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AAI CHAIRMAN V P AGRAWAL ON FUTURE PLANS
CRUISING HEIGHTS June 2011 n ` 90
Special Issue
www.cruisingheights.in
aviation outlook
HAPPY LANDINGS AFTER WEATHERING THE DOWNTURN, THE COUNTRY’S CIVIL AVIATION INDUSTRY IS ALL SET TO FLY HIGH, TAKING IN ITS STRIDE THE MAJOR CHALLENGES OF INFRASTRUCTURE AND RISING FUEL PRICES.
PLUS þ Swords out in Europe vs Gulf carriers’ duel þ Kiran Grandhi on creating the future þ Ground handling: The nowhere story þ MRO: Brighter prospects but obstacles remain þ A-Z of the air cargo business
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2011 AVIATION OUTLOOK EDITOR-IN-CHIEF’S NOTE
Keep it simple, silly! T he great irony of Indian aviation is the complexities that govern the sector. The hotter it got, the K Srinivasan bigger it grew and the larger it expanded, the more complex became the regulation mechanism. And while aviation grew at a merry 25-30 percent year on year, the framework to govern this crazy growth trajectory did not grow even at three per cent! Infact so bad was the situation some years back that the Federal Aviation Authority warned that it would downgrade India’s rating, sending the entire Civil Aviation Ministry into a tizzy. The present Secretary and the then DG of the DGCA, Dr Nasim Zaidi, was in the thick of it and the regulator’s effort to beef up the directorate began then. It is still a work in progress. By the same yardstick, airports and airlines have to seek over a 100 different approvals before they can commence operations and, mind you, half of them are from the Ministry of Civil Aviation and its sundry agencies. A consequence of such a ‘licence raj’, if one may put it that way, is the edifying spectacle of the husband working for a private airline, and the wife overseeing security for the same airline in the Bureau of Civil Aviation Security (BCAS) that governs the security infrastructure in India. What’s happened in the DGCA when parents regulated and children went to fly for the airline is too well documented to bear repetition. While the officials are all paying a price for their subterfuge, there are no questions being asked of the airlines that were so obliging. If corners were being cut, why did they acquiesce in the first place? But as one operator put it pithily: “If you quarrel with the
TOUGH JOB: Controllers at ATC room.
umpire, you can be run out!” If that is one aspect of the story, HR is another burning issue. With the Ministry of Civil Aviation moving to license Air Traffic Controllers (ATCOs), it is just a matter of time before they are poached by others in the region and the larger world. There is plenty of respect for their abilities and it’s remarkable that this band of men and women have given us a relatively accident-free sky during all these years as aviation grew and grew and the pressure on them became unbearable. If there are any lessons that we need to learn from all this it is that we need to ramp up our human resources. That is going to be our greatest challenge in the coming decade as aviation grows at an annual 15 per cent. It is unbelievable that the DGCA doesn’t have an official with sufficient seniority and maturity to be DG. And each time the post is up for appointment, there is an outsider who gets the top job. It would also help if we can simplify our regulatory mechanism. As Ranbir Kapoor says in a different context, keep it simple, silly.
JUNE 2011 CRUISING HEIGHTS
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AVIATION OUTLOOK 2011
contents¨¨
ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST
OFF THE CUFF AGE OF THE PALM FLIERS
32 AROUND ASIA 56 INDIA SETS STANDARDS
AVIATION VETERAN BASHIR AHMAD ON THE HEADY GROWTH OF INDIAN AVIATION
4 CRUISING HEIGHTS JUNE 2011
OUTLOOK
TAKE-OFF TO A BRIGHTER FUTURE
THE DOWNTURN ALMOST FORGOTTEN, THE INDIAN AVIATION INDUSTRY IS POISED FOR A BIGGER LEAP EVEN AS IT BATTLES INFRASTRUCTURE WOES AND FUEL PRICE HIKES.
INFRASTRUCTURE
52 CREATING FOR GROWTH
V P AGRAWAL, CHAIRMAN, AAI, ON FUTURE PLANS AND REVENUES
POLICY 22 WHO WILL WIN THIS ROUND? AKBAR AL BAKER TAKES ON ULRICH SCHULTE-STRATHAUS IN THE BATTLE BETWEEN EUROPE AND THE GULF!
Like most of the developed world, the mobile has started playing a major role in travel bookings in Asia. Brett Henry, Vice President India, Abacus International points out that bookings on mobiles in the Asian region finished at a record high in 2010, up 11 per cent over the previous year. Writing in Eye for Travel, Henry forecasts that the mobile will be the next platform for travel management. Indicating that in an emerging market like India, "where penetration of personal computers is low, mobile Internet on handsets will be popular choice amongst consumers due to its affordability and portability". He writes that "67 per cent of travellers and 77 per cent of frequent business travellers with Internet-enabled mobile devices use the mobile Internet to find local services and attractions" while 53 per cent of leisure travellers indicated that real-time flight information is their top preferred mobile feature". This year, 2011, will see travellers resorting to "planned spontaneity" with Apps for mobile-enabled services changing lives and travel habits. Air Asia, for example, uses promotional tools to drive its sales via its mobile services: numerous bookings are done everyday in addition to seat selection and check-ins. Japanese All Nippon Airways customers use their mobiles to make domestic and international bookings along with the usual add-ons like seat selection, etc. In the next few year, mobile services will enable travellers to be more productive when it will bring in just-in-time data based on the user's location.
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AVIATION OUTLOOK 2011 §§ CONTENTS ¨¨ FORECAST 30 CREATING THE FUTURE
KIRAN GRANDHI BELIEVES THAT 100 AIRPORTS WOULD BE NEEDED IN NEXT 10 YEARS
UPGRADE 58 TOP OPERATION MIAL’S RUNWAY MARATHON FINALLY ENDS!
CARGO 86 BUSINESS OF AIR CARGO
AIR CARGO BUSINESS AROUND THE WORLD HAS A LONG WAY TO GO
CRUISING HEIGHTS
Volume VI No 2
Editor-in-Chief
K SRINIVASAN Managing Editor
TIRTHANKAR GHOSH Group Consulting Editor
R KRISHNAN Consulting Editor
NANDU MANJESHWAR Deputy Editor
PC SINGH Special Correspondent (Mumbai)
ROOHI AHMAD Copy Editor
ASHOK KUMAR Editorial Coordinator
LAKSHMI SINGH Sub-editor-cum-reporter
PUNIT MISHRA Design
RUCHI SINHA, MOHIT KANSAL, SHIV PHOTO COURTESY: aviationweek.com
Picture Editor
PRADEEP CHANDRA Photo Editor
77
HC TIWARI —————————— Publishing Director
ROHIT GOEL Director (Admin & Corporate Affairs)
RAJIV SINGH Asst. Manager (Subscription)
JAYA SINGH
CHOPPER SPECIAL US AVIATION SECRETS UNVEILED
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THE ABBOTOBAD OPERATION BY THE US NAVY SEALS BROUGHT BEFORE THE WORLD THE SIKORSKY BLACK HAWK STEALTH MACHINE THAT “FLOATS LIKE A BUTTERFLY AND STINGS LIKE A BEE”
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BACKPAGE 114 NOT A CAR OR A PLANE DEBUTING THIS YEAR, THE NEW TRANSITION ROADABLE AIRCRAFT IS BOTH ROLLED INTO ONE
NEWS 10 Q4 RESULTS ARE MIXED
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Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 Tel: +91-11-41033381-82
TOUGH TIMES ARE AHEAD AS NATURE AND OIL PLAY HAVOC.
100 HIGH ON CARGO BIZ
BLUE DART, JET AND KALE CONSULTANTS CONTINUE THEIR GOOD RUN
104 GREAT TIMES CONTINUE
JET AND KINGFISHER UNVEIL ENTICING OFFERS FOR PASSENGERS AND MUCH MORE
6 CRUISING HEIGHTS JUNE 2011
COVER PHOTO: H C TIWARI COVER DESIGN: RUCHI SINHA
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, B240, Okhla Industrial Area, Phase- I, New Delhi-110020.
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AVIATION OUTLOOK 2011 §§ PERISCOPE ¨¨
“ LETTERS TO EDITOR
Whither air cargo security? (May 2011) was very interesting story to read. Aviation is particularly susceptible and seems to get more and more vulnerable after 9/11. air cargo Thus air cargo security also is top priority becomes imminent in this regard. There are numbers of challenges when it comes to air cargo security. 100 per cent screening for cargo planes is the need of the hour as well as striking the right balance regarding the security. Pranay Rai, Kolkata
Policy review “I request new Chairmen of Public Accounts Committee (PAC) Dr Murli Manohar Joshi to highlight the CAG report on Air India.” NITIN GADKARI, BJP President, on the CAG report pertaining to Air India.
Going Green “We have a target to get 30 per cent of our jet fuel from alternative fuels by the year 2030.” KENNETH KOVAL , V P, India operations, FedEx Express, on the use of alternative fuels by FedEx.
CRUISING HEIGHTS www.cruisingheights.in
May 2011 ` 90
ACI lauds India’s airport journey
The Air India tangle
Reality bites
“Railway accidents are probed by an agency of the civil aviation ministry. Then why shouldn't air accidents be probed by an outside organisation?”
security AIR CARGO SECURITY IS NOW ON TOP OF THE LIST NOW THAT FOUR ASSOCIATIONS OF THE GLOBAL AIR CARGO ADVISORY GROUP HAVE SIGNED THE BASIC PRINCIPLES AND GOT DOWN TO WORK
Opportunities aplenty for Eurocopter India
PLUS
SITARAM YECHURY, CPI(M) Leader, on on air accidents not being probed by outside organisation.
Pawan Hans defends its records IATA and CAPA on profitability TNT looks at domestic growth Remembering Yuri’s first flight Those flying Twenties
The focus story Strike (May 2011) gave an interesting insight into the ever-growing problem of Air India. The pilot's strike in Air India has once again brought into focus the state of the ailing carrier. Every now and then, Vayalar Ravi, Minister for Civil Aviation, announces his commitment to make a success of Air India but to no avail and this Air India episode testifies that. The strikes has been part and parcel in the history of Air India. But what becomes all the more important that strikes have become more of a norm than exception. Sooraj Kumar, Vadodara After reading the story Pawan Hans defends itself (May 2011), I think that Pawan Hans company has not resurrected its chequered history. After these incidents, one can only say that Pawan Hans has lost its charm and credibility. This raises serious questions about the charter services in India. The Tawang crash has surely sullied the image of Pawan Hans. Even though, Pawan Hans has repeatedly claimed that its helicopters were properly and regularly maintained, it has little bearing on the disastrous air accidents in the past. Kumar Abhishek, Dhanbad
All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin (East), New Delhi -13, OR mail to cruisingheights@newsline.in.
8 CRUISING HEIGHTS JUNE 2011
In the driver seat “FICCI would suggest ideas on how the implementation of the Goods and Services Tax (GST) would affect taxation in the aviation industry.” DINESH KESKAR, President, Boeing India, on the taxation issues in the Indian aviation industry.
Raising alarm “I'm not saying they should not recruit children of DGCA officials. But if it is an irregular recruitment, the airlines will have reasons to regret.” E K BHARAT BHUSHAN, Director General, DGCA, on the growing practices of nepotism in DGCA.
Still dicey “The second quarter is likely to see continued depressed air travel markets due to the events in Japan and MENA.” GIOVANNI BISIGNANI, IATA Director General and CEO, on the future of air travel markets ahead of events in Japan and Middle East and North Africa (MENA).
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2011 AVIATION OUTLOOK Regal Airport Hotel emerges at top
TOPPING THE CHART: Regal Airport Hotel at Hong Kong International Airport.
COLD STATS
Skytrax recently announced the best airport hotels in the world for 2010-2011. Hong Kong International Airport's And Regal Airport Hotel emerged at the top. While Crowne Plaza of Changi Airport secured second position based on 860,000 survey responses collated over a 12-month period, Sofitel at London's Heathrow Airport stood at third position and Kempinski Hotel, Munich Airport, managed to garner the fourth position. The Fairmont of Vancouver International Airport came fifth. The sixth
position went to Langham Place, Beijing Capital International Airport, while the seventh position was secured by Pan Pacific Hotel, Kuala Lumpur International Airport. Hyatt Regency Hotel of Incheon International Airport bagged the eighth position, Stamford Plaza of Sydney Airport stood at No 9 and the tenth position went to Novotel of Suvarnabhumi Airport at Bangkok.
LOOKING GLASS We've been pushing for a long, long time...It's time it took off...
Continuing good run “Over the last five years, we have seen significant increase in passenger traffic at Chhatrapati Shivaji International Airport (CSIA) and this growth is expected to continue.” G V SANJAY REDDY, Managing Director, Mumbai International Airport Pvt Ltd (MIAL), on MIAL completing five years of operations.
Enticing offers “At Jet Airways, we have always endeavoured to provide our First Class and Premiere guests with an unparalleled in-flight travel experience — including a world-class in-flight product, superb service, and class-leading cuisine.” SUDHEER RAGHAVAN , Chief Commerical Officer, Jet Airways, on the kind of services being offered by Jet Airways to passengers.
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The Q4 results and the outlook ahead he skyrocketing fuel prices had an inevitable impact on the earnings of domestic carriers. But for this factor, the domestic airlines perhaps excluding the state owned would have been in the profit region. In the last one year, fuel prices have risen so much that airlines have become increasingly weary of undertaking faster capacity expansion. With economy continuing to rise, the rising demand in the face of lower capacity expansion seems to have delivered industry-wise increase in seat load factor which the more efficient among the competing carriers have managed to capitalise on. But the rising demand failed to deliver higher yields because there was a limit up to which the rising fuel prices could be passed on to the customers. As we saw in the past any unrestricted rise in fare by way of complete pass through of fuel prices had a debilitating impact on the demand and even pushing it down. This happened in the recession years of 2008-09. Obviously, once bitten twice shy, various Indian carriers did not wish to repeat that mistake. However, in the process it left them in the red. They would have been in even deeper red but for across the board moderate rise in fares by airlines. Jet Airways (India) Limited along with its low cost arm JetLite
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10 CRUISING HEIGHTS JUNE 2011
registered a loss of `200 crore during Q4 of fiscal 2010-11 (Jan-Mar 2011) compared to a profit of `224 crore in the fourth quarter of previous fiscal 2009-10. The rising fuel prices wiped out the profits the airline made in the first three quarters of fiscal 2010-11. Raj Sivakumar, Jet Airways’ Vice President (Network Planning, Revenue Management and Distribution) said: “It is only fuel and nothing else that was a major burner.” For the same level of operation Jet Airways paid additional fuel bill of `343 crore. Overall, Jet’s fuel bill in 2010-11 was `1279 crroe which was `443 crore more than it spent in 2009-10. Compared to a net loss of `420 crore in 2009-10, Jet made a consolidated net loss of `86 crore in fiscal ending March 31, 2011. Compared to last fiscal the net revenue of the airline in 2010-11 rose by 20 per cent to `14737 crore. The loss was contained by aggressive route rationalisation and cost cutting. Jet Airways CEO Nikos Kardassis, said: “While we may not be able to impact external factors, Jet Airways’ relentless focus remains on improving efficiencies and productivity.” Airlines world over have been hit by rising fuel prices and Jet was no exception. Therefore, this could impact traffic growth in the short run but in the medium term the growth outlook may remain intact.
An assessment of the airlines result showed that rising fuel prices and stiff competition impacted Jet Airways profitability as much others. Compared to a net profit of `4.62 crore in the Q4 of 2010, it made a net loss of `107.5 crore in Q4 of fiscal 2011. The impact would have been lower by `58 crore, which the airline had to pay as per the service tax demand raised on it. The fear is the high fuel prices are well on their way to impact the earnings in the first quarter Q1 (April-June) of current fiscal 2011-12 as well. The intensity of the problem is evident from the fact that while in Q4 2010, Jet registered a seat load factor of 75 per cent, this rose to 79.2 per cent in Q4 2011. This clearly meant that the yields had failed to keep pace with rising fuel prices which could not be passed through fully to the passengers for fear of losing passengers. This is evident from the fact that while international operations rose by 18 per cent, domestic rose by 9 per cent and traffic carried by Jet rose by 15 per cent in Q4. Despite all these its yields rose by only one per cent. During fiscal 2010-11, Jet Airways registered total revenues of `14522 crore. On a year-on-year basis and on stand alone basis, Jet made a small profit of `9.6 crore compared to a loss of `467 crore in 2009-10. In the current fiscal 2011-12, Jet Airways is proposing to add 10 aircraft of which four will be for
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replacement of its older aircraft. It is revenues of `6496 crore, which was 23 also expecting two of its Boeing 777 per cent more than the previous year. to be returned in Q1 of 2011-12 by the This was due to increase in foreign carrier which had taken it on passenger traffic and better capacity lease. Once the aircraft are received, utilisation. A major reason for the Jet will replace upgrade the routes better financial performance was the using A 330 with B 777. The A 330 debt recast the airline got from the released will be deployed on its new banks in 2010 which helped it lower international route to Manila and interest costs. While the passenger some Gulf routes. The airline will also soon do a sale-and-leaseback transaction for 10 Boeing-737 aircraft, freeing up around `600 crore for the airline. While the savings on interest would be insignificant, since it would need to pay rentals on the aircraft, the company could retire a small part of its debt. While the company’s total debt is estimated at close to `13,000 crore, the high-cost portion is Vijay Mallya Naresh Goyal approximately `3,000 crore. The company’s net debt-to-equity for the year to March 2011 is estimated by load factor, the airline industry as a analysts to be over 1,100 per cent, whole rose by 6 per cent to 78 per after the announcement of the cent in 2010-11, for Kingfisher it rose company’s results for the December by 9 per cent to 81 per cent. What is 2010 quarter. significant here is that Kingfisher Jet Airways total debt as on date Airlines managed to up its load factor is `13,000 crore of which working and passenger carried despite capital loan alone is `3500 crore. The offering fewer seats following the fear gripping Jet like any other unplanned grounding of some of its borrower is the prospects of rising aircraft. Its fleet size fell by one to 66 interest rate which will surely deliver in 2010-11 compared to 67 in 2009-10. a serious blow to it. It also incurred an excess cost of Kingfisher Airlines suffered a loss `220 crore on account of some of its of `1027 crore in fiscal 2010aircraft being grounded in 11 as against a loss of 2010-11. On the outlook `1647.20 crore in the for this year, Kingfisher previous fiscal 2009-10. It Airlines said the demand did not issue separately continued to be robust results for Q4 of fiscal 2010which was backed by 11 but released the strong macro economic consolidated results. As environment and growth per this, its losses fell by 38 in most industry per cent year-on-year basis segments. Domestic Neil Mils due to restructuring of the capacity expansion is loans as also improved performance expected to remain lower than of the airline. Kingfisher Airlines’ growth in demand resulting in EBIDTA stood at`140 crore as against continued increase in industry load a negative`690 crore in previous fiscal factor in fiscal 2011-12. Yields are 2009-10. This meant a virtual recovery likely to remain stable. of `830 crore over the year. Meanwhile, SpiceJet Ltd The airline reportedly made announced a loss of `59 crore in the operational profits. It clocked annual fourth quarter, compared with a
profit of `27.45 crore a year earlier, because of rising fuel costs. But it managed to swing to a record annual profit of `101.15 crore on the back of its strong first three quarters. The sixyear-old SpiceJet made its first profit (`61.45 crore) in fiscal 2010. Quarterly revenue rose to `759 crore from `573 crore.The carrier needs to raise around $250 million this fiscal to expand its fleet to 43 from 29. Nearly 80 per cent of this fund requirement is already tied up in financing with a Canadian lending agency for Bombardier Q400s, Mills said after the results were announced. The balance $50 million, or around `200 crore, is likely to be infused by the promoters to help “fund the long-term growth”, he said. SpiceJet flies 29 Boeing 737 aircraft with 192 daily flights to 23 cities. This fleet will expand to 43 aircraft with 11 owned Bombardier Q400s and leased Boeing 737s. Mills said international operations will remain at less than 10 per cent of the airline’s total revenue despite the expansion. The focus will remain on the domestic market, which is expected to expand in double digits this year tailing last year’s 18 per cent growth. Some new international cities, besides Kathmandu and Colombo, will be added to the airline’s network depending on the routes granted by the aviation ministry. In the quarter ended 31 March, SpiceJet’s fuel expenses jumped to `395 crore from `214 crore earlier, partly on the back of rising international fuel prices. Fuel prices constitute 30-50 per cent of an Indian carrier’s costs. The fourth quarter “wasn’t as good you would have expected”, Mills said. “There was a 35 per cent jump in (international) fuel cost, but the other difference was the indiscipline in pricing from one of our competitors.” He was alluding to Air India’s dead cheap ticket price strategy to overcome the turbulence in the airline. JUNE 2011 CRUISING HEIGHTS
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INFRASTRUCTURE NEWS IBS DEAL WITH CARGOITALIA Kerala-based software firm, IBS Software Services, has inked a deal with Cargoitalia, an Italian airline, for implementing its cargo management solution, iCargo.The implementation is set to be completed by July. The solution will then manage the entire freight movement of this all-cargo carrier including core-cargo operations from quotes and bookings through capacity and revenue management, track and trace, accounting and proof of deliveries.
NO IPO FOR EMIRATES Emirates chairman and chief executive Sheikh Ahmed bin Saeed al Maktoum has dismissed speculation that the recordbreaking profitable airline will be part of a privatisation initiative by the Dubai government. Sheikh Ahmed said: “An IPO is not going to happen this year or next, beyond that I cannot say as is the decision of the Saeed al Maktoum government. But there is no need to do it.” Given Emirates healthy cash balance, an IPO is beginning to look more of a faint hope as each year passes. There isn’t a pressing need to launch an IPO and one wouldn’t be surprised if this is the stance they hold until the turn of the decade.
GMR AIRPORTS TO RECEIVE $200 MN FDI The government has approved a proposal of the GMR Airports Holding to receive additional foreign direct investment (FDI) of $200 million. This will be in addition to the earlier approval to induct foreign investment of $200 million. The two proposals will result in FDI inflows of `1,920 crore. The foreign investment will be received by way of “subscription
12 CRUISING HEIGHTS JUNE 2011
AF 447 findings vidence gleaned from the Airbus A330’s Air France flight 447 in 2009 that killed 228 people shows the autopilot disengaged after speed readings became unreliable, forcing the two co-pilots in the cockpit to take over, just as the jet traversed a storm. Data from the final minutes indicate the aircraft went into a stall before crashing into the sea, four hours into its flight to Paris. The BEA, France’s flight-accident investigator, has revealed in its initial findings, its first findings from the analysis of the two data recorders. The boxes were retrieved from the bottom of the Atlantic this month, after almost two years of intermittent search missions. The data and voices proved to be intact, allowing the BEA to reconstruct Flight AF447’s last minutes. The aircraft took off on May 31, 2009, in Rio de Janeiro under the stewardship of Chief Pilot Marc Dubois and two deputies. About four hours into the flight, the A330, now cruising on autopilot at an altitude of about 35,000 feet (10,700 metres), passed over an area known as the inter-tropical convergence zone close to the equator where storms produce icy, windy conditions that create
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frequent turbulence. With Dubois taking a routine break outside the cockpit, the two less-seasoned pilots were in charge when the plane’s air speed sensors failed, most likely after icing up. The absence of reliable speed data prompted the autopilot to disengage, data transmitted from the flight has shown. Amid darkness and likely storm turbulence, the two pilots were forced to take control and keep the correct level of thrust on the two engines to maintain the right air speed and pitch attitude, the degree to which the jet’s nose is tilted upward, according to two people who have been briefed on the data recorders. They spoke on condition of anonymity ahead of the BEA’s report. Readings from the flight data retrieved from the sea bed show the jet lost velocity, which led to a lowspeed stall because the plane slowed to the point where its wings suddenly lose lift. While getting out of a stall is part of any standard pilot training, coping with the challenge amid adverse weather conditions, darkness, and a multitude of automated alarm signals may have overwhelmed the flight crew.
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Flydubai take-off with 140 per cent ith plans to increase routes to 40 cities by end of this year, flydubai CEO Ghaith Al Ghaith has set his sights on possibly adding more flights to the Asian subcontinent. The carrier is also on track to launch its holiday packages concept soon. Speaking to journalists recently, the head of Dubai’s low-cost airline’s, however, refused to confirm if India was the destination of choice, saying: “We are certainly looking at going from 36 destinations to 40 by the end of 2011 but it is too early to confirm the new cities we are flying into. “Looking at the demand and numbers, the subcontinent, the GCC, Eastern Europe and the Far East
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routes are all very attractive to us. Expansion into these regions is a natural progression.” When asked specifically about launching more services to India considering in 2009 the airline was forced to postponeits three routes, Coimbatore, Chandigarh and Lucknow, and reimburse passengers due to operational issues, Ghaith said: “This has nothing to do with me. The conversation over landing rights is between the two governments. The dialogue is always going and we are always ready to fly on routes that there is a market for.” Ghaith also confirmed that the airline is expecting a capacity increase of 140 per cent over last year.
Lit may go Konnect in Jet! et Airways plans to bring all its low-fare operations under the Jet Konnect brand and phase out the JetLite brand completely. The country’s largest airline by passengers carried believes that this move will simplify operations and remove the current confusion over two similar low-fare brands— Jet Konnect and JetLite.
ended a messy legal battle between Jet and Sahara India Commercial Corporation. The battle has its origins in Jet’s April 2007 purchase of Sahara Airlines —which operated Air Sahara — and later rebranding it to JetLite. This court order will now enable Jet to carry out several business operations, including developing land, selling and leasing back of planes and rebranding JetLite, all of which had come under a cloud because of the litigation. In 2009, when the aviation business went into a tailspin, Jet had no option but to float a new brand (Konnect) to increase capacity on low-fare routes since it could not do so under JetLite. Analysts point out that now Jet Airways is free to run JetLite the way it likes and take outstanding deliveries of planes from Boeing. Jet Airways JetLite But why does Jet want to Though no timeline is available phase out the JetLite brand? An for this transition, sources in the airline official explained that doing so aviation industry and some officials would create some business class of Jet confirmed that internal seats on low-fare routes. Konnect discussions have been held on aircraft already offer some business phasing out JetLite. These talks have class seats at lower fares whereas gained momentum after the recent JetLite flights are all economy. Bombay High Court order, which
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INFRASTRUCTURE NEWS to compulsorily convertible preference shares of face value of `1,000 each pursuant to Foreign Investment Promotion Board recommendation in its meeting held on February 15, 2011”, an official statement said.
CM SEEKS GRANT FOR 3 NEW AIRPORTS IN UTTARAKHAND Uttarakhand Chief Minister Ramesh Pokhriyal Nisahank has sought the development of three new airports in the hill state. Nishank said the Centre should develop — Naini-Saini airport in Pithoragarh district, Chaniyalisaur in Uttarkashi and Gauchar in Chamoli district with the cent per cent Ramesh Pokhriyal “infrastructure grant”. “All these three airports are located near the international borders which are strategically very important,” he said in a representation to Montek Singh Ahluwalia, Deputy Chairperson of the Planning Commission. The Chief Minister cited the examples of Pakyong airport in Sikkim, Itanagar in Arunachal Pradesh and Cheithu in Nagaland, which are being developed. The three airports in Uttarakhand can also be developed by the Airports Authority of India similarly, Nishank emphasised. The development of the three airports would not only give fillip to the tourism sector in the hill state but also help in providing quick relief during the time of natural disasters, he said.
DURGAPUR AIRPORT TO BE READY BY 2012
The Durgapur Airport city promoter, Bengal Aerotropolis Projects Ltd (BAPL) expects the state government to hand over the last portion of 525 acres by July, concluding a 30month ambitious process to acquire 2,345 acres. The last tract
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Hurrah for Bisignani, hello to Tyler
of land includes those in Andal, Badur and Dubchuria moujas. Anticipating a commissioning date in July 2012, BAPL officials held talks with SpiceJet and IndiGo on April 27 and presented passenger potential statistics through trend analysis, travel agents’ feedback and a market research survey. Route planning data prepared by Changi Airports after analysing traffic studies showed the potential to operate twice daily flights to Delhi with Airbus 319/320 or Boeing 737800/900 aircraft and one flight each on Bagdogra-DurgapurMumbai and GuwahatiDurgapur-Chennai/Bengaluru sectors daily with similar aircraft. This is apart from a daily ATR services to Kolkata. SpiceJet and IndoGo apart, the carrier has held preliminary talks with Air India, Jet Airways and Kingfisher Airlines to operate regional flights. “The response has been encouraging. A clearer picture will emerge when we will be closer to the commissioning stage."
t will be Giovanni Bisignani’s last hurrah and the first for Tony Tyler and there will be plenty of emotions when the International Air Transport Association (IATA) heavyweights meet for the 67th Annual General Meeting (AGM) in Singapore from 5 to 7 June 2011. This will be the third time that Singapore will host the IATA AGM. The first time was in 1976. The last time was in 2004 when the industry took the historic decision to move to 100 per cent e-ticketing globally This year, the AGM will take place as the industry continues its recovery from the global financial crisis. The meeting’s agenda will comprise the major topics facing air transport today, including the drive for even better environmental performance, the impact of rising fuel prices on weak industry profitability and efficiency gains through technology. One highlight of the event will be a long-term look at aviation’s future with the presentation of the results of IATA’s Vision 2050 initiative. The 67th IATA AGM was originally scheduled to be held in Cairo, Egypt. “We regret not being able to host this event in Egypt as originally planned. We look forward to hosting a future AGM in
NAVI MUMBAI AIRPORT CLEARS FINAL HURDLE
The steering committee of the Union Civil Aviation Ministry has cleared the final hurdle for the Navi Mumbai international airport. The stamp of approval to the master plan was given at a meeting held in New Delhi. The airport will be developed in four phases with 2014, 2017, 2025 and 2031 as deadlines with a capacity of 60 million passengers per annum by the end of 2031 as against 10 million passengers per annum at Mumbai international airport. The Civil Aviation Ministry
14 CRUISING HEIGHTS JUNE 2011
I
Giovanni Bisignani
Egypt when its political transition is complete,” said Bisignani. Bisignani joined IATA as Director General and CEO in June 2002. Since that time, he has reshaped and refocused the organisation to better serve its global membership of 230 airlines with a mission to represent, lead and serve the air transport industry. Bisignani’s agenda of change has impacted the industry’s top priorities through programs such as the IATA Operational Safety Audit, the first global standard for airline safety management, and “Simplifying the Business,” which uses technology to bring convenience to travellers and cost reduction to airlines. Most recently, Bisignani put IATA in the centre of the debate on climate change and aviation, uniting the industry in a drive to achieve carbon neutral growth and eventually zero-carbon emissions. Before joining IATA, Bisignani launched the Opodo travel portal and was CEO and Managing Director of Alitalia. He has been a member of the Pratt & Whitney Advisory Board, chairman of Galileo International, and held senior positions at Citibank. The now incoming DG,Tony Tyler is a classic industry insider having retired from the top job at Cathay Pacific just months back. If Bisignani is feisty and tough as nails, Tyler is suave and silken smooth but with the same steely determination that had Tony Tyler made Bisignani’s tenure so memorable.
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DGCA stripped of probe powers he Directorate General of Civil serious impact on the airlines Aviation (DGCA) will no longer insurance premium and has been be the three-in-one investigatorsuspected of being manipulated in prosecutor-judge combine when it the past, said a senior official. comes to investigating serious air Under the new system, reports of mishaps. any mishap will be sent to the The government has DGCA along with a copy issued an order to set up to the panel. The panel an independent panel will also follow up under the Civil Aviation implementation of the Ministry that will take help safety recommendations from independent experts made with every probe to investigate accidents report. It will also advise and serious incidents. The the DGCA from time to panel will conduct the time on accident probe independent of the prevention steps, said Bharat Bhushan DGCA. The demand for sources. having an independent investigator The government studied various gained momentum after last year’s models for deciding the shape of the Mangalore crash and the recent independent probe panel. Usually, spate of incidents in Pawan Hans. probe panels are kept away from the The accident investigation committee department whose accidents they will have five officers apart from would probe to have a fair and independent resource personnel independent report with low chances whose help they can take. The panel of manipulation. For instance, the will classify a mishap as accident or agency probing railway mishaps serious incident as this rating has comes under the aviation ministry.
