Ch january 2009 by Newsline

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January 2009

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EDITOR-IN-CHIEF’S NOTE

‘I have an open mind’

2008:We are postponing the implementation of the ground-handling policy indefinitely. There are hundreds of jobs at stake.

he late Vishwanath Pratap Singh once said that he was able to become Prime Minister because he had the ability to manage contradictions. Praful Patel can give him a run for his money any day of the week. But unlike Singh, the Minister for Civil Aviation is at least transparent with his notion. He has said time and time again: there is nothing sacrosanct about policy, it is a dynamic process.What is good today could well be awful tomorrow. As we ring in the new year, and the last few months of the UPA sarkar, here are a list of contradictions that were ‘managed’.

On Air India 2005: What I am looking at is synergy between Air India and Indian Airlines. They need to work together, streamline their operations and not compete against each other. Synergy is the key, not merger. 2006: Air India and Indian Airlines must merge. That is the only way they can compete with the private players. Synergy is not the answer.

On non-metro airports 2007: We shall modernise over 35 nonmetro airports and the AAI shall be responsible for the air side, but the terminal operations and the city side initiative must rest with the PPP partner. 2008: Air side and terminal operations will lie with the AAI, the PPP partner will handle the city side developments.

On Ground-Handling

On FDI in the airline business 2005: India is not yet ready for FDI in airlines by foreign airlines. We need a mature market and a fleet size of at least 1,000 aircraft before we can allow that. 2008: We must have an open mind on this issue. After all, if airlines don’t invest in airlines, who will?

On flying overseas 2005: We shall follow the five-year 20aircraft rule. We have to be sure that airlines operating on the Indian flag keep up the prestige of the country. We also need to protect our national carriers. 2008: We are reviewing the rule. My first priority is not the airlines, but the travelling public. My concern is to offer them enough options, it is not to bother whether x or y or z is affected. So how does he manage all the contradictions? Simple. Praful Patel sells his convictions with the hard-sell of a globetrotting salesman. He will work the aisles, pump the hands, work behind the scenes and get those who matter on his side. The number of meetings that he must have had over the years with the Cabinet Secretary, with the Prime Minister, with Montek Singh Ahluwalia are indicative of the effort he is willing to make. And mind you, he has had four different Secretaries to work with. That isn’t easy. It only goes to show that even to manage contradictions you need some skill! It’s another matter, though, whether they are good, long-term policies or not.

2006: We have initiated a ground-handling policy that inculcates all the best practices and provides enough options for the airlines.

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Off the cuff

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Pay as you fly Taking a cue from the cellphone industry, a South African airline is selling flights by the minute and allowing customers to buy tickets and book flights via SMSs. Airtime Airlines takes to the sky later this month, offering three flights a day from its base in Durban to Johannesburg, Cape Town and Port Elizabeth. Passengers purchase minutes much like they would for a prepaid cell phone and redeem them for a ticket. Fees are assessed according to the length of the flight — say, 75 minutes for the run from Durban to Johannesburg — and could save as much as half of what competing airlines charge. Vino Eargambram, the Airlines’ chief executive, calls Airtime “a low-key operation targeting a very distinct market — young professionals and self-employed business people.” And while low fares are central to the Airline’s business plan, Eargambram says it will stand out from its competitors by offering complimentary snacks, drinks and other amenities that have become inflight luxuries elsewhere. According to IAfrica.com reports, the Airline, which is owned by Blackbird Aerospace and includes at least one cellular provider as a partner, must clear several regulatory hurdles before its planned launch. If Airtime irons out those details, passengers will buy minutes instead of a traditional point-to-point ticket. They can buy a “starter pack” of prepaid minutes and top off their accounts by purchasing more minutes — by text message — at the going rate of 5 Rand (about 53 cents) a minute. Flight times have been mapped out in advance, so sitting on a runway for three hours won’t triple the cost of your ticket. Topping off accounts is where things get interesting. The cost for Airtime minutes can fluctuate, presumably according to promotions and market factors, so topping off becomes an exercise comparable to fuel hedging.

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GROUNDED – INDIA’S GROUND-HANDLING POLICY p30 With the government standing firm on its ‘No lay-offs’ policy, the implementation of the new ground-handling policy has been deferred till further orders. The policy, which was to be implemented with effect from January 1, 2009, would have led to large-scale lay-offs among the ground-handling staff.

OFF THE RECORD

When does R K Singh move out of Rajiv Gandhi Bhawan to take up his position in ICAO’s Board as India’s representative? Plus: Kiran Kumar Grandhi’s election as Chairman of the GMR Airport Division.

CRUISING HEIGHTS January 2009

NEWS DIGEST

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With AERA finally being notified in the official gazette, the stage is set for the Indian airports to finally have a tariff regulator.

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

CRUISING HEIGHTS Editor-in-Chief

K SRINIVASAN Managing Editor

TIRTHANKAR GHOSH Senior Editor

RENU RANGELA

CARGO SNIPPETS

Consulting Editor

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Logistics major Gati is on an expansion spree. It has identified three cargo companies in China and may be willing to buy any one of them for up to $5 mn. Plus: Air India’s cargo plans.

COLUMN

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Veteran aviation watcher R Krishnan discusses how the current economic scenario and the slowdown in the aviation industry have spurred a demand for FDI in Indian aviation.

R KRISHNAN Art Director

BHART BHARDWAJ Layout Artists

RUCHI SINHA PRADEEP JHA RAVINDER GUSAIN Co-ordinating Photo Editor

H C TIWARI Subscription

JAYA SINGH Gen Manager

RAJIV SINGH

SNIPPETS

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Jet has restructured its routes and taken several other cost-cutting measures, while Air India has cut down on its fuel surcharge and SpiceJet has enhanced its flight frequency. Plus: More aviation and tourism news.

INTERVIEW p40

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Pilots have always had this reputation of being a cranky lot but one never knew that these persons who take split-second decisions can also delay meetings. Plus: more unusual aviation stories.

RENU MITTAL

Sumeet Nadkar (Head Logistics Special Business Unit) Kale Consultants, is optimistic about the future of the logistics industry, despite the current bleak economic scenario.

BACK PAGE GLOBETROTTING

Executive Director

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Kingfisher’s 2009 calendar is back to electrify the mind and the soul, with exciting visuals of six hot-shot models from around the globe photographed in all their stunning glory.

CRUISING HEIGHTS January 2009

Editorial & Marketing office: Newsline Publications Pvt. Ltd. C-15, Sector 6, Noida 201 301 Tele: +91-120-4145555 All information in CRUISING HEIGHTS is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase-I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase-I, New Delhi 110020 Vol III No 9

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Lower fares

PERISCOPE

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We have decided to bring down the fuel surcharge now because crude prices have fallen globally, thereby bringing down ATF prices. Although crude prices are still volatile, we hope they will stabilise at the current levels, so that there is a short to medium term relief in ATF costs. Air India CMD RAGHU MENON on the Maharaja’s decision to reduce prices.

LETTERS TO EDITOR

The cover story (2008… Darkness, but…, December 2008) happened to capture all the twists and turns that the aviation industry in the country saw through the year. Indeed, 2008 saw ups and downs like never before. We had two world class airports starting operations but we also had the whopping rise of ATF. The aviation sector witnessed a marriage of interests (Kingfisher and Jet) and a divorce (Vijay Mallya and Capt G R Gopinath). In fact, your omnibus cover story touched all aspects of the aviation industry. Great work! Ranbeer Singh, Delhi December 2008

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Illustrations: Rajeev Kumar

So, it is goodbye to Dr K Ramalingam (Off the record, December 2008)! The former chairman of the Airports Authority of India (AAI) has seen the aviation sector through bad times and good times. He is one of those rare government officials who was able to adapt himself to the changing times. In his tenure, the metro airports went through a major churning process before they were handed over to private developers. But through it all, Dr Ramalingam maintained the AAI’s supremacy. Efficient persons like him should be utilized by the government in the nation-building process. Purnendu Sanyal, Kolkata

Giovanni Bisignani, the IATA chief, is not afraid to call a spade a spade (Guest Column, December 2008). He understands that the commercial aviation sector is essential for the economy of nations — big and small and that is why he does not shy away from taking governments to task. The bleak picture he has painted of the aviation industry should be a warning bell for most nations. He has mentioned what needs to be done in all departments: from the environment to security. It is time each one pulled up their aviation socks. If the aviation sector is healthy, the economy is certain to improve. P M Balasubramaniam, Kochi

Ten per cent only I am confident that you will also accept this is in best interests of the company and its continued operations — and continued employment — of all the employees.

Jet Airways Chairman NARESH GOYAL in his letter to all employees pleading with them for a salary cut.

Let them in We are not singling out India but, along with other countries, will certainly recommend that foreign airlines be allowed to pick up a stake in domestic airlines. We are supporting the relaxation of overseas investment as this could help airlines to stay afloat or re-structure their business more efficiently.

IATA Chief Economist BRIAN PEARCE for FDI infusion through airlines in the Indian market.

Their choice It’s a commercial decision of air carriers. Civil Aviation Secretary MADHAVAN NAMBIAR on the reluctance of airlines to reduce fares.

It’s not done Loss of revenue is one reason why states are opposed to ATF being given ‘declared goods status’. Anyway, we are totally against any unilateral action from the Centre. West Bengal Finance Minister DR ASIM DASGUPTA on the ATF issue.

All correspondence may be addressed to Editor, Cruising Heights, C-15, Sector 6, Noida 201 301 OR mail to cruisingheights@newsline.in

CRUISING HEIGHTS January 2009

Lower it The projected revenue from real estate has been hit and we will take a decision on the situation in the coming days, so that work does not suffer and the airport meets its deadline. Civil Aviation Minister PRAFUL PATEL on Delhi airport’s financial issue.

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2008: Good year for air safety

The fatal accident rate for 2008 of one per 1.3 million flights was better than the overall rate for the nine years since 2000 of one per 1.2 million flights. The worst accident of 2008 was the Spanair MD-80 crash in August, which killed 149 of the 166 passengers on board and five of six crew when it crashed beside the runway at Madrid Barajas Airport. Only two other accidents killed more than 50 people; the Aeroflot Nord (Boeing 737) and Itek Air (Boeing 737) crashes resulted in 82 and 65 deaths, respectively.

COLD STATS

The year 2008 was the second-best on record for air safety. There was a 25 per cent decline in the number of fatalities from aircraft accidents, according to statistics from London-based Ascend, an aerospace data and consulting firm. One trend worth noting: planes have become more survivable in crashes. Government rules requiring stronger aircraft seats and cabin materials that burn slower — and only at much higher temperatures — have allowed more people to escape aircraft cabins. Ascend counted 539 passenger and crew fatalities worldwide in 2008, an improvement on the 730 fatalities recorded in 2007. Only 2004 recorded fewer fatalities at 434. However, 2008 also saw 28 fatal air accidents in total, compared to only 24 in 2007.

