cover dec:cover novemver NEW.qxd
11/26/2009
12:27 PM
Page 1
Rs 60
December 2009
n
io
t en
36
t
nv Co ial I A c CA spe A h
Taking airport experience to new heights Chhatrapati Shivaji International Airport, Mumbai
20,000 sq. ft. of duty-free shopping to add to your CSIA experience World-class luxury brands in various categories: from watches to apparels, from perfumes to accessories and all with the most celebrated brand tags. The new improved CSIA is outfitted with it all.
Conveniences at the airport : 200 check-in counters • Expanded baggage make-up and reclaim • In-line baggage screening system • More immigration counters • More airline ticket counters • Check-in lounge for premium passengers • Best-in-class duty free shopping • Spa, spacious plaza & food court • Multi-level parking & airline lounges • Hotel and office space
www.csia.in
VISION FOR CSIA: To be one of the world’s best airports that consistently delights customers and be the pride of Mumbai.
www.gvk.com
Power
Airports
Roads
Urban Infrastructure thoughtrains csi011109
Off the cuff
Content 2-3 march CH 2008 final new.qxd
Claim your bag, courtesy RFID Loosing luggage is a nightmare that neither passenger nor airport wants to happen. Other than the heartbreaks for the passenger, it is the matter of spending more than $3 billion annually unnecessarily. To get rid of it, RFID or radiofrequency identification is the technology that airports worldwide are planning to be equipped with to control mishandling of luggage. IBM is working with partners including Motorola Inc. and Vanderlande Industries BV, a Dutch company that builds sorting systems, to get the aviation industry to tag bags with RFID, which is 99 per cent accurate, according to Brian O'Rourke, who runs aviation services at International Business Machines Corp. The system is already used widely in other industries, such as inventory management by retailers including Wal-Mart Stores Inc. Each RFID tag emits a unique signature which enables sensors to locate the tagged object. Hong Kong International Airport and McCarran International in Las Vegas were the first to introduce RFID. IBM and Vanderlande recently installed equipment at Amsterdam’s Schiphol Airport. But aviation industry overall is moving slowly because the technology installation is demanding a huge amount of expenditure and the technology players cannot yet justify the multimillion-dollar cost of the system. On the other side, Samuel Ingalls, who handles baggage technology at McCarran International in Las Vegas, says that installing and maintaining the airport’s RFID system is less expensive than a common optical system and costs “a fraction” as much to maintain. Ingalls hopes that the benefits will start to expand exponentially as the world moves to RFID and all bags get electronic tags.
11/27/2009
12:41 PM
Page 2
contents
THE YEAR OF THE PILOT
p34
2009 has been one year that the pilot will remember. It saw the pilot come out from the anonymity of the cockpit to the glare of camera flashlights. Unfazed by the recession and the bleeding airlines, the pilots struck work, demanded recognition for union activities, got into a fracas in flying aircraft and much more. The pilot’s colleagues, the cabin crew, were no less. A report.
NEWS DIGEST
p8
The Airports Authority of India has been facing serious funds shortage; the financial woes of domestic carriers; Egyptair is all set to expand in the Indian market banking heavily on its entry into the Star Alliance and more.
CRUISING HEIGHTS December 2009
FOCUS
p20
Unlike the past show, this year’s Dubai Airshow was low on hype and even lower on the number of orders. Even so, the show underscored the fact that the Gulf will steer global aviation in the future.
Jaipur
Haridwar
Indore East Delhi NCR India Toll Free : 1800-1800-456
Amritsar
Ahmedabad
Jalandhar
Chennai
INDIA OPERATIONS OFFICE INDIA OPERATIONS OFFICE
Katra (Vaishnodevi)
Gurgaon Sec 29
www.countryinns.com/india
Country Development & Management Services (P) Ltd. Block E, No.5, Commercial Complex, Masjid Moth Greater Kailash ‐ II, New Delhi ‐ 1100 048, India Tel: 91 11 2922 1911, Fax : 91 11 2921 9841 Email : mail@cdmsindia.com
I love this Country !! Destination India…
Content 2-3 march CH 2008 final new.qxd
11/27/2009
12:41 PM
Page 4
contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS TRAVEL & TOURISM PROFILES NEWS DIGEST
CHOCKS OFF
p24
CRUISING HEIGHTS Volume IV No 8
Editor-in-Chief
K SRINIVASAN Managing Editor TIRTHANKAR GHOSH
Consulting Editor R KRISHNAN
INTERVIEW
p26
Privately-owned Cochin Airport CEO Krishnadas Nair speaks about the plans. He is now looking at the next phase of the airport’s growth with two hotels, an SEZ, a golf course and even an aerospace museum.
Air India’s problems — almost all of them are of their own making — will never end. In the midst of the gloom, someone has suggested changing the mascot. Would that help AI?
Reporters PUNIT MISHRA, JASLEEN KAUR SREYA SHANDILYA
Art Director BHART BHARDWAJ
Design RUCHI SINHA, PRADEEP JHA
Photo Editor H C TIWARI
Director
RAVI SHARMA (Mob. 9650433900)
Gen Manager RAJIV SINGH (Mob. 9810030533)
Regional Manager (Mumbai) MADHURI REKHI (Mob. 9769439988)
Manager (Business Development) PRANAV KHULLAR (Mob. 9650433088)
SNIPPETS
Asst. Manager (Corporate Affairs)
p66
The TAAI election has concluded in Mumbai and Rajinder Rai has won the race for President again; AI and Aerostar, in concert are all set to sell repair services for jet engines; Singaporean gourmet magic in the capital and more.
BACK PAGE
p72
Airbus's photo competition has recognised and appreciated the wonder kids from across the world who have captured nature from different angles. Cover: The unknown pilot and cabin crew hogged the limelight through the year. There were so many incidents that we did not know who to put on our cover and who to leave out.
ACAAI CONVENTION
p41
ACAAI's 36th annual convention is all set to be held in Goa. The global economic downturn and its impact on the Indian air cargo industry will hold centrestage in during six exhaustive business sessions. Plus: Featuring interviews and columns for in-depth analysis of various elements of cargo industry worldwide.
4
Inside: Special CRUISING HEIGHTS feature on the 2009 convention of the Air Cargo Agents Association of India. This editorial pullout willl be distributed at the convention in Goa.
CRUISING HEIGHTS December 2009
AMIT SINHA (Mob. 9650433099)
Subscription JAYA SINGH (Mob. 9650433044)
Executive Director RENU MITTAL Editorial & Marketing office: Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 Tel: +91-11-41033381-82 Mumbai: Ms Madhuri Rekhi (Mob. 09769439988) Platina, 9th floor, C-Block, G-59, Next to Citibank Bandra Kurla Complex, Bandra (East), Mumbai 400051, Tel: +91 22 3953 0528 All information in CRUISING HEIGHTS is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase-I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase-I, New Delhi-110020.
Periscope 4-5 March 2008.qxd
11/26/2009
9:14 PM
Page 2
Dreamdelay
PERISCOPE
“
All airlines that have ordered B787 will get compensated for the delay. AI will also get compensated and the details will be decided once the test flights are done and delivery schedules are firmed up. DR DINESH KESKAR, Head of Boeing Indian on the delay in the Dreamliner.
Big appetite Our intention is to have a majority stake and management control as and when we get that opportunity. We want to bring visible changes in the (Bengaluru) airport.
G V SANJAY REDDY, Vice-Chairman, GVK Power and Infrastructure on acquiring a stake in Bengaluru airport (BIAL).
LETTERS TO EDITOR
Mopping up the moolah
Air India has lost its charm and glory which it used to enjoy during its initial days as the story (Air India and the case of poor Maharaja, November ’09) highlighted. The Maharaja is seeing the worst phase ever and fighting to regain his lost ground. The public sector airline's financial condition has gone from bad to worse in recent times. Air India, once the national pride, is finding it difficult to survive. But who is responsible for this ailing condition of Maharaja? I think, the government is the main culprit. It didn’t take necessary steps to improve the condition of the ailing airline. Rakesh Jain, Jodhpur
Illustrations: Rajeev Kumar
The cargo story (Logistics sector gets ready to boom, November’09) unveiled some very pertinent facts about the air express industry. In fact, the role of the air express industry in logistics holds paramount importance as the industry is growing by leaps and bounds. The transportation business in the future would be largely benefitted as more air express companies step in. The industry has a lot of potential. However, it will take some time because of the economic downturn. Ram Srivastav, Lucknow
6
Cathay does a tony show (November ’09) made interesting reading. Cathay Pacific has forged ahead under the able leadership of Tony Tyler. Tyler started the ball rolling as soon as he took charge and the results the airline produced is there for all to see. The carrier has made quite a reputation in the industry due to its efficient management policies. As a matter of fact, the airline is branching out not in India but also in other countries. The airline is beefing up its operations which will surely benefit it in the long run. Emran Sheikh, Vadodara
The shareholders of Kingfisher (Airlines) have approved a $100 million rights issue, as well as a $100 million GDR (global depository receipts) issue. Both are on track, we have got the shareholders’ approval, so we are now focusing on all the formalities (the) funds would be utilised towards debt reduction, so that we can save on our financial cost to improve our bottom line.
Kingfisher Airways Chairman VIJAY MALLYA on the business plan of the airline.
Pressure on LCC Every time a full-service carrier converts an aircraft into single class for low-cost operations it adds capacity into the system, thus creating pressure on the LCCs. KAPIL KAUL, India head of the CAPA, on the narrow gap between the cost of running a low-cost airline and a full-service carrier.
Long way to go In India, we still have a long way to go. I hope the new steps will help us attract more customers. MARCEL BIEDERMAN, head of sales and marketing, Swiss Airlines (intercontinental) on hiring Indian girls for in-flight duties on flights to the sub continent.
All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin (East), New Delhi -13, OR mail to cruisingheights@newsline.in
CRUISING HEIGHTS December 2009
New jet fuel technology It is exactly like the normal fuel, except that it has emission properties that are better than the normal aviation fuel. Qatar Airways CEO AKBAR AL BAKER, on being first to fly with fuel from natural gas.
Periscope 4-5 March 2008.qxd
11/26/2009
9:14 PM
Page 3
The good, the bad and the ugly
houses homeless people at night. The biggest problem, however, seems to be with the unpleasant and unhelpful attitudes of airport personnel. Moscow Sheremetyevo: The airport continues to be dirty and chaotic.To top it all, the staff are rude. New York, JFK: Hectic, limited seating, frequent announcements, rude counter staff, rude customs/security, limited number of benches, restaurants/shops closed at night. Travellers loved these airports for their amenities, friendly staff and comfortable seating.Topping the list was Singapore Changi. Others on the list included Seoul Incheon; Amsterdam Schiphol; Oslo Gardermoen; Hong Kong; Dubai; Frankfurt International; Munich; Vancouver; and, Denver.
COLD STATS
While the whole world debates about the best airport on earth, our researchers came across a website — www.sleepinginairports.net — that points out the best and worst airports to sleep in. Their 2009 poll results are out and it lists the ten airports you should never have to spend a few hours in. The website advises to avoid these ten airports if at all possible. Among them are: Paris Charles de Gaulle, Moscow Sheremetyevo, New York JFK, Los Angeles, Chicago O’Hare, Manila, Rome Fiumicino, and London Heathrow. Two of our Indian airports are there too but then the readers who provide the ratings do not seem to be aware that both Delhi and Mumbai airports are slowly undergoing a transformation — for the better. Paris Charles de Gaulle: Apparently, the airport tops the list because it
LOOKING GLASS That’s our bleeding airlines!!!
AI gets lifeline We are broadly looking at equity infusion linked to AI's monthly performance parameters and we are only looking at till March 2010. After that, government would take final call on final support to the airline. PRAFUL PATEL, Civil Aviation Minister, on the decision of GoM to inject Rs 2000 cr in AI only if the airline cut costs and enhances revenue.
Big losses Airfare on India-US sector is ridiculously low. A person flying to the US via Europe pays higher fare, but pays less when flying directly from India. JITENDER BHARAGAVA, Air India Executive Director (PR) on the likely decision of AI to scrap its non-stop flight to the US.
CRUISING HEIGHTS December 2009
7
NewsDigest 8 to 15.qxd
11/26/2009
7:17 PM
Page 2
NEWS DIGEST
Navi Mumbai sputters to life government and at PMO level spread over for last one year, the Ministry of Environment and Forest (MoEF) issued the amendment — the CRZ notification, 1991 permitting NMIA in CRZ (Coastal Regulation Zone) area on May 15, 2009. Following that amendment, City and Industrial Development Corporation of Maharashtra Limited (CIDCO) made an application for CRZ clearance to Maharashtra Coastal Zone Management Authority in July 2009. This Authority at its meeting on July 16, 2009 considered the NMIA project and recommended the case with certain conditions to MoEF for further clearance from their end in August 2009. Simultaneously, the Corporation made an application to MoEF for approval of Terms of Reference (TOR) for carrying an “Environmental Impact Assessment (EIA) Study”. The MoEF meeting held on July 21, 2009, considered the project of NMIA and finalised the TOR for carrying out the ith the return of the its sixth meeting held on November 20, EIA study and conveyed to the Steering Congress-NCP combine to 2009, took stock of the situation. It was Committee in August 2009. Based on rule Maharashtra for the decided at the political level that the various conditions put in the TOR third time in a row (first Maharashtra Government would take up prescribed by MoEF, CIDCO initiated time it was only Congress, with one voice (read the required fresh actions and resecond time Congress-NCP Congress and NCP) the activated the ongoing consultancy that and now again the same issue of according a very went slow owing to environment issues. Joint Venture) the heat on early clearance to the After this CIDCO initiated fresh action the Centre to allow the state project. In this connection which include the following: (i) CIDCO government to go ahead while they have already associated with Mumbai University for with its plan to build a brand met the Prime Minister, protection, preservation, regeneration of new Greenfield airport at they propose to compensatory mangrove required Navi Mumbai has gathered meet him again due to the airport project in August steam. In the case of the to ensure that 2009; (ii) Signed MoU with M/S BJP, its vocal Jai Sri Ram the project gets Lewis Environmental Services Inc., slogan fell on politicallyearly approval. USA to provide expert advice on deaf ears of the voters and Any delay the work of Mumbai University to so no temple at Ayodhya. In will create enable the project authorities Praful Patel the case of the Maharashtra serious problem including the steering Government, its slogan, 'We want Navi for Mumbaikars. Already, committee to bring the Mumbai airport’had fallen on the deaf because of serious best practice in ears of Jairam (Ramesh). congestion, Mumbai preservation and But that may not be for long as the has lost the first spot to protection of first thing the new government did soon Delhi in terms of mangrove in and after returning to power was to hold a traffic handled by around airport in meeting to hasten the clearance of Navi Delhi airport. The November 2009; Mumbai which had got caught in the Steering Committee (iii) CIDCO environmental net spread by Jairam at its meeting appointed DHI, Denmark to provide Ramesh, the Environment Minister, who reviewed the Expert Review recently became famous with his yet project and noted in Consultancy another one-liner that 'India should get a the following: order to bring in the Nobel Prize for filth'. The Steering After the constant Ashok Chavan best practice of water Committee for development of Navi persuasion by the management in and Mumbai International Airport (NMIA) at state and central
W
8
CRUISING HEIGHTS December 2009
NewsDigest 8 to 15.qxd
11/26/2009
7:17 PM
Page 12
NEWS DIGEST
around airport in September 2009 ; (iv) on the airport master plan and the CIDCO is in the process of appointing Detailed Project Report (DPR) the Groundwater Surveys and plan. Of the 1153 hectares of land Development Agency required for the (GSDA), Pune to study the NMIA, CIDCO is impact of Ground Water already in possesQuality and Quantity in the sion of 57 per cent of impact zone due to the land. Besides, development of NMIA; (v) about 443 hectares CIDCO already appointed of or 21 per cent of M/S Heman Sahai & government land Associates to advice on all and about 457 The Chhatrapati Shivaji International Airport (top) in Mumbai legal matters of project as hectares or 22 per and (above) the proposed ATC Tower of the airport. well as preparation of cent of private land is in the prepared by the Relief and Rehabilitation the transaction documents process of being trans- Policy (R&R) which is now being disfor NMIA. ferred/acquisition by the cussed with the affected people. The Maharashtra Chief Secretary The Corporation has project authorities. Since great urgency acquired by the NMIA is Jony Joseph already expedited the work about 3,000 families spread evident from the fact that the Prime relating to carrying out of EIA studies by over ten settlements from the seven vil- Consultant LBG Consortium has forecast IIT, Mumbai, and work of the prime con- lages are required to be rehabilitated and after factoring in economic recession sultants, LBG-INECO-RITES Consortium re-settled, the project authorities have that the Mumbai Metropolitan Region (MMR) will have a demand of 25.7 Million Passengers Per Annum (MPPA) in 2010-11 which will rise to 69.7 MMPA in 2020-21 and further to 113.6 MMPA in 2030-31. Thus after allocating for the demand at the existing CSIA, the travel demand for NMIA in 2014-15 has been estimated at 10.6 million MMPA and rising to 33 MMPA in 2020-21 and further to 61.27 MMPA in 2030-31. Thus it has become amply clear that any delay in according approval to NMIA will spell a disaster for Mumbaikars. Not just the congestion at the existing Chhatrapati Shivaji International Airport but even the inadequacy of Air Traffic Control (ATC) personnel at Mumbai could make life very difficult for The Minister of State for Environment and Forests (Independent Charge), Jairam Ramesh (extreme right) air passengers as well as airport manannouncing the Notification of the Revised National Ambient Air Quality Standards - 2009, in New Delhi on agers in Mumbai. November 18, 2009. The Secretary, Ministry of Environment and Forests, Vijai Sharma is also seen.
10
CRUISING HEIGHTS December 2009
NewsDigest 8 to 15.qxd
11/26/2009
7:18 PM
Page 14
NEWS DIGEST
Photos: H.C. Tiwari
It’s bloomin’ red still!
T
Naresh Goyal
hat the Indian carriers are making losses for the last three years is no news. But what may be is the revelation that the private carriers are competing to catch up with each other primarily Jet and its subsidiaries and Kingfisher Airlines and its so-called but now merged subsidiary
12
Vijay Mallya
M Thiagarajan
Deccan. On the other hand, instead of giving them a tough fight in the airline business and market, state owned merged Air India has left them way behind in losses. Civil Aviation Minister Praful Patel informed Parliament, the other day, that six of the eight scheduled domestic
CRUISING HEIGHTS December 2009
Kalanidhi Maran
carriers posted losses of Rs 2,994 cr in fiscal 2008-09. Of this Jet and its subsidiary JetLite recorded combined losses of Rs 1,032 cr with Jet losing Rs 402 cr and JetLite Rs 630 cr, Kingfisher Airlines Rs 1,602 cr, SpiceJet Rs 352.50 cr and GoAir Rs 22.5 cr. Surprisingly, IndiGo made a profit of Rs 82.16 cr and Paramount Rs 7.26 cr. But when it came to Air India it made a whopping loss of Rs 5,548 cr in 2008-09 to take the total loss of all Indian carriers to Rs 8557.37 cr. So, Air India accounted for nearly 64 per cent of all airline losses in fiscal 2008-09. In contrast during the previous fiscal 2007-08 the total losses of the domestic airlines was Rs 5922.74 cr of which Air India alone was Rs 2,226 cr or 37 per cent. So, we have an Air India which instead of growing by leaps and bounds is actually seeing its losses growing that way. In the case of Jet Airways and subsidiaries its losses actually rose to Rs 1032.70 cr from the previous year’s Rs 986.38 cr. But Kingfisher Airlines contained its losses and brought it down from previous year’s Rs 2084.48 cr to Rs 1,602 cr in fiscal 2008-09. If we take the private airlines alone, their losses came down from Rs 3696.58 cr in 2007-08 to Rs 2,994 cr in 2008-09. In fact, during 2007-08 even IndiGo made a loss and the only exception was Paramount which made a profit of Rs 23.1 cr. Since Paramout Airlines is a closely held private company its finances are not easily accessible. But if it is making profit, then how is it that it got into a spat with two of its lessors? Paramount sources are clear it has nothing to do with money, but more with different
pawan hans ad.qxd
11/25/2009
3:23 PM
Page 1
Reaching far-wide To fulfill your sky touching needs
Established in 1985 Pawan Hans is India's largest helicopter operator. From Off-shore business activities, casualty and rescue work, film shootings, to pilgrimage tours, Pawan Hans carries out different important jobs outstandingly helping Indian economy quietly. Pawan Hans is always at your service. Anywhere,Anytime,Anyhow.
India's largest helicopter
State-of-the-art fleet of helicopters
Bell 206L4, Bell 407, Dauphin SA 365N, Dauphin A365N3, Mi-172s
First aviation company with ISO 9001:2000 certification in India
A highly-skilled team
The approved Maintenance Centre of Eurocopter for Dauphin series helicopter
(A Govt. of India Enterprises) An ISO 9001: 2000 Registered by SMR
INSPIRED
BY
LIMITLESS
Corp. Office: Safdarjung Airport, New Delhi-110003. Ph.: 011-24632273, fax: 011-24652081 E-mail: dgm.mktg@phhl.co.in Website: www.pawanhans.nic.in
SKY
NewsDigest 8 to 15.qxd
11/26/2009
7:18 PM
Page 16
NEWS DIGEST
Inside a Paramount Embraer.
interpretations of the agreement. We now understand that Paramount has begun talks with manufacturers of ATR (42 or 72 we don’t know) to connect the smaller cities in Tamil Nadu and other stations its Embraer already connects. Maybe its response to the threat
perception it sees from the recent entry of the politically powerful Maran brothers in the airline business whose Sun TV group acquired the yet-to-start regional airline Star Aviation which is also supposed to connect the southern region with its, again yet-to-be-acquired Embraers. The Maran
brothers are reported to have paid Rs 1,000 cr to acquire Star Aviation promoted by ETA group whose promoter Salahaudin is again a very close family friend of Karunanidhi and the DMK. So we wish M Thiagarajan and his Paramount a lot of political luck to withstand the Marans’business acumen. After all, who can forget the cable TV fight in Tamil Nadu when the Marans’Sumangali Cable Vision was first challenged by ADMK chief Jayalalitha and later by Karunanidhi himself when his DMK came to power? There are, though, some basic questions regarding these losses and actual health of Indian carriers. The losses that have been reported, on the face of it, do not reflect the reality. If one were to look at the operational losses rather holistically then it should be at least 20 per cent higher. After all, who will pay for the other outstandings — be it working capital expenses, or lease rentals — and, of course, the interest and principle payment for new aircraft that were acquired with great frenzy during the “good times” post-2004 but pre-2009.