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PM on AI and other issues rime Minister Manmohan Singh acknowledged that national carrier Air India was passing through a “difficult phase”, but sought to put the blame for the situation on global recession and high costs of operations. “Air India is passing through a difficult phase as a result of global recession and high cost of operation. Equity support has been injected in 2010 and 2011. Turn-around plan of Air India is being closely monitored,” Singh said in the report — “Government of Arvind Jadhav the UPA: Report to the people”— on completion of two years of UPA-II. He also praised public sector helicopter service Pawan Hans, which has been in the news for the wrong reasons due to a spate of crashes recently. “Pawan Hans has introduced sea plane operations in Andaman and Nicobar Islands as a
P
pilot project to connect Port Blair and Havelock and other islands in North Andaman,” Singh said. He lauded some of the achievements of his government in the field of civil aviation like completion of Phase-I work of Indira Gandhi International Airport and Terminal 3 becoming operational in July 2010. The IGI airport, which can handle 34 million passengers per annum, was adjudged the fourth best in the Manmohan Singh world. Two mega projects are being undertaken at Chennai and Kolkata airports for their modernisation and development. Singh said India participated in the Assembly Session of the International Civil Aviation Organisation held in 2010 in which it was re-elected to the Council of ICAO.
INFRASTRUCTURE NEWS will now hold another meeting with CIDCO, which is the nodal agency for the airport project, within the next two months to select the Request for Proposal (RFQ) — the process of shortlisting developers for the project. While clearing the airport project, Civil Aviation Secretary Nasim Zaidi asked CIDCO to put on hold the proposed demolition of a hillock till the developer is finalised. CIDCO had sought permission to demolish the 92metre hillock on the airport site. The meeting was also attended by Airports Authority of India (AAI) chief Vijay Agarwal and CIDCO chief Tanaji Satre. The Civil Aviation Ministry also took a review of the land acquisition, shifting of the electricity towers on the plot and rehabilitation of villagers that get affected with the project. To ensure that the proposed Navi Mumbai international airport doesn’t face problems similar to those at Mumbai airport caused by the cluster of slums, CIDCO has decided to keep 370 hectares around the new site as a nodevelopment zone. Meanwhile, In an effort to study how cities having more than one airport distribute air traffic amongst themselves, CIDCO officials have spent a week in the US during which they visited New York City, Washington DC and Miami. The Navi Mumbai airport, the second airport in Mumbai, will handle one crore passengers initially. Bids for developing the project will be invited later this year. The Navi Mumbai airport needs a total of 2,020 hectares of land. Recent reports suggest that out of this, 1,333 hectares are already with CIDCO, another 263 hectares of government land is in the process of being transferred to it. 424 hectares of private land is still to be acquired.
AAI FOR REGIONAL HUBS The Civil Aviation Ministry has agreed in principle to develop Guwahati, Agartala, Imphal and
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SIA forms budget long-haul carrier ingapore Airlines (SIA) will set up a low-cost, long-haul airline as Jetstar and AirAsia X to lure intercontinental travelers with cheaper fares. The new airline will begin flights within a year, using widebody planes. The unit’s name, management and route network will be announced at a later date, it said. It will initially source the widebodies from SIA. The airline has
S Guwahati Airport
Dibrugarh airports in North-East as regional hubs. To begin with, the related works for developing regional hub at Guwahati is expected to start in June. The ministry has also agreed to the demand of Ministry of Development of North-Eastern Region (DoNER) to increase flights to Lilabari and Tezpur airports in Assam, which are close to Arunachal Pradesh’s capital Itanagar. Lilabari airport will now have five daily flights, connecting Kolkata and Guwahati. Similarly, Tezpur too will have five daily flights to Guwahati and Jorhat and one weekly flight to Silchar and Kolkata. The foundation stone for the regional hub in Guwahati is expected to be laid soon. This will help in night parking of aircraft at Guwahati and early morning operations to the interiors of the region. Both the ministries have also agreed to establish a composite training school for ground-level staff for navigation and aircraft maintenance at Lilabari, Assam. Land has already been acquired by Assam government and the project will be funded by North Eastern Council (NEC). Bangalore International Airport Limited, the operator of the Bengaluru International Airport, has said that the expansion of the passenger terminal building will commence during June 2011. The terminal is currently spread over an G V Sanjay Reddy
16 CRUISING HEIGHTS JUNE 2011
some Boeing 777-200s and Boeing and it may add services to north Asia 747-400s that it is planning to phase and southern Europe this year. The out this year. It could have these carrier was then touting fares 30 per reconfigured for the new long-haul, cent cheaper than rivals. low-cost carrier. Industry executives Qantas has also used Jetstar to say SIA is more likely to use the take over or begin routes that weren’t Boeing 777s for the new outfit profitable enough for the mainline because they burn less fuel than the operations. The budget unit has been 747s. able to support these flights because According to CAPA (Centre for its costs are as much as 40 per cent Asia Pacific Aviation), it is believed lower than the Qantas-branded unit’s. the new airline will be a point-toThe carrier is now the fastest-growing point carrier and will have a flying business at Sydneycompletely separate based Qantas, contributing management team and a about a third of earnings completely different before interest and tax in brand than SIA. This the six months ended Dec. will ensure that the new 31. airline captures new AirAsia X, partly segments of the market, owned by AirAsia Bhd. and rather than takes traffic Richard Branson’s Virgin away from the mainline Group Ltd., flies to London, carrier. Australia and Japan from SIA declined to say its Kuala Lumpur hub. The which routes the new airline plans to more than long-haul, low-cost triple its fleet to 38 planes Goh Choon Phong carrier will serve, but it from 11 by 2020. Tiger Air, could end up targeting markets AirAsia and other budget similar to those operated by AirAsia carriers have won market share in X, a long-haul, low-cost carrier based Asia as they add new planes and in Kuala Lumpur. One of AirAsia X’s introduce more routes. Low-cost major markets is Australia, where it airlines’ passenger numbers jumped has had success winning over 26 per cent at Singapore’s Changi students and price-conscious leisure airport last month, more than double travelers. This is a consumer segment the pace for full-service carriers www.straitstimes.com
BIAL TO EXPAND TERMINAL
that SIA hopes to tap with its new carrier. Singapore Air faces increasing competition on long-haul routes from the Singapore-based unit of Qantas Airways Jetstar arm. Jetstar began flying from Singapore to Melbourne in December, offering both economy and businessclass seats. The carrier has also started Auckland flights,
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A brand makeover for the Maharaja
INFRASTRUCTURE NEWS
Even as Air India tries to raise its head from the depths it finds itself in, moves are on to improve its image. Air India’s inflight magazines — the 35-year-old Swagat produced by Media Transasia for erstwhile Indian Airlines and Namaskar produced by CMYK Printech Ltd for erstwhile Air India— have been discontinued with a new one. Kamaljit Rattan, Air India Corporate Communications Chief said: “With national and international flights having one single code — AI, there is no point of having two separate inflight magazines for the merged single entity. ”
area of 70,000 sq metres. On completion of the expansion work, the terminal area will be doubled. The terminal capacity will be increased to over 17 million passengers a year, with the flexibility to expand to 20 million. This is expected to meet the traffic demand for the next few years. Simultaneously, a comprehensive review of the master plan is under way. “With the commencement of the terminal expansion, we hope to alleviate any hurdles being faced by passengers today. On its completion, we envision an enhanced airport that befits the city of Bengaluru, enhances its business opportunities, complements its culture and welcomes its visitors,” said G V Sanjay Reddy, Managing Director, Bangalore International Airport Limited. The design of the expanded terminal will sport an enhanced and modern design elevation and will be completed approximately 18 months from the commencement of the construction. The construction partners for the project chosen are Larsen & Toubro, through an international competitive bidding process. The enhanced terminal is aimed at significantly improving passenger experience, making access to seating, amenities and commercial facilities easier and better
Air India did a series of presentations to various stakeholders to point out that the airline now needed just one magazine. Rattan emphasised the fact that one publication would go a long way to build the brand image of Air India. However, tenders were floated and the contract for a single magazine has been awarded to Maxposure Media for three years. The magazine, to be known as Air India Magazine, will be available on both international and domestic flights. But one will miss the old brands, particularly Swagat, the first of India's inflight publications.
Branson closing on alliance ichard Branson said he’s in talks with as many as three potential suitors for Virgin Atlantic Airways Ltd. and that he’s likely to reach a decision on a partnership sometime in the next quarter.”Discussions with two or three parties are progressing,” Branson told journalists and added, “Within the next two or three months we should be clear on whether there’s an alliance we’re happy with or not.” The airline has hired Deutsche Bank AG to assess Virgin Atlantic’s strategic options as rivals British Airways and American Airlines boost cooperation on key transAtlantic routes. The entrepreneur, who founded the U.K. carrier in 1984, said that while joining an alliance is essential, it’s not yet clear whether he will sell down his 51 per cent stake.”I’ve always made clear that I would still be very much involved,” Branson said. “My principal interest is in the alliance. If it means selling shares, we’ll consider that.”The fate of a 49 per cent stake in Virgin Atlantic held by Singapore Airlines Ltd., which could determine control of the company, will probably turn on the choice of alliance, he said.
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DELOITTE PICKS HOLES IN AIR INDIA’S REVIVAL PLAN Casting doubts on Air India’s turnaround plan, Deloitte Touche Tohmatsu India said that the airline has overplayed its revenue, yield and market share growth projections while understating a likely increase in fuel and staff expenses. The consultancy criticised Air India’s assumption that fuel www.peakoiltaskforce.net
Richard Branson
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18 CRUISING HEIGHTS JUNE 2011
shrunk and load factors dropped, while low-cost carriers continued to expand rapidly and improve their load factors. In the fiscal year ending March 2011 (FY 2010-11), SIA transported 16.6 million passengers. A decade earlier, in FY 2000-01, SIA transported 15 million passengers. This represents only 11 per cent growth over the last 10 years, or a paltry 1.1 per cent per annum. Total traffic at Changi during almost the same period (from calendar 2000 to calendar 2010) increased from 28.6 million to 42 million passengers, representing 32 per cent growth over the decade or 3.2 per cent per annum. SIA is poised to become only the second full service carrier in the world (after Qantas) to establish a long-haul low-cost subsidiary. The other successful combination, also based on connecting and complementing the parent carrier is that of AirAsia X, whose model has depended so much on the growing ability for low-cost operators to network their operations.
Boeing 787 set for August delivery oeing narrowed its target date for delivery of the first 787 Dreamliner as it announced plans to run mock commercial flights with the first customer, Japanese carrier All Nippon Airways. Boeing said in a statement it planned to deliver the first plane between August and September. Using the second flight test aircraft code-named ZA002, Boeing said it planned to carry out test flights in Japan together with ANA to help prepare for real operations. The in-service test flights will
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take place in the week of July 4. Boeing expects to fly the Dreamliner between Haneda Airport in Tokyo and airports in Osaka, Okayama and Hiroshima. During the July validation, ANA’s maintenance crews will also practise maintenance and servicing of the 787. “This will include typical ground-servicing activities, fit checks of airplane jacks and maintenance hangar stands, towing and refueling the airplane, and other routine maintenance operations,” said Boeing.
www.jyi.org
costs, which account for nearly 40 per cent of an airline’s operating expenses, would not rise. In December 2010, Deloitte was appointed to review the turnaround plan drafted by SBI Caps and Air India. The underlying theme of the Deloitte report is that the turnaround plan is not feasible and is riddled with wrong assumptions leading to ambitious projections and realisations. In short, it is not realistic and workable. Deloitte has also questioned Air India’s fleet acquisition plan, indicating that such a strategy could actually lower yields and have adverse financial implications. Aviation consultancy Simat Helliesen & Eichner, which carried out a detailed route planning and capacity exercise, has suggested 87 narrow-body aircraft for Air India by 2015, but the carrier has proposed 143, according to Deloitte’s report dated February 11, 2011. “The only justification that one can have for going in for such capacity expansion can, therefore, be the adoption of a strategy of buying market share through deploying high capacity into the market (with corresponding lower yields and consequent financial implications),” Deloitte said. On Air India’s plan to increase widebody aircraft to 54 by 2014-15 from 30 at present, Deloitte says that before buying these planes, the airline’s priority should be to increase the passenger load factor (PLF) on existing routes. Air India, which witnessed almost constant flat yields over the last five years, expects yields from wide-body aircraft to grow at roughly 5 per cent per annum and at 3 per cent per annum from narrow-body aircraft. “In effect, therefore, Air India has assumed that all three factors — capacity, PLF and yields — will witness simultaneous increase. In a competitive scenario, this assumption seems ambitious and reflects the best-case scenario,” Deloitte said.
“We are seeing a new market segment being created and this will provide another growth opportunity,” said Chief Executive Goh Choon Phong in a statement. “As we have observed on short-haul routes within Asia, low-fare airlines help stimulate demand for travel, and we expect this will also prove true for longer flights. At the same time we remain fully committed to the further growth of SIA, which will continue to offer the highest-quality products and services to our customers,” he adds. The surprising, but also potentially far reaching, announcement could signal much more than merely another example of an Asia Pacific long-haul low-cost operation. For Singapore Airlines it marks a major refocus of its long-term strategy—restoring growth and catering more effectively for the burgeoning leisure market. Over the last several years SIA has seen its share of its home market steadily drop as low-cost carriers have rapidly expanded. This trend accelerated in recent months as SIA’s traffic has
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AVIATION OUTLOOK 2011 §§ TRAFFIC DATA ¨¨
PASSENGERS CARRIED BY SCHEDULED DOMESTIC AIRLINES
Passengers carried by domestic airlines during Jan-Apr 2011 were 190.02 lakh as against 160.42 lakh during the corresponding period of previous year thereby registering a growth of +18.4 per cent.
Pax Carried (in Lakhs) 250
2010
2011
Growth
- YoY(+18.4%) - MoM(+11.5%)
190.02
200
REASONS OF CANCELLATIONS
Commercial 4.7% Operational 64.8%
Consec/Misc 13.6%
160.42 150
Weather 4.5%
100 46.71
41.88
50 0
YoY
Technical 12.4%
MoM
ON-TIME PERFORMANCE FOREIGN CARRIERS
70 foreign carriers operating to/from India. At the time of compilation of this report, OTP data of 55 carriers was received. On-Time Performance (Apr 2011): On-Time 82.1%
ON-TIME PERFORMANCE FOREIGN CARRIERS
On-Time 80.7% Very Late (30-44m) 4.1%
Very Late (15-29 min) 9.0% Excessive (> 44 min) 5.0%
Late (15-29 m) 10.4%
Late (30-44 min) 3.9%
Excessive (> 44 m) 4.8% 81.2% (Arrivals)
79.9% (Departures)
Air traffic registers marginal growth he month of April 2011 witnessed decrease in seat factor as compared to previous month primarily due to lean season. Passengers carried by domestic airlines during Jan-Apr 2011 were 190.02 lakh as against 160.42 lakh during the corresponding period of previous year thereby registering a growth of + 18.4 per cent. The market share of domestic passengers carried by the scheduled airlines in April 2011 was: IndiGo: 19.7 per cent; Jet Airways: 17.5 per cent and Jet Lite: 7.3 per cent (Jet Airways + JetLite = 24.8 per cent);
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19 CRUISING HEIGHTS JUNE 2011
Kingfisher: 20 per cent; Air India (Domestic): 15.4 per cent; SpiceJet: 13.6 per cent and GoAir: 6.4 per cent. The overall cancellation rate of scheduled domestic airlines for the month of April, 2011 was 2.3 per cent. The cancellations by domestic carriers were: IndiGo (0.4), GoAir (0.4), SpiceJet (1.1), Jet Airways (1.1), Kingfisher (0.8), Air India-Domestic (8.9) and JetLite (2.3). The major cause of cancellation was due to operational (64.8 per cent) followed by miscellaneous reasons (13.6 per cent); weather which accounted for
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2011 AVIATION OUTLOOK ON-TIME PERFORMANCE (OTP)
CAPACITY VS DEMAND
Scheduled Domestic Airlines, Overall OTP (Apr 2011)-88.1% % of Total Ops
40
OTP
30
100
20
92.5
92.2
92.4
91.8
% change over Month
120 91 80.9
80
77.4
60 40 20
21.6
23.3
15.1 4.7
0 Jet Airways
10.8
6.5
10 0 -10 -20
17.9
-30
4.7
-40
May
Kingfisher SpiceJet Air India (Dom) JetLite On-Time Performance (%)
Go Air
IndiGo
MARKET SHARE OF SCHEDULED DOMESTIC AIRLINES IndiGo 19.5%
Jun
July
Aug
Oct
Sep
Jan
Feb
Mar Apr
SEAT FACTORS OF SCHEDULED DOMESTIC AIRLINES
The month of Apr 2011 witnessed decrease in seat factor as compared to previous month primarily due to lean season. Mar. 11
Apr. 11
100
Seat Factor (%)
JetLite 7.3%
80
Jet Airways 17.5%
Kingfisher 20.0% SpiceJet 13.6%
76.7 60
61.1
68.1
69.2
66
80.4 79.8 72.1
82.1 75.4
71.7
78
81.2 78.6
40 20 0
Air India
Jet Airways
JetLite
Kingfisher
GoAir 6.4%
CANCELLATION DATA OF SCHEDULED DOMESTIC AIRLINES Overall Cancellation Rate in Apr 2011 – 2.3%
GoAir
0.4
IndiGo
0.4 0.8
Kingfisher
1.7
Go Air
1.7
Air India (Dom)
1.9
Jet Airways
1.1
JetLite
2
JetLite
1
2.3
IndiGo 4.1
Air India 2
3
4
8.9
2.4
SpiceJet 5
Cancellation Rate (%)
IndiGo
GoAir
Total number of complaints (Apr 2011) — 1090 Number of passenger-related complaints — 2.4 per 10,000 passengers carried.
1.1
2.3
SpiceJet
PASSENGER COMPLAINTS OF SCHEDULED DOMESTIC AIRLINES
SpiceJet
0
Dec
Nov
Year-over-Year
Air India (Dom) 15.4%
Kingfisher
Demand (RPKM)
Capacity (ASKM)
4.1
Jet Airways 0
1
2
3
4
5
No.of Complaints/10,000 Pax
4.5 per cent. The other causes were technical (12.4 per cent), commercial (4.7 per cent). During the month of April 2011, total number of 1090 passenger-related complaints had been received by the scheduled domestic airlines. The number of complaints per 10,000 passengers carried for the month was 2.4. Jet Airways recorded the highest numbers of passenger complaints (4.1) while GoAir was the lowest (1.7). The other carriers recorded: SpiceJet (2.4), JetLite (2), Kingfisher (1.7) and Air India — Domestic (1.9).
The overall On-Time Performance (OTP) of scheduled domestic airlines for April 2011 was 88.1 per cent. A majority of delays have been attributed to reactionary causes (57 per cent) while weather (2 per cent), government authorities (9 per cent) and miscellaneous reasons (9 per cent) were second biggest causes of delay. Jet Airways had the highest OTP of 92.5. Other airlines' OTP in the month were: IndiGo (92.4), Kingfisher (91), JetLite (91.8), Air India —Domestic (77.4), Spicejet (80.9) and GoAir (92.2). JUNE 2011 CRUISING HEIGHTS
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A battle royale In early January this year, Ulrich Schulte-Strathaus, Secretary General, Association of European Airlines, made a stinging speech at the Aviation Club in Washington where a large portion of his remarks focussed on the woes that airlines face in competing with the giants — Emirates, Qatar and Etihad - from the Middle East. Weeks later, the charismatic Akbar Al Baker gave Schulte-Strathaus a dose of his own medicine with a point-by-point rebuttal that caused waves globally. In the wake of the Air India strike and the large number of comments on how the Gulf is inundating India, here are two sides to the picture: …After a conference I attended recently in Munich, I spoke to the waitress in a restaurant who told me she would go on vacation to Thailand. I asked which airline she would fly on, thinking of my member airlines, of course. She replied that her first choice was “evidently” Emirates. “Evidently”? Well, in case the news passed you by, in 2009 Emirates became the world’s largest international airline, in passenger-km terms. For a large proportion of European travellers, it offers a one-stop transfer product to all the major Asian, Australasian and African destinations. And it is growing, massively. Its CEO is on record as saying that its planned fleet of 90 A380 superjumbos could be increased to 120 if stand capacity were available at its Dubai hub. And, I suspect, for the reasons that I explain in a minute, Dubai will certainly accommodate Emirates’ need for yet further capacity on the ground. Now — in case you’re not aware — the United Arab Emirates has two main commercial centres, the other being Abu Dhabi, just 75 miles away. Each has its own airline with global aspirations — the Abu Dhabi carrier is Etihad, smaller than Emirates but growing more quickly. These airlines are owned by their respective governments, and operated as an instrument of national strategy (if ‘national’ is the right word within this regional rivalry), and they are integrated vertically across commerce, tourism and foreign policy — as our Canadian friends have recently discovered. For them, the airlines are just a part — a tool — of this vertically-integrated economic chain. But the phenomenon is not restricted to the United Arab Emirates. Just up the desert highway about 230 miles from Dubai and 185 miles from Abu Dhabi is the city-state of Qatar, whose airline also has global aspirations, and is -- you guessed it -- growing. These three airlines have more widebody seats on
order than the entire US industry has in its current fleet. [I’ll pause to let you reflect on that — the total longhaul lift capability of Delta-plus-United-plusAmerican-plus-Continental-plus-US Airways doesn’t match up to the order book of just these three Gulf airlines]. 425 brand-new longhaul aircraft in the next five years — where will they fly? The answer, of course, has to be everywhere. Looking to the West of the Gulf hubs, we can expect further saturation of Europe, but also increased penetration of the US market. And Canada. To the East, the emerging economic superpowers of India and China are obvious candidates, but so, too, are other Asian countries — Japan, Korea, Thailand, Singapore, Malaysia, Indonesia, Vietnam,
“Do not impose policies extra-territorially”
ULRICH SCHULTE-STRATHAUS
22 CRUISING HEIGHTS JUNE 2011
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2011 AVIATION OUTLOOK I recently came across the remarks made by SchulteStrathaus, Secretary General of the Association of European Airlines, about how global competition needs to be addressed by the International Civil Aviation Organisation, similar to what the industry is calling for in the domain of the environment. He focussed on the competitive pressure that airlines from the Gulf are posing on their counterparts elsewhere. Usually I would choose not to comment directly on calls to find ways to limit the growth of the Gulf carriers, including Qatar Airways. However, because Mr Schulte-Strathaus chose to address one of the august forums of aviation visionaries in the world, I thought I needed to put the record straight. In his remarks, Mr Schulte-Strathaus included a number of “facts” which I beg to disagree with. The first is that the geographical proximity of Doha, Dubai and Abu Dhabi gives rise to an anomaly in aviation. The fact of the matter is that having a multitude of hubs in close proximity is common: Paris, Amsterdam, and London; Singapore and Kuala Lumpur; the airports of New York and so on. Therefore, having three major hubs within a 280 miles radius is not a novelty. He also raises the issue that the governments of Qatar and the UAE consider the airlines of the Gulf part of national strategy and a “tool of a vertically integrated economic chain”. Again, he is trying to highlight a norm rather than an anomaly in the current geopolitical structure. Can he tell me of any country of the world which does not consider its air transport industry, be that an individual airline or a multitude of them, part of national interests? Was it not the case that the US government provided its airlines with cash outlays and tax breaks, as well as war insurance subsidies after September 11 in order to
ensure the continuity of the US air transport industry? Mr Schulte-Strathaus goes further in saying that two of the Gulf airlines have never made a profit. First of all, I would like to ask him how does he know that since Etihad and Qatar Airways are not publishing their financial reports as yet? But from the principle standpoint: If profit was the only reason, why airlines buy airplanes, as he is insinuating, then the net result of buying new airplanes in this industry should have been negative during the last decade. The average age of our fleet is around five years only. We do not keep airplanes operating for 20 to 30 years. Therefore, you will find that in order to maintain the lowest cost in seat mile, and the greatest appeal to customers, our order book is higher than elsewhere because we maintain a young fleet. The crux of the matter in what Mr SchulteStrathaus is saying lies in his remark: “These (Gulf) airlines are efficient, they have extremely low unit cost yet deliver consistently high service quality. They also have the full support of their domestic political institutions.” I couldn’t say that better! Is it a mistake to be efficient and to have a low-unit cost? Is it wrong for governments to be supportive to its national interests? Is he advocating that airlines which have high-unit cost and do not deliver consistently high-service quality should be protected from efficient low-cost and high-service airlines? Mr Schulte-Strathaus is saying that we are driven by a “policy which is not compatible with that of the US, Europe, Australia, China, Canada, and so on.” I’m really lost here! Most of these governments are signatories of the Agenda for Freedom brokered by IATA, which calls for free market access. In
“European airlines should accept competition”
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AVIATION OUTLOOK 2011 and so on. And, then there’s Australia and New Zealand. And South America. You get the picture. Here I ask: Does growth of this magnitude really make sense? After all, the population of Dubai is just 2.3 million people, about the size of Pittsburgh and smaller than Baltimore. Qatar, at 1.4 million, is smaller than Providence, Rhode Island’s metropolitan population, and Abu Dhabi, at just under 900,000, is about the size of Fresno, California or Tulsa, Oklahoma. So, again, I ask: “Does growth of this magnitude make sense?” I am sorry to confuse you, but the answer is a clear yes, and no. But, who am I kidding? This is Washington, where lawyers and lobbyists— I know that’s most of you — make your living taking both sides or moving between them, so “yes and no” makes perfect sense in this city and this crowd. The “Yes” answer is that, yes, it does make sense even for a region with, in global terms, a limited population size, to invest heavily into infrastructure, if the investments generate a sufficient return. And evidently, the Emirates of the Gulf region is satisfied with the value-added created by its investments or believe that in the long-run these investments will generate macroeconomic, vertically-integrated returns of the magnitude sufficient to warrant the investment. But does it make sense for airlines and travellers worldwide if three carriers -- two of which have never made a profit -- collectively commit $ 100 billion to transforming the aviation map of the world? I do not know the answer, but the situation
fact, even the Director General of IATA, Giovanni Bisignani, recently called upon the Canadian government to respect the liberal market access principle and avoid protectionism. Does Mr Schulte-Strathaus advocate that this policy of liberalisation should only apply when his member airlines are the beneficiaries? Doesn’t Mr. Schulte-Strathaus consider the control over the overwhelming majority of slots in a highly-congested region — a lopsided support to national airlines against new entrants, including airlines, which are coming from airports where European airlines can operate freely, without any reciprocity in terms of slots quality? Mr Schulte-Strathaus is finally requesting governments to prevent additional market access in the short term. Perhaps, he should also ask governments to forego liberalisation policies, deregulation and why not foregoing market economy and resort to protectionism, inefficiencies, cartel price fixing, and anticonsumer behaviour. Where would
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makes me uneasy. I am not paranoid, although this is an accusation frequently used when Europeans speak out about Gulf carrier expansion. Make no mistake -- these airlines are efficient, they have extremely low-unit costs yet deliver consistently high-service quality. They have clarity of vision and decisiveness of action. They also have the full and enthusiastic support of their domestic political institutions. My point is this: In a market of double-digit growth, airlines that have long-haul aircraft fleets which dwarf those of their international competitors are being driven by a policy which is not compatible with that of the US and Europe, or, I suspect, Australia, China, Japan, Canada, Mexico, Brazil, Chile, Korea and so on. You get the picture. How does a European or US airline compete in the short- medium and long-term? Or, a Canadian, Japanese, Australian, Brazilian carrier compete? In the short term, the answer could be to ask governments to prevent additional market access. But stalling growth opportunities for airlines is not synonymous for “another year gained”; it is tantamount to “another year lost”. The purpose of an aviation policy cannot consist of intervening in commercial airline decisions. The purpose of regulatory activity must be to provide for safety, of course, but also to address imbalances, divergences of policies, and distortions to competition. So the answer is ensuring that the governmental policies converge. That should not be done by imposing one’s own policies extraterritorially.
protectionism end if his calls are heeded by the governments? Isn’t it the right of any consumer to get access to the best prices and the best value for money? If Europe is not investing enough in aviation infrastructure, and if Europe had developed a cost base, which is becoming burdensome on some of its old establishments, and if Europe is not addressing the cost of its social safetynet in a way which maintains a competitive posture for its airlines, should then the European consumer be penalised by depriving him from cost-efficient aviation services? And where does this protectionism end? Would the next target be the European low-cost carriers because they managed to provide competitive services to the members of AEA? I believe the answer is clear. The European airlines were pioneers in a large number of areas. We in the Gulf airlines community have learnt a lot from them. They should accept competition and the customer being in the driver’s seat.
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§§ AIR SHOW ¨¨
So what’s the news for Paris? FOR ONE, DESPITE THE YO YO NATURE OF THE RECOVERY THIS YEAR, THE SIGNS ARE GOOD. THE AIR SHOW ORGANISERS REPORT THAT EXHIBITION SPACE HAS BEEN FULLY BOOKED SINCE THE END OF JANUARY — THE FIRST TIME THIS HAS HAPPENED IN THE SHOW’S HISTORY, WITH SOME 2,000 EXHIBITORS SET TO ATTEND. AND THE ORGANISERS SAY THAT THE SHOW WILL SEE SOME 340,000 VISITORS PASS THROUGH THE GATES.
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2011 AVIATION OUTLOOK n terms of commercial news, perhaps the biggest is that Boeing is not announcing any 737 `replacement` at Paris. It was expected that the American manufacturer would make its proposition known in response to Airbus A320neo. Instead it is expected to ‘clarify’ its thinking on a 737 successor. Boeing hasn’t been able to make up its mind on a re-engined 737 as a me-too product— whose costs are prohibitive. In any case the timeline for next-generation engine remains closer towards the end of this decade. However, a 737 replacement reveals or product launch also seems out for the moment. The company has hinted from day one that it would prefer a clean sheet option to any bid to tamper with the present product. But its woes with the 787 seem to have put any plans to seriously examine the 737 options in the backburner for the moment. But one thing is for sure, there will be plenty of discussion on the Boeing options at Paris--
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Single-or twin-aisle? open-rotors? Much food for thought. But the Dreamliner scheduled to begin services with ANA and Air India later this year will be on display at the show as will the 747-8I. However both aircraft will be in the static section in keeping with Boeing policy of not taking part in flying display. Their scheduled appearance at the Paris air show is also in keeping with its flight test programme. Both are behind schedule and are now in the final stages of their certification process. It is expected that they will be cleared for commercial flying closer towards October. While commercial aviation is improving, the military side remains gloomy. Severe cuts in the defence budgets in the UK, France and other European nations translates into far fewer programme opportunities. Across the Atlantic, even in the US, traditionally a high spender, there are now severe difficulties and several proposed
INTO THE SKIES: Visitors watching the A380 take off at the Paris Air Show, 2010.
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cutbacks and scrapping. The one bright spot is AsiaPacific and especially India, now involved in a major military procurement spend. But the US is bringing all its regulars to the air show —the C-17, C-130J, F-16C, F-15E, and E-3 Awacs. At the moment there is no news on the No V-22 or F-35 appearance is planned or expected. The F/A-18E/F Super Hornet currently is also not listed to be there, either. Interestingly with Stealth technology being so much in the news, it’s a bit of dampener that both the new stealth fighters taking to the air in Russia and China— Sukhoi PAK-FA nor the Chengdu J-20 — will be making the trip to Le Bourget. Though the J-20 was extremely unlikely, an appearance by the PAK-FA would have been a big plus for the organisers, it's not happening. When the MIG-29 first appeared at a major air show at Farnborough in 1988 it created waves and changed their Russian perception on the display of their hardware at air shows. It is believed that the PAK-FA will make it first appearance at Moscow’s MAKS show in August. Sukhoi’s Su-30 Flanker multirole fighter has been pulled from the show by Russia for unknown reasons —after the organisers previously
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announced it would be attending. However the airframer will still bring its SuperJet 100 airliner along — which has just entered revenue service. Another fighter to appear will be the China-Pakistani JF-17 —which at Paris this year will take part in the flying display — unlike last year’s Farnborough when it stayed on the ground in static area. The show will provide the next forum for Dassault and Eurofighter— the two fighters shortlisted for the Indian MMRCA bid— to further reaffirm their position as the best in the business. Both the aircraft are now in combat use over Libya for France and the UK. Their performance has been the subject of intense media scrutiny and both aircraft while they have performed creditably have been cited for various other issues. Absent this year will be the JAS-39 Gripen, somewhat unfortunately given that the aircraft is making its combat debut currently as part of the UN Resolution 1973 enforcement action in Libya. Also flying will be the Airbus Military 400M. There are other aircraft that will AWE-INSPIRING: Camcopter UAV (Unmanned Aerial Vehicle) helicopter in flight.
Sukhoi’s Su-30 Flanker multirole fighter has been pulled from the show by Russia for unknown reasons — after the organisers previously announced it would be attending.
