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EDITOR-IN-CHIEF’S NOTE

Fast-tracking services!

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hy is Air India in such a tearing hurry to order an addition to its fleet? In the next five years, the airline is scheduled to receive close to a 100 new aircraft — virtually a plane-anda-half each month! Not happy with that, it wants to look at its fleet planning for 2011 and beyond. Not bad for a company that didn’t order any new aircraft for close to a quarter century!

One of the prime reasons given for this extraordinary fast-tracking is the desire to be dynamic and not look at new aircraft once the numbers grow, but look at projections and plan accordingly for the future. Good idea.

But, pray, what are the projections?

What are the numbers Air India is likely to do five years from now? How many stations are they likely to serve, what sort of aircraft would they require and, most important, what are the airline’s long term plans? Does it have a world vision for 2015 or 2020? Is it available in cold print?

While none of this is available as yet, Air India has embarked on the fleet acquisition programme with all sorts of stories flying around, including one that states that one of the short-listed aircraft is the gargantuan A380. But there is no official news from AI except that the process of identifying aircraft for ‘beyond 2011’ is underway. One of the arguments for the lack of a vision

CRUISING HEIGHTS December 2007

document is that the aviation business is really dynamic and in constant churn.

Buttressing the argument is the phenomenal 100 per cent-plus growth in the domestic segment. Who could ever have projected such a growth curve, is the constant refrain.

The argument is completely bogus.

Yes, no one can predict the sort of growth spiral witnessed in the Indian market, but which airline had planned even for a 20 per cent increase? Not one, and this includes the man who supposedly keeps his ear to the ground: Naresh Goyal. So, how come Air India is now suddenly looking at a growth five years beyond?

One does buy AI CMD V. Thulasidas’ argument that the Maharaja cannot afford to be lax and must never again be caught with an ageing fleet or a fleet of leased aircraft. But, frankly, just a spanking new fleet isn’t enough. Ground services, inflight services, reservations — all need huge improvement. If the final product has to be world class, it isn’t enough to have gleaming new aircraft. You also require global standards in service efficiency — on board and on the ground.

So, it might be a good idea to fasttrack operational efficiency in many of these departments, bring out greater cohesiveness between Air India and Indian (Airlines) staff that are now under one Maharaja.

Or else, there really may be no need for any more aircraft. The paying passenger will fast track himself into sundry other carriers that now dot the Indian skies!

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Coming soon to your cell: Airline tickets From the ticket counter, you moved to the Internet, from the net you moved to the friendly neighbourhood shop, now the aviation revolution comes to you on the mobile.

Simplifly Deccan has announced tickets on the mobile — you can buy your ticket through your sim card, but it will arrive in your mailbox. When is it going to be a hundred per cent digital without a paper transaction?

Maybe, another 12 months.

But in the US it has just about begun.

If you fly Continental Airlines in the next three months, and have a connection in Houston, you'll likely be able to take part in a pilot programme that allows passengers to board flights using just a cell phone or PDA instead of a paper-

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DEEP IN RED p24 Air India suffered a net loss of Rs 447.93 crore while Indian a net loss of Rs 250 crore for 2006-07 and in the current fiscal 2007-08, the losses of the two combined could be as high as Rs 1,000 crore. What ails the two airlines?

boarding pass. If the test is successful, the programme could expand across the US, according to airport officials.

Instead of using paperboarding passes, the airlines will send a special bar code to the cell phone or PDA of each passenger. The bar code will store the passenger's name and flight information. A TSA working will scan the bar code with a special handheld device. Passengers will still need to show a photo ID to board the plane.

NEWS DIGEST

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It has been great going for the AAI: it paid Rs.112 crore as dividend to the Government for the financial year 2006-07.

CRUISING HEIGHTS December 2007

DUBAI AIRSHOW

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The 2006 edition of the Dubai show saw some 45421 industry-linked visitors from 131 countries. More than the attendance, the five-day show created history as far as sales of aircraft went.

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

INTERVIEW

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Nalin Rodrigo, in his last interview as the head of SriLankan Cargo, talks about the plans and programmes of the carrier.

CRUISING HEIGHTS K. SRINIVASAN Editor-in-Chief

TIRTHANKAR GHOSH Managing Editor

R. KRISHNAN Consulting Editor

AALOK SRIVASTAV

CARGO

Copy Editor

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BIRENDRA KUMAR

SriLankan, the national carrier from the island nation, is on a song. The only foreign carrier to have 100 flights from India, its cargo wing has capitalised on the 'Hub in the Ocean' concept and is reaping dividends.

Proof-Reader

RUCHI SINHA PRADEEP JHA Layout Artists

BHART BHARDWAJ Art Director

H.C. TIWARI Co-ordinating Photo Editor

RAJIV SINGH Gen. Manager (Admn.)

RENU MITTAL Executive Director

SNIPPETS

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The Dubai-based Emirates has seen more than three million travellers from over 240 countries signing up for its award-winning frequent flyer programme.

PERSPECTIVE

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Airport tangle: Should there be an airport at Greater Noida or not? Does the rule of setting up an airport within 150 km radius of a present one hold ground? A look at the pros and cons.

GLOBETROTTING

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Aircraft flying over Wales, England could spiral out of control because its pilots are being poisoned in flight by toxic fumes.

BACK PAGE

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Ryanair's pin-up calendar has become one of the hottest items on sale. Reason: skimpily-attired cabin crew.

CRUISING HEIGHTS December 2007

JAYA SINGH Subscription

Editorial & Marketing office: Newsline Publications Pvt. Ltd. C-15, Sector 6, Noida 201 301 Telefax.: +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.

Owned and published by K. Srinivasan 4C Pocket-IV, Mayur Vihar Phase-I, Delhi 110091 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase-I, New Delhi 110 020 Vol II No 8

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Diamonds are forever

PERISCOPE

“

At present, even a small investment

by AAI requires approval from the Cabinet committee on Economic Affairs (CCEA). Once AAI gets the mini ratna status it would have to get approval of its board only for capex of up to Rs 500 crore.

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

LETTERS TO EDITOR

THE COVER STORY (Flying in Formation, November’07), made interesting reading. Captain G. R. Gopinath has indeed revolutionised low cost air travel in India and has brought in a perfect business model for other carriers to follow. Captain Gopi should be lauded for his initiative and guts as he has done wonders not only for Deccan, but for the entire aviation industry of India.

R. Sridhar, Pune November 2007

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It was a pleasure to read the cover story. I have always appreciated Capt G. R. Gopinath for the revolution he has brought to Indian aviation sector. He has set the industry on fire and made his competitors run for every single rupee. Now, when the common man shakes hand with the king of good times, I guess it would be for the betterment of the industry itself. Besides flying at low rates, the common man can also experience the luxury and, of course, have a good time.

P. Mishra, New Delhi

Illustrations: Rajeev Kumar

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All correspondence may be addressed to Editor, Cruising Heights, C-15, Sector 6, Noida 201 301 OR mail to newslinepublications@rediffmail.com

Together with our partners, we will all work in close collaboration to study the use of synthetic jet fuels or GTL kerosene, in our drive towards a cleaner and safer world. And we at Qatar Airways look onward to becoming the first airline in the world to power commercial aircraft with natural gas.

Qatar Air CEO AKBAR AL BAKER on the decision to drive the search for synthetic fuels.

Getting tough There will be a series of random checks at airports where complaints of norms being violated are being received on a regular basis. The random check will bring in some discipline and awareness among the airlines and airport staff.

KANU GOHAIN, Director General of Civil Aviation on how he will approach the efforts to reduce accidents at airports.

I am a regular flier and was really thrilled when I read about the inaugural commercial flight of the A380 (With A380 in the air, Airbus gets going, November ‘07), the big daddy of all airplanes. It is hard to imagine a plane of this size. The facilities available in the plane would make any flier eager to have their first date with the plane.

Monish Malhotra, Mumbai The analysis about the Gulf market (The Gulf tangle, November’07) was impressive as the writer pointed out the main factors responsible for the decrease in Indian revenues. The analysis is like a mirror to the carriers from India because it has brought out the real picture. Some lessons can be learnt. The foremost among them: how can Indian airlines improve their facilities, services as well as number of routes so that they do not lose revenue to competitiors from the Gulf.

Thomas Jose, Thiruvanthapuram

A new beginning

We ain’t smoking EU norms are unlikely to result in any impact on the airline (Air India) because most of our aircraft by that time will be new.

Air India's Spokesman and Executive Director (PR) Jitender Bhargava on the EU emission norms for the airline industry.

Crazy kiya re I don’t know what it is. I think its crazy RAVI NEDUNGADI , CFO & president, UB Group, which owns Kingfisher and Deccan on the yo yo like manner in which the Air Deccan stock fluctuated

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October trends

COLD STATS

Civil Aviation (DGCA), another full service carrier Kingfisher Airlines managed to maintain its growth momentum and recorded a market share of 12.7 per cent in October against 11.8 per cent in September.

During January-October 2007 period, Air India and Jet registered a sharp decline in their market share to 19.8 per cent and 22.7 per cent, respectively. In the same period last year, Indian and Jet Airways' market share stood at 22.2 per cent and 32.3 per cent, respectively.

Budget carriers such as IndiGo and SpiceJet have given full service carriers Air India — in real terms the domestic wing, Indian — and Jet Airways — plenty of reasons to ponder. The big two's domestic market share continued to decline in October 2007 dropping to 17.6 per cent for Air India and 21.5 per cent for Jet against 19.2 per cent and 22.2 per cent, respectively, in the previous month. According to the data compiled by the Directorate General of

LOOKING GLASS

That’s the result of allowing liquor on domestic flights!

Gung-ho on cargo There are logistics companies such as FedEx and UPS in the US, which have over 700 aircraft and I don't see any reason India should be far behind.

Logistics infrastructure is being developed across the country and we want airlines, both public and private, to have more cargo planes.

Civil Aviation Minister PRAFUL PATEL on the cargo business

Give and take We have asked them to give more seats to us since there are more Indian carriers now seeking rights to fly to this sector. We are ready to give more seats for all Gulf carriers provided our carriers also get more.

Mantriji on the unceasing demand for more seats from Gulf carriers

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OFF THE RECORD WHEN SHAHRUKH KHAN got Deepika Padukone to debut in Om Shanti Om, little did he realise that there would come a time when they would be on opposite sides of the fence? Well, Shahrukh is on the board of Jet Airways and plumps naturally for Naresh Goyal.And Deepika is with Kingfisher and plumps for the King of Good Times. And it is no secret that Naresh and Vijay Mallaya aren’t the best of friends.

For one, Naresh is fuming at the bigtime poaching that Kingfisher has indulged in over the past few months in weaning away top-drawer talent in airport services, inflight and international operations (apart from the redoubtable Nandini Verma in Delhi) to manage its growing operations.

And now that he has got Deepika Padukone as his brand ambassador, he has split the Om Shanti Om pair.

If reports are to be believed, Deepika is doing a sparkling new promo for Kingfisher that will go on stream with their global operations. Whether it rides on the Simplifly Deccan bandwagon or on Kingfisher remains to be seen.

Either way Deepika will do the honours.

Meanwhile, what is it that Shekhar Kapoor is getting Shahrukh Khan to do for Jet Airways? Well, it is clear that he is directing a corporate film that will be shown worldwide by Naresh Goyal. But what is the film all about and when will it be made? Considering that Kapoor takes a decade per film, this one should take about a year considering it should be several minutes long! Unless, of course, Naresh and Shahrukh convince him that it is imperative to get the promo on the air-fast, very fast.

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So what’s the buzz on Kanu Gohain? Simple. He continues till next summer. Or till the Ministry of Civil Aviation can find a replacement for him. As someone jokingly suggested his job is “co-terminus with that of the Civil Aviation Minister”. But the fact of the matter is for the long-term health of the DGCA there will have to be a replacement — internal or external.

The rules have been relaxed and it is now only five years of aviation and airport-related experience for an external candidate, but for internal officers, it’s the same — at least two years as number two. Meanwhile, Gohain has offers by the dozens, literally. ICAO wants his services, major airlines want him as advisor and even Praful Patel has an assignment or two in store for him. Kya luck hai, Kanu Gohain.

Some have got it, some haven’t got it and they are the ones who are mounting the pressure. When are we going to get our licenses, they ask. Among

them is MDLR that is in the process of refurbishing its image, adding muscle and getting off the ground.

But the way things are going, MDLR could very well start its cargo operations first before it settles into its regional airlines slot.

After a long, long time, Pawan Hans is on the fast inside track. The public sector chopper company has a dynamic but low profile CMD in R. K. Tyagi who has redefined the thrust areas of the company and is working to slowly but surely reduce their over-dependence on the offshore R K Tyagi business. The company will shift into its spanking new corporate building in Noida this coming year and that looks like a grand prelude to the exciting times ahead in 2008.

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OFF THE RECORD

Gopal gets his act together Anil Goel

U.K. Bose

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GOPAL GOYAL of MDLR airlines is getting his act together, finally. Goyal who had started off with former Vayudoot CEO Harsh Vardhan, as his advisor, has now moved on to getting a whole time team on board including former Indian (Airlines), Commercial Director Anil Goel and former CEO of Air Sahara, Uttam Kumar Bose.Both have their jobs cut out. Goel as the CEO will have to virtually rewrite the script for the ambitious plans of his Chairman.

That would, perhaps, begin with a relook at the fuel-guzzling Avro RJ-70 jets that have been leased by the company. They have three of the aircraft (64 economy and six business

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class configuration) and the prime reason they were hired seems to be the low-lease rentals. That would make sense when one doesn’t have a license. But with permission to fly on the regional routes just around the corner, it looks a little out of place to use these aircrafts, when fuel prices are breaking the ceiling.

For Anil Goel, it is a tough new ask. The airline veteran who spent several months advising Accenture on the Air India-Indian (Airlines) merger (don’t ask him about the experience, he smiles but doesn’t talk about it), is believed to have been given a carte blanche by Gopal to completely rewrite the airline’s business from scratch and set up a company they can all be proud off. Bose who moved from Air Sahara — where he had a running feud with Alok Sharma comes to MDLR via Jackson Airlines that had its own ambitions of setting up a LCC. But clearly Jagson didn’t interest the manufacturers enough to offer them aircraft (they wanted to buy the A320) and, therefore, Bose who didn’t have much to do there moves from Connaught Place to Gurgaon. It is expected that Bose will look after the nuts and bolts operation of the company.

Meanwhile, the real estate entrepreneurturned-aviation enthusiast has hired Percept Advertising to give the company a complete makeover.

On the cards, is a corporate film and a new advertising campaign to bring back the zing and launch MDLR.The only thing they now require is a licence to operate. That, according to Goyal, is just around the corner.

Silent spectator WHY IS Hansraj Bharadwaj so keen to bare his heart (and soul) only before the Union Cabinet and not offer an opinion in cold print?