H
ad it been any private airline, the promoters would have been roasted by both DGCA (Directorate General Civil Aviation) and MoCA (Ministry of Civil Aviation). But since the actors are state players and not non-state players, the authorities some how slipped up on the safety front where both letter and spirit needs to be followed. And in the instant case there was no letter and all that was followed was only the spirit as life is precious to everyone. However, it took a tragic accident and death of Andhra Pradesh Chief Minister Dr YS Rajashekhara Reddy to jolt the authorities to sit up and take notice. We don’t see any other reason for the DGCA safety audit
14
Photo Courtesy: The Hindu
Making merry without a license A file photo of the late Andhra Pradesh Chief Minister Dr Y S Rajasekhara Reddy ready to take off in a state government helicopter.
review that took place in November 2009. A simple release issued by the PIB said it all by implication if not openly. According to the release, MoCA held a meeting with officials of the state governments on air services operations. The meeting, organised by the DGCA, was held to sort out and rectify the drawbacks of the present system of operation of aircraft by state governments. The release was honest to state that as on date there is no defined or laid down regulation for CRUISING HEIGHTS December 2009
such operations though state governments do have registered aircraft under normal and passenger category. Currently, all state governments (except for governments in North-East, Himachal Pradesh and Orissa) have got helicopters/aircraft for use by Chief Ministers, Ministers of state Government and other VIPs. In all, there are 14 helicopters and 21 aircraft operated by state governments. Only governments of J&K and Rajasthan have got the NSOP (Non-
NewsDigest 8 to 15.qxd
11/26/2009
7:19 PM
Page 17
Scheduled Operator Permit) and all the other states are operating without any operating permit. It is like any private carrier simply buys aircraft gets them registered and begin to ferry passengers without getting an operating permit from the DGCA. An investigation by DGCA found that stringent controls on operations of aircraft/helicopters by state government and oversight of DGCA are required for safety of passengers, which include the
Photos: H.C. Tiwari
HIGH-FLIERS ALL: (Clockwise from left) BJP leader L K Advani; former Railway Minister Lalu Yadav; and, Bihar Chief Minister Nitish Kumar.
R K Tyagi
Naseem Zaidi
CRUISING HEIGHTS December 2009
VIPs and high dignitaries. It was then decided at the meeting that MoCA and DGCA will follow the principle of ‘one level safety’to extend safety oversight of DGCA to all kinds of operations: commercial, general, helicopters and state governments. As a proactive measure DGCA would carry out: One-time safety audit to be carried out on all the state government “aviation wings”; State pilots to undergo one-time check under DGCA flight inspectors; and, Enhanced surveillance of general aviation and state government aircraft and in this connection DGCA would issue regulations detailing comprehensive instructions for operations, air worthiness and safety aspects of state government air services. State governments will be required to obtain Air Service Authorisation from the DGCA as required under the Aircraft Rules within four months. MoCA/DGCA has stated that state governments will be required to upgrade their existing resources and facilities to ensure higher degree of safety by doing extensive internal and external audits. What was very significant and interesting was the presence of Pawan Hans Chairman R K Tyagi along with secretary Civil Aviation M M Nambiar and DGCA Dr Nasim Zaidi. Incidentally, R K Tyagi heads the committee that is currently investigating the helicopter crash that killed Dr Y S Rajashekara Reddy.
15
NewsDigest.qxd
11/26/2009
7:33 PM
Page 12
NEWS DIGEST
For Egyptair, India holds promise
I
t has been a slow and cautious move by Egyptair, Egypt’s national carrier. Unlike its neighbours — the carriers in the Gulf — it has not increased Indian destinations or flights. However, like the Gulf carriers, Egyptair is optimistic about the future. India is a big market and the carrier is looking forward to growth not only for passengers but also for freight. Ahmed Wasfy, General ManagerIndia, Egyptair, who has been in Mumbai since September 2006, believes that the growth in the number of flights will “ultimately give us the opportunity for betterment of India-Egypt relations. There is slow and steady improvement now and that is my expectation,” he said. For Wasfy, that would mean enhancing the number of flights from the present four from Mumbai; in fact, the number went up from three to four at the end of October 2009. “The introduction of the new service,” said Wasfy while talking to CRUISING HEIGHTS, “is a sign of our confidence in the tremendous potential of India as an emerging source market. The flight enhancement from Mumbai for the current winter schedule is planned keeping in perspective the increasing passenger traffic movement from Mumbai to Cairo and also for stopover passengers on their onward connection to major cities in Europe, the US, Middle East and Africa”. Egyptair now flies every Sunday, Tuesday, Wednesday and Thursday from Mumbai. The total seat capacity offered by the carrier is 1,072, which includes 96 seats in business class and 976 in economy every week. The loads to and from India have increased, according to Wasfy and hovered between 70-75 per cent. “Our most recent addition of the fourth frequency between Mumbai and Cairo was definitely planned to cater to travellers looking for efficient and world class service. We have the best flight schedules. A passenger who is
16
flying from Bombay reaches Cairo early morning which means he has the whole day to take up his business. For leisure travellers also the schedules have been so tailored that they do not waste day timings in flying and are ready to go sightseeing as soon as they land in Egypt.” Egyptair is, in fact, looking forward to cash in on its induction into the Star Alliance in July 2008. That will enable the carrier to provide more destinations to its
easier transiting for passengers connecting to the Middle East and the rest of Africa. The terminal has started catering to all Star Alliance carriers serving Cairo. In addition, Egypt has been seeing the numbers of Indian tourists going up steadily over the last few years. In 2008, nearly 100,000 Indians visited the country; a rise of 7.7 per cent from the previous year. Of this, a large percentage are corporate incentive groups keen to
A view of Cairo Airport's Terminal 3.
flyers. The carrier is incidentally looking forward to enhance the number of flights to and from Mumbai and also planning to touch other stations in India with New Delhi as the next stop, provided it gets the green signal from India. As Wasfy said, “Our ultimate objective is to have daily flights from India.” Egyptair’s Wasfy is upbeat about the Indian market despite the fact that the carrier’s management is unwilling to enhance the number of flights touching Mumbai — not immediately. He has his reason: the new TB3 terminal at Cairo has started operations and that would mean
CRUISING HEIGHTS December 2009
experience nightlife, cruises and visits to well-known places like the Aswan Dam, Luxor and Alexandria. Unfazed by the downturn, Egyptair has been wooing Indian tourists and it recently announced attractive fares from Mumbai to kick-start its tourism season. Not only are the four flights conveniently timed, but as Wasfy informed, Egyptair had “convenient onward connections to major cities in Europe and USA as well as to cities in the African continent”. Wasfy also said that the Indian flyer
Ad dummy.qxd
2/26/2009
10:34 AM
Page 1
NewsDigest.qxd
11/26/2009
7:33 PM
Page 14
NEWS DIGEST
Ahmed Wasfy General ManagerIndia, Egyptair
The flights (from Mumbai to Cairo) will ultimately give us the opportunity for betterment of India-Egypt relations could look forward to traditional Egyptian service on board the flight. “Our quality of service is evident from the fact that we are a Star Alliance member. We take good care of the passengers, ensure all comforts and safety. In addition, we serve vegetarian and Asian favorites in our inflight menu.” The General Manager-India also pointed out that the introduction of new
18
WORLD CLASS SERVICE: Satisfied flyers inside an Egyptair plane.
flight between Mumbai and Cairo would increase international trade between the two countries. In fact, trade has been on the rise: it touched $4 billion and Egypt wants to double this by next year, according to Mohamed Higazy, the Ambassador of Egypt to India. Wasfy informed that the cargo traffic has grown and each flight to Cairo carried between ten to 15 tons of cargo. Egyptair is looking forward to the future with hope. The carrier has not been touched by the global recession in the way other airlines have and its CEO Hussein Massoud recently said that the carrier “expects more improvement” during the first half of 2010. It expects to carry around
CRUISING HEIGHTS December 2009
eight million passengers in 2009-10, up by around 14 per cent from last year. It also wants to take delivery of the first of its eight A330-300s in August 2010 instead of August 2011. While India — rather more destinations in the country — will continue to be on Egyptair’s radar, the airline will be concentrating on adding new African destinations. To begin with, the carrier has been upgrading its fleet, which it hopes to complete by 2014. And by 2019, it hopes to fly the A380. From a fleet of 32 aircraft in 2003, the airline will have 72 aircraft. As for cargo, Egyptair has chalked out plans to lease an A300-600F and phase out two A300-B4 freighters in the coming years.
Linking Cultures and Continents 22 times a week from 5 cities in India
Fly to th
e
t s a E e l d Mid
SINCE 1954
www.kuwaitair ways.com
KUWAIT AIRWAYS 401, ASHOKA ESTATE, 24 BARAKHAMBA ROAD, NEW DELHI - 110 001 TEL: 011-23354373/4390/4386/4377 011-43667124/25
KUWAIT AIRWAYS KUWAIT AIRWAYS 39/6823, POLACHIRACKAL BLOCK NO. 5, TEMPLE TOWERS MANSIONS 476, ANNA SALAI NANDANAM RAVIPURAM, M.G. ROAD, CHENNAI - 600 035 KOCHI - 682 015 TEL: 044-24315162/64/69 TEL: 0484-2382574-6, 0484-2382503
KUWAIT AIRWAYS TC-9/2587-3, TRADERS TOWER VELLAYAMBALAM TRIVANDRUM - 695 010 TEL: 0471-2721575/2316620 0471-2721295/2721668
KUWAIT AIRWAYS 902, NARIMAN BHAVAN 9TH FLOOR NARIMAN POINT MUMBAI - 400 021 TEL: 022-66555655
NewsDigest focus.qxd
11/26/2009
7:38 PM
Page 2
FOCUS
ELEVENTH DUBAI AIRSHOW
Fewer orders but hope reigns supreme While it is true that the global aviation industry is in its worst year, the 11th Dubai Airshow has proved that the future will certainly be brighter, reports Brij Bhardwaj.
T
his was one airshow where there was virtually no hype — from aircraft and engine manufacturers — and fewer photo ops of deals signed. Instead, what the 11th Dubai Airshow did generate was a lot of optimism. Coming as it did on the heels of the global recession, the hope that the airshow sent out said a lot to the world’s aviation industry. The welcoming words came from Sheikh Ahmed Bin Saeed Al Maktoum, President, Dubai Department of Civil Aviation and Chairman of Dubai Airports. In his welcome address to exhibitors, delegates and visitors, Sheikh Ahmed said: “We are open to ideas: we are ready to work with companies in partnership.” Describing the Dubai airshow as timely and on the cusp of a business upturn, he pointed out: “The airshow comes at an important time for the aerospace industry as the world begins to see a revival in fortunes. During the past two years, the business has experienced unprecedented turbulence. However, I am very pleased that many
20
The 11th Dubai Airshow did generate was a lot of optimism. Coming as it did on the heels of the global recession, the hope that the airshow sent out said a lot to the world’s aviation industry
CRUISING HEIGHTS December 2009
of the organisations at the show this year were among those that continued to invest in the industry during the worst of times.” Dubai and the Middle East would spearhead the growth in the aviation industry. He said, “It is the Middle East - and the GCC (Gulf Cooperation Council) in particular - that has seen a growth in air transport, while elsewhere there have been falling passenger numbers. It is in the Gulf that we have seen launch of customer deliveries of some of the finest business jets. It is Middle Eastern carriers that have been leading the way with the introduction of new cabin and in-flight communication technologies. It is also in this region that we see the greatest investment in ground infrastructure, such as airports and air traffic management systems.” The airshow this year was being seen as a weathervane for the aviation industry. And the industry did not fail to show up: there were 890 exhibitors from 47 countries, including 150 new-toshow participants. Among the new participants were those from the UAE,
AD dummy.qxd
11/21/2009
1:29 PM
Page 1
NewsDigest focus.qxd
11/26/2009
7:38 PM
Page 4
Glimpses from 11th Dubai Airshow.
Saudi Arabia, the UK and USA. The products covered a range of activities from training simulators, to the world’s first planned supersonic business jet, from VIP and specialised aircraft services to suppliers of ejector seats and unmanned aerial vehicles. “The scale and scope of opportunity is hugely diverse and the prevailing sentiment on the exhibition floor is one of business innovation,” said Alison Weller, Director, F&E Aerospace, the organisers of the airshow. What was noticeable was the giants of the industry struggling to persuade carriers not to cancel orders because of delays in deliveries of new planes like Dreamliner by Boeing and Airbus 380 by their European rival. Even so, orders did take place. Airbus kicked off sales when Ethiopian Airlines announced the first order for 12 Airbus A350 XWBs, a deal worth $3 bn on catalogue prices. Airbus followed it up with ten A320s to Yemenia Airlines, worth $700 mn. Among the other carriers that placed orders were Oman Air for five Embraer 175s in a deal worth $177.5 mn; Air Algerie ordered seven Boeing Next-Generation 737-800s; Tassili Airlines of Algeria placed its first order for Boeing airplanes, signing a deal for four Next-Generation 737-800s; La Reunionbased Air Austral formalised an order for two A380 super-jumbo jets; and, Nepal Airlines Corp., formalised a memorandum of understanding for one A330-200 wide-body and one Airbus A320 single-aisle aircraft. The low sales, however, did not prevent the plane manufacturers from making announcements about long term demands for aircraft in the Gulf region as well as around the world. Boeing’s prediction was to double the fleet in the Middle Eastern region in 20 years, while Airbus predicted that 1,436 planes will
22
The show was excellent in terms of comfort level for the exhibitors and visitors. It only showed that Dubai had acquired the expertise to stage events that can be compared to the best in the world CRUISING HEIGHTS December 2009
have to be added during the same period. Both makers were confident that the region was heading for a record growth and investments were being made in infrastructure to meet the growing demand. The predictions showed a marked improvement when compared to last year primarily due to the improved economic outlook. While the outlook for airlines was at best a prediction of better performance in the years to come, demand for private executive jets was healthy if not mindboggling. Royal Jet announced that it would upgrade and refurbish its fleet of five Boeing jets. At the same time Mubadala Development Co, a government undertaking of the Dubai government announced major expansion plans to make components for Airbus and Boeing and even said that it wanted to build a Business Jet by 2018. The show was excellent in terms of comfort level for the exhibitors and visitors. It only showed that Dubai had acquired the expertise to stage events that can be compared to the best in the world. The city which had become a favourite destination is reeling with the economic recession. The extent of recession could be judged from the fact that a city newspaper writing about the airshow said that the Dubai economy had received a boost because the show had attracted 25,000 visitors who would be spending a few million dollars. Another indication of depressed market was the total business transacted at the show amounted to around $13 bn against the $150 bn in the show held in 2007. Most of the airlines announced that they would need at least a year or more to break even as the traffic is yet to pick up. The Indian presence at the show was low-key with Aviation Minister Praful Patel putting in an appearance on the day when Air India signed a agreement with a Gulf company for maintaining their engines. The other Indian VIP was Chairman of Jet Airways, Naresh Goyal. There was no hype about India as there were no announcements to be made.
Document2
8/26/2009
1:14 PM
Page 1
Krishnan’s col final.qxd
11/27/2009
12:31 PM
Page 2
COLUMN/CHOCKS OFF
T R Krishnan
he other day, at a wedding dinner I started chatting with some guests. One of them, a bureaucrat, who knew my passion for aviation, remarked, “We don’t know what to do with Air India.” I told him, “Please don’t do anything because you cannot do anything.” My idea was not to belittle the government’s efforts to save Air India. What I wanted to say was that all the efforts that had been put in till now had not delivered any results. Figuratively speaking, Air India used to be the national carrier. After the mess it has so efficiently managed to get into, it is the nation which is now
airline has got this fine idea that if you re-brand Air India and change the mascot — the grand Maharaja of yesteryears — and replace it with something modern, passengers would then, perhaps, relate to Air India much more easily and the state-owned carriers would once again acquire their magnetic qualities and attract the missing or vanishing passengers. Those were the days when there was no competition; or, it was not as fierce as it is now. But then those were also the days when former Prime Minister Indira Gandhi abolished the privy purse of erstwhile maharajas after she ushered in a socialist India. Interestingly, during those days of socialist India, Air India did far
How do you solve a problem like
Air India? During those days of socialist India, Air India did far better as a Maharaja than today when India as a whole has turned capitalistic with many new capitalists starting their own airlines 24
Unlike Maria in the famous musical, The Sound of Music, Air India makes you cry. But then there are some smart managers in the carrier who feel that a change of the mascot would do the trick. carrying Air India. The last bureaucrat CMD of Air India, Raghu Menon before he was sent packing to the Information and Broadcasting Ministry as Secretary, had actually written a letter to the parent Ministry of Civil Aviation that Air India should, if possible, immediately lease the new aircraft that were being delivered in quick succession. Menon took over Air India in April 2008 and wrote his letter a couple of months later. There was no response. After he was sent out to I&B, the new management coming under even greater pressure wanted to cancel the orders. Caught by a very sticky purchase agreement with Boeing, it was advised by the same Ministry of Civil Aviation to explore the opportunity of immediately leasing out its Boeing 777-200 LRs and, if possible, some Boeing 777-300 ERs besides deferring delivery of the remaining three 777-300 ERs. In the meantime, Air India’s losses rose like the July 26, 2006 monsoon floods in Mumbai city. The bureaucratic process of “under consideration” damaged the carrier even more. Now, we hear Air India has come out with another brilliant idea of engaging a high profile advertising/branding agency to rebrand Air India. Someone in the CRUISING HEIGHTS December 2009
better as a Maharaja than today when India as a whole has turned capitalistic with many new capitalists starting their own airlines. I must relate to a suggestion I read in one of the newspapers recently that officials closely linked to Air India feel and agree with some business entrepreneurs/agencies that are looking for business from a dying Maharaja that no present day passenger would want to relate to a pot-bellied Maharaja or a well-fed one at that. The mascot should be leaner and fitter. I believe these people feel that the ‘healthy’ Maharaja should go and in should come the lean and fit, suited and booted
Krishnan’s col final.qxd
11/27/2009
12:32 PM
Photo: H.C.Tiwari
smart guy who should be nearly Size Zero. Okay, you can replace the Maharaja with a Size Zero ambassador. But how do you attract the passengers who have moved over to other carriers especially the ones from the Gulf, where Size Zero or even its faint display is unacceptable. In fact, the entire Gulf is actually ruled by Emirs or their maharajas and they have done quite well so far in running their airlines be it the Emir of Dubai, Abu Dhabi or Qatar. As it is Air India has removed 25 sectors from its schedule in the last one year. These include Amritsar-Birmingham, Delhi-LA, Mumbai-Dares-Salam, Delhi-Seoul, Mumbai-Seoul, Ahmedabad-Sharjah, Chennai-Bangkok, HyderabadBangkok, Nagpur-Bangkok, Guwahati-Bangkok, Delhi-Kuala Lumpur, Bengaluru-Sharjah, DelhiLahore, Goa-Sharjah, Chennai-Sharjah, TrichyDoha-Calicut, Kozhikode-Kuwait, Calicut-Muscat and Kochi-Muscat. Incidentally, Air India’s less than two year old supposedly top class product the non-stop Delhi-NY and Mumbai-NY is under severe pressure of falling yields and no business class — first class passengers. Just look at these withdrawals — the information was shared by the Civil Aviation Minister Praful Patel in Parliament during the ongoing winter session. The withdrawal from Sharjah of the Air IndiaIndian combine has come at a time when the lessthan four-year-old Sharjah-based carrier Air Arabia has been making serious inroads into India and connecting 11 cities. Incidentally, during 2008-09, Air Arabia, as we reported earlier, has become one of the four busiest carriers to fly into and out of India in terms of passenger share and market share. Air India thinks that by replacing its full service carriers with the low-cost Air India Express, it can counter the likes of Air Arabia. At the same time, one needs to know what happened to the so-called launch of the domestic LCC announced by Air India CMD at his maiden press conference in New Delhi on August 7, 2009 where he also spoke of the turnaround plan. The domestic LCC of Air India was to be launched in September ‘09 but there are no signs of it for another two to three months. Air India has been wanting to reduce costs and increase yields. While it has not succeeded in cutting costs to the extent it wanted to, its revenues are actually contracting largely because of falling yields. Let’s look at Kingfisher Airlines — certainly not an airline that can be taken as a comparison. But, nevertheless, Vijay Mallya has managed to reduce losses of Kingfisher Airlines from Rs 2,048 crore in 2007-08 to Rs 1,602 crore in 2008-09. During this period, he also shrunk his fleet from 75 to 59 partly by returning leased aircraft and partly grounding some aircraft because of technical and engineering reasons. He now wants to raise $600 mn through a combination of rights issue, GDR (Global Depository Receipt) and private placement of equity. His shareholders have, however, permitted him to raise $200 mn of which $100 mn could be through rights issue and the balance $100 mn through GDR. The whole
Page 3
NOTHING HAS CHANGED WITH AI THOUGH THOSE IN COMMAND HAVE CHANGED: (L-R) Former Air India CMD Raghu Menon; former Secretary MoCA Ashok Chawla; and Aviation Minister Praful Patel.
idea is to reduce debt, stated Mallya. Mallya’s yet-to-happen alliance partner Naresh Goyal and Jet Airways are also in trouble. If market gossip is to be believed while Mallya’s debts are over Rs 8,500 crore, Goyal’s debt is nearly Rs 16,000 crore. Afraid of defaulting, Goyal now frantically wants to raise at least $400 mn to avert any immediate crisis. Though he has been wishing to raise this money for more than a year-and-a-half, the intervention of global recession and its associated crisis hit even harder as he was rapidly expanding in foreign sectors. When big guys like Singapore Airlines and British Airways are making losses, it is no wonder that Goyal is in a soup. But to make it tasty he needs to raise money and that can come in only through private placement or the Qualified Institutional Placement (QIP) route. While he is awaiting the approval from FIPB (Foreign Investment Promotion Board), sources said, should Naresh Goyal raise the entire money through this route, then his holdings in Jet which currently stands at 79.90 per cent may come down to 53 per cent. It is a scenario he has been avoiding for the last two years. At least in the case of Kingfisher and Jet, the companies can be valued. But this luxury is not available with Air India even if one were to value its real estate as the negatives are too strong. The only way out for Air India would be to either close down or drastically reduce manpower or restructure its pay and allowances. There is no other way that Air India can be redeemed. I must say sorry to my readers because there is no way of getting away from Air India till Air India gets away from all of us. But I promise to give yet another dimension of Air India in the next issue which seems to suggest that whichever way you look at Air India, it will simply never make money — leave alone profits. (Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.)