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GLIPMSES OF PARIS AIR SHOW, 2010: (Clockwise from top left) Flying display by the Dassault Rafale aircraft; Four aircraft from the Airbus family before take-off; a view of the static display area; a spectacular display by the Eurocopter Tiger aircraft; visit of the French Prime Minister François Fillon at one of the stand and visitors in front of the US Department of Defence stand.
also be around, such as the Pilatus PC-21 and AT802 light attack aircraft. Also around would be the Aermacchi M-346 advanced jet trainer, the C-27J tactical transport and the Tiger attack helicopter. For the first time, the show will see the public appearance and flying display by the Solar Impulse solarpowered aircraft as its ‘special guest’. The prototype, currently a work in progress and undertaking a series of record-breaking flights, will make a public airshow appearance outside home country of Switzerland. The organisers say that the Solar Impulse is planned to make a 10-15min flight every day weather conditions permitting. The aircraft has been designed to demonstrate solar technology by flying continuously day and night on solar power and solar energy stored in its batteries. Solar Impulse’s first flight took place in 2009. It has since undergone various system and flight tests and been flown through a continuous 26-hour-plus period without using fuel. This green focus will also be enhanced with a special pavilion focussed on alternative fuels — enabling visitors to quickly see the main players in one place and helping others understand and measure the ‘patchwork’ approach of biofuel tests and demonstrations underway across the whole globe. Another exciting demonstrator to appear at the show will be Eurocopter’s X3 compound helicopter. This, too, is expected to take part in the flying display which, say the organisers, will see more than 40 aircraft taking part. One type of aircraft that won’t be appearing en masse in the flying display yet are UAVs, though the Schiebel Camcopter will return after making its flight debut in the 2009 Le Bourget. Though the organisers acknowledge this is a fast-growing sector, they argue that the smaller UAVs do not make for an impressive flying display, being too
tiny to awe the crowds stood behind any display line. An indoor flying display, in the halls, meanwhile would mean giving up valuable exhibitor space. For the larger UAVs, too, there is a problem — that of air show restrictions. The limited airspace and nearby urban areas means that at the moment it is a no-no. By the time the next generation of European UAVS and UCAVs appear (for example the Dassault Neuron), the show may be able to host unmanned air vehicles. Some €10m have been spent in refurbishing facilities at the exhibition centre for this year’s show — as well as €2m in upgrading the 350 corporate chalets. While many of the big companies have given the chalets a go-by the chalets have been snapped up by SMEs looking to boost their profile lure new customers. But overseas participation will boost the show. China’s COMAC, for example, will be making its debut and bringing its model of the C919 airliner to a Western air show for the first time. All in all, some 200 international delegations are registered and expected to attend. Meanwhile, the organisers have launched a special ELITE programme for companies to host VIPs in extra style and comfort. The ELITE programme, which features limited availability, features a fast track entrance, lounge area, unlimited refreshments and a concierge service among other advantages. For the rest of the visitors, the organisers promise improved access at the event, including more shuttle bus services, free WiFi across the show (including a dedicated smartphone show site) and free entry to the Air and Space Museum at Le Bourget for visitors. Finally, they stressed that for the 3,000 press expected to attend there will be new ‘virtual pigeonholes’ allowing companies to deposit press packs, images and other material online for media. JUNE 2011 CRUISING HEIGHTS
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AVIATION OUTLOOK 2011 §§ INFRASTRUCTURE ¨¨
Creating the future KIRAN GRANDHI
THE LAST 10 YEARS HAVE WITNESSED RAPID CHANGES IN THE AVIATION SECTOR IN THE COUNTRY. KIRAN GRANDHI BELIEVES THAT THE INDIAN AVIATION INDUSTRY IS AT AN INFLECTION POINT, AND IN THE NEXT 10 YEARS, AT LEAST 100 AIRPORTS MORE WOULD NEED TO BE DEVELOPED.
011, which is nothing short of a landmark in the history of civil aviation — it marks the completion of a hundred years of civil aviation in India. Incidentally, 2011 in a way also marks 10 years of privatisation in the airports business. Ten years back almost to the day, the GMR Group received the preferred bidder status for Hyderabad Airport, and I feel very proud to have been a part of the team that won the bid from both the central and state governments. At the beginning of the new century, the Indian aviation industry was still in a very nascent stage — the Open Skies Policy was yet to be put in place, the airports were not privatised, low-cost carriers were not present and the number of commercial aircraft in the country were just 113 in March 2001, less than two per cent of the commercial aircraft fleet in US in December 2001!However, for us at GMR, the last decade has indeed been a momentous one. In April 2001, the GMR Group was selected as the preferred bidder for the Greenfield airport for Hyderabad, the capital city of Andhra Pradesh. And thus began our journey as India’s first private airport developer, from concept to commissioning. The challenge of design and construction of the Hyderabad airport, which would surpass world standards, incorporating the best of technology and environmentfriendly features, was completed within 36 months of the foundation stone being laid. It was a wonderful tribute to the concept of Public Private Partnership initiated by the Ministry of Civil Aviation. And in April 2006, we won the bid to develop the Indira Gandhi International Airport at Delhi with a very stiff deadline of commissioning the new Terminal 3. Our team rose to this challenge and completed Terminal 3 in a record 37 months, well in time to welcome the participants of the Commonwealth Games. I am sure all of you would have entered our country through Terminal 3 and experienced the world-class facilities that have been created yet again, through the PPP model. This phase of the GMR journey has enabled to create a resource pool of airport management professionals in India. Now in the year 2011, 10 years after the opening-up of the sector, the Indian aviation scenario is witnessing incredible growth. India’s domestic air traffic grew by almost 19 per cent post the recession. The DGCA
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reported that December 2010 was the busiest month in India’s aviation history, with over five million passengers travelling within the country for the first time. In fact, Airbus has projected the compounded annual growth rate of Indian domestic traffic at 10.2 per cent per annum till 2028. The number of aircraft owned by Indian carriers has grown from 113 to 373 in the last 10 years, with orders for 292 aircraft and options for another 159 aircraft. Currently, five airports have been privatised by the government — Bengaluru, Kochi, Delhi, Hyderabad and Mumbai — under the Public Private Partnership or PPP model. All these have been developed according to world class standards. We have seen tremendous increase in terms of service standards in these airports.
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2011 AVIATION OUTLOOK The low-cost carrier model has created a whole new market of travellers. Ever since their launch, the LCCs combined market share has gone up from under 10 per cent in 2005 to almost 65 per cent by January 2011. There has been a substantial increase in bilaterals, with international flights tripling from almost 9300 flights in January 2002 to 26193 flights in January 2011. Even the state-run Airports Authority of India’s airports are being transformed slowly but surely — the ongoing modernisation at Chennai and Kolkata airports are live examples. Indian airport developers have today gone global to Turkey, South Asia and even Indonesia, and with the expertise gained, are looking for more such opportunities across the globe. Our new airports signify the new India, it symbolises
decade. In fact, by 2030, 270 million of our population would be attaining average working age, and 70 per cent of employment would be generated for these in urban areas. India needs more cities, more urban infrastructure to accommodate the increased urbanisation. In this context, I see the infrastructure for Indian aviation industry achieving greater heights in terms of more airports being privatised and more airports being upgraded in the Tier 2 and 3 cities. These cities would need massive urban infrastructure including airports, as they grow to become mini metros. Indian airports could start playing a dominant role in world aviation by creating hubs in India with the active collaboration of airlines and the state and central governments. With the huge talent pool of qualified engineers and educated service staff, there would be a substantial increase in providing aviation services such as MRO, engine maintenance, cargo hubs and free trade or special economic zones. Indian airports especially most of the newly privatised ones like Delhi, Hyderabad and Bengaluru will develop into an aerotropolis. The Indian economy will be primarily driven by the service industry, and air traffic will act as a major catalyst. Our next generation and qualified population will ensure that manufacturing of all the world-class products for airports, aircraft and the aviation industry in general would be done in India. Overall, I foresee the resurgence of Indian airports and our aviation industry during the next 10 years, and
EXUDING CLASS: (L-R) Delhi and Hyderabad Airports have emerged as one of the best airports in India.
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Indian airport developers have today gone global to Turkey, South Asia and even Indonesia, and with the expertise gained, and are looking for more such opportunities across the globe.
a young India, which has the confidence to create and deliver world-class products, services and infrastructure. The Indian aviation industry is currently at an inflection point, and in the next 10 years, my belief is that at least 100 airports more would need to be developed. So, looking at the next decade, by 2021 what we at GMR foresee is that people migrating from rural areas to urban cities would substantially increase. Our latest census figures indicate that at least 200 to 250 million people would be migrating to cities during this
am extremely confident that India will play a constructive and affirmative role in the world aviation scenario. In conclusion, I would like to end with a quote from the famous management guru Peter F Drucker who said that, “The best way to predict the future is to create it.” (Kiran Grandhi is the Chairman of GMR Airports. This is excerpted from his speech at the recent ACI Congress in Delhi.) JUNE 2011 CRUISING HEIGHTS
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§§ AIRCRAFT MAINTENANCE ¨¨
MRO outlook bright but… THE DOWNTURN TOOK AWAY THE SHINE FROM THE MAINTENANCE, REPAIR AND OVERHAUL BUSINESS BUT THE SITUATION HAS CHANGED FOR THE BETTER. HOWEVER, OVER-CAPACITY COULD RESTART THE TAILSPIN. A REPORT FROM THE CRUISING HEIGHTS BUREAU.
METICULOUS APPROACH: Engineers inspecting an aircraft in the MRO workshop.
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2011 AVIATION OUTLOOK he business of Maintenance, Repair and Overhaul (MRO) suffered severely worldwide during the global economic meltdown when airlines scaled down their capacity and introduced severe cost-cutting measures. Once the world economy began its expansion phase and airlines moved to the profit mode — notwithstanding the rising fuel prices — the importance of MRO as a business worth getting into has once again begun to engage the attention of aviation investors in India. It now seems that better days are ahead for the MRO business except for the fact that any over-capacity could again spell danger to the participants. According to aviation industry, the civil aviation MRO market reportedly ended STRONG FOUNDATION: Arvind Jadhav, Chairman and Managing Director of Air India, year 2010 with a $ 42 bn business that laying the foundation stone for construction of its MRO and engineering facility at was 7.5 per cent higher than that in Shamshabad Airport on May 2, 2009. 2009. This, however, does not mean that things are fine for all MRO establishments. Europe with $10.4 bn, Asia-Pacific $ 5.6 bn, China $ 2.3 The prolonged downturn of 2008 and 2009 took its bn, South America $ 2 bn, Africa $ 1.5 bn, Eastern toll and because of this it is feared that the average Europe $1.2 bn and India $ 444 mn. Because of the small annual growth may be 4.4 per cent over the decade up to base, the MRO business in India grew by 11.5 per cent. 2020. While from now on to 2015, the MRO business In India, if one can say so, it was more of an optical would grow by 3.4 per cent, it will then pick up to 5.4 illusion when compared to MRO business worldwide. per cent annually between 2015 and 2020. In valued There are many views ranging from high growth on terms, the MRO business will grow from $ 50 bn in 2015 small base to a virtual explosion in MRO business in to $ 65.3 bn by 2020. It was pointed out that MRO unit India. But there is a wide consensus in aviation circles costs calculated on the basis of 1000 available seat miles that it will take quite a while before India’s MRO have been dropping since 2001. While exchange rate business acquires a global scale and size or even begins fluctuations had their impact, the improvement in to rival China’s MRO development. Projections on MRO process and technologies had its own downward business globally by Team SIA and Ascend and by Frost pressure on costs. But with the arrival of newer and Sullivan show a small variation of a bn US dollars generation engines, though airlines using them save on by 2020. According to the latter’s estimate, Europe is fuel consumption, they nevertheless cost more to expected to see a two per cent annual growth in its MRO maintain. revenues, North America 0.2 per cent, China 8.2 per cent, According to Frost and Sullivan, based on a ten-year India forecast at 8.9 per cent and the rest of Asia-Pacific MRO profile, beginning 2000, China earned 10.3 per cent excluding China and India at 3.2 per cent. Closely of Asia Pacific MRO revenue in 2000. This rose to 21.5 follows Middle East with annual revenue growth per cent or equal to what Singapore earned in 2009. estimated at 6.1 per cent. What is clear as per estimates Japan, which was the third-largest MRO revenue-earner, of most studies is that the core of aerospace MRO dropped from its earlier share of 16.6 per cent to 16 per activity is shifting to Asia with China to a larger extent cent a decade later. While this meant virtual stagnation and India to a smaller extent may be providing the lead. in the case of Japan, the recent earthquake coupled with The question that is widely asked is: Is India on the its continuing economic problems impacting the travel verge of a MRO revolution? There is no straight industry may not see its MRO industry bouncing back in answer to this. A report by Pricewaterhouse Cooper the near future. and CII in 2009 noted that India’s MRO segment is Incidentally, ANA will be taking its first Boeing 787 expected to grow by 10 per cent to reach $ 800 mn by Dreamliner in September or October of 2011 thus setting end-2010 and further rise to $ 2.6 bn by 2020. But this in motion new aircraft induction that, perhaps, even JAL projection is an over-estimate considering that MRO in may follow. In that event, there may not be any need India did a total business of only $ 444 mn in 2008 and immediately for any major maintenance or the bread this was also the year when mid-way global recession and butter of MROs in the near future. In terms of MRO hit Indian aviation sector forcing domestic carriers to spends by airlines in their respective countries, US $15.6 cancel or postpone new deliveries. bn was the largest MRO spender followed by Western At the height of the aviation boom in India during
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FUELLING GROWTH: GMR Airports Chairman Kiran Kumar Grandhi (third from left) exchanging memorandum of understanding documents with Tengku Dato' Azmil Zahruddin, Managing Director & CEO, Malaysia Airlines for the establishment of an MRO facility at the Rajiv Gandhi International Airport (RGIA), Shamshabad, Hyderabad.
2005-06, every domestic carrier called a news conference to announce its grand plan to set up an airframe MRO followed by one for engine, components, etc. In fact, the domestic carriers even forgot if they were in the business of flying or engineering. The recession of 2008-09 set at rest all such ambitions as most carriers entered the debt zone. Hence, it appears that Indian aviation is back to square one as far as setting up an MRO shop is concerned. But there are some who feel that MRO can still be a good bet in India that currently has 420 commercial aircraft. A recent report by the Aeronautical Society of India has estimated the MRO market in India to grow from below $ one bn to $2.6 bn by 2020. Earlier, we had stated that the market within India at present was $ 450 mn. Another estimate suggests that if we include the money spent by airlines to send their aircraft to foreign-located MROs then the expenditure was $ 800 mn. In any case it is difficult to guess the right estimate. The report further noted that in value terms the major segment of MRO business included engines (35 per cent), airframe (20 to 25 per cent), component (20 to 25 per cent) and Line Maintenance (about 20 to 25 per cent). With the exception of line maintenance work, majority of MRO work related to other segments which were mostly carried out abroad. Hence, there is a potential for thirdparty MRO facilities in India. It is in this context, the initiatives taken in the last couple of years in this direction have now assumed increased significance considering that every airline worth its name is in fast expansion mode. We can look at the MRO plans of some of the major players in India. Air India undoubtedly remains the best bet for providing MRO service as it has been in this business for decades and also built a reputation for it, notwithstanding the serious trouble the mother ship — Air India — finds itself in. Prior to the merger of AI and IA, the consultant Accenture had recommended that while the main airline should be a stand alone-venture, the engineering and ground-handling services of the company should be hived off as separate business units.
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While the legal merger took place in August 2007, it is only now when the airline is in a virtually collapsing stage that the Air India management has prepared a cabinet note and sent it to the parent Ministry of Civil Aviation for an approval for the hive-off. In the instant case, the MRO may see nearly 8000 of Air India’s engineering staff from both the carriers coming under one umbrella. Besides, the engine shop as also the airframe shop in Mumbai airport, Air India is constructing another MRO in Hyderabad where the airline has got five acres of land in Shamshabad airport of the GHIAL. One more engineering shop has been set up in Trivandrum for B 737-type aircraft. However, the most important of all is the brand-new MRO that is being set up by Boeing in Nagpur and where construction has just begun. In Delhi, there was an MRO under Indian Airlines which is now being upgraded with Airbus assistance to provide airframe services to A 320 family aircraft. Overall, Air India’s MRO will provide a full range of services for both widebody and narrowbody Boeing and Airbus aircraft. It will provide airframe as also engine overhaul services. AI has also entered into a 20-year JV agreement with GE Aviation, which covers the maintenance, repair and overhaul of GE 90 engines. The deal signed between the two companies is worth $ 90 mn of which GE will contribute $ 20 mn and balance by Air India. This new AI-GE facility will be based in Mumbai and later will shift to Nagpur, where Air India has identified land very near the Boeing MRO where it proposes to provide engine overhaul for not just GE 90 engine but also CFM-5 and CFM-7 engines which are powering both its Boeing 737-800s and the A 320 family. Incidentally, the Boeing MRO is being built by the American aircraft-maker as part of its commitment to sell 68 Boeing aircraft to Air India while the running of the entire MRO will be left to Air India. Boeing has appointed L&T to undertake the civil construction work in Nagpur which we can say is a “work in progress”. Air India is very confident that all its MROs spread virtually across the length and breadth of the country
Air India undoubtedly remains the best bet for providing MRO service as it has been in this business for decades and also built a reputation for it
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Thinking without limits
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will provide top-class airframe and engine overhaul services to not just its own 140 aircraft but also to the aircraft of other airlines both within India and abroad. It is this third party work which Air India thinks will drive its MRO brand name as also business. Ernst & Young in its report has estimated that India’s aircraft fleet would go up from 375 in 2009 to 600 in the next five years. With an additional 1000 jets flying domestically and internationally in the next 20 years there is good scope for MRO business in India. Notwithstanding the availability of skilled manpower which may become scarce, should the so-called MRO explosion indeed happen, there are some other serious issues that could well hamper the free growth of MROs in India. The incidence of high taxes, customs duties and shortage of skilled manpower will surely hinder the ambitious plans for large-scale MROs in India. It has been stated that servicing an aircraft in India entails a service tax of 10.3 per cent which overseas MROs do not charge. Importing spares/components entails levy of customs duties of up to 50 per cent besides a 12.5 per cent VAT. In places like Mumbai there is also an additional octroi of four per cent. So while a “C Check” ( half overhaul of an aircraft done every 18 months) on an A 320 is estimated to cost `2 crore abroad, the estimate in India because of these levies could be as high as `3 crore. Thus India’s cheap labour cost will be neutralized by imported spares and components. Hence, it appears that the Maharaja will have to take the lead in providing MRO services to not only its own aircraft but others or third-party planes as well. The much talked-about Boeing MRO is finally beginning to see the light of the day. The Nagpur-based MRO by Boeing is coming up on land or area already declared an SEZ. This will, therefore, save the MRO from the kind of levies described above and hence preserve its competitive edge. This MRO complex is expected to be ready by end
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2012. The Boeing-sponsored MRO, which will be run and managed by Air India, will have two hangars to accommodate two Boeing 777s (one 777 in each hangar) or six Boeing 737s or three 737s in each hangar. This MRO will be mainly dedicated to Air India’s 68 Boeing aircraft comprising 18 (now 17) B 737-800s, Eight B 777200 LR, 15 B 777-300 ER and 27 B 787s. As per the plan, this MRO will also cater to all regional Boeing fleet in South East Asia and Dubai, provided the price is right for the airlines wanting to send in their planes. The second MRO being planned is a JV between NACIL (I) and EADS and one of the 15-member MRO companies that have teamed up with Airbus. While EADS and NACIL have firmed up their ends, the business plan has been submitted to the government and soon thereafter a third pure MRO players from among the 15 members will be inducted as a partner. Most probably it could be ST Aerospace. Even this MRO will be dedicated fully to Airbus narrowbody aircraft or A
TWO SIDES OF THE SAME COIN: (Top) Maintenance, Repair and Overhaul (MRO) facility provides the best approach to aircraft engineering and (below) shortage of skilled manpower is hampering the growth of large-scale MROs in India.
Notwithstanding the availability of skilled manpower, which may become scarce, should the so-called MRO explosion indeed happen, there are some other serious issues that could well hamper the free-growth of MROs in India
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AVIATION OUTLOOK 2011 320 family. In due course, it for widebody aircraft and could be extended to two hangars for narrowbody widebody like A 330s. As aircraft. Recently, Jet Airways per the agreement signed invested `45 cr in this JV and between NACIL and EADS, also get its aircraft the JV will become a maintained at this MRO. Jet member of Airbus MRO Airways also signed a 10network. According to year agreement with ST EADS, this facility, which is Engineering Singapore, to come up in Delhi, will whose subsidiary is ST also cater to the markets in Aerospace. South Asian Region and The $750 mn contract neighbouring countries. By was signed in March 2010 2013 as per EADS by Jet Airways Executive calculation over one Director Saroj Datta with ST hundred single-aisle Aerospace in Singapore. narrowbody aircraft and Under this deal, ST around 10 widebody Aerospace will maintain Jet A JEWEL IN THE CROWN: MN Rajgopal, Executive Director (Engiaircraft per year would be Airways and JetLite’s CFM neering) receiving the Best Airline MRO in India Award from Ravi Menon, Director, Air Works India. (required) maintained and engines based on hourly the centre would employ contract. This agreement about 300 Indian technical personnel. envisaged commissioning of “entire hospital shop” at The only private third party-oriented MRO is Air Jet Airways’ hangar in Mumbai airport. The two Works which set up its brand new facility in Hosur, near together will build an engine shop there. ST Aerospace Bengaluru. Air Works’ MRO has already got DGCA and scope of work will involve off-wing, on-wing and onEASA certification. DGCA has given it approval to work site support as well as technical and annual on ATR 42-500 and ATR 72-500 and Kingfisher Airlines maintenance support to the fleet of both Jet Airways has already begun to get its ATRs serviced and and JetLite. maintained at this centre. DGCA has also approved Air What remains to be known is how MIAL — Works to conduct major checks on B 737 NGs as also A promoted and operated by GVK — proposes to expand 320 family aircraft. The company is spending $ 50 mn at its airport facilities including lengthening the runway, the same place to build a hangar for widebody aircraft. building 11 (four already done) parallel taxi-way This new hangar was expected to become operational (rapid exit ways), which will help it in increasing the by the end of the first quarter of 2011. Air Works is now hourly aircraft movement in the very congested looking towards significantly developing heavy Mumbai airport. In fact, some of these facilities can be maintenance work in General Aviation as well. built only if the Air India hangar is shifted or broken According to Air Works Vice President Nick White, the down completely as also those which are on the side of company has about 90 aircraft under annual the airport where Jet has its huge hangar. maintenance contract which includes both simple and We can say confidently that it will take quite few complex checks. Air Works is qualified to maintain over years before India will be able to get anywhere near 50 types of aircraft and has over 100 customers across 12 China or Singapore. With new/substantial expansion
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DGCA has also approved Air Works to conduct major checks on B 737 NGs as also A 320 family aircraft. The company is spending $ 50 mn at the same place to build a hangar for widebody aircraft
maintenance locations in India. Recently, it also opened one such facility in Trichy. Yet another MRO is coming up in Hyderabad airport being set up by GMR, the promoter of HIAL in a 50:50 JV with Malaysian Airlines Systems. Besides, it has also developed and opened its CFM56 maintenance training centre in GMR’s HIAL Aeropark SEZ. This was done to support its customers throughout India and the region. This state-of-the-art facility which mirrors facilities in the US/China/France, will provide hands on training for staff on CFM56-5B and CFM56-7B engineers. Once the centre is fully operational it will have the capacity to train 500 students annually. Training has reportedly commenced. This facility is in the same SEZ where GMR is setting up its airframe MRO in JV with MAE. The JV is expected to become operational very soon. It will have one hangar
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taking place in MROs located in South East Asia (mainly Singapore) and the Gulf like Dubai and Abu Dhabi besides Qatar in Middle East the possibility of India becoming an MRO hub for this part of the world appears over-ambitious. Even well-established MRO HAECO in Hong Kong lost money in 2008-09 and 2009-10. It is planning to set up another unit to perform heavy checks on A 320s. To bank upon low labour costs in India to attract third-party business is like a pie in the sky. Even within India, one may ask why do Jet Airways and Spice who are Boeing customers not seek a tie-up with Air India’s upcoming airframe MRO in Nagpur? This is a fully loaded question and the two private carriers say they are not sure what would be the priority in terms of servicing between state-owned carriers aircraft and those owned by the private carriers.
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§§ GROUND HANDLING ¨¨
MAY I HELP YOU?: General administration forms an integral part of ground handling.
Ground handling: Nowhere story! THE SUPREME COURT HAS POSTED THE GROUND-HANDLING CASE FOR FINAL HEARING IN JULY. TILL THEN STATUS QUO HAS TO BE MAINTAINED. BUT THE GOVERNMENT HAS STRUCK BACK... R KRISHNAN ON THE STRUGGLE BETWEEN THE CIVIL AVIATION MINISTRY AND THE FIA. he new Ground Handling Policy (GHP), announced with much fanfare in September 2007, seems to be on hold again. It virtually had an annual date more to miss every succeeding year than to be implemented because of the opposition from the domestic private carriers as they feared that it would take away their control on their airline in terms of assuring a quicker turn-around so crucial to control costs and adhere to best practices in terms of maintaining ontime performance. When the Union Government finally took the call and decided to implement it with effect from January 1, 2011, the private airlines under their umbrella organisation Federation of Indian Airlines (FIA) knocked
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the doors of Delhi High Court. The airlines do self-handling like general administration, baggage, freight and mail handling, loading and unloading of aircraft, crew, passenger and baggage and fuel handling besides catering services. According to official sources, the domestic carriers had earlier promised that they would go along with the new ground-handling policy after it was stalled earlier and that was the reason for the DGCA to notify that the new policy would become effective from January, 2011. But instead, the airlines chose to challenge the new policy in the Delhi High Court. The airlines, on the other hand, had a legitimate fear that handing over their ground-handling JUNE 2011 CRUISING HEIGHTS
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FIA challenged the new Ground Handling Policy (GHP) stating it was aimed at overturning the level playing field and would violate Article 19(1) (g) of the Constitution
functions to independent companies would take away the airlines’ control over their cost, efficiency, scalability, and management of ground-support activities. The Centre, on the other hand, feared that allowing too many personnel on the airport tarmac and other restricted/technical areas could pose serious security risks. FIA challenged the new Ground-Handling Policy (GHP) stating it was aimed at overturning the level playing field and would violate Article 19(1) (g) of the Constitution. FIA said ground-handling was an intrinsic part of their operations and remained at the heart of an airline. However, the government had a different take on it and quoted the security aspect as being of paramount importance to the whole issue. It was because of its seriousness and the need to ensure security that it decided to have a uniform policy. The security aspect also forced the government view it so it had become absolutely essential to have access to latest technology and manage the technologies being used on matters relating to security protocol. The government representative told the court that it was a matter of fact that Indian aviation had become a target of international terrorism which made it imperative on the part of the authorities to take control of ground-handling of all flights. It was mentioned that ground-handling activity required the presence of maximum number of personnel in sensitive areas of the airports and in view of the security concerns it had expressed, such activity by each of the airline on its own would not be appreciated and therefore allowed. Following this, the Delhi High Court lifted the stay on the implementation of the new or should we say nearly four-year-old GHP which was still
waiting for acceptance by private domestic carriers. After the Delhi High Court’s ruling in favour of the government and against the FIA, the former said the new policy would be implemented with effect from April, 2011 and the High Court directed the private airlines to sign up with the recognised GH service providers in the relevant airports. It may be mentioned here that after the policy was originally announced in September 2007 by the DGCA, it was a see-saw battle with the private carriers which the government sought to finally resolve in June 2010 when it got the DGCA to issue a notification that the so-called new GHP would be implemented with effect from January 1, 2011. However, the private airlines challenged it and filed a writ petition against it in the Delhi High Court and got a stay. It was following this that the matter was heard in the Delhi High Court which finally rejected the writ petition and ruled in the first week of March 2011 that the new GHP would be implemented with effect from April 1, 2011. But FIA, an umbrella organisation of private domestic carriers, appealed against this order of the Delhi High Court in the Supreme Court in April this year. The FIA has since got a breather as the Supreme Court posted the case for final hearing in July 2011. Till then it has asked the government to maintain status quo, which means no implementation and allowing airlines to do self-handling. The FIA said it had no issues on it and in any case was complying with whatever BCAS wanted. Meanwhile, the Civil Aviation Ministry has written to all airlines to hire their own staff to do ground-handling at non-major airports. At various smaller airports, the airlines outsource the ground-handling work, as it is cheaper for them to do so.
MAINTAINING CORDIAL RELATION: Ground-handling staff at the airports usually hired by their respective airlines.
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Simply put, the government has decided that the operators must stew in their own juice and if it is self-handling they want then they better do it across the board throughout the country
Many view this as a direct consequence of the FIA’s decision to fight the government tooth and nail on the GH issue. Simply put, the government has decided that the operators must stew in their own juice and if it is self handling they want then they better do it across the board throughout the country. It needs to be mentioned here that soon after the Delhi High Court rejected the writ and lifted the stay, the Ministry of Civil Aviation through the state-owned Airports Authority of India issued a detailed circular to the six metro airports where the GHP was intended to be implemented. The six metro airports were Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bengaluru. The aim of the policy as stated earlier was to increase the security and safety at these airports whose questioning was turned down by the FIA was turned down by the Delhi High Court. As per the original policy, which, continued to be unchanged, required three groundhandling agencies in each of this six airports details of which are given later in this article. Following the rejection of the writ, the High Court upheld the earlier decision of the Cabinet Committee on Security which required activities like baggage handling, cargo scanning, taxiing, refueling and cleaning among other things of private sector airlines by the officially recognized GH companies. On April 4, 2011 the Supreme Court heard the appeal of the FIA against the order of the Delhi High Court as also the challenge of the Ground-Handling Policy. Following this it issued notices to RESPONSIBLE SHOULDERS: Young girl carriying baggage at one of the airports
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the Ministry of Civil Aviation, DGCA, BCAS and other agencies. But the Supreme Court did not stay the March 4, 2011 order of the Delhi High Court and hence wanted the member airlines of FIA to immediately sign up with any one of the three GH companies in the six designated metro airports. The airlines singed MoUs with the GH companies complying with the Supreme Court order. In a way, it meant the private airlines would outsource their ground-handling activities to these companies. As per reports, the government faced a tough time in Supreme Court to justify its policy of keeping out private airlines from GH duty which was to be handed over to one of the three companies: the designated company by the airport operator either stand alone or in JV based on a revenuesharing model Air India- SATS JV which got this role based on some kind of "Grandfather’s right or being a state-owned company and hence fully safe from security point of view and a third joint venture selected through a bid process conducted by the airport operator concerned. While GMR and GVK handled Delhi, Hyderabad and Mumbai, Bengaluru respectively, the state-owned AAI handles Chennai and Kolkata airport. The private airlines complied with Supreme Court direction within 24 hours and signed MOGs with one of the ground-handling companies in these six airports as approved by the DGCA. The Supreme Court, however, asked the government as to when these private airlines had their own services why should they go in for services of others. The Solicitor General reportedly observed that ground-handling had been taken away from private airlines keeping in view the security concerns. The two-judge bench of the Supreme Court observed that while it was right for the government to make policy, why should it disturb something when it was going smoothly. It was reportedly stated that the government was trying to bring the competent private airlines to a level of incompetence. As per media reports, the government representative was even asked if he had travelled by private airlines and how it kept up its timing. It feared that the efficiency of the private airlines would be killed. The government was further asked that when the private carriers had their own services why they should go in for the services of others. It was also raised by the court that if ensuring security was true in the six metros, then what about other cities like Jammu and Kashmir, Amritsar and even Kochi which had been left out of the DGCA list? The Supreme Court had given time for the petitioners and respondents to file their response. As per the policy, it was decided that in the six metro airports — Delhi, Mumbai, Kolkata, Chennai,
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TOUGH TASK: (L-R) CISF personnel in all the airports in the country provide all the security-related functions and ground-handling staff are also responsible for baggage handling.