LOOKING GLASS Down go ticket prices and up goes air travel. Will it back to the good, old times?

Big time crisis Unlike Indian travellers, who don’t book too ahead in advance, Europeans, Americans and tourists from some other countries make their bookings six months to a year in advance. 20 to 25 per cent of those advance bookings, spread for up to a year, have been cancelled. This is the biggest-ever crisis faced by Indian tourism. Travel Agents Association of India (TAAI) Chief RAJINDER RAI on the fallout of the Mumbai blasts.

Tourists from the US and UK have deferred their travel to India. It’s a natural transgression after terror struck Mumbai last week. Air India’s ED (PR) JITENDRA BHARGAVA on the fallout of the blasts.

CRUISING HEIGHTS January 2009

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OFF THE RECORD

GMR, Satyam and Hyderabad airport

Grandhi Mallikarjun Rao

even years ago, Grandhi to the table. Or they wouldn’t be thickMallikarjun Rao was not the skinned enough to take on the barbs man he is today. Few knew that often accompany such projects in him as the driving infrastruc- the hinterland. tural giant that he has become The classic case is that of Infosys today. And GMR was like dime-a-dozen mentor K R Narayana Murthy, who other companies — at least that’s what quit as Chairman of BIAL (Bangalore the then Andhra Pradesh Chief Minister International Airport Ltd), unable to Chandrababu Naidu inferred. When the take the barbs directed by former Prime global tender for the new Hyderabad Minister H D Deve Gowda. Despite airport at Shamshabad was floated at repeated pleas by a large number of that time, Rao emerged as the lowest well-meaning people, including the probidder and Naidu had no option but to ject’s CEO Albert Brunner, Murthy said consider him. But it was with deep ‘no’, and that was the end of it. Many reservation. In fact, at one stage he even believe that the relatively lesser issues at asked Siemens-Zurich airport, who Hyderabad, Delhi and Mumbai are a were higher by over Rs 200 crores, to consequence of the owners driving the match the GMR bid and take the proj- project, unlike Bangalore. ect. They haughtily turned him (much In fact, at one point it came to such a to their eternal regret) down, and Naidu pass that the group was preparing to had no option but to go with GMR. give up the project rather than accept a When that didn’t work, he wanted government nominee as Chairman. them to get their partners, Malaysian Anyway, to cut a long story short, the Airports, to bring in money. GMR somehow managed that — although the then PM Mahathir Mohammad was bitterly opposed to any deal with India. When that came, Naidu played his final card. He wanted that the project should have a non-executive Chairman who would be a government nominee. His choices: Anji Reddy of Dr Reddy’s Laboratories or Ramalinga Raju of Satyam. Raju, incidentally, was the one who was Anji Reddy Ramalinga Raju the master of ceremonies when President Bill Clinton visited India nine years ago. He presented him with his favourite T-shirt made in Hyderabad and wowed him with the magic of the India IT story. GMR said no, and for a full 18 months it was a stalemate, with Rao arguing that when his company Hyderabad Airport was investing over 65 per cent of the moolah, surely they had a right to leadership on the proposal finally fell through and GMR mission. One reason for his reluctance initiated the project under the leaderwas the experience he had with other ship of Rao. So just imagine what could projects where non-executive chairmen have been the consequence if Rao had sat on the board and drove missions, said yes, and Raju had landed on the without either the drive or the commit- board of the HIAL as Chairman. ment that an entrepreneur would bring Baal Baal bach gaye baba! CRUISING HEIGHTS January 2009

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OFF THE RECORD

Going down, down, down T

he International Air Transport Association (IATA) has nothing good for the aircargo industry in 2009. It has forecast a bleak year with traffic declining by five per cent following a drop of 1.5 percent in 2008. Before 2008, the last time that cargo declined was in 2001 when a six per cent drop was recorded. IATA has projected that the aviation sector’s losses in 2009 would be at US$2.5 billion with all regions, except the US. “The outlook is bleak. The chronic industry crisis will continue into 2009 with $2.5 billion in losses. We face the worst revenue environment in 50 years,” said Giovanni Bisignani, IATA’s director general and chief executive officer. IATA has also updated its forecast for 2008 to a loss of $5 billion against the $5.2 billion loss projected in September as a result of the rapid decline in fuel prices. The reduction in industry losses from 2008 to 2009 is primarily due to a shift in the results of North American carriers. In the Asia-Pacific, carriers will see losses more than double from the $500 million in 2008 to $1.1 billion in 2009. With 45 per cent of the global cargo market, the region’s carriers will be disproportionately impacted by the expected five percent drop in global cargo markets next year.

Japan, the region’s largest market, is already in recession and the two main growth markets — China and India — are expected to deliver a major shift in performance. Chinese growth will slow as a result of the drop-off in exports. Meanwhile, in India, our carriers, which are already struggling can expect a drop in demand following the terror incidents in November in Mumbai. In Europe, the losses for carriers will increase ten-fold to $1 billion. Europe’s

main economies are already in recession. Hedging has locked in high fuel prices for many of the region’s carriers in US dollar terms, and the weakened euro is multiplying the impact. Even the Middle East, which was touted as a growing market, will see airlines losing upto $200 million. The challenge for the region will be to match capacity to demand as fleets expand and traffic slows, particularly for longhaul connections.

Dispatches

t’s the final month for R K Singh at Rajiv Gandhi Bhawan.The longestserving civil servant at the Ministry of Civil Aviation will finally move at the end of this month to his new job. That job is thousands of miles away in Montreal, where he will be India’s representative on the ICAO Board. The tortuous clearance that is a part of the government’s appointment procedures is now finally slowly meandering towards a climax, and Singh should hopefully have the formal letter by the end of the month. So when is he likely to take over in Montreal? If sources are to be believed, it will be sometime in early March. And his colleague across the aisle, A K Srivastava, is also leaving this month. So the Ministry will virtually have a new look in season 2009.The Secretary is

just three months into his job, the two key Joint Secretaries will be fresh off the oven so to say, the DG at the DGCA is new, you have a new Chairman at the AAI, and AERA, which is expected to be in place by March 31, will have three new faces. Well, one person who is surely joining is Prashant Shukla. Now whose job — R K’s or Srivastava’s — he gets is a matter of detail, but there is space for one more joint secretary. There are a few names in the air. Would you like to hazard a guess on who is the Mantriji’s choice?

R K Singh

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t’s the sort of perfect gesture that makes for a happy new year. AAI Chairman K Ramalingam demitted office on superannuation on December 31. His

CRUISING HEIGHTS January 2009

Vijai Prakash Aggarwal

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Junior is Chairman K

K Ramalingam

Naseem Zaidi

Just look at the Federation of Indian Airlines (FIA). It’s really a ‘nobody’ and has become a lobbying tool for a few to make their point. There is also a sharp cleavage between the LCCs and the full service carriers. At one meeting recently, IndiGo Chief Rahul Bhatia told the legacy carriers where they got off when he declined to keep the fares at a differential of Rs 500 between the LCCs and the others. But that’s not the only battle; the chasm between them is so vast that the Association has really failed to take off. Kiran must learn from the mistakes of FIA. If indeed this Association has to be a vibrant body that takes its perspective across the country to the powers that be, it must inclusive and bipartisan. These are words that the Republicans and Democrats often use in America. Maybe it could be useful in the Indian context as well.

successor, Vijai Prakash Aggarwal, took over on January 1, and the first thing he did was take a large bouquet of flowers to his predecessor’s home and greet him on the occasion. Good graces like these are few and far between, but, with this one move, Aggarwal has sent the signal that as far as he is concerned, he will administer with dignity and plenty of grace. Days later, there was plenty of bonhomie in the evening at the Maurya Hotel, where the Authority’s big guns gathered, along with the DGCA and Joint Secretary Arun Mishra, to giver Ramu a rumbustious farewell dinner. Mantriji was there as well, and according to one insider, “the bonhomie and the camaraderie” had to be seen to be believed. Interestingly, Aggarwal won much praise from the Minister for the high-quality work delivered by the AAI at the Aurangabad terminal. The new Haj complex was inaugurated last month to coincide with the Haj flights.

CRUISING HEIGHTS January 2009

Kiran Kumar Grandhi

Photo: H.C. Tiwari

iran Kumar Grandhi, the man who drives the modernisation of Delhi Airport and is Chairman of the GMR Airport Division, has been elected as Chairman of the newly created Association of Airport Operators. This is something that has been too long in coming. Considering that the Ministry of Civil Aviation is completely skewed in its decisionmaking in favour of the airlines, the airlines did need a body that could lobby on its behalf as a unit. Kiran, as the founder Chairman of this Association, has his job cut out for him. But there is plenty that he will have to resolve before they can really become a powerhouse lobbying institution. For one, they will have to have the AAI fully onboard. After all, over three-fourths of the country’s airports are under their control, and if they are not part of the regime, the Association wouldn’t be worth anything.

*** *** **** **** **** ***** o what’s the latest on Naseem Zaidi? Simple. He has closed all windows and doors, and is working like a Lone Ranger who says, “Kemo Sabe” only on the call of the Minister. The open house system that was in place during the Kanu Gohain regime has now been replaced with ‘only by appointment’. One of the first to take advantage of this route was Vinod Sareen — for the uninitiated, he is the man who handles the Jet Airways’ nuts and bolts in Delhi. Now Vinod, the smart man that he is, decided that it was best to see Zaidi with Kamal Ahmed (Joint Commissioner — Police Training — in Delhi and related to the DG). The gentleman that he is, Naseem met both, but when Sareen turned up the next day hoping that he had a five-year multi- entry visa, he found his immigration blocked. He was politely told not to come without an appointment. So next time you want to meet Zaidi, you must smile when he opens his appointment diary. Matlab, aapka visa lag gaya!