CRUISING HEIGHTS December 2009
Air India has removed 25 sectors from its schedule in the last one year… The withdrawal from Sharjah has come at a time when Air Arabia has been making serious inroads into India 25
Interview ceo cial corrected.qxd
11/26/2009
7:52 PM
Page 2
INTERVIEW
C
ochin International Airport Ltd (CIAL) finally has a CEO who is mild-mannered, low key and focused on the core issues: the airport and its development. No wonder Krishandas Nair has won wide all-round praise for the way he has handled the airport in his one year at the helm. He has now unfolded the next phase of the airport’s growth: to build an Aerotropolis on 450 acres of land that will ultimately generate substantial non-aeronautical revenue to shore up the airport’s revenue streams. CIAL has 1300 acres of undeveloped land surrounding the airport which it wants to ultimately convert into a full-fledged airport city. Besides the MRO and Aviation Academy, the plan also envisages construction of two hotels: one attached to the airport and outside it, a five star luxury hotel with guests having access to 18-hole golf course. A 32-acre piece of land has been earmarked separately for developing an advanced IT park to support ITES (Information Technology Enabled Service). The Kerala government expects the IT park to be a great success as the city of Kochi falls on the sea cable route between South Africa and Far East. For most of these activities, CIAL has moved an SEZ application with the Central Government. It will also have a logistics centre which will provide a brand new hub for freighters. Recently, Kochi airport began to receive freighters albeit only a few. In addition, 25 acres have been earmarked for building a super-specialty hospital that will focus on segments like ayurveda, cardiac care, neurology, orthopaedics, cosmetic dentistry, etc. The exhibition centre under development at CIAL is likely to start operations in the second half of 2010. It will have an aerospace museum to display models of real aircraft, aeronautical equipment, model of airports and many more. Excerpts from an exclusive interview with Krishnadas Nair:HR
Q A
:Cochin was the first private airport, more than a decade old. How has it performed?
:Cochin airport, as you rightly said, is the first private airport, unlike other private airports where the public has shareholdings. We have more than 20,000 public shareholders. Now if you ask, how is it performing? Initially, it was more of development and in the project stage. Now it is on its way for the next phase of growth.
Cochin airport has been focusing on non-aeronautical revenues, which constitutes almost 50 per cent. Even though land is limited, in the next phase of growth, we will come up with a lot of new projects like the golf course.
What about profitability? The profitability is quite good. Many things are outsourced like ground handling revenue and do not come directly to the airport. Cochin does not have the user-development fee. They introduced it and then they cancelled it after three years. The profit has been around Rs 45 cr. This financial year, 2008-09, the turnover has registered a 30 per cent increase and it is now Rs 172 cr. Profit also enhanced by about 30 per cent and is about Rs 62 cr. One of the problems that other airports have been facing is on aeronautical revenue and non-aeronautical revenue. Usually it is the non aeronautical revenue that subsidies the other part. What’s the status in Cochin? Right from the beginning, Cochin airport has been focusing on non-aeronautical revenues, which constitutes almost 50 per cent. Even though land is limited, in the next phase of growth, we will come up with a lot of new projects like the golf course. We are also going to have a Special Economic Zone (SEZ) where a large number of airport-related industries can come. So that will bring (additional) revenue to the airport. Is it a plan or have you called for bids? We have already advertised and the plan has been approved by the Kerala government. It is resting with the Centre for the SEZ approval. As part of this we also have an MRO. We start with the narrow-bodied first and then go into the wide-bodied. In this MRO, are you doing it alone or do you have a JV partner? We have now bid for the partner. We are now looking at whether we need to have a single partner or multiple partners. For aircraft maintenance? We can have aircraft maintenance
Photos: H.C. Tiwari
“WE ARE READY FOR PHASE II AT CIAL”
26
CRUISING HEIGHTS December 2009
Interview ceo cial corrected.qxd
11/26/2009
(airframe). We can have an airline partner, a technology partner and an investment partner. And the investment… Regarding the MRO, we are initially looking at it from the partner’s point of view. The total project is about Rs 120 cr over a period of 3-4 years. We are already investing from CIAL by building two hangars for narrow-bodied aircraft and an apron on around 30 acres of land. This will serve the 737s and A320s.What about the wide-bodied? That (wide bodied) will come after the partner comes. We are already starting with the line maintenance and Check-A service. But when you talk of an MRO, you talk of C and D checks as well… Of course, right upto D-Check. Another big project we are looking at is the airport mall. In the airport area there are no big malls. It can bring in a lot of (revenue). In Cochin airport, we have 3.6 million passengers and out of them nearly two million are overseas passengers. What I have found in Cochin airport is that every passenger who comes to board an aircraft, often has 5-6 members coming to the airport (to send off). So, Cochin airport has so many visitors and this is a great opportunity for commercial activity. We have now tendered out space for retail shops in the airport terminal building in the visitors area. We have also created a fully airconditioned viewing gallery, over about 6000 sqft, from where you can see the aircraft landing and taking off day and night. Visitors have to pay and get into the balcony, where we have advertised for restaurants, eating places and food courts. Then we are also coming out with an airport hotel and an airport hospital. What kinds of fresh investment are you
Cochin airport has “so many visitors and this is a great opportunity for commercial activity
”
7:53 PM
Page 3
Interview ceo cial corrected.qxd
11/26/2009
7:53 PM
Page 4
INTERVIEW looking at, if all this comes together? This all depends upon the investors. I have not really looked at that. MRO, as I have told you, is our investment whereas the hotel project depends on how the hotelier is going to plan. There will be two types of hotels. One is the airport hotel with about 70 beds and their investment may be around Rs 20-30 cr. We are also looking at a five-star hotel with a convention centre next to the golf course and that project will be around Rs 200 cr as investment. CIAL Board has approved for going ahead to explore and find investors. On the aeronautical side, you were going to widen the runway to accommodate and extend it for A380? The runway has been upgraded. It is not designed for A380, but it can land (if necessary).We have done recarpeting of the runway since it’s ten years old (3.4 km).
We are also opening Cochin airport as a hub for freighters. We have the best centre for perishable cargo which can handle about 20,000 tonnes per year.
What about Ground Handling? Air India’s contract has been extended by three months till December 2009. We have already appointed the Bird Group. We can have two (ground handlers). What about the second? Only at that time, we will have to see what Air India wants to do. We have some other idea.
looking at chartered flights since there is not a single one now. We have now formed a marketing department in the airport to start a dialogue with the airlines. We are also opening Cochin airport as a hub for freighters. We have the best centre for perishable cargo which can handle about 20,000 tonnes per year. Not only vegetables and fruits but flowers, marine and meat products can be there. It can come from neighbouring Tamil Nadu area and catchment areas. Cochin could be another one in the south. So that is the plan. Are you planning a second phase? The second phase of expansion is our ten-year plan. This plan has been approved by the Board which features tenfold increase in the revenue: from Rs 170 cr to go to Rs 1700 cr. To execute this plan, we have decided to enhance the aeronautical and the non-aeronautical revenues. We would go 50-50. So we will increase the utilisation of space and utilisation of land through the various projects. We want to give Cochin airport a different image. We also want to be a hub for education and training. So, we have already started a CIAL Management Academy. We are going to start a CIAL Technical Institute by using the airport infrastructure and facilities.
Are they a JV? No, they are independent.
The MRO in Nagpur has been declared an SEZ. One reason is the complex taxation. But in Cochin it is inside the airport. How do you resolve this? We are thinking about it. We have told the MRO partners about this. So, whether it is an SEZ or not, we are very confident of getting a partner. We have a first-mover advantage because Nagpur has not come. And if we can have a cost effective solution; we definitely will get (business).
Now, AI has tied up with SATS (Singapore Airline Technical Services). Will you get a world class ground handler like SATS? So let them bid. I don’t know whether I should be quoted but I don’t think SATS is better than Air India. Once upon a time it was Air India, which trained Singapore Airlines. It is we who have run down our airlines. So we are the people who taught Singapore. So you should not say that. The Gulf traffic accounts substantially for Cochin airport operations. Have you discussed with Emirates for creating a hub facility in Cochin? In the aeronautical side, we are having a campaign to attract a lot more airlines to come to Kochi and have direct flights to certain destinations. Around Kochi there are a lot of tourist centres along with health tourism, beach tourism, wildlife tourism and various (other travel opportunities). So we are
28
THE CAPTAIN AND HIS FIRST OFFICER: CEO CIAL Krishnadas Nair and CIAL Director A C K Nair.
CRUISING HEIGHTS December 2009
Are the Gulf carriers looking at the project? They are all looking at the project with a lot of interest. We are not talking to any particular (airline). So far we were only looking at people who have experience in maintenance. Now, we have changed our policy. We said we could have an airline as our partner. We can have a technology and an investment partner. So, that decision has been taken only in the recent Board (meeting).
AAI focus 2.qxd
11/26/2009
5:44 PM
Page 3
AAI: Special Focus TAKE
OFF V P AGRAWAL Chairman, AAI
irports Authority of India (AAI) is the largest airport operator and manages 124 airports across the length and breadth of the country. In addition, it is also the sole authority responsible for managing Indian airspace. To meet the unprecedented growth of the aviation industry, the AAI has embarked upon airport infrastructure development: it is a ‘Herculean’ task by any yardstick. The aim is to create "World Class Airports" to ensure that ultimate comfort is provided to air passengers transiting through our airports. To substantiate the claim it would be apt to mention the likely capital expenditure to be incurred and the number of airports being modernised to provide a glimpse of the magnitude of work. In the five-year plan it is envisaged to invest more than Rs. 12,000 cr for 53 airports in addition to Kolkata and Chennai airports. The task is challenging: on one hand, is the changing Indian scenario where new market forces are constantly emerging and on the other, are the expectations/ demands of the stakeholders of the aviation fraternity in particular and the flying population at large. The work at hand entails all functions of aviation management: updating ATM procedures, CNS equipment, terminal, cargo buildings, apron, taxi tracks and runways. Since time is the most important factor in the whole
A
Continued on page 31
An Air India aircraft at Kolkata Airport: High growth record among AAI’s metro airports.
The growth is back! ndian aviation is slowly looking up if the traffic figures of the last three months are any indication. In October this year, the sector saw a 37 per cent growth in the number of passengers. October has been the third consecutive month showing doubledigit growth. There was a one per cent growth in June 2009 followed by eight per cent in July and 19 per cent in August. Commenting on the development, Airports Authority of India (AAI) Chairman Mr V P Agrawal said: “The situation has improved and traffic is growing steadily.” He said the worst seemed to be over and the “feedback that we are getting is that we can expect steady improvement in traffic”. Giving credence to Mr Agrawal's assessment are the numbers on the ground: Jaipur, for instance, had a growth of 81.5 per cent in August; Port Blair grew by 74 per cent; Patna had a whopping 79 per cent growth with Jodhpur reporting an astonishing 522 per cent growth with the passenger
I
AAI all set for Kumbh Mela 2010 aridwar stages the Kumbh Mela every four years and millions of pilgrims from across the globe visit Haridwar during the Mela to take a dip in the holy Ganges. This time AAI takes pride in to make the pilgrimage for devotees a memorable one. We, at AAI, are looking forward to be of service to devotees with our fully operational airport, which is 18 km away from the 'Holy City'. The Jolly Grant-Dehradun Airport is fully operational with a new Terminal Building capable of handling 150
H
Har-ki-Pauri at Haridwar.
CRUISING HEIGHTS December 2009
numbers increasing from just 1,583 to 9,847. Kolkata led the metro airports with a 33.4 per cent growth. For AAI, Mr Agrawal said, it was a matter of great satisfaction, that airports under their operation had recorded such healthy numbers. “It encourages us that the passengers have shown complete faith in our delivery system and the amenities we have provided through our ongoing upgradation programme at various airports.” Meanwhile, the Authority will borrow Rs 1,200 crore in the next four months to fund expansion and upgradation of airports across the country. A decision to this effect was finalised by the AAI Board in late November. AAI presented a detailed picture of its financial position to the Board that approved the plan. This was considered necessary since the Authority was going in for large-scale investments and revenues were not growing in line with projections due to the slump in air traffic in the last years.
pax at any given point of time. The apron can accommodate two Airbus 320 type of aircraft. Equipped with night landing facilities and ILS installation in progress, the watch hours are 1000 to 1700 hrs IST, during which period there are two arrivals and two departures everyday from and to Delhi. AAI has the capacity and capability to handle more flights: scheduled and charter flights during the established watch hours. AAI also has plans to liaise with M/s Pawn Hans and other concerned authorities to consider introduction of helicopter services during the Mela period.
29
AAI focus 2.qxd
11/26/2009
5:44 PM
Page 4
AAI: Special Focus
AAI inducts sophisticated support infrastructure anaging airports entails significant groundwork in terms of having adequate and proper ground support/safety systems to ensure safe operation of aircraft. Due to everchanging technology and as a result of new and larger airborne platforms in the skies, AAI as an airport operator has to keep itself abreast of the changing scenario. That demands constant monitoring of the facilities available in its inventory. Investments, therefore, have to be incurred by AAI to acquire world-class, specialised equipment and vehicles to maintain high safety standards. Some of these are:
M
The ASFT measures the friction value of the runway surface. A sophisticated computer controlled measuring device is connected to a special wheel through which the friction value is instantly measured while the vehicle cruises at a constant speed of 95 kmph. AAI has imported nine ASFTs — each costing Rs 80 lakhs -from Sweden and deployed at various locations.
Runway Mechanical Sweeper Foreign Object Debris (FODs) is a potential threat to the operation of aircraft on ground, as its entry in to the engine causes damages. Effective and speedy removal of FODs is ensured by these machines. AAI is inducting five such machines in 2010. This machine, costing about Rs 2.70 cr can sweep up to 90,000 sq mt in one hour at a speed of 40 kmph. The induction of such specialised equiment is a clear testimony of AAI’s commitment and efforts to ensure that safety is provided and maintained at all its airports.
Runway Rubber Removal Machine This sophisticated high pressure (2500 bar) water jet machine removes deposited rubber from the runway to restore the friction value without causing damage to the surface. The
machine can remove rubber up to 800 sq mt area in one hour. The removed rubber is sucked in to a storage tank to avoid runway contamination. AAI has imported two machines from Germany each costing Rs 2.35 cr.
Runway Marking Machine
30
Airfield Fire Fighting and Rescue Vehicle (AFFRV or ACFT) Fire services at the airport play a vital role in aviation safety and the AFFRV is its backbone. This vehicle carries 10,000-12,000 litres of water and 1,500 litres of foam and is capable of achieving 0-80 kmph speed in less than 30 seconds. It can throw extinguishing media at 4,500 litres per minute up to a distance of 90 meters. AAI inducted 15 such vehicles in 2007-08 and 40 more AFFRVs will be inducted by May 2010. These Austrian-built vehicle costs Rs 3.35 cr each. AAI is also going to induct five SFFRVs with High Reach Extendable Turret (HRET) capable of delivering extinguishing media up to a height of 15 meters for precise delivery of media in difficult locations of aircraft. These AFFRVs with HRET will be placed at major airports and each would cost about Rs 5 cr.
Runway Surface Friction Testing Machine (ASFT)
ALL FOR SAFETY: (Top) A Runway Surface Friction Testing Machine at work; (right from top to bottom) Runway Rubber Removal Machine; Runway Marking Machine; Airfield Fire Fighting and Rescue Vehicle; and, Runway Mechanical Sweeper.
width at speeds varying from 4-20 kmph, can do such jobs with speed and accuracy. AAI has two of these machines, each costing Rs 80 lakhs imported from Germany, in operation and five more are being inducted.
Busy airports require restoration of various markings on runways, taxiways and aprons in a very limited time. This sophisticated marking machine capable of marking lines up to 100 cms
CRUISING HEIGHTS December 2009
Hareendranathan E P, General Manager (Technical), a graduate in Mechanical Engineering, joined AAI in 1985. He has been instrumental in introducing various state-of-the-art equipment such as rubber deposit removal machines, runway marking machines for airport maintenance and safety equipment like Airfield Crash Fire tenders and other firefighting equipment.
AAI focus 2.qxd
11/26/2009
5:44 PM
Page 5
TAKE
plan, dependence on manual planning and execution can prove to be detrimental in the long run. It is here, then, that we have introduced IT. Like the old Chinese proverb, "A journey of a thousand miles begins with a single step", ushering in IT in airport operations/management was the single step AAI took for success and better governance. IT being a versatile tool has no defined limits in its application and extensive, judicious and optimum utilisation can be done in all facets of aviation, beginning with e-tendering, planning/execution of projects, commercial/land/cargo management and procurement of equipment — be it CNS or safetyrelated — and working out ATM procedures for safe/secure aircraft operations in the congested skies. As the third largest land-owner in the country after the Railways and Defence, AAI has the enormous responsibility to not only safeguard its estates but ensure gainful utilisation to generate revenue from nonaeronautical avenues to adequately augment our earnings, especially in
OFF
the changed scenario where four of our major profit-earning airports have been hived off. The need and responsibility has, therefore, increased manifold. The present revenue generated from this source is to the tune of 20 to 22 per cent of the total earnings while the range the world over at leading airports is between 45 to 50 per cent. There is then ample scope for us to exploit this resource to our advantage. The concept of online handling of processes, activities and information have progressively increased with the technological development in the area of Information Technology and increased use of the Internet. Newer areas of applications including those for its gainful utilisation in aviation too, are gradually being covered through Internet-based technology. All the manual processes and services are slowly being converted into ITenabled ones through appropriate business process re-engineering. We, at AAI, have taken a huge leap and have ushered in this versatile technology in our day-to-day management and operation of
airports. To provide you a glimpse of where we have introduced IT, an illustrative list is given below: E-tendering: Including all commercial matters and procurement of CNS - ATM equipment. Cargo Operations: ETV (Elevated Transfer Vehicle), AS&RS (Automated Storage & Retrieval System), Bar Code System, EDI Implementation and e-auctioning of Unclaimed Cargo. Land Matters: Land Acquisition, Records (under GLAMS) and Utilisation Plan. ATM - CNS Operations: GAGAN (GPS Aided Geo-Augmented Navigation), PNB (Performance Based Navigation) and Auto Track 3. The impact of automation and implementation of IT has resulted in the least human intervention towards expeditious and efficient handling with accuracy and a complaint-free environment. To ensure transparency, we at AAI, have an Integrity Pact in place under the watchful eyes of eminent independent personalities.
Watch out for AAI’s budding sportspersons irports Authority of India has recently inducted outstanding young sportspersons under its various sports schemes: Sports Talent Search and Training Scheme, Sports Contract Scheme and Sports Scholarship Scheme. A few of the recent achievements by AAI’s sportspersons are highlighted below: N Sikki Reddy inducted under the AAI Sports Contract Scheme was the winner of the singles of the National Junior Girls Badminton Championship held at Mandya. She was also a part of the Girls Doubles winning team. Sai Praneet inducted under the AAI Sports WINNERS ALL: N Sikki Reddy (left) and table tennis champ Soumyajit Ghosh Contract Scheme was the winner of the Singles of pose with their trophies. the National Junior Boys Badminton Championship held at Mandya. He was also a part of 64kg category. the Boys Doubles winning team. Rohit Yadav inducted under the AAI Sports Scholarship Scheme was winner of the singles of the National Sub Soumyajit Ghosh inducted under AAI Sports Contract Junior Boys Badminton Championship held at Jaipur. Scheme was the winner of the Youth event in the National Ranking Table Tennis Tournament held at P V Sindhu inducted under AAI Sports Scholarship Siliguri. Scheme won the singles of the National Sub-Junior Girls Badminton Championship held at Jaipur. She was also Balwinder Beniwal inducted under AAI Sports Contract the runner-up in the singles event of National Junior Scheme was Runner-up in the Senior National Girls Badminton Championship. Boxing Championship held at Hyderabad in Men's
A
CRUISING HEIGHTS December 2009
31
AAI focus 2.qxd
11/26/2009
5:44 PM
Page 6
AAI: Special Focus
Pakyong on course irports Authority of India has taken up development of the new Greenfield Airport at Pakyong, Sikkim for operation of ATR-72 types of aircraft. The Minister of State for Civil Aviation, Mr Praful Patel, laid the foundation stone for the construction of the airport along with the Chief Minister of Sikkim, Mr Pawan Kumar Chamling and the Governer of the state, Mr B P Singh. This will be the first airport in the state and in that sense it is a major project that will help open up Sikkim to the rest of the country. “The track record of Airports
A
The proposed Terminal Building with area of 3000 sq m will incorporate local architectural features and have all modem passenger amenities such as baggage handling system, CCTV, FIDS, fire fighting and alarm system, etc. to cater to 50 incoming and 50 outgoing passengers. Close to 10 per cent of the physical work required at the site for the construction of the airport has been completed and the Authority is following up on a systematic month-tomonth basis for on-time completion of the project.