Hyderabad and Bengaluru — none of the domestic airline operators would be allowed to do self-handling. The Union Cabinet and the Cabinet Committee on Security, while granting approval to the new GroundHandling Policy had laid down that there would be three specialist ground-handling companies in each of the six airports, namely Air India and its JV partner (a foreign ground-handling company with a lot of expertise in the field), the airport operator-led JV and a third independent company, which would provide ground support services, subject to that JV winning the bid in the respective airport falling in the category of the six metro airports. As for the existing Kolkata and Chennai airports, since state-owned Airports Authority of India (AAI) has been retained as the operator, it selected Messrs Bhadra International as its partner, based on revenue-sharing bids. Bhadra International will provide ground-handling services in Chennai and Kolkata. Besides, there will be Air India and its JV partner and another third independent ground-handling operator as in the other four metro airports mentioned above. The airlines have maintained that such restriction would affect their ability to distinguish themselves from rivals and render ground-handling equipment worth hundreds of crores of rupees useless. The Civil Aviation Ministry had formulated the new ground-handling policy based on the security concerns in the face of terror attacks. The policy, however, could not be implemented as airlines lobbied against it and argued that it would add to the cost of the already bleeding industry. Even as this debate continued, the Bureau of Civil Aviation Security (BCAS) had written to the Ministry of Civil Aviation much before the airlines sought judicial intervention that it wanted the airlines not to provide ground-handling services and in this context listed at least 13 security-related functions, which included access to aircraft, screening of baggage and security search at various airport points to be provided by official agencies. As all know, the Central Industrial Security Force (CISF), in all the airports in the country, provides all the security-related functions. However, if people lose jobs
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because of the new policy, what will the new Civil Aviation Minister Vayalar Ravi, a self-confessed trade unionist, say? Soon after taking over, he said, he was a trade unionist and would ensure that the public sector Air India was nursed back to health. Will his trade unionism begin and end with state-owned enterprises or will it be in line with workers anywhere or workers everywhere? In 2007, the Union Government announced a new GHP. It said the policy would not be implemented for one year — till December 2008 — to give time to domestic airlines to make way for an alternative arrangement. Thus, it was to become effective from January 1, 2009, by then only the following companies were to be permitted to provide ground-handling services at six Indian metro airports - Delhi, Mumbai, Kolkata, Chennai, Bengaluru and Hyderabad — (i) Airport operator that is either Airports Authority of India (AAI) or the private operator managing the relevant metro airport in a Joint Venture (JV) with a known ground-handling agency, (ii) Air India which has already tied-up with SATS; and (iii) Private groundhandling agent. Considering the rapid pace of urbanisation in nonmetros, there is a high probability that cities like Ahmedabad, Coimbatore, Trichy, Goa, Nagpur, Thiruvananthapuram, Chandigarh, Amritsar, Jaipur, etc. would become important business propositions. In a way, as a result of the new arrangement and induction of new GH agents by AAI, one could — for the first time — get to see a sea change in groundhandling facilities in these airports. Those wanting development of a strong airport infrastructure believe that the new GHP should be implemented as it is one of the important ingredients of a new airport’s business plan. Those who are airline backers feel that the already bruised domestic carriers, due to falling passenger loads, yields and rising fuel price, need a breather for some more time before the implementation can be announced. Now that the economy has kick-started and passenger loads are coming back, they may all want this
Considering the rapid pace of urbanisation in non-metros, there is a high probability that cities like Ahmedabad, Coimbatore, Trichy, Goa, Nagpur, Thiruvananthapuram, etc would become important business propositions
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AVIATION OUTLOOK 2011 SEA-SAW STRUGGLE
RESPITE FOR CARRIERS
CENTRE STRIKES BACK
Implementation of GHP has witnessed resistance from the private airlines.
Private airlines have praised the SC order asking for maintenance of the status quo.
The Civil Aviation Ministry has now asked the airlines to do ground handling at non-major airports
The FIA, whose membership includes all the domestic carriers, contended that member-airlines could efficiently manage their ground-handling services of their aircraft as at present. Moreover, the airlines would also be forced to retrench nearly 3,000 workers, who are associated with ground- handling work, on behalf of these carriers all over India. As per information available with the government, Jet Airways has 250 in-house GH staff or on its rolls and
breather to continue till they are able to recover the losses sustained over the last two years. This recovery may see carriers expanding their network, induct newer aircraft, re-induct aircraft that were temporarily leased, etc. In short, the airlines may want to convey a message: ‘Please hold back the new GHP for some more time till we get back on our feet again.’ As for airports, a revival of airline business would mean more money for them once again. Under the proposed new GHP regulation, airlines are not allowed to do self-handling at these six metro airports as many of them were doing. While domestic airlines have been allowed to do self-handling at non-metro airports, no foreign carrier has been allowed to do self-handling. A Centre for Asia Pacific Aviation (CAPA) study showed that domestic airlines objected to the new GHP as they felt awarding their ground-handling job to third party ground handlers would lead to a) loss or dilution of control over service quality as airlines feel the first point of interface between passengers and airline staff is at the check-in counter/gate and induction of a third party on airlines’ behalf will dilute its USP; b) airlines stated that they are not too concerned about the impact of outsourcing ramp activities but were not willing to trade their USP, like on-time performance which they fear could happen as one could not expect the third party GH provider to treat all the airlines as their own respective staff do; c) while airlines doing self-handling could cut cost on their own self-handling, this may not be the case when a third party is doing the job leading to rise in costs; and d) limiting the number of ground handlers to three is limiting competition. Incidentally, what an airport operator or a ground handler can charge for various ground-handling services is now an important matter awaiting examination and resolution by the newly set-up Aviation Economic Regulatory Authority (AERA).
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outsourced 1000 workers. Kingfisher Airlines has 150 such staff on its roll while it has outsourced 1600 staff; IndiGo has its 46 personnel doing GH work and outsourced 574 workers, SpiceJet has 80 GH staff on its roll while it outsourced 470 and Go Air has 54 company employees and outsourced 250 staff to provide ground handling to its flights across India. In the case of Air India, it has 800 workers on its rolls with another 990 on contract or outsourced.
Independent ground handlers have stated that they will make huge investments in GH equipment to enhance service quality and efficiency. If airport infrastructure is expected to suck in a few billion dollars in investment then it will be a total distortion if such investment is not made in ground-handling , a very crucial aspect of airport management, that includes a drastic reduction in downtime or turnaround time for aircraft and thereby increase the rate of aircraft movement. This aspect, then, of airport revenue stream cannot be wished away. If India is to have international standards of ground-handling , then it is an investment that will have to be made. Introduction of international best practices and software-based resource allocation systems will lead to greater efficiencies in the utilisation of equipment. At one time, last year, Mumbai Airport had listed an inventory of more than 90 ground power units which was more than three times for an airport of its size. It is not known if this position has changed. As for traditional agencies — be it airlines or otherwise — there is over-staffing and the fear of job losses and the resulting airport unrest is what has been bothering policymakers after announcing the ground-handling policy. An important trend for ground handlers in the context of the Indian market is the rapid growth of Low Cost Carriers (LCCs) and similar subsidiaries of full service carriers. Today, LCCs account for nearly 60 per cent of the domestic market share or even more. When their negotiation position increases it will not be surprising that they may even demand competitive bids from potential GH agencies. At present, since the airlines are allowed self-handling and in case of LCCs, it is beneficial since it ensures a quick turnaround of the aircraft. The LCCs will not want this compromise by a third party agency providing ground-handling and also the cost at which it will be provided. Should this cost rise, it could crack the LCC model.
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AVIATION OUTLOOK 2011 §§ ENVIRONMENT ¨¨
Strategic alliance of global aviation and environment Inderjit Singh
AS WE LOOK AT THE FUTURE OF PLANES AND AIRPORTS WE SHOULD ALSO BE EQUALLY COMMITTED TO LOOK AT THE FUTURE OF THE ENVIRONMENT, WRITES INDERJIT SINGH
viation and environment, I firmly believe, are synonymous in some ways. For one, both are boundless. They have no geographical boundaries. Aviation’s impact, be it a system failure, for instance, temporary grounding of an aircraft type for a suspect malfunctioning in the aftermath of an accident, or human involvement, i.e. pilot error or acts of unlawful intervention against civil aviation; is not confined to a region, a nation or even a continent and has the potential to result into a systematic failure of the world air traffic network. Likewise, an environmental effect such as Eyjafjallajokull— sounds Greek but not — the volcano that spewed the massive ash clouds in Iceland, a natural phenomenon that spread over the continent leading to the closure of most of Europe’s airspace. A very high proportion of flights within, to and from Europe were cancelled creating, according to IATA, the highest level of global air travel disruption since the Second World War. A tsunami originating from Sumatra created havoc there before cutting across several countries, oceans and even continents causing large-scale damage to infrastructure en-route, including coastal and off-shore airports to reach the beaches of Somalia. The recent quake-tsunaminuclear crises in Japan have caused catastrophic loss to life, degradation of the environment and major losses to the aviation industry. Whether it is through fog-bound Asian airports, snow-engulfed European facilities, or an air traffic controllers’ strike at US airports — while transportation services around the globe are disrupted by weather conditions or administrative problems: aviation and the environment have reciprocal influences on each other. Their actions and reactions are not mutually exclusive. Geoscientists have warned that the continued environmental degradation in all its forms of climate change, ozone depletion, et al could spark more hazardous geological events and natural disasters such as hurricanes, droughts, volcanoes, landslides, earthquakes and an increased frequency of tsunamis.
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AVIATION ENVIRONMENT COMPATIBILITY Aviation, the world’s most global industry, is caught today in a tug-of-war between increasing air traffic and the urgent need to reduce the ever-increasing deterioration of the environment. What place can airports and airlines hold in a world clamouring to halt
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the destruction of Greenfield areas, gasping for cleaner air to breathe, and begging for a little peace and quiet? It has to grow, wants earnestly to undertake environmental protection but is in a dilemma whether to control the problem by airport land-use planning, changing the aircraft type, penalising noisy jets, imposing night curfews or further evolving guidelines and legislations. So, how do we make aviation environmentallyfriendly? Don’t fly! That appears to be the view of some of the more extreme and increasingly vocal environmental activists. While air travel is growing rapidly, so are protests and resistance against the development of airport projects. For over a decade now, a major issue for the aviation industry has been to overcome these challenges that are seemingly in conflict with the requirements of the environmental regulators
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2011 AVIATION OUTLOOK and concerns of local residents. Communities feel that airports have fallen short in tackling the broad range of environmental issues associated with day-to-day operations. Recent case studies show that community activists and government environmental authorities are becoming increasingly effective in obstructing development plans unless their problems are adequately addressed and nuisance factors minimised. They view the airport planning processes with skepticism, considering them to be a legal mechanism for skirting their concern. It is pertinent to note that environmental concerns have not only adversely affected aviation operations but also at times stymied its growth. The scrapping of the Third Runway plan for Heathrow, now even supported by the government, is a glaring example of the dominance of environmental activists and uproar of the protestors. In terms of destinations served by worldwide international airports, Heathrow has fallen from second in 1990 to seventh in 2010, and the numbers of destinations that can be directly accessed from Heathrow now are 157 compared with 224 from Paris’s Charles de Gaulle airport and 235 from Frankfurt. This shows that London’s only hub airport is losing out to other European airports, which, if sustained, could have long-term damaging effects for the economies of London and the UK. Government’s judgment in the matter notwithstanding, the pros and cons of an additional runway visa-vis a brand new airport elsewhere in the city with its
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monumental cost and environmental impact, to me, still remain a matter of debate.
DE-CARBONIZING THE WORLD ATMOSPHERE From purely the aviation industry’s perspective, however, having acknowledged its effect on climate change, it is turning its attention to the adverse impact of the climate change on itself — the industry — with its sincere intention of looking for a win-win situation. Admittedly, according to the Intergovernmental Panel on Climate Change (IPCC) of the UN, aviation contributes about 2 per cent of the global carbon emissions towards the environmental pollution — a small proportion as compared to the contribution from industries other than aviation. However, this observation does not absolve the aviation industry of the responsibility to clean up its act and make a determined effort to not only contain pollution but consistently attempt to de-carbonize the world’s air transport network. The efforts should be to consistently reduce it through the introduction of appropriate technology and human endeavour to attain “environmentally friendly aviation” — through more efficient turbofan engines, composite materials for lighter airframe structures, various aerodynamics tweaks, and development of sophisticated flightmanagement systems. In the growing international climate of environmental awareness, a great many of the world’s industries now realise that ignoring the environment is no longer an option but an indispensable
Admittedly, according to the Intergovernmental Panel on Climate Change (IPCC) of the UN, aviation contributes about 2 per cent of the global carbon emissions towards the environmental pollution necessity — and the aviation industry is certainly no exception. Industries and governments that do not take the environment seriously will lose out, because customers are demanding cleaner products and services, the best employees prefer to work for environmentally responsible firms, financial institutions are more willing to lend to companies that prevent pollution rather than those that may have to pay large clean-up bills. Insurance companies are more willing to cover clean companies, environmental regulations are getting tougher and the economic instruments — taxes, charges and trade permits — will reward the clean and green companies and penalise the polluters.
AVIATION INDUSTRY INITIATIVES The aviation industry, i.e. airlines, airports and the aircraft manufacturers are adequately sensitised to the effects of aviation on the environment. The effect of aviation on climate change due to greenhouse gas emissions, aircraft noise and indiscriminate use of precious energy for the operations and maintenance of the airports are the major concerns. The ICAO Council in 2004 had launched three major initiatives, to limit or reduce the number of people affected by aircraft noise; the impact of aviation emissions on local air quality; and the impact of aviation greenhouse gas emissions on the global climate. It also adopted Strategic Objectives with NATURAL CALAMITY: Eyjafjallajökull put the aviation industry in throes in 2010.
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PLANET EARTH: FIRST FOREMOST FRONTIER
ON THE BACKFOOT: Passengers had a harrowing time during the volcanic ash episode due to cancellation of flights.
high priority given to environmental protection and have since then progressively developed a range of standards, policies and guidance material to address aircraft noise and engine emissions embracing technological improvements, operating procedures, proper organisation of air traffic, appropriate airport land-use planning and promoting energy efficiency at airports as part of a green airport approach to improve quality and environmental sustainability within the ambit of the ICAO Polluter Pays Principle (PPP). Most of this work is undertaken through the ICAO Council’s Committee on Aviation Environmental Protection (CAEP), which consists of Members and Observers from States, intergovernmental and non-governmental organisations representing aviation industry and environmental interests. As eco-friendliness moves from being a fringe benefit to a virtual necessity in today’s markets, airports are struggling with containment of the eco-problem on a massive scale. Dramatic solutions are being sought worldwide, with airports being built offshore, such as Hong Kong and innovative measures being explored in the implementation of noise abatement procedures, in checking contamination of soil and underground water by use of special chemicals for aircraft and pavement anti-icing and de-icing, fuel spillage, airline and airport vehicles maintenance; appropriate disposal and recycling of waste and hazardous substances produced by catering, maintenance and other airline and airport operations in building environment-friendly airports on land. The industry, through the ICAO, is aiming to reduce its carbon footprint by half in the next 15 years — an achievable target considering that the current generation of aircraft is 42 per cent more fuel-efficient compared to last two decades — and 50 per cent quieter, reducing noise pollution as well. A step towards the reduction of greenhouse gas emissions by airlines is the implementation of Single European Sky (SES) schemes, which will allow for more efficient air traffic management (ATM) over European skies. Once implemented, this scheme is expected to lower flight time, and eliminate 16 million tonnes of greenhouse gas emission a year. In the United States, the Nextgen (Next Generation ATM—creating more direct routes), when implemented, will save 19 million tons of
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Astrophysicist Professor Greg Laughlin, University of California, Santa Cruz, reckons the monetary value of the planet earth at $4,800 trillion, dwarfing the GDP of World at 62.22 trillion, EU at $15.90 trillion, US at $14.62 trillion, China at $5.74 trillion and India at $1.43 trillion in 2010, corresponding to an insignificant 1.29 per cent, 0.33 per cent, 0.30 per cent, 0.12 per cent and 0.03 per cent respectively, of the estimated earth value. The entire world governments’ political and administrative machineries tirelessly work overtime to secure that elusive 0.01 per cent or thereabouts increase in their annual GDP. Yet despite the best intentions and efforts of all concerned, there appears to be no consensus or a universal policy framework that mitigates the
The monetary value of the planet earth at $4,800 trillion dwarfs the GDP of the World at $62.22 trillion, EU at $15.90 trillion, US at $14.62 trillion, China at $5.74 trillion and India at $1.43 trillion in 2010, corresponding to an insignificant 1.29 per cent, 0.33 per cent, 0.30 per cent, 0.12 per cent and 0.03 per cent of the estimated earth value. degradation of the environment at a planetary level. Individual country interests and concerns largely dominate the scene. It is like the proverbial “not seeing the wood for the trees”. We ought to see the ‘Big Picture” and protect Planet Earth. As we look at the future of the planes and airports we should be equally committed to look at the future of the environment. In his 2005 book The Weather Makers — about climate science and global warming — and his latest publication, Here on Earth; twin biographies, of humanity and the planet, Tim Flannery, an Australian ‘environmental celebrity’ — reminds us of the various ways in which humans are influencing their environment — most of them in a negative way — and asks the readers to recognise that even in an age of high technology, our prosperity and well being depend on our natural environment, which furnishes us with air, water, food and the natural resources on which industrial civilisation relies.
AVIATION AND ENVIRONS HAVE TO COEXIST Finally, my take in the matter: We all in the aviation businesses, be it airports, airlines or aircraft manufacturing, have to recognise that aviation industry’s sustainability, prosperity and growth lies — in our unambiguous respect and concern for the environment in which we operate - both on the ground and up in the air. (The writer is aviation analyst, former Senior Vice President, Dubai Aerospace Enterprise, Airport Director IGIA, New Delhi, and an ICAO Airport Consultant. He may be contacted at indi279@gmail.com.)
Fraport – Airport Operations from Austria to Xi’an.
The Company Fraport AG is a leading player in the global airport industry. Following its initial public offering (IPO) Fraport has become the second largest listed airport company in the world, by revenues. Fraport’s expertise is based on more than 80 years of aviation history at Frankfurt am Main, Germany. Frankfurt Airport (airport code = FRA) is located about 12 kilometers from downtown Frankfurt. A renowned pioneer for decades, FRA serves as Fraport’s home base and as a showcase for the company’s know-how, technology, products, and services. With outstanding connectivity to all five continents of the globe, FRA is a intermodal hub with one of the largest catchment areas in the world and direct access to the German high-speed railway network. FRA is strategically situated in the heart of Germany and the European Union. Airlines can profit from high utilization rates and traffic yields.
Range of services The company prides itself in being a leading-edge provider of integrated airport services. Besides managing FRA, Fraport AG and its subsidiaries provide the full range of planning, design, operational,
commercial and management services for airports around the world. Fraport AG serves as a neutral partner to the world’s major airlines: offering a complete package of aircraft, cargo, passenger and other ground handling services. Outside Germany, the company has ground services operations in Austria. Other areas of Fraport expertise include cargo and ground handling, real estate development, airport retailing, IT services, consulting, intermodal concepts, environmental management, hub management, training, etc.
Fraport worldwide Through investments, joint ventures and management contracts, Fraport is now active on 4 continents. Fraport served some 73.7 million passengers in 2009 and handled 2.1 million metric tons of cargo (airfreight and airmail) at the Group’s airports. Fraport, which bids for airport management projects worldwide, was awarded a 30-year concession for operating, managing and developing Indira Gandhi International Airport (IGIA) in India. Together with state-run Airports Authority of India (AAI) Fraport AG has formed “Delhi International Airport Private Limited (DIAL)”. Fraport is the nominated “Airport Operator” and an Airport Operator Agreement
concluded with DIAL – under which it will be utilizing its extensive airport expertise developed over the past 80 years to assist with the operation, management and development of IGIA.
Fraport AG Frankfurt Airport Services Worldwide 60547 Frankfurt am Main, Germany E-mail: marketing@fraport.de Internet: www.fraport.com www.frankfurt-airport.com Contact: Ansgar Sickert Vijender Sharma Fraport India Paharpur Business Centre Suite 302 21, Nehru Place New Delhi – 110 019, India Phone: +91 11 4120 7355 (AS) +91 11 4120 7334 (VS) Fax: +91 11 4120 7558 Mobile: +91 99 1038 2806 E-mail: ansgar.sickert@fraport.in vijender.sharma@fraport.in
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“Non-aeronautical revenues V P AGRAWAL, CHAIRMAN, AIRPORTS AUTHORITY OF INDIA, ON FUTURE PLANS.
Q: A:
PHOTO: H.C. Tiwari
It is now more than three years since private enterprise took over management to operate four metro airports: Delhi, Mumbai, Hyderabad and Bengaluru. Frankly, how do you describe the experience? Well, to answer your question, it may be apt if I were to state that ‘Change is always for better’. Having said that, it would but be prudent if one was to view the move from the larger perspective and not merely ‘hindsight’. As is well established, our sector had witnessed unprecedented boom in the last decade and it is also a fact that our infrastructure at the airports was below par and thus, we had no other option but to embark upon in a big way to provide matching infrastructure. The cost involved in such a venture was so exorbitant, that it was beyond the reach of either AAI or the exchequer. Therefore, in my opinion, the decision to take the PPP route was not only the need of the hour but timely too. The other added advantage that accrued was that it offered an opportunity to AAI to focus its attention on the large number of much-neglected non-metro airports across the length and breadth of our vast country, many of which were serving international routes too. This, you would appreciate, was a humongous task in itself. The other very important facet of airport modernisation, which invariably is lost sight of, if I may put it inadvertently, is airspace management, which is the sole responsibility of AAI. As a sequel to the growth, the density of air traffic too was
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will rise manifold” bound to increase by leaps and bounds, for which appropriate systems were required to be put in place. Import of state-of-the-art technology to ensure seamless transition through Indian skies entails a huge expenditure which has to be borne by AAI. It may be of relevance to set the record straight by mentioning that air traffic — be it at metro or non-metro airports — is managed and regulated by AAI. As such opening the doors to private players was the only viable solution to ensure creation of world-class airport infrastructure across the country. It would be apt if I were to sum up the answer by saying that the experience has been fruitful and, as they say ‘rest is history’. The nine per cent GDP growth has already seen air traffic grow by 20 per cent annually. When do you think it will begin to crowd the non-metro airports? I suppose you would agree that the unprecedented growth that has since been witnessed, surely did not originate or end up at the metro airports only and there ought to have been substantial contribution from the non-metros too. Non-metro airports also play a pivotal role. It would be interesting to note that the traffic growth at non-metro airports is at a much faster pace when compared to the metro airports. As is well established, neither mere presence of infrastructure at airport ensures air connectivity nor absence of infrastructure can provide air connectivity. This, as you are aware, is directly dependent on the market forces of demand as revealed in the survey carried out by the airlines for drawing up their business plan. The non-availability of appropriate infrastructure at the non-metro airports at that point of time did have a salutary effect on the airlines’ operational planning for new route connectivity. Moreover, construction of infrastructure does not only entail a long gestation period but it is also essential for airlines to assure the airport operator of sustained operation and utilisation of the airport and other facilities. The apprehension of crowding non-metro airports put forth by you was relevant in the pre-modification/ modernisation period, but as of now the situation is in favour of the non-metro airports as the capacity is much in excess of the demand. It may be of relevance to record that the modernisation of terminal buildings has been carried out on a ‘modular’ concept, which has scope for further expansion if circumstances so demand. As on date, infrastructure at non-metro airports is underutilised. The airlines’ were invariably planning for a morning flight to a non-metro and an evening return flight, with a large yawning gap in between. The other dimension is the
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avoidable strain on resources of not only the AAI but also, Met, Security and other agencies. With the changing trend of the travelling populace visà-vis increased per capita income, non-metro airports have already started attracting night halts of the aircraft which in turn assures early morning and late evening return flights — example, Ahemdabad, Pune, Goa, etc. A humble beginning in this direction has already been made. I suppose it would only be fair to assume that the time is not far when full utilisation of the infrastructure, coupled with the fact that the rate of induction of number of aircraft on the anvil will dry up the night parking slots at metro airports, leaving no choice with the operator to re-work their plans. Non-metro airports are not only capable of handling traffic but they do have appropriate facilities in place. Do you think traffic handled by the Airports Authority of India’s airports — the two metros, Chennai and Kolkata and 35 non-metros — will soon overtake that of four non-AAI metro airports? It is not just the four non-AAI metro Airports, viz., Delhi International Airports Ltd. (DIAL), Mumbai International Airport Ltd. (MIAL), Bengaluru International Airport Ltd. (BIAL) and Rajiv Gandhi International Airport Ltd., Hyderabad (HIAL), but add Cochin and Nagpur airports, to the list as these two airports are out of AAI’s ambit. However, in my opinion, you have touched upon a very pertinent issue by comparing the growth of air traffic across the country in time to come and have made a comparison between non-comparables. Notwithstanding that most of our prosperous airports have been hived off, we at AAI took on the challenge upfront and embarked on the task of developing the second and third tier airports, including those in the North-East region, remote and island areas, where you would agree no private player may ever dare to tread. Traffic originating or terminating at the metros includes a substantial portion of traffic from non-metros too. Notwithstanding the same, the density of traffic between the metros being what it is, a stage may arise when your apprehension will come true. Let there be no doubt that in times to come the density of traffic originating/terminating at non-metros is bound to grow. I say this with confidence keeping in view the growth of air traffic in our country visà-vis the changing mindset of the travelling populace of our country coupled with the economic growth on the anvil. It stands to reason that the traffic handled at the AAI airports may not lag far behind. However, to give you an insight of the situation as it stands today, the aircraft
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Air Navigation Services will be hived off from AAI into a separate company. Action has been initiated and a Member (ANS) on the AAI Board has been positioned.
movement at ex-non-AAI airports is 52.4 per cent and AAI airports is 47.6 per cent, whereas, in terms of the passenger density at ex-non-AAI airports, it is 59 per cent and at AAI airports it is 41 per cent. What is needed to ensure that or has it started happening? The AAI has already set the ball rolling in this direction by modernising two metro, 35 non-metro and 23 other airports. We have 60 upgraded airports as of now. The commissioning of another 30 airports, now in a state of disuse, is on the anvil. The day is not far off when the concept of ‘hub and spoke’ would see the light of day in Indian aviation. Due credence also ought to be given to the fact that as an outcome of modernisation we have spare capacity at these airports, with infrastructure compatible to handle all types of loads, that in turn is bound to make a perceivable dent in the traffic loads of metro airports.
What are the funding options before AAI in view of Finance Ministry’s rejection of AAI’s request for tax free bonds? AAI is planning to raise funds mainly out of internal resources. However, the shortfall is to be met out of the borrowing amount to `900.00 crore and `824 crore, respectively through debt financing during 2010-11 and 2011-12. This is by way of long-term and short-term borrowings programme. As regards the tax-free bonds, we at AAI have not given up hope.
What is the corporate vision of AAI for 2020? Will land be a constraining factor? How do you propose to deal with it? The corporate vision of AAI is “to be a world-class organisation providing leadership in Air Traffic Services and Airport Management and making a major hub in the Asia Pacific region by 2016”. Land is fast becoming a rare commodity. Airports being land-intensive can be perceived by the common Is it true that ANS of AAI will be hived off as a man as a lot of land being usurped by AAI especially separate business unit? with no visible construction. However, Air Safety — Yes, it is true that Air Navigation Services will be hived which is paramount to aviation — dictates vacant graded off from AAI into a separate company. Action has since areas known as basic strips, Runway End Safety Area been initiated and as a step in that direction a post of (RESA), where no constructional activity is permitted. Member (ANS) on the The state governments are Board of AAI has since been finding it difficult to created and an incumbent acquire land from the positioned too. Also, action already built-up areas of with regard to other the public. The associated issues for its establishment of smooth transition into an Greenfield airports has an independent entity is inbuilt constraint of site underway. As and when the selection, which needs to Directorate’s functions get be taken into account, stabilised and is on a sound with reference to not only footing to operate as a fullland availability but also fledged unit, appropriate air space management action with regard to the issues of the already modalities involved in operational airports granting it separate entity nearby, including that of STRICT VIGIL: Controllers at work in the ATC room. status will be initiated. defence. With the passage of time and traffic Will such a step not seriously impact the revenue becoming denser, the need to get airports licensed with stream of AAI? the enforcement of norms is not only becoming In my opinion, it will have an effect initially but not to inescapable but also, stricter. an extent, which could be a cause of worry. As you I would like to close on an optimistic note by stating would be aware, with our newly-created infrastructure, that we are confident of bringing about perceivable we are bound to generate substantial non-aeronautical changes in the aviation sector of our country in general revenues. We would have 90-odd airports and the aerial landscape in particular. We have just operationalised, thereby enhancing our non-aeronautical recently successfully hosted ACI Asia-Pacific Regional revenues manifold. Assembly, which offered us a unique opportunity to showcase our strength to almost 500 delegates that How much has AAI spent on the modernisation of 35 included the who’s who of global aviation. I daresay our non-metros and how much remains to be spent? achievements, and that include GAGAN, the satellite AAI has incurred `3238 crore (cumulative capital navigation project which would be the fourth of its kind expenditure up to January, 2011). Funds amounting to in the world, have not only been well received but approximately `1250 crore are likely to be spent in future appreciated too. I have no iota of doubt that we have on these projects. enhanced the prospects of Indian aviation manifold.
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§§ ACROSS ASIA ¨¨
“India has ‘Global Standards’” TAN SRI BASHIR AHMAD BIN ABDUL MAJID HAS BEEN MANAGING DIRECTOR OF MALAYSIA AIRPORTS HOLDINGS BERHAD (MAHB) SINCE 2003. AN AVIATION VETERAN WHO HAS SPENT A LIFETIME WITH MALAYSIAN AIRLINES, TAN SRI BASHIR IS ON THE BOARD OF DELHI AND HYDERABAD AIRPORTS. RECENTLY IN THE CAPITAL FOR THE AIRPORTS COUNCIL ASIA PACIFIC CONFERENCE, HE REFLECTED ON THE HEADY INDIAN GROWTH STORY AND THE PLANS FOR MAHB
Q: A:
PHOTO: H.C. Tiwari
Your relations with GMR are now ten years old and are growing from strength to strength. How has your partnership with GMR gone forward? I think our partnership with GMR has been very, very good. We first started our partnership in Hyderabad and then we did some partnership in Delhi but very important now is our partnership overseas where we are together with them in Istanbul and Maldives. Of course over the years we have found that we have developed a lot of common interest in promoting airport development and we have found that they are good partners to us. I remember Mr G M Rao once mentioned that no one knew GMR and it took a lot of persuasion to get Malaysia Airports Holdings Berhad (MAHB) on board. Is that so? Of course, yes. I mean India was the first time we were going overseas and, of course, we were rather cautious at that point in time and we really wanted to make sure that, you know, we have the right partner to work with.
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We continue to revisit our proposals and look at these on a case-by-case basis and we are very prudent in our selection because we do not want to overstretch ourselves
Your assessment of Delhi and Hyderabad airports. I think they are great airports. They are world-class airports. The design everything — it’s all world class. Global standards. KLIA is a great airport, but the LCC terminal gives it a completely different dimension. I think the LCC has served its purpose of giving the low-cost carriers room to expand because at this stage at the main terminal, they wouldn’t have enough capacity for expanding the way they are. What we have already built, gives them an opportunity to expand their operations. The general perception and trends are that LCCs will dominate operations as we move ahead to closer to 6070 per cent of all business. So what happens to mainliner terminals with expensive investments? No, I think as far as the passengers are concerned they still want the same kind of airports. I mean they still look for retail, they still look for shopping, F&B. So, airports will continue to have all those things. I thought even in a current airport right now, they have these facilities.
We are building a second terminal, a huge terminal which will be ready by next year and will essentially cater for low-fare travel growth in KL. How is it going to be different from the present terminal? The present terminal… the growth has been very substantial. The present terminal caters for only 10 million and an additional three million now. The new terminal is going to be for 30 million. Is it an expansion of the present airport? A completely new terminal for thirty million. Will it be a seamless integration of the present LCC terminal with the new one? We’ll close down the present low-cost terminal once the new one comes up. All those airlines operating at the present low-cost airport will be moved to this terminal. What happens to the present one? The present one? We will use it for cargo.