The Law Ministry is the only element in the Greater Noida airport controversy that has declined to offer Hansraj Bharadwaj its opinion in cold print. Those in the know state that Bharadwaj is keen not to ruffle political feathers considering the fact that Uttar Pradesh Chief Minister Mayawati is keen on the airport and has the support of the Civil Aviation Ministry. But there are others who are not so keen including the FM and the Planning Commission and, of course, GMR. Meanwhile, GMR has unleashed a public relations drive in political circles to convince those who matter that the airport will do them no good. The problem is Jaiprakash Gaur of Jaypee Industries; is telling Mayawati that it will do them a world of good! And therein lies the true story. Gaur Vs Rao.Who wins this round?

That the one company that seems to impress everyone — media, the babus and the public at large — is Indigo. It is low profile, steady and completely grounded in reality. Insiders state that if all goes as planned, and so far it has, the company should be in profits in the next few months.

That the Central Vigilance Commission (CVC) has got hold of several Airports Authority of India purchases to find out if everything is above board.

Those in the know state that this is a result of complaints by several vendors. Others state that it was a suo moto initiative by the Ministry to stop harassment by a set of vendors. Anyway, the sum of all the parts is that the AAI is going through each purchase with a toothcomb. “We are happy that this has happened. At least matters will be clear once and for all,” said one official. Apparently, the file under scrutiny is for passenger boarding bridges (PBB), better known as aero bridges, with a battle royale between a US and Japan-

Rajiv Gandhi Bhawan ese firm. Now, don’t ask us who has been done in and who is getting the order. No one is talking and no one knows. It’s all in the files in the CVC.

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HERE HAS BEEN speculation that after acquiring 46 per cent stake directly in Deccan Aviation and another five per cent indirectly, UB-promoted Kingfisher Airlines may reverse merge rebranded Simplifly Deccan. This saw unusual activity in the stock markets with Deccan shares rising on one day to nearly Rs 245 that is nearly Rs 90 more than that paid by Vijay Mallya to buy 46 per cent.

After initial purchase of 26 per cent and another 20 per cent through open offer, there was still about 30 per cent with the group of original promoters of Deccan Aviation. When rumours of the reverse merger gathered momentum, the share prices began to rise, as the market was full of gossip that at least one of the promoters may cash out by selling to Mallya.

With Kalpathru and Kamadhenu Soon, however, the rumour was quashed by Deccan Aviation itself stating that there was no truth in it and that such a proposal was not even been considered by its revamped Board.

The UB representative on the board and its CFO Ravi Nedungadi also said he had not heard of any such proposal, laying to rest the rumours.

One isn’t able to fathom what use will it be of to Kingfisher, should the rumour be true. As we argued in the last issue, it is only Deccan that will complete five years of continuous flying in August 2008 and thus become entitled to fly foreign routes. It will take another twoand-a-half years for Kingfisher to complete five years of continuous flying. So why not use the rights of Deccan and then go in CRUISING HEIGHTS December 2007

for your own (Kingfisher) when it becomes due provided the five year ban on foreign routes remains till then?

After all, Jet Airways that acquired Air Sahara and rechristened it as JetLite has also applied, like Simplifly Deccan, for foreign routes. Like Jet, even Kingfisher believes that two in hand is better than one in the bush. But Vijay Mallya seems to have gone a step further. He has argued that while there may be a rule barring under-five-year old schedule domestic carriers from flying foreign routes, there was nothing suggesting that the logo has to be the same. Well-said Mallya!

May we also tell you that why not offer your aircraft to Deccan on wet lease to fly foreign routes?

After all, did Air India not use Jet Airways aircraft along with Jet colours to fly some foreign routes on wet lease, though for a few days only? Here also we may state that there is nothing in the rule that says that lease — whether wet or dry — should

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NEWS DIGEST

SYDNEY OPERA HOUSE: Kingfisher has been invited to fly to Australia

be of a minimum period. Yes, there is a DGCA rule that says that the leased aircraft cannot be older than 12 years. Simplifly Deccan’s has filed for various destinations. These include Bangalore-SFO, Mumbai-New York and Bangalore-New York preferably on non-stop basis, as Kingfisher is getting ready to receive deliveries of A 340-500 and perhaps 600.

It has even sought from Airbus Industrie if it can advance the deliveries of A 380 to end 2009 from the scheduled 2011-12.

Already Sydney Airport Corporation Limited has approached Kingfisher to

start direct flights to Sydney, as there are no direct non-stop flights between India and Australia notwithstanding the fast rising flow of Indian tourists and businesses to the Australian continent. Meanwhile, Kingfisher has received two more leased A 321-200 from a leading Ireland-based leasing company AWAS taking its tally of leased A 321s to five. The lease is for 9 years.

Following these developments, Deccan Aviation has put on hold taking further delivery of its already ordered Airbus A 320s pending route rationalisation

INFRASTRUCTURE

NEWS Highest-ever dividend from AAI THE AIRPORTS Authority of India (AAI) today paid a sum of Rs. 112 crore as dividend to the government. This is its full and final dividend for the financial year 2006-07. Earlier, AAI had paid an interim dividend of Rs. 60 crore to the Government of India in January 2007. With this, the total dividend payout for the year 2006-07 stands at Rs. 172 crore. This is the highest-ever dividend paid by AAI to Government of India.

The dividend cheque was handed over by Dr. K. Ramalingam, Chairman AAI, to Praful Patel, Minister for Civil Aviation. Ashok Chawla, Secretary, Civil Aviation, Board Members of AAI and other senior officials of Ministry of Civil Aviation were also present on the occasion.

During 2006-07, Airports Authority of India earned the highest-ever revenue of Rs. 3,726 crore and earned profit after tax of Rs.860 crore. During the year 2006-07, AAI incurred the highest-ever capital expenditure of Rs. 1,040 crore to modernize the airports and passenger facilities all over the country. AAI is

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between the LCC and Kingfisher. Mallya, on his part, has stated that full clarity will emerge once the report of the consultants — Accenture — is received in the second week of December 2007. Of course, we must once again point out here that even though Accenture might have crossed the first milestone in terms of completing the legal merger of Air India and Indian, it still has access to huge data of the two state-owned carriers’ routes and other commercial intelligence. This is a classic case of conflict of interests, but the Ministry has clearly chosen to look the other way.

Whatever be the ultimate route rationalisation of Deccan and Kingfisher’s routes, all the hard work done by Gopi in building a route network that is bigger than even Indian, time has come for it to shrink in the name of rationalisation.

Now, we hear Kingfisher would fly to Jaipur, Jodhpur and even Jaisalmer from Delhi and other places — a route that for long had been flown by the now-dead Alliance Air. Of course, we do agree that you don’t need an Accenture to tell you that. But then route is one thing and commercial content another. In the meanwhile, Deccan has already logged an accumulated loss of Rs 1,100 crore if losses of JulySeptember 2007 are included. Add to it the losses of Kingfisher. The picture you get of Vijay Mallya is that of a brave man flanked on either side by the mythical Kalpathru and Kamadhenu.

also undertaking development of 35 non-metro airports to meet the growing demand of civil aviation sector.

Patelspeak CIVIL AVIATION MINISTER Praful Patel had plenty to say about airport infrastructure during the past month.Here are the highlights of Patelspeak: Work on upgrading the Chennai and Kolkata airports will begin latest by March 2008.

He also announced that international airlines would be permitted to land at the Calicut airport from next year. In this regard he mentioned that there had been a 100 per cent increase in the number of international and domestic airlines operating to and from Kerala, since 2004.

Patel said that a policy on Greenfield airports would be in place by early next year.

He said that the Ministry of Civil Aviation was considering a proposal to allow the building of more than one airport in a particular region. Currently, govern-

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Opening the skies!

AS USUAL, for this year’s (2007-08) winter season also (beginning December 1, 2007 to January 2008), the Ministry of Civil Aviation has decided to allow all foreign airlines coming to India to increase their capacity. Thus all airlines have been allowed to upgrade their aircraft to any capacity level on their existing frequencies at all airports in India.

Under the limited open sky policy, all foreign airlines governed by bilaterals or air services agreement with India, can bring aircraft of any size subject to frequency

remaining the same, to take passengers into and out of India. They will also have to operate on the slots allotted to them and there will be no increase in the number of slots. In the earlier years it was not uncommon to see the two-month limited open sky being extended to nearly four or end-March in view of rising traffic. In the case of India, there has been a massive boom in air traffic with nearly 40 per cent annual growth. Further, new met reports suggest that some of the important destinations like Delhi will be as usual severe-

ment policy does not allow an international airport to come up within 150 km of an existing one.

No take-off yet for Madhurapudi airport THERE’S NO TAKE off yet for the Madhurapudi airport upgradation, the all-important air-head for Rajahmundry and Kakinada, two of the fastest growing cities of central coastal region.

Even the agreement reached between the State Government and the Airports Authority of India (AAI) hasn’t fast-tracked the development. Though 1605 acres have to be acquired for the construction of a new terminal, office buildings, control towers and an apron as per the agreement, nothing has been done so far.

As per the agreement, the runway has to be expanded to 2060 metres in three phases (536 metres in phase I, 457 in Phase II and 1067 in Phase III) to enable landing of wide-bodied aircraft.

The existing airport is in 318 acres and the runway length is 1750 metres. Currently, the Deccan Airways is operating two 72seaters from Rajahmundry to Chennai and Hyderabad. The existing apron is inadequate for even parking choppers and smaller planes line the Cessna and Air King.

Significantly, the occupancy ratio of the existing flights is very good and at least two more flights are needed for the two destinations. The demand for increased air-connectivity has stemmed from Kakinada emerging into an industrial hub due to the presence of Oil and Natural Gas Corporation (ONGC), Gas Authority of India Limited (GAIL), Cairn Energy Limited, Reliance, Nagarjuna

ly affected by fog for nearly 40 days beginning mid-December. In a way there could be inordinate delays and also cancellations. So, when mother nature affords the window of opportunity, it will be wiser to use even bigger birds to fly in and out of India. And should the open sky extend to four months, it could mean bad news for state-owned Air India and to a lesser extent Jet, the only other big guy flying wide body planes on international routes. It will affect mainly Delhi and to a lesser extent Kolkata, which hardly has comparable traffic. But then January is also the time when Air India is planning to start its second non-stop direct flight to the US from Delhi to New York, perhaps at the end of January 2008. We only hope that the jinx that caught Air India in the recent weeks and more severely in the winter of 2005 does not repeat itself in early 2008.

Fertilizers and Chemicals Limited (NFCL), Godavari Fertilizers and Chemicals Limited (GFCL) and AP Paper Mills. More industrial units such as oil refineries, paper mills and chemical plants are likely to come up in the proposed Kakinada Special Economic Zone (KSEZ).

Most AAI staff spurn DIAL offer ONLY 9 PER CENT of the over 2300 employees of the Airports Authority of India (AAI) working in Delhi airport have opted for a voluntary scheme to join the GMR group-promoted Delhi International Airport Ltd (DIAL), the public-private joint venture that is modernising the airport.

This is despite the fact that the AAI employees who joined the new company, according to DIAL, have received an average 75 per cent salary increase based on a scheme that was offered to all the employees at the start of this year. The average age of those who accepted the offer is between 30 and 35 years.

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NEWS DIGEST

FAQ

With the latest hike, the fuel surcharge alone will come up to Rs 1,650 per ticket, apart from a Rs 150 congestion surcharge and Rs 225 passenger service tax payable to airports.

In all, a passenger will end up paying Rs 2,025 per ticket apart from what airlines call the “basic fare” of a ticket, which varies depending on the route, passenger traffic and the time of purchase of the ticket.

As fuel prices soared to a year long high, Airline CEOs wondered what next.

Here’s what they said:

Here are the hard facts on the Aviation Turbine Fuel (ATF) bill that airlines pay and the frequent hikes that they resort to as prices soar in the world market.

Jet fuel accounts for 40 per cent of operating costs for domestic airlines and the domestic industry is estimated to spend around $1.9 billion, or Rs 7,543 crore, annually on fuel bill, based on November 2007 rates.

Last Word Siddanth Sharma Spicejet

Wolfgang Prock-Schauer Jet Airways

M. Thiagarajan Paramount Airways

Since aviation fuel hikes have become a monthly affair and there’s no relief in sight like tax cuts, we will try to have differential fuel surcharge for different routes from next month.

Airlines are in a difficult situation with fuel cost being 70 to 90 per cent higher than places like Dubai. A 20-minute hovering leads to an extra cost of Rs 500-600 per passenger or Rs 50,000.

The fuel surcharge will immediately hit the low fare carriers. Cost-sensitive passengers, who have just shifted from railways to airlines, will now consider going back. This is not a healthy trend.

AAI approval for Mohali airport THE AIRPORTS Authority of India (AAI) has formally approved the proposed Mohali international airport.

The decision was conveyed to the Punjab government recently, a spokesperson of the Chief Minister’s office said. The AAI said it had also approved the memorandum of understanding (MoU), the draft for which had been prepared by the state government. The AAI has further confirmed that the joint survey team that had conducted a feasibility study for an international airport in the region had firmed up the actual land requirement for the project. It has also finalised the master plan of the venture.

According to the findings of the survey team, an area of 300 acres has been fixed as the land required for completing the total facility. Keeping in mind future requirements, the development plan will provide for operating standard international flight carriers. The plan also includes the construction of parallel taxi track and extension of runway at the existing defence airbase, says Punjab CM Prakash Singh Badal

Sarthak Behuria, Chairman, Indian Oil: There is no scope for reducing ATF prices until international crude prices come down, or the governSarthak Behuria ment lowers the taxes.

We are not going to do business at a loss.

If anybody can import ATF at a price better than us, they can do it.

the AAI communication.

The state government and the joint venture partner would coordinate with the Chandigarh Administration in the acquisition of the requisite land. The MoU will be signed by the GMADA (Greater Mohali Area Development Authority). The MoU will require a formal clearance from the Union Ministry of Civil Aviation.

A request is now being sent to the Defence Secretary by the AAI for formalising approval to the level of the international airport, including provision for cargo facility. The Defence Ministry had agreed in principle to the airport at the high-level meeting in September.

CIAL has non-metro, foreign airports on radar COCHIN INTERNATIONAL Airport Ltd (CIAL), the company that built the new international airport at Kochi, India’s first to be built by a private sector firm, is looking to build airports in India and in other countries in an effort to tap growing demand for airline infrastructure in many parts of the world.

CIAL plans to participate in the modernisation programme of 35 nonCIAL Chief metro airports in the country and also S. Bharath Cochin wants to build airports in Sri Lanka, Ghana, Angola and Papua New Guinea, according to S. Bharath,

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Say yes to Cape Town convention THE UNION CABINET has approved India’s accession to the Cape Town Convention/Protocol. The Convention provides an international legal and institutional framework for creation, prioritization and enforcement of international interests in aircraft thereby facilitate cross-border financing and leasing of aircraft. Announcing the cabinet decision, Information and Broadcasting Minister Priyaranjan Das Munshi pointed out that the decision would help Indian aviation companies to get cheaper credit and broaden aircraft financing options. It would provide greater confidence to the creditors and cut risks applicable to asset

based financing and leasing transactions.