The scope of works includes the following: Runway 02/20, 1700x30m (Aircraft ATR/72/500, AUW/21 tonnes) with Turning Pad at both ends. Taxi way -116m x15m Apron-106m x 76m-capacity - 2 ATR-72 type of aircraft at a time Stop way - 60m x 30m Runway basic strip- 1820 m x 150 m Car Park- Capacity 50 nos. Cross Drainage System Terminal Building (100 Pax) - 50 pax incoming and 50 pax outgoing Fire Station (Cat-VI)-cum-Air Traffic Control Tower -15 m ht. Operational wall of 2.9m height. Communication and Navigational Systems (CNS) facilities (VHF, HF, NDB & DVOR) High Intensity Runway Light (HIRL), Airport Beacon, PAPI at both ends Meteorological Office/Equipment
Connecting Sikkim to India Sikkim is the land-locked state of India came into existence in 1975. The fairy tale land of abundant beauty, butterflies, orchids, mountains and flowers, monastery and mystery, lies between 27”5’ - 28”15’ North and 88”58’ East. The state is a mountainous one with hills and mountains scaling 800 ft to 28168 ft (Kanchendzonga). It shares its international border with Nepal in the west and Bhutan in the east. The northern border touches Tibet and the southern border West Bengal. The nearest airport is at Bagdogra and rail head is at Siliguri, both in West Bengal. Due to hilly terrain and weather related problems, the road connectivity to Sikkim from these connecting points is frequently interrupted.
Authority of India (AAI) has been exemplary in the past five years and this Pakyong Greenfield airport project will be completed within its stipulated deadline of July, 2011. The airport will move Sikkim towards the path of prosperity,” Mr Patel said on February 28, 2009, during the Bhoomi Puja ceremony of the airport project at Dikling Hills, Pakyong, East Sikkim. Since then, work has gone on in a systematic manner to fulfill the commitment of deadline made to the people of the state. The work involves heavy earth work in cutting and filling and construction of geosynthetic reinforced earth retaining wall with height up to 84 m and channelising of existing jhoras (water streams) without disturbing their downstream flow. GREAT BEGINNING: (Inset)Civil Aviation Minister Praful Patel, Sikkim Governor B P Singh and Chief Minister Pawan Chamling at the Bhoomi Pujan ceremony of Pakyong Airport; and, work on in full swing at the site of the airport.
32
CRUISING HEIGHTS December 2009
Building an airport in the hilly terrain of Sikkim is a huge challenge. The airport will be built at a height of 1404 metres above mean sea level. The scope of work shall involve excavation of 100 metre depth and earth filling of slopes of 80 metre height, stabilised with Geogrid Reinforced Retaining Wall. A large volume of earthwork, 6.5 million m3, shall involve blasting in hard rock apart from excavation in soft rock and soil. To protect the environment, excavated slopes of 100 meter height will be planted with local species of flora.
Document3
11/23/2009
5:18 PM
Page 1
Ministry of Civil Aviation Government of India
Federation of Indian Chambers of Commerce and Industry
nd
2 International Exhibition & Conference on Civil Aviation
2010
March 3-7, 2010, Begumpet Airport, Sardar Patel Road, Hyderabad, India EVENT FORMAT
Exhibition • Static Display • Conference • Media Conferences • Chalets • Flying Displays / Customer Demonstration Flights • CEOs Forum • Inauguration & Networking Dinner DISPLAY PROFILE Aircraft • Aircraft Machinery & Equipment Companies • Aircraft Interior • Airlines, Airline Services & Air Cargo • Skill Development • Airport Infrastructure
Partner Country: France
Focus Country: USA In association with
For Participation, contact: FICCI Delhi Office: FICCI Trade Fair Secretariat, Federation House, Tansen Marg, New Delhi - 110 001 Tel: 91-11-32939542 (D), 32910417 (D), 23738760 - 70 (Extn: 440/503/429) Fax: 91-11-23359734 (D), 23721504, 23320714 E-mail: indiaaviation@ficci.com, ishan.pandita@ficci.com FICCI Bangalore Office: FICCI VITC Building, 1st Floor, Kasturba Road, Bangalore - 560001 Telefax: 91-80-22861949, E-mail: vivekkodikal@ficci.com Overseas Associate:
Supported by:
I N T E R N A T I O N A L
Farnborough International Limited
Airports Authority of India
www.india-aviation.in
Directorate General of Civil Aviation
Pawan Hans Helicopters Ltd.
Cover Story Dec.qxd
11/28/2009
12:43 PM
Page 2
COVER STORY
Year of I t has been the year of the pilot without a doubt! Incredible landings, terrible accidents, angry strike calls, overflying destinations, fisticuffs in the cockpit, sleeping on the job. You name it and these blokes did it. Boy, 2009, the year of the guy in the cockpit indeed! Most of us were weaned on the image of the guy in the cockpit being a rakish, handsome son of a gun who got all the applause and the gals as he performed incredible feats in the air, travelled to distant lands and earned an unbelievable amount of money in the process. It’s the James Bond vision or as Gloria Steinem would have us believe, the male chauvinist vision.
ARE WE IN IT TOGETHER? Cabin crew might be on the aircraft with the pilots but they go their different ways when the need arises.
34
— and, of course,
Cover Story Dec.qxd
11/28/2009
12:43 PM
Page 3
the pilot
the cabin crew...
Through the year, pilots — and cabin crew — have been in the news for all sorts of reasons. While some have been adulated and feted, most others have got themselves in the spotlight for all the wrong reasons: from sleeping on duty to a bout of fisticuffs.
35
Cover Story Dec.qxd
11/28/2009
12:43 PM
Page 4
COVER STORY
AIR STRIKES
W
ithout a doubt if there is any one strike that must get ‘grandfather’ status for being just and fair in the decision of the pilots to strike work, it has to be the one in September this year by the Fort Lauderdale-based Amerijet. Would you believe it the management had removed all working toilets on its Boeing 727s that fly from Florida to South America and the Caribbean? According to one report, “Amerijet’s female pilots are forced to relieve themselves by squatting over bags. Male pilots urinate into bags hanging just outside the cockpit doors. There are no sanitary facilities in which to wash.” The strike was to ask for better working conditions: a key being toilets onboard the aircraft! More recently, there was a pilot strike in the land of the Midnight Sun: Finland. The strike was a consequence of a breakdown in wage negotiations and outsourcing. In the Take it or leave it, that’s the vision that’s stayed all these decades — until the fateful afternoon of January 15 when Capt. Chesley “Sully” Sullenberger and his crew became international heroes by safely guiding their US Airways Flight 1549 to an emergency water landing in New York City’s frigid Hudson River. The Airbus A320’s two engines had lost thrust following a bird strike. There wasn’t a scratch on any one of the 155 on board the flight. Sully literally sullied the Bond image and instead emerged as a hard-working, decent, middle-of-the-road bloke who went home to his wife at night. And to cap it all, he was balding and middle-aged. Rakish, you must be kidding! “My decision to remain in the profession I love has come at a great financial cost to me and my family. My pay has been cut 40 per cent,” he said and mentioned he was finding it difficult to make both ends meet. His First Officer on that flight, Jeff Skiles, added the icing: “I personally earn half of what I once earned…any pilots like Captain Sullenberger and myself have had to split their focus from the airline piloting profession and develop alternative businesses or careers. I myself am a general contractor. For the last six years, I have worked seven days a week between my two jobs just to maintain a middle-class standard of living.” There was much empathy with the duo and plenty of sympathy for the pilot community in general. If anything in the 11 months since then it has been all the way downhill. Ask anyone what they think of
36
end the pilots had to agree to a five per cent wage cut and the outsourcing deal as well. These are tough times. But if you believe these are flash-inthe-pan disruptions, think again. The year has been full of strike calls by pilots worldwide for a wide variety of reasons — poor pay, tough new conditions by management, thanks to the unending slump in the aviation business, outsourcing and what have you. The loos were a solitary unusual exception. Here is a sampling from the actions of the year: January Air France unions call strike for January 29.
Lufthansa’s contract air pilots go on
strike in pay dispute.
American Airlines pilots meet to
discuss strike options.
April ANA pilots strike cancels 149 flights in Japan. Air Berlin braces for strike as pilots demand higher wages. PIA pilots strike. June UPS pilot union votes to authorise strike.
February American Airlines pilots plan disruptions, not full strike.
August Pilot strike grounds Royal Air Maroc planes. Lufthansa pilots strike. Pilot strike at Air Berlin.
March Pilots and cabin crew of All Nippon Airways go on strike.
September TAP pilots strike ahead of Portuguese general election.
The drama aboard Air India IC-884 in early October was something else. At 30,000 feet while overflying Pakistan in the early hours before dawn on a Sharjah-DelhiLucknow flight, a “scuffle broke out between a pilot and two cabin crew members” CRUISING HEIGHTS December 2009
the guy in the front of the plane and they’ll tell you that if he isn’t jostling with the purser, he is either overflying his destination or sleeping in the cockpit! If Sully’s was a class act, the drama aboard Air India IC-884 in early October was something else. At 30,000 feet while overflying Pakistan in the early hours before dawn on a Sharjah-Delhi-Lucknow flight, a “scuffle broke out between a pilot and two cabin crew members” — it was probably the worst incident of 2009. An embarrassed Maharaja derostered both the pilots and grounded the flight purser and the air hostess involved in the incident. What a shocker though!
11/28/2009
12:43 PM
Page 5
to strike. Under the US Railway Labor Act, pilots must participate in a mediation process designed particularly to force a resolution before a strike. If it fails, the US President can order a 60-day cooling off period. At this point the pilots must return to work — the President feels a strike would substantially disrupt the national transportation system. If this fails, The US Congress may force both sides to accept a
settlement, or may extend the cooling-off period indefinitely. This is what happened to American Airlines pilots in the Nineties when President Clinton ordered the cooling-off period four minutes after they went on strike, and they were forced to accept a settlement. It is no surprise that there have been virtually no strikes in the arc from Singapore to Down Under. Cathay Pacific, SIA and Qantas have all been buffeted by the headwinds of the economic recession. Cathay, in fact, sent its entire staff on unpaid leave in rotation and Qantas has taken a huge hit on its balance sheet, but there has been no strike to work. It has, perhaps, got something to do with the philosophy and the policies of the companies. There’s been no strike call in the Gulf — no surprise considering that cabin and cockpit crew in the Emirates, Etihad, Gulf and Qatar are a mixture of communities and nationalities. As for the Chinese? Say strike and they ask you what it means!
The most bitter sweet memory of that strike was the Jet cabin crew in their striking yellow uniforms beseeching the pilots to return to work in the ‘national interest’. Everyone had a good laugh and applauded the girls for the loyalty
laptop! Back home, the fisticuffs apart, there were two back-to-back strikes that hit the two biggest airlines in the business:Air India and Jet Airways. The Jet strike was a no-brainer: a management determined to stop the pilots from unionizing and sacking the leaders to nip it in the bud and the pilots striking in unison to bring the airline to a dead halt. But the most bitter sweet memory of that strike was the Jet cabin crew in their striking yellow uniforms beseeching the pilots to return to work in the ‘national interest’ and for the sake of the ‘poor passengers’. Everyone had a good laugh and applauded the girls for the loyalty to the airline and for reaffirming the fundamental principle that we are together in the aircraft, but we aren’t wedded to the same beliefs. Talk to these girls — and this is true across the board, be it Jet, Indigo, Spicejet, Kingfisher or even the new entrants at Air India — and there is the ambition of middle India. Of dreams to be fulfilled, ambitions to be achieved and of a remarkable liberation from a life of ordinariness or drudgery of a 10-5 job to one that they literally view as manna from heaven: here today, there tommorow, revelling in the jet-setting opportunity presented to them and never wanting the dream to fade or dim. No wonder the Jet gals cried themselves hoarse outside Delhi and Mumbai airports. Please come back, they beseeched. While the Jet pilots quickly went back
Photo : Nagender Dubey
Cover Story Dec.qxd
THE RESCUE ACT?: Air India pilots put up a hoarding against pay cuts but not on how to rescue the airline.
Interestingly, there are few strikes in America. Pilots, like in India, call in sick. And the Labour Commissioner calls them back to work and the Courts declare the strike illegal in this country unless they have been through the process of arbitration in its entirety that can take long, very long. Federal law in the US makes it very difficult for railway and airline employees Weeks later, a Northwest Airlines Airbus A320, became a NORDO (no radio communications) flight at 37,000 feet. The flight was operating from San Diego (see graphic on page 38). The pilots failed to make radio contact with ground controllers for more than an hour and overflew their Minneapolis destination by 150 miles before discovering the mistake and turning around. The pilots didn’t become aware of their situation until a flight attendant contacted them on the intercom. Air Force jets scrambled and the FBI launched an investigation to see if there was more to it than two pilots busy with duty schedules on a The smiles hide it all: Pilots at their controls.
CRUISING HEIGHTS December 2009
37
Cover Story Dec.qxd
11/28/2009
12:43 PM
Page 6
COVER STORY
IT’S ALL ABOUT MONEY, HONEY
S
pain’s Iberia (the ailing tions, staged a demonstration, airline announced its plans which included workers last month to merge with handing leaflets to arriving BA) said that the cabin crew was passengers and chanting sloset to strike for eight days of gans decrying the CEO. In the industrial action in December. air, flight attendants wore red The management buckled and badges to indicate flights announced a four per cent pay couldn’t fly without revision. Earlier in October them.Laura Glading, Presithere had been two days of strike dent of the Association of — a trailer for a longer action in Professional Flight Attenthe peak winter festival season dants, said the demonstrations to bring the management to its were designed to “show manknees. agement that we stand strong Closer to Christmas there together. American Airlines could be chaos at British thinks that we’re just going to airports as British Airways cabin lie down and do nothing”. crew prepare to strike. The likeHere again, there is not a ly strike is a fallout of the severe whimper of protest or wage cost-cutting measures introissues at most of the low-cost Jet cabin crew demonstrate after their sacking in October 2008. duced by BA — less crew on air- They were later reinstated. airlines. They simply come in craft and lesser jobs both on the and roll off the runway. Most ground and in the air as well. Take for Unions said they had tried to negotiate of the issues engulf the legacy carriers example, a Boeing 747: each flight will with BA but the carrier is “intent on con- as they trim fat and try to stay afloat. lose one member of cabin crew. The air- frontation”. Both Air Lingus and Ryanair, the line will also introduce a two-year pay Earlier in November, flight atten- premier LCCs on the Continent have freeze on basic wages for cabin crew. BA dants — as the Yanks prefer to call the ruthlessly trimmed further from their says the changes are vital for survival but air hostesses — at American Airlines, lean and mean structure. But there has the cabin crews are not impressed. bitter over delayed contract negotia- hardly been a protest.
THIS IS HOW THE FLIGHT WENT ASTRAY: A graphic which appeared in the UK’s Daily Mail to show how the pilots of the Northwest Airlines overshot their destination by 150 miles.
to the cockpit once Naresh Goyal realized that his friends in Delhi were not going to support him. Knowing Goyal one won’t be surprised if he works to have a ‘cooling off’ act (see box) legislated by the government. But no cooling off can help the Maharaja! The pilots had struck work once earlier in September (and are now threatening to strike again) over wage cuts. They are now seeking wage revision
38
The pilots have failed to cut much ice with the travelling public who see them as venal, over-paid, under-performing individuals CRUISING HEIGHTS December 2009
and parity in wages with other pilots and an inquiry into the mismanagement of the company. A key is the Productivity Linked Incentives (PLI) that the airline management is determined to slash? “Where is the productity to demand PLI?” asked one of those involved in the deliberations to release hard cash to the beleaguered airline. The Indian Commercial Pilots Association (ICPA) has also charged Air India Chairman Arvind Jadhav of trying to provoke a strike and on that pretext declare a lockout which could make several wage agreements lapse. The pilots, however, have failed to cut much ice with the travelling public who see them as venal, over-paid, under-performing individuals. For one, almost across the board (barring, perhaps, the US), pilots have spoken only when it comes to their wages. As one senior Air India Director said: “They are hardly interested whether we survive or perish. All that bothers them is their FDTL (flight duty time limit), their wages, their upgrades and their sundry other perks. They are the most self-centered jerks you can find anywhere on this earth.” Sully certainly isn’t one. He is a cere-
Cover Story Dec.qxd
11/28/2009
12:44 PM
Page 8
COVER STORY
TIPPLERS, BEWARE!
T
he Director General of Civil Aviation, Naseem Zaidi, has finally decided that enough is enough. Tippling before a flight would henceforth attract ‘zero tolerance’. And as part of that drill it will be mandatory for pilots to undergo a mandatory alcohol test prior to each flight. At the moment a pilot has to declare that he is fit for flying before operating an aircraft with either the airlines concerned or the DGCA undertaking random tests on pilots. And what if someone is caught drunk? First-time offenders will be derostered from flying duties for a period of at least four weeks and disciplinary action taken by the airline. Instructor, examiner, check-pilot and cabin crew, if found guilty for a second time in a row, would be considered alcohol-dependent and would lose such ratings permanently. Any relapses after undergoing detoxification treatment may entail permanent grounding. Contrast this with what happened to an American pilot Captain Joseph Crites, 57,
bral pilot, the likes of who sare vanishing today. As his co-pilot, Jeff Skiles said at the hearing to investigate the accident: “Sully and I have over 70 years of experience and 40,000 flying hours between us. New pilots in the jet aircraft of our affiliate airlines have 300 hours. When I began at US Airways, the company required several thousand hours just to gain an interview for a pilot position. It is certainly in the interest of the travelling public to have experienced crews in the cockpit.” And one who won’t be engrossed in their laptop, lose their temper and flay the purser or sleep as the aircraft flies along. One wonders what is more important: sexy looks or experience. Take the case of our very own Air India, which incidentally tried to hire Miss India finalists and even promised to pay them a higher salary than other crew members in the mid-1990s. All of a sudden, towards the end of last year, the management dismissed ten air hostesses. Reason: they were too fat to fly. The company had warned them to slim down
40
ON BOARD SERVICE: Liquor for passengers but not a drop for the pilot (right).
who was twice the alcohol limit when he arrived for a transatlantic at Heathrow in May. Security guards at Heathrow smelled alcohol on his breath as he was about to take charge of an American Airlines Boeing 777 bound for Chicago with 204 passengers on board. The former US Air Force flier could have been jailed for two years but escaped with a £1,500 fine only because of a spotless record over a 40-year career. It was a strong unfamiliar British beer that did the damage, but for Crites, his career was over — something the court clarified while handing down the sentence. Pilots are prohibited from flying in Great
THREE CHEERS: US Airways flight 1549 Capt. Chesley B Sullenberger III (seated, centre) and First Officer Jeffrey B. Skiles (seated, right) receive a standing ovation on Capitol Hill in Washington, Tuesday, February 24, 2009.
CRUISING HEIGHTS December 2009
Britain if their blood-alcohol content is above 0.02 per cent, or the equivalent of having about half a glass of regular beer. In June, Praful Patel informed a shocked Parliament that in the last three years, a total of 196 alcohol-positive cases were reported. Liquor baron Vijay Mallaya-promoted Kingfisher had topped the list of erring airlines with eight pilots failing the breath test, followed by IndiGo and SpiceJet with six pilots each. JetLite, Paramount and Jet Airways also had pilots in the dock with three pilots each in the guilty list. Not one has lost his job. And that's the key difference.
and the hostesses had gone to court on the issue. Sheila Joshi, a 51-yearold Air India hostess with 27 years of service was one of those whose appeal to the High Court had been turned down. She told a daily after the defeat in court: “It is incredibly upsetting that working women are being targeted. This is not a modelling job; we are not working a catwalk.” In fact, she had shed some kilos but not as much as the AI management wanted. “Now, if you are just ten grams over, it's goodbye,” Mrs Joshi said. “It’s ridiculous: weight is not an infectious disease.” P.S. Believe it or not, if Sullenberger put the pilot in the spotlight in January, an Australian has done exactly the same ten-and-ahalf months later. Captain Dominic James of Pel Air defied the odds to land his jet intact in pitch darkness on choppy seas. The air ambulance had been on an emergency mission to evacuate a sick Australian woman and her husband from Western Samoa. James ditched the plane as it ran low on fuel, after four attempts to land at Norfolk airport because of bad weather.