How big has been Air Asia as a catalyst in the growth of aviation in the region? Air Asia has played a very dominant role in the development Then what’s the concept of low-fare travel. We work of no-frills?Agreed there very closely with them and we will be F&B and retail, support them very strongly. We but what’s the look into their operational difference? requirements in terms of their At this stage when we business plans. We also work BEAUTIFUL EDIFICE: A view of the satellite terminal at look at it, we have to very closely with Malaysian Kuala Lumpur International Airport. cater for the passengers. Airlines. These are all our When we talk about no-frills, the requirements are the partners. Only thing, their requirements may vary. So operating requirements of the airlines. In the terminals, we have to cater for their differences. we have to give out the best. There will be not that much difference in terms of the passengers’ Are you also expanding on your own beyond your requirements. Maybe the shops will be a little different. collaboration with GMR ? The one in Madinah is our own. What’s the real difference? Maybe the type of offering may be different. Maybe in Are you looking at others too? the main terminal you may have high fashion; F&B Not at this stage, no. catering will be different. Yes. There could be some difference. But still, most of the requirements are the Successful airports look for opportunities, why are you same. The passenger requirements are the same. hersitant? Are you not interested? We are. We are very prudent about it. We continue to But what happens during a downturn. Airlines cut revisit our proposals and look at these on a case-by-case down routes… What is it that airports can do to cut basis and we are very prudent in our selection because their costs? we do not want to overstretch ourselves. It is a very We accept the fact that the gestation period for an important decision for us. airport takes a long time. Infrastructure development always takes a long time to recover. And so we accept Principally, though, your partnership with GMR is for ups and downs. We include that into our forecast. all their ventures in the airport business. No, it is open. They could partner with us or we could What are new plans for KLIA? discuss on a case by case basis. JUNE 2011 CRUISING HEIGHTS
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§§ INTERVIEW ¨¨
It’s been a unique experience SOUTH AFRICAN CONNIE MULLER IS AT EASE AND AT HOME AT MUMBAI AS THE HEAD OF OPERATIONS AT MUMBAI AIRPORT. IN THIS FREE WHEELING INTERVIEW, HE SPEAKS ABOUT THE COMPLEXITIES OF CLOSING AND RECARPETING A RUNWAY WHILE OPERATIONS HAPPEN ALL AROUND. SOME EXCERPTS
Q: A:
What all come under your charge — operations?
Operations is basically divided into three separate areas. First of all there is the landside operations — that is all the operations from the city up to the terminal. Then the terminal operations which is all the operations in the confines of the terminal. And then the airside operations which covers all the activities outside the terminal on ground; and in certain of the activities, on the approaches. All operations can classify in one of those three. Airport operation does not necessarily include the operations in the sky that is normally carried out by an independent organisation which handles the ATC and so forth, in our case completely by AAI. In terms of operational efficiency, where do you see the actual efficiency matrix in order to improve aircraft movements, turnaround etc? The main thing that you must understand is how the capacity of an airport is determined. The capacity is a permutation. It’s your air capacity, your ground movement capacity, capacity of parking facilities, capacity of the terminal and then the capacity of your landside. And all of those capacities must be in synchronisation to actually optimise the usage of an airport.
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The operational efficiency is a combination of your planning and operational efficiency and that of the ATC. No, it’s not only us. The airlines play the biggest role. If an airline does not operate in line with its plans then it doesn’t matter what you do on the ground or in the air. If an airline isn’t efficient and uses its slot, the next airline gets to use it. No, it doesn’t work that way. If your slots are managed properly, then all aircraft will come to your space in that sequence. If one doesn’t take up that slot there’s going to be a gap, if everything goes according to plan. The problem is not if an airline does not fill a slot; the problem comes in when an airline fills an extra slot by becoming late. So if an airline is late, it immediately takes up a slot somewhere, which is not there and because that airline then comes in an unavailable slot, then somebody is going to lose his slot. So he moves one up. So all those slots then move up by one. Now you get three airlines that don’t follow their slots. So suddenly you’ve got three aircraft wheeling up and it sets everyone behind them. Now you get the other thing — there are also nonscheduled movements, there are also emergency movements. We have divergence to Mumbai on a regular basis for medical reasons. Now that diverted flight that comes in here — if our slots are full — that aircraft gets preference because it’s an emergency. He takes up a slot that is not there. So suddenly everything moves up. When you say regular how many? More than two-three-a-month. Mostly international carriers. Any aircraft that lands, if it lands here without a slot, you also have two different types of that type of movement. It’s an airline with ground support or an airline without ground support. An airline with ground support is again a permutation of two things. The ground support might be at the airport at that point in time or might not be at the airport at that point in time. All of those permutations again will play a role in how long that aircraft is going to be on the ground. Now, where you have a limited number of parking bays, if it’s
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PHOTO COURTESY: f4aviation.co.uk
Take a very simplistic way of looking at the capacity in the air — a small aircraft takes up more capacity than a 747. Now a lot of people might say that doesn’t make sense, but if you have a stream of aircrafts and in that stream of aircraft you have one small aircraft, then the whole stream gets affected and lengthened because the space that must be provided between a 747 and that small aircraft, must be more, otherwise the small aircraft will be turned on its back. Now in all these areas you have that difficulty in matching the capacities. So you can’t say that in one specific area it is weighing more than the others. In any of these variables, if there is one that is out of balance with the rest, it will affect all permutations. INSPIRING CHANGE: MIAL is keen to replicate the Gatwick Airport infrastructure model.
an emergency, you must give him a parking bay. In a medical emergency, you must give him a parking bay where the medical evacuation can take place. Because he has now diverted, if he has taken up fuel just sufficient to do his normal route plus the holding at these final destinations, and suddenly has burned more. So if he wants to resume his flight, he has to take up fuel. So all of those things come into play. So, any diversion, to an airport is at least an hour. This is true of airports world over, what has been the experience of Mumbai Airport in all these aspects? At this stage you must remember that when MIAL got involved with this airport, there were a lot of issues that had to be addressed. For example, both our runways had to be reconstructed. It’s not a simple overlay, but total reconstruction. Last year, when we did the cross runway — runway 1432, we closed that runway for a period of six-seven months. But we closed that runway completely and the reason why we had to do that was a part of that runway, the foundation was so poor that we had to dig it up deep. And we had to reconstruct that portion in layers and that is the only section of our total runway network at this stage that is constructed in concrete. But that whole runway had to be reconstructed. In addition to that, we had to reconstruct the intersections. Now the difficulty was a cross runway configuration is that when you touch the intersection, then you close the airport. You remember the twentytwo days that we closed this airport for six hours per day, once a week? That in my opinion was one of the most challenging construction projects that we had embarked upon. And the fact that we were able to complete that work and to complete not only that work because when you embark upon a major reconstruction project for any project on the airport — DGCA and IACO — requires all airports to follow a safety management system where you have to submit a detailed plan as to what you want to do, how you are going to execute that and how you are going to mitigate any risk factors that must be identified during this process of analysis.
DGCA and IACO — requires all airports to follow a safety management system where you have to submit a detailed plan as to what you want to do, how you are going to execute that
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First of all, I don’t believe that our airspace is as efficiently managed as Gatwick. Secondly, I do not believe that our operations for Air Traffic Control (ATC) are as efficient as Gatwick
Now that whole process was completed and DGCA gave us permission to undertake that work. And in those twenty-two weeks that we did that work, we then started analysing already the work that we have to do this year. When we did that analysis we realised that if we work on the main runway (0927) and we operated on the cross runway (1432), then we must have the parallel taxiway available as well. So the intersection of the parallel taxiway was the main runway, also had to be upgraded in the same period of twenty-two weeks. Because that was not included in the initial safety analysis that we did for 1432, when we identified that there was a problem, with the next analysis we had to adjust this scope of work that was carried out in those twenty two weeks and did that as well. Fortunately, our processes enabled us to identify that so we could immediately adjust and also include the taxiway intersection. You must realise that if you take a big chunk out of your total capacity, it must have an effect on the available capacity. But in order to develop and to upgrade the airport as per your master plan, there are certain sacrifices that must be made. But even with those sacrifices, we’ve been able to increase the number of air traffic movements (ATMs) that we’ve operated over here and we’ve been able to increase the number of passengers. Why is Gatwick exceptional? And what makes it exceptional? Yes, but its efficiency is just again a product. It also have a mix like us. First of all, the air space is managed in a way that enables them to handle 55 movements. The total air space management in England actually supports that. Then the ground movements also support 55 movements. It also has sufficient number of parking bays that can accommodate 55 movements an hour within the turnaround time of each of those aircraft that are parked. And the terminal building can accommodate that number of passengers that come in and move out with 55 movements an hour. And they’ve got the city links that can give those passengers out of the terminal. So it is a permutation. No, applying the Gatwick model where do you see the roadblocks? First of all, I don’t believe that our airspace is as efficiently managed as Gatwick. Secondly, I do not believe that our operations for Air Traffic Control (ATC) are as efficient as Gatwick. I know for sure that our ground movement cannot be operated as efficiently as Gatwick at this stage. Simple thing — we are closing our main runway for eight hours a day, six days a week. So at this stage, it’s not possible to handle that. Once you are ready, then? Three years from now when we’ve got all our parking bays, we’ve got our runways configuration, we’ve got our approaches sorted out, then I don’t see any reason why we should not be able to handle 50 movements an hour. Gatwick is not a unique scenario in the world.
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Gatwick was looked at as an airport with a single runway. But there are other airports with a crossrunway configuration because the cross-runway configuration should be able to give you more than Gatwick. So the master plan for this airport has been drawn up for cross- runway configuration, which gives us a capacity that might be more than Gatwick. That is the maximum that this airport can handle because we’ve got few limitations of a cross runway. Possibly with efficient cross-runway operation we can handle sixty movements. Three years from now what will be the assets ready on the ground ? You must remember that one of the things that we are looking at doing is to develop this new integrated terminal. As a terminal that will be able to handle both wide bodied and narrow-bodied aircraft. So, around that terminal we are going to have thirty-two aerobridges, but those thirty-two contact stands can double up to sixty four narrow-bodied stands. So, on one widebodied stand you can park two narrow bodies. Now that makes the configurations of the aerobridges a little bit more difficult but all sixty-four narrow-bodied stands will be served with aerobridges and the thirty two wide bodies will be served with aerobridges. The two Code F wide-bodied stands which are for the 380s and the big 747s will actually be fitted with three aerobridges. Now that again, if you have a configuration where you’ve got aerobridges and you’ve got fuel hydrants and you’ve got all of that in place, then you should be able to turn an aircraft around faster than when you park the same number of aircraft remote and you have to transport everybody with a coach. So, that is just one of the other aspects of this whole permutation of what establishes or what determines your capacity. What are the hotspots you have identified and how do you mitigate them? For each of those hotspots, we then sit down with the ATC and with the airlines and we come up with procedures and changes in order to mitigate them. That are the reason why you must notify hotspots. The hotspots are notified and become part of the AIP which is the publication that all pilots read. So you approach an area and you are being told that that is an area you must be careful. Then the pilots take due care. That’s the reason why you have to identify the hotspots and notify in your AIP. How many hot spots do you have? Seven. Now during the runway reconstruction that we are busy with now, we have actually identified a separate chart in which we have identified other hotspots because closing the main runway, then operating on the 1432 runway, having to cross that, while all the other operators don’t obviously there will be other areas where the pilots must take due care. That’s a temporary thing.
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Tremendous Achievement he ambitious project to ramp up the numbers comes in the wake of MIAL’s decision last year to get UK’s air traffic service provider NATS to study how the capacity of the airport can be increased. NATS has already made a presentation to the Civil Aviation Ministry and it is now officially a work in progress. So what inspires MIAL to recruit NATS? Simple, it is being inspired by London’s legendary ‘other’ airport, Gatwick that has achieved global eminence for doing 60 movements per hour using a single runway. MIAL’s proposal for 48 flight movements an hour -- approved by the DGCA -- would take another year to implement. NATS will utilise a number of software simulations and modelling tools for the purpose of runway and airport capacity determination, identify the bottlenecks that limited airport capacity, enhancement of capacity achieved through improvement in air traffic procedures besides making changes to physical infrastructure, better ATC equipment, improved ground-handling system and ATM tools, etc. Mumbai has a cross runway 14-32 and simultaneous runway operations occur during the peak hours in the morning and evening. Currently, the airport does around 34 movements an hour on an average, but airport officials are categorical that on a day-to-day basis, the number is much higher. To achieve higher movements on a consistent basis, pilots will have to be educated on clearing the runway in the shortest time possible and air traffic controllers will have to undergo additional training. MIAL will also have to build more rapid exit taxiways.
T
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Lack of new slot availability at CSIA is one reason why airlines have found it difficult to introduce new flights in and out of Mumbai despite the growing passenger traffic. Over the past two years, the Civil Aviation Ministry rejected proposals from at least 15 international airlines that were keen to start operations to Mumbai. Analysts said this mismatch in demand and supply is one of the reasons why airfares out of Mumbai shoot up during the
peak-travelling season. Poor runway infrastructure is another reason why flights end up hovering over Mumbai airport for 20-40 minutes, waiting to land. Airport officials said 48 movements an hour is not an unreasonable target and, in fact, the airport has seen high movements despite the secondary runway being in use from 9 am to 5 pm. In real terms this seems like a marginal increase considering MIAL has already approved 44 flight movements per hour for Mumbai, including 36 commercial flights per hour and an additional eight general aviation aircraft movements. This should really not be difficult especially when the main runway will be in use again.
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§§ INFRASTRUCTURE ¨¨
Unshackle PPP airports to accelerate aviation PRIVATELY-HELD AIRPORTS IN THE COUNTRY HAVE BEEN FACING OBSTACLES IN THEIR GROWTH. SATYAN NAYAR FROM THE ASSOCIATION OF PRIVATE AIRPORT OPERATORS POINTS OUT THAT THE COUNTRY WOULD BENEFIT IF RIGHT POLICIES AND INCENTIVES ARE IN PLACE. ver the last two decades the countries around the world have spent on an average 4 per cent of their national income on creating infrastructure. Despite this massive expenditure approximately 1.1 billion people still lack access to primary infrastructure facilities such as water, sanitation, electricity and transportation. This shows that largescale government expenditure alone does not translate into improved public services. The problem is often a combination of weak institutional capacity, poor governance, lack of incentive for efficiency, political interference and multiple supervision by multiple governmental agencies. Because of this the management of the project lacks true ownership, functional autonomy and incentive for efficiency and productivity. Public Private Partnership (PPP) is the best available solution to overcome such a situation. Even though PPP does not have the ability to solve all the issues for development of infrastructure facilities, they can be the most effective tool for addressing the underlined causes for inefficiency and poor performance. Above all the PPP models give much relief to the government on its constraints of raising large funds required for providing the necessary infrastructure in the country. It is in this background that several countries have pioneered the development of innovative PPP projects across a range of infra sectors and are successful in improving the delivery of services in a manner that is affordable, equitable and sustainable. All the infrastructure sectors in the country such as electricity, oil, gas, coal, telecommunications, ports,
O
EFFICIENT AND CLASSY: Delhi International Airport's T3 is one of the best examples of PPP.
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airports, inland waterways, water and sanitation, railways and highways are priority sectors where the government is actively involving private participation to meet the funding gap. The development of infrastructure is the top priority of the government. The importance of this can be gauged from the fact that in the Union Budget for the year 2011-12, the government has allocated `2,14,000 cr for infrastructure which
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Even though PPP does not have the ability to solve all issues for development of infrastructure, they can be the most effective tool to address inefficiency and poor performance.
amounts to 48.5 per cent of the total plan allocation. In fact, Indian infrastructure has the potential to absorb more than $ 150 bn in FDI over the next five years. PPP presents most attractive option of meeting the infrastructure targets not only in a timely and most efficient manner but also in upgrading the standard of delivery through greater efficiency. However, there are many critical issues and concerns surrounding the design of policies and creation of institutions that will promote PPP to attract investments and a balanced regulatory framework which will ensure both viability and a level playing field between the government and private participants, etc.
REGULATORY UNCERTAINTY In the case of Indian airports, the private sector has played a major role in airport infrastructure development over past few years by constructing worldclass airports, bringing cost effectiveness in operations, maintenance and service delivery. It has also ensured timely and adequate capacity expansions. Historically, the growth in demand for air travel outpaced airport infrastructure facility. Realising this, the government decided to restructure and modernise airports through joint venture companies through PPP route with an objective to set up airports of international standards and to utilise private funds and professional management expertise available with private sector. Private participation has helped overcome this gap in demand and supply by constructing world-class airports in India on PPP project models at Delhi, Mumbai, Hyderabad, Bengaluru and Cochin. It is needless to mention that the development of the sector requires a
robust and forward-looking regulatory framework. A fair and transparent regulatory process ensuring regulatory systems that are insulated from interference and political capture is very important for achieving the desired goal. It was only anticipating a progressive and stable regulatory framework that private participants have invested approx more than `30,000 cr in the sector in the last five years. Establishment of stable and investor friendly regulatory mechanism is vital for the development of PPP projects. The Planning Commission recognised this fact and noted in its policy papers on infrastructure: “The ability to mobilise private resources on large scale depends critically upon the creation of a supportive investor-friendly environment and the regulatory system is a critical component of that environment.� Contracts and legal agreements are at the heart of any Public Private Partnership transactions. PPPs achieve the objectives set forth by the government if the agreements are grounded in the rule of law with win-win approach for both the government and the private participants. Needless to mention that we should take advantages of international best practices to improve the PPP models which gives confidence to the investors and ensure world-class service delivery.
THE TILL ISSUE The most important regulatory issue confronting the PPP airport operators today is the Till issue. Airports worldwide are witnessing many non-aero activities other than the movement of flights. These commercial activities generate revenue. Treatments of such non-aero revenues in tariff fixation are generally known as Till Approach. There are three types of approaches on treatment of such revenues, i.e. Single Till, Dual Till and Hybrid Till. In the Single Till the entire revenue generated out of the non-aero activities in the airports are adjusted against the Aggregate Revenue Requirement (ARR) of an operator. In the case of Hybrid Till, a certain percentage of the non-aero revenue is only considered whereas the Dual Till approach does not consider non-aero revenues for the purpose of calculating the revenue requirement. ARR is the maximum revenue which an operator is entitled to from his regulated services as determined by the regulator. In order to understand the real impact of non-aero revenue to the financials of an operator, we must understand the methodology adopted by the regulator for calculating the revenue requirement of the operator, i.e. ARR = Return on investment + Depreciation + O&M (-) Non-aero revenue
(Cost of Capital)
(Cost of Depreciation of Assets)
(Cost of O& M)
From the above one can understand that if the entire non-aero revenue is considered for tariff fixation this will adversely affect the viability of an airport operator. There are arguments both in favour and against Dual or Single Till. The longterm viability of the operator largely depends on the decision on this Till issue. The single Till Regulatory position of AERA on this issue will adversely affect the viability of all the PPP airports. The JUNE 2011 CRUISING HEIGHTS
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AVIATION OUTLOOK 2011 reality is that adoption of the from reality. On the other Single Till approach would hand, the private airports, not send the right signals to under the current regime the potential investors and with the freedom of could be seen as a retrograde developing non-aeronautical step after the recent revenues, have proven their successful experience of efforts of achieving service private participation both in excellence. Private the Brownfield and investment in PPP projects Greenfield airports in the will get encouragement only country. Single Till is only if there is an assurance on suitable if the entire airport adopting Dual/Hybrid TILL sector is managed by approach. government departments CAG AUDIT OF PPP where viability, capacity PROJECTS building, quality of service, The resistance to change the passenger and cargo facilities mindset of the people is and profit are not critical evident from the recent issues to be considered. attempt by various agencies It is pertinent to note here to control the PPP projects. that the report of the Deepak More and more private Parekh Committee on operators are investing into Infrastructure Financing, the sector in the construction, May 2007, pegs capital operations and maintenance investment requirement for of airports to world-class infrastructure sectors during standard. As explained the XIIth Five Year Plan at $ 1 earlier, establishment of trillion. Given that the airport PROFESSIONAL TO THE CORE: (Top and bottom) Mumbai and investor-friendly regime is sector competes with power, Bengaluru airports showcase quality. vital in attracting huge ports and roads for capital, investments into the sector. Everybody agrees that which have relatively low regulatory risk and most without the involvement of private sector participation domestic investors have presence across infrastructure to infuse the much required funds for the development sectors, it is highly likely that the much required private of this sector is next to impossible. Hence, the policycapital will find its way to other infra sectors starving makers has to ensure an investor-friendly environment the airport sector of funds. for the smooth flow of both domestic and foreign The revenue from real estate is also to be treated as investments into the sector. There are many issues which aero revenue. Real estate revenue development comes are not investor friendly or are rather obstacles for with its share of risks as well as real estate development encouraging private participation such as proposal of requires specific entrepreneurial effort and expertise. An CAG to audit PPP projects, declaration of private airport operator has to incur the upfront costs with no airports as public authority for the purpose of Right to certainty of the quantum of real estate revenues. In such Information Act, etc. These issues are seriously affecting a scenario the airport operator in fact must be the investor's interest and willingness to invest in this incentivised for real estate revenue development and all sector. There are apprehensions that such intrusive the revenues accruing through such effort should not, by regulations will adversely affect the functional autonomy default, go towards subsidising aeronautical charges. now available with the PPP projects which are essential Revenue shares bid out for Brownfield airports implicitly for achieving international standards. Too much of such value the revenue generating potential of accompanying oversight from multiple agencies can impede land. Greenfield airports like Bengaluru, Hyderabad and innovations which are badly needed for efficient Cochin airports are far away from city centres. It would performance rather than complying with some outdated take substantial time, effort and costs on part of these rules and procedures. airport operators to develop commercial activities profitably in these areas. APPLICATION OF RTI ACT ON PPP PROJECTS The concession agreements signed with the An issue of concern relates to the applicability of Right operators have stringent inbuilt performance standards to Information Act (RTI) on private airports. The which if not met lead to heavy financial penalties. As a industry is deeply concerned about the increasing result the concession agreement themselves ensure number of RTI applications seeking information service level at a high standard for international including the information on business plans, etc. comparison. Hence, the argument that the Single Till Responding to such RTI information is not possible as approach only can protect the interest of users is far
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A fair and transparent regulatory process ensuring regulatory systems that are insulated from interference and political capture is very important to achieve desired goals.
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Many studies have proved that the PPP projects in the long run will provide the public service more efficiently and economically than a sole public entity.
not only would this lead to disclosure of confidential business information but also consume valuable time and resources. In fact, most of such applications seem to be filed for frivolous reasons. It is also quite possible that persons with vested interests use the RTI medium to get information to misuse it. This could be with the sole intention of tarnishing the business reputation of an operator and definitely not with any public interest in mind. If at all the government wants to consider RTI Act mandated for PPP projects, it should be only for the projects which have more than 50 per cent of shareholding by the government. All other PPP projects should be free from the RTI Act.
SECOND AIRPORT WITHIN 150 KM
airports across the country to world-class standards and not limiting the private sector role only to city side development. Many studies have proved that the PPP projects in the long run will provide the public service more efficiently and economically than a sole public entity. Efficiency consideration also suggests that the ownership of providing public service does not have to be exclusively on public bodies. Mixed public-private ownership, i.e. PPP will be more efficient in terms of cost and service delivery. There is no economic reason for limiting the private participation only on the city side development of non-metro airports.
AIRPORT CHARGES FROM 80-SEATERS
Airports are getting revenue from commercial aircraft As per the present policy, no airport should be allowed for using the airport facilities. However smaller aircraft generally within 150 km from existing airports. However, — 80-seater and below — are exempted from payment there are attempts to set up a few airports within 150 km of landing charges. This results in revenue loss to the of existing airports which seem to be more for political airport operators. In order to encourage regional reasons rather than on techno-economic considerations. connectivity, the government had earlier exempted This also will result in duplication of resources and smaller aircraft from payment of landing charges. investments. The operators have serious concern on their However, now due to robust growth in the economy, long-term viability. Such airlines are witnessing huge proposals should not be increase in capacity and considered on routine basis. If demand and hence there is at all any such proposals are to no justification to provide be considered, then the exemption to such smaller authorities concerned must aircraft even now as all the take into account all aspects airlines are using such including the viability of the smaller planes on existing operator, the traffic commercial business model potential for both existing and even on metro routes to new operator, etc. before generate revenue. Moreover, approving such proposals. this is also against the “user More importantly, the viability pays” principle. In fact, of the existing airport is to be many a times the fare ensured first before taking a charges of these aircraft are PIONEERING EFFORT: The Cochin International Airport was the first decision to set up a new one in PPP initiative in creating airport infrastructure . equal to or even higher than the same city as otherwise it is the full service carriers. The likely that both the existing and new airports will become loss of revenue earning potential to the PPP operator is unviable which is not in public interest. not negligible to ignore. Airports play a critical role in promoting trade, PRIVATE PARTICIPATION IN 35 NON-METRO tourism and economic development of the country. All AIRPORTS PPP airport operators are striving their best to provide It is evidently clear that the steps taken by the world-class airport infrastructure, providing world class government for private participation in the aviation services and helping accelerate the development of the sector is a big success. However, in the case of the 35 aviation sector in India. PPP models must be emulated in non-metro airports earmarked for all sectors particularly in airports so that the government expansion/modernidation, the private operators are can attract the much required scarce resource which allowed to participate only for the development of city when effectively utilised will create vital infrastructure side and not given the opportunity and responsibility for in a time-bound manner. Experience in other countries the airside and terminal development. On one side, there shows that much higher private investment levels can be is argument that the government does not have sufficient achieved with the right policies and incentives in place. funds to undertake such large investments, whereas on Given a progressive, forward-looking and investorthe other side, the private sector that is willing to invest friendly policy environment with a stable regulatory are not being fully permitted. This is to be changed and system the PPP projects would enhance the wealth and the Public Private Participation (PPP) model should be prosperity of the nation and in this exercise all the adopted to allow private operators participate in the stakeholders will be equally benefitted. PPP is a win-win entire modernisation process of developing these situation for all stakeholders.
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AVIATION OUTLOOK 2011 §§ SPECIAL SECTION ¨¨
AAI ushers in welcome changes THE AIRPORTS AUTHORITY OF INDIA (AAI) MANAGES 125 AIRPORTS BUT THERE ARE NO IMPORTANT ISSUES THAT DEMAND IMMEDIATE ATTENTION, FOR THE SIMPLE REASON THAT ALL CRITICAL AREAS HAVE BEEN WELL TAKEN CARE OF IN THE PLANS OF MODERNISATION, MENTIONS VP AGRAWAL, CHAIRMAN, AAI. s an outcome of the influx of air traffic in the past decade, AAI embarked upon a plan to modernise and upgrade its airports with a dual aim: first, to match/keep a pace with the increase in density, both of the aircraft and the air-travelling populace; and, second, to provide the country with world-class airports. Accordingly, 60 airports including the Kolkata and Chennai airports were identified for modernisation and upgradation, the rationale being to develop the state capitals and other airports that have the potential to attract tourist and business travellers who would meaningfully contribute towards the economic growth of the state. The task involved was so humongous and cost intensive, that the magnitude can well be gauged from
A
the fact that the capital expenditure of AAI in the 10th Five Year Plan was `3,534 cr, whereas in the 11th Five Year plan it was `12,964 cr, an increase of almost 300 per cent, the modernisation of the Kolkata and Chennai airports being to the tune of `4,340 cr (`2,325 cr for Kolkata and `2,015 cr for Chennai). Most of the airport infrastructure projects initiated have been completed or are near completion and are thus, making AAI stands in good stead, as the facilities provided are not only userfriendly but also of world-class standards. Therefore, it would be appropriate if I were to state with confidence that the infrastructure at Indian airports are looking up. As of now, there are no important issues which demand immediate attention, for the simple reason that all critical areas have been well taken care of in our plans of
WELCOMING THE WORLD: AAI’s world-class airports — (clockwise from top left) Chennai, Amritsar and Ahmedabad — are architectural wonders that provide comfort and facilities to fliers.
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2011 AVIATION OUTLOOK modernisation. However, we are fully conscious of the fact that modernisation and upgradation are a continuous process to be at par with the other airports the world over. In addition to the ground-based airport infrastructure, AAI has taken many steps in modernising its CNS-ATM facilities, where AAI has drawn up the Master Plan for implementation of FANS (Future Air Navigation System). This includes shift from Voice Communication to Digital Data Communication, from Ground Based Navigation to Satellite Based Navigation (i.e. GAGAN-Indian SBAS), modern radar coverage with ADS-B, Multilateration, etc. The implementation of the CNS-ATM Master Plan will put India amongst an elite group of countries with an efficient ATM System supported by a strong and robust CNS infrastructure consisting of Digital Data Unit, integrated ATM automation network, SWIM (System Wide Information Management) Separation Management System. The aim is to provide safe, efficient, cost-effective and environment-friendly ATM services, applying gate-togate approach and to achieve a “Collaborative and Coordinated Global Approach” to ensure harmonisation
and the adoption of the technological solutions. To ensure that appropriate returns accrue, AAI took a conscientious decision to take advantage of forums such as RDG and has thus put 16 of its airports on the Routesonline website which is frequently visited by major airlines and other stakeholders of global aviation. AAI also participated in a big way in the RDG Forum 2010 held at Vancouver, Canada, to market its airports and announce its arrival in the global aviation arena. It was also our good fortune that we got an opportunity to host the 6th ACI Asia-Pacific Regional Assembly, Conference and Exhibition for the first-time ever in India. This was a unique forum for us to showcase our strength and expertise to nearly 400 delegates from across the globe. It would only be apt if I were to conclude on an optimistic note by assuring all air travellers coming to India that we at AAI manage 125 airports and the whole of the Indian/adjoining oceanic airspace as identified by ICAO. You are not only in safe hands but would also enjoy our hospitality in keeping with true Indian tradition at our world-class airports, making your visit more meaningful, pleasant and memorable.
Green airports, the AAI way THE AIRPORTS AUTHORITY OF INDIA HAS TAKEN CONCRETE STEPS TO INCORPORATE A GREEN APPROACH IN THE CONSTRUCTION OF AIRPORTS UNDER ITS JURISDICTION ACROSS THE COUNTRY. THE CONSTRUCTION OF PAKYONG AIRPORT IN SIKKIM ENTAILS THE USE OF REVOLUTIONARY TECHNIQUES NOT ONLY TO MINIMISE ENVIRONMENTAL DAMAGE BUT ALSO TO OVERCOME THE UNIQUE CHALLENGES POSED BY THE SITE, POINTS OUT VP AGRAWAL, CHAIRMAN, AAI. irports are a country’s window to the world and symbols of national pride. The Airports Authority of India (AAI) is the premier organisation in the country in the civil aviation sector. Providing state-ofthe-art infrastructure contributing to the economic growth and prosperity of the nation is an essential part of AAI’s mission statement. As a responsible corporate entity, AAI has included ‘sustainability’ also in its mission and goal. AAI has been paying special attention at the planning and design stage in the construction of airports:
SOLAR ENERGY
SITE
WATER AND WASTE MANAGEMENT
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Conservation of top soil Prevention of erosion during construction Avoiding noise, water and air pollution during and after construction Protection of existing trees and plantation of trees in and around building, after construction
BUILDING FORM
Shape, orientation and envelope of building depending upon solar movement Maximising daylight and heat gain Wind direction Use of insulated glass
Solar photovoltaic panels, cells for electricity generation Solar water heaters Use of solar energy for street lights
ENERGY CONSERVATION
Adherence to Energy Conservation Building code — ECBC norms Use of all electrical appliances like fans, air conditioners, geysers, etc conforming to Bureau of Energy Efficiency (BEE) 3 star and above Occupancy sensors, timers to shut off lights automatically
Use of faucets/taps with sensors Use of cisterns with low water consumption Recycling of water through Sewage Treatment Plant (STP) Use of recycled water for HVAC, gardening and flushing Rain water harvesting through recharging ground water by bore wells. AAI has adopted a policy of having all its projects evaluated on ‘Green Rating for Integrated Habitat
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AVIATION OUTLOOK 2011 Assessment’ (GRIHA) — with the aim of achieving a four-star rating. This will go a long way towards addressing issues relating to the country’s preparedness with respect to climate change.
SIKKIM AIRPORT Sikkim is a land-locked hilly state in the north-east. Its northern border touches Tibet and the southern border is with West Bengal. The nearest railhead is Siliguri and the closest airport is Bagdogra. Due to the hilly terrain and the meandering road along the Teesta River, connectivity to the capital Gangtok is not always assured, especially in the rainy season. With a view to improving connectivity to the state capital, the government decided to construct a new airport. The site selection for an airport in a hilly region is a tedious task, as an airport’s runway and apron requires flat land due to operational considerations. Pakyong situated approximately 30 km from Gangtok was chosen as the new site after a detailed survey. The new airport at Pakyong would be able to handle ATR-72 class of aircraft. Its runway 02/20 is 1700 x 30 m and apron will be able to park 2 ATR-72s. The new terminal building will have a capacity of handling 100 passengers at a time. All other facilities and features required for a civil airport i.e. ATC tower, fire station, communication and navigational systems, airport runway lighting, meteorological aids/system are included in the project. The biggest challenge while taking up the construction of runway, parking apron, etc. was the cutting of hills and filling up valleys and ravines to achieve flat terrain. Other challenges included: Retaining wall/structures up to 75 m height Disposal of extra earth Sourcing for borrowing earth material for filling Stability of slopes Minimising the impact on environment due to cutting and filling.