The convention came into effect in 2006 and provides a balance between increased creditor rights that will ultimately reduce financing costs. It would apply to sale, financing and leasing of airframes, aircraft engines and helicopters among other things. Dasmunshi said: “The risk reduction will not only result in the availability of aviation credit at a cheaper cost but also broaden the spectrum of financing alternatives available to aircraft operators which at present will mean big for India with its booming aviation industry.”

The Cape Town Convention could see

Managing Director, CIAL. Bharath added that CIAL is in talks with an international finance company and a technical partner to promote a new company that will handle these projects.

“The government of Sri Lanka has invited us to study the possibilities of building an airport there. We have got offers from Ghana, Angola and Papua New Guinea. CIAL’s team will shortly visit those countries,” he said.

Nagpur modernisation update THE AIRPORTS Authority of India (AAI) has extended the deadline for completion of the modernisation of the Dr Ambedkar International Airport by almost six months.

Sources at the airport informed that as per initial plans, the expansion work was to be completed by September-end, but AAI extended the deadline by almost six months making some modifications in the earlier design and now the new-look airport with world-class passenger amenities would be ready by March2008, a senior airport official said. The Rs 43-crore modernisation project launched by AAI is moving at a snail’s pace, but now with a slew of new expansion work being undertaken, the project cost has escalated to almost Rs 79 crore, he added.

Deccan Aviation to bid for airport projects DECCAN AVIATION will bid for airports projects across the country as part of a consortium with three other companies, including the Nitin Raheja Group, IDFC and the GVK Group.

According to the Deccan Aviation Executive Chairman,

not only Air India save as much as Rs 264 crore (savings of one per cent of the acquisition cost of US $ 6 billion or say US $ 66 million) on its 68 Boeing aircraft deal but also Indian for the purchase of 43 Airbus aircraft. The benefits will be to the lessors and those in the business of mortgage of aircraft including providing security for repossession of aircraft in case of default especially when payment obligations have been met. After India signs the Convention and the document is filed with a UN agency in Rome, the US Exim Bank, which was involved in the financing of Air India’s aircraft purchase will be able to lower its exposure fee.

Capt G. R. Gopinath, the consortium will bid for airport projects in Tier 2 and 3 cities across the country, with each partner holding 25 per cent stake in the consortium.

The consortium has bid for three airport projects at Gulbarga, Bijapur and Shimoga in Karnataka. It is also in talks with the Maharashtra as well as the Andhra Pradesh government for building airports in Tier 2 cities. Capt Gopinath said that as the airports themselves will not earn enough revenues for the promoters, industrial parks would be built around them.

Surprise checks to bring discipline on ground RATTLED BY A series of freak accidents on the ground at various airports across the country, the Director General of Civil Aviation (DGCA) plans to discipline airlines and airport staff by conducting surprise checks.

“There will be a series of random checks at airports where complaints of norms being violated are being received on a regular basis. The random check will bring in Kanu Gohain some discipline and awareness among the airlines and airport staff,” Kanu Gohain, Director General of Civil Aviation, told the media.

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Bull’s eye THE GUINEA-BISSAU MILITARY recently threatened to fire on any suspected drug plane entering its airspace in an attempt to crack down on rampant cocaine trafficking through the poor West African country.

“We have already installed anti-aircraft guns on all the Bijagos Islands,” said army

Hawaiian fiasco chief of staff General Tagme Na Waye. “Any plane detected in this zone without authorisation will be shot down.” It was unclear if Na Waye meant guns had been placed on the 10 to 15 main Bijagos Islands, or the 50-some islands that make up the archipelago that rings Guinea-Bissau’s coast.

That’s rich, isn’t it?

S

omeone had to do it. Saudi Prince Alwa-leed bin Talal became the first person in the world to buy himself the ultimate status symbol: an A380 superjumbo. The world’s biggest commercial aircraft will be his personal jet.

Ranked by Forbes magazine as the 13th richest person in the world, Prince Alwaleed flew to the recent Dubai Airshow in his private Boeing 747. With flags flying from the cockpit, he taxied over to the A380 to take a look.

Airbus laid out the red carpet for the prince. Dubbed the Flying Palace, the private jet does not come any bigger or any

18

more expensive. The list price, admittedly before discounts for a prince or any other buyer, is $319m, but it could well cost up to a further $200m to provide the aircraft interior in the style to which the Prince is accustomed. Airbus said the cabin outfitting would be undertaken “at a yet to be chosen completion centre”. There are few aircraft engineering groups that would have the capability to carry out such a contract: the favourites are likely to be either Lufthansa Technik in Hamburg or Jet Aviation in Basle.

Private jets were sold at unprecedented levels this year and there are waiting lists of several years for many executive jets, let alone a flying palace. Even the world’s richest private jet buyer will have to be patient. John Leahy, Airbus’s chief commercial officer, said Prince Alwaleed’s A380 would not be delivered until 2010. And then the outfitting could take one to two years.

So what could one have on board, no expense spared? Bedrooms, bathrooms, steam baths, offices, conference rooms, lounges, quarters for the staff — literally below stairs — a cinema of course, but then much more, if you can get it by the aviation safety authorities.

Many of the rich looked to their yacht designers for inspiration for their jets, but “much more is possible in yachts, because there are fewer restrictions”. Prince Alwaleed will have much to ponder as he waits patiently for delivery of his superjet.

CRUISING HEIGHTS December 2007

Cause of crash: Deadly gas

AIRCRAFT FLYING over Wales, England could spiral out of control because its pilots are being poisoned in flight by toxic fumes, according to a report in Wales on Sunday. That is the shocking warning from one former airline pilot who had to give up his $1,03,000-a-year job after years of being exposed to the deadly gases.

John Hoyte, chairman of the Aerotoxic Association, said that aircraft crew could pass out and endanger flights. He told the newspaper: "Pilots can be knocked out by the fumes and in that situation there's every chance a plane could crash.

Cardiff or any other city could be taken out."

The toxic smell, compared to "Sweaty feet or old tennis shoes", according to a report in the Aerotoxic Syndrome, is called a 'fume event.' It takes place when air entering the plane's engines becomes contaminated with toxic chemicals used in engine oil. The chemicals then get mixed up with the cabin's oxygen supply and poisonous air is pumped into the aircraft.

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A LOCAL STORE, Savers Thrift Store in Honolulu, Hawaii, flew a large red balloon tethered to a light pole outside its Waipahu store as it often does this to advertise a sale. The ad became a dangerous obstacle for one of the Honolulu Police Department’s helicopters. The officers on board

were helping police on the ground catch a suspected thief when the chopper flew too close to the balloon and severed the rope attached to it. Part of the rope got sucked into the tail assembly, damaging the tail and part of the fuselage.

Result: the chopper had to make an emergency landing.

TELEVISION ACTOR John Stamos would probably prefer the world remember him more for his work on the medical drama “ER,” than the nine years he spent playing Uncle Jesse on the sitcom “Full House”... but there’s at least one woman he’d prefer not remember him at all.

The woman approached Stamos as he was sleeping on a recent United Airlines flight and tried to shake him

The spy’s a fly JUST BELOW A half-opened garage door, a tiny device can be seen at the feet of someone lurking in the shadows. It looks like a blue dragonfly. Then its miniature wings begin to flap as it slips under the door and darts along the street. After rising through the air it stops to hover outside the window of a building several storeys high. There is an opening on the roof, and it slips inside. As it flits from room to room, its video-camera ‘eye’ transmits pictures to a screen on a remotecontrol unit strapped to the wrist of its clandestine operator.

This is not a scene from a James Bond film, in which 007 tests a new device from ‘Q’, but an animated video produced by Onera, France’s national aerospace centre, to explain Remanta, a project to develop the technologies needed for miniature robotic aircraft. More bug-like flying devices are being developed in other research laboratories around the world.

A few are already small enough to be carried in a briefcase; others are the size of a jet fighter and need a runway for take-off. These drones or unmanned aerial vehicles (UAVs) are advantageous. While operating even a small helicopter can cost Rs 40,000 an hour or more, the bill for a drone is a fraction of that.

Help, there’s a fire in my spacesuit

awake. The actor asked the woman to let him sleep in peace, but she persisted. Later, when he got up to use the restroom, the lady took his seat and wouldn’t give it up when confronted by flight attendants.

mounted life-support system during a training exercise. The test was quickly aborted.

An internal NASA memo said experts were working around the clock to determine the cause of the smell, but had not found out the cause. That’s good news and bad. Good because it appears there is little risk for a catastrophic fire and bad because space isn’t kind of the environment where you want to face inexplicable problems.

Mushroom mission Thailand’s air force is investigating after a pilot allegedly landed a search-and-rescue helicopter in a field to pick mushrooms for his mother. Seven air force crew including the two pilots were being probed after they made the unscheduled hour-long stop in a rice paddy in western Kanchanaburi province recently.

“It’s obviously wrong to leave the plane unattended for one hour -- it could risk terrorist sabotage,” said air force spokesman Monthon Suchookorn. The local press quoted villagers in Kanchanaburi who said they were perplexed when the chopper flew in low over the fields and then landed.

They asked the crew what they were doing, and one pilot replied that his mother had called and asked him to pick up some mushrooms.

What rubbish!

Where there’s smoke ... well, NASA isn’t sure. A trainee working inside a spacesuit during a pressure-chamber test recently reported smelling smoke inside the suit, and that report spelt trouble for the launch of the shuttle Atlantis.

A recent report on MSNBC said rookie Russian cosmonaut Mikhail Korniyenko also reported “heat behind his neck,” coming from the suit’s backpack-

Residents of Menasha, West Indies, reported that they were recently dumped on... literally…possibly by an airplane.

Police Lt. Mike Krueger said some residents along one street called the police one afternoon observing many suspicious spots and clumps on siding, sidewalks and patios to their homes.

The houses are directly under a flight path for the Outagamie County Regional Airport (ATW) near Appleton.

Some homes had stains that were difficult, if not impossible, to remove, according to the Appleton Post-Crescent.

“It looks like somebody released the holding tank for their septic and that fluid was dropped through that section of neighbourhood and it stains,” Krueger said.

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Illustrations by Rajeev Kumar

Fan following

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The big

airport tangle

S

hould another airport come up at Greater Noida in Jewar, less than 150 km from the Indira Gandhi International Airport or should it not? That’s the multicrore question that the Law Ministry wants to opine on, in camera, in the Union Cabinet, that the Civil Aviation Ministry vociferously supports and the Finance Ministry opposes. The Planning Commission ignored the techno-feasibility study of the UP Government and said that a completely new one must be carried out.

Of course, it goes without saying that the GMR group that is at the helm of the Delhi airport makeover, doesn't want the airport to ever come, while Uttar Pradesh Chief Minister Mayawati has staked her all in making sure the airport does happen.

The Civil Aviation Ministry, that has been tom-tomming its intent to close down Begumpet airport at Hyderabad and shut down operations at HAL airport in Bangalore because two new Greenfield

Getting into the act

W

hile the status of the International Airport at Greater Noida continues to be debated, there are several corporates preparing for the bidding process in the hope that it will be eventually cleared.

Delhi-based Jaypee group may partner US-based Houston Airport System (HAS) in its bid to build the proposed airport at Jewar. Jaypee Associates Executive Chairman, Manoj Gaur told the media that the group was interested in entering airport construction space but didn't give details. Houston Airport System operates three facilities in Houston: George Bush Intercontinental Airport, William P Hobby Airport, and Ellington Field.

Yes, no, maybe.

Those are the words that are being thrown around regarding the establishment of an international airport in Greater Noida. While the Civil Aviation Ministry and a section of MPs along with the Uttar Pradesh Chief Minister wants it to take place, there are others who do not want it. A report.

Delhi-based Parsvnath Developers plans a consortium with a Turkish airport operator TAV Airports Holding, domestic infrastructure finance firm IL&FS and Transport Network Ltd, to bid for the Greater Noida airport. Parsvnath plans to hold majority stake in the consortium.

Turkey-based TAV group at present manages and operates, under longterm BOT contracts, four airports comprising Istanbul Ataturk Airport, Ankara's Esenboga Airport and Izmir's Adnan Menderes Airport in Turkey, and Tblisi Airport in the Georgian Republic. TAV has also got a contract to upgrade and develop two airports in Tunisia.

Another Delhi-based real estate player Omaxe too is in negotiations with foreign airport operators to kick-start its airport building venture.

(Top) The Istanbul Ataturk Airport, which is managed by TAV Airports Holding

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projects are coming up in these two southern capitals, has, however, overruled objections from the Finance Ministry.

Civil Aviation Ministry officials say that one reason for the Ministry taking up cudgels on behalf of the Jewar project is the vociferous clamour at the consultative committee meeting where MPs were clear that there should be no embargo on having more airports. After all, they argued, if London can have four airports why can't the National Capital Region of Delhi have more than one? Members called for a revision of the existing airport policy to allow multiple airports at metropolitan cities.

The MPs stressed that multiple airports would be required in the major cities as the civil aviation sector is booming.

Members who attended the meeting included the high profile Rahul Gandhi.

That the Civil Aviation Ministry is behind the move was evident. "The ministry fully shares the views and the concerns of the members. The issue was raised by the ministry in the recent meeting on the infrastructure committee headed by Prime Minister Manmohan Singh," Civil Aviation Minister Praful Patel said.

The note seeking clearance for the project has been sent to the Union Cabinet and is expected to be taken up for discussion very soon. The state government is offering tax breaks for the airport and this is stated in the note sent to the Cabinet.

So what will DIAL (Delhi International Airport Ltd) do? DIAL has indicated it will seek compensation and demand a level-playing field. Wanting to mollify DIAL, the cabinet note has underlined several other important provisos after pointing out that the central government has at no stage given any traffic guarantee to DIAL or assured exclusive rights to IGI airport. These are: The proposed airport in Greater Noida should follow the same service conditions which have been imposed on Delhi International Airport (DIAL); and, DIAL has been made to build its airport to International Civil Aviation Organisation (ICAO) standards and also has to adhere to a point system for quantifying service standards as prescribed by ICAO. That includes maintaining a performance standard of 3.75 at all times, covering 90 per cent of passenger traffic through aerobridges, delivering baggage within three minutes.

What the GMR Group is stating in its favour are several issues including that at the time of the request-for-proposal by the AAI for restructuring Mumbai and Delhi airports, the indicative plan by the AAI for

FAQ GREATER NOIDA AIRPORT Name of the project: Taj International Aviation Hub (TIAH) Cost: Rs 3,505 crore Area: Across 1500 hectares of land.

The site: The proposed site for the project is nearly 72 km from Delhi and 120 km from Agra, in a village called Jewar.

Investors: The principal investor will be the Taj Expressway Authority. It will, in consultation with the state government, make available the land to either an SPV or a developer.

Equity Pattern: A private investor will hold 74 per cent stake in the joint venture, while the State Government will hold 13 per cent through the TIAH. The balance 13 per cent would be held by other agencies such as the Airports

Civil Aviation Ministry officials argue, if London can have four airports why can’t the National Capital Region of Delhi have more than one?