ACAAI COVER.qxd
11/26/2009
11:36 AM
Page 1
CRUISING HEIGHTS 36TH ACAAI CONVENTION SPECIAL
g Kong. 07 at Hon ntion in 20 ve n co I A A AC of the last ceremony Inaugural
ACAAI: Exploring the new world order Coming on the heels of the global downturn and the recovery, the Air Cargo Agents Association’s 36th Convention in Goa will take a close look at the dynamics of change that has impacted the air cargo industry.
Lead story and Interview.qxd
11/26/2009
12:02 PM
Page 2
ACAAI T H E
A I R
C A R G O
A G E N T S
A S S O C I A T I O N
O F
I N D I A
CARGO
Time for new ground rules The Air Cargo Agents Association’s convention in Goa comes at a very crucial time. While recession has stymied growth, the march of globalisation cannot be halted. In such a situation, new rules have to laid down and that is exactly what the convention will discuss, reports Mickee Menon. oming as it does after a long gap — the last Air Cargo Agents Association of India (ACAAI) meet was in Hong Kong in 2007 and the 2008 convention scheduled for Bahrain had to be cancelled due to 26/11 (the terror strike in Mumbai) — the Associations 36th annual convention at Goa will take on the global economic crisis and its effects on the air cargo industry head-on. As J Krishnan, ACAAI President put it, “The downturn has had its impact on our industry, both directly and indirectly.” According to report presented by ACAAI at the 36th Executive Council Meeting of the Federation of Asia Pacific Air Cargo Associations (FAPAA) in June, “the year so far maybe looking gloomy for the Indian air cargo industry. It’s not great, but it’s
C
better than bad”. The strong demand for faster delivery of goods by shippers has been creating challenges for the air cargo industry in the country. The report also mentioned that the extensive forces of liberalisation and globalisation had radically transformed world trade and opened up economies and fuelled consumer demand on an unequalled scale. ACAAI also pointed out that in such circumstances, recession was the biggest threat to airline profitability. Obviously, these factors will be discussed at length during the convention. Talking to CRUISING HEIGHTS, Krishnan said “A convention is not an event to participate and forget. It is the culmination of the work rendered through the year for the member and also an opportunity to interact nationally with our members. Concerns affecting our members will be heard and acted upon. The main refrain will be to understand, accept and harness the changes for a vibrant industry.” In keeping with the present scenario, the convention’s theme is: Integrated Logistics — New World Order. “The theme,” said Krishnan, “is to help review and plan for the future and not necessarily a statement on the economy. The past two years has witnessed an unprecedented downturn and
FROM OUR FILES: ACAAI office bearers (l-r) ACAAI Vice President Bharat Thakkar, former President Keshav Tanna, President J Krishnan and Secretary General Hemant Bhatia with P V Bhide, Secretary-Revenue, Ministry of Finance (third from left) during a symposium held last year in May; and (below) sun and sand of Goa is ready for ACAAI members.
42
CRUISING HEIGHTS December 2009
Lead story and Interview.qxd
11/26/2009
12:02 PM
Page 3
ACAAI T H E
A I R
C A R G O
A G E N T S
A S S O C I A T I O N
O F
I N D I A
“We will harness changes for a vibrant industry” ACAAI President J Krishnan on what the Goa convention aims to achieve
:The Convention in Goa is taking place after a long time. Do you think that the timing of the convention is right? : The convention by ACAAI is the only event held by the air cargo fraternity in India. Having visited various regions in Asia it is a very logical decision to return to India for this annual convention.
Photo: H.C.Tiwari
Q
A
WORK IN PROGRESS: Construction and development work at Nagpur cargo hub in full swing.
many old rules of the game are no longer valid. But the new rules are yet to be framed. The theme, then, is the first attempt to prepare to face a changed and changing environment.” Among the changes that ACAAI will be focusing on, range from EDI to infrastructure. It has its senior members from its Board of Advisors in the Civil Aviation Core Group (CACG) set up by the government to advise on the civil aviation policy. As for infrastructure development, the association has suggested that there was an urgent need
out the two-day convention. These sessions would be addressed by distinguished speakers from India and across the world and deal with topics like ‘New World Order and its impact on India’, ‘Quality and Cost - The Management Challenge’ and ‘Infrastructure — It’s about time!” Perhaps, one of the most important sessions that a number of members are looking forward to is the one on technology: ‘Technology Power Tool for Excellence in Delivery’. Currently, there is no industry level platform and
As for infrastructure development, the association has suggested that there was an urgent need for a review. for a review. It also feels there should be a vision at the local level for overall effectiveness of the airports and a detailed look should be taken at the overall transaction, cost and time that the customer had to bear. The agenda, therefore, for discussions will be varied. Bharat Thakkar, ACAAI Vice President pointed out to ACNFT that there would be “six business sessions spread
each segment of the aircargo industry has its own EDI system, thereby fragmenting the EDI change process. These segments need to be integrated and a uniform standalone system, which is able to communicate effectively with each segment of the industry, needs to be put in place urgently. ACAAI is in the process of establishing such an industry platform. Another major issue that
Your theme for the convention is “Integrated Logistics — New World Order”. What will the major points be that you wish ACAAI members will take up at the Convention? The theme is to help review and plan for the future and not necessarily a statement on the economy. The past two years has witnessed an unprecedented downturn and many old rules of the game are no longer valid. But the new rules are yet to be framed. Hence this theme is the first attempt to prepare to face a changed and changing environment. How have you structured the six business sessions featuring eminent speakers from the Government and private sectors? Starting from the impact of the downturn, the business sessions will explore issues of management, technology, regulation and last but not the least infrastructure. Taxation will also form a crucial part of one business session. At almost every convention, there are discussions regarding the
CRUISING HEIGHTS December 2009
infrastructure — or rather the lack of it — that the industry faces. Will this convention send out a white paper on the infrastructure? Distinguished speakers from the private operators, an airline and ACAAI will spell out the roadblocks and identify the way forward. The convention resolutions will be perused jointly with service users and providers to bridge the huge gap in the present infrastructure. ACAAI had a few members on the committee constituted by the Civil Aviation Minister on Aviation. Nothing much has happened on that front. Yes, it is true due to various changes at the MoCA (Ministry of Civil Aviation) and burning issues as far as the carriers are concerned, regular meetings have not taken place. ACAAI’s role as a catalyst to change will always remain a dominant milestone to be reached. What will be the message that you would like to give to ACAAI members? A convention is not an event to participate and forget. It is the culmination of the work rendered through the year for the member and also an opportunity to interact nationally with our members. Concerns affecting our members will be heard and acted upon. The main refrain will be to understand, accept and harness the changes for a vibrant industry.
43
Lead story and Interview.qxd
11/26/2009
12:02 PM
Page 4
ACAAI CARGO
T H E
A I R
C A R G O
will be discussed among the members is the lack of trained manpower in the industry. “The problems of gaining, training and retaining our talent, are now acute. ACAAI is seeking clearance from the DGCA office to be recognised as a training institute. Once this is done, ACAAI would take it upon itself to professionally train its members, keeping them abreast of industry needs,” stated the country report placed during the FAPAA meeting. The other important subject that will be talked about at Goa will be the introduction of IATA Resolution 815. The Indian Air Cargo agent has been governed by Resolution 801. Under the new resolution, a
A G E N T S
A S S O C I A T I O N
CLASSY SETTING: The Lalit at Goa where the ACAAI convention will take place.
Joint Council comprising six carriers and six ACAAI forwarders will represent the interest of the Air Cargo Committee. The Joint Council has been fully empowered to establish and manage the new programme. A significant
aspect of this new resolution is the recognition of the transition of the role of the “air cargo agent” into an “air cargo intermediary”. The principal-to-principal relationship of the airline and the air cargo intermediary has
O F
I N D I A
been appropriately addressed under this new resolution. Lastly, of course, what could generate a lot of heat will be the business session on infrastructure: ‘Infrastructure — It’s about time!’. Time and again, the air cargo industry in the country has pointed out that air cargo remains crucial to globalisation. In an increasingly global community and market place, aviation and air cargo have been playing an important role in the value chain of global transport and logistic, which in turn would prompt the cargo market to grow four and five-fold by 2020 surpassing even passenger traffic. “Our progress is indeed gaining great momentum, but, it is
“An opportunity to interact about major issues and shortcomings” Bharat Thakkar, Vice President, ACAAI, speaks about the convention and also sets forth the association’s role in the present scenario.
:What made you choose Goa as the convention venue? : In the past several years, we have been to several countries — Colombo in 2002, Dubai in 2003, Kula Lumpur in 2004, Bangkok in 2005, Chiang Mai in 2006, Hong Kong in 2007 and were to go Bahrain in 2008 which was called off due to the terror strike at Mumbai. This year the convention provides a great opportunity to our members (since the convention is) in India to interact with officials from government departments as well as meet several custodians handling cargo at international airports.
Q A
What kind of participation are you expecting? Owners and top management of ACAAI, active and associate members from the forwarders, country heads of allied members, airlines and
44
general sales agents (GSA) with their cargo teams will attend. In addition, commercial members, bonded trucking companies, custodians and distinguished guest speakers from all over the world as well as stakeholders will be attending. What are the special features that ACAAI members will see in this convention? The theme of the ACAAI convention is: “Integrated Logistics — New World Order”. We will have six business sessions spread over two days addressing various issues by distinguished speakers from India and across the world, covering the following topics: New World Order — Impact on India; Quality And Cost — The Management Challenge; Infrastructure — It’s
About Time!; Technology — Power Tool for Excellence in Delivery; Creating an Enabling Environment — The Legal Procedures and Practices; and, Goods and Service Tax — Interactive Session. All these will be followed by an in-house forum for members only. How important is ACAAI in today's economy? Since 1970, ACAAI is the only recognised national association representing the air cargo industry in India. Starting with 16 members, it now has a strength of over 500. Besides safeguarding the interest of its members and promoting their interests, it provides professional assistance and guidance not only to its members but also to various central and state government departments/
CRUISING HEIGHTS December 2009
authorities connected with the industry. ACAAI promotes growth, development and professionalism in the India air cargo business. The association provides a regular medium for dialogue with members' principals, the airlines, their customers, the exporters and importers and various government departments/authorities. The association also maintains close contacts with world bodies related to the air cargo trade and represents matters affecting our country's airfreight forwarding industry at various international forms. In addition, we are members of various government committees. ACAAI has been developing a new technology platform for networking among the cargo fraternity. The details of the system will be discussed at the convention, before it is launched.
10/30/09
3:26:14 PM
A tS
/D t
C l
J bN
i i
R
Print Ad
Qatar
Studio:
Cyndi
Size:
A3
Media
Client:
i
C
Kelvin it
Art Director:
Cheng Wah
Production:
World-Class Service
2009
2012
2014
• Live Animals
• Automotive
• Vulnerable Goods
• Valuables
• Dangerous Goods
• Gold
Safe
• Platinum
Premium
• Special Temperature
• Fresh
Cool
industry standard. So for your most priceless cargo, there’s only one simple choice to make.
General
of cargo – from the most valuable to the most fragile, delivering exceptional service and performance that exceed the
and a strategically located one-stop HUB focused only on cargo. Our handling expertise spans across a wide range
cargo services around the world. Our phenomenal growth is accelerated by our global network of over 80 destinations
From a small player a decade ago to one of the industry’s fastest growing, Qatar Airways Cargo continues to expand its
Business growth demands unbeatable dedication and attitude. Introducing Qatar Airways Cargo: The rising star in the cargo industry.
2005
2:38 PM
2000
24
destinations
63
destinations
87
destinations
100
destinations
120
destinations
11/26/2009
We deliver to the world. qrcargo.com
success.
FAST-GROWING
The industry’s best kept secret is also a
QR5255B Cargo_A3 Print Ads_r1.ai
Document3 Page 1
Lead story and Interview.qxd
11/26/2009
12:02 PM
Page 6
ACAAI CARGO
T H E
A I R
C A R G O
A G E N T S
A S S O C I A T I O N
Upward movement coming or the global air cargo industry which is amidst one of the worstever business cycles, year 2009 brought no respite. The downward movement of the air cargo business further Joy John enhanced the nervousness of major players. Cargo demand has fallen off a cliff. After a shocking 25 per cent decrease last year, it dropped a further 22 per cent. Most of the customers affected by the slump reduced their despatches opting for sea freight due to increased frequency and reduced transit times. In this period, logistics and efficient man-management can make all the difference between success and failure and this is the dynamic area where strategies are formulated, applied, supported and
F
infrastructure, which can ultimately revolutionise the Indian air cargo industry,” ACAAI members maintained. “With the continuous growth our industry is witnessing, our current infrastructure is
implemented. Today, in the era of globalisation, only integrated logistics can play a major role to revive the business and those who have competence in such management to serve multiple clients and products can survive the next ten years. The cargo industry is going through challenging times and within the next two quarters we can see upward movement. Industry is optimistic about India's growth trajectory as the country's economic environment looks steady. It is expected that industries will bounce back. Aiding it on its growth path will be the ambitious Rs 20,000 cr programme inviting the private sector to build and develop multi-modal logistics parks along the proposed eastern and western dedicated freight corridors. (The writer is Executive Director, East West Freight Carriers Pvt Ltd.)
under immense strain. We have been promised major improvements in this sector and it is the objective of the government to provide world class facilities and services. With privatisation, we are
moving closer to our quest for Air Cargo Villages and Agents Bonded Terminals but the progress should be much faster.” ACAAI has, in fact, made recommendations to the
“
The current state of the air cargo industry is not very different than the present state of affair in other businesses. There is some hope, anxiety, frustration, helplessness and, some purpose and achievement. I think the Forwarding community, for the last two years, has grappled with many challenges, for instance, fuel surcharge, security surcharge, etc. which brought a huge financial burden on the customer and thereby impacted their business and on re-bound gripped forwarders. While one was learning to tackle fuel surcharge and security surcharge, we are now hit with the financial meltdown and the economic slowdown globally. While one was comprehending this, we have the scenario where carriers have increased their rates and reduced capacities, bringing a new set of challenges to the table. What is commendable here is the ability of the forwarder to stay in the race. Never before in the history of this trade, are we faced with such a situation. There is a complete need to see a unified front of the community to battle some of these challenges.
— Raajeev Bhatnagar Regional Vice President- India Sub-continent, Uz
46
O F
I N D I A
Ministry of Civil Aviation as regards infrastructure development. The Association has suggested that there is an urgent need for a review. In addition, it feels there should be a vision at the local level for effectiveness of the airports and a detailed look should be taken at the overall transaction, cost and time that the customer bears. Vice President Thakkar pointed out that “ACAAI has developed a new technology platform for networking among the cargo fraternity. The details of the system will be discussed at the convention, before it is launched.” After all the brainstorming at the business sessions, Sunil Arora, the Convention Chairman, said that “this year’s convention at Goa will also be an opportunity for ACAAI members to let their hair down and enjoy the sun, sand and sea as well as the place’s unique culture and hospitality”.
“
What could generate a lot of heat will be the business session on infrastructure. The air cargo industry has pointed out that air cargo infrastructure remains crucial to globalisation. CRUISING HEIGHTS December 2009
The last 14 months have, probably, seen the worst economic crisis the world has seen in the last 60 years. The worst hit was the financial institutions followed by world trade and as a result, the cargo industry, because of its dependency on the world economy. Everyone and every business were touched in some shape or form by this crisis. India seems to have been able to ride this challenge much better than most other countries. The positive side of the crisis is that it has allowed weak businesses to disappear and strong to survive. The process of globalisation will continue and India is well placed to participate in the industrial and manufacturing sectors. The cargo industry has also evolved bringing in more professionalism and also transitioning from the traditional brokerage type of operations into true forwarding and supply chain operations type of activities. As we go forward, India needs to focus on its infrastructure to service logistical needs of the various sectors involved in manufacturing/services, etc. Projects like the MIHAN in Nagpur should be replicated in various developing industrial areas within the country.
— Ram Menen DSVP Cargo, Emirates
Document1
11/24/2009
4:15 PM
Page 1
Cargo Nagpur hub.qxd
11/25/2009
5:20 PM
Page 2
ACAAI CARGO
T H E
A I R
C A R G O
agpur is all set to develop as India’s first multi-modal air cargo hub. This is a key project of the Government of Maharashtra and the Maharashtra Airport Development Company Limited (MADC) has been set upto convert the existing airport into a cargo hub. Additional land has been procured for building the cargo facilities and developing a Special Economic Zone (SEZ) that will host a large number of industries. The cargo hub and the SEZ will cover a land area of 40.25 square km. The project has raised around Rs 3,000 million from the state government, banks and other sources. It is expected to be completed by 2010 and targets to serve 14 million passengers and 0.87 million tonnes of cargo. Nagpur does have certain advantages. It is centrally located and is well-connected with road and railway network with different parts of India. India does not have a cargo hub and Nagpur is located on the international flight paths of major airlines. Generally, hub airports are located within the one-to-two hours fly zone of major cities and there are no hub airports within five hour of flying between Dubai and Bangkok. Nagpur, thus, has the potential of not only being the hub for India but also for the South Asia region. Existing airports like Mumbai and Delhi are becoming congested and the availability of land for setting up cargo facilities at the two places is limited. In India, where land acquisition is a major problem, a huge amount of land is available in Nagpur for development of transport and warehousing facilities. The MADC is extending the existing airstrip and constructing a new airstrip that can handle 50 flights a day. The project will have a captive power plant
A G E N T S
A S S O C I A T I O N
O F
I N D I A
N
48
Questions about Nagpur’s viability remain Even as the Nagpur airport hub takes shape, there are questions about its long-term utility. After a nationwide survey, three researchers have concluded that though Nagpur has certain advantages, it would not be a good hub. and a road terminal of 60 hectares which can accommodate parking space for 1000 trucks. There are likely to be around 14 godowns in addition to the space dedicated for private players to develop their own warehousing facilities. In recent years, there has been an increase in cargo and
passenger traffic in Nagpur. A large number of domestic airlines including Indian Airlines, Jet Airways, IndiGo and Kingfisher Airlines connect to Nagpur and the airport caters to international flights from the Middle East and South Asian countries among others. The SEZ, which is one of
CRUISING HEIGHTS December 2009
the largest multi-product SEZs, is likely to have some captive cargo. Captive cargo is a key determinant for setting up a hub. Leading IT companies such as Satyam Computers Services Limited and Tata Consultancy Services have expressed interest to locate in the SEZ. Boeing has signed an MoU to locate a
Cargo Nagpur hub.qxd
11/25/2009
5:20 PM
Page 3
ACAAI T H E
A I R
C A R G O
A G E N T S
Photo: H.C.Tiwari
Some challenges to meet at Integrated International and National Cargo and Courier Terminal, Nagpur Airport.
repair centre at Nagpur. The SEZ will also house an integrated township with an international school, healthcare facilities, etc. India Post has shifted its hub to Nagpur and has tied up with Air India to use the airport for domestic cargo from four zones: north, south, east and west. In this context, it is worth mentioning that in the 1950s Nagpur was the hub for the then Indian Post and Telegraph but when cargo flights started flying long distance, Nagpur was abandoned. The Department of Post is trying to improve mail connectivity to northeastern states and Nagpur will help to link consignments from west and south to the northeast through Kolkata. Some Indian freight forwarders have already established presence in
Nagpur. Among them is Deccan Express Logistics, which signed an MoU with the MADC to set up a cargo base in Nagpur. Overall, it is expected that development of a hub will be beneficial for the country and
A S S O C I A T I O N
The most notable among them is a study conducted by the Planning Commission on the integrated logistic sector of India. The study found that New Delhi was better suited to develop as a hub rather than Nagpur. The Indian Council for Research on International Economic Relations (ICRIER) along with the Indian Institute of Management (Calcutta) did a nationwide survey of 133 express companies, 90 clients and 25 freight forwarders to understand the feasibility of Nagpur as a hub for express delivery services (EDS). The survey found that the EDS industry preferred operating on a “hub and spoke� model. Some important global hubs include the one at Leipzig (Germany) for DHL, and Memphis (US) for Fedex. With the growth of trade in the Asian region, global integrators have developed hubs in Asia. DHL, for instance, has its Central Asia hub at Hong Kong, Fedex has its Middle East hub in Dubai while UPS (United Parcel Service) has recently developed a hub at Shanghai (China). Although the hub-andspoke model is generally used in the international cargo context, it can also be tailored to be used for domestic shipments, especially for large countries like India. When asked what determined the choice of hubs, express
Though Nagpur is centrally located, express freight movement is currently between west-south, west-north and south-north due to the skewed distribution of Indian businesses. at the onset it looks like Nagpur has been the right choice. However, some recent reports have criticised the choice of the airport as a hub.