These challenges were met by: Adopting a design with optimum level of runway at which volume of cutting matched with filling requirements Choosing innovative ‘Composite Soil Reinforcement System’ for hill slope retaining structure
GREEN TERRAMESH UNIT FASCIA Based on the following parameters, the final selection of the system was done: a. Seismic consideration: Sikkim airport being located in a seismic region, the flexibility of structures is very important to absorb seismic shocks. RCC walls being rigid offer little flexibility during seismic activity and hence are not very suitable. Reinforced soil wall with panels, segmental walls, wraparound system walls and composite soil reinforcement system walls are flexible and have an ability to withstand and absorb seismic shocks, making them more suitable. b. Foundation considerations: Normally, RCC walls require greater depth of foundation requiring increased excavation. Reinforced soil walls require lesser excavation effort as the foundation depth is smaller. c. Speed of construction: RCC wall construction consumes more time as it involves erection of formwork, placement of reinforcement bars, curing, removal of formwork etc. Composite soil reinforcement system walls are less labour intensive to construct and by utilising soil, the construction is speedy. They have modular blocks for ready use and don't require any special form works. d. Use of local material: One of the stringent requirements of the project is to use cutting material like soil and stones for filling on the valley side. Composite Soil reinforcement systems use locally available stones. e. Cost of construction: RCC wall construction requires greater excavation for foundation, costly materials such as cement and steel, scaffolding materials.
Rooting for excellence in navigation five-day event comprising an ICAO workshop seminar and Task Force Meeting was inaugurated recently by Civil Aviation Secretary Dr ZNA Zaidi. Those present in the inaugural function included VP Agrawal, Chairman of Airports Authority of India (AAI), V Somasundaram, Member (ANS) AAI and Len Wick, International Civil Aviation Organisation (ICAO), ATM Regional Officer, Asia Pacific Region, Bangkok. Delegates from more than 20 countries across the world and professional bodies deliberated on the implementation of PBN (Performance Based Navigation) and the potential benefits to airlines in particular and the travelling public at large. PBN implementation will result in the efficient use of airspace, reduction in operating costs of airlines and the carbon footprints. The AAI has been playing a stellar role in implementing these procedures at various airports and bringing together neighbouring countries, so that a
A
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EFFICIENCY ABOVE ALL: Civil Aviation Secretary Dr S N A Zaidi at the inauguration of the ICAO PBN Workshop.
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Composite Soil Reinforced walls are 50 to 70 per cent cheaper than RCC walls. Based on these criteria, composite soil reinforcement system was the best possible solution as the retaining structure. Thus an environment-friendly solution on cutting the sides has been adopted by minimising the use of any synthetic material.
ENVIRONMENTAL IMPACT
petroleum purification. Therefore, the reinforcing element made up of polyester and LLDPE has a very limited impact on the environment. Using a composite system is cost effective and very environmental friendly. In addition to the above, the Gabion Facia i.e. Terramesh unit uses locally available stones and sloped facia, i.e., Green Terramesh promotes growth of vegetation at the facing. Thus, apart from substantial reduction of CO2 emission, there is an increase in oxygen level in the environment due to the vegetation on the facing.
Generally, for retaining structure use of RCC retaining wall is an obvious choice. However, there is big impact CHANNELISING SURFACE WATER (JHORAS) on the environment whenever an RCC structure is AND SUB-SURFACE WATER constructed. For construction of RCC retaining structure The site at Pakyong has rugged and mountainous for Sikkim airport project requiring 53,600 sq m of terrain where the contour level varies from 1330 to retaining structure with height ranging from 20 to 75 1520 metres. A huge catchment area exists above the metres, over 150,000 cu m of concrete and 18,000 MT of airport land and there are steel would have been about 11 water streams required. To produce 150,000 (jhoras) flowing across the cu m of concrete, location. In addition, there are approximately the following number of sub-surface water material would be required: Cement: 60,000 metric streams, water springs across tonnes the airport site, which serve Coarse aggregate: 220,000 the needs of population metric tonnes around airport site. Fine aggregate: 150,000 Channelising of these surface metric tonnes streams and sub-surface Steel: 18,000 metric streams is very important not tonnes only for stability of filled-up The amount of CO2 earth embankments but also emissions connected to to meet the water needs of the the electricity required to people around airport site. ENVIRONMENT-FRIENDLY: Construction work at Pakyong produce steel at the steel AAI designed storm water plant has been calculated to be 0.65 tonnes of CO2 drainage systems keeping in mind the environmental per tonne of steel. aspects taking care to avoid any environmental For the proposed solution only 608 MT of steel shall damage by following the topography of the land. The be used for the facing. Secondly, reinforcing element, i.e., design takes care of both surface and sub-subsurface high strength geogrid used for reinforcing the soil is ade water to keep it intact. The design also takes care to up polyester and LLDPE which are byproduct of use the water to upgrade the ground water table. cohesive approach to seamless benefits across the AsiaPacific region is achieved. The PBN Workshop, which ran parallel to the PBN Seminar and Task Force Meeting, enabled participating states with various degrees of knowledge on the procedural design and PBN implementation to share their knowledge, so that the hurdles in the implementation of these procedures could be removed and the airspace optimally utilised. In his inaugural address, Civil Aviation Secretary Dr Zaidi highlighted the initiatives taken by India on the aviation front to support the global implementation of PBN and complimented the AAI for its proactive role in making the transition from legacy navigation systems to future air navigation system. He also provided insights into the initiatives of the Ministry of Civil Aviation, the Directorate General of Civil Aviation and the Air Navigation Services (ANS) provider, the AAI in areas such as improved VHF coverage, seamless surveillance coverage and improved navigation systems, both terrestrial and celestial. He particularly touched upon GAGAN, India's Satellite Based Augmentation System, a combined project of AAI and the Indian Space Research
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Organisation (ISRO). The Secretary also complimented Indian Aviation fraternity for its excellent performance, especially experts from ATM (Air Traffic Management) and CNS for the wonderful job that they were performing especially in the wake of increasing air traffic. Len Wicks, Regional Officer ATM of the APAC Office of ICAO, appreciated India for taking the lead in the region in organising the event and forging cooperation among the states in sharing PBN expertise. This, he hoped, would promote faster and cohesive PBN implementation leading to seamless provision of services. AAI Chairman VP Agrawal urged the participants to make best use of the services of ICAO, Federal Aviation Authority and EUROCONTROL representatives in honing their PBN skills further. The PBN workshop, Seminar and the Task Force Meeting not only provided the opportunity to Indian delegates to keep themselves abreast of international best practices in PBN but also paved the way to establish India's commitment in implementing ICAO's global plan initiatives.
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§§ SPECIAL SECTION ¨¨
FOCUS ON ‘COPTERS p85
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STEALTHY WARRIOR
WORK STALLED
MISSILES FOR DHRUV
Get the lowdown on the bird used in the bin Laden raid
Pawan Hans grounding has stalled the work of the BRO
Dhruv is to be armed with the HELINA missiles
PHOTO COURTESY: singletrackworld.com
p92
Float like a butterfly and sting like a bee! THE AVIATION WORLD HAS BEEN ABUZZ WITH SPECULATION ABOUT THE UBER-STEALTHY MYSTERY CHOPPER USED IN THE BIN LADEN RAID. HERE IS WHAT WE HAVE LEARNT ABOUT THE 'GHOST OF ABBOTTABAD' o put it bluntly, it was not an ordinary machine. And the verdict from defence and chopper experts from around the globe, particularly America is clear: the helicopter destroyed in the bin Laden compound in Abbottobad is a Sikorsky Black Hawk stealth machine that, to use a classic Mohammad Ali phrase, “floats like a butterfly and stings like a bee”. So is it a new aircraft? Unlikely. The US army has a long history of heavily modifying existing rotorcraft for secret missions. Experts are finally coming around to the view that what was left behind in Pakistan was most probably a heavily modified and upgraded stealthoptimised MH-60 Black Hawk, a mainstay of the military’s helicopter fleet—a conclusion that connects
T
SHOCK AND AWE: Pakistani security men try to make sense of the mystery machine, and above: The RAH-66, from which the Abbottabad Raider reportedly borrowed stealth elements
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Experts are finally coming around to the view that what was left behind in Pakistan was most probably a heavily modified and upgraded stealthoptimised MH-60 Black Hawk, a mainstay of the military's helicopter fleet
with what CIA Director people. Just two prototypes Leon Panetta said that the of that machine were built 25-man strike team that got before the US Army Osama Bin Laden was cancelled the programme in “carried in two Black Hawk 2004. That shelving had helicopters that went in”. nothing to do with the The UH-60 Black Hawk prototype but the costs: the helicopter, manufactured by money to upgrade existing Sikorsky, first entered helicopters. At that point in service with the US army in time it was announced that 1979. Since then, the $44relevant technologies million helicopter has developed in the Comanche become a workhorse across programme would be all branches of the American “retained” and “much of AVENGING ANGEL: The Black Hawk is the mount of US Special Forces military, with the US forces what we’ve gained out of currently operating 1,349. There are numerous variations Comanche we can push forward into the tech base for on the basic design, with the Special Forces typically future joint rotorcraft kinds of capabilities as we look using the highly modified MH-60 variant. The Black further out”. Hawk, which first began flying in 1978, has a crew of Was it used in the Black Hawks in Abbottabad? The three or four and can carry 11 soldiers equipped for White House and Department of Defence have combat. consistently refused to comment on what type of Perhaps, what has made this modification relatively helicopter crashed in the raid. All that was officially said simple is that the US had this technology for years and initially was: “We lost one helicopter due to mechanical may actually have taken from the now-cancelled RAHfailure.” Later it was clarified “The aircraft was 66 Comanche helicopter. That bird featured shrouded destroyed by the crew, and the assault force and crew rotor heads and unspecified absorbent materials, said members boarded the remaining aircraft to exit the one expert. The Comanche was designed to be an armed compound.” Sikorsky also declined to comment on the reconnaissance craft capable of carrying only two aircraft. All questions were referred to the Department of
The stealth machine: A few things that stood out Gareth Jennings, the aviation desk editor at Jane’s Weekly had a few things to tell CNN: Colour: The first thing that stood out is the colour scheme. Whereas most Black Hawk Army helicopters are painted olive green, this particular one is gray. Not just any gray; it’s infrared-suppressant gray, and the purpose of the IR gray, as it’s known, is to help reduce the vulnerability of the helicopter to ground-launched heat-seeking missile systems. Blades: Photos from Abbottabad show that the chopper had a five-bladed tail rotor. “On a conventional Black Hawk, you have four blades. The addition of the extra rotor blades on the tail rotor hub reduces the acoustic signature of the helicopter there by making it hard to hear, giving the SEALs that extra few minutes to get over the compound before anyone on the ground quite knows what’s going on,” according to Jennings. Noise suppression: Those five tail rotor blades are partially covered by a disk-like object that Jennings called a “hub-mounted vibration suppression system”. He believes it provides more noise suppression and some possible protection for the tail rotor from bullets of shrapnel. And it’s not typical on military helicopters. “No, I’ve never seen that on an operational helicopter
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before,” Jennings said. But he added that a similar system was part of the Comanche helicopter design. Shorter and thinner: The blades on that tail rotor also appear to be shorter and thinner than typical Black Hawk helicopter blades. One former Army Black Hawk pilot, who asked not to be identified, said, “More blades and shorter blades mean the helicopter would make less noise in flight.” It’s not just the tail rotor blades that are different. “On the main rotor assembly that was actually destroyed by the SEAL team on the ground the blades themselves are threaded, which signifies that these are carbon composite rotor blades as opposed to conventional metal rotor blades, which again signifies aspects of stealth technology that have been incorporated into this particular helicopter,” Jennings said. Fuselage: Some photos show parts of the helicopter appear similar to non-secret stealth aircraft. “What’s left of the tail section of that helicopter, the shape of the fuselage, it’s canted. It’s angled. It’s a shape that’s synonymous with fixed-wing stealth fighters such as the F-22, the F-35. Essentially, it’s designed to defeat radar. If you eliminate right angles in an aircraft design, radar waves can’t bounce back,” Jennings said.
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After the crash, the SEALs blew up as much of the Blackhawk as they could — presumably to hide the secret stealth components — but had to leave the tail section intact as it fell outside the compound
Defense. Regarding any possible accident investigation, the manufacturer said: “We customarily support the military when requested to do so. We have not received such a request.” However former Black Hawk pilots confirm that two of the copters together can just barely squeeze in 25 people plus their weapons and other gear. It’s, therefore, inconceivable that a single surviving Black Hawk could have transported all 25 members of the assault team. So why did the chopper go down? When air molecules heat up, air becomes less dense and helicopter blades can lose their lift ability as they land. These newer Black Hawks came equipped with special General Electric engines that were to reduce the risk of a hot landing problem. US Senators and Congressmen who were briefed on the mission said the damaged helicopter had not malfunctioned. Instead, they said, it got caught in an air vortex caused by higherthan-expected temperatures and the high compound walls, which blocked the downwash of the rotor blades.
Sikorsky and Lockheed have a long history together and the two share a key Naval Seahawk contract, in which Lockheed receives a basic Seahawk helicopter and upgrades it to fight submarines. While a standard MH-60 Black Hawk weighs as little as 11,124 pounds empty, reports suggest a stealthmodified version might weigh more than 12,000 pounds. The tail rotor, for instance, had extra blades to make it quieter in the air, and was covered with a disc-shaped device sometimes referred to as a “hubcap”. The main rotor would also have been modified and, according to some reports, the entire helicopter would have been given a “silver loaded” paint job to avoid detection by infrared sensors. There’s also speculation that the stealth helicopters may have been outfitted with larger fuel tanks, to increase their range. All that additional weight might have contributed to what aviators call “settling with power”, when a helicopter descends too quickly. It is also likely that, as a further measure to evade detection by radar, the windshield was painted with a special coating, which could have interfered with the night-vision goggles pilots typically use in these kinds of operations. But given the amount of training before the mission, it seems unlikely the pilot wouldn’t have known about the challenges caused by the additional weight and potentially reduced visibility. That would include making the sides of the helicopter both flatter and slanted as a way of deflecting radar signals. Before the Pakistanis returned the tail section of the chopper to the Americans, there was a lot of speculation that the Chinese might get their hands on the remains. If they did, it wouldn't have been the first time they have got their hands on US stealth technology. In 1999, an F-117 Nighthawk bomber was shot out of the sky by Serbian UNFORGETTABLE DEBUT: The raid provided the first glimpse of this baffling chopper rebels, with much of the wreckage making its way to China. It has been speculated that the As a result, the helicopter lost its lift power while recent unveiling of China's first stealth aircraft owes a hovering over the yard and had to make a hard landing, lot to technical knowhow gleaned from the destroyed clipping one of the walls with its tail. The SEALs were Nighthawk. about to ‘fast rope’ into the courtyard in front of bin Pakistani officials had even hinted that they might let Laden’s house when the Black Hawk lost lift. The pilot China take a look at the wreckage of the top-secret US nudged the Black Hawk forward into a controlled crash helicopter left behind after the raid that killed bin Laden. but sheared off its tail section. The SEALs were able to An unidentified Pakistani official had told ABC News continue with their mission and, before they left, blew that the Chinese were "very interested" in taking a look up as much of the Blackhawk as they could -at the remains. A second unidentified official had even presumably to hide the secret stealth components-- but gone a step further, telling the network, "We might let had to leave the tail section intact as it fell outside the them (the Chinese) take a look." compound For the record it may be mentioned that the top Vertical Magazine’s story on the stealth helicopter stealth fighter, the F-22, has never been flown in combat. offered that radar-evading technology might have added The long-range B-2 bombers have been used sparingly, weight to the aircraft and contributed to the hard including a recent bombing run that destroyed an landing that crippled the craft during the raid. The Black airfield in Libya. The Pentagon announced in late 2009 Hawks on the mission to capture or kill bin Laden that it was testing a bat-winged stealth drone, the RQappear to have had a modified exterior akin to the F-117 170 Sentinel, in Afghanistan, and it was quickly Night Hawk stealth fighter built by Lockheed Martin. dubbed the “Beast of Kandahar”.
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TURKISH DELIGHT: Turkey will soon develop a light utility helicopter, possibly with Sikorsky.
Turkey to make light choppers Turkey soon will begin to design and develop a military and civilian light utility helicopter, probably together with a foreign partner —possibly Sikorsky. Defence procurement chief Murad Bayar said on the light utility helicopter issue that Sikorsky did not have a helicopter weighing between 4,500 and 5,500 kilograms, the type of platform Turkey wanted to
develop.”Turkey and Sikorsky Aircraft together can work on this matter. If it happens, it happens. If it doesn’t, we are ready to work with other companies,” Bayar said. Bayar’s remarks to Hurriyet Daily News & Economic Review came during a boat tour of the Bosphorus on the sidelines of the 2011 International Defence Industry Fair, or IDEF, held in Istanbul between May 10 and 13. At the inauguration Turkish President Abdullah Gül said that Turkey had attached great importance to the defence industry in recent years. “The country particularly has experienced great improvement in terms of designing the productions and using local sources in defence industry,” Gül said. Sikorsky Aircraft in late April won a $3.5 billion contract against the Italian Agusta Westland to jointly manufacture the T-70 large utility helicopter weighing more than 10,000 kilograms, a Turkish version of its S70i International Black Hawk. Sikorsky and its Turkish partners led by TAI will produce the first batch of a total of 109 helicopters, mostly for military and security forces. With follow-on orders, the number of utility helicopters to be jointly produced may exceed 600, defence officials have said. Turkish and Sikorsky officials have already discussed the light utility helicopter, and the talks are expected to intensify in future months.
Pawan Hans crash stalls BRO work The grounding of Pawan Hans’ fleet post the two crashes in Arunachal Pradesh in April has created headaches of a different type for the Border Roads Organisation (BRO). The organisation is pursuing an ambitious programme of road building on the ChinaIndia border, and the Pawan Hans choppers were its lifeline to fast tracking the project. The choppers were used to ferry material to road sites in remote areas and the machines grounded the project undergoes one more delay. For the record it may be mentioned that on April 19, a Pawan Hans Mi-172 helicopter had crashed near Tawang, killing 17 passengers as well as crew members and grievously LEFT IN THE LURCH: The grounding of injuring five more. Pawan Hans has held up BRO’s work. On April 30, another Pawan Hans AS350 B3 helicopter crashed near Sela Pass, killing Arunachal Pradesh Chief Minister Dorjee Khandu and four others on board. Since then, Pawan Hans has suspended operations in the North-East region. These grounded helicopters have been central to BRO’s success in by-and-large meeting tough road building schedules. Another 12 border roads that BRO is building along the Sino-Indian border in Ladakh are not affected by the Pawan Hans grounding. BRO was using a Pawan Hans Mi-172 helicopter to carry a dismantled bulldozer to specific locales for building.
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HEAVYWEIGHT WHIRLYBIRD: This is the largest unmanned Chinese chopper.
China debuts new heavyhitter An unmanned helicopter, the largest of its kind in China, successfully completed its first flight in Weifang City of east China’s Shandong Province early May. The medium-sized unmanned helicopter, with a maximum takeoff weight of 757 kg, departed from the flight-test centre of Weifang Tianxiang Aerospace Industry Co and hovered for ten minutes, performing a few manoeuvres before finishing with a stable landing. The helicopter, model number “V750”, has a load capacity of over 80 kg. It can fly a maximum speed of 161 km per hour with a cruising duration of over four hours. The aircraft can be controlled by humans within a distance of over 150 km or automatically fly following input by its programmes. It could be used in surveillance, search and rescue, and scientific exploration for both military and civilian purposes.
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AVIATION OUTLOOK 2011 Fighting with one chopper
READY FOR ACTION: Dhruv is to be armed with a version of the Nag anti-tank missile.
Dhruv gets missiles Marking a major step forward in technology development, India is expected to equip indigenouslybuilt Dhruv helicopters with missiles in two years as part of an ambitious missile-development programme. The guided air-to-ground HELINA, an upgraded version of Nag anti-tank missile, is being indigenously developed by the Defence Research and Development Organisation (DRDO) and will be in the final stages and ready for user trials in 2013. “For the first time, we are developing indigenously a missile called HELINA for being deployed on the weaponised version of the ALH Dhruv helicopter,” DRDO chief VK Saraswat told journalists. Under the programme, propulsion systems of the NAG missile have been strengthened and they would be able to take out enemy tanks from a range of seven to eight kms. Saraswat said the initial trials of the missile from ground-based system have been successful and work will now begin on its integration with the helicopters.
There is only one helicopter catering to over 70,000 central police troops deployed for anti-Naxal operations as six other choppers — emergency lifelines during casualty evacuation and reinforcements — are out of service for various reasons for almost two months. Government has deployed a fleet of seven helicopters — four of the Indian Air Force (IAF) and three Advanced Light Helicopter (ALH) ‘Dhruvs’ of the BSF — for use by 72 battalions of the CRPF, BSF, ITBP and local police units of the states. They have their bases at Raipur (Chhattisgarh) and Ranchi (Jharkhand). The choppers are the most vital machine when it comes to troop deployment, casualty evacuation and sending reinforcements to assist antiNaxal operations. Reports suggest that two ‘Dhruvs’ are gathering dust at the Raipur airbase for the past two months as their spare parts are not available, the third is with the Hindustan Aeronautics Limited (HAL) as it has clocked 500 flying hours after which it needs servicing. From the fleet of the IAF, one Mi-17 was in West Bengal for election purposes, while the other has been given to the Chhattisgarh government for movement of VIPs and top officials in the state and the third has already clocked its stipulated flying hours and is getting serviced. With only one IAF chopper left for all anti-Naxal operations spread across the vast expanse of various states, priority-setting of tasks for the lone machine has become a difficult job. While officials of the central forces rue that the rule of having only 80 hours of flying time for the choppers in a month is not helping them, the IAF, according to official records, has flown sorties over this time-limit keeping in mind such exigencies. Headquarters has been requested to extend this 80-hour time limit many times but nothing has come about. The IAF has brought out the 80-hour rule as it has to maintain the serviceability of these machines as per standards.
Human-powered Chopper creates history A team of more than 50 students at the University of Maryland's A. James Clark School of Engineering has succeeded in flying their human-powered helicopter, Gamera. Pilot Judy Wexler, a 24-year-old student, pedaled furiously, taking the craft several inches into the air for about four seconds, setting a world record for human-powered helicopter flight with a female pilot. The Gamera itself is about a third of a football field in size, with a 60-foot cross-beam frame attached to four rotor blades, each sweeping a diameter of 42 feet. The rig is made from lightweight materials such as balsa, foam, mylar, and carbon fiber, and weighs 210 pounds including the pilot. Speaking of which, the entire thing was powered by hand and foot pedaling. According to Dr. Antonio Filippone, Professor of Aerospace Engineering at the University of Manchester, the pilot needed to produce a thrust force 15 times the weight of the machine to overcome the drag from the blades. The record to beat though is the Sikorsky Challenge, and $ 250,000 in award money on the line, which entails
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ALL MUSCLE: Pedal-powered Gamera has set a new record
having a fixed-wing aircraft, solely powered by a human, hover at least three metres off the ground and to remain within a 10-cubic-metres box for at least 60 seconds. The American Helicopter Society originally put forth the challenge in 1980. The current record holder for any human-powered fixed-wing flight is the Yuri 1, created by the Nihon Aero Student group in 1994, which hovered at eight inches for 19.46 seconds.
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TRENDS THE COUNTRY is witnessing an increasing demand for the 3PL (third party logistics) business, with companies from diversified sectors now concentrating on managing their supply chain mechanisms in a better way as well as deepening their market penetration. One of the major sectors, FMCG, has provided considerable contribution to the 3PL market and has significant potency to grow in
Fall in IATA confidence index RESULTS FROM the International Air Transport Association (IATA)’s quarterly Airline Business Confidence Index conducted in April point to a significant deterioration in sentiment on the outlook for industry profitability in 2011. The bulk of respondents now expect the level of profitability to fall this year, driven largely by a significant increase in fuel costs. The extent of improvement in reported profitability also moderated during the first quarter of 2011. While 55 per cent of respondents reported improved profitability during Q1 2011, almost a third reported poorer results. In March IATA revised down its forecast for 2011 industry profits to US$
8.6 billion, a decline of almost 50 per cent from the estimated US$ 16 billion profits achieved in 2010. Both cargo and passenger demand continued to improve during the first quarter of 2011 with increase in cargo demand reported by 59 per cent of respondents on the cargo side and 65 per cent on the passenger side of the business. These are lower than the 80 per cent level reported in January. Expectations for further improvements in demand over the 12 months ahead are also moderating, according to the IATA survey. The current expansion of air freight and travel markets has further to run, but growth rates are likely to be lower, it added.
UAE keen to invest UNITED ARAB Emirates Minister of Foreign Trade, Sheikha Lubna bin Khalid al Qasimi recently said she wants to grow bilateral trade with India which, during the first 10 months of 2010, reached $ 35.8 bn to register a significant increase from 2009 when the figure stood at $ 29.4 bn. “Both our countries have been implementing key economic and trade reforms and diversifying our income generators over the past few years, so we have had a growing appreciation for how complementary our trade approaches are with those of India’s,” she said in an interview with a news agency. With the steady transition towards global economic recovery the UAE Minister said the two countries should help each other boost their commercial productivity and competitiveness to maintain their strategic positions within the global markets. This includes expansion into emerging areas such as high technology and alternative energy, on top of more traditional areas of trade cooperation such as energy, services, metal industries, real estate and construction. “By trading with India, we share its access to the global markets. On the other hand, owing to the UAE’s own strategic geographic location, we offer India a gateway to the thriving Arab markets and so we benefit from the influx of Indian goods and services to our markets,” she said. In 2009, UAE companies invested around $ 1.5 billion or 1.4 per cent of India’s Foreign Direct Investments in India.
“Africa has its own rhythm, has its own rules, has its own phase of things — you can do very good business in Africa, but there are challenges. Not everybody will go here full-fledged. This takes a much longer term approach and is much more difficult to work in because of corruption, etc.”
Peter Scholten Saudi Cargo VP Commercial on doing business in Africa
future. According to a research report by RNCOS, that specialises in industry intelligence and creative solutions for contemporary business segments, “3rd Party Logistics Market in India”, the 3PL market in the FMCG industry will post good momentum in coming years and is anticipated to grow at a CAGR of around 38 per cent till 2013. The study reveals that, with the implementation of total VAT system in India, this particular market is anticipated to further boost its share, thereby changing the FMCG companies’ warehousing model and driving them towards the 3PL adoption. Moreover, the FMCG manufacturers will focus more on increasing their penetration levels in unexplored markets and will outsource logistic services to other companies. Due to all these reasons, the 3PL market in FMCG industry is showing positive outlook. The research says that the 3PL market will not only witness a high rise in FMCG, but also in other segments, such as retail, IT hardware, auto and auto components, consumer electronics, and durables.
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A-Z of air cargo THE AIR CARGO BUSINESS AROUND THE WORLD HAS A LONG WAY TO GO ALTHOUGH IT HAS COME OF AGE. IN FACT, THERE IS NO “IDEAL CARGO AIRLINE”, EMPHASISED DJ GHOSH, WHO HAS DECIDED TO TELL THE WORLD EXACTLY WHAT INGREDIENTS ARE NEEDED TO RUN A PERFECT AIR CARGO BUSINESS. A REPORT FROM TIRTHANKAR GHOSH. inding someone who knows the air cargo business may be easy but then there are only a handful — probably — who want to disseminate the knowledge. D J Ghosh, founder and president of the New York-based American Friendship World Air Cargo Corporation, has taken it on himself to set up a website on what he lovingly referred to as “the complete encyclopedia for the air cargo professional”. An entrepreneur since 1993, Ghosh has been creating new air cargo market opportunities and his website is “intended to create, develop and refine the business intelligence that will be needed to support the science of independent air cargo operations”. A strong believer that the air cargo business has come of age and is no longer “a grown-up child that has lived for too long under the same roof as his parents”, Ghosh says that it is important to understand that air cargo operators cannot stay for too long “under the umbrellas of their passenger counterparts”. What are the necessary ingredients that make up a cargo airline? Talking to CRUISING HEIGHTS, Ghosh pointed out: “If you look at the ideal cargo airline, the only ones which really fit in the definition are the integrators. They have an end-to-end product where they define the expectations and the parameters of the cargo offering. Everybody else has a diffused offering.
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2011 AVIATION OUTLOOK And the reason they have a diffused offering is because they do not control the supply chain.” He said that most cargo airline operators have to “rely on partners who are extremely unreliable and who also have their own definitions of service”. His prescription, therefore, is “Until we have an integrated service offering, the air cargo proposition will not stand by itself.” If that is the case, did FRONT RUNNER: Air cargo he mean to say that the integrators account for the bulk of high belly cargo figures global air cargo. are not really ‘air cargo’ as he understands it? “I don’t even think belly cargo should have existed,” said Ghosh. “It just happened by default.” He explained that most of the freight that is carried in bellies is done so because there is empty space in the belly of aircraft. Of course, it has developed into a bigger product. “But I think to get our game in order, you really have to provide a main deck offering,” he said. He went on to detail that the trade was growing exponentially along with the expanding economies. “The volume of business is going up and I guess that’s where the size of the pie is growing. But the offering of air cargo itself is still a long way to go and the reason it has a long way to go is that it is still a very diluted offering. It is confused between the passenger offering and the freight offering. Until this becomes a separate discipline on its own, I think it won’t stand by itself,” Ghosh justified. The “thinking” entrepreneur said that air cargo operators started cargo but with a disparate offering. “What they haven’t done is define the product offering. Every cargo requires some degree of sensitivity and some dedication in the business model itself,” said Ghosh. He gave the example of pharmaceuticals thus “We have to move in a certain temperature - controlled environment.” As for perishables, there is a whole variety. Moving garments on hangers or transporting computer chips: all these are products, according to Ghosh, “require a scientific definition and a scientific approach to moving them logistically. So until we provide the definition, everything is going to move in the generic space and there’s going to be no dedicated offering for these products”. He then went on to point out emphatically that the passenger business alone could not provide the kind of dedicated service that was needed. The man is preparing a plan and hoped to start the “intelligent” cargo airline in the United States. Perhaps as operations develop and become scalable, “we will be able to get people to buy into the model”. Said Ghosh, “If you look at any global brand -- whether it is a hotel chain or a restaurant chain -- it develops a concept. Then they take that concept and tests it in different markets. If there’s integrity in the concept then it can be scaled globally and provide a definite service offering. You won’t have a different service offering in a different country.” The process to transform the air cargo industry has JUNE 2011 CRUISING HEIGHTS
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A frequent attendee at most aviation and air cargo events, Ghosh said international organisations did not have on their agendas to provide scientific bases for the industry.
begun: “That’s why we’ve created a model, we’ve put up a website. We want to create the definitions of each and every aspect of the air cargo airline business. As of now, I think IATA has done it to a certain extent. But they really haven’t gone and taken this game to a new level. This business is still a very scattered one. We intend to provide a definition and a scientific base which will take air cargo to a level where everybody who gets into this business is pre-qualified and competent to get into this business,” said Ghosh. A frequent attendee at most aviation and air cargo events, Ghosh said international organisations did not have on their agendas to provide scientific bases for the industry. Instead, “what they have on their agenda is bringing people together. They provide a network where you bring like-minded people together but to get into the
to learn on how to conduct the business, he commented. Listing out the tremendous opportunities for cargo carriers in the expanding world market, he said, “There is opportunity in Asia, and intra-Asia -- that is actually the bigger segment of the market-- as well as between Asia and the other continents like Europe and North America. Within this framework there is tremendous opportunity if we can define the types of products and services, which should be used in the Asian markets,” he said. And this is where his startup airline, American Friendship World Air Cargo Corporation comes in. He wants to address these opportunities by supporting traditional airlines with additional freighter capacity on long-term leases. “For one thing, we had originally conceived of American Friendship as a concept airline and what we’ve tried to do over the years is to refine the definition of a cargo airline and how it should operate in a dedicated space,” he told CRUISING HEIGHTS. India will be the place to be in for the air cargo industry. Aware about the infrastructure deficiencies and other related problems, Ghosh believes that the country is moving in the right direction. “It will take time,” he said. “We have to realise that India operates within a democratic framework. So, the way the government moves has to be within certain parameters, unlike in China. But then in the long run this is a more stable way to do business. You have to work with all the interested parties in the business and once they’ve laid down the agreements and the ground rules, I think things will move a little quicker,” he said. He agreed “It is complicated but I think it addresses due processes and that’s really important.” A regular visitor to TOUGH NUT TO CRACK: Air transport of fruits and vegetables and pharmaceuticals (inset) has been the challenging task for air freight companies. India - “I think I’m already into India in one way or the other”, he said. nitty-gritty of the business you really need research and DJ Ghosh is keen to impart the ABC of the air cargo people who are extremely competent in their subject business to stakeholders present or potential. He meets matter,” he said. And that is what Ghosh and American people, visits conferences, etc. which he describes as Friendship intends to develop. “We intend to develop “feelers and the creation of the ground work that you what you call domain expertise even in the movement of have to do to come into the game”. Comparing his a particular product in the way a container is built, in a moves with that of former US President Richard Nixon way an aircraft is financed, in a way an airport is going to China, he said, “It took America almost 20 years selected, in the way pilots are trained -- all of these will before they saw the light at the end of the tunnel. I think be well documented on our site. In short, it will be like a that India’s more ahead in the game (of aviation and air manual from A to Z dealing with every aspect of the cargo).” cargo business.” However, the industry in the country still has a long For the moment, however, Ghosh sees immense way to go. “In spite of technology, in spite of everything opportunities — downturn or no downturn. “I think the else, it is surprising how slow these industries move and biggest opportunity exists in economies like China and how slow the thinking moves…,” he said. “It takes a India. They are what I call ‘nascent economies’ in terms huge effort to change the mindset, even in this global of the air cargo game.” India, for example, has no world and it’s not only in India, even in America for freighter airline per se. So, the learning curve in India is people to change their ways, change their set attitudes, still a very long one. The Indian cargo industry is willing requires phenomenal effort.”