CRUISING HEIGHTS December 2007

Authority of India.

Revenue: The projected revenue is to the tune of nearly Rs 170 crore in 2011 and, according to the Cabinet proposal, is set to grow to around Rs 2,187 crore by 2038.

Traffic: The Civil Aviation Ministry has backed the assessment of the UP government's feasibility study that in the initial phase five per cent traffic will be diverted, which will go up to 15 per cent by 2035. As for cargo traffic, eight per cent of Delhi’s cargo will be diverted by 2011 and is likely to go up to 20 per cent in 2035. The projected traffic volume for TIAH is 3.9 million in 2011, which will grow to 82.6 million over the next 25 years.

(Top) Shape of things to come: artist's impression of the new Delhi International Airport. TIAH could be bigger than DIAL

Delhi contemplated only a single airport, unlike in Mumbai, where Navi Mumbai was mentioned.

DIAL wants the same tough performance conditions on whoever bags the Jewar project. While the ministry can lay down the operational conditions, it has no control over some other issues. For example, the amount of land that is earmarked for the airport that will go to the developer for commercial use. That is purely a prerogative of the state government.

Meanwhile, Haryana Chief Minister Bhupinder Singh Hooda has also approached the Centre, pitching for an airport near Sonepat, which could serve as the second airport for the National Capital Region. Hooda has argued that an airport at Sonepat was imperative considering that soon the region would have several special economic zones and would attract

huge air traffic.

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STEMMING

THE LOSSES! HYPED AS ONE OF THE LARGEST AIRLINES IN ASIA, THE NEWLY-MERGED AIR INDIA IS WOBBLING ALONG INSTEAD OF FLYING HIGH. WHILE LOSSES OF BOTH ENTITIES — AIR INDIA AND THE ERSTWHILE INDIAN — ARE STEEP, THERE IS NEED TO ENSURE PROPER INTEGRATION OF THE TWO CARRIERS, AS R. KRISHNAN FOUND OUT.

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CRUISING HEIGHTS December 2007

The NACIL Board adopted the accounts of the two entities – Air India and Indian – for the year 2006-07

Air India and Indian are not new airlines trying to sell themselves.

They are more than 50 years old with a market presence

T

HE MORE AIR INDIA tried to change, the more it has remained the same. And after the legal merger between Air India and Indian, it may remain the same for quite some time till external competition and internal compulsion either pull them in or push them out together. Six Air India flights in mid-November 2007 were delayed inordinately and some cancelled due to technical hitch and pilot shortage triggered by flight duty time restrictions or what is known as Flight Duty Time Limit (FDTL). A week later a few more flights were delayed not on account of former Air India but former Indian. Again technical hitch was the villain and in two cases pilots walked out as they had completed their FDTL. In the earlier incident, Air India ground staff was not to be seen; leaving the harried passengers to fret and fume. In the latter case, passengers have got so used to delays that they did not protest vehemently even after record 48 hours delay to a flight going to Dubai. One wonders if it would be right to say that over the years the culture of Air India-Indian customers has changed. They have begun to like taking it lying down as they did during the long flight delays notwithstanding the massive dose of competition injected into the system.

Even if one allows for technical snag and DGCA-mandated FDTL, what seems unpardonable is the ground staff behaviour.

One cannot expect the nodal Ministry of Civil Aviation to fix this problem. It needs to be fixed in-house as related by Air India Chairman and Managing Director V. Thulasidas in his letter to AI staff soon after the delays that hit its schedules in mid-November.

In the past no-competition days, Air India pilots, cabin crew, engineers and ground staff would often hold the airline to ransom for the flimsiest reason and go on flash strikes. Today, competition is killing even the best airline but things remain the same in Air India. For Air India, it is a double-whammy as Indian (domestic arm) of the new merged entity National Aviation Company of India Limited (NACIL) also adorns the brand Air India and the maharaja gets blamed for everything.

Recently, after a long wait, the NACIL Board adopted the accounts of the two entities – Air India and Indian – for the year 2006-07. Air India suffered a net loss of Rs 447.93 crore and Indian a net loss of Rs 250 crore. It was not adopted without drama. While Air India books revealed the truth hard on the face of the directors, that of Indian was first sought to be whitewashed by its finance guys. They, for some inexplicable reason, tried to keep aside the loss of nearly Rs 300 crores of Alliance Air as if that

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THE LOSSES! HYPED AS ONE OF THE LARGEST AIRLINES IN ASIA, THE NEWLY-MERGED AIR INDIA IS WOBBLING ALONG INSTEAD OF FLYING HIGH. WHILE LOSSES OF BOTH ENTITIES — AIR INDIA AND THE ERSTWHILE INDIAN — ARE STEEP, THERE IS NEED TO ENSURE PROPER INTEGRATION OF THE TWO CARRIERS, AS R. KRISHNAN FOUND OUT.

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CRUISING HEIGHTS December 2007

The NACIL Board adopted the accounts of the two entities – Air India and Indian – for the year 2006-07

Air India and Indian are not new airlines trying to sell themselves.

They are more than 50 years old with a market presence

T

HE MORE AIR INDIA tried to change, the more it has remained the same. And after the legal merger between Air India and Indian, it may remain the same for quite some time till external competition and internal compulsion either pull them in or push them out together. Six Air India flights in mid-November 2007 were delayed inordinately and some cancelled due to technical hitch and pilot shortage triggered by flight duty time restrictions or what is known as Flight Duty Time Limit (FDTL). A week later a few more flights were delayed not on account of former Air India but former Indian. Again technical hitch was the villain and in two cases pilots walked out as they had completed their FDTL. In the earlier incident, Air India ground staff was not to be seen; leaving the harried passengers to fret and fume. In the latter case, passengers have got so used to delays that they did not protest vehemently even after record 48 hours delay to a flight going to Dubai. One wonders if it would be right to say that over the years the culture of Air India-Indian customers has changed. They have begun to like taking it lying down as they did during the long flight delays notwithstanding the massive dose of competition injected into the system.

Even if one allows for technical snag and DGCA-mandated FDTL, what seems unpardonable is the ground staff behaviour.

One cannot expect the nodal Ministry of Civil Aviation to fix this problem. It needs to be fixed in-house as related by Air India Chairman and Managing Director V. Thulasidas in his letter to AI staff soon after the delays that hit its schedules in mid-November.

In the past no-competition days, Air India pilots, cabin crew, engineers and ground staff would often hold the airline to ransom for the flimsiest reason and go on flash strikes. Today, competition is killing even the best airline but things remain the same in Air India. For Air India, it is a double-whammy as Indian (domestic arm) of the new merged entity National Aviation Company of India Limited (NACIL) also adorns the brand Air India and the maharaja gets blamed for everything.

Recently, after a long wait, the NACIL Board adopted the accounts of the two entities – Air India and Indian – for the year 2006-07. Air India suffered a net loss of Rs 447.93 crore and Indian a net loss of Rs 250 crore. It was not adopted without drama. While Air India books revealed the truth hard on the face of the directors, that of Indian was first sought to be whitewashed by its finance guys. They, for some inexplicable reason, tried to keep aside the loss of nearly Rs 300 crores of Alliance Air as if that

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airline did not exist. When Air Indians questioned Indians, the truth came out and it was later disclosed that Indian had booked a loss of Rs 250 crore.

In any case these loss figures will be subject to revision and may go upwards in the coming months when actual accounts are finally reconciled and firmed up. An airline official has, however, pointed out that these losses are higher than projected, as all these were not cash losses but due to provisioning for higher depreciation. After all, the new aircraft — all 111 of them — are to be delivered and absorbed in the fleet between the second half of 2006 and 2011. Even as the argument that progressively higher depreciation will continue to haunt the two carriers now merged under brand Air India, the never-say-fall in jet fuel prices is drilling a new hole in the airline’s belly.

As sources said, in the current fiscal 2007-08, the losses of the two combined could be as high as Rs 1000 crore. Perhaps, it is in line with this that the merged entity has sought a loan or grant of Rs 1000 crore from the Union Government to shore up its equity base, which is not more than Rs 250 crore combined to enhance its borrowing ability and capacity. True, no airline in India is making profits. So much so that Kingfisher which recently took over Deccan (its 46 per cent equity) has scaled down its requirement and hence delivery schedule of new Airbus aircraft.

No major domestic carrier or known glob-

26

Six Air India flights in mid-November 2007 were delayed inordinately and some cancelled due to technical hitch and pilot shortage triggered by flight duty time restrictions or what is known as Flight Duty Time Limit (FDTL) CRUISING HEIGHTS December 2007

al mega carrier has announced major aircraft purchase orders.

The exceptions include only Gulf and Middle East based carriers like Etihad, Emirates, Qatar and Oman Airways. It is also well known that these carriers have been depending very heavily on the Indian customers out of India and coming from abroad to nourish their own carriers. Very recently China announced the purchase of 160 Airbus Aircraft that included nearly 110 of A320 and 50 A330s. Strangely, China has not placed any order for either A380 or A350.

Let’s look at Air India. It has been prodded partly by the nodal Ministry of Civil Aviation and pushed by some diehard lovers of mega carriers from within, that the merged entity should buy alfa the Super Jumbo A380 (preferably) or Boeing 747-8 (reluctantly) — the two types from which even China has kept away so far.

The real medicine for Air India would be to look for narrow body and wide body, medium capacity, long-range carriers instead of fancy jumbos and super jumbos.

Even before the real competition has begun to shred the Indian market into small pieces to be shared by mostly Gulfbased carriers and some of India’s own growing-up airlines, we hear Air India wanting to buy a fancy number of more than 100 aircraft to meet the gap that may arise from 2011-2012.

If depreciation can cause such havoc in 2006-07 for acquiring only three to five of the 111 new aircraft, what will it do in those areas when much of its capital base gets eroded even after the infusion of the asked-for Rs 1,000 crore. The government acceding to its requests will depend hugely on how best the people staffing the state-owned carrier would like to make of it. Any merger of such huge proportions needs to first integrate, and then consolidate the fleet and routes, and merge the cultures before embarking on new plans.

Maybe, it will be worthwhile to ask an outside audit body to look into the finances of the two merged carriers before any big ticket expenditure is announced.

A look at certain other aspects of the carrier: Air India currently operates over 30 wide body aircraft comprising 14 A310s, 7 Boeing 747-400s, one 747-400 Combi, two 747-300 Combis, three Boeing 777-200 LR and three Boeing 777300 ER (one more to come before endNovember 2007) and 14 narrow body Boeing 737-800s by its LCC arm — Air India Express. It also has on wet lease, one each of Boeing 767-300 and a Boeing 757. Air India signed a deal with Boeing to acquire 68 aircraft valued at Rs 35,000 crore in January 2006. Deliveries

(few have come) were to be made between 2006 end and 2011.

It well knew the number of pilots it would require progressively to operate its fleet. Though 70 per cent of these aircraft are for replacement of the existing fleet and 30 per cent for additional capacity, Air India could have arranged the pilots in time. Today, Air India has few 777 pilots and faces a shortage of 200 pilots. On its rolls are 117 expat pilots. Pilot shortage in Air India has become so acute that at least two of its brand new Boeing 777-300 ERs acquired in October 2007 were grounded in Mumbai as there was no one to fly them. Yes, one of them was used in the November 2007 delays when it was flown from Mumbai to Delhi to ferry passengers back to Mumbai.

A fine and brand new aircraft like A 330-200 acquired on lease in November 2007 has been deployed on the MumbaiGoa-Kozhikode-Sharjah route when Swiss recently started using it to fly the Zurich-Delhi route. The Ministry gave in to pressure from Kerala, which complained that only flights from places like Mumbai got better treatment. The Keralabased All India Airport Users Forum claimed that Air India provided substandard services in the Gulf sector where passengers were mainly from Kerala, but provided five-star treatment to passengers going to Britain and the US, while charging comparatively lower fares. Not many know that the day a Boeing 747-300 Combi meant for Delhi-Tokyo sector developed a technical snag, the flight was cancelled instead of inducting an alternate aircraft. A330-200 could have easily done it via Hong Kong and at the same time also provided a good and quality product.

Air India argued that since there was no pair aircraft of the same type available this could not be done.

Jet is fast stepping into stations from where Air India is operating like it recently decided…Air India started the Delhi-AmritsarBirminghamToronto flight. But Jet being smarter has started Amrtisar-London direct flight taking the cream away from Air India

CRUISING HEIGHTS December 2007

Indian has 715 pilots including commanders to operate a fleet of 74 aircraft of which 48 are Airbus A320s (including 18 on lease), seven A319s, three A321s, 11 vintage Boeing 737-200s, three A300s and two ATRs. The Boeing 737-200s are virtually grounded. At least five Boeings have been — or are in the process of being transferred — to GATI and one to India Post. Effectively, Indian should be using just over 60 aircraft. Indian has also finalised its purchase deal for buying 43 Airbus aircraft valued at Rs 20,000 crore comprising 19 A319s, 20 A321s and four A320s between late 2006 and 2011. Since Indian mostly flies on short sectors compared to long haul by Air India, the flight duty time restrictions allowed it to utilise the aircraft for between three to four take-offs and landings by its pilots.

Globally, there is a shortage of pilots.

In 2007, there should have been 15000 new hires to replace approximately 12000 retirements. The additional pilots are meant to operate new fleets. India and China are contributing to the demand.

China is currently producing 1500 pilots annually as against India’s 40 domestically. New flight academies planned in India will take up to two years to function. Even the new simulators being installed by Air India and Indian will be available largely for conversion and not for producing fresh pilots who will require about four to five years of flying before getting ready for pilot jobs in the state-owned or any other carrier. But India cannot see itself in isolation as major carriers like Singapore Airlines, Emirates, Qantas, Cathay and BA are also expanding at a terrific pace after placing orders for wide body Boeings and Airbus in the last two years. While they will also need expat pilots, India will require nearly 5000 pilots over the next five years. That is a very tall order consid-

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ering the speed of supply today.

So, where will Air India find pilots to fly its planes? Once the merger of Air India and Indian is complete and the ordered aircraft join the fleet, the new Air India will have 130 aircraft by 2011. Since the maharaja feels this will not be adequate and with the Ministry of Civil Aviation also prodding it, Air India has begun a new exercise to buy another 100 narrow and wide body aircraft. There is serious talk of Air India buying the new version of the Jumbo, the Boeing 747-8 or the Super Jumbo Airbus A380 to replace its own six Boeing 747-400s passenger aircraft, which will be converted into freighters.

When Air India signed to buy 68 aircraft, it kept out both the Boeing 747-8 and A380s as it felt it would not be able to fill them. Its 250-seater Boeing 777200 LR flying Mumbai-New York nonstop had not been able to get a load factor of more than 47 per cent when it launched the services on July 31, 2007.