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Airbus

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oeing caught in the mire of a delayed Dreamliner programme and a debilitating eight weeks machinists’ strike has seen a 15 per cent decline in deliveries last year and lost its lead in orders to Airbus. It’s been what one plane-maker called the ’dampener year’ with the world economic slowdown, the yo-yo factor in fuel prices and the gnawing recession bringing down sharply the overall orders to 662 from 1,413 in 2007. The decline in deliveries, to 375 from last year’s 441, places Boeing behind Airbus for the sixth straight year. Beginning 205 when the scorching pace of growth in the Asia-Pacific region spurred the airline industry’s growth, both Boeing and Airbus had stacked up record orders creating backlogs that would be fulfilled at the earliest by 2015. But all that is a thing of the past. Demand slowed in 2008 as the recession forced a cutback in air travel, deliveries were deferred, options weren’t exercised and airlines said a silent prayer that the Dreamliner was delayed. So they didn’t have to worry about filling airplanes and they were also getting paid for the delay! What better in this age of recession! Boeing said there were 93 Dreamliners ordered in 2008, primarily by Middle East customers. The 737 remained the bestseller, with 484 orders, while customers agreed to buy 54 777s, 28 767s and three 747s. The company’s commercial order backlog now stands at 3,714 planes. In an ironical twist, Airbus said it was winning more orders for the A330 widebody plane than previously anticipated, thanks to the delay in the 787 Dreamliner. For the record the A 330 is a 15-year-old design. Airbus COO John Leahy told Bloomberg that an increase in demand from airlines is behind the decision to accelerate production of the passenger version of the A330 and postpone manufacturing of a cargo variant. Singapore Airlines is leasing 19 A330s because the Dreamliners it ordered won’t arrive until at least 2011. Virgin Atlantic Airways will get the first of 15 787s in 2013 at best and is considering the A330 to plug the gap. The A330, which seats 250 to 300 people, compared to 210 to 290 for the 787, won 129 orders in the first 11 months of last year, just three short of the total for the whole of 2007. That success came as Airbus orders fell about 40 per cent overall. “You’ve got a situation where neither the 787 nor the A350 is on the market. So demand for the A330 is not just its own demand,” he said. “We’d expect it to continue selling through 2015 and beyond.”

Boeing said: “While current-generation smaller twins such as the 767 and the A330 have seen upticks in orders over the past year to fill airlines’ needs for capacity until the 787 reaches the market, the changing economic environment makes it more likely that carriers will prefer to wait for the 787 with its breakthrough economics.” Some aircraft leasing companies with contracts for the A330 freighter have been allowed to switch to the passenger version to take advantage of surging demand, Leahy said. Lessors who ordered the cargo plane include USbased Guggenheim Aviation and Air Castle Partners. Among airlines that ordered A330 models last year were China Southern, which took 10 of the aircraft and has the same number of 787s on order; Air China, with 20 A330-200s and 15 787s; and Gulf Air, which has a contract for 20 A330-300s. Japanese carrier ANA, in September last year, added nine Boeing 767-300ER planes to its fleet to prevent 787 delays from hurting expansion. Azerbaijan Airlines in August cancelled one of three 787s, taking a 767 instead. The airlines weren’t immediately available for comment. Boeing last year had 28 orders for the passenger version of the 767 compared with just three in 2007. The plane is a decade older even than the A330. Virgin may also look at Boeing models as a stopgap while it waits for the 787s. Boeing’s 633 orders mark a four-year low for its sales team, which had achieved three straight years of 1,000plus orders and beat Airbus in 2006 and 2007. Boeing’s output, which had been forecast to increase by 10 per cent in 2008, ended up declining by nearly 15 per cent from 441 to 330 as the result of its 58-day machinists’ strike. Airbus handed over its 12th A380 superjumbo jet for the year, meeting the company’s delivery goal for 2008. The company has delivered a total of 13 A380s after delaying its first delivery to Singapore Airlines by nearly two years. “This gives us a good basis to further ramp up our production in 2009,” Airbus president and chief executive officer Tom Enders said in a press statement. Boeing’s 787 Dreamliner also will be about two years late if the company is able to stick to its most recent schedule revision. In mid-December, Boeing pushed back the first Dreamliner delivery to Japan’s All Nippon Airways to early 2010. The company is expected to provide further details about the jet’s latest delay — as well as any financial implications the delay may have — later this month.

CRUISING HEIGHTS January 2009

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THE MONOPOLY CONTINUES!

T INFRASTRUCTURE NEWS

he Airports Economic Regulatory Authority (AERA) has been notified in the official gazette and should be in place before the end of the current fiscal on March 31, 2009. It may be recalled that the AERA Bill 2007 had received the Union Cabinet’s approval in May 2007, but was finally cleared after it travelled through the Parliamentary Standing Committee consultations, in October 2008. The Bill received

Presidential assent in December 2008 and has now been notified in the official gazette. Once AERA becomes operational, the Indian airports will truly have a tariff regulator, which is supposed to be in line with the international practice. AERA’s prime objective is to create a level playing field and foster healthy competition between airports, encourage investment in airport facilities, regulate fares and protect passenger interests. AERA will approve

AAI gets Miniratna status Airports Authority of India (AAI), the country’s largest airport operator and manager, has been granted the status of Miniratna Category-I. This paves the way for exercise of enhanced powers in matters of joint ventures and capital investment. “AAI fulfills the criteria laid down for grant of Miniratna Category-I status relating to continuous profit for last three years and positive net worth,” an official statement said, adding, however, that AAI will be able to exercise its Miniratna powers only after its board is restructured with the induction of at least three non-official directors.

Marg to operate Bijapur airport Marg Ltd, a Chennai-based company engaged in infrastructure development, has won the contract for building and operating an airport at Bijapur, Karnataka.

tariff structure - airport charges, including air navigation charges — and monitor the infrastructure standards at airports. Charges for navigational services that are levied by AAI will also be subject to AERA’s approval. The regulatory authority is supposed to encourage investment in airport facilities and also issue guidelines for efficient and economical operations of notified airports. AERA will determine tariff once in five years, but may amend it from time to time, depending upon subsequent developments. It will also be empowered to penalise any government agency for any default. Unlike in telecom, where the Telecom Regulatory Authority of India (TRAI) got evolved over a period of time (since it was first legislated in 1997 and subsequently amended in 1999-2000) because of too many issues, too many players, too much politicisation etc, AERA is coming at a time when sufficient experience has been gathered by the Indian government, as also the corporate sector, in dealing with the aviation business —both airlines and airlines-related issues like MRO etc, and airports and airport-related issues like ground-handling etc. It was only after separately dealing with fixed-line and wireless telephony technologies, internet telephony etc. that the Department of Telecom came out with its famous Universal Access Service Provider concept and the Universal Access Licence. It also moved from the earlier licence fee regime to revenue share concept. In the case of aviation business, there

The airport is to come up on a 727-acre land at Burnapur village near Bijapur. Under a public-private partnership agreement, Marg will design, develop and operate the airport for 30 years. The agreement provides for extending the period further.

Bidar terminal ready Work on the airport terminal in Bidar, Karnataka, is nearing completion, and civil aviation operations will be launched soon. The work is under way near the Air Force Station on Chidri Road. The terminal has been designed on the lines of the one at Dehradun. It is being built on an area of 1,450 square metres at a cost of Rs. 3 crore.

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NEWS DIGEST is no revenue share in airlines business, while there is revenue share in airports business, particularly the modernisation and expansion of brown field airports (like Delhi and Mumbai), whose majority shares have been handed over to the private sector as part of the PPP regime. So, in a way, the issues are much clearer in the aviation business, than was and is the case with telecom. But then, that is not the end of the story. With dozens of retired aviation bureaucrats from within Rajiv Gandhi Bhawan and Air India-Indian Airlines combine waiting for rehabilitation, AERA should not become a parking slot for babus, like the old unused aircraft and step-ladders of erstwhile airlines like East-West, US, Damania and NEPC, besides written-off old IAF transport planes in some of our airports. We are not saying that all retired babus want rehabilitation, nor are we saying that they do not have the requisite knowledge. All that is being said is that those with technical- managerial background should make a better fit. Even as we state this with caution, what we would nevertheless like to say rather openly is that lessons still remain to be learnt. For instance, after economic reforms, the people of India saw the tyranny of the government or state monopoly slowly ending. But just when it was about to end, we saw it being replaced by private monopoly. For instance, in the power sector, why has the government not capped the number of Ultra Mega Power Plants (UMPPs) it has and is tendering to bidders? We already have one group

getting two such UMPPs, and another winner of a UMPP getting ready to get one more. Officials could argue that there are only about seven UMPPs on the tender block and not those many players to bid for them. But this cannot be an argument when the government has allowed 100 per cent FDI in power. Now let’s move over to the airport sector. When Delhi and Mumbai airport bids were awarded to GMR and GVK, and OMDA was signed after they were

selected on a points system, driven primarily by the revenue share they offered to the government, it was also clarified by the government that no airport would come up within 150 kilometers of the existing one. And should one come up, then these winning bidders would have the first right of refusal when bids are invited for that new airport (within 150 kilometer radius). This was fair enough from the bidder’s point of view but not from the point of view of monopoly. Moreover, we also have a situation where same groups could be building more and more airports, replacing perhaps the monopoly of AAI in parts. One could always argue that not everyone is interested in the airport business, but then alternatively, can’t we ask as to why the same parties should be allowed to own more and more airports. To those with the other view, this argument may appear to be illogical and flimsy. But then, don’t we

More CCTVs at Delhi DIAL is increasing the number of closed-circuit television cameras inside Delhi airport. A four-layered intrusion detection system will also be installed around the perimeter of the airport by mid-2009. The all-weather system can effectively track any kind of intrusion on the airport land and sound an alarm. At the recently renovated international terminal, DIAL has introduced an online baggage screening system, wherein cameras installed in the belts can search for, and analyse, any prohibited items.

Cochin grows by 23 per cent The Cochin International Airport Limited (CIAL) has registered a growth rate of 23.5 per cent during the financial year 2007-2008, with its turnover reaching Rs. 138.21 crore, as against Rs. 111.87 crore in the

learn from experience of more matured market economies which, whether we like it or not, are becoming one, irrespective of the current global meltdown and its aftereffects? Just days ago, the UK Competition Commission confirmed that BAA should sell both London Gatwick and Stansted airports, leading to the break-up of the airport operators’ control of London airports, for which UK airlines have long pushed. Though this decision is subject to consultation, it is almost certain to be upheld. BAA has also been called to sell Edinburgh. The airport operator, a subsidiary of Grupo Ferrovial, will be allowed to retain Heathrow and three other UK airports. The UK Competition Commission has stated that the most effective way to introduce competition is to require the three London airports and two principal Scottish airports be handed over to separate owners. This was because, under separate ownership, airport operators, including BAA, will have a much greater incentive to be far more responsive to their customers —both airlines and passengers. There should be a more effective and flexible system of airport regulation. The Competition Commission of UK’s Inquiry Chairman for BAA case, Christopher Clarke, stated that there was need to adopt licencebased regime of economic regulation for airport owners to give the regulator more ability to intervene flexibly on issues such as performance and financing. In the instant case, he argued that the licence should

previous fiscal, according to its 14th annual report. The report said that, as in the previous year, the growth in revenue was primarily led by an increase in the non-aeronautical revenue sources of duty-free sales, rent collection and royalties. The income from duty-free business in the airport, accounting for nearly 30 per cent of the company’s turnover, stood at Rs.41.68 crore, registering a growth rate of 28 per cent.