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AAI to take cargo to new level THE GROWTH OF AIR CARGO OVER THE LAST FIVE YEARS HAS PROMPTED THE AIRPORTS AUTHORITY OF INDIA TO INITIATE MOVES TO PROVIDE INFRASTRUCTURE AND FACILITIES THAT WILL PROVIDE A MAJOR BOOST TO AIR CARGO. A CRUISING HEIGHTS BUREAU REPORT. he initiatives taken by the Ministry of Civil Aviation to boost cargo operations in all the airports operated by the governmentcontrolled Airports Authority of India (AAI) are gaining momentum. The Compound Growth Rate over the past five years indicates that international and domestic cargo have been increasing annually at the rate of 10.6 per cent and 7.9 per cent,
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respectively accounting for 9.7 per cent compound growth rate for total cargo traffic at all Indian airports. Focusing on the vast potential for air cargo, the AAI has responded to the India growth story and launched an ambitious programme to upgrade and enhance the cargo operations in its airports. AAI had other pressing reasons too. With two of its major airports — Delhi and Mumbai — no longer
MAKING HAY: Cargo planes at the cargo terminal in Chennai Airport.
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2011 AVIATION OUTLOOK under its belt, the Authority was bound to take stock of the changed ground realities and review the policy of cargo operations. A review was also necessitated due to the changing market forces: a number of industrial townships and regions within the country with surplus agricultural produce demanded the availability of air cargo facilities from the nearest airport to not only save transportation time but also cut costs. This has opened up new vistas for the AAI. AAI Chairman VP Agrawal said that the growth rate of cargo in the last five years had been 10.5 per cent for international cargo and 25.1 per cent for domestic cargo. The overall growth was 15.3 per cent. In the next ten year, the growth for international cargo would be around 9.6 per cent while domestic cargo would be 11.7 per cent. The overall growth has been forecast at 10.47 per cent. In such circumstances, the country would need more than the one dedicated cargo hub that is under construction at Nagpur. “Geographical and technical support, coupled with availability of skilled manpower, provides an opportunity for India to be a major cargo transshipment centre,” said the AAI Chairman. “However, whilst planning an international cargo terminal at any Indian airport, the provision for storage and handling of transshipment cargo is the basic criteria. Accordingly, the Ministry of Civil Aviation has constituted a Working Group under Economic Advisory Council of the ministry, which has on its agenda under consideration to permit transshipment cargo by Customs so that it can help airlines bring cargo to connect to other international destinations. Initiatives have been taken by JVC operators, like BIAL, MIAL — Nagpur and a few state governments like Haryana is proposing for a dedicated Greenfield cargo airport. Transshipment from one continent to another continent entails intercontinental flights, which is now possible with the expanded airports, like, Delhi, Mumbai, Hyderabad and Bengaluru. Nagpur airport has on its anvil to develop a dedicated cargo hub for domestic cargo movement as well as for international freight in future. AAI airports of yesteryears have their land constraint problems for the growth of airports, which are, as of date, hybrid — meeting both passenger and cargo needs.” The AAI Chairman said that other than Nagpur, the Authority was keen to develop regional airports in southern India. The airport at Chennai is undergoing major upgradation and will serve as a cargo hub for southern region once all the construction activity is complete. Meanwhile, the Customs authorities have been approached for permission to handle transshipment at Chennai airport and the ramp transfer of cargo. The moves will make it possible to develop a hub at Chennai. Air cargo facilities need to take stock of the steady growth in the pharma sector in the country. According to a recent report by PricewaterhouseCoopers (PwC), India will among the top 10 global pharmaceuticals markets in terms of sales by 2020 with the total value reaching $50 bn. The report mentioned that around $70 bn worth of
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Mood upbeat but efficiency is at a low he trend in 2011 seems positive. Overall the mood in business circles is upbeat and most of the companies across industries such as engineering, automotive, pharma, apparel, all seem to have their order books full for 2011. SESH KULKARNI The trend for 2012 too, also looks not only upbeat and positive but interesting and promising. Despite the various scams, hunger strikes and other nagging issues surrounding the political scenario, industry has chugged along and not been troubled by the sentiments relating to the scams, etc. This is very evident from the way the stock market has responded to these happenings: it has bounced back. Occasionally, however, worries have risen due to: a) Weakening dollar against rupee and possible impact on exports; b) Growing fuel prices in the international market; and, c) Civil unrest in certain countries. Since all these factors have the potential of being serious obstacles, I strongly feel most will be overcome since Indian and global businesses have learnt to take these into their stride and march forward. While one is very buoyant about business prospects, what is worrying is the efficiency level in our business of freight forwarding and overall logistics. I don't see any steps being taken by the players, the infrastructure providers or by the government to help consolidate and ease the work environment and processes. The continued delay in the implementation of the General Sales Tax is definitely a serious pain point. To add to that is the lack of interest on the part of the government—to bestow industry status to the logistics industry is a huge deterrent while the lack of automation at the various handling points and Customs interfaces do slow the processes down adding to costs and affecting productivity. Some of these concerns have to be addressed fast since these will drive efficiency, productivity and reduce cost for all stakeholders and would possibly add that much zip to the business in the coming years. (The writer is President & CEO, UFM)
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TOWARDS DEVELOPMENT: (L-R) An Inside view of newly-developed cargo centre at Chennai Airport
drugs are expected to go off patent in the US over the next three years and India could manufacture a substantial share of those drugs. In addition, the country produces more than 20 per cent of the world’s generic drugs and will become a competitor of global pharma in some key areas, and a potential partner in others. Looking at the prospects, the AAI has launched a programme to set up centres for perishable cargo. In fact, centres for perishable cargo already exist at AAI airports, said Chairman Agrawal, including those at Kolkata and Chennai. He informed “ The Government of India has a policy to encourage cold storage facilities at airports and levies nominal rates for land license fee for the first seven years for a state/central government undertaking.” Such centres have been established at Amritsar, Coimbatore, Guwahati and Lucknow airports. APEDA (Agricultural and Processed food products Export Development Authority), under the Ministry of Commerce supports the initiative by establishing the cold storage facility, on a land given by AAI at airports. According to the AAI, Chennai Airport has handled pharmaceuticals constituting 1.5 per cent of the total cargo handled. The present infrastructure includes three chambers of cold storage with different temperature specifications. It also has a further 500 sq.
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Guwahati, walk-in cold rooms have been provided since the tonnage of perishable cargo handled at these airports is not that high. These AAI moves apart, the Ministry of Civil Aviation too has chalked out plans to enhance air cargo volumes. One of the significant moves, said Agrawal, was to lessen the undue strain on existing terminal facilities created on scarce airport land. “The concept of setting up air freight city/city village was felt and the Export Promotion Board (EPB) directed the Ministry of Commerce to prepare a project for setting up one each at Delhi and Mumbai,” he said. Among the other measures, to sustain and achieve the target of growth in future, the AAI and the Ministry of Civil Aviation commissioned a study on the growth in air cargo in the country. The PricewaterhouseCoopers study suggested initiatives to support the growth of air cargo. Among these were: Simplification of procedures through electronic enablement. Provision for efficient handling infrastructure. Supporting the growth of cargo hub operations. Regulations of performance standards and provision of service The Chairman also dwelt at length on security at airports. He pointed out that the AAI had taken a number of steps to strengthen the existing security
According to the AAI, Chennai Airport has handled pharmaceuticals constituting 1.5 per cent of the total cargo handled. The present infrastructure includes three chambers of cold storage
mt storage area in the Perishable Cargo Centre. A new facility is being created with six cold storage chambers measuring an area of 26,000 square meters. At Kolkata Airport, the Centre for Perishable Cargo is spread out on an area of 750 sq.mt. It has three cold chambers with different temperature specifications to accommodate pharmaceuticals other than the perishable cargo. Another airport that has a dedicated centre for perishable cargo is Amritsar. Measuring 1311 sq. mt under the control of Council for Value Added Horticulture in Punjab (CVAHP), the facility has sufficient capacity to store and handle pharmaceuticals. At Coimbatore, Lucknow and
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arrangements at its cargo terminals. Among the measures employed were the deployment of CISF at the main entry and exit gates to prevent any armed attack and the creation of security hold areas at all cargo terminals managed by the AAI. He also mentioned that arrangements had been made for 100 per cent screening of export cargo by providing X-Ray screening machines. In addition, detailed plans have been drawn up for the installation of closed-circuit TV cameras at the city side car parks and inside the cargo terminal buildings covering Customs examination areas, security-hold area and the air side at Chennai and Kolkata airports.
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Air cargo in futuristic mode T N MIRCHANDANEY
AIR CARGO INDUSTRY HAS ENTERED INTO AN INTERESTING PHASE AND IS POISED TO PROVIDE LOGISTICS AND SUPPLY CHAIN SOLUTIONS BY ADOPTING MORE INNOVATIVE APPROACH AS TULSI NOWLAKHA MIRCHANDANEY WRITES.
he distinction between the passenger and cargo segments in aviation is no more conspicuously evident than in the progress of the two segments in the past three decades. The growth in passenger air travel has been driven by the low- cost low fare passenger airlines. So universal has been the success of the low- cost carrier, that a school of thought predicted the almost certain demise of the fullservice carrier, to be replaced by low-cost airlines for travel of the general public, and fractional ownership of the business jet. The business jet would serve corporate travel and the more luxury-inclined, selective traveller who could find himself/herself unwittingly sharing space with the less affluent but increasing masses that have found an affordable and convenient mode of transportation within easy reach. The prediction has not come to pass, of course, with a few full-service airlines continuing to re-invent themselves, but the low-cost value proposition has undoubtedly stimulated passenger growth, has proven to be a sound strategy and is here to stay. The air cargo segment, on the other hand, has charted a divergent course for itself. The lower-cost, belly-hold capacity growths of air cargo, typically the by-product of passenger airlines, are outpaced by the quantum leap in the premium, dedicated capacity offered by air express carriers. This trend has been manifesting itself in market-after-market. In the USA, the largest aviation market in the world with ample air cargo belly-hold capacity, the demand for dedicated air express capacity has not diminished, and now represents a dominant market share in air cargo. In contrast to the passenger airlines, air cargo growths are driven by the premium, air express segment, rather than the low- cost segment. The distinction lies in the drivers of the two segments. While passenger-travel is getting more commoditised and denuded of frills, catering to larger constituencies, air cargo is becoming increasingly customised to a customer level and to the package level in air express, and caters primarily to a business constituency. The trends are driven by the user groups. The past two decades have seen a sea-change in customer profile, primarily in the increasing customisation of goods and services and the power of the individual customer. We see examples of this all around us. You can select a laptop or a home plan from the web and have it
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ADDING VALUE TO GDP: Air express operators provide a major fillip to the air cargo industry in US.
customised to your requirements in almost the same way that you would select a pizza with a choice of toppings, and have it delivered to your home. The second driver is increased globalisation. Resources are no longer confined to the points of production. They are outsourced to suppliers of the highest quality at the lowest cost, and they can be located anywhere in the globe. According to a report on the air cargo contribution to economic development, assembly of some laptops entails procurement of parts and components that are involved in over 200 border crossings! There are countless such business models today, and they fuel the need for reliable, time-definite, high-quality air transportation provided by air express operators. No other mode of transportation is able to provide an equivalent sustainable quality of service. Third, in the global marketplace of the internet, business is not constrained by shelf space. Sellers are moving away from stocking of mainly fast-moving items
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2011 AVIATION OUTLOOK because retail space is limited and expensive. The internet has enabled limitless choice, and products are displayed practically free of cost, so that even the smallest business when aggregated over the millions of customers worldwide, can be thriving and profitable. Aviation’s role in air express transportation has, therefore, evolved into the essential air connectivity component in a seamless, end-to-end distribution that originates with the shipper and ends with the consignee. In a fast-paced world of instant gratification, airport-toairport carriage lends itself to fractured services that compound delays and handling, taking the edge-off market competitiveness for the customer. In such an environment, it is critical for airport operators and regulatory authorities to firstly recognise that air express contributes to economic development by implementing effective logistics. This is a proven, universal
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As an essential service, and I do believe carriage of timesensitive and time-definite goods that are core to the supply chains of the country’s commerce and trade constitutes an essential service, the access to a robust support infrastructure is key to quality delivery. Air express organisations have invested significantly in infrastructure such as vast, countrywide networks and proprietary advanced technology, as well as assets and people to ensure complete control over the entire distribution process, endto-end. However, they are still entirely dependent on access to the country’s commercially important airports to process their time-sensitive shipments through their dedicated, selfhandling facilities, and for the air connectivity provided by their dedicated flights. Air express services must co-exist with vibrant trading centres, and to relegate them to distant airports render the services ineffectual and only serve to add to cost. Most importantly, the airport operators and regulatory authorities need to grasp the distinction between the needs of passengers and air express. Air express operations are necessarily scheduled at night, and slots have a large impact on deliveries. They cannot be rescheduled to day operations. Ramp transfers are a norm, so dedicated parking bays at close proximity to each other are intrinsic to quick turnarounds. Allocating parking bays at great distances from connecting flights are a recipe for disaster. Additionally, the customer’s competitiveness is affected by transaction costs. ATF comprises a huge cost component to airline operations, more so for freighter operations where aircraft are derived from the secondary market and are necessarily older than the more youthful fleet of passenger airlines. The charges for the airport facilities must also reflect the infrastructure and services provided. Increase in tonnage, for example, does not require expensive extensions of vast corridors of carpeted terminals or additional food courts warranted by increase in passenger numbers. Cost competitiveness has a direct impact on the air express operator’s costs and the customer and the country’s trading competitiveness. Air express growths have traditionally outpaced GDP growths, and represent a huge opportunity for stimulating the country’s economic development through their wide, geographic reach. When we plan for the future, it would
Air express growths have traditionally outpaced GDP growths, and represent a huge opportunity for stimulating the country’s economic development through their wide, geographic reach
model. The Logistics Performance Index (LPI) study by the World Bank (World Bank: Trade Logistics in the Global Economy 2010) indicates that a country that promotes an efficient and cost-effective transport and logistics sector achieves one-two per cent higher GDP growth compared to other countries at the same level of development. Airports are of strategic national importance and play a key role in enabling effective and reliable logistics, and their mandate as a public utility is the equal facilitation of people and goods. Unfortunately, with the focussed attention on passengers, the latter is all too often neglected. We have witnessed tangible changes on the passenger side. Today, international passengers are able to exit Indian airports within half an hour of their arrival — cargo or air express, regrettably, does not enjoy the same priority.
become mandatory for user groups to be co-opted into and collaborate with the planning process, if we aim for sustained success. User access to airports, infrastructure and facilities is fundamental determinants to facilitate the movement of goods within the country and globally, and cost is an important factor in market entry and presence. An achievement equal to the passenger segment success in India will be accomplished only when the small entrepreneur in India’s hinterland is able to conveniently access markets for his products across the country and around the world speedily and compete cost-effectively, in the same manner that he can now travel on a low-cost airline. That would truly connote an ‘India Shining’. (The writer is Managing Director, Blue Dart Aviation Ltd.) JUNE 2011 CRUISING HEIGHTS
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Ready for Indian cargo WFS HAS BEEN HANDLING BAGGAGE AND RAMP OPERATIONS IN TWO OF THE COUNTRY’S AIRPORTS. THE COMPANY WANTS TO ENTER AIRPORTS IN A BIG WAY WITH ITS EXPERTISE IN AIR CARGO, AS ITS COO BARRY NASSBERG TOLD TIRTHANKAR GHOSH. orldwide Flight Services (WFS) has been present in Asia for some 12 years but has yet to get into the air cargo business in India. Way back in September 2009, it was reported that WFS had tied up with a consortium of the Bird Group for the construction of a second cargo terminal at Delhi’s Indira Gandhi International Airport. The contract was supposedly for a concession period of 25 years but it did not work out. Indeed, it would have been a big name in WFS’ portfolio: the airport is the largest airport in the country and, in terms of cargo traffic, has been witnessing a compound annual growth rate of 10 per cent over the last four years. That, however, was a missed opportunity. But WFS is in India along with Bird Group at Delhi and Cochin airports with their ground handling operations. In fact, WFS India launched operations at Delhi on July 1, 2009, and at Cochin on June 10, 2009, providing ramp and passenger-handling services for a number of international carriers. As Barry D Nassberg, Executive Vice President and Chief Operating Officer, WFS, based at Hong Kong, pointed out, “We are not on the cargo side of the business. Our entry has been Bangkok for cargo handling …It’s been a huge success for us. We operate at 121 airports around the world and Bangkok, in terms of its cargo handling, is our second largest. So, for an airport that has only now been
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in terms of the volume it represents, this year it will be close to 10 per cent of our total annual cargo handling volumes. I mean we do about 3½ million tonnes a year globally and this year Bangkok will come close to being 10 per cent. As Asia is prominent and growing; we have a lot of aspirations for development in Asia.” WFS has its eyes set on India. Nassberg acknowledged the fact that the company was operating in India. “But not for cargo. We are on the ramp and the passenger side. We are active in India, yes. Now, cargo is next and we are going in with intent into cargo,” he emphasised. To put the record straight, the WFS management is bullish about India. Nassberg pointed out that handling cargo in India was absolutely on the horizon. “We are very optimistic.” Looking ahead five years from now, WFS “will be in more than one airport in India in cargo handling. Right now we are watching the developments in Mumbai very carefully both in terms of the existing airport and in terms of Navi Mumbai and we are keen to participate in that. I’m sure that we will… there are other opportunities in India.” These “opportunities” would mean “being allowed to develop cargo facilities in airports” in Tier-II cities. The presence of WFS in Asia — in Hong
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BULLISH ON AIR CARGO: Entering into air cargo business in India would add another feather to the cap of Worldwide Flight Services (WFS).
Kong and Thailand — was a bit of a gamble but the move has paid off. WFS did not believe it would do so well. As Nassberg confessed, “We didn’t think so when we started because we opened our Hong Kong office in late ‘96 and then shortly afterwards in early ‘97 came the big crash in Thailand and things started to deteriorate.” But, on hindsight, it was a well thought-out move. “We had some misgivings,” said Nassberg, “but then in retrospect, we were in the right place and the right time. We came in at the bottom of the market at a time when many of our competitors were scared away and we were resilient and we remained committed and it has paid off to us. And the fact is that if we look at the global airport services companies, we feel that our presence in Asia has surpassed the others. We have done better than anyone else has and certainly have better potential. We are very well placed and it’s because we are committed to it during the downtimes.” The commitment comes from the unique blend of experience that WFS has. Nassberg ascribes it to the dual
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The wealth of experience has helped WFS move into China. “We have a very well-developed relationship (with China),” said Nassberg. “In fact we maintain an office in Beijing… even though we’re not doing any activity on the ground in China, we maintain an office in Beijing just to manage the relationships with our Chinese airline customers and that has served us very, very well. It shows our commitment to them and to the region and to the kind of support that they would not normally find,” he said. “You would not normally find the representative of an international airline’s key global ground handler right next door. That has worked very well and that will serve us well as we develop in the region.” The success in China has prompted WFS to look closely at India and enhance its portfolio. “When we look at economic growth in Asia,” said Nassberg, “we look at production and the tremendous potential. We also look at airport infrastructure and development which tends to predict where economies are going. We
The WFS CEO came out with the example of the major Chinese airlines — Air China, China Eastern and China Southern — that have, for many years, been amongst WFS’ biggest customers in Europe and in North America.
origins of the company: Europe and North America. “We’ve taken bits from either side.” The cargo -handling experience has come from Europe “where we have most of the cargo-handling experience and we are one of the largest players in Europe. That has served us very well: not only the experience but the relationships with airlines.” The WFS CEO came out with the example of the major Chinese airlines —Air China, China Eastern and China Southern — that have, for many years, been amongst WFS’ biggest customers in Europe and in North America. “Long before we were planning to do anything in Asia, they were with us,” commented Nassberg.
think the best years are very much still ahead. As for India, the time has come and despite the infrastructure problems, things have to move. “It’s going to take years,” Nassberg agreed, “but you have to start. A journey of a thousand miles starts with one step and that step’s got to be taken. We can sit here and talk about it as long as we want; the problem is not going to go away. So we have got to address it.” Infrastructure in India is a challenge and Nassberg was somewhat familiar with the situation as well as the challenge. Even so, “we look forward to being there in cargo as well,” he said. JUNE 2011 CRUISING HEIGHTS
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Connecting customers FEDEX HAS BEEN BULLISH ABOUT INDIA AND THE OPENING OF THE FTN OFFICE IN NORTH INDIA RECENTLY IS ANOTHER MOVE TO CONSOLIDATE THE BUSINESS AND LOOK TO THE FUTURE. FedEx Trade Networks (FTN) announced recently that it had opened freight forwarding operations in Delhi along with those at Le Havre, France; Barcelona, Spain; Bratislava, Slovakia; and Istanbul, Turkey. Opening an office in Delhi was an important move for the freight-forwarding arm of FedEx. Delhi's Indira Gandhi International Airport is scheduled to open an integrated cargo terminal by March 2013 and air cargo volumes are expected to increase to approximately one million tonnes annually. The new operations in Delhi will offer FTN customers increased access to major global markets, both inbound and outbound. According to Rajat Khosla, FTN's Country Manager, India: "Delhi is India's second-largest airport in terms of cargo traffic. It also serves as the gateway to the industrial areas of northern India." The Delhi office is the third FTN office to open in the country. Khosla believes that north India's customers will benefit from flexible FTN's freight forwarding solutions that employ a variety of value-added services, including the ability to track and analyse its complete supply chain and managed control its goods in transit from point of origin to final-mile delivery. In this one-on-one, Khosla spoke at length about FTN to Tirthankar Ghosh. Excerpts:
Q: A:
Fedex's aggressive expansion has seen FTN opening offices across the globe. How does FTN operate?
The Fedex Trade Network is a fully-owned subsidiary of the Fedex Corporation. FTN is an international air and ocean freight forwarding company, which offers inbound and outbound as well as custom brokerage and service transport and other value-added services. FTN has established 38 offices outside of North America. And in India, we had an alliance with a service provider. In a
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2011 AVIATION OUTLOOK sense we were present in India. Given our commitment to our customers, we opened our services in Chennai and Mumbai in 2010 and in Delhi in 2011. Basically, what are you doing is freight forwarding? We offer air and ocean freight forwarding, customs brokerage as well as pick-up and delivery. We also offer value-added services like global order logistics, which allows the customer to take control of his purchase orders' management. It is a web-based service as it gives a buyer visibility and control from the time the purchase orders are placed till the time the goods are delivered. This is a value-added service. We also have Fedex International Direct Distribution, which consolidates several shipments at origin, custom clear them and transfer them as one shipment at the destination and reconsolidate them. Let's say, a customer wants to send packages to a thousand addresses in USA. We will label them and pack them in India. We will consolidate them as one shipment. So instead of going to a distribution centre in USA and then processing them there, breaking down and packaging them in the USA as thousand shipments, we will consolidate them as one shipment in India and then on arrival in USA in our warehouse they will be broken down after custom clearance. After custom clearance, the goods would be directly delivered to the addresses. So you bypass the distribution centre, saving time and saving costs. How are you different from any other freight forwarder? We are basically differentiating on our brand, our services, reliability and quality. By opening offices in India we are providing access to people with local experience, expertise and knowledge. So in that sense, we bring knowledge, skills, technology for a customer. Of late, we have seen Fedex very bullish about India. So, how do you foresee the market now? As you are aware, India has seen very steady growth. Fedex is a customer-focussed company. We look at our customers and try to see that we connect them to this important market. We also provide them whatever solution they require to manage their supply chain and logistics.
LINKING IMPOTANT MARKETS: The Fedex Trade Networks at work, and (inset) Rajat Khosla
You started from Chennai and Mumbai. How has the business been? Our customers have grown their businesses. We have been able to connect them to this very important market place. So, in that sense we have been able to provide air and ocean freight forwarding customs brokerage and other value-added services. We offer our customers capacity on all commercial airlines as per their requirements. So, customers require capacity as per their requirement and we are able to access the capacity in all oceanliners and airliners across the entire availability in the market. We have customers across all industry segments. Especially in India, we have customers in textiles, apparels, engineering and hi-tech. Our office in Gurgaon will cater to the entire North Indian market, which has important industrial segment such as textiles, automobiles, leather and engineering.
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AVIATION OUTLOOK 2011 §§ CARGO JOTTINGS ¨¨
Blue Dart increases profit by 30.56 per cent
EXPRESS AIR and integrated transportation, distribution and logistics company Blue Dart Express Limited recently declared its financial results for the first quarter (Q1) ended March 31, 2011. The company posted `36.11 cr profit after tax for the quarter ended March 31, 2011. Income from operations (inclusive of fuel surcharge) for the quarter ended March 31, 2011 stood at `336.33 cr, an Anil Khanna increase of 30.56 per cent over the corresponding quarter of the previous year. Anil Khanna, Managing Director, Blue Dart Express Ltd, said, “Since inception, customer centricity has been of paramount importance to Blue Dart. We constantly innovate; strengthen our product portfolio to serve our customers with solutions that match up to meet their dynamic and evolving business needs. We will continue to focus on delivering world-class service quality, experience and maintain our reliability quotient…Our plan to support the Indian growth story is on track.”
Majority of airlines on course for SIS
QATAR AIRWAYS Chief Solutions provider to the airline and travel industry, Kale Consultants recently announced the results of its Simplified Interline Settlement (SIS) — Airline Preparedness Survey 2011. The survey shows that majority (82 per cent) of respondents of the airlines -82 respondents representing 66 airlines globally, participated in the survey -- have initiated and finalised their course of action and budgets to become SIS compliant. The survey highlights that over the last six months the priority level for SIS compliance has increased. Some highlights of the survey:
82 per cent of airlines have already initiated steps towards SIS compliance, but only 19 per cent expect their systems to be compliant by the September 2011 deadline. SIS encompasses the passenger, cargo and miscellaneous (nontransport) interline business of an airline, but even at this advanced stage only 43 per cent of respondents fully understand the changes required in their passenger revenue accounting processes. Understanding of changes required for the cargo and miscellaneous (nontransport) interline business processes are still very low. In fact the improvement in understanding these areas has been negligible.
Air China Cargo starts operations
AIR CHINA Cargo (ACC) has begun operation as a joint venture cargo carrier between Air China Limited and Cathay Pacific Airways Limited. An opening ceremony was held recently in Beijing to commemorate the development. Under the joint venture, Air China has a 51 per cent equity interest in ACC while the Cathay Pacific Group has a 25 per cent equity interest together with a 24 per cent economic interest. There are seven directors on the ACC
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SMOOTH TAKE-OFF: Officials and dignitaries at the launch of Air China's operations. Among those in the photo are the Party Secretary, Air China Cargo, Huang Bin; Director Marketing and Sales, Cathay Pacific, Rupert Hogg; Assistant President, General Manager of Strategy and Development, Air China, Zhang Yang; Chief Executive of Cathay Pacific Airways, John Slosar; President of Air China, Cai Jian Jiang; Chairman of Cathay Pacific Airways, Christopher Pratt among others.
board. Four, including the Chairman, are appointed by Air China, while three, including the Vice Chairman, are appointed by the Cathay Pacific Group. The make-up of the ACC board and management team is designed to take full advantage of the complementary strengths of the two companies in terms of experience and expertise to prepare the joint venture for broad international growth. With its principal operating base in Shanghai, the joint venture will soon have a fleet of 12 Boeing 747-400s freighters. China's continued economic growth in recent years has helped turn the country into one of the world's fastest-growing air cargo markets. Faster fleet development has been enabled through the joint venture, helping ACC achieve economies of scale and consolidate its market position. Choosing Shanghai as its principal operating base ensures that ACC is well positioned to capture business opportunities out of the Yangtze River Delta region, which accounts for two-third of China's air cargo business. In addition, the cargo “belly space” provided through Air China's extensive domestic and international passenger network will also provide strong impetus to ACC's global business development.
Jet gets 'Air Cargo Award of Excellence'
JET AIRWAYS has recently been awarded the 'Air Cargo Award of Excellence' by the Air Cargo World Magazine, a leading trade publication serving the freight industry worldwide. The Air Cargo Excellence survey is based upon a rating system that measures airlines and airports on specific criteria and subsequently ranks them to identify their performance levels. As a reflection of the high standards of the airline's systems and procedures, Jet Airways emerged victorious from amongst several leading cargo airlines, receiving a certificate of merit from the publishers of Air Cargo World. This ACE Award for the category 'Air Carrier - Up to 199,999 annual tonnes' is based on overall ratings given by air freight forwarders to the airline engaged in the business in key areas of measurement. These areas of measurement seek to recognise and honour excellence in customer service, performance, value and information technology.
Project1_Layout 1 5/2/2011 12:32 PM Page 1
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AVIATION OUTLOOK 2011 §§ CARGO JOTTINGS ¨¨ Sudheer Raghavan, Chief Commercial Officer, Jet Airways, said, “At Jet Airways, we are committed to offering our freight customers the very best of services and an award of this stature stands testimony to the quality of our efforts and encourages us to further raise the bar in customer satisfaction.”
FedEx's CSR initiative for road safety
EXPRESS AIR Safe Kids Foundation India, in collaboration with Urivi Vikram Charitable Trust and Programme Sponsor FedEx Express, unveiled an exhibition of 120 photographs showcasing children's perspectives on pedestrian safety recently. The exhibition forms part of the Safe Kids Photovoice initiative that aims to educate children on safe pedestrian practices through the use of innovative engagement techniques. It celebrates the perspective of 12 children aged 11-14 years who visited various traffic locations in Delhi identifying road safety hazards and capturing educational messages through the use of their cameras. Safe Kids plans to share the unique photo-exhibition to
worked closely with the Safe Kids Foundation globally over the past decade in equipping children with pedestrian safety knowledge and tips. We are proud that since 2008 the Safe Kids Photovoice initiative has helped make children safer in India,” commented Taarek Hinedi, Managing Director, Operations, FedEx Express India
ROAD SAFETY BEGINS FROM CHILDHOOD: (Standing from left) UNB Rao, Chairman, Urvi Vikram Charitable Trust, Ajay Chadha, Special Commissioner of Police, (Administration and Traffic) and Venkat Reddy, Senior Manager-Operations, Fedex Express, distributing gifts to the winners of Photovoice.
five schools in Delhi as part of the organisation's pedestrian road safety awareness initiative. “Road safety is a top priority for FedEx. We have
Another award for AirAsia cargo
AIRASIA has been named the world's best airline again, this time for exemplary customer care in its cargo arm. The carrier received the Air Cargo Industry Customer Care Award from Air Cargo Week (ACW) after emerging first in a global survey that polled industry peers and shippers. Sathis Manoharen, Regional Head of Cargo of AirAsia, received the award on behalf of the airline during the transport logistic/Air Cargo Europe Exhibition, which saw executives from the air cargo community, airports, airlines, shippers, suppliers and service providers from around the world. “This award reflects how strongly the AirAsia brand has grown in cargo. We are relatively new in cargo, yet we have established leadership in many aspects of this industry. We are proud to be recognised globally, and we are taking this win as a renewal of our commitment to offer high-quality cargo service at very reasonable prices. We continue to innovate to better serve our markets,” said Manoharen. This is the second time for the airline to win an ACW World Air Cargo Award; last year, it was named the Air Cargo Industry New Comer of the Year.