With the start of high season from midOctober 2007 and lasting up to January 2008 (a yearly phenomenon), the loads on Boeing 777-200 LRs have reportedly gone up to 70 per cent. The question is: how will it fill the 475 to 500-seater Boeing 747-8 or the 555-seater three class configured luxurious A380 Super Jumbo? Airlines are supposed to make money and not acquire aircraft for pride and fancy. Even if Air India buys a dozen big birds and the remaining being medium capacity long range aircraft like either the Boeing 777s or 787s and Airbus A330

28

When Air India signed to buy 68 aircraft, it kept out both the Boeing 747-8 and A380s as it felt it would not be able to fill them. Its 250seater Boeing 777-200 LR flying Mumbai-New York non-stop had not been able to get a load factor of more than 47 per cent when it launched the services on July 31, 2007 CRUISING HEIGHTS December 2007

or A350s besides narrow body Boeing 737-800s or Airbus A320s, the pilot shortage will constrain it heavily.

The basis for the new acquisition programme is NACIL’s assumption that CAGR will be 12 per cent in international traffic and 15 per cent in domestic traffic for meeting its fleet requirements.

Besides, it has also been stated that the new aircraft requirement will also meet the opportunities offered by the Sixth Freedom rights given to Air India. Sixth Freedom allows an airline to pick passengers from a country other than its origin and carry them to a third country. Air India is working on the assumption that the induction of the present batch and newer batch of aircraft beyond 2012 will increase its market share to 30 per cent in international traffic and 35 per cent in the domestic market from the present lower than over 20 per cent market share by the year 2020.

The cargo market share is also expected to increase to 30 per cent. From the current 600 flights a day of the airline, it is hoped that by 2016-17, the airline may be able to operate 1200 flights a day. Induction of new aircraft may see Air India more than double the weekly frequency of international flights to the US, Europe and elsewhere. China certainly with a much bigger aviation market and possessing far more aircraft has not fallen for the pride and joy of the really big birds. Then, why should Air India? It was, perhaps, interesting to note that the Boeing 777-200 LR carried only 47 passengers on board its CRUISING HEIGHTS May 2007

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Mumbai-New York direct flight a month after the start of the busy season. The Kolkata-Singapore flight in October 2007 had only 28 passengers to the city-state in South East Asia and returned with two passengers only. The plane had a capacity to carry 180 passengers.

Neither Air India nor Indian are brand new airlines trying to sell themselves.

They are more than 50 years old with a well-entrenched market presence. How is it that they fill low loads and what will they do if given big birds with capacities between 500 and 800 passengers? Can you imagine Air India flying two flights a day or even a flight a day to transport passengers from point to point with such loads? Airline officials argue that the company did not want to repeat the same mistake of not giving fresh orders and therefore looking beyond 2011 when the present purchase order will be completed.

Strangely, no one has even talked of integration of the two airlines and consolidation of the two. How can expansion before consolidation help? It has to be a focused expansion and not directionless as it appears now.

Mind you, Jet is fast stepping into stations from where Air India is operating like it recently decided to fly from Ahmedabad to London besides already connecting Newark and New York and soon to LA and San Francisco. Air India started the Delhi-Amritsar-Birmingham-

30

The recent separate board meetings of Air India and Indian — even if they are common — showed that integration of the two airlines in right earnest is yet to happen. The minds are refusing to think alike as the different colours of the aircraft indicate CRUISING HEIGHTS December 2007

Toronto flight. But Jet being smarter has started Amrtisar-London direct flight taking the cream away from Air India. From hop-step-and-jump, Air India wants to do long jump. But it should be lean and fit for such an acrobatic or do we say aerobatic exercise. Kingfisher is waiting for its aircraft, including the Super Jumbo by end2009 (as per its request to Airbus) to fly Indians non-stop between India and the US. Even when competition internally has not yet reached its maximum, the stateowned carrier is waiting for the market to respond to its products and services. What will happen when a superior product is offered by Jet and soon by Kingfisher apart from the likes of Emirates, SIA, etc., really get in big time?

In between, one also heard some airline officials saying that the new fleet will largely boost the presence of the stateowned merged carrier increasing its market share in India. Here, by new fleet we mean the one that is to be acquired beyond 2012 and up to 2017.

The staff of unmerged Air India got full arrears running into hundreds of crores of rupees. The Indian staff is yet to receive arrears. A new wage deal for the combined entity is due from January 1, 2007. While the costs are rising, productivity is not. Air India wants to buy fancy planes to keep them on ground as it has done with a few new ones. How will it service the huge capex of Rs 55,000 crore for purchasing 111 new aircraft and also meet depreciation and interest outgo especially at a time when yields are not rising and the US economy faces a recession?

Air India, which reportedly made a loss of approximately Rs 700 crore in fiscal 2006-07, may end up 2007-08 fiscal with a loss of Rs 900 crore. Even the sale-lease back of six old A310s in March 2007 did not help. The recent separate board meetings of Air India and Indian, even if they are common, showed that integration of the two airlines in right earnest is yet to happen. The minds are refusing to think alike as the different colours of the aircraft indicate.

Notwithstanding all this, Air India still has a positive Ebitdar (earnings before interest, tax, depreciation, amortisation and rent). It has a positive working capital as stated by the company secretary of the airline. The status of Indian is even more precarious and recently, if sources are to be believed, the domestic carrier sought a huge working capital accommodation from a leading public sector bank.

The facility it wanted was virtually the same as what the combined entity sought from the government to shore up its equity base.

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SPECTACULAR: A flypast on the opening day of the Airshow

Up, up and away This year’s Dubai Airshow exceeded the total tally of aircraft sold at any air show. A quick look at how the five-day show progressed.

T

he tenth edition of the Dubai Airshow — the largest of which opened at the Airport Expo Dubai, United Arab Emirates — smashed all its previous declared on-site order books within the first five hours of the event.

The history-making news was made

by Emirates, the international airline of the United Arab Emirates, which placed orders and options worth over US $34.9 billion — beating the total for the whole of 2005 event by US $13.6 billion and were quickly added to by Cessna sales worth US $190 million in total and a US

The orders — which created civil aviation history — were for 120 Airbus A350s, 11 A380s and 12 Boeing 777300ERs CRUISING HEIGHTS December 2007

$145 million deal clinched by Brazilian plane-maker Embraer with an order from Abu Dhabi’s Falcon Aviation Services.

The orders — which again created civil aviation history — were for 120 Airbus A350s, 11 A380s and 12 Boeing 777-300ERs — with Emirates now set to become the world’s largest 777 operator in the next few years.

Some 45421 industry-linked visitors from 131 countries attended the five-day show, which ran at Airport Expo Dubai, United Arab Emirates — a 30 per cent increase in the number attending the 2005 event. The turnout included 32 civil

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“This really was a world-beating event in every way,” said Virginia Kern, Chairman of Fairs & Exhibitions (F&E), which organises the show in conjunction with the Civil Aviation Authority of Dubai and in collaboration with the UAE Armed Forces. “The visitor breakdown shows a particularly high turnout of airline executives — which reflects the huge growth that has taken place in the Middle East’s civil aviation profile in recent years,” Kern pointed out. She also said, “So with record numbers of exhibitors, aircraft displayed, on-site orders taken and visitors, there can be no doubt whatsoever that when it comes to aviation, this region now has a truly global standing.”

The show, which featured 850 exhibitors from 50 countries, 11 national pavilions and over 140 aircraft, smashed all previous declared on-site order tallies for any international aerospace event — with the final order book exceeding US $100 billion.

“In build-up everyone was expecting major orders — but none of us could have predicted the sheer size and scale of the announcements,” said Alison Weller, Director Aerospace, F&E, Further adding, “The show more than surpassed any expectations and earned its mantle as the world’s third largest aerospace exhibition.”

One of the highlights of the show was the unveiling of a new name, brand and logo for Dubai Airports. Comprising Dubai’s two airports, Dubai International and the recently renamed Al Maktoum International, currently under construction as part of Dubai World Central, the new look brand aims to manage the

32

SIGNED AND SEALED: His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai (standing), looks on as His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive Emirates Airline and Group, signs the Airbus contract with Tom Enders, President and Chief Executive Officer, Airbus

GREAT SHOW: More than 45000 industrylinked visitors from 131 countries attended the Dubai Airshow

CRUISING HEIGHTS December 2007

world’s largest airports and connect the world.

Airbus propelled its A350 to success while adding a few more notches to its delivery order book for A380. Said Sheikh Maktoum, Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group: “In 2003, our plan was for Emirates to have 100 aircraft by 2010. We have already surpassed that target.”

While Airbus was counting its orders, Boeing that has sold B787 to almost everybody else, also got some.

Boeing CEO Scott Carson was in Dubai and with Qatar Airways CEO Akbar Al Baker at his side, he announced that the carrier had placed orders for 92 aircraft — all Boeings — the first of which was due for delivery in two weeks, and more next month.

The order comprised 30 firm B787 Dreamliners with an option for a further 30, to be delivered between 2010 and 2014; and 27 firm B777s with an option for an additional five. The B777 order includes seven B777-200 freighters that will start arriving in 2009, as well as six B777-200LRs and 14 B777-300ERs with deliveries beginning in a couple of weeks and running until mid-2010. Al Baker said the B787 would form the core of his airline’s regional and medium-haul fleet from the next decade. Asked why Qatar had opted for A350s (of which it has 80 on order) and B787s, he replied that the A350s would not be ready until the second half of 2013. “That could mean December 31, 2013.”

The total order, including the 35 options, is worth $13.5bn and Al Baker pointed out that with the exception of its

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Qatar looks at other fuel options

T

he Dubai Airshow saw another landmark development when airlines moved to curb fuel emissions and look at cutting-edge fuel options. Qatar Airways entered into an agreement with key players across the aviation, fuel and educational sectors to power its aircraft with natural gas.

The revolutionary move would see Qatar Airways become the first commercial airline in the world to operate flights using gasto-liquids kerosene fuel — seen as the technology of the future — that will be environment friendly, helping to significantly reduce carbon emissions and reduce the impact on climate change.

A Letter of Intent was signed during the show to investigate fuel-related benefits of using Synthetic Jet Fuels to power aviation turbine engines. Qatar Airways has been joined by Qatar Petroleum, Shell, Airbus, Rolls Royce, Qatar Science & Technology Park and Woqod (Qatar Fuel Company) for the intensive study to be carried out over the next few years.

During the ‘Working Together Agreement’ signing ceremony Qatar Airways CEO Akbar Al Baker spoke of how the global spotlight was firmly on the most sensitive issue facing the world: the need to be more environmentally responsible. “There is a huge movement lobbying for the reduction in carbon emissions to make for a cleaner and safer environment,” he said. He pointed out: “The aviation industry has been at the centre of this highly topical debate. We as industry leaders gathered here at this press conference are committed to this cause and today’s move highlights how serious we take this important issue.”

Qatar Airways will work in close collaboration with its partners, to study the use of synthetic jet fuels, or GTL kerosene “in our drive towards a cleaner and safer world. And we at Qatar Airways look onward to becoming the first airline in the world to power commercial aircraft with natural gas,” said the CEO. The consortium’s research will focus on the benefits of using GTL kerosene, with particular emphasis on improved air quality,

A340-600s, Qatar Airways had always confirmed its options. “We are a young fleet and we won’t be keeping aircraft longer than five or six years,” he said.

Yes, you read correctly — five or six years. When questioned further about his aircraft replacement plans, Al Baker kept mum, saying, “I don’t pre-empt what is in my brain. I will keep it a surprise.” As of next year the average age of Qatar’s fleet will be three years. When Al Baker was asked whether he was concerned about how potential further delays to the Dreamliner would affect his mammoth expansion plans, his response was pointed: “Delays Boeing are having should be considered insignificant compared to the delays we have had on the A380.”

There were others too. Aerion took an order for its Mach 1.6 supersonic business jet from a member of the Ajman Royal family, which will ensure that its owner, Sheikh Rashid Bin Humaid Al Noaimi, becomes one of the first world leaders to routinely fly above the speed of sound while Sikorsky used the show to

SEARCH FOR ALTERNATIVES: At the GTL press conference, from left to right: Mick Forey from Rolls Royce, Saad Sherida Al-Kabi from Qatar Petroleum, Qatar Airways CEO Al Baker and Shell Aviation Vice President Sjoerd Post

fuel economy and reduced carbon emissions in an around airports and at cruising altitude. Training and research will be carried out at the state-of-art facilities within the Qatar Science and Technology Park, a world-class education and research centre run under the auspices of Qatar Foundation.

Qatar Petroleum and Shell are currently building a multi-billion dollar, world class, fully integrated gas-to-liquids complex, which is set to transform the State of Qatar into the GTL capital of the world. GTL kerosene will be an important component of the Pearl GTL project, intended to be marketed as a natural gas derived synthetic component for jet fuel.

Aircraft fuel currently accounts for as much as 40 per cent of an airline’s operating costs. With spiralling jet fuel prices, GTL kerosene is expected to significantly reduce carbon emissions, reduce fuel burn and improve aircraft operational efficiency.

ALL SMILES: His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive Emirates Airline and Group, shakes hands with Tom Enders, President and Chief Executive Officer, Airbus, after Emirates signed the historic civil aviation aircraft order for 120 Airbus A350s and 11 A380s

CRUISING HEIGHTS December 2007

announce sales of its Black Hawk Helicopters to the Air Forces of Bahrain and the UAE. Day Two brought the headlinegrabbing deal between Saudi Arabia’s Prince Alwaleed bin Talal bin Abdulaziz Alsaud, Chairman of the Kingdom Holding Company and Airbus for an A380 Flying Palace — becoming the first customer for the VIP version of the new double-deck airliner.

The show’s record sales tally soared further when Dubai Aerospace Enterprise (DAE) signed a US $13.5 billion letter of intent with Airbus for up to 100 aircraft, which included an associated deal with Rolls-Royce for Trent XWB engines to power the A350 XWBs. The aircraft will be owned by the group’s aircraft leasing and financing business, DAE Capital.

Within hours, DAE Capital went on to sign a letter of intent for 100 aircraft with Boeing — for 70 Boeing 737 next generation aircraft and 30 widebody planes.

And Boeing was smiling further when Dubai-based aircraft leasing com-

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GRAND VIEW: Planes, planes and more planes parked at the Dubai Airport for the Airshow

pany LCAL placed an order for six additional 787-8 Dreamliners.

It wasn’t just the two great mainframe providers who were celebrating. Ferrari’s Formula One driver Felipe Massa also helped fast-track business when he ordered a Piaggio Aero P180 Avanti II advanced twin-engined Italian executive aircraft — billed as the world’s fastest turboprop.

Day Three saw the momentum maintained. DAE once again led the rally when it kick-started its entry into the aircraft leasing business by buying eight Airbus aircraft from Emirates airline in a split purchase and leaseback deal.