Steering panel clears MP cargo airport The first greenfield cargo airport to be developed as a joint venture with Madhya Pradesh government and Gwalior Agriculture Company Limited (GACL), a subsidiary of Gwalior Sugar Company Limited (GSCL), has been given ‘in-principle’ approval by the concerned steering committee. The committee is headed by the civil aviation secretary and includes representatives from all ministries and departments concerned. The cargo airport will be developed at Dabra, 42 km south of Gwalior, and is awaiting approvals from the Airports Authority of India and DGCA. GACL and the state government aim to set the international cargo airport with a linked special economic zone. The company aims to join hands with Singapore-based

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impose a set of duties on the operator of Heathrow. What we find missing in India is a similar Competition Commission of India. Though it exists on paper it neither has the staff, nor the member, nor the legal teeth to bite, as in UK and the US. Further, the OMDA itself permits a near-monopoly, though based on competitive tender bidding process. But what happens, or will happen, to competition after the tender has been won by the same bidder who won earlier has not been sought to be addressed, as is being done now by the UK Competition Commission against the BAA. For instance, both GMR and GVK have the first right of refusal in case second airports come up at Greater Noida and Navi Mumbai respectively. Since it is a legal contract, nothing can be done. But for the future, the Ministry of Law and Justice, besides an everactive (on behalf of some airlines) Ministry of Civil Aviation could have thought of it. But it has not! Once India and the world economy come out of the current economic and financial meltdown and India regains 9 per cent GDP growth, there will be definite repetition of shrill economic activities around even the semi-urban areas. By then, the Golden Quadrilateral and the North-South, East-West corridors would have extended their tentacles. Road movement will be a far bigger reality. The 150-kilometer radius rule for alternate airports will become a stumbling block. What will AERA and its members, who are to assume office shortly, do then?

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Naresh Goyal

Vijay Mallya

SAB ‘GOLMAL’ HAI!

here is a joke going around in the aviation circles. Soon after Jet owner Naresh Goyal and Kingfisher owner Vijay Mallya decided to form an alliance, as announced by them in mid-October 2008, they were looking for various names that could better describe their new-found

consultant Jurong International, which is linked to the Singapore airport consortium The facility is expected to be completed by 2010, subject to approvals. “The international cargo airport alone will be completed with an investment of Rs 800-1000 crore,” according to sources.

Air Works selects Ramco’s modules Ramco’s Global Aviation M&E (maintenance & engineering) and MRO (maintenance, repair and overhaul) software provider, a division of Ramco Systems, has announced that Air Works has selected its suite of materials management and MRO modules covering the operations of both, general aviation and commercial aviation MRO. Ramco’s Aviation Solution will support Air Works’ complete business process of the MRO operation, according to a press release.

No additional passenger fee The civil aviation ministry has rejected a proposal by the Delhi International Airport Pvt. Ltd, or DIAL, the operator of New Delhi’s Indira Gandhi International Airport, to charge an

relationship. When it was rumoured that they could even form a single airline, the name search became furious. It was then decided that the first two alphabets of Goyal and the first three alphabets of Mallya be fused to form their “Golmal” airlines. Jokes apart, in any case, their so-called alliance is not going anywhere.

additional passenger fee from passengers. The ministry rejected the proposal to levy Rs. 300 as airport development fee on each out-bound passenger, after the law ministry said it was not permissible to impose such a fee for now, according to reports. The additional fee proposed was over and above Rs1,000 each on those flying international routes, for a period starting January 2009 until December 2011. The law ministry is of the view that the privatisation agreement, also known as the operations management and development agreement, between DIAL and the Union government signed in 2006 does not permit such a charge.

Funds crunch could hit Delhi airport Delhi International Airport Pvt. Ltd (DIAL), which operates New Delhi’s Indira Gandhi International Airport, has warned the civil aviation ministry that work on the modernisation of the country’s second-busiest airport may come to a halt in the next 45

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NEWS DIGEST This is notwithstanding the brave words from Mallya. Soon after the AGM of his Kamadhenu UB, Mallya denied to the media the so-called press reports that his relationship with Jet Airways Chief Naresh Goyal had soured. On the contrary, he said, their relationship was very fine and both of them were absolutely committed to working together to reduce costs and improve the prospects of both the airlines. According to Mallya, going forward from January 2009, the two companies would make some progressive announcements. Mallya made his views known to the press after the AGM held in Bengaluru on December 26, 2008. The grapevine has it that the two met at a closed-door meeting in London to avoid duplicating flights and agree on code-share on overseas routes. Rumours had it that Kingfisher wanted Jet to reduce frequency on some international routes as Kingfisher itself was launching some new flights. For instance, it launched Mumbai-London flights with its 330-200 and soon followed it up with flights to Singapore and Hong Kong. So, whether it is a question of competition or code-share, only the Doctor that Vijay Mallya is can tell us. Even as this tamasha goes on, Emirates Airlines has announced its partnership with Jet Airways, which spans a unilateral code-share agreement and a reciprocal frequent flyer arrangement. An Emirates release noted that from mid-December 2008, Emirates will unilaterally share on Jet Airways’ daily flights from Mumbai and New Delhi to Dubai, to give travellers better connectivity and an expanded range of services between India and Dubai.

Emirates’ customers will have the option to travel on its four daily flights, as well as Jet Airways’ daily service between Mumbai and Dubai. Likewise, the customers will also be able to fly New Delhi-Dubai. Incidentally, this is only the beginning and could soon be extended to other flights as well. Emirates President Tim Clark has informed the media that the Dubai-based airline is the only carrier, perhaps, which is continuing to expand even during the current troubled days. Though its profits for the first six months (April-September) of 2008 dropped 80 per cent to US $77 million, compared to US $469 million in the same period of the previous financial year, the airline has neither cut routes nor cancelled the already ordered aircraft for its fleet expansion and renewal. For Emirates, India remains a key market and its current operation of 150 weekly flights will increase to 163 per week by February 2009, and more a few weeks later. India will become the largest station within the Emirates network in terms of daily operations. From February 2009, Emirates will launch five daily flights to Mumbai and four daily flights to New Delhi. Beginning February 2009, Emirates will have 48,735one-direction weekly seats to India, and the load factors will remain at 75 per cent and above. In this context, even if we accept Vijay Mallya’s stand that the alliance has not been called off, what will remain within the `Golmal’ Airlines will be an alliance on East-Bound Flights. Once Mallya begins to compete with Goyal on these routes as well, it will be just an alliance for groundhandling!

days if the consortium is unable to raise funds. The Rs. 8,890 crore modernisation project could be hit drastically if the funds crunch worsened, DIAL, a GMR Infrastructure Ltd-led consortium, has warned. GMR group chairman G. Mallikarjuna Rao has told the ministry that DIAL has not been able to raise the required funds that it had expected to by leveraging real estate, and the problem has worsened with banks backing off from releasing agreed-to amounts as indicators such as passenger traffic, on which the loan was based, have changed drastically.

AP airport projects hit The public-private projects undertaken by the state government to improve Andhra Pradesh airport infrastructure are faced with problems, especially in the matter of land acquisition. vijaywada airport In 2007, the state government signed MoUs with the Airports Authority of India (AAI) for development of Madhurapudi (Rajahmundry) airport,

THE LCC TAMASHA

n our October 2008 issue, we had said the airline industry was confronted with Hobson’s choice. If you hike the fares, the passengers would disappear and if you reduced the fares, the airlines would disappear. After passengers did the disappearing act, they are now being sought out by domestic airlines. After the ATF prices shot through the roof, there was total panic and airlines, as a rule, hiked fares to meet the growing costs. So much so that they began to cut back on orders and even began to cancel already placed orders and lease some aircraft back as a cost-cutting measure. They also reduced frequencies and cut down the stations they were connecting during the hey days in 2006 and 2007. With the second half of 2008 beginning to see a real fall in traffic, and fuel prices refusing to come down fast enough, the suspense continued. But after the global meltdown became a reality everywhere, including India, and global crude prices nose-dived as a consequence, things began to change. Today, global crude prices are at a three-year low, from US $147 a barrel to US $38 a barrel. Consequently, the

Gannavaram (Vijayawada) airport and the ones at Kadapa and Warangal. Of the four projects, only Kadapa has made significant progress, with 45 per cent of the work completed. For the other three airports, additional land is still to be acquired. Land acquisition may be taken up during 2009.

Logistics majors for Delhi cargo airport The proposals for a new cargo facility and upgradation of the existing one at Delhi airport have drawn several top Indian and international aviation and logistics companies such as Air India, Singapore Airport Terminal Services (SATS), Menzies, Bobba, Swissport, Bird Group and Worldwide Flight Services (WFS). These companies have responded either individually or through tie-ups with one another. All the joint ventures that have submitted RFPs have ground-handling contracts for major Indian airports. The scope of the cargo project includes building, financing, and operating a 70,000 square metre greenfield cargo terminal as a twin facility to the existing one, which will also be upgraded and redesigned, making for a combined area of

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prices of ATF have also dropped sharply. The ATF price today is less than what it was in end-2005, when domestic carriers, for the first time, imposed fuel surcharge on account of rising fuel prices. After a bit of tough-talking by Civil Aviation Minister Praful Patel and parliamentarians, and steep fall in fuel prices along with the disappearance trick by passengers, the airlines began to regain consciousness, and thus has begun major fare cuts with effect from January 2009. While on the face of it, the fare cuts seem sharp, in reality however, they are merely a cut on the basic fares and very little on the fuel surcharge that continues to rule between Rs 1,750 and Rs 3,100, depending upon the distance travelled. Air India started with a meager Rs 400 cut in fuel surcharge and later followed it up with reduction in basic fares. Others have now followed suit, but it is still not enough, if seen against the fall in fuel prices. But the airlines have a point. They say they are yet to recover the losses they sustained as a result of the prolonged increase in ATF prices. Airlines introduced fuel surcharge of Rs 200 to start with, in November 2005, when ATF was costing Rs 35,761 per kiloliter in Delhi. As ATF prices rose to Rs 71,028 per kiloliter in August 2008, the fuel surcharge rose to as much as Rs 3,100, depending upon the distance and the sector covered. While ATF prices have since fallen more than half, the fuel surcharge has not fallen that much. So, while we are about to witness

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the return of the passengers, what will happen to airlines is anybody’s guess. While the government has indicated that it will ask the airlines to roll back the fuel surcharge, the airlines have refused to fully comply with the official request, sorry direction, as they feel they are still to recover fully from the impact of high jet fuel prices of earlier months. Even Civil Aviation Minister Praful Patel has said this, but the two full service carriers, Jet and Kingfiisher, have refused to oblige. What takes the cake is the high figure quoted by airlines to still parrot the theme that fuel costs 45 per cent to 50 per cent of their operating costs, when fuel prices have reduced by more than 50 per

150,000 square metres.