IBS appoints Rajiv Shah as CEO
IBS SOFTWARE Services, the leading provider of new-generation IT solutions to the global Travel, Transportation and Logistics industry, announced the appointment of Rajiv Shah as its Chief Executive Officer. He will take Rajiv Shah responsibility for the operation of IBS' business worldwide and report to VK Mathews, Executive Chairman.
Qatar to take stake in Cargolux recently placing an order for three 777 freighters. QATAR AIRWAYS, one of the Arab world's largest Cargolux, which operates 14 747-400 freighters, carriers, is all set to take a 33 per cent stake in European ended three straight years in the red with its swing to a all-cargo airline Cargolux, Europe's largest all-cargo $59.8 mn profit in 2010 from a $153.3 mn loss in 2009. airline. The carrier, which boosted 2010 revenue 29.3 per cent to “We are soon going to sign an agreement with them $1.75 bn and carried 683,380 tonne of cargo, expects to (Cargolux) ... in a few weeks. We see take delivery this year of the first of there are synergies and Qatar 13 747-8 freighters it has ordered. Airways would like to expand,” chief Cargolux had announced some executive Akbar Al Baker said in time ago that it was in talks to sell Dubai though he did not mention a stake to a strategic investor. how much the deal was worth. Qatar Airways will continue to However, analysts estimate the stake look for other deals in the future to be worth around $220 mn. Said Baker, “We will only be Qatar Airways, which is halfinterested in other airlines if they owned by the Qatar Investment are healthy, well established and Authority, has been expanding its will add value to Qatar Airways,” WORKING TOGETHER: A Cargolux carrier and cargo and freighter network, most Baker said. (inset) Qatar chief Akbar Al Baker
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DOMESTIC AIRLINES Jet marks 18th anniversary JET MARKED its 18th anniversary with a tree plantation drive at the site of its new training centre in Gurgaon. The occasion saw the convergence of the senior management and employees of Jet, as they helped plant eighteen symbolic Gulmohar, Ashoka and Bottlebrush saplings, one, for each of the eighteen years of the airline’s services. Jet Airways commenced operations on May 5, 1993, to twelve Indian cities, with a fleet of four Boeing 737-300 aircraft. The airline has since emerged as one of the fastest growing in the world, with current operations to 71 destinations across India and Europe, Asia, Africa, North America and the Gulf. The airline’s fleet of 97 state-ofthe-art wide and narrow-bodied aircraft is also one of the youngest fleet in the world. Inflight dining experience: In an endeavour to redefine the in-flight dining experience for its guests, Jet Airways unveiled a new line of crockery from the house of William Edwards — one of Britain’s awarded ceramic designers. The concept for this new Jet Airways’ service drew inspiration from the airline’s corporate identity and has created a distinctive look for both Premiere and First Class, differentiating it from other airline brands. The design elements of the new crockery incorporate the traditional hand decoration techniques of English potters in the Stoke-On-Trent area, handed down from generations. Working mainly on special commissions, the William Edwards hand wrought tableware for Jet Airways sets the airline’s hallmark onboard service to a new level. The First Class collection utilises a style and
EXQUISITE: Jet Airways’ new collection
colouration that picks up on the warm rich colours and textures associated with Indian culture, with the use of precious metal and real gold and gold mica to add richness to the collection. In addition, the airline will also redefine the in-flight dining experience for its guests with a range of varied and delectable Indian and international menu options. Rated Best On-Time Performer: Jet Airways has been rated the best on-time performer amongst all other scheduled domestic airlines with an on-time performance of 94.9 per cent. JetLite, the airlines wholly-owned subsidiary was also not too far behind registering an impressive on-time performance of 91 per cent, as per figures released by the Director General of Civil Aviation. The Jet Airways Group, while posting its seventeenth month of consecutive growth, also maintained its dominant leadership position in the Indian aviation sector with a market share of 25.4 per cent.
MIAL celebrates passengers’ day Emergency Exercise at Chhatrapati Shivaji AS MUMBAI International Airport Pvt Ltd (MIAL) International Airport (CSIA). This drill involved all completed five years of operations at Chhatrapati Response Departments of MIAL Operations to assess Shivaji International Airport (CSIA), passengers were and evaluate the preparedness of MIAL and its treated to some memorable moments. agencies at CSIA in handling an A series of initiatives on the occasion of emergency situation. Moreover, it Passengers’ Day were organised to provided an opportunity for the commemorate the occasion. The response teams from CSIA’s highlights of the day were the wellvarious units, including fire and choreographed flash mob performances emergency services, terminals, conducted at both the domestic and airside operations, engineering and international terminals. The group also maintenance, security and medical displayed a banner with a thanksgiving services, to put their emergency message to the passengers. Chocolate trainings to the test. The exercise boxes bearing thank you messages also measured the preparedness of CULTURAL FEST: Passengers watch as they and discount coupons for various local emergency response units are greeted to a surprise dance and music retail and that assisted MIAL in the crisis. To performance. F & B outlets were also distributed to add a sense of reality to the drill, all the passengers at the airport. MIAL has been more than 100 volunteers acted as meeters/ greeters, celebrating Passengers’ Day at CSIA for three injured passengers and flight crew. The drill consecutive years now. encompassed all aspects of emergency response, Emergency exercise at CSIA: In order to test the including evacuation and rescue, fire fighting, security, adequacy of the airport Emergency Response Plan in medical services, and communications. The duration times of an aircraft emergency, Mumbai International of the exercise was for approximately two hours and Airport Pvt Ltd (MIAL) conducted a Full-Scale this did not affect airline operations at CSIA.
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DOMESTIC AIRLINES AI Express partners with ICICI Lombard ICICI LOMBARD GIC Ltd. has collaborated with Air India Express to provide unique travel insurance solutions at cost-effective rates to overseas and domestic travellers. The association would enable customers to
certifications including ISO 14001:2004 and ISO 27001. The airport has also achieved OHSAS 18001 certification, a prestigious international standard for facilities with world-class safety and health management systems. BIAL is now one of very few airports in the country that can claim world-class Quality (9001), Environment (14001), Information Security Management System Standards (27001) and Occupational Health & Safety (18001) Management Systems. In addition to this certification, BIAL engages employees in regular health and safety improvements and conducts job safety analyses.
Kingfisher wins two awards
STRATEGIC TIE-UP: Air India Express's collaboration with ICICI Lombard (inset) will provide overseas and domestic travellers a unique travel insurance.
take advantage of Group Travel Insurance (Overseas) being valid for a period as short as 15 days or return to the India, whichever is earlier. The policy ensures that customers travelling abroad will be secure against possible risks during their travel. The policy covers a host of situations such as medical expenses caused by hospitalisation arising out of accidents, loss from trip delay, loss or delay of checked-in baggage, etc. The insurance policies can be purchased at AI’s website while booking flight tickets. The e-policy is issued instantaneously without any paperwork with immediate confirmation via email and SMS. The company has also tied up with Europ Assistance, a leading global assistance provider to ensure hassle-free claim settlements. AI announces new Gwalior-Mumbai flight: Minister for Civil Aviation Vayalar Ravi flagged off the inaugural flight of Air India from Gwalior to Mumbai recently at the Rajmata Vijaya Raje Scindia Civil Terminal. With this, Gwalior is now connected with the national capital as well as the financial capital of the country. The introduction of this much-needed flight will link the two important cities and facilitate the movement of business and leisure travellers.
Another first for BIAL AFTER A process lasting almost six months, Bengaluru International Airport Limited (BIAL) has had its work processes certified to the internationally recognised quality management system standard, ISO 9001: 2008. BIAL is now one of the first airports in ONE MORE IN THE KITTY: (L-R) Hari Kumar, the country to VP, Engineering & Maintenance, BIAL; Hari achieve this version Marar, President, Airport Operations, BIAL; of ISO 9001 and the Bhaskar Bodapati, Director- Finance, BIAL first to acquire four receiving the certification.
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KINGFISHER AIRLINES announced that it has won two awards for King Club at the 2011 Frequent Traveler Awards. King Club, the frequent flyer programme, received the awards for the ‘Best Promotion for Redemption’ and ‘Best Loyalty Credit Card’ for American Express Kingfisher First Credit Card. This is the third consecutive year that Kingfisher Airlines has won the award and it is the only Indian airline to have won from the Middle East and Asia/Oceania region. The awards were received by Atul Kumria, Head of Sales, PROUD MOMENT: Atul Kumria, Head-Sales, Kingfisher Airlines, Kingfisher Airlines, North America, receiving the North America. Frequent Traveler Award 2011 Elated at this Steven Belkin Committee Chair, recognition, Anshu Frequent Traveler Awards. Sarin, Vice President of Guest Loyalty and Kingfisher Holidays commented, “It is an honour for King Club to have won this prestigious award. Kingfisher Airlines would like to reaffirm its commitment to providing our King Club members the best benefits and privileges in the coming years. The recognition drives us to constantly innovate and come up with unique reward offerings that make King Club India’s most rewarding frequent-flyer programme. I would like to say a big thank you to our guests from across the globe for believing in us.” In alliance with Royal Caribbean International: Royal Caribbean International and Kingfisher Airlines have formed an alliance that will offer customers conveniently bundled vacation packages as well as enhanced member benefits for members of King Club, Kingfisher Airlines’ loyalty programme. “Working together, we can offer a number of synergies and new benefits to our Royal Caribbean International guests, and to Kingfisher customers,” explained Michael Bayley, Executive Vice President of International for Royal Caribbean Cruises, Ltd. “At King Club, our vision is to deliver a bouquet of unmatched and innovative benefits across the world to our members, in collaboration with leading national and international brands,” said Anshu Sarin, Vice President of Guest Loyalty and Kingfisher Holidays at Kingfisher Airlines Ltd.
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INTERNATIONAL AIRLINES Flydubai, Travelport sign key deal FLYDUBAI, HAS reached a landmark agreement that will ensures that all Travelport-connected travel agents worldwide have full access to Flydubai fares. The deal will enable Flydubai to tap into the extensive worldwide network of 63,000 travel agents who currently use Travelport’s Galileo or Worldspan global EXPANDING GLOBAL REACH: distribution system. In Flydubai CEO Ghaith Al Ghaith with turn, agents can access Rabih Saab, President and Managing content from one of Director of Travelport Middle East Middle East’s best lowand Africa while signing the MoU. cost carriers. Importantly, travel agents will be able to book flights with Flydubai and partner airlines under the same passenger name record. Travelport is the first GDS provider to offer travel agents fares and inventory from Flydubai, which operates a growing route network of 36 destinations with 16 aircraft.
a growing revenue stream for AirAsia. Income from these allows the airline to offset the effects of fuel price hikes and other rising operational costs. To Japan with Love: AirAsia’s commitment, solidarity and support for the victims of tsunami and earthquake in Northeast Japan come in the form of launching a year-long inter-regional campaign To Japan with Love aimed at helping Japan get back on its feet after the disaster. As a fundraising drive across the airline’s entire network and logistical support for an ASEAN Secretariat-led regional youth outreach programme. The campaign consists of special donation boxes which are available on all of AirAsia flights for guests to donate towards this worthy cause. The airline will also sell 5,000 special themed limited edition wristbands onboard all its flights, to raise more funds. AirAsia hopes to raise US$1million for the people of Japan. AirAsia will also host a special charity evening.
AIrAsia introduces fuel surcharge AIRASIA REINTRODUCED fuel surcharges beginning May 3, 2011, for all domestic and international routes. Bookings made before May 3 will not be affected by the fuel surcharge. The reintroduction of fuel surcharge by AirAsia is to offset the escalating jet fuel price, which has exceeded $140 per barrel. AirAsia’s ancillary products and services — like Baggage Supersize, Hot Meals, AirAsia Insure, AirAsiaMegastore and cargo are
QA expands to Saudi Arabia QATAR AIRWAYS has significantly increased flights to the Kingdom of Saudi Arabia with the introduction of a fourth destination and additional services to existing markets, representing a dramatic 71 per cent rise in frequency. The western Saudi city of Medina becomes Qatar Airway’s newest destination in the Kingdom with four-flights-aweek, beginning July 14. The new route launch is in addition to increased capacity CAPACITY EXPANSION: Qatar Airways CEO to Saudi Arabia’s Akbar Al Baker, pictured left, announcing two largest cities — new global expansion programme. the capital Riyadh and Red Sea port city of Jeddah, which will each see their daily services rise to double daily, effective June 1. Also from June 1, the eastern city of Dammam will see capacity increase from the current 21 flights a week to 28. The capacity increases help facilitate the growing religious tourism industry in Saudi Arabia.
FUNDRAISING SPREE: Members of AirAsia at the ‘To Japan with Love’ campaign.
All proceeds from the sale of wristbands, tickets and tour packages will be channelled to Japan Platform. Meanwhile, the airline will also be providing free flights to Japan for a group of participants of the ASEAN Youth Caravan of Goodwill to Northeast Japan, which will start in June. The caravan will bring together youth volunteer, who will be visiting the communities affected by the disasters to perform cultural shows to help ease the burden of the residents and to foster cultural ties. In conjunction with the official launch of the aid campaign, AirAsia X is offering promotional all-in fares to Tokyo. Going strong in 2011: AirAsia X announced its performance for the first quarter of 2011. The airline carried 0.64 million passengers, an increase of 56.5 per cent over the same quarter in 2010. Adding six new routes in Q1-2011 versus Q1-2010: Mumbai, Delhi, Tehran, Seoul, Tokyo, and Paris, the aircraft fleet size also increased from eight and eleven. In terms of passenger traffic, AirAsia X grew by 59.8 per cent to 3.6 billion Revenue-PassengerKms (RPKs) for Q1-2011, making it the second largest lowcost carrier in Southeast Asia, after AirAsia Malaysia. It’s capacity grew by 48 per cent to 4.5 billion AvailableSeat-Kms (ASKs), resulting in a load factor of 81 per cent, an increase of six percentage-points from the same quarter last year, where it registered a load factor of 75 per cent. JUNE 2011 CRUISING HEIGHTS
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INTERNATIONAL AIRLINES Travel the world in 80 days
Ethiopian Airlines extends sales
MICHAEL COREY from Canada wins Cathay Pacific Airways’ competition “Travel the World in 80 Days with Cathay Pacific”, earning him the right to unlimited travel on the airline’s network. The contest, launched on the Cathay Pacific Facebook in the month of January, attracted nearly 4,000 entries from around the world. Eight finalists were invited to Hong Kong from 12 to 14 April to take part in a one-day city challenge during which they were asked to show their initiative and creativity to post two blogs and upload photos that captured the essence of the city’s attractions. As the THE WINNER TAKES IT ALL: Michael Corey winner, wins the “Travel the World in 80 Days” with Michael will Cathay Pacific contest. receive unlimited round-trip Economy Class tickets from Hong Kong to any destination on the networks of Cathay Pacific and sister airline Dragonair for 80 days between June and August 2011. Also included in the prize are three nights’ hotel accommodation in each destination, a daily allowance of up to HK$2,800 per trip, global travel insurance and a Canon PowerShot G12 Digital Compact Camera. In return, Michael will be submitting regular report on his travel experiences, including photos and videos, for posting on the Cathay Pacific’s Facebook page, Twitter feed, Youtube channel and other channels.
CONSTANTLY MONITORING the volume of business trips originating in the territories of Europe and Asia, Ethiopian Airlines is looking to increase the focus on the field of business travel in its extensive African network. Given that traffic is expected to further increase in this segment, the African airline is setting up a new project to develop the company’s corporate sales. As a result of the long-term and successful cooperation with AVIAREPS as its preferred General Sales Agent, Ethiopian Airlines has appointed the international leading aviation and tourism management company as its sole partner for global corporate sales for the regions of Europe and Asia recently. With two Global Account Managers being responsible for the development of the new segment in Europe and Asia. To attract global companies to the attractive flight offers from Ethiopia’s flag carrier and conclude air transport contracts on behalf of its client,
Emirates reaches a remarkable level DESPITE A challenging business climate, the Emirates Group has marked its 23rd consecutive year of profit with a record performance of $1.6 billion net profit. The 2010-11 Annual Report of the Emirates Group —comprising Emirates Airline, dnata and their subsidiary companies released the report in Dubai. The Group’s revenue increased by 26.4 per cent reaching a remarkable new level at AED 57.4 billion. The Group’s exceptional performance this year owes much to its dexterity and ability to adapt to changing market conditions quickly. During the year, dnata forged forward with its international expansion through its proven strategy of acquisition, taking ownership of Alpha Flight Group Ltd, a leading caterer. Emirates Airline’s revenues grew by 25 per cent from last year to reach AED 54.4 billion. Airline profits of AED 5.4 billion marked an increase of 51.9 per cent over 2009-10’s profits of AED 3.5 billion. Passenger Seat Factor, at 80 per cent, indicates the airline’s highest ever,
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PROMOTING SALES: The new Ethiopian Airlines corporate sales team.
AVIAREPS will set up regional activities. The Account Managers are in charge of establishing contacts with affiliated groups, global companies and travel agencies to promote Ethiopian Airlines’ special company fares.
a remarkable achievement given a substantial increase in seat capacity of 13 per cent. Expanding its global footprint, the airline launched passenger services to six new destinations as well as increasing frequency and capacity to a number of high-demand cities across multiple markets. Cargo revenue contributed 17.4 per cent to the airline’s total transport revenue, yet again one of the highest contributions of any airline . For Dnata, the 2010-11 financial year has seen major international expansion to become the world’s fourth largest air services provider. Dnata’s revenue, driven by international expansion, crossed the AED 4 billion mark for the first time in its operating history reaching AED 4.4 billion. Breaking new ground dnata became the first airport service provider in Switzerland to obtain IATA’s Safety Audit for Ground Operations (ISAGO) accreditation, designed to improve ground handling quality and safety. Dnata’s operations in Pakistan also achieved the same certification during the year.
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TRAVEL & TOURISM Huge Indian tourism arrivals in SA
Cox and Kings expedites visa process
SOUTH AFRICAN tourism witnessed an increase in Indian tourist arrivals to the country in 2010 with a jump of close to 17.3 per cent. Says Hanneli Slabber, Country Head India, South African Tourism, "We are glad South Africa finds an important Hanneli place in an Indian's vacation or business Slabber itinerary. The upward movement in numbers that we have seen from Indian travelers in the past year restores our belief of further intensifying our outreach program to tap into this growing market and accelerate Indian arrivals in South Africa for the current year." The difference of 16,384 tourist arrivals in a year shows that the UNWTO report has a large amount of inbound travel coming in from India. The 33.2 per cent growth in tourist arrivals from Asia to South Africa outperformed that of every other region in the world, including arrivals growth of 13.9 per cent from the Middle East, 7.7 per cent for the Americas, 5 per cent for Australia, 6.4 per cent for Africa and 3.2 per cent for Europe. Amongst the top three regions in Asia, India ranks highest in the number of inbound travellers for JanDec 2010 with 71,587 travellers, followed by China (including Hong Kong) which was second highest at 68,309 and the other parts of Asia at 28,116. In January 2011, Indian tourist arrivals to South Africa increased to 62 per cent (6415 Arrivals) as compared to the same period in the corresponding year.
OBTAINING A Dubai Visa has become easier for Indians. All you have to do is visit Cox and Kings Global Services (CKGS). The company has tied up with DNATA which has enabled a large number of Indians travelling to Dubai with a smooth and seamless experience. All they have to do is either visit Cox and Kings or go online on www.cnkmdv.com and apply for the same. This facility will help eliminate the time-consuming process of coordinating with the hotel and the local sponsor in Dubai. Through CNKMDV, travellers can apply online and obtain the visa in three working days. CNKMDV will process two types of visas—tourist and transit visas. Tourist visas are valid for a maximum period of 30 days after entry and will cost `4,550, whereas the 96-hour-visa (short stay visa), will cost `3550. Sanjay Bhaduri says, “This service will be beneficial to business travellers, senior citizens, unaccompanied minors, first-time travellers, group travellers and transit passengers.”
Ajmer’s Urs fair draws tourists
Yatra.com fuels growth WITH THE strategic objective of increasing broadband penetration in India through fostering entrepreneurship in e-commerce opportunities, Yatra.com, recently, announced that it received `200 crore from blue chip investors, namely, Valiant Capital Management, Northwest Venture Partners and Intel Capital. The investment will help accelerate the online travel company’s growth plans by enabling the company to increase sales and marketing activities, expand its hotels and holidays business and selectively pursue strategic acquisitions. Yatra.com partners with domestic and international airlines to offer flight-booking services at the best rates. Sudheer Kuppam, Managing Director, Intel Capital Asia Pacific, said, “We believe travel will continue to be the dominant ecommerce segment and leads growth of online transactions in the tier two and three cities in India. The team has worked hard to execute on its vision of serving the needs of business and leisure travelers in India.” Customers can access Yatra.com through its user-friendly website, 24x7 multi-lingual call centre, a countrywide network of 30 Holiday Lounges and Yatra Travel Express stores or via their mobile phones.
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WONDERFULLY LIT: The Urs Fair attracts thousands of visitors every year.
THE URS FAIR in Ajmer is celebrated to mark the death anniversary of revered Sufi saint Khwaja Moinud-din Chishti. The site has the distinction of holding the largest Muslim fair in India, where more than five lakh devotees from different communities come to pay homage to the Khwaja on his Urs. The saint’s mortal remains are said to be buried in Ajmer’s Dargah Sharif drawing millions of visitors during the Urs fair. The fair is held during the first six days of Rajab, which is the seventh month of the Islamic calendar. During the Urs, professional singers known as Qawwals sit just outside the main worship place and sing praises to the saint which is the main attraction for the foreign visitors. It is a time for celebration and festivity in the memory of a great saint.
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BECAUSE
There are CBs accredited by bodies not members of IAF
There are CBs accredited by members of IAF arrangement but not accredited for technical areas of your operations
There are CBs accredited by bodies not members of IAF Multi-Lateral arrangement for mutual recognition
Save yourself from all headaches Rely on NABCB accredited certificates For any information, contact NATIONAL ACCREDITION BOARD FOR CERTIFICATION BODIES (NABCB) Quality Council of India
NABCB
2nd Floor, Institution of Engineers Building, 2, Bahadur Shah Zafar Marg, New Delhi-110002, India Tel: +91-11-2337-8056/57, 9321,9260, Fax: +91-11-23379621, Email: nabcb@qcin.org
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TRAVEL & TOURISM Sarovar embarks on expansion drive SAROVAR PARK Plaza recently opened its another hotel in Faridabad. Located at 30 kms from the international Airport and around 25 kms from the Hazrat Nizamuddin Railway Station, Park Plaza Faridabad will serve as an base for guests travelling with business interests in South Delhi and NCR. Commenting on the hotel opening Anil Madhok, Managing Director, Sarovar Hotels and Resorts said, "Faridabad has virtually no quality accommodation at reasonable price points and the city has been witnessing an escalating demand for such options. Park Plaza Faridabad will fill this gap in this important industrial town located between Agra and Delhi by offering a distinct yet exquisite hospitality experience to business travellers and other visitors." In another expansion drive, Sarovar Hotels and Resorts announced the opening of The Ashtan Sarovar Portico in New Delhi. Located at Green Park in the heart of South Delhi, The Ashtan Sarovar Portico is the Company's ninth hotel in Delhi and NCR.
BACK TO NORMAL: Egyptian Tourism Minister, H E Mounir Fakry Abdel Noor, H E Amr El Ezaby, Chairman Egypt Tourism Office and Adel El Masry, Director, Egypt Tourism Office, India with the delegation of Indian media.
Luxor, Sharm El Sheikh, the historic Tahrir Square, Nile cruise and rich culture was showcased through various functions held for the delegation by the tourism authority. On this occasion Adel El Masry, Director, Egypt Tourism Office, said, "Egyptian Tourism is gaining confidence from its tourists about their safety and wellbeing in the country post-political democratic movement. Tourists have started coming to Egypt as they are confident that they will not have any problems pertaining to their security and safety." In India, the Egypt tourism office succeeded to a great extent which is evident from their participation in trade fairs such as SATTE, New Delhi 2011, TTF and OTM in Mumbai in February, the photo exhibition at the Egypt Embassy in New Delhi, we love Egypt event at the Tahrir Square despite the democratic movement.
SLH unveils gold coin competition LUXURY AT ITS BEST: Guest room shot at Majestic Court Sarovar Portico, Navi Mumbai.
The centrally air-conditioned hotel offers a boutique experience with 50 well-designed rooms with a contemporary appeal and all-modern amenities conforming to the standards of an international 3-star hotel. In-room facilities include LCD television, tea/coffee maker, private mini-bar, electronic safe, 24hour room service, laundry service and Wi-Fi. Apart from NCR region, Sarovar also launched its fourth hotel, Majestic Court Sarovar Portico in Navi Mumbai. The hotel located in Mahape, an industrial hub in Navi Mumbai, offers contemporary services and facilities to suit the needs of both international and domestic business travellers. With its 58 rooms and suites which are well-equipped with modern conveniences.
Egypt tourism back on track EGYPT TOURISM recently in the month of April conducted a media familiarisation trip which was planned with the consent of Ministry of Tourism and EgyptAir as travel partners by the efforts of Adel El Masry, Director, Egyptian Tourism Office, Mumbai, India. The FAM trip covered places such as Cairo,
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To celebrate its 20th anniversary, Small Luxury Hotels of the World (SLH) unveiled a chance to win up to a 12 night stay at an SLH hotel of their choice anywhere in the world plus GBP£1,000 spending money every month for the rest of the year. With 120 room nights and GBP£10,000 up for grabs at www.slh.com/goldcoins, there 10 lucky winners would be singled out throughout the SLH Gold Coin Competition. There are 20 SLH Gold Coins hidden in the pages of the SLH website, www.slh.com. The coins might be found next to an eco-resort in Mozambique, a golfing package in Costa Rica or a honeymoon offer in the Indian Ocean. Collecting coins is easy, and from that very first glimpse of gold, a 7 night luxury stay is within reach. From the first coin that is collected, competition entrants will automatically be added to every monthly draw until the end of the competition on December 31, 2011. To win an even bigger prize of a 12 night stay plus GBP£1,000 spending money, treasure seekers need to find 15 or more coins, and for any particularly talented gold coin hunters who manage to collect all 20, a special bonus draw will take place at the end of the year. There will also be an added element of surprise for coin-collectors as SLH has teamed up with luxury partners to offer entrants the chance to win bonus prizes throughout the competition.
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2011 AVIATION OUTLOOK BirdRes partners with PVR
UNIQUE: The sports bar exudes great architectural splendour.
Delhi gets Sports Bar and Grill UNDERDOGGS SPORTS Bar and Grill, Delhi’s new game arena and hangout, opens at Ambience Mall, Vasant Kunj. Over 9,000 sq ft of fun, relaxation and stimulation New Delhi’s latest hotspot, Underdoggs sports bar and grill is now open. At Ambience Mall, Vasant Kunj, it is a one of a kind sports bar that combines world cuisine and beverages with unique sports and entertainment options under one roof. Underdoggs plays 40 HDTVs & four projection screens for sports aficionados, who, besides watching live sport channels will also be able to catch the action on various sports highlight videos as well as sports bloopers. Underdoggs offers a multitude of options from pool tables to shuffleboards to dart boards, even table tennis and interactive gaming consoles that is enjoyable. “Underdoggs is the new, cool, never-a-dull-moment hangout that Delhi has been waiting for. It has been designed for fun, relaxation, stimulation,” says Preet Saini, promoter of Underdoggs Sports Bar & Grill. Along with a great ambience, the restaurant and bar offers a menu featuring “Great American Pub Food”, smartly crossed with European and Indian tones.
TO PROVIDE a hassle-free movie-watching experience, BirdRes recently partnered with PVR Cinemas for booking movie tickets to offer value add-ons to its customers. The cinema tool allows BirdRes customers to select show timings, seats and other preferences. Customers can book their tickets through an agent credit limit or an agent credit card on www.birdres.com. Tickets can then be collected at the PVR outlets by showing the transaction SMS or e-mail confirmation along with a photo identity card. This is the first B2B partnership for PVR, enabling the customer to pay through the credit shell via BirdRes, without providing any credit card details. Commenting on the partnership, Ankur Bhatia, Executive Director, Bird Group, said, “Partnerships such as these are an important step for constantly innovating and developing new unique solutions catering to the demand from our customers and partners. This further augments the group’s strength and position as a pioneer in providing a wide array of services and solutions to its partners.”
Fairmont debuts in India TO DEVELOP world-class city centre hotels in major urban areas, Fairmont Hotels & Resorts, a luxury hotel brand with over 60 properties, will soon be opening two new hotels in India — Fairmont Jaipur and Fairmont Hyderabad. Chris Cahill, President of Fairmont, recently visited the country to meet with development partners, tour the property sites and attend the HICSA conference in Mumbai. Fairmont offers a very distinctive portfolio, a collection of landmark properties worldwide that appeals to group and leisure guests. The group offers its guests to experience outstanding service, superb locations and dedication to local communities. The brand prides itself on its place within the community and the simple, everyday travel experiences offered are unique.
APPOINTMENTS Girish Kumar joins Marriott, Chennai GIRISH KUMAR has joined Courtyard by Marriott, Chennai as a new Executive Chef. Prior to joining Courtyard by Marriott, he was the Executive Chef in Goa Marriott Resort Girish Kumar and Executive Sous Chef at the JW Marriott, Mumbai. As Executive Chef at Courtyard by Marriott, Chennai, he oversees all operations related to multicuisine restaurants in the property. Chef Girish’s area of expertise is the Continental cuisine. Blending his rich experience with the flavours of the restaurant, Chef Girish believes that the secret to creating some of the most special recipes with a unique flavour comes from
this unique hobby of experimenting with ingredients.
Chinese Chef for The Claridges LIN LIN Yang has joined The Claridges, New Delhi as Master Lin Lin Yang Chinese Chef. He comes with over 13 years of experience in preparing authentic Chinese cuisine. In his new capacity Chef Yang will be responsible for the menu planning & operations of Jade, Authentic Chinese Restaurant at The Claridges, New Delhi. Chef Yang’s culinary career spans across some of the finest restaurants in India and abroad. His culinary repertoire includes the famous Guangdong, Sichuan and authentic Beijing food.
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Is it a car? Is it a plane? WONDER CAR: The Transition is being pitched as being more convenient than conventional planes. Drive the car to the airport and fly away!
ne of the most annoying aspects of urban life is the infuriating traffic. Being stuck in the middle of road, moving at snail’s pace, has almost become part of our daily grind. Haven’t we all wanted to fly away from the excruciating traffic hold-ups far out of reach of the red lights and the incessant honking? With the new Transition Roadable Aircraft those dreams have come close to reality. Debuting this year, the new creation is a plane with foldable wings that converts into a car. Created by Massachusetts-based company Terrafugia, it’s the brainchild of Carl Dietrich, an aerospace engineer, and his friends from MIT, who were also pilots. The design of the production version was made public at AirVenture Oshkosh on July 26, 2010 and though it did look like something out of a mad scientist’s dream but it actually works. Owners can drive the car from their garage to an airport where they can take off to fly within a range of 740 km. Terrafugia is also pitching the Transition to private pilots as more convenient and cheaper than flying. It gets rid of the pain of trying to find another mode of transportation to
O
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get to and from airports: You drive the car to the airport and then you’re good to go. When you land, you fold up the wings and hit the road. Once airborne, airport delays and bad weather will no longer be an issue as pilots will now be able to fold up the Transition’s wings and drive. Airports charge hangar fees to store private planes, which are pretty expensive to begin with but the Transition can be easily stored in one’s garage. The Transition is expected to be released this year with an estimated purchase price of $194,000. But there may be additional charges for options like a radio, transponder or GPS. Another option is a full-plane parachute. The Transition’s success will depend on whether getting a pilot’s license can become as routine as getting a driver’s licence. And maintaining the “vehicle” will obviously be more difficult than getting a tune-up at a service station. The plane is designed to fly primarily under 10,000 feet with a maximum takeoff weight of 1,430 pounds, including fuel and passengers. Gas mileage on the road is about 30 miles per gallon. While owners in the US will be required to obtain a Sport Pilot certificate, which can be acquired after 20 hours of observed flying time, one wonders what our own Directorate General of Civil Aviation will do if is confronted with a potential pilot/driver of a Transition. Quite some time ago, we had news that a businessman from Gujarat was keen to buy one of these gadgets.
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