Other deals concluded were a firm contract for ten Airbus A350 XWBs from Yemenia, a US $500 million MRO contract by Abu Dhabi’s Etihad Airways to Abu Dhabi Aircraft Technologies and an order for five A330s from Oman Air. Eclipse Aviation, which makes the world’s first Very Light Jet, sold 12 Eclipse 500 jets to Dubai Aerospace Enterprise Flight Academy Even as the curtain prepared to come down on the show, business was still being done. At US $8.8 million, Emirates

34

NEIGHBOURS' PRIDE: The fast-growing Pakistani airline Airblue’s CEO S. Abbasi signs a deal for eight additional A320s with Airbus’ John Leahy

The new Dubai Airshow site will raise the benchmark for world-class aerospace show facilities. It will cover 425000 square metres CRUISING HEIGHTS December 2007

placed one of the world’s largest-ever Cabin Service Trainer (CST) installation orders. The contract went to Dubai’s Spatial Composite Solutions which will design 13 CSTs with Emirates’ specifications for various Airbus and Boeing configurations and install them at the airline’s new Aviation Crew Training College.

The future of the Dubai Airshow looks brighter than ever as major regional aviation players outlined huge expansion plans — from new training centres, to MRO facilities, fleet expansion and refurbishment and even the launch of yet another new airline for the region.

Saudi Arabia’s National Air Services, the fastest-growing independent provider of aviation services in the Middle East, told a packed media corps that it intends to add 120 new aircraft to its fleet over the next five years while Abu Dhabi’s Royal Jet, announced a refurbishment and upgradation programme for its five BBJ aircraft which form the world’s largest solely-owned BBJ fleet.

As the show closed, key industry players rushed to ensure that they were secure for the 2009 event with many increasing the size of their stands and chalets — with a large number doubling their floor space commitment. Over 5000 square metres of floor space was contracted for 2009 before the curtain fell on Dubai Airshow 2007 by companies from throughout North America and the Middle East.

Leading the early day booking surge was Abu Dhabi’s Mubadala Development Company, which reserved more than 800 square metres and a 500 square metre chalet. Other major industry names which have confirmed for the 2009 event include Boeing, Cessna, Eclipse, KBR, Hawker, Crane and Pratt & Whitney.

The show was a fitting farewell to Airport Expo Dubai, which has been its home since the mid 90s, as it is to move in 2009 to a new, purpose-built site at the giant Dubai World Central aviation community in Jebel Ali, a 30 minutes’ drive outside of Dubai city.

The new Dubai Airshow site will raise the benchmark for world-class aerospace show facilities. It will cover 425000 square metres — double the size of Airport Expo Dubai — with 42000 square metres of exhibition space. It will have 130 chalets, car parking for 4000 cars in 2009, rising to 7000 for subse quent events.

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IVRCL, a Rs 3,000 crore group, is a name to reckon with in infrastructure, construction and real estate sectors in the country.

IVR Prime Urban Developers Limited is a 100 per cent subsidiary of IVRCL and has successfully completed the prestigious Hill Ridge Township at Gatchi Bowli, Hyderabad.

Many other projects are in various stages of implementation at Bangalore, Chennai, Hyderabad and Pune.

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

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

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

2, 3 & 4 Bedrooms Appartments with highend specifications

Development of IT SEZ at Sector 144

IVRCL INFRASTRUCTURES & PROJECTS LIMITED

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

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Smart moves take SRILANKAN CARGO AHEAD SriLankan Cargo, the cargo carrier from the tiny island nation, has utilised its strategic location — mid-way between Europe and the Middle East and Asia-Pacific — to move more than 150000 metric tonnes of cargo per annum. Stretching out to destinations in India and the region from its ‘Hub in the Ocean’, SriLankan has been able to earn an enviable reputation among shippers worldwide, reports Tirthankar Ghosh.

A

S 2007 DRAWS to a close, one airline CEO who should be happy is SriLankan’s Peter Hill.

His reason: SriLankan’s growing presence in India (see box on Page 40). But other than the increasing passenger loads, the carrier’s cargo section has done remarkably well under the able leadership of Nalin Rodrigo.

The small island nation’s national carrier has achieved what many other airlines have not been able to do. It was the first to start freighter services to Coimbatore to ferry garments from the Tirupur region and perishables — a service that even our national carriers did not think of putting into action. This

36

SriLankan Cargo set a new record in 2006 for handling of freight at Colombo's Bandarnaike International Airport CRUISING HEIGHTS December 2007

adventurous spirit, if one may term it that, has seen the carrier’s cargo revenues jump up.

Last year, SriLankan Cargo set a new record for handling of freight at Colombo’s Bandarnaike International Airport (BIA) with a total of 167289 metric tonnes, an increase of 4.48 per cent over the previous calendar year.

Said Nalin Rodrigo, Head of SriLankan Cargo: “Our success is due to our expanded network throughout the Indian Subcontinent, coupled with promotional activities to increase awareness and confidence of our customers in the SriLankan Cargo brand. This was the 5th consecutive calendar year that we have set a new record at BIA.”

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The total volumes handled by SriLankan Cargo at BIA have gone up over the years: 102497 tonnes in 2001, 113891 tonnes in 2002, 124522 tonnes in 2003, 146883 tonnes in 2004, and 160118 tonnes in 2005. And in 2006, SriLankan Cargo carried more than half of the total freight handled in the year.

One of the major reasons for this success is the strategy that SriLankan Cargo had the foresight to adopt quite a few years ago. It positioned Colombo as the ‘Hub in the Ocean’. The idea was to cash in on the fast-growing Indian economy and connect it with the rest of the world, both for exports and imports. The establishment of a bunkering hub along the busy shipping routes between the Middle East and the Far East has obviously attracted a lot of attention.

Shipments fly in and out from the ‘Hub in the Ocean’ with Colombo taking a large share of the credit for the transshipment. In fact, the Hub’s growth has been phenomenal leading Nalin Rodrigo to comment that it was operating at near capacity.

While on one hand, SriLankan ferries out its own export garments, on the other it also takes a huge load of the country’s perishable cargo in its Airbus A320 and A330 aircraft. The carrier also has dedicated freighter services to several Indian cities and the Maldives, using an Antonov AN12F freighter. In fact, perishable cargo is one of the mainstays of SriLankan: it carries around 60 per cent of the country’s perishable cargo — fruits, vegetables, cut flowers and fisheries product exports — to more

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A major reason for this success is the strategy that SriLankan Cargo had the foresight to adopt quite a few years ago. It positioned Colombo as the ‘Hub in the Ocean’. The idea was to cash in on the fast-growing Indian economy and connect it with the rest of the world, both for exports and imports

CRUISING HEIGHTS December 2007

HAPPY MAN: SriLankan CEO Peter Hill

than 51 destinations in 28 countries.

These exports saw a massive jump of 34 per cent in the first three months of 2007 over the same period a year ago.

According to SriLankan sources, the combined exports from the four items totalled LKR5.3 billion in the first three months of this year, up from about LKR4 billion in 2006. Commented Rodrigo: “We have had a firm understanding with the local fruit, flower and vegetable growers in a very interdependent business. Perishable cargo exporters, including the smaller exporters have been enjoying extremely preferential rates. Tariffs have also been maintained at the same levels for over a decade and the fuel surcharge adjustments have been extremely moderate and far below the level of fluctuation.”

On its part, the authorities have provided the necessary infrastructure for growth. Perishable cargo exporters, for example, can avail priority processing, cold storage facilities from the airport to the final point of delivery and dedicated cargo-hold space on all flights. Most perishables are headed for two main markets: Male and the Middle East.

While vegetables, fruits and flowers are exported in bulk to the top resorts in Male, the Middle East’s supermarket chains and caterers are the biggest buyers of perishables. The other important markets are the EU, which takes plants and cut foliage, and the Far East for fresh fish exports.

However, along with the perishables, the adventurous link that

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INTERVIEW Nalin Rodrigo leaves the island nation for Australia. His successor is Johann Wijesinghe, SriLankan’s Manager for UK, Ireland and Scandinavia. Rodrigo led the air cargo division’s growth and revenue development. He expanded the product line and dived headfirst to areas like Coimbatore where other carriers did not venture. To Rodrigo goes part of the credit for building the ‘Hub in the Ocean’ through which SriLankan has been successful in capturing a significant market share in South Asia.

“Expertise and

brought us this

Q

:How has the air cargo market grown in the past decade? A credit rating agency predicts a 20 per cent plus growth in next 5-10 years. What is your response to that? : Industry research indicates that the world air cargo traffic is expected to expand at an average annual growth rate of 6.1 per cent over the next two decades (2005 to 2025) from a rate of 5.1 per cent as experienced during the period 1995 to 2005, tripling current traffic levels.

Air cargo markets linked to Asia are expected to continue to lead the world air cargo industry in terms of average annual growth rates with the boom in the economic activities of the region, while the more mature markets of North America and Europe will experience lower than average growth. The share of world air cargo trade connected to Asia’s markets is expected to increase from 51 per cent to 63 per cent. The intraAsia air cargo market constitutes 15.9 per cent of world air cargo traffic in terms of tonnage, sustaining an average annual growth of 10.8 per cent for the past two decades exceeding world average rates. Factors contributing to this remarkable growth included movement of in-process manufactured goods between assembly plants within Asia, a global production chain that increasingly depends on China’s manufacturing capabilities, high demand for Asian exports in North America and Europe and growing consumer demand within the region.

A

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professionalism has far”

Amidst the goings-on with Emirates, a piece of news that has gone unnoticed is the departure of Nalin Rodrigo, the head of SriLankan Cargo and literally its single-most important mover. In his last interview as the SriLankan cargo chief to Tirthankar Ghosh, Nalin Rodrigo speaks about SriLankan Cargo’s growth

SriLankan cargo has come a long way. What are the values on which the cargo division runs?

SriLankan Cargo is more than just a cargo service. It is a perfect combination of professionalism, reliability and technology. Our aim is to be a dependable air cargo service provider, one that serves as a vital link in the global supply chain. Our commitment lies in meeting and exceeding our customer’s expectations by contributing to the development of domestic, regional and global trade.

What according to you was the turning point when you decided to ramp up India operations and what were some of the factors that complimented your decision?

How would you explain the present operational strength of your

cargo operations?

For centuries Colombo has been considered the most convenient port situated midway in the East-West trade route. By promoting Sri Lanka as the ‘Hub in the Ocean’ we have been able to successfully communicate to the world our natural geographical location and position ourselves as a strong regional hub perfectly placed between the commercial centres of the East and West.

Coupled with our ‘Shipped as Booked’ policy and a high reliability on handling we have been successful in winning the confidence of our customers and have thus grown the business by double digits annually over the past four years.

One of your mainstays is perishables. what plans do you have to enhance facilities for transport of perishables?

SriLankan Cargo carried close to 60 per cent of Sri Lanka’s perishable cargo to over 54 destinations in 28 countries, including to the Maldives and 11 key cities in India. We have had a firm understanding with the local fruit, flower and vegetable growers in a very interdependent business. Perishable cargo exporters in Sri Lanka have been enjoying extremely preferential rates. Tariffs have also been maintained at the same levels for over a decade and the fuel surcharge adjustments have been extremely moderate and far below the level of fluctuation. A number of other specialised services are also available for perishable cargo exporters in Sri Lanka, including priority processing, cold storage facilities from the airport up to the final point of delivery and dedicated

cargo-hold space on all flights.

What is the load factor on your planes today and how do you operate them?

With our fleet of Airbus A320s, A330s, A340s and dedicated regional freighter, which is used to supplement the distribution from the hub, we currently transport close to 300 tonnes of cargo everyday throughout our network.

What is your position in Asia?

Industry research highlights the opportunities presented by the high growth experienced by the air cargo industry within Asia with the boom in economic activities in the region.

As such the main focus of SriLankan Cargo during this time would be on catering to this regional demand for air cargo.

With the boom in air cargo, Indian is going in for freighters. Will SriLankan go in for a major shift in business and decide to go for full-scale cargo operations — coming out of the niche express market?

Yes, there is a five-year plan on the

cards.

CRUISING HEIGHTS December 2007

“

Our responsibility transcends beyond cargo handling and delivery into building lasting friendships.

It’s all about making someone’s day and no one understands that better than us

“

What makes SriLankan cargo different from other similar freighter services operating in the country?

We offer our customers a worldwide network with unmatched high frequencies to our neighboring country India. Our strategically located state-of-the-art cargo centre offers a cargo hub that’s ready and able to handle any sort of cargo from live animals to dangerous or fragile goods. However, what makes us your precious link in the supply chain is the expertise and professionalism of our staff. We believe that our responsibilities transcends beyond just cargo handling and delivery into building lasting friendships. It’s all about making someone’s day and no one understands that better than us.

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CARGO

SriLankan scores a century

“I

am a proud man. I have scored a century. I am 100 not out!” That was SriLankan’s CEO Peter Hill who surely knows how to appeal to his future customers.

Heading the flagship carrier of a nation that takes great pride in the exploits of its cricketers, Hill could not have found a better audience than the Indian press, which also revels in cricket. Hill was, of course, referring to SriLankan’s achievement of a 100 weekly flights into India. Hill emphasised: “SriLankan Airlines is extremely proud to be the first foreign carrier in history to fly one hundred times a week to India. We recognised very early the important role that India plays in this part of the world, and we have been steadily increasing the number of flights, and the cities that we serve.” And like a good cricket batsman, Hill said he would not mind taking his 100 to 150 — over the next five years.

“The airline has been steadily increasing its operations in India since 2003. We will increase our operations to India by 150 flights per week in the next five years,” said Hill. The carrier has recently started direct flights between Colombo and Coimbatore, which is among its 11 Indian destinations.

Perhaps, what is most important is that SriLankan has been able to seize the opportunity of flying to destinations in the country — it does not touch all the metros but certainly flies to Tier-2 cities — where others have not dared to.

While it already has plans to start direct operations from some Indian cities to Europe and the Gulf, it is serious about touching Kolkata, the only metro it has still to touch. According to Manoj Gunawardena, who heads the carrier’s World-

SriLankan Cargo has forged between Coimbatore and Colombo has brought it rich dividends. Tirupur’s garment units were ill-served prior to SriLankan’s direct freighter link. Today, the exclusive link ferries garment shipments out from Coimbatore and brings in imports from the Far East. The freighter link has come as a big boon to garment manufacturers who avail of the same-day connectivity to West Asia and Malaysia and to Europe with just a 30-hour transit for shipments booked from Coimbatore.

The AN-12F aircraft with its 17-tonne cargo capacity has become the ideal vehicle to ferry flowers and vegetables from Coimbatore.

Having achieved success in the first phase of the ‘Hub in the Ocean’ concept, SriLankan Cargo has chalked out an ambitious plan to enhance it. It launched a regional charter service, which is an addition to SriLankan Cargo’s current scheduled services to 50 destinations in 28 countries. The new move seeks to push SriLankan’s reach worldwide by giving its customers a single air cargo service provider. It is now possible to fly in cargo to any destination across South Asia, even to points not connected by

40

wide Passenger Sales: “One-third of our business starts and ends in India…We are investing in India as a destination. We have the option of exploring 15 other tier-2 cities. Kolkata is also in our planning horizon. The airlines wants to connect south Indian cities to Europe, the Gulf and Far East.

We also have the option to explore 15 Manoj Gunawardena Tier-2 Indian cities like Varanasi, Bhubaneshwar, Port Blair, Guwahati, Jaipur and others.”