Unique Cargo Village at Bengaluru airport A new, first-of-its-kind Cargo Village will start functioning at the Bengaluru International Airport soon. The 11-acre facility, being built by Bangalore International Airport Ltd at a cost of Rs. 12 crore, will house 120 freight forwarders and 80 custom house agents. According to a BIAL release, the Cargo Village will have extensive facilities, including banks, conference rooms, training rooms, business centre, a help desk, staff canteen, besides parking

Bengaluru airport

cent. At least Kingfisher’s Vijay Mallya had been maintaining that he will reduce fares only after ATF is made a “Declared Goods” to attract a uniform sales tax of only 4 per cent, as against the range of 4 to 32 per cent imposed by various states on ATF. As if to settle this issue, the Empowered Committee of State Finance Ministers, and its Chairman and West Bengal Finance Minister Dr Asim Dasgupta, has said the states were totally opposed to this idea as it would mean a loss of Rs 4,000 crore in tax revenue. It also made no sense when ATF prices have fallen steeply. With this, at least one part of the issue has been settled.

space for 80 trucks. “This will be an advanced facility managed by the cargo associations. It will be ready for occupation from January 1, 2009,” said the release, adding that BIAL hoped to make the airport the cargo hub of the South. The cargo facility has come up in 10 months, close to the two terminals run by the two cargo concessionaires — Menzies Aviation Bobba Pvt Ltd and Air India-SATS.

Bengal’s first private airport by 2011 The first private airport in West Bengal is likely to be operational by 2011. The proposed project has got a go ahead from a steering committe set up by the government and clearing the hurdle of objections from Coal India Ltd. Bengal Aerotropolis Projects Ltd (BAPL) expects to complete the acquisition of 2,362.84 acre required for the first phase in the next four to six months. BAPL is the promoter of the first airport city or Aerotropolis in the country in Burdwan district in association with Singapore’s Changi International Airports. Meanwhile, the West Bengal government has initiated a move to set up a cargo airport with an air cargo complex in Purulia, preferably in private partnership. An abandoned

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Notwithstanding all this, one full per November 2008 figures, IndiGo and service carrier promoter has blamed Spice garnered a market share of 14.7 LCCs for the current problem afflicting per cent and 10.8 per cent respectively, the airline industry. He elaborated this as against Jet’s 19 per cent and JetLite’s theme extensively in a “virtually 7.7 per cent, Kingifsher’s 11.6 per cent sponsored article” in a and its so-called LCC Air business daily. To be fair to Deccan or Kingfisher Red him, he has been saying at 13.3 per cent. Air India this all along, and has even domestic had a market tried to make a difference share of 18 per cent. to his own so-called onceNow, superimpose the upon-a-time LCC by fleet strength of the two offering a `Red’ food LCCs, Spice and IndiGo, basket to passengers. He on the combined fleet of feels India is not ready for Jet and Kingfisher LCC — a view which was separately. One finds that carried forward by an the LCCs have certainly Asim Dasgupta aviation expert who, in a done a wonderful job. published article of his Even if we compare views, said LCCs can never be a success IndiGo with either the combined fleet in India as 70 per cent of the costs were strength of Jet+JetLite or common to both full service and low Kingfisher+Deccan, the LCC’s market cost carriers. Besides, LCCs also did not share has been greater, with a seat load have dedicated low cost airports. factor of 73 per cent — the highest for Further, it was that 30 per cent any domestic airline in India difference which distinguished LCCs individually. from FSCs, and hence meant working By the way, IndiGo, and to a lesser hard to retain the difference. extent Spice, did not make a tamasha of By the same logic, what this expert all surcharges which full service carriers and his mentor failed to say: Is India had been doing. The point which ready for domestic flights with costly everyone needs to understand, and more but needless in-flight entertainment? so the votaries of `No LCCs in India’, is After all, Jet Airways made all its money why the full service carriers should try without IFE. Air India (domestic Indian to match their fares to that of LCCs. Will earlier) made money when it did not it, or will it not hurt the Goyals, Mallyas have IFE, but now makes losses with and Raghu Menons of the Indian IFE. aviation industry? But more about Let’s look at the market share. As Raghu Menon later.

airstrip of the Second World War has been identified for the development of the airport. However, the proposals invited by the state transport department from private firms are believed to have evoked poor response. The state government is now mulling floating a global tender.

Jet may buy stake in Hyderabad MRO facility Jet Airways is likely to buy a stake in the maintenance, repair and overhaul (MRO) facility at the new Hyderabad international airport. Reports quoted a senior Jet Airways official as saying there was a proposal to buy a stake in the MRO facility. German carrier Lufthansa pulled out of a joint venture with Hyderabad International Airport. However, the airport has signed an agreement with Malaysian Airlines. The MRO centre is promoted by the GMR group, which also operates the airport. It will handle all types of aircraft, including the A380s.

35 non-metro airports to be modernised Upgradation and modernisation of 35 non-metro airports is

ndia’s first airport under the new Greenfield airport project is coming up near Durgapur in West Bengal. This was stated by Civil Aviation Minister Praful Patel while laying the foundation stone for the modernisation and expansion of the Kolkata airport by the Airports Authority of India (AAI). The new Greenfield airport coming up at Andal in Durgapur will have equity participation from Changi airport of Singapore. While on the modernisation of the Kolkata airport project, External Affairs Minister Pranab Mukherjee said, “This will be a test of public enterprise, where no cost or time over-run will be there,” CPM member Sitaram Yechuri said, “It will be a test case for AAI (to prove that they are as, if not more, competent as the private sector),” and expressed confidence that AAI will prove itself. Modernisation of the Rs 1,942 crore Kolkata and Chennai airports will be done by AAI without any borrowing. Besides, AAI is also working on the modernisation of 15 non-metro airports at a total cost of over Rs 12,000 crore. What, however, took the cake was the West Begnal CM’s remark that “it was a red-letter day for the state”. So long it remains only a red letter, it is okay. But should the modernisation of

expected to be completed by the Airports Authority of India by 2009-2010. This was disclosed by Union Minister for Civil Aviation Praful Patel in Parliament recently. In addition, 13 airports have been taken up for upgradation by AAI, the Minister said, adding that AAI proposes to spend Rs 12,434.34 crore during the 11th Plan till 2011-12 for development of airport infrastructure in the country. An expenditure of Rs 6,443.53 crore has been proposed for development of non-metro airports, the Minister said.

Mumbai airport fees to be hiked The ministry of civil aviation has approved Mumbai International Airport Ltd’s (MIAL) proposal to raise airport charges by 10 per cent. The existing passenger service fee, paid by travellers, is Rs 225 per ticket from all airports.

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raising objections, against the project on the ground that the entire area had huge coal deposits of good quality, in which India had great shortage. West Bengal Commerce and Industry Secretary Sabyasachi Sen remarked that the land for the airport and the air strip could not be negotiated, though the state was not averse to discussions with CIL for relocating the township and the real estate as well. The West Bengal Industrial Development Corporation has asked for an independent study to be conducted by Tata engineers to see whether the coal reserves in the area earmarked for the proposed airport city in Andal can be mined. After Nano, we hope Andal does not become literally a `Nano project’. But one thing for sure has happened. Even before anyone has been able to set foot on the Andal project area, it has been laid with LAND MINES, sorry COAL MINES.

GREENFIELD

AIRPORT SEES`RED’

Pranab Mukherjee

Kolkata airport project also become red in spirit, then perhaps only strikes that Marxists are known for will add colour to the airport rather than any aesthetic touch by its foreign architect, who designed the new terminal, and a Bangkok company that won the bid to build it. Yet another importance of the Kolkata airport is that once it is speedily completed it will aid India’s “Look

East” policy. As for Andal Greenfield project, even before any groundbreaking ceremony, the project became shrouded in controversy, as with all ambitious and pioneering projects in West Bengal. The state government recently issued Section 4 notice for acquiring 2,700 acres of land of the total required 350 acres for Andal airport. Central PSU Coal India Limited, meanwhile, has raised, and has been

But with the hike, landing charges, parking charges and passenger service fee payable by the airlines to the Mumbai airport will increase by 10 per cent. MIAL, a joint venture company owned by a GVK group-led consortium and the Airports Authority of India, was formed in March 2006 to manage and develop the Chhatrapati Shivaji International Airport in Mumbai.

Ram Charan joins Deccan as advisor Noted business strategist Ram Charan is joining Capt GR Gopinath’s start-up logistics company Deccan Express as an advisor. The new venture is expected to kick off in May next year with a fleet of six cargo aircraft connecting 14 locations and supported by a trucking service that will reach out to 68 places across the country. “We are gearing Ram charan up to launch services in May-June, with a fleet of three Airbus 310s and three ATRs having 14 air touchpoints. We will be the largest and double the size of existing industry players on day one,” Capt Gopinath, chairman & managing director, Deccan Express Logistics, said.

Meanwhile, Capt G R Gopinath, one of the bigger individual shareholders in Kingfisher Airlines, has sold some more shares in the company and is now left with only his lockin shares, which cannot be sold for a while. His newly-formed holding company Deccan Emerging Business Ventures, which encompasses his chopper, cargo and hospitality businesses and which holds a stake in Kingfisher, has also off-loaded a large quantity of its shares.

Failed system delays US senator’s plane US senator John Kerry’s plane was delayed and had to circle the Indira Gandhi International Airport at Delhi for nearly an hour after the Instrument Landing System (ILS) of the airport’s two runways failed. Ironically, the incident occurred just two days after the Director General of Commercial Aviation gave a certification John Kerry to the third runway. Kerry was on a visit to New Delhi for talks with senior leaders and was travelling in a US Army aircraft.

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NEWS DIGEST

A LONG HAUL INDEED!

ir India is one of the three full service carriers which has announced between 35 per cent and 82 per cent cut in its fares for domestic flights. This comes after it extended a Rs 400 cut in its fuel surcharge more than a month ago. Like the other two full service carriers-Jet and Kingfisher, Air India (Domestic) has also effected a substantial cut in its basic fares. In any case, it never collected congestion charge from its passengers, unlike others. Perhaps only GOD will be able to save Air India from

this fare cut, as it will not necessarily translate into more than corresponding increase in passenger loads. Let it be stated here that when we say Air India (Domestic), it also includes Air India Express carriage of domestic passengers on the domestic leg, which is quite popular on routes such as Chennai-Mumbai and vice versa. In a way, the number of flights offered on the domestic route by Air India is indeed quite huge. Air India had a market share of only 18 per cent in November 2008, despite it carrying passengers on a practically renewed fleet.