companies pointed out that the volume of traffic was the most important determinant. Ideally, hubs should be physically located close to the
CRUISING HEIGHTS December 2009
O F
I N D I A
area of maximum volume of business and should be on or around international flying routes to reduce delays. Take the case of UPS. As the volume of traffic from China increased, UPS shifted its hub from Philippines to China. Availability of land and other infrastructure facilities have also to be taken into consideration while choosing the location of a hub. It is easier for countries catering to transshipment cargo to develop as a hub due to the volume of traffic. For example, hubs have developed in Singapore, Hong Kong and Dubai. Often, intra-regional trade determines the location of a hub and global integrators tend to have their hubs in EU and ASEAN which have high intra-regional trade. Lastly, service quality and airport costs play a major role in decision making. The feasibility of Nagpur as a hub has to be evaluated taking all this into account. The survey found that most express delivery companies do not have a major interest in setting up a hub at Nagpur. This is also evident from the fact that while the Express Delivery Council of India has a common user terminal in Delhi and Mumbai, it has not taken up space in Nagpur since its member companies have not expressed any interest. Companies like Fedex and DHL which have developed gateways in airports like Delhi have also shown no interest in Nagpur. Major express companies even pointed out that though Nagpur was centrally located, express freight movement was currently between west-south, west-north and south-north due to the skewed distribution of Indian businesses. The western part of India, mainly Mumbai, receives maximum volume of consignment followed by the northern and southern parts of the country. Moreover, a very high percentage of the cargo flies in
49
Cargo Nagpur hub.qxd
11/25/2009
5:20 PM
Page 4
ACAAI CARGO
T H E
A I R
C A R G O
either from the US, Europe or Gulf countries to India. In such a scenario, it may not make business sense to fly the consignments to Nagpur and then ship them back to Mumbai. Also, the flying time and fuel cost to Nagpur is more than to Delhi or Mumbai if the cargo is from the western countries. They also argued that that volume of cargo was small and was often transported in the belly of passenger carriers rather than freighters. In such a context, Delhi and Mumbai which receives a large number of passenger airlines are more suited for the development of a hub. When asked if due to India’s “Look East” policy and increasing trade with China, ASEAN and other Asian countries, Nagpur could become a more feasible option, express companies
A G E N T S
argued that this depended on the flow of traffic between Indian cities and the Asian countries. If the volume of traffic was more for Mumbai or Delhi, then flights could fly directly to those stations without a halt at Nagpur,
A S S O C I A T I O N
was more than 50 per cent of the total trade, inter-regional trade in SAARC was only five per cent of the total trade of the member countries and that did not justify the establishment of a hub. A third segment pointed out
The government could provide land and other facilities for infrastructure but it was upto the express companies to decide where to locate their hubs. which could actually increase delays. In fact, some companies suggested that Bangalore could be developed as hub to facilitate the increasing trade with ASEAN. Others argued that unlike the EU where intra-regional trade
that if industries developed in Nagpur and nearby region the feasibility of the hub would increase. At present, the traffic volume was low. Incidentally, companies like Deccan Express Logistics, which have opted for space in
… but Nagpur is attracting business otwithstanding the concerns about MIHAN’s (Multi-modal International Cargo Hub and Airport at Nagpur) viability, the project has generated a lot of interest around the world. Nagpur's geographical location, ample availability of manpower and land has made it ideal for multinationals to set up establishments. Spread over an area of 4, 354 hectares, the hub will be easily accessible to all metro cities in the country. And as for aircargo, studies have shown that the country has the potential to generate 33.60 lakh tonnes of aircargo every year, both domestic and international and Nagpur could take a major part of the business. Today, multinational companies have not only acquired land but also started work. While US aircraft manufacturer Boeing, for example, has signed an agreement with Maharashtra Airport Development Company (MADC) to set up a $100-million maintenance, repair and overhaul (MRO) facility, British business has also started to take notice of the proposed hub. Britain's Trade, Investment and Business Minister Lord Mervyn Davies put Nagpur on his agenda during his recent visit to India. The UKIBC (UK-India Business Council) has hopes that by engaging with Nagpur, British businesses will be able to grow with the city. The UK
N
50
Minister's delegation that visited the city, had companies from urban infrastructure, town planning, mining, energy, legal, financial, construction, water, power, education, and brand marketing sectors. Along with promoting India in the world as a trading hub, the project also aims to boost the economy of the under-developed Vidarbha region of Maharashtra. With India Post's initiative of restarting postal air operations making Nagpur the hub, the cargo hub project has suddenly become important. Even Captain G R Gopinath’s Deccan 360 has made Nagpur its centre of operations. A Rs 90-crore central hub spread over 50 acres at Nagpur airport has been established. Deccan 360’s eight freighters will link Nagpur to around 15 airports in the country. The planes will bring in cargo to Nagpur, where it will be offloaded, segregated and then sent back on freighters to their destinations.
CRUISING HEIGHTS December 2009
O F
I N D I A
Nagpur, are also setting up similar facilities in other cities like Delhi and Hyderabad. The survey found that the government policy in this regard seemed to be unclear. While the Ministry of Civil Aviation has been trying to develop Nagpur as a hub, the proposed new Act on couriers, Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2009, has restricted transshipment. In September 2007, the government came up with a policy on ground handling which imposed restrictions on self-handling by airlines. In fact, in most hubs, airlines are allowed to do self-handling. If the companies are allowed to do self-handling in Nagpur they may be inclined to set up operations. The Ministry of Civil Aviation has also proposed a five-year exemption of all airport and navigation charges for both domestic and international airlines. This would, in all likelihood, increase the attractiveness of Nagpur as a hub. Overall, the survey found that while government could provide land and other facilities for infrastructure development but it was upto the express companies to decide where to locate their hubs. Attractive incentives like lower handling charges and facilities like self-handling could positively influence the decision to set up a hub but to make it economically viable the logistic service providers emphasised that there should be traffic volumes. (The three researchers, Arpita Mukherjee, Partha Pratim Pal and Subrata Mitra, completed a study for ICRIER on the express industry. While Dr Arpita Mukherjee is a Professor at ICRIER, Dr Partha Pratim Pal and Dr Subrata Mitra are Professors at IIM-C. They can be contacted at arpita@icrier.res.in.)
Document1
9/23/2009
10:44 AM
Page 1
Qatar.qxd
11/25/2009
6:31 PM
Page 2
ACAAI CARGO
T H E
A I R
C A R G O
A G E N T S
A S S O C I A T I O N
O F
I N D I A
“2010 will determine if demands are temporary or there is solid growth” Dileepa Wijesundera, Senior Vice-President, Qatar Airways Cargo, looks at the future... : What has been Qatar Airways’ approach to a tough 2009? : The past year has been challenging for the industry with many carriers reducing capacity and offering low rates to generate cash flow, though Qatar Airways Cargo has performed well through its diverse network and numerous trade lanes feeding the overall business. We are continuing to see growth in Asia, particularly South Asia, as well as USA and Europe where frequencies and destinations have been increased. Potential for growth exists in numerous locations, particularly in Africa. The coming year will determine whether recent improvements in demand are temporary or whether there is solid growth across the industry.
Q A
Despite the tough conditions, Middle Eastern carriers have been increasing capacity/flights to and from India. Where does your optimism stem from? As exports continue to grow from India to many of the cargo destinations we fly to, so too has the need for more cargo uplift. We have deployed narrow-body and wide-body passenger aircraft with significant cargo volumes to and from the ten Indian gateways we serve.
52
Qatar Airways now operates services to Delhi, Hyderabad, Ahmedabad, Mumbai, Kochi, Thiruvananthapuran, Calicut, Kozhikode, Amritsar and Goa. India is an important market both for passengers and cargo. There is a large Indian workforce in Qatar and across the GCC, creating heavy demand. Also returning workers normally have goods to return home sent as cargo. This large working population also creates demand for Indian goods in the Middle East countries. Qatar’s geographic location is advantageous as we can reach most major cities in the world non-stop from Doha. With further deliveries of Boeing 777 aircraft expected, Qatar Airways will be able to further strengthen its position in the market.
How much are the bilaterals responsible for your growth? Qatar’s success story extends well beyond the airline and encompasses the entire country, which is experiencing massive economic development and providing opportunities for international companies to come and invest in worldclass projects. Qatar is now the world’s largest exporter of natural gas, and is an increasingly attractive place to do business. The country has the highest GDP per capita in the world and is expecting economic growth of ten per cent in the financial year 2009-10. Bi-laterals play their part in allowing the airline
according to the aircraft type. The ten Indian destinations are served by both wide-body and narrow-body aircraft. The Boeing B777 aircraft used on a regular basis to Delhi has the ability to carry up to 30 tonnes in addition to the passenger load.
to push for access to various markets. However, the growth of the airline is underscored by the growth of the country.
Does the optimism stem from the hub you operate from? What is the future of the hub? Considerable investment has been made in facilities and infrastructure at the Doha Cargo Hub. Special chiller/freezer facilities are available for perishable cargo, designated holding areas for dangerous goods, valuable, vulnerable and live stock. From recent customer surveys, the transshipment performance of the Doha Hub was rated one of the highest in the industry. Being built at the New Doha International Airport, it is a new state-of-the-art Cargo Terminal with all the latest technology and facility. Once completed and opened, it will be the envy of the industry. How many freighters have you in service to and out of India? Qatar Airways Cargo operates regular freighter flights to India, six times a week to Chennai, two times to Delhi. The tonnage on the passenger aircraft varies
CRUISING HEIGHTS December 2009
What does the cargo comprise and where is it basically destined for? The types of cargo exported from India are varied, dominated by perishables i.e. meat and horticulture products during seasonal times of the year but also garments, electronics, mobile phones. The main destinations being the Middle East, USA and Europe. Any new products coming on stream at Qatar Cargo? Qatar Airways Cargo is always looking for new product initiatives. Over the past few months we have concentrated on realigning our present products into groups: Q Premium — Platinum, Gold; Q Safe — Dangerous Goods, Livestock, Valuable, Vulnerable, Automotive; Q Cool - Fresh, Special Temperature (still under development); Q General; Q Mail; and, Q Charters. In addition to the above are the new network destinations. Expansion highlights so far in 2009, include the launch of flights to Houston, Texas, the addition of the airline’s ninth and tenth destinations in India, Amritsar and Goa. Frequency increases in 2009 include additional flights to
Qatar.qxd
11/25/2009
6:31 PM
Page 4
ACAAI CARGO
T H E
A I R
C A R G O
Athens, Paris, Stockholm, Zurich, Madrid, Lagos, Manila, Muscat, Kuala Lumpur, Algiers and Tunis. The commencement of flights to Melbourne on December 6 will see Qatar Airways Cargo adding an entirely new continent to its network, an exciting prospect and one that will open up opportunities for existing customers in Europe, UK, Africa and the Middle East, as well as presenting new customers out of Australia with access to the airline’s world-class operation. Three brand new Boeing B777 freighters will join the Qatar Airways Cargo fleet from mid 2010, as the company continues to fulfill its vision to deliver the highest quality of services to a growing number of partners worldwide. These aircraft will bring a new dimension to the cargo business as well as opportunities to develop new products. Qatar Airways Cargo has recently become an associated member of Cargo2000 and is involved in the IATA e-freight initiatives.
A G E N T S
Last week, Qatar Airways Cargo recommenced freighter flights from its Doha Hub to Senai Airport, Johor Bahru, Johor, Malaysia. These flights are aimed at developing Senai Airport as a South East Asia regional freighter Hub for Qatar Airways Cargo. The strategic position of Senai gives the ability to carry goods between many South East Asia cities using the rapidly expanding Qatar Airways Cargo network. Connecting road links are provided between Johor Bahru, Kuala Lumpur and Singapore for each flight.
How do you see business from India five years from now? Qatar Airways Cargo sees India as an important part of its business activity now and for many years to come. India will continue to be a dominant force in world trade volumes. After India, where is the future? We believe the present and immediate future continues to be in the likes of India and China but developing
A S S O C I A T I O N
countries in South America, South East Asia and Eastern Europe will also grow in importance as trading nations. With state-of-the-art hub facilities at Doha International Airport, Qatar Airways Cargo delivers to 87 destinations worldwide using its own Airbus A300600 freighters and 72 Qatar Airways passenger aircraft. This will increase to 120 destinations and 120 aircraft in the next five years. Qatar Airways, which is one of the fastest growing airlines in the world, has experienced unprecedented expansion averaging 35 percent annual growth for the past 12 years. Expansion highlights so far in 2009, include the launch of flights to Houston, Texas, the addition of the airline’s ninth and tenth destinations in India, Amritsar — in the northern Indian state of Punjab, Goa — the popular India holiday destination, as well as a confirmed order for 24 Airbus A320 family aircraft, placed at this year’s Paris Air Show. The airline is receiving
BIG FLY: A Qatar aircraft on its route.
54
CRUISING HEIGHTS December 2009
O F
I N D I A
new planes into the fleet at an average rate of one per month and has massive aircraft orders worth over US$40 billion, including 80 Airbus A350s, 24 Airbus A320 family of aircraft, 60 Boeing 787s and 32 Boeing 777s. The airline is one of the launch customers of the twin-deck Airbus A380 ‘super jumbos’ with five on order and scheduled for 2011. The Qatar Airways Cargo network provides a global reach for customers in Africa, Europe, UK, USA, Middle East, South East Asia, North Asia, Japan and now Australia, with services to many destinations in these countries. Although growing at a rapid pace, Qatar Airways Cargo continues to operate in a flexible manner that allows it to react to shifting market dynamics quickly either with pricing initiatives or moving capacity allocations from one trade lane to another. The world-class operation of Qatar Airways Cargo presents customers with a number of leading features:
A Doha Hub with dedicated staff and facilities to ensure all transships are processed in an efficient, seamless manner.
A diverse network
A modern efficient aircraft fleet
An excellent on-time operating performance
A mixed freighter / passenger aircraft fleet
Competitive pricing
Known quality service provider
A rapidly expanding network offering new destinations, increased frequency.
Fedex cargo stroy.qxd
11/25/2009
5:13 PM
Page 3
ACAAI CARGO
T H E
A I R
C A R G O
A G E N T S
A S S O C I A T I O N
O F
I N D I A
Domestic express service from The international express giant has stepped into the domestic sector - a niche, it felt, was not as adequately serviced as it should have been. Tirthankar Ghosh met Taarek Hinedi to find out what FedEx India has started to offer. he express market is in for big-ticket competition. With FedEx Corp announcing the launch of FedEx India, a nextbusiness-day domestic express service for the Indian market, the international express delivery giant has taken a big step. As Taarek Hinedi, FedEx’s Managing Director, India Operations, put it, “We will provide customers with a highly reliable and convenient shipping solution for their time critical commercial and non-commercial consignments across key Indian markets.” The launch follows the company’s domestic express service launches in China, Mexico and the UK. Hinedi said, “We started the market for both commercial and non-
T
FedEx
AT YOUR DOORSTEP: FedEx is approaching the furthest corner of India, expanding the choices in domestic express services.
commercial purposes. It is something new for India because there has not been much choice in the domestic business here.” The FedEx MD said that express facilities were available at the top end and at the bottom. “We have come in now to fill up
Africa, stems from the fact that FedEx was committed to supporting Indian businesses by providing a competitive service to key markets across India. Adding a domestic express service to the broad portfolio of international products has increased
In the first phase, FedEx India will offer delivery to a number of major Indian cities and to anyone who needs timedefinite services. the gap.” The major reason for FedEx to start its Indiaspecific services, according to Robert W Elliott, President, FedEx Express, Europe, Middle East, Indian Subcontinent and
FedEx’s ability to further facilitate commerce for customers doing business in India. “It demonstrates our continued commitment to the market and our confidence in its future growth,” said Elliott talking
CRUISING HEIGHTS December 2009
about the Indian launch. The reason for starting the domestic services, said Hinedi, was prompted by a number of factors. First, it was the international giant’s experience. In addition, “We had our international customers who said they wanted the same type of experience, the same type of reliability, the same type of money-back guarantee that they were getting on the domestic front. There is a demand for time-definite, reliable service at the domestic level and we have come in and now we want to plug that gap.” In the first phase, FedEx India will offer delivery to a number of major Indian cities and to anyone who needs time-definite services: B2B, individuals, retail customers, etc. In short, “We will be carrying anything that is IATA approved,” said Hinedi.
55
Fedex cargo stroy.qxd
11/25/2009
5:13 PM
Page 4
ACAAI A I R
C A R G O
A G E N T S
A S S O C I A T I O N
CARGO
T H E
A portion of the FedEx Express fleet of aircraft await their newest deliveries at the Memphis hub.
“Our initial launch,” said the MD, “has been in 14 key cities right now in India and we are serving 50 destination markets. The reason why we chose those 14 is because that represents a majority of the trading lanes right now and roughly around 60 to 70 per cent of the trading pattern in India.” The plans are there to enlarge the services in the future, “but we haven’t decided to execute them yet”. Among the services FedEx will be providing realtime online tracking and oncall pick up. In addition, the services will be backed by the FedEx money back guarantee. Using a common account number, international customers will be able to avail the convenience of working with a single provider for both their domestic and international shipping needs. FedEx India branding will be visible on FedEx vans and courier uniforms in the 14 cities of origin. For the services, Hinedi mentioned that FedEx would not be putting in new
56
Will India operations launch another Guangzhou hub? edEx’s domestic services in India were part of similar initiatives taken by the express major in different parts of the world. Domestic services have been launced in China, Mexico and the UK. China plays an important role in FedEx’s scheme. Early this year, Guangzhou ushered in FedEx’s entire Asia-Pacific hub operations from Subic Bay to its new hub at Bayun Airport. The hub has its own ramp control tower, a first for an international air express cargo facility in China, which enables FedEx to control aircraft movement on the ground, aircraft parking plans as well as loading and unloading priorities. The first phase of the launch of the domestic operations in
F
India has been prompted by the strong economic growth, an upsurge in foreign direct investment, and an increase in bilateral trade. These factors, along with infrastructure improvements and greater access, makes India one of the world's most promising markets. Like the Guangzhou hub, FedEx could build an India hub that will link the dynamic economic region to many nations in the FedEx global network.
CRUISING HEIGHTS December 2009
O F
I N D I A
infrastructure or using freighters for domestic transportation. “We are using the existing infrastructure in India right now and that includes our current line-haul - whether surface or air or any other means that we are using... we haven’t put it in any new aircraft. We have definitely put in some infrastructure like branding, personnel, etc.” Aware of the existing infrastructure in the country or rather the lack of it, Hinedi said, “We have learnt to deal with those areas and how to work within those parameters and deliver services that our customers are looking for.” As for business prospects in India - and perhaps the main reason for the launch of the domestic services - Kenneth F Koval, vice president, Operations, FedEx Express, India, pointed out that “India has great untapped business potential as one of the world’s fastest-growing economic markets.” That was elaborated by Hinedi when he spoke about the market conditions and the recession. “The recession...I wouldn’t say it is over but I would say that the indications are that things are recovering. In India, the growth rate is still 6.5 per cent of GDP. And when the global economy starts rebounding, I think the recovery will be a lot faster in India than in any other part of the world.” That is perhaps, why Hinedi believed that despite the competition — the domestic express market is witnessing new players like Deccan 360 — “I wouldn’t say the market is crowded. I would say the demand for domestic, time-definite, reliable services is there. We are providing customers the choice. In the past (before FedEx came on the scene) they did not have a choice.”
Cargo
Colmn.qxd
11/26/2009
11:04 AM
Page 2
ACAAI A I R
COLUMN/CARGO
T H E
C A R G O
A G E N T S
A S S O C I A T I O N
O F
I N D I A
Delivery for a new world To satisfy the smallest demand from the furthest corner of the country, express delivery with technology can be large enough to sustain a profitable business, writes Tulsi Mirchandaney. ne of the most insightful and eloquent portrayals I have come across about the changing nature of demand is in the book, The Long Tail, by Chris Anderson. A demand that is, perhaps, confined to the small segment of internet users today, but would increasingly touch the lives of many more across the globe, and necessarily define the way a significant quantum of business would be conducted in future. There is an almost imperceptible shift from the ‘blockbuster’ mindset, the mindset that stocks and caters to popular demand, the products that attract the highest sales. This model was the result of inefficient distribution that was unable to match demand with supply because retail space was finite and constrained. We are now witnessing boundless choice driving niche demand that is almost limitless (the ‘long tail’ of the demand graph of countless products in a category that declines but never falls to zero). This demand is fuelled by unconstrained channels of online retail and innovative distribution, unrestricted by inventory in brick-and-mortar space, and delivered with almost as much ease across borders as within neighbourhoods. A bookstore with limited shelf space catering to a small segment of customers within a given area is now replaced by a vast online store visible to the world and feeding an enormous customer base, transcending barriers of age, culture and geography. Even the smallest demand, aggregated over a wide geography, and enabled by effective technology and logistics, can be large enough to sustain a profitable business. I find here a close analogy to the evolution of air express distribution. Air express demand registered universal growth trends, even predating popular internet usage. Internationally, it outpaced air cargo demand with a CAGR of 17
O
The aviation network forms an intrinsic part of the air express system. Almost 81 per cent of the world’s freighters are utilised by air express operators.