However, all these plans would be put into action only after SriLankan signs a new agreement with the Dubai-based Emirates, which controls 43.6 per cent stake in the carrier.

The 10-year-old contract expires in March next year and as Peter Hill put it, “The negotiations between the government and Emirates have been going on for 18 months. I would have liked to have seen them resolved by now.” The latest meeting is scheduled on January 8. SriLankan is keeping all its business plans on hold — and that will include an expansion of the fleet from the present 14 to 30 aircraft by 2013 — till a final decision is taken. If and when the planes are ordered they would in all likelihood be a ‘50-50’ mix of narrowbodied and wide-bodied aircraft. The SriLankan-Emirate partnership began in 1998. While the Sri Lanka government held a majority stake, it left Emirates to run the show. In fact, the airline has been run efficiently and has been a profitable venture.

Having achieved success in the first phase of the ‘Hub in the Ocean’ concept, SriLankan Cargo has chalked out an ambitious plan to enhance it CRUISING HEIGHTS December 2007

regular scheduled services at short notice, with all landing clearances obtained by SriLankan Cargo. The service promoted by SriLankan also allow businesses to leverage the benefit of a single service provider, avoiding possible delays and losses caused by breaking up the consignments and the different routes taken by each operator. “While scheduled services give businesses a regular connection to key destinations around the world, the globalisation and the fast pace of businesses sometimes demands collection and delivery to remote locations,” Rodrigo said pointing out that his carrier had become an integral part of the supply chain for many leading brand name manufacturers, who depend heavily on just-in-time delivery of raw material from suppliers and finished goods to their customers.

SriLankan Cargo has proven that with the right approach and planning, it is possible for a nation with little manufacturing prowess to become a world-class carrier. It is not without reason that many industry stalwarts believe that the strong growth from the East Asian bloc is partly due to the strength of SriLankan Cargo in

the South Asian region.

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CARGO NEWS Blue Dart ramps up in 25th year of operations INTEGRATED EXPRESS, courier and package distribution major Blue Dart Express recently entered its 25th year of operation in the country. Established in 1983 with a modest capital of Rs 30,000, Blue Dart is today a Rs 670 crore company and a market leader with 41.7 per cent share in the domestic organised air express segment.

Blue Dart, since inception, has striven to pre-empt market demand so that it is prepared to meet the growing demands of its customers. It has played a pivotal role in facilitating the trade and commerce of the country and has, almost single handedly, transformed the way people correspond, communicate and distribute packages today.

Anil Khanna The company has an unmatched reach to over 17600 MD, Blue Dart Express locations catering to over 26000 loyal customer base across all industry verticals. Pioneers in India’s air express segment, Blue Dart today operates six air freighters across 62 air routes with a payload capacity of 300 tonnes per night.

Anil Khanna, Managing Director, Blue Dart Express, speaking about the 25 years of the company, said, “Our efforts to continuously innovate and build on our existing infrastructure have made us one of the most trusted and recognised brands in the country.”

Blue Dart plans to add another B-757 to its existing fleet of six freighters plying across 62 air routes with a payload capacity of 300 tonnes per night. It recently launched an independent ground network operation called ‘Surfaceline’ owing to the improved road infrastructure. The company is adding 58 new warehouses across the country and 596 new road route connections by the year 2010 and has earmarked an investment of Rs 1,000 crore for the short to medium term to strengthen its air and ground operations and technology.

UPS ties up with AFL for India expansion UPS JETAIR EXPRESS recently announced a strategic alliance with AFL that will significantly expand accessibility to UPS services in India while providing export capabilities to AFL. The alliance will take effect on January 1, 2008, when all AFL WiZ Express Centres across the country will promote UPS's international express delivery service to customers in the country. UPS Jetair Express will continue to operate as an international express delivery service provider connecting India with the global marketplace, while AFL will continue to function as a

Emirates Skycargo wins global awards THE DUBAI-BASED Emirates SkyCargo has been awarded a clutch of prestigious prizes at awards ceremonies on two continents. The carrier won the Air Cargo Carrier of the Year at the inaugural Supply Chain Asia Logistics Awards in Hong Kong, which was attended by more than 300 senior industry executives. Members of Supply Chain Asia voted Emirates SkyCargo their favourite airline for its excellent services and innovative supply chain support from a shortlist of major players, which included Cargolux, Cathay Pacific Cargo, Lufthansa Cargo and Singapore Airlines Cargo.

Emirates SkyCargo also received the esteemed Best Carrier to the Middle East award, for the 10th year in a row, in recognition of its service excellence, at the annual conference and gala dinner of the Italian Association of Airfreight Forwarders (ANAMA) at which airlines were awarded for their commitment to customer service and performance quality during 2006. Emirates SkyCargo Italy also ranked second in the Best Carrier to Australia category.

Dnata is ground handler of the year GROUND HANDLING major based in Dubai, Dnata, was named ‘Ground Handling Provider of the Year’. The premium accolade was awarded at the first Aviation Business Awards.

The event, organised by ITP Publishing, saw acknowledgement in 14 categories awarded to the region’s most outstanding players in the aviation industry. A panel of judges selected Ismail Ali Albanna, Executive Vice Dnata from among four other shortlisted con- President, Dnata, receives ground hantenders, using a stringent set of criteria that dling honour at the Aviation Business ranged from operating experience, staff training Awards Ceremony held in Dubai and company ethics, to growth figures, quality of services and facilities offered, unique selling points and operating standards and practices.

The award was presented to Ismail Ali Albanna, Executive Vice President, Dnata.

After the ceremony he spoke of this feat: “This is a huge achievement for the Dnata Airport Operations team, which has delivered results despite operating in a high-pressure environment where it faces daily challenges brought about by the aggressive expansion of Dubai Airport and our company’s own rapid growth.”

Dnata’s Ground Handling Provider of the Year award was announced during the 10th Dubai Airshow week. Dnata Airport Operations is responsible for ensuring the smooth flow of aircraft, passengers and cargo through Dubai International Airport.

CRUISING HEIGHTS December 2007

TIE-UP: At the signing ceremony (l-r) Pirojshaw Sarkari, Managing Director, UPS Jetair Express, Dan Brutto, President, UPS International, Cyrus Guzder, Chairman and Managing Director, AFL and Ken Torok, President, UPS Asia Pacific

domestic service provider connecting businesses across India. The strategic alliance also allows AFL to pick up international export shipments on behalf of UPS destined for the more than 200 countries and territories that UPS serves.

UPS access points for customers with international express delivery requirements will exponentially increase to more than 200 locations in India.

“Our strategic alliance with AFL comes out of our belief in the potential of the Indian market,” said Dan Brutto, president of UPS International. “We have been exploring different options to expand our operations in India and concluded AFL offered the fastest route to expansion along with the most capabilities.” Pirojshaw Sarkari, Managing Director, UPS Jetair Express said, “Covering over 5700 postal codes, AFL enjoys a strong foothold in the domestic market in India. Our alliance with AFL will strategically strengthen both UPS and AFL capabilities in India.

By combining strengths of both the organisations, we can provide customers increased access and a comprehensive range of services and solutions.”

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NATIONAL Jet upgrades Singapore & Malaysia services IN RESPONSE to high passenger demand, Jet Airways has introduced its luxurious Airbus 330-200 aircraft on the widely acclaimed Mumbai-Singapore-Mumbai sector, the Chennai-Singapore-Chennai sector and the Chennai-Kuala Lumpur-Chennai sector.

Jet Airways’passengers on these sectors can now enjoy the airline's revolutionary Premiere Class. Featuring a new cabin design, it offers every Première passenger a virtual living room, a space to work, rest or play.

Jet Airways’Airbus 330-200 aircraft also offers a state-ofthe-art in-flight Panasonic eX2 entertainment system that offers passengers over 200 hours of entertainment, including movies, television and music — all on demand and all heard through Bose noise cancellation headphones.

Codeshare with Brussels Airlines: Jet Airways has expanded its

partnership with Brussels Airlines, offering seamless travel to Jet Airways customers from India to Birmingham and Madrid via its hub in Brussels. This codeshare partnership will be expanded shortly to other European cities, such as Paris, Lyon, Vienna, and Berlin via Jet Airways hub in Brussels.

Not only is Brussels the capital of the European Union, its physical location combined with Brussels Airlines’network, makes Jet Airways hub in Brussels the natural gateway to Europe and Africa.

Daily flights from Chennai to Toronto and New York:The airline has introduced daily flights from Chennai to Toronto and New York.

Jet Airways will use a brand new Airbus 330-200 aircraft on this route, which carries its passengers in a two-class layout and offers unprecedented levels of luxury, privacy and comfort in the air. Jet Airways is offering a special inaugural Economy return fare of Rs. 36,000/- plus taxes. Premiere class return fares start from Rs. 1,57,500/- plus taxes.

At Brussels, Jet Airways’First and Premier Class passengers will be welcomed at the airlines’newly inaugurated lounge, a stunning example of contemporary design. The facilities and features, as well as the comfort and luxury of the lounge in Brussels make it arguably one of the best in the world.

Kolkata-Ahmedabad service:The airline has introduced a new Kolkata-Ahmedabad service with the operation of three flights a week and additional frequency on the Kolkata-Guwahati sector in December 2007. These flights will operate with a Boeing 737800 aircraft with 24 seats in Premiere Class and 120 seats in Economy Class.

Dhaka connections from Delhi and Kolkata: Jet Airways also launched daily direct flights from Kolkata to Dhaka and four flights a week from Delhi to Dhaka in December 2007. With the induction of these new flights, Jet Airways’Dhaka passengers will get a convenient connection when flying to and from London via Delhi. These flights will operate with a Boeing 737-800 aircraft with 24 seats in Premiere and 120 seats in Economy Class.

Kingfisher taps virgin routes THE AIRLINE recently announced that it would be adding 16 new flights to its daily departures on seven new sectors. The newly introduced services include flights on virgin routes, which were not being served by any airline so far. These are Aurangabad-Udaipur, Jodhpur-Jaisalmer and Agra-Jaipur. The other new services launched by Kingfisher Airlines include a service from Jaipur to Udaipur, Udaipur to Jodhpur, Jodhpur to Jaisalmer, Agra to Jaipur, Jaipur to Jodhpur, Jaipur to Agra, Agra to New Delhi and New Delhi to Jaipur. The five new cities that Kingfisher Airlines will add to its route network are Aurangabad, Agra, Udaipur, Jodhpur and Jaisalmer. These flights will be operated using brand new ATR72-500.

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GoAir’s fog-flights to go CAT-III compliant

IndiGo to Kalinga

AS PART of its fog strategy, GoAir will ensure that all its fog-destination flights will be flown by CAT-III compliant pilots. According to the current published schedule of the airline, on a daily basis, GoAir requires eight sets of CAT III compliant flying crew. However, GoAir will have 12 sets of CAT III compliant flying crew ready. Each set will comprise of one CAT III compliant Pilot-In-Command (PIC) and one CAT III compliant Co-Pilot. As part of its other customer service initiatives announced for the fog season this year, GoAir is ensuring that in case of fog-related flight delays beyond a specified duration, the airline will provide snacks and refreshments to passengers of the fog-affected flights. Commenting on its fog initiatives, Jeh Wadia, Managing Director, GoAir added, “We have also installed a special Fog Helpline to reply to all our passengers’queries and issues relating to the fog condition and impact. This special helpline can be accessed through our customer care service on 1800-222-111 and 9223222111.”

INDIGO HAS STARTED new daily flights connecting Bhubaneshwar to Delhi, Hyderabad and Bangalore.

Bhubaneshwar is the 16th destination on IndiGo’s network.

Speaking on the new services from Bhubaneshwar, Bruce Ashby, President and CEO of IndiGo said, “At IndiGo, we are steadily building our route network. After launching operations in August 2006, IndiGo has now carried over 3 million passengers on approx 24000 flights, and this number is increasing everyday. We are further consolidating our presence in India by strengthening our connectivity in the cities we already serve.”

With its 14th aircraft, the airline now operates 102 daily flights flying to 16 destinations, including Agartala, Bangalore, Bhubaneshwar, Chennai, Delhi, Goa, Guwahati, Hyderabad, Imphal, Jaipur, Kochi, Kolkata, Mumbai, Nagpur, Pune and Vadodara.

IndiGo plans to take delivery of one more brand-new A320 aircraft in 2007 itself, taking the fleet size to 15. It plans to serve approximately 30 Indian cities by 2010, with a fleet of approximately 40 A320s.

Deccan announces m-Fly initiative SIMPLIFLY DECCAN recently announced its mFly initiative in partnership with Oxigen Services (India) Pvt. Ltd. m-Fly account is a prepaid user account which can be accessed through mobile phone to book Deccan tickets instantly. In yet another first of its kind initiative by Deccan, passengers will now be able to book, pay and generate an e-ticket on their mobile phones. India has estimated 200 million mobile phone users which is roughly 20 per cent of our population. Deccan wishes to leverage this huge potential for simplifying air travel. With m-Fly, Deccan passengers will be able to book tickets any time and from practically any location and reduce dependence on debit cards / credit cards and ticketing windows.

INTERNATIONAL SAS returns to Delhi

Emirates’ Skywards soars

SAS INTERNATIONAL is launching two direct intercontinental routes to New Delhi in India and San Francisco in the US in autumn 2008.

The launch is part of SAS' new expansion strategy, which this year has resulted in three new routes between Stockholm-Bangkok, Stockholm-Beijing and Copenhagen-Dubai route. SAS is also expanding its fleet with an additional Airbus A340 for the new routes. SAS will initially offer four non-stop flights per week between Copenhagen and New Delhi from November 2008 to support India's strong growth and demand for flight connections.

The new Airbus 340, to be used on the New Delhi and San Francisco flights, has approximately 245 seats in three classes: Business Class, Economy Extra — an upgraded economy class with extra legroom and extra in-flight service, and Economy Class.

MORE THAN three million travellers from over 240 countries have signed on for Skywards, the award-winning frequent flyer programme of Emirates and SriLankan Airlines.

Launched in 2000 Skywards has to date received 13 awards, including several InsideFlyer magazine’s Annual Freddie Awards — considered top accolades in the loyalty industry.

Its members in India too were offered the opportunity to earn triple and double Skywards Miles for selected destinations in December 2007.

More services to Australia: Emirates has announced that its services to Australia would grow to 70 a week, providing much-needed capacity to cater to the increasing demand from around the airline’s network.

Emirates’ Chairman and CEO Sheikh Free stay in Houston with Emirates’ tick- Ahmed bin Saeed Al-Maktoum announcets: Emirates has launched services to Houston, ing the expansion of his airlines’ services Texas — its second destination in the United to Australia from 49 to 70 flights every week States and announced a fabulous free hotel stay to customers in all the three classes of travel, till February 28, 2008.

Emirates’ First Class customers to Houston receive three nights inclusive of continental breakfast at the Granduca Hotel, Houston, in a junior suite; Business Class passengers, two nights in a junior suite, and Economy Class passengers one night in a superior room.