Pvt carriers owe Rs 362 cr to AAI Private airlines, including Jet Airways and Kingfisher Airlines, owe Rs 362.47 crore to the Airports Authority of India (AAI) as on October 31, 2008. In a written reply to a question in Rajya Sabha, Civil Aviation Minister Praful Patel said Kingfisher-Air Deccan combine owed Rs 286.62 crore to

Moreover, a brand new aircraft is no guarantee for filling seats. Ask Mallya whose business class seats, despite being the best, carry much lower loads on even busy sectors like Delhi-Mumbai. How, then, can Air India, which finds even its economy loads much less, compete? At 57.5 per cent seat factor, such fare cuts can be suicidal unless the optimism is so great that it can outweigh any fall in revenue. Air India’s losses in 2007-08 was Rs 2,226 crore, which was three times the loss of Rs 722 crore (taking both Air India and Indian together) in

the AAI from January 2008. The largest private carrier Jet Airways-Jetlite combine owed Rs 32.78 crore to the AAI as current dues. Low cost carriers SpiceJet, Indigo Airline and GoAir had dues of Rs 15.76 crore, Rs 6 crore and Rs 8.81 crore, respectively to the AAI. Paramount Airways owed Rs 12.50 crore to the Authority.

PSA pulls out of container terminal deal The Singapore-government owned PSA International Pte Ltd, which is the world’s second biggest container port operator, has withdrawn from a Rs1,300 crore deal to develop a container handling facility at Hazira, Gujarat. The company has cited tough financial terms for its decision to pull out of the deal, according to a report, which said the company was not willing to participate in the development of the project unless the `stiff’ terms were changed. Shell Gas BV, part of the Royal Dutch Shell Group, has a 74% stake in Hazira Port Pvt. Ltd, or HPPL, an entity formed to develop and operate Hazira port. France’s Total Gaz Electricité holds the remaining equity in HPPL.

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2006-07. In the current fiscal 2008-09, the PSU airline is likely to incur a loss of Rs 2,156 crore, even as the government is examining a proposal for additional equity infusion to the extent of Rs 2,500 crore, besides a soft loan of Rs 1,500 crore. Though these figures are provisional, the fact is Air India requires a huge monetary injection to take it out of ICU. Air India CMD Raghu Menon has put a brave face and told the media that the airline was guided more by the fact that fuel prices have come down sharply. Even though Air India took the lead in November 2008 and cut fuel surcharge by Rs 400, it was not enough. It wanted to offer a substantial concession despite the fact that airlines were, and are still, facing financial difficulties. According to Menon, it has become important to revive both leisure and corporate travel. Like Mallya and Goyal, who exuded confidence, Menon also said should the fuel prices not go up again, as in the recent past, even Air India will be able to break even. Now all this is based on the support of equity and loan it is to get from the government. He said Air India, in the next 14 months, will receive 23 new Airbus aircraft A319 and A320, which will be used in the domestic network with the state-of-the-art IFE system. But as we said before, mere possession of brand new aircraft is no guarantee for attracting passengers. It is also the men and women behind these flying machines, both on the ground and

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up in the air, that matters. For instance, as said before in an earlier issue, the A321 Air India flies on the domestic route is as brand new as the ones flown by Kingfisher. But the executive class seats of Air India A321 do not even have a footrest, leave alone other comforting elements for a busy business traveller, as one finds in Kingfisher. So unless you

cent load factor could have ensured a near break-even. But when the fuel prices have halved and fares have been reduced to where they are, then loads will have to rise to a minimum 70 per cent, should the airlines even dream of breaking even. Considering that Air India load was 57 per cent in November 2008, as against 63 per cent for Jet Airways and 62.5 per cent

Raghu Menon

drop fares, you cannot get passengers, and should you drop fares beyond, then what do you do to regain your net worth which is already eroded beyond recognition? There is one factor which most of the full service carriers, including Air India, fear to factor in. When the fares were high on account of high fuel prices, a 63 per

as the combined average for Kingfisher and Kingfisher Red , it is going to be a long haul for Air India to make profits on even short haul! We are not saying that other airlines are in a better position. It is only that they are slightly better off, even though collectively all of them are worse off.

AAI, MADC agree on Nagpur airport pact

Cochin airport defers user fee decision

Finally, after much haggling, an agreement has been reached between the Airports Authority of India (AAI) and the state government-promoted Maharashtra Airport Development Corporation (MADC) on the shareholding pattern of Nagpur airport the company that will develop Nagpur’s proposed international airport. The airport, proposed to be developed over 1,364 hectares, will be part of Multi Nodal International Cargo Hub at Nagpur (MIHAN). The project cost has been slated at around Rs 4,500 crore. According to reports, as per the agreement, AAI would be given 49 per cent stake in the company for bringing existing airport infrastructure and around 400 hectares, while the MADC would get 51 per cent for the additional land it would bring for the project.

A decision on reintroduction of user charge on every passenger at the Cochin airport has been deferred. Kerala Chief Minister V.S. Achuthanandan said a decision on this would now be taken at the next meeting of the board of directors of Cochin International Airport Ltd (CIAL), India’s first airport built in public-private partnership model. CIAL used to charge a fee of Rs.500 till December 31, 2005, when its then chairman, Chief Minister Oommen Chandy, decided to cancel the fee following a series of protests from passengers.

‘Navy delayed Dabolim airport expansion’ A parliamentary committee headed by Syed Shahnawaz Hussain has found the Navy responsible for delay in the rennovation and expansion of Goa’s Dabolim airport. In a report, the parliamentary committee on petitions has said that it is “anguished to note that the expansion of the Dabolim airport was delayed owing to the nontransfer of a piece of land measuring 2.52 acres by the Navy, since they claimed that the land handed over earlier by the State government to the AAI belonged to them.”

CRUISING HEIGHTS January 2009

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GREEN CODE I

t is no more an excusive club. If you have done it, there are hundreds of others who had done it as well. A polar flight is passé these days. But what adds to the adrenalin is the green tinge to the journey. There is nothing new or out of the ordinary in airlines tracking near the North Pole to save precious fuel and time on long-haul flights. That’s been around for years, though at times it can be real test of one’s nerves, considering the blindingly white light and the alarming drop in communications. But things are improving all the time. With the end of the cold war, tension abated just as long-haul aircraft became available to serve the growing demand for nonstop travel between cities a half-world apart. United Airlines, for example, had more than 1,400 flights on the polar route last year, up from a dozen in 1999.The other big ticket polar route users include

Continental and Air Canada. Now Emirates joins the bandwagon. “Emirates is seeking to reduce the environmental impact of our operations wherever we can and the Environment inaugural flight is a perfect example of these ambitions,” said Emirates Airlines Chairman and Chief Executive Sheikh Ahmed bin Saeed Al-Maktoum. “The development of new technologies, flight operation proce-

New York Times aviation reporter Joe Sharkey at the press conference

CRUISING HEIGHTS January 2009

LOWW

LFPG

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dures and advanced air traffic management proves that our industry is making real gains in environmental performance.” As Boeing says: “Non-stop flights between North America and Asia via the North Pole, while long recognised as advantageous, have only now become practical. Increased access to Russian airspace, the gradual liberalisation of bilateral agreements, and growing demand for interna-

The Emirates cabin crew is all smiles

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VTBD San Francisco International Airport Director John Martin, Sheikh Ahmed, San Francisco Mayor ‘s Chief of Staff Steve Kava.

Gina Antonini addresses the crowd.

NOKLI

GYD SOLAK OMDB Celebrations all around.

HOW HISTORY WAS MADE!

The first Emirates airplane flying the route to San Francisco from Dubai was a Boeing 777-200LR, which landed here after a 8,100mile flight that took 15 hours and 20 minutes. Emirates described it as the “world’s first cross-polar green flight.” Translation: The 777— known for having better fuel-efficiency than older long-range planes — was routed near the North Pole to save about 2,000 gallons of carbon-emitting fuel. Making the trip required special clearances from Canada, Iceland, Russia and the United States, and from the Emirates home state of Dubai, where the plane received priority clearance for departure. The plane was specially washed beforehand to minimise drag. The aircraft used electrical power on the ground in Dubai rather than running its auxiliary power unit.

A pre-planned priority departure route out of Dubai provided an unimpeded climb through to cruise altitude, allowing the aircraft to reach its optimum cruise altitude as quickly and efficiently as possible. Negotiations with the Russian Government allowed a preferred route over Russian and Canadian airspace for the most efficient path. Real time updates of current weather and wind conditions allowed the flight crew to modify their flight path on route. The aircraft tracked lose to the North Pole, following extensive work by Emirates and aircraft manufacturers to open this new routing. SFO ATC ensured a continuous descent approach to minimise fuel burn. The aircraft used minimal thrust on landing and a single-engine taxi to its gate. All on-board glass, newspapers, aluminium and paper was collected for recycling.

CRUISING HEIGHTS January 2009

tional service to and from China are among the factors that have helped make the new routes viable.” As a general rule, cross-polar routes provide time and distance savings only on

The Pioneers ? Circa 1954, SAS inaugurated DC-6B service from Copenhagen to Los Angeles. In 1957, SAS began polar service from Copenhagen to Tokyo via Anchorage. In 1983, Finnair inaugurated the first nonstop service from Europe to Japan by flying from Helsinki north through the polar region.

flights from North America to Asia. On the return flight, the polar tracks are less advantageous than conventional, more southerly routes, which typically benefit from strong tailwinds. Current markets served by non-stop polar routes include New York and Newark to Hong Kong, Chicago to Hong Kong and Beijing, Detroit to Beijing and Shanghai.

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SECURITY

Washing the ‘hotlines’

In a ‘pilot project’, Pawan Hans has taken on the job of cleaning the insulators on top of transmission lines of the polluting materials that trickle into them, causing power tripping — a common problem across the entire Northern Grid.

t is a common occurrence across North India and is often referred to as ‘tripping’. It’s really nothing but the polluting material — dust particles and bird droppings combined with the moisture — that get deposited on insulators atop transmission poles along the Northern Power Grid. As the water content increases, these pollutants trickle into the insulators and you have a tripping.

OPERATION CLEAN-UP: Pawan Hans’ special helicopter gets ready to clean up insulators across the Northern Grid of the dust particles and bird droppings mixed with moisture that cause frequent tripping; (right) Pawan Hans Chairman and Managing Director R K Tyagi discussing the clean-up operation with the chopper pilot.

