinesh Keskar, Vice President of Sales, Boeing Commercial Airplanes. According to Capt. P.P Singh, CEO Air India Charters Ltd, the planes would boost the operations of Air India Express, which started its operation in April 2005. "Within a year we have recorded impressive profits," he said. "A large group of customers today are demanding low cost international flights; hence expanding the network is the best solution to tap this growing market. Now, with the arrival of the first B 737-800, we aim to serve more Middle Eastern routes."

CRUISING HEIGHTS December 2006

Photo : H.C. Tiwari

The Maharaja gets his first

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