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SNIPPETS Currently under trial since April 2007, 54000 connections have alreadybeen registered.

China Southern joins Skyteam CHINA SOUTHERN AIRLINES has officially become the 11th full member of SkyTeam, making the alliance the first to welcome a carrier from the mainland of China. China is one of the fastest growing aviation markets in the world and the addition of China Southern allows SkyTeam to provide its customers around the world with greater travel options to one of the world’s top tourist destinations. With the addition of China Southern Airlines, SkyTeam now serves approximately 428 million annual passengers through a worldwide system of 16400 daily flights covering 841 destinations in 162 countries. China Southern, with the most extensive airline route network in China, operates the largest and most advanced airline fleet in the country. The carrier is also widely recognised for its safety and customer service standards, and was honoured with the Four-Star Flight Safety Award by the General Administration of Civil Aviation of China (CAAC) in 2007 — the most prestigious award in safe flight operations in the Chinese aviation industry.

Air France explores and innovates AIR FRANCE has been increasing its efforts to offer the most advanced innovations over the past few years. By setting up its own Research and Development unit, Air France seeks to explore the latest ideas and trends in the airline sector as well as focus on the major new preferences of consumers, new technologies and design. It distributes 450000 survey forms annually on board its aircraft and also uses FB@home, a tool that enables it to collect the views of its customers.

Moreover, each year, a group of people from different sectors of the company meet to discuss the potential changes to air travel over the next 5 to 15 years. Lastly, the “InnovAction” program, makes it possible to collect and structure ideas on how to innovate and improve on products and services for customers. Air France is the world’s first airline to offer its customers such a service.

Sivaji at 35000 feet, courtesy Singapore Airlines SINGAPORE AIRLINES has had an exclusive association with blockbuster Tamil movie Sivaji The Boss. This is the first time that Singapore Airlines has obtained exclusive rights to any Indian movie to be screened onboard. The Tamil movie is being screened, exclusively on KrisWorld — inflight entertainment system, for a period of three months on all Singapore Airlines flights.

Premiered onboard on December 1, 2007, over two million passengers across the world saw this most successful Tamil movie.

New manager for AP: Paul Ng has been appointed the new State Manager for Andhra Pradesh. He will be based in Hyderabad and will be responsible for overseeing the operations of Singapore Airlines in the whole state.

Lufthansa is Best European Airlines — again LUFTHANSA GERMAN AIRLINES received the prestigious award for Best European Airline at the 18th TTG Asia Travel Awards 2007 in Bangkok, on 25 October 2007. “2007 marks a fantastic year for Lufthansa in Asia-Pacific as we continue to provide quality service that our customers have grown accustomed to from Lufthansa. Being awarded the Best European Airline in Asia-Pacific at the 18th TTG Asia Travel Awards bears testimony to our relentless pursuit of the highest standards in network, innovation, quality, punctuality and reliability,” said Uwe Mueller, Vice-President, Lufthansa, Asia-Pacific.

Austrian promotes Vienna with free ticket scheme To commemorate the tenth anniversary of services between Delhi and Vienna, Austrian Airlines has announced an exclusive offer titled “Fly Austrian — Win free tickets for 3 years” to all its customers. The offer (starting October 27, ’07 -January 27, ’08) will confer the customers a chance to win free tickets for the next three consecutive years.

Commenting on completing 10 years of successful operations, Ramesh Marwah, Deputy Country Manager — India said, “It is a moment of celebration for Austrian Airlines on completing 10 glorious years of successful services between Delhi-Vienna.

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TRAVEL & TOURISM 100 more reasons to visit Sri Lanka

Sri Lanka excels in Ayurvedic and other ethnic treatments at its spas

SRILANKAN HOLIDAYS is celebrating SriLankan Airlines’milestone of 100 flights a week to India with a free holiday for every 100th customer. Holidaymakers from across India purchasing a SriLankan Holidays package between November 27, 2007 and March 5, 2008, will qualify for the promotion.

First property of Hamshire Hotels opens HYDERABAD has a brand new luxury hotel — the Hampshire Plaza Hotel by the Hampshire Hotels & Resorts Ltd. The hotel is located at Lakdi ka pul, just five kms from the airport and nine kms from Hi-Tech city. Among its attractions include Cassia — the all day dining, Hydrate — the bar and Bombay Palace — the fine dining restaurant serving Indian cuisine, which has already established its name in USA, Canada, Malaysia, UK & Hungary. The hotel has an exclusive club floor with its own business centre and a club lounge. Wi-fi connectivity, four well equipped meeting rooms and a gym are some of the other facilities the hotel offers.

London Mayor unveils office to promote tourism in Delhi KEN LIVINGSTONE, the Mayor of London today officially announced the opening of ‘The London India Office’in Delhi to promote business, culture and tourism between the two cities.

The Mayor Ken Livingstone said: “India is an economic superpower, with a growth rate of over nine per cent a year. Its tourism industry is also growing rapidly — in 2006, 230000 From our files: The kick-off to the London-Delhi tie-up began with the Regent Street Festival, which showcased India on the Indians came to London, streets of London. Adding glamour to the event was Amrita spending $152 million overArora, who is seen in the photo with the Mayor of London taking Japan and making Ken Livingstone them the biggest spenders from the Asian market. Indian students are also flocking to London to study, with numbers doubling from 2190 in 2001 to 4320 in 2005. London’s largest minority ethnic community is Indians and 10000 Indian-owned businesses have based themselves in the UK capital. “We want more people from India to make London their first choice for visiting, studying or locating a business. This new office in Delhi will show Indians what London has to offer and will provide practical resources to help encourage greater economic and cultural activity.”

CRUISING HEIGHTS December 2007

Bali keen to welcome Indian tourists THE GOVERNMENT of Bali is keen to invite Indians to come to experience Bali. And in this direction, Bali tourism organised road shows in four Indian metros — Mumbai, Chennai, Hyderabad and Delhi in November 2007. The direct arrivals of Indian tourists to Bali have increased several folds in the last five years.

“We hope that more and more tourists, especially from India, will visit Bali in the near future. This will certainly assist us a lot in the effort to increase the number of tourist arrivals to Bali,” says I Nyoman Wardawan, the head of the Tourist Information Service of the Bali Tourism Authority who was in India to organise the road shows.

Tourism plays a crucial role in Balinese economy, which lacks natural resources like minerals and gas. A study shows that 38 per cent of opportunities and 51 per cent of people’s income are directly associated with tourists’expenditure and investment.

Balinese community and India have a strong emotional relationship, which has its roots in the ancient times. Balinese society is basically Hindu and Ramayana and Mahabharata have a great influence on Balinese culture. “Therefore, we invite everyone from India to come to Bali to see this tiny island.

Through this road-show, we are hoping to build a closer and stronger relationship and thus develop Bali tourism,” says an enthusiastic Wardawan.

Dancers performing the traditional dance of Bali during the Bali Tourism press conference held along with the roadshow

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CUNARD’S NEW LINER INTERGLOBE CRUISES, the India representative of Cunard has announced Cunard’s newest liner, Queen Victoria. The 90000-ton vessel is the second-largest ship, the 168-year old ocean liner company has ever built.

Jaypee Palace Hotel hosts SAARC officials AFTER HOLDING the second meeting of the SAARC Interior/Home Ministers at New Delhi on October 25, 2007, the delegates continued to visit the Taj Mahal and stayed at Jaypee Palace Hotel and Convention Centre, Agra. The delegates were given a traditional welcome at the hotel. During their stay, the delegates also visited Meena Bazaar, a display of famous handicrafts of Agra like inlay work on marble, leather handcrafted items and zardoozi art, set up in Jaypee Palace Hotel premises, specially for the visiting delegation.

Yatra ties up with Sify YATRA ONLINE PVT. LTD has tied-up with Sify Technologies Ltd. Through the alliance, Yatra plans to increase the penetration of travel-related services, including air tickets and hotels/packages at retail level, via Sify’s 7000 retail points across 220 cities in India.

While the travel market in India is flourishing, it is still difficult for Indian travellers to find, compare and select best hotel packages and deals, and make reservations at the lowest cost and finest service. This new initiative by Yatra and Sify will try and address this need.

Yatra.com has also launched a ‘Yatra Care Program’. The programme has three services: Yatra Trip Guarantee, Yatra Miles and My Yatra.

ITB Berlin to feature Economy Accommodation

From the ship’s double and tripleheight spaces — a design feature of grand liners of the past — to rooms imbued with an elegant yet understated British charm, the overall effect is both contemporary and classically historic.

Dramatic architecture and design is evident throughout the ship, which also features some exciting innovations, including the first twostorey library at sea.

AROUND THE WORLD, budget accommodation is one of the major travel trends of the future and the most dynamic force behind the growth in the industry. According to the latest survey by the US-based youth organisation, Staywyse, 1.6 billion overnights are registered annually worldwide among travellers under 30 — regardless whether they are on holiday, business trips or on their way to meetings and conferences.

Between 2005 and 2020, this market segment is expected to expand by 70 per cent. The ITB Berlin is offering interested exhibitors fully equipped, 10 square-metre, turnkey stands, at a cost of only 2,300 euros to display their economy accommodation units. The price also includes use of the ITB Economy Accommodation Lounge, an exclusive area where exhibitors can retreat to hold in-depth meetings with industry experts.

Siti Malaysia for travel geeks TOURISM MALAYSIA has officially launched its new brand ambassador in cyberspace, ‘Siti Malaysia’. Siti Malaysia is an animated icon that will function as a Windows Live Agent on the Windows Live Messenger, reaching to more than 285 million users worldwide.

Representing the young and savvy Malaysia, Siti Malaysia will showcase the tourism diversity of the nation in the virtual world. Siti Malaysia was officially inaugurated by Mirza Mohammad Taiyab, Director-General, Tourism Malaysia. One can add sitimalaysia@hotmail.com as their MSN contact to ‘chat’ with Siti about attractive tourist destinations.

Double honour for TAAI

FELICITATION: TAAI members congratulate C. V. Prasad (exterme left) on his election as UFTAA President

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C. V. PRASAD, PRESIDENT of the Travel Agents Association of India (TAAI) was recently unanimously elected president of UFTAA for 2007-08.

Prasad became the third Indian to rise to the coveted post. At a recent felicitation by TAAI in Delhi, Prasad pointed out that his election was further recognition of India as an emerging market and also its capability to lead the world. He also said that since the agendas of TAAI and UFTAA were similar, he would be able to address them more comprehensively.

The Indian travel fraternity is upbeat about Prasad’s election. According to Rajji Rai, Vice President of TAAI: “We feel proud that the global travel fraternity has recognised TAAI's importance.

Earlier, we were only trying to fight issues like zero commission within our country. Now, we will have the global platform to leverage the point.”

CRUISING HEIGHTS December 2007

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IHG appoints Chandpuri INTERCONTINENTAL HOTELS GROUP recently announced the appointment of Taranjit Chandpuri as director, design, South West Asia.

The appointment supports the growing operations of the group, especially in India. Taranjit joins IHG from DLF Hilton hotels, where he most recently held the position of deputy general manager, responsible for all their hospitality projects across India.

He has over 17 years of experience in planning, coordination and project management of 4 hotels and over 17 other facilities. Prior to his role in DLF, Taranjit was deputy general manager with TV Today Network.

Spain eyes India Spain has set its sights on India, as one of its priority tourism markets. India has been touted as one of the fastest growing outbound tourist markets, a fact further borne out by the increase in connec-

Unique herbal resort from WelcomHeritage THE WELCOMHERITAGE CHAIN has a large number of Jungle Lodges, located at India’s various wildlife sanctuaries, as part of its heritage destinations. Its newest resort offers a vast farm cum resort full of herbs and medicinal plants. Here in beautiful natural surroundings, can be seen India’s vast treasure house of ancient herbs used in curing all manner of ailments, used by sages and doctors down the ages.

Located just an hour’s drive away from Hyderabad, Pragati Resorts offer an 85-acre spread with tree-lined avenues, lush green lawns, quaint cottages and water bodies — creating an

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tivity from India to Europe. The number of India-Europe seats has increased threefold, surpassing 4.5 million seats a year. In its commitment to the Indian market, various agreements and projects have been undertaken by Spain to research and develop a number of marketing strategies that will educate consumers about the country and its culture. The highlight will be the opening of a National Tourist Office of Spain in Mumbai in late 2008, to handle the new opportunities that India brings.

Jamaica Tourism has a new chairman John Lynch, a tourism expert from the Caribbean, has been appointed as the new chairman of the Jamaica Tourist Board. An industry veteran with 30 years of professional experience, Lynch has been associated with the Caribbean tourism industry in varied capacities and roles. Lynch has served over the last four years on the marketing sub-committee of the JTB’s Board of Directors. He additionally sits on the board of directors for the Caribbean Tourism Development Corporation.

exotic paradise for nature lovers and pleasure seekers. This is where the ecological balance is maintained throughout its 85 acres — where rain-water is harvested and over 500 varieties of medicinal plants are grown without the use of any fertilizer.

The Resort has features like 36 well-furnished, independant thematic cottages, Swiss Tents with attached baths for outdoor camping, arrangements for large international conferences, an open-air auditorium, a club house and a library. The resort has been voted the best Farmland/ Resort in Andhra Pradesh.

WelcomHeritage chain of heritage properties includes palaces, forts, resorts, manors, havelis, residences, tea homes and jungle lodges, located in 18 Indian states.

CRUISING HEIGHTS December 2007

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Heatstroke in December!

T

he “trolley dolly” is how the Daily Mail described air hostesses of Ryanair and went on to add: “Scantily-clad Ryanair girls posing in the skimpiest of bikinis will do nothing to improve public perception…”

But the airline’s Director for Human Resources, Eddie Wilson was candid enough to admit: “Ryanair’s gorgeous cabin crew are raising the cabin temperature with 2008's hottest calendar.

Passengers will be able to bring a dozen of Europe's most stunning cabin crew home for just £5.”

This exclusive charity calendar —The Girls of Ryanair — is being sold on board all Ryanair flights from November 17. Believe it or not, the money will go to Angels Quest, which provides respite care for special needs children.

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3rd National Quality Conclave

QUALITY FOR NATIONAL WELL-BEING 16 -17 February, 2008 New Delhi, India The conclave will be addressed by distinguished national and international speakers

Former President Dr A.P.J. Abdul Kalam at the inauguration of Second National Quality Conclave in New Delhi on February 9, 2007

Sessions on: Quality in Food sector Public services Education Hospitals and healthcare services Environment, CDM Lean SMEs Sharing of experiences — presentation by award winning companies

Six Sigma practices

Economics of Quality

Special registration fee for full-time students (Management & Engineering) Last conclave was attended by over 800 delegates For further details on sponsorship opportunities and registration, please contact: Quality Conclave Secretariat Quality Council of India Institution of Engineers Building, 2 Bahadur Shah Zafar Marg, New Delhi – 110 002 Tel: 011 2337 9321, 2337 0567, Fax: 011 2337 9621 Email: nbqp@qcin.org, sg@qcin.org

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