CRUISING HEIGHTS January 2009

The owners of these transmission lines, the Power Grid Corporation of India, continue to use the traditional method of turning off the power supply, employing a huge labour force to get on top of the lines and manually clear the bilge, and not always very successfully. For the first time, though, in what is viewed as a ‘pilot project’, Pawan Hans has taken on the job of cleaning these insulators across the Northern Grid. The

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SECURITY

method is simple. A chopper with a water-filled tank in its belly is used. The water is usually treated with a range of chemicals to make the cleansing more effective. The chopper hovers along the transmission lines, spraying this speciallytreated water on the insulators. In the industry, it is known as “hot line washing”. The great advantage is, you don't need to turn off the power lines, the specially treated de-mineralised water does the trick, you save on the mass of daily wagers that you have to employ, and the entire process is clinical. Pawan Hans is using one Bell 206L4 type helicopter in Dadri, Aligarh and Muradnagar to clean the lines. On an aver-

Pawan Hans is using one Bell 206L4 type helicopter in Dadri, Aligarh and Muradnagar to clean the lines...The helicopter has been fitted with a special tank CRUISING HEIGHTS January 2009

age, a helicopter would be able to clean about 15 transmission towers in a day (at the moment it is 11 towers a day), while manually this work would take up days. The helicopter has been fitted with a special tank. These are specially fitted tanks and the entire technology has come in from a company in New Zealand that was short-listed for the job after a global tender. Every third week, a fresh set of operators — a pilot and a technologist arrive to handle the chore. They start close to the site and spend close to six-eight hours each day on the job. Pawan Hans has set up a temporary helipad, for quick sorties and refuelling, in the region of the operations. Pawan Hans Chairman and Managing Director R K Tyagi said that the “project has been progressing satisfactorily” and he hoped that it would be a precursor to the company getting to handle this chore across the national grid of the power transmission giant. After all, there are pollutants across the spread, and these need to be cleaned everywhere. For the record, the project cost is over Rs 7 crores.

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COVER STORY

GROUN INDIA’S NEW GROUND For the moment, there is status quo. The implementation of the new groundhandling policy has been deferred till further orders (read indefinitely). R Krishnan unveils the story behind the development, which, he says, is entirely in line with the government policy of ‘No Lay-Offs’, at least for now.

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NDED! ND-HANDLING POLICY S

o the new Ground-Handling policy (GH Policy) has not come into force. The policy, which was to be implemented with effect from January 1, 2009, has been deferred till further orders. The postponement of the policy, which would have led to large-scale lay-offs among the ground-handling staff, was, in fact, expected. CRUISING HEIGHTS had, in its previous issue, also more or less hinted at such deferment, considering the central government’s sensitive approach to lay-offs or any such issues. ‘No Lay-Off, Come What May’ — that was the definitive message that the UPA government had sent out the moment the impact of the current global meltdown began to be felt on Indian Inc.

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COVER STORY It may be recalled how some of the ministers within the central government had strongly reacted to the Jet Airways’ announcement, in October 2008, to lay off nearly 700 cabin crew, followed by the sacking of another 1,900 staff. And within a day, the airline was forced to beat a hasty retreat, with Jet Airways Chairman Naresh Goyal stating on TV that he was kept in the dark about the move by his own officials. In any case, he said, he could not bear to see people losing jobs, resulting in misery to them and their families. Even if we give him the benefit of doubt, the fact is that the Jet chairman clearly feared an adverse reaction from the government, thereby forcing him to backtrack on the airline’s decision on the lay-offs. This was in sharp contrast to an earlier occasion when this very airline had sacked more than 400 employees of JetLite. Or for that matter, when the erstwhile Air Sahara went in for similar lay-offs and when Kingfisher sacked nearly 300 staff soon after it took over Air Deccan. For the moment, however, the message from the government is very clear — ‘Kindly Lay Off from Lay-Off!’ There is evidently no exception to this rule, not even when it comes to a matter related to security concerns. Because the new GH policy was formulated taking into account the various critical security parameters in the wake of the Mumbai terror attacks. However, the implementation of the new policy would have meant lay-offs and closure of the GH divisions of most airlines since, as per the revised policy guidelines, no self-handling was to be permitted except for GH to be provided by three officially approved companies in each of the six metro airports. Interestingly, this is not the first time such a GH policy has been grounded. The first time was in 2003 when the then NDA government at the Centre had sought to implement a similar policy. The NDA government’s move then had sparked a major hue and cry, particularly from two domestic airlines — Jet Airways and Air Sahara, which opposed the policy on the ground that their huge GH staff would be rendered jobless. Consequently, the implementation of the GH policy then was indefinitely postponed. One notable fact about the previous attempt to introduce the new ground-handling policy was the NDA government’s attempt to rope in new GH companies to take on the ground-handling operations. The move was stalled because it would have paved the way for possible entry, into the Indian aviation sector, of Dnata, a Dubaibased GH company that is reported to be employing many Pakistanis, including about 100 ex-PAF officials. The latest ten-

NO CHANGE: Cargo operations and passenger check-in, along with other ground-handling processes, continue as earlier.

CRUISING HEIGHTS January 2009

sions between India and Pakistan have not changed Dnata’s policy to employ former PAF employees to provide GH in Dubai. On the other hand, Dnata, strangely, has not paired up with any Indian company to form a GH JV for providing services in the six metro airports under the new policy. The Dnata issue apart, there are major global aspects this time to the postponement of the new GH policy. With the opening of the aviation sector to global players on such a large scale in the last five years, a change in the ground-handling policy will have a major impact on foreign airlines too. The reason, undoubtedly, for employees of foreign airlines taking up the cudgels against the GH policy, apart from domestic airlines like Jet, Kingfisher, Spice, IndiGo etc, which are opposing its implementation for their own individual reasons, and also apart from the 14 unions representing 30,000 employees of NACIL that are opposed to

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the move for reasons of job security! The GH work involves, among other things, passenger check-in, cleaning aircraft, handling of aircraft, fuelling, baggage handling, boarding and passenger disembarking etc, besides tarmac jobs, such as pushback of plane, including in the cargo area. Employee unions of Gulf Air, British Airways and Saudi Arabian Airlines have challenged the official notification issued by AAI and DGCA disallowing foreign airlines’ employees (Indian or non-Indian) from handling ground services at any of their airports with effect from January 2, 2009. By airports here we mean any airport in the country and not just the ones in the six metros. The unions have challenged the circular before the Bombay High Court. Thus, while in 2003, it was employees of domestic carriers who were strongly opposed to the GH policy, in 2009 it is the

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There are major global aspects this time to the postponement of the new ground-handling policy CRUISING HEIGHTS January 2009

employees of foreign carriers who have legally challenged the official decision which was primarily driven by security considerations. Even though the foreign carriers, per se, may have no role in this move, the fact remains that there has been a perceptible shift in the profile of the opponents. Ironically, however, these very employees of foreign airlines have no legal remedy should their foreign employer fold up business and withdraw from India. The DGCA submitted before the Bombay High Court that the decision on the new GH was taken by the Union Government after reviewing important aspects of safety and security. The DGCA also noted that `competitive bidding ensures that the bestequipped GH agency is selected, as is the norm the world over’. Further, entrusting the GH work to a select few will reduce chaos and congestion at the airports. As on date, more than 50 GH agencies are providing such services. The DGCA affidavit also explained the government motive behind the move. DGCA said the upkeep, development and upgradation of the airport infrastructure needs financial resources which are to be raised from airport-related services such as GH. This would ensure generation of income for the airport operator not only to maintain the infrastructure but also to ensure orderly growth and development of the airport. Under the new policy, the airlines would have to opt for one of the three GH agents selected through the bidding process by the airport operator, DGCA pointed out. In the case that came up before the Vacation Bench of Bombay HC, MIAL also filed an intervention application. This followed the selection by MIAL of two consortia — Celebi, a Turkish GH company, and AIAS, a Kuwaiti company — for providing GH services at the Mumbai airport. Sources said that very little is known about these two companies outside their own countries. Another firm which has been selected is Menzies, a European GH company which is already providing GH at an Indian metro airport in a JV with an Indian company. The credentials of this agency are also under scanner, with the Air India employees’ union alleging that about a month ago, the UK Department of Transport confiscated the licence of Menzies for a security lapse. Even as this drama continued, Air India’s decision to team up with SATS for GH services in other metros besides Bengaluru and Hyderabad, and non-metro airports, hit a bottleneck. As per a Union Cabinet decision, the Air India-SATS JV has been referred to a Committee of Secretaries headed by the Cabinet Secretary. The

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COVER STORY

point of contention, as we reported earlier in CRUISING HEIGHTS, is that the equity holding patterns for the Bengaluru and Hyderabad JVs are different. What’s more, after the recent decision on bids inviting JV partners for GH, Air India zeroed in on SATS once again but formed the JV this time with yet another equity holding pattern. Thus, to do the same job with the same foreign partner, Air India has sought to set up three different companies with three different equity holding patterns. A confusing scenario indeed! The confusion was compounded by the fact that just before the new GH policy was to take effect on January 1, 2009, the 14 unions representing over 30,000 employees of NACIL or Brand Air India threatened to go on strike. They opposed the government’s decision on exclusive GH agencies, with the lead being provided by AI’s JV with SATS. AI earns about Rs 1,000 crore from GH services provided to third parties. Had the new policy come into effect from January 1, 2009, nearly 20,000 of the employees engaged in GH business for Air India would

To do the same job with the same foreign partner, Air India has sought to set up three different companies with three different equity holding patterns. A confusing scenario indeed! CRUISING HEIGHTS January 2009

have been shifted to the JV with SATS. This was a matter of concern for the employees since the third JV with SATS was slated to progressively move towards becoming a 50:50 venture. (Though the first JV for Bengaluru was 60:40 AI:SATS and the second for Hyderabad was 59:41 AI:SATS, the subsequent ones for the remaining four metros and non-metros were proposed to be in a ratio of 50:50). For the AI employees, this had serious implications as they would no longer strictly be a part of a majority-owned PSA that AI is otherwise. The employees’ unions vehemently opposed the move as backdoor privatisation, which they argued would mean a drastic change in their service conditions from a government entity to a new one. The unions further alleged that the revenue-sharing formula had also not been disclosed. They were also apprehensive of the trigger effect of the GH privatisation, which they felt would lead to similar privatisation of MRO through JVs with EADS and Boeing. For the moment, the matter is before the Labour Commissioner. Notwithstanding these issues and developments, DIAL, a GMR-led consortium, has recently circulated two RFPs to set up a new cargo facility at the Delhi airport and to upgrade the existing one. The last date for the RPFs is February 16, 2009. Delhi accounts for 25 per cent of total air cargo transported in the country. AI-SATS, Bird Group-World Flight Services, Menzies-Bobba etc. are supposedly responding to the RFPs, besides some other consortiums. These JVs have already got a contract for GH in one of the six metro airports. The scope of the cargo project includes building, financing, and operating a 70,000 square meter Greenfield cargo terminal as a twin facility to the existing one, which will also be upgraded and redesigned, making for a combined area that will have features such as express cargo, perishable goods section etc. A DAIL statement said the upgraded cargo facility will have the capacity to handle one million tonnes of cargo a year. The facility currently has six parking bays for parking freighter aircraft, which will be increased to 16. As of now, total confusion and chaos prevails on the ground, so far as the groundhandling issue is concerned. All one can say at this juncture is that this seems to be a classic case of mishandling the ground-handling issue. When, if at all, the new groundhandling policy will eventually take off is a moot question. Tangled as it is in legal imbroglios, the issue does not seem to beget an early solution. And the new ground-handling policy seems to be well and truly grounded, as of now.