58
CRUISING HEIGHTS December 2009
per cent since 1997, growing from a 3.5 per cent market share in 1991 to 13.2 per cent in 2007. In the USA, it posted a dominant market share of 62.9 per cent in 2007 from 3.2 per cent in 1975, and the same trends have been witnessed in Europe. Though India lagged behind by almost two decades, the growth trends were comparable at a steady 30 - 35 per cent for over a decade, outgrowing the passenger airline support infrastructure and ushering in an aviation system dedicated to air express distribution. Express packages were typically small in size, large in numbers, and urgent in nature, serving a large audience, across boundaries and a wide geography, but still personal in that the delivery was door-to-door. It was a strategic fit for the new world of individual choice. Reliability of delivery within a short time window differentiated the product offering from all other modes of transportation, and formed the basis of the business model. The product fulfilled a latent need and there was no looking back. What airmail did for the individual by bridging distance and time, air express achieved for business, only faster and more reliably, enabled by technology. By a strange coincidence, airmail was the genesis of commercial aviation, both in India and the USA — almost as if small packages possess a proclivity towards their own space and a natural affinity for proprietary air transportation! Why is the aviation infrastructure important? Typically, the aviation network forms an intrinsic part of the air express system, and almost 81 per cent of the world’s freighters are utilised by air express operators. This is significant, in view of the fact that the major share of the world air cargo capacity, about 42 per cent, is proffered in the bellyholds of passenger airlines. Bellyhold capacity is passenger-focused, a by-product of passenger
Cargo
Colmn.qxd
11/26/2009
11:04 AM
Page 3
ACAAI T H E
A I R
C A R G O
airlines and, though globally air cargo contribution to total revenue of passenger airlines sways wildly between four per cent to 50 per cent, the passenger takes precedence and air cargo does not necessarily meet the requirements of commerce in terms of schedules or capacity. Air cargo distribution is limited to airports, and final delivery to the end-customer is fragmented and performed by other service providers. The strong progress of air express since its inception confirms that, in effect, bellyhold capacity is not the preferred option for commerce and trade that are the primary users, regardless of the fact that it comes at lower costs. Customers have voted with their loyalty for demand capacity that is consistent, reliable, safe, secure and dedicated to their business. The aviation component is just one element in this vast network of infrastructure, technology and people, but an important one. Control over the entire process that is time-constrained and timebound is key and, invariably, all the peripheral activities of self ground handling, aircraft maintenance and dedicated hubs form an essential part of the process in order to deliver a consistently high level of quality. Consequently, investments into the integrated air network are vital and have been significant. The prudence of investing in dedicated air networks have been a source of great debate for as long as I can remember — to pledge to a fixed cost model of high capital assets or a less reliable variable cost of commercial lift on passenger airlines? The call must be even more acute in the kind of downturn confronting us today. However, quality has been the determining factor. Without the high quality levels that have defined air express distribution, the service would degenerate into an undifferentiated product. And, sustained service quality excellence can only happen in a controlled environment where the process elements of operations of aircraft, ground handling and the availability of support infrastructure at any given time are assured. Are express airlines still relevant today? We are witnessing some of the most difficult times in recent aviation history, the only positive aspect being the welcome decline in fuel prices from the unprecedented highs of 2008 that crippled so many airlines and pushed an unfortunate few out of business. Various strategies have emerged
A G E N T S
A S S O C I A T I O N
to deal with the unanticipated and unpredictable economic predicament confronting us globally, but I have observed no dampening of quality deliverables. Most cutbacks have been in the areas of salaries, increments, recruitments and a freeze on replacements and indirect costs; basically, how to achieve more with less, but without impacting service to the customer. The more prudent ones are putting everything under a scanner and subjecting everything to close scrutiny, including routes. Schedules are no longer a seasonal exercise, but a subject of daily study, and dynamic solutions are sought for each variation in demand. A similar focus exists for daily fuel consumption which forms a significant proportion of direct operating costs, and optimising fuel uplift can bring about substantial gains. However, quality standards are upheld. As a service organisation, people have been at the heart of our operations and have created the brand. They are ideally positioned to bring about the much needed cost savings because of their knowledge, skill and, most importantly, a sense of ownership and awareness that each one contributes towards the profitability of the organisation, Consequently, people at all levels have a key role to play in innovating and finding cost-effective solutions in each of their areas. The upturn will happen and when it does, we would have raised the bar to emerge a leaner, more efficient and effective organisation. On the contrary, the focus on lean and green presents even greater opportunity for technology to innovate and find wider access through the use of the internet by small business, and a wider customer base. The benefits are enormous — from 24x7 availability of online manuals for maintenance, the move to a paperless world and saving our trees, to driving niche markets and demand in semi-urban and rural areas by enabling visibility, access and logistics. Air express airlines have a major role to play. They can ideally respond to the new world demand with an expertise that has been honed for exactly such an activity. They can provide a continuation of their back-end support to the increasing volumes of packages, however small, because they have the unique, proven capability of serving such markets, customisable to a power of one. Small is beautiful! (The columnist is Managing Director, Blue Dart Aviation Ltd and the views expressed are her own.)
CRUISING HEIGHTS December 2009
O F
I N D I A
Quality has been the determining factor. Without the high quality levels, air express distribution, would degenerate into an undifferentiated product.
59
Christoph Remund interview.qxd
11/26/2009
11:14 AM
Page 2
ACAAI CARGO
T H E
A I R
C A R G O
A G E N T S
A S S O C I A T I O N
O F
I N D I A
“India will drive growth for DHL globally” Christoph Remund, CEO, DHL Lemuir Logistics Pvt Ltd, India, is upbeat about the major opportunities that India presents. :What has been DHL’s approach to recession 2009? :With a clear focus on profitability, cost management and focused investment in growth markets, DHL is successfully navigating through the crisis. Our Strategy 2015 defines a clear roadmap for the future that is perceived positively by our customers, our investors and our employees.
Q A
Any new products coming on stream at DHL? A core element of DHL’s freight management service offering is the ability to move single or complex shipments, at any time and to any destination worldwide. DHL specialises in providing innovative and customised solutions from a single source. It has always been our focus to develop quality products and services so as to grow in tandem with the macro economic development. In 2009, DHL continued to introduce new ocean freight
services, recent ones include a new connection from the Inland Container Depot (ICD) Ludhiana to Nhava Sheva, connecting North India to our global network; a weekly direct LCL (less than container load) service connecting Chennai to Felixstowe and a new weekly LCL service to Dubai. Our airfreight customers have recognised that our range of products and services gives them unparalleled choices in terms of transportation mode, time and cost. DHL and Lufthansa’s joint cargo operation, AeroLogic was set up mid this year to offer highly reliable and efficient air transport services on the Asia-Europe trade lane. Currently servicing LeipzigSingapore-Delhi-Leipzig, the airline will expand to offer new direct connections to most of Asia’s major metropolitan areas. DHL will continue to invest in innovative and costeffective solutions to cater to the needs of our customers. With offices in 32 locations across the country, manned by over 1,100 qualified employees, the company is strategically poised to enhance servicing capabilities, make significant investments to further consolidate its leadership position and add
Asia will rule global trade in 2028 A DHL study forecasts that Asia would shape the direction and future for economic and commercial expansion by contributing almost 40 per cent of global trade by 2028. Hermann Ude, CEO, DHL Global Forwarding, Freight, in the APEC CEO Summit 2009 in Singapore, said, “Asia’s economies, particularly China and to a lesser extent India will remain the center of gravity for trade. Within three identified triangles of trade — intra-Asia, Middle East-Africa-Asia and Latin America-Asia — China’s imports of raw materials and exports of various manufactured goods such as industrial machinery, textiles and telecommunications and office equipment dominates trade volumes.” He pointed out that in 1999, Asia’s share in the global logistics market stood at 34 per cent, or $15.57 billion. By 2008 the figure had grown to $339 billion, making up 46 per cent — or nearly half of the worldwide market.
60
infrastructure, people and systems to better serve its customers. DHL being a market leader in express, logistics and supply chain services, focuses on executing strategies and capabilities, and constantly adapting them to changing market needs, seamlessly integrating our global experience and local expertise. considerable value to its service offering.
What are your organisation’s investment plans for Indian market for the coming year? Operating in 41 countries and territories in the Asia-Pacific region, DHL has invested over $2.2 bn in Asia-Pacific, to provide leading-edge infrastructure for customers. Over the last five years, DHL has invested over $315 mn in India, including $163 mn for the acquisition of Blue Dart Express, the premium domestic courier and integrated air express package distribution company in India. More recent investments include our ‘Fashion & Apparel Centres of Excellence’ in Tirupur and ‘Life Science Competence Centres’ in Mumbai, Hyderabad and Singapore. DHL will continue to invest in network
How do you see business from India five years from now? At DHL, we look at India as a key market which will drive growth for us globally. The entrepreneurial spirit in India and the opportunities created in the export-import markets give us plenty of opportunities to grow. In the coming decade, there will be a substantial growth in the manufacturing segment, which will mean opportunities for logistics companies. There are two reasons why we see a major opportunity here. Firstly, the size of the domestic market itself is getting larger. Secondly, India serves as a major sourcing and supply hub, the market potential in India is evident with the forecast growth that container traffic will grow by 9-11 per cent until 2012.
DHL identified core trade lanes driving growth in the three high growth triangles of trade. Within intra-Asia trade, DHL expects China to be responsible for some 40 per cent of trade. Of these, China’s trade with India, Japan, etc will continue to dominate trade volumes. While at present, a significant part of the trade within Middle East-Africa-Asia growth triangle is contributed by oil and gas exports from Middle East to Japan, South Korea, Taiwan and Singapore, growth on these lanes has been stagnant. Trade growth within the triangle would come from China’s trade with South Africa, Saudi Arabia, UAE through China’s imports of raw material. The rise of the emerging economies, particularly Asia, and its role in shaping the global economy will be the result of several converging trends like globalisation, persistence of labour arbitrage, shifting centers of labour and consumption, emergence of Asia as the knowledge economy and natural resources to remain drivers of trade.
CRUISING HEIGHTS December 2009
Cargo Jottings12 final.qxd
11/25/2009
5:09 PM
Page 2
ACAAI CARGO JOTTINGS
T H E
A I R
C A R G O
A G E N T S
A S S O C I A T I O N
O F
I N D I A
CONCOR readies to gain lost ground
Security partnership at Bengaluru
UNFAZED by the competition from the private sector, the Container Corporation of India (CONCOR) took a decision some time ago to set up a slew of facilities for the exportimport trade. Among these were establishment of dedicated air freight stations, expansion of the network of inland container depots (ICDs) and cold chain storage services. Once a monopoly, at least 15 per cent of the containerised cargo transport business has been taken away from CONCOR by private container service operators like the Adani Group, APL, Dubai Ports World, Reliance and Arshiya International. The new initiatives from CONCOR will see the addition of four more terminals to its existing chain of 59 ICDs. In addition, there are plans to set up dedicated air freight stations at seven ICDs so that cargo can be directly transported through bonded trucks to airlines. It is also seeking Customs clearance to operate a container freight station (CFS) at the airport in Bangalore.
IN a first for the Indian logistics industry, international logisitics major DHL recently announced that its freight forwarding division, DHL Global Forwarding, had signed a security partnership with Air India-SATS, Bengaluru. The security partnership will develop standard operating procedures that support and fulfill customers’ security requirements. According to the partnership, DHL Global Forwarding will work with Air India-SATS and agree on standard operating procedures (SOP) for high-value and high-risk air cargo, to share best practices and information on crime trends. Commenting on the partnership, Christoph Remund, CEO,
TNT Express provides digital signatures TNT Express recently announced that it will provide its customers with online access to PoD (Proof of Delivery) signature images. The PoDs are a new standard feature of the company's track and trace facility within its online and PC-based shipping tools myTNT, ExpressShipper, ExpressManager and ExpressConnect. Images are available from over 85 countries worldwide, including all mature express markets, emerging markets such as India, China and Brazil, as well as many other destinations. A PoD signature image is a digital copy of the receiver's signature or company stamp, plus the date and time of delivery. Images will typically be available the morning after the day of delivery. Easy access will benefit senders by giving more control over their shipments, TNT said.
The Air India-SATS unit at Bengaluru International Airport.
DHL Lemuir Logistics said that the partnership would ensure that security in today’s supply chain became more efficient and effective. To achieve that it was important for all involved parties to promote collaboration, open communication and best practices. For TjunKyet Kwa Senior Vice President-Cargo, Air India SATS Airport Services the tie-up would develop stringent internal and external security procedures, which were an integral part of a successful supply chain especially for high value shipments. On his part, Debashis Golder, Vice President Cargo, Air India SATS, added that the security partnership programme would help create a safer environment for DHL and Air India-SATS employees who handle high-value and high-risk products.
Capt Gopi sets Nagpur hub rolling NOVEMBER saw a new era in express logistics in India with the launch of Deccan 360’s operations. Captain G R Gopinath’s express logistics became the first Indian company to create a hub and spoke distribution model. Deccan 360 started commercial operations with eight freighters covering 15 airports. With its fleet of over 300 trucks and 850 vehicles nationwide, eight major surface hubs, with a capacity of more than 300 tonnes per night by air and more than 60 warehousing hubs, Capt Gopi plans to deliver overnight services to 50 cities — all of which will be done by more that 60 franchisees nationwide. It will also assist international freighters to bring freight into Nagpur and utilise Deccan 360’s network to provide the domestic connectivity. The core of Deccan 360’s hub and spoke model is the stateof-the-art hub being developed across a total area of 50 acres at Nagpur. Capt Gopi has signed a MoU with the GMR group, for setting up express cargo operating facilities at Delhi and Hyderabad airports, which, together with the central hub in Nagpur will form an extensive state-of-the-art multimodal (surface and air) storage, transportation and delivery network bringing connectivity to every corner of the country. He has also set up a central call centre at Bangalore to ensure customer satisfaction. Speaking at the launch, which saw the presence of the Civil
62
EXCHANGE OF SMILES: Captain Gopinath is all set to revolutionise the domestic logistics industry with the launch of Deccan 360's hub in Nagpur; Civil Aviation Minister Praful Patel was also present at the launch.
Aviation Minister Praful Patel, Deccan 360 Chairman and Managing Director Capt Gopinath said, “My vision for Deccan 360 is of an express cargo and logistics network which will not only make markets and consumers come closer in the metros and in the hinterlands but will also create opportunities for people in all parts of the country, generating economic and social value at a local and at the national level.”
CRUISING HEIGHTS December 2009
Document2
11/23/2009
12:11 PM
Page 1
February 1st, 2007, AFL Cargo has entered into a historic joint venture with DACHSER GmbH & Co. KG. to form AFL
DACHSER Private Limited - a new powerhouse in global freight forwarding. Over the last 62 years, AFL has pioneered the cargo, logistics and courier express industries in India. On the same lines, DACHSER is one of Europe's leading logistics companies with industry expertise of 77 years. Definitely AFL DACHSER is the team you can trust for all your cargo needs. Through the fully integrated network spanning over 33 locations in India and 260 locations worldwide, AFL DACHSER assures you of enhanced Speed and Efficiency. With two industry leaders in Logistics joining forces, a success route awaits you at info@afldachser.co.in
Cargo Jottings12 final.qxd
11/26/2009
1:21 PM
Page 3
ACAAI T H E
A I R
C A R G O
A G E N T S
A S S O C I A T I O N
O F
I N D I A
LAST IN/FIRST OUT
TRENDS
Indian aircargo gets ready for better times WITH recession dying out slowly, the air cargo industry could see a new sunrise in 2010. That would definitely mean better times for the country’s aircargo sector. Data released by the Airports Authority of India (AAI) reveals that domestic air freight has been growing in double digits since May, compared with a contraction between October 2008 and March 2009. During the year 2008-09, all operational Indian airports together handled 16.97 lakh tonnes of freight registering a negative growth of -1.0 per cent when compared with the corresponding period of 2007-08. Over the past five years, international and domestic cargo has been increasing annually at the rate
of 10.6 per cent and 7.9 per cent respectively, which accounts for 9.7 per cent compound growth rate for total cargo traffic at all Indian airports. It is in such an environment that Capt Gopinath’s Deccan 360, with eight freighters, has already marked its presence (see Cargo Jottings). Another cargo carrier, Aryan Cargo Express Pvt Ltd has decided to start operations with two Airbus A310 freighters early next year. According to Mukut Pathak, MD, Aryan Cargo Express Pvt Ltd, the launch would be sometime between January 15 and February 1, 2010 since the period between February and March is the peak season for air cargo.
THE CCA or the Cool Chain Association established to harmonise the global movement and handling of perishables and temperature sensitive products (PTSP) to the benefit of the consumer and the supply chain participants is leaving no stone unturned for members throughout the world. The Chairman of the group, Robert Arendal, wants more members. He said, “No doubt tough times are upon us all but integrity of the cool chain for all sorts of perishables has never been more vital; so, we are reaching out to industry stakeholders and shippers as well for participation — more than ever — for the benefit of everyone.” The CCA has also been promoting the fact that membership and certification
Airbus starts a new era in aircargo A brand new A330-200F touched the skies over the southern parts of France on November 5, 2009. Commenting on this four-hour maiden flight,Airbus in a statement, said:“This milestone marks the start of a 180 hour flight-test and certification campaign, and paves the way for first delivery of the type in the summer of 2010.” Among those who have ordered the A330 freighter are:Turkish Airlines, Guggenheim Aviation and Matlin Paterson. The freighter can transport either 64 tons nonstop over a distance of 7,400 km or 69 tons upto 5,930 km.The freight compartments can be cooled down to five degrees centigrade enabling transports of temperature sensitive products. In addition, a new software tool offered by Airbus enables loadmasters the virtual loading of the plane too. “The A330-200F is the right aircraft at the right time.The efficient A330-200F is very well adapted to today’s market dynamics of rising fuel prices and increased pressure on yields,” said John Leahy, Airbus Chief Operating Officer — Customers. In addition to carrying commercial goods there might be another task coming up for the A330-200F. It could replace the 45-year-old airrefuelling tanker KC-135 — or its latest version, the KC-767AT.What could weigh in favour of Airbus is the fact that the A330200F tanker transporter weighs less and is a smaller aircraft.
Asia’s economies, particularly China and to a lesser extent India will remain the centre of gravity for trade. There’s no doubt Asia and the emerging markets (will contribute almost 40 percent of global trade by 2028). will shape the direction and future for economic and commercial expansion.
Herman Ude
CEO, DHL Global Forwarding, Freight at the APEC CEO Summit 2009 in Singapore
CRUISING HEIGHTS December 2009
makes business practice sense to cargo transporters. According to Christian Helms, CCA secretary general,”Cool Chain Quality Indicators is the tool that both baselines top quality in the handling of perishables and benchmarks CCA members’ offerings for air, sea or road cargo.” As a non-profit organisation, the CCA is dependent on its membership for funding, and while the world is listening, the current economy is making it more difficult for CCA members to devote time and resources. To overcome the situation, CCA is promoting communications with the industry and organizing conferences and seminars. It is also adapting simpler ways like facilitating the easy download of its quarterly newsletter Cool Times from the website.
63
Snippets Aviation.qxd
11/26/2009
8:33 PM
Page 2
SNIPPETS
DOMESTIC AIRLINES Air India and Aerostar together are A Team Air India’s Engine Overhaul Facility, Mumbai, and Aerostar Asset Management, “Sharjah, UAE are coming with practical and cost effective solutions for engine repair management which will result in reduced cost of ownership for engines operators. A marketing agreement has been executed between the two companies and the brand was launched at the Dubai Air show, held from November15 - 19, 2009.This Engine maintenance, repair and operations (MRO) brand called, “The A Team”, created by
Jet Airways enhances its offers JET Airways and its subsidiary JetLite announced new and exciting offers for their ongoing ‘Boarding Card Delights’ programme that can be enjoyed up to January 31, 2010. This programme has partnered established brands across four different categories i.e. retail, hotels, dining/restaurants and car rentals thereby extending special benefits and privileges beyond air travel. On presenting Jet Airways or JetLite boarding cards, at the various partner establishments/outlets the passengers can avail these offers. Commenting on this, Sudheer Raghavan, Chief Commercial Officer, Jet Airways, said: “Since inception, it has been the airlines’ constant endeavor to seek different and add value to its offerings to its valued guests.”
(L-R) V P Nagarajan, Executive Director ETA Star Group; K M Unni, Director Engineering-Air India; Salahuddin, MD, ETA-Star Group; Jitender Bharagava, Executive Director, Corporate Communications-Air India; S Rotkar, Executive Director Sales & Marketing-Air India, Ajay Chaukulkar, GM, Aerostar; A K Datta, GM Engine Overhaul-Air India and Yashelle Taherian, Aerostar after the signing ceremony in Dubai.
the duo, is initially for the Middle East market. The alliance will sell repair services for jet engines such as GE CF6-50 and 80 series, P&W 4000 series, GE-90 series and CFM56-7 series and will also cover CFM56-5 series engine in the near future.
CFM’s maintenance training centre at GHIAL GMR Hyderabad International Airport Ltd (GHIAL) and engine manufacturer, CFM International (CFM) signed an agreement to establish a new CFM56 maintenance training center to support its customers in the South Asian region. This training centre, which will commence operations by late January 2010, will be located in the GMR Aerospace Park, being developed in the exclusive 250 acre aviation Special Economic Zone (SEZ) that forms part of the Rajiv Gandhi International Airport complex. The agreement was signed, in the presence of the French Minister for Foreign Trade, H E Anne-Marie Idrac, by P Sripathy, CEO of GHIAL and Paul-Andre Chevrin, CFM International Vice President for India. G M Rao, Group Chairman, GMR Group, commented by setting up the maintenance training center in Hyderabad, Indian commercial aviation industry would be benefitted in a big way.
66
It would help India’s airline companies considerably in reducing costs and aircraft down time, and conserve valuable foreign exchange for the country. It would also create huge employment opportunities for talented Indian youth. “This is a significant milestone in our plans to develop the Rajiv Gandhi International Airport as a preferred hub for Maintenance, Repair and Overhauling (MRO) facility in South Asia,” said Sripathy, CEO, GHIAL. The facility signalled the beginning of GHIAL’s plans to create a one-stop aviation support cluster of international standards in Hyderabad. With two SEZs of 250 acres each, GHIAL’s plan was to bring all aviation and avionics related activities in India, added, Sripathy. Paul-Andre Chevrin, CFM said: “The new training center, will mirror CFM facilities currently operating in France, the United States, and China, and would initially provide advanced courses in line maintenance and inspection.”