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COLUMN/CHOCKS OFF

R Krishnan

he world is witnessing a new big bang. Everyone who matters is carrying a large bowl. A bowl so huge that it seems to dwarf even the borrower! Unlike the big bang millions of years ago, which led to the creation of our Universe, the one taking place now is of a different kind. This is a monetary big bang, where all the money — greenbacks, euros, rupees etc. — is simply disappearing into a huge bottomless pit, showing no signs of the demand reviving soon. The aviation industry fits into this new big bang scenario appropriately, as it is one industry which operates both in the sky and on land, quite like the big bang. Having said that, when we watch the reaction of aviation industry players, including the policy-makers, their true character emerges quite transparently, leaving one wondering as to why they had been so opaque in all their dealings in the past. When the going was good, the tough went along. Not just the big boys like Jet and Kingfisher but even the low-fare guys like Spicejet and IndiGo rolled out big plans to induct a big fleet to make their presence felt with a bang.

Will it be a FDI

Big Bang now? The number of domestic passengers carried by all Indian carriers in November 2008 was just 3 million, compared to 3.8 million carried in November 2007 38

India became a darling of the world and every PE firm, and anyone remotely connected with the airline business made it a point to visit India. This was natural, since the Indian economy was on a high, as was the global economy; stock markets were high, besides M&As, and plans for MRO, pilot training etc. topped the agenda of every player. India in fact escaped the initial effects of the meltdown. It was rather the skyrocketing global crude prices and jet fuel prices that hit the Indian aviation industry first, like elsewhere. Soon, however, the effects of the global meltdown engulfed India and the entire India Inc was scrapping the bottom of the barrel. There’s an old adage that when the going is tough, the tough get going. The new saying is that when the going gets tough, the tough go to the government. Nothing has illustrated this more graphically than the aviation industry, be it the airlines or airport developers. Nothing wrong in this, except that they have begun to remind us of the age-old saying “Unko Nani Yaad Aa Gayi”. So what did they do when the going got tough? Airline promoters first rescheduled their aircraft deliveries and later even sent back what they were already flying because it got difficult to keep them on the ground or mainCRUISING HEIGHTS January 2009

tain them when passengers vanished from the scene. Jet Airways not just postponed taking delivery of its aircraft but even leased five of its wide bodies to foreign carriers, and plans to lease out two more till it is able to weather the storm, initially triggered by the rising fuel prices and subsequently by the extended effect of vanishing passengers who had, in fact, started disappearing much earlier. The number of domestic passengers carried by all Indian carriers in November 2008 was just 3 million, compared to 3.8 million carried in November 2007. The declining trend is now sought to be reversed with a cut in fares following a sharp fall in crude and jet fuel prices. But as we said earlier, the new big bang theory of a bottomless pit is continuing to suck all money without pushing the demand up. Both Prime Minister Dr Manmohan Singh and Deputy Chairman of Planning Commission Dr Montek Singh Ahluwalia have said the year 2009-10 will be even tougher as GDP growth could fall below 6 per cent from 7 per cent in the current fiscal, and more than the average 9 per cent enjoyed in the last four years when we saw our aviation big boys talking of buying everything that was flying. During the days of high fuel prices and high fares the domestic airlines needed a load

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factor of over 65 per cent to break even. But following the fare cut, the very same players, beginning 2009, will have to touch a load factor of over 73 per cent just to break even, leave alone earn profits. In such a scenario, we have Air India saying it will do better by inducting 23 brand new aircraft between January 2009 and March 2010. The logic is simply missing. Even as the Maharaja awaits his new clothes in the form of equity and loan support from an equally impoverished central government, Jet and Kingfisher are seen carrying their big bowls around for alms. There is one story which says Jet Chairman Naresh Goyal has been able to secure Rs 1,000 crore from two Indian banks. Kingfisher, after taking over Air Deccan, has managed to lessen its financial burden by shifting a part of its huge losses to the next fiscal, merely as an accounting stunt which will not reflect the true health to the PE companies that Kingfisher Chairman Vijay Mallya is furiously looking for. So what does the policy-maker do here? Just what he always wanted to do — begin to speculate on the possibility of allowing FDI from foreign airlines in Indian domestic carriers, which was always a taboo for policymakers of various hues, be it of the NDA or the UPA. I still recall the day when Civil Aviation Minister Praful Patel told two interviewers that FDI from foreign airlines in the Indian domestic carriers will have to wait till the Indian airlines attain a critical mass of 800 to 1,000 aircraft flying in India’s own skies. With the aviation industry now moving in the opposite direction and actually shrinking in size, Praful Patel will have to wait much longer before his critical mass theory becomes a reality. But

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even as one waits for his theory to translate into reality, policy-makers seem to want to offer emergency quota tickets, as in the Indian Railways, to accommodate their `favourites’. A few months ago, at a function sponsored by Jet Airways in New Delhi’s Taj Hotel, IATA Chief Giovani Bisignani told a questioner that the Indian aviation industry was still not ready for FDI from foreign carriers. In late December 2008, the same IATA and its bureaucrats, including its Chief Economist, say it is time India allows FDI from foreign carriers in domestic aviation. In fact, IATA plans to make this a major theme in its meeting to be held soon. Though the issue is not really Indiacentric, as other countries have also been told the same thing, the fact remains that it was first said in India, about India, and for India. Back home, too, with the opponents and supporters of FDI (read Jet’s Naresh Goyal and Kingfisher’s Vijay Mallya) now finding themselves together in the same bottomless pit, the demand for FDI is gaining momentum. The policy-makers in the Rajiv Gandhi Bhawan, housing the Ministry of Civil Aviation, cannot but play along in the circumstances. As for the all those who had been waiting in the domestic queue with the dream to get into the flying business, it’s going to be a long wait indeed. For the moment, all they can do is blame their fate for not being able to take advantage of the all-time low fuel prices and the all-time low lease rentals that prevailed not so long ago. Now, it seems unlikely that they will get into the aviation business soon. (Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.) CRUISING HEIGHTS January 2009

Back home, too, with the opponents and supporters of FDI now finding themselves together in the same bottomless pit, the demand for FDI is gaining momentum 39

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INTERVIEW

:The ‘Technology Survey for the Indian Logistics Industry — 2008’ has come at a time when world economy is going through a downturn and no one has been able to predict when the situation will be normal again. The forecasts seem to be rather optimistic. What are the main findings of the survey? :In fact, the tough economic climate will necessitate focus on efficiency and productivity more than ever. As indicated in the survey, the lack of automation in the Indian logistics industry has given rise to inefficiencies, duplication of processes. With the global slowdown and tough competition, the logistics companies will be keen to embrace technology to increase operational efficiencies as well as create competitive differentiators.

We have been slow to accept IT solutions, be it in freight forwarding or in airports? Take, for example, ICEGATE. There have been complaints about its functioning since it started. Do you believe that we will be able to make headway by 2013?

We are quite confident that India will be at a new level of automation by 2013. ICEGATE has been giving a few problems due to unanticipated level of transactions and probably improper IT infrastructure. However, the Indian Customs is already on its modernisation route. We, at Kale, are quite keen to bring our experience to the international logistics industry and create some benchmark solutions for the Indian logistics industry that will orchestrate the world’s best practices, as well as be amenable to the Indian sensitivities. We have already created solutions for the Indian Forwarding Industry, Container Freight Station/ ICD Industry, Airports, Cargo Carriers, and have deployed these with the Indian logistics players. The experience of companies like Kale, which work very closely with international industry agencies like IATA and international customers, will surely benefit the Indian logistics industry. Moreover, there is always a silver lining to the dark clouds; the advantage of starting late is that the Indian logistics industry gets to exploit the benefits of the latest technology and learn from the experience of other countries/industries. In a nutshell, we strongly believe that there will be significant progress in IT adoption in the Indian logistics industry by

“ LOGISTICS

THE

Downturn or no downturn, Sumeet Nadkar (Head — Logistics Special Business Unit) will have to become more technology-oriented to enhance efficiency. 40

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2013, and honestly, this is not an option, it’s a weapon for survival for the logistics industry players.

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have one of the most inefficient logistics infrastructures in the world today, which is the result of archaic rules, lack of uniform government policies, improper development of transport modes like roads, rail, inland waterways, complete lack of automation and hence redundant processes. This results in higher costs of transportation, inventory, administration, and so on. Our survey reveals that this can definitely be reduced by attacking the inefficiencies through automation, enabling better planning and enhancing customer satisfaction through automation. If IT can help in reducing a small percentage of this “Efficiency Gap” (13 per cent minus 5 per cent), it will mean a huge amount released for the industry that is currently locked in inefficiencies.

Do you feel that the mindset of those working in the cargo industry in general is undergoing enough of a change to usher in big-ticket IT solutions? We, in fact, do not anticipate proliferation of big-ticket IT solutions. Our survey clearly states that IT adoption will increase through the proliferation of Software-as-a-Service (SaaS) model, which essentially means pay-as-you-use. This will make the solutions more affordable without any significant investments. Having said that, there will still be a place for big-ticket solutions in infrastructure areas, such as ports, airports, logistics parks etc.

Let’s take the example of aircargo. The sector does not seem to be doing too well, so far as domestic carriers are concerned. Do you think the country’s aircargo business will make strides big enough for IT to flourish? This is a classical chicken and egg situation, compounded by the fact that the aircargo industry is in the throes of change. To attract more cargo to the air mode, costs will have to be controlled and will have to be competitive. In order to ensure that the aircargo handling processes are super-efficient, there has to be complete understanding of the market and its profitability and IT can help the aircargo stakeholders in doing that. With the modernisation of the airports, creation of inter-modal hubs like the one in Nagpur, the untapped domestic demand and the inefficiency of other