CRUISING HEIGHTS December 2009
Snippets Aviation.qxd
11/26/2009
8:33 PM
Page 3
INTERNATIONAL AIRLINES SA and Tourism New Zealand tie-up SINGAPORE Airlines (SA) and Tourism New Zealand have signed a joint agreement to boost tourism arrivals to New Zealand via Singapore Airlines’ services between Singapore and both Auckland and Christchurch. The three-year memorandum of understanding (MoU) will come into effect on January 1, 2010. The partnership has committed NZD$ 2 million over three years to fund joint activities, which include marketing and tourism campaigns in priority markets and familiarisation programmes for consumer media and travel agents from Singapore, China, India, UK, Germany and France. Having deep roots in New Zealand with daily B777 flights to Christchurch and 12 times weekly flights to Auckland, Singapore Airlines’ Executive Vice President, Marketing and the Regions, Huang Cheng Eng said: “We remain steadfast in our commitment to promote the varied and wonderful tourist attractions in New Zealand to the world and this agreement reinforces that commitment”. Tourism New Zealand Chief Executive George Hickton said, "Tourism New Zealand is delighted with the enhanced marketing opportunities that this agreement will provide.
Emirates receives award
Dubai-based Emirates Airline added yet another feather to its cap as it bagged the award for the Best West-bound International Airline from the Travel Agents Federation of India (TAFI). Over 400 travel and trade professionals joined Emirates in celebrating this occassion as Orhan Abbas, Emirates’ Vice President, India and Nepal, collected the award at a convention organised by TAFI at Chiang Mai, Thailand.
SAA hits the first goal THIS year, another ‘first’ is claimed by South African Airways (SAA) by reviving its Soccer Tournament - Soccermania 2009, organised for travel fraternity in Mumbai and inaugurated by South African Consulate. Tauseef Khan, SAA Acting Head - South East Asia, said: "It is truly an honour that our invitation for participation is so well received by our trade partners. The enthusiasm and turnout are clear evidence of our close relationship with the travel trade and other stake holders. We will continue to improve on our quality of the tournament every year. I would like to thank our trade partners for the support they have given us through out the year". 24 teams of leading travel agencies and tour operators battled it out in the tournament played at the Western Railway Football
Orhan Abbas, Emirates' Vice President, India and Nepal, receiving the award at the convention organised by TAFI at Chiang Mai, Thailand.
In receiving the award, decided on the basis of a poll conducted by over 1,000 IATA agents across India, Emirates beat stiff competition from 16 international airlines. Abbas said, “We are delighted to be recognised as the best west-bound airline by TAFI. Emirates' is closely associated with the travel trade across its network recognizing them as true partners to growth. It truly presents Emirates as a world-class airline committed to providing the best to our customers in India.” The polling process was undertaken at two levels — offline conducted by AC Nielsen and online through websites of TravelBiz Monitor and TAFI. In 2009 alone, Emirates won awards across categories including Best Airline, Best First Class and Best Airline Inflight Entertainment Award (awarded for the fifth year in a row by Skytrax).
APPOINTMENTS Saurabh in new role Travel operators battled in the SAA’s Soccer Tournament - Soccermania 2009
Ground. The excitement was palpable as soon as teams — Akbar Travels and Parikh Travels reached the finals. The matches were played on a league cum knock out basis. Akbar Travels won the match. In addition, the winning team was given free tickets to South Africa and four nights stay at Mabula Lodge. While the runners up were given shopping vouchers worth Rs 2500, courtesy SAA, Sun International and Southern Sun Hotels.
Singapore Airlines has announced the appointment of Saurabh Karnik as the Manager, passenger sales for North India. Based in Delhi, he will lead the operations of the airline in Punjab, Rajasthan, Haryana, UP and surrounding areas. Prior to taking over this role, he was Manager North India for South African Airways and Manager North and East India for Virgin Atlantic. His more than a decade career in the Saurabh Karnik travel industry saw him carry out various roles, which included that of a Regional Manager with SOTC, Kuoni Travels and many more.
CRUISING HEIGHTS December 2009
67
Snippets Aviation.qxd
11/26/2009
8:33 PM
Page 4
SNIPPETS
TRAVEL & TOURISM Enjoy Jamaica every second A little island in the Caribbean Sea packed with umpteen wonderful sights — Jamaica is the most scenic and sought-after destinations among all the islands. With lush plains, percolating waterfalls, bubbly springs, sunny beaches, colonial towns, neon-lit nightlife and a host of events and festivals, there are so many attractions to relish in Jamaica. James Bond buffs can visit James Bond beach, the place where Ian Fleming gave birth to James Bond. 1960’s hippie movement’s observer, The Seven Mile Beach, is home to a carefree, laid-back environment. Water sports and Adventure activities are prolific in Jamaica and visitors can indulge in various water and land activities. Jamaican events and festivals are perfect glimpse of the rich culture and tradition of the island country. One cannot afford to miss the most celebrated events in Jamaica like legendary musician Bob Marley’s Birthday on February 6, Reggae Sum fest, in July in Montego Bay and Ocho Rios Jazz Festival in June. For nature lovers there is astounding variety of flora and fauna in Jamaica and along with this, Jamaica also caters a lot of historical sightseeing and there are many buildings on the island that bear testimony to its colonial past. Historic tours and sites like the Maroon village tour, Green Grotto caves are worth a visit. Visitors can have a holistic cultural experience through Outameni Experience which is an interactive cultural journey depicting a unique blend of music, art, dance, film, drama and authentic Jamaican cuisine.
(L-R) Karan Anand, Head-Relationships and Supplier Management, Cox and Kings India Ltd (CKIL), Vassilis Theocharides, Director, Middle East and Gulf, Cyprus Tourism Organisation and Ashutosh Mehere, Vice-President, FIT, CKIL, pose for a photograph with the newly released brochure on Cyprus at the press conference held in Mumbai recently. The brochure, specially designed for the Indian market describes the destination and packages.
said, “Cyprus is the closest European destination for Indian travellers. Though a modern island nation, it retains an essentially Mediterranean character.” He further added with English as widely spoken language and more than 19 Indian restaurants, Cyprus could be a comfortable destination for the Indian traveller. CKIL has also released an exclusive Cyprus brochure with information on various destinations and itineraries. Speaking on the launch of the brochure, Ashutosh Mehere, Vice-President, FIT, CKIL, said, “This brochure is a collection of destinations and itineraries for both leisure and corporate travellers and caters specifically to the taste of the Indian traveller.”
California Tourism welcomes Indian travellers
Music, festival and fun create Jamaica.
Shopping in Jamaica is an enjoyable experience as it is a paradise for enthusiastic shoppers and Jamaica is a haven for duty free shopping. And when it comes to appetite, Jamaican cuisine is a big treat; it is tangy and sometimes very hot. Jamaica’s gastronomic legacy continues to attract food connoisseurs from across the world to taste and savor the distinctive cuisine of the Caribbean Island.
Cyprus has an Indian touch CYPRUS Tourism Organisation is launching a marketing initiative with Cox and Kings India Ltd (CKIL) as Cyprus is trying to woo the lucrative Indian outbound market. CKIL is offering a free holiday offer for 100 people through print and television campaign that would be commenced shortly. Addressing the press in Mumbai, Vassilis Theocharides, Director, Middle East and Gulf, Cyprus Tourism Organisation,
68
CALIFORNIA Travel and Tourism Commission (CTTC) has contracted Sartha Marketing of New Delhi to help promote California as a unique tourism destination to travellers in India. The Sartha Marketing Consultants will work closely with the CTTC in a limited representation capacity that strengthens California’s relationship with travel trade professionals in India. “India is an important international travel market that has shown significant growth to the US in recent years,” said Caroline Beteta, CTTC president and CEO and national chair of the US Travel Association. “As we continue to strengthen international awareness of the California brand, we look forward to working with Sartha Marketing to increase California’s market share of Indian visitors to the US”, she added. Sartha Marketing will expand cooperative marketing opportunities Sheema Vohra, president of with airlines and travel distributors, Sartha Marketing Consultants. work with operators and retail travel agents in every market to increase visibility of California in tour packages and for special groups, and increase consumer awareness of the California lifestyle and attractions through the media.
CRUISING HEIGHTS December 2009
Snippets Aviation.qxd
11/26/2009
8:33 PM
Page 5
Mario paints Spain and India relationship THE King of Spain, His Majesty Juan Carlos has awarded the well-known Indian cartoonist, Mario de Miranda with the highest civilian honour ‘the la Cruz de Isabel la Católica’, a Spanish civil order granted in recognition of services that benefit the country. The prestigious award ceremony took place in Goa on November 10, 2009 to celebrate the achievements and devotion of Mario in strengthening the ties between Spain and India through his paintings. Miguel Neito Sandoval, Tourism Counsellor, Director of the Tourism Department, and Embassy of Spain in India presented the award.
Mauritius entices avid Indian shoppers BEING always conceptualised as a high-end leisure destination with its sun-kissed beaches, Mauritius is now redefining its holiday experiences by earning a reputation of being a shopper’s paradise - which has been boosted by the diversity and quality of the products at unbeaten prices. A shopping and leisure paradise, Grand Bay is famous for its vibrant nightlife and plenty of restaurants, bars and discos. However, the heart and soul of Mauritius lie in its local markets. Flacq is one of the most important villages in Mauritius and boasts of the country’s largest open air market. This market is famous for the local crafts - basketwork, embroidery, pottery, cut stones and recycled glass. Offering more than just rows of shops and restaurants, Caudan Waterfront offers the unavoidable shopping arcade with esteemed duty-free shops. Curepipe is a place where, most of the Franco-Mauritians as well as tourists love to shop and scatter their money in numerous duty-free shops, diamond cutting workshops, ship model factories and a hand-made oriental carpet shop. The major shopping centre, Phoenix is famous for its hypermarket, food court and sports store. While you are in Mauritius, don’t forget to purchase, pullovers and knitwear as Mauritius has an enviable reputation for textiles production. Leading brands of shirts, trousers, suits, dresses, suits for women, shorts or swim wear are sold at unbeatable prices.
A KING AND AN ARTIST: Mario de Miranda being honoured by the King of Spain Juan Carlos.
The series of his work, showcased in an exhibition in India, was a unique project aimed at enhancing the cultural relationship between the two countries. The paintings were later compiled into a coffee table book for promotional purpose for the Indian market. Based in Loutolim, Goa, India, Mario was accorded Padma Shri in 1988 and Padma Bhushan in 2002 for his extensive contribution in the field of Literature and Education.
Rai claims victory in TAAI election again RAJINDER RAI has been elected as TAAI’s President for the second consecutive term. The 58th annual general meeting and election of Travel Agents Association of India, TAAI, for the new office bearers and managing committee for the year 2009-10 concluded in Mumbai. The event was attended by members from all over India. Along with Rai, Sunil Kumar and Iqbal Mulla successfully saved their posts as Secretary and Treasurer respectively. Jagdeep S Rikhy, elected to the post of Vice-President, is a new entry in the team. He was serving as managing committee member since last three years. The managing committee has five new names in the new term — N G Shankar, Director, Durga World Travels India Pvt Ltd (Benguluru); Sunil Notani, Managing Director, Air Aman Travels Pvt Ltd (Madhya Pradesh); N M Sharafudeen, Managing Partner, Omega Travel & Tourist Agency (Kerala); Mohanjit Sainai, Director, EMMJay Travels & Export Pvt Ltd (Punjab) and Marzban Anita, Chairman, Avesta Travels and Tours (Mumbai) apart from Sanjay Datta and Vijay Mohan Raj who were the managing committee members in the last term as well.
WINNING SMILES: (L-R) Jagdeep S Rikhy, Rajinder Rai,Sunil Kumar and Iqbal Mulla.
CRUISING HEIGHTS December 2009
69
Snippets Aviation.qxd
11/26/2009
8:33 PM
Page 6
SNIPPETS
Amex Business Travel wins AT the 16th Annual World Travel Awards, held in London on November 8, 2009, American Express Business Travel, has been recognised as the “World’s Leading Business Travel Agency”. The name of the winner was decided by votes of more than 1, 80,000 travel professionals and key suppliers. For the third time, American Express Business Travel has grabbed an accolade from World Travel Awards. Mark Douglas, vice president, American Express Business Travel who received the award, commented, “This award underscores American Express Business Travel’s focus on delivering exceptional customer service with unparalleled global reach,” said Douglas. “We are truly thankful for this recognition and will strive to continue to provide our customers with the services they need online, offline and around the world.” In addition to “World’s Leading Business Travel Agency,” the company was also named the “Best Corporate Travel Agency” for the second consecutive year by TTG Asia Travel Awards in October, and earlier this year, based on volume of annual sales and company size, it was listed as number one on Travel Weekly’s annual “Power List”.
Sarovar’s The Muse in the capital SAROVAR has expanded its network of property to 11 in the capital and NCR with the signing of management cum franchise contract for the famous ‘The Muse’ at Nehru Place to re-brand it as ‘The Muse Sarovar Portico’. This 41-room boutique hotel is slated to commence operations by December 2009. Located at Chirag Enclave in Nehru Place, South Delhi, The Muse Sarovar Portico is 14 km from the domestic airport, 21 km from the Indira Gandhi International Airport and 12 km from New Delhi Railway Station.
Singapore creates gourmet magic
ENTICING fragrances, budding taste and visualizing treats -all these make the Singapore Hawker’s Food Festival, a tantalized experience, organized from November 14 to November 28, 2009 at InterContinental Eros, Nehru Place. To create the Singaporean magic, two chefs — Chef Dennis Fong and Chef Chuan Seng — were flown from Singapore with their finest gourmet experience. Both took the food lovers to their Singaporean culinary rollercoaster, where food lovers could not resist themselves from sinking their teeth into the best signature dishes like the Singapore chilli crab, Hainanese chicken rice, satays (charcoal grill), roti paranthas and much more. This year, the spotlight was on Peranakan cuisine. Singapore’s Read Bridge at Clarke Quay was lined with stalls to offer the taste of Peranakan food. In addition, a special dinner was organised during the festival to tempt the taste buds with over 100 Peranakan dishes. The main five stalls at Singapore hawker centre had all ‘nothing less than best’ to offer — charcoal grill seafood, roasted chicken and duck, fried flat noodles, Singapore specials (carrot cake and oyster omelet) and Muslim favourites (Chicken/lamb rending). The food festival was sponsored by MTS and Jet Airways.
Inside view of Sarovar ‘The Muse’.
Commenting on the signing, Anil Madhok, MD, Sarovar Hotels & Resorts said, “Taking into consideration the need-gap and to provide quality accommodation at competitive prices, Sarovar Hotels has a very ambitious plan for this region. Also, with the Commonwealth Games fast approaching, this addition would bring some relief to the room requirement in the capital”. The rooms at the hotel are spacious with all modern amenities and facilities suited for business travellers and tourists wanting to break journey for onward travel. Hotel’s promoter, Vikrant Puri said, “The hotel site is a well-travelled route and very close to business districts and main shopping areas”. In addition, Sarovar’s room inventory in the capital and NCR would total to 776 before the scheduled Commonwealth Games in October 2010.
70
(Top) Julian Ayers (left), GM, InterContinental Eros, with fashion designer Abdul Haldar and mouth-watering Singaporean style foods alluring visitors with aroma and taste.
CRUISING HEIGHTS December 2009
Snippets Aviation.qxd
11/26/2009
8:33 PM
Page 7
Awards presented by Hospitality India THE fifth Hospitality India and Explore the World Annual International awards were presented recently in Delhi. The 2009 edition of the show, held in association with China Tourism, was significant since it saw the launch of yet another publication from the Hospitality India group: India: Yesterday, Today, Tomorrow. The publication focuses on political, socio-economic and business issues bringing to light the achievements of our past political leaders. In her message, Kumari Selja, the Minister for Urban Development and Tourism, said, “The tourist traffic, both domestic and international, has grown at an admirable pace in recent times. The only way to sustain this high growth is by way of crating worldclass tourism infrastructure, construction of all categories of hotels and crating a vast pool of personnel for the hospitality sector.” Speaking on the occasion, the Managing Editor of Hospitality India and Editor-in-Chief of Explore the World, D L Kalra said, “The vision of Hospitality India and Explore the World Annual International Awards 2009 is to stimulate competitive spirit towards qualitative growth of the Indian hospitality, tourism and travel
Banyan Tree’s Ungasan in Bali - a delightful sojourn BANYAN Tree Hotels and Resorts, is ready to open its second grand property ‘Banyan Tree Ungasan’ in Indonesia’s land of beauty and culture, Bali. Being perched 70 meters above the sea level on the cliff-top of the island’s southernmost peninsula, Ungasan promises panoramic ocean views, effortless rejuvenation and unforgettable cultural discoveries. Banyan Tree is introducing special ‘Ungasan unveils package’, which offers complimentary third-night stay with a minimum two consecutive nights’ booking with breakfast at Bamboo Restaurant and return airport transfers by Mercedes ML 350 for two people. In addition, for four-night stay or above, tourists will enjoy a complimentary four-course set dinner at JuMa-Na Restaurant.
Hotels.com’s selected hotels for Christmas cheer IF you are planning a perfect holiday to celebrate Christmas this year and you are not getting the best hotel, here is the key! Hotels.com has selected some of the most Santa-friendly hotels across the world that offer memorable Christmas experiences. Hotels.com’s ‘Christmas Cheer’ hotel recommendations offer guests all the trimming needed for the perfect Christmas stay. Johan Svanstrom, Managing Director of Hotels.com Asia Pacific, believes that at Christmas time, hotels should do their best to
industries, an award that recognizes efforts of institutions and individuals in providing value to products and professionalism in services.” The gala even was graced by Christy Fernandes, Secretary to the President of India; T K A Nair, Principal Secretary to the Prime Minister of India, Sujit Banerjee, Secretary, Ministry of Tourism, and Mohammed Higazy, Ambassador of Egypt in India. make their guests feel right at home. “It’s great to see that so many hotels get into the spirit of Christmas and ensure that their guests have a memorable holiday. Whether you are visiting a hotel just for a Christmas meal or are staying for a few nights over the Christmas holiday, clearly there are hotels within all budgets that will guarantee you a great Christmas holiday experience”.
Leela’s Chairman is honorary hotelier The International Hotel and Restaurant Association (IH&RA) has decided to honour the Chairman of The Leela Palaces, Hotels and Resorts Captain C.P. Krishnan Nair with the prestigious award ‘Hotelier of the Century’ during the IH&RA congress slated to be held in Belgrade Serbia from January 18-20, 2010. This is the second time in 140 years that this award will be awarded to a hotelier after Joseph Giacoponello former President and CEO of the Leading Hotels of the World.
Yatra.com appoints Marketing Head THE online travel company, Yatra.com, appointed Pratik Mazumder as the Head of Marketing. Mazumdar will be responsible for the overall marketing function including developing and launching new marketing initiatives, managing the brand, consumer intelligence and ad sales. He will be managing the key strategic relations with partners and alliances, and explore new revenue opportunities as well. Mazumder, Head of Marketing, Yatra.com yelled, “I feel privileged to join Yatra.com. I’m looking forward to be part of a growing and innovative online travel business, which is expected to expand in the near future.
CRUISING HEIGHTS December 2009
71
back page corrected.qxd
11/26/2009
7:56 PM
Page 2
BACK PAGE
Sharpshooters of a different kind Airbus’ initiative — “See the Bigger Picture” where children from six to 16 years were invited to take photos of biodiversity and upload on Airbus’ created site, www.seethebiggerpicture.org — has ended. The competition has ended and eight talented winners have emerged from the thousands of photos that were submitted (see CRUISING HEIGHTS, September 2009). The effort was meant to stimulate and raise awareness on biodiversity among children, families and educators around the world. Among the photos were animals, colourful insects, flowers drenched in pollen, vast landscapes, harsh winter morning and glowing evening sun: that was the glimpse of biodiversity, captured by children for the competition. Commenting on the competition, Tom Enders, CEO and President, Airbus, said: “The standard of entries from every corner of the world has been extremely impressive and a great reminder of the variety of living species we have around us. At Airbus, we are working with the Convention on Biological Diversity (CBD) and using our global outreach to raise awareness of the need to preserve the variety of life on earth.” The eight talented winners were chosen from 2,350 entries in 99 countries. Children of Airbus employees were also encouraged to enter and three prize winners were selected from those 247 entries. In addition, 20 children were also awarded honourable mentions for their impressive
entries and of these, two were Indians. The eight talented winners who will be given once-in-a-lifetime trip to the Washington headquarters of National Geographic in December, are: Anthony Avellano, 12, from California, USA; Prerona Kundu, 11, from Kansas, USA; Chad Nelson, 12, from the Dominican Republic; Alex Marttunen, 11, from Finland; Clémence Bonnefous, 8, from France; Vinzent Raintung, 8, from Germany; Julia Kresse, 15, from Germany; and, Patryk Majchrzak, 16, from Poland. Launched in July, the international photo competition was the joint initiative of Airbus, National Geographic Society and the Secretariat of CBD, part of the United Nations Environment Programme. It encouraged young people to engage in nature and consider the global loss of biodiversity. The competition was developed as part of Airbus’ support for The Green Wave, a youth engagement programme of the CBD to encourage young people to learn about the complexity of life on earth and its role in their future. THE WINNING IMAGES: 1. Alex Marttunen a 11-year old, found a top of the broken bottle which was thrown as trash but this insect has made its home into this broken bottle; 2. Anthony Avellano, (12) captured a banana slug at Redwood National Park, California; 3. A lonely ladybug captured by Julia Kresse, (15); 4. A sleepy butterfly with lots drops by Patryk Majchrzak, (16); 5. Prerona Kundu, (11), tried to show going-to-be lost amphibians, such as frogs are endangered but they are a very important part of an ecosystem; 6. Dominican lizard clicked by Chad Nelson, (12); 7. Orang utan - taken by Vinzent Raintung, (8); and, 8. A yellow caterpillar nourishes itself on yellow plant by Clémence Bonnefous, (7).
72
AD dummy.qxd
11/21/2009
1:22 PM
RNI No. DELENG/2006/16897 Posting Dt. 3-4/12/09 Reg. No. DL(E) 20/5294/2009-11
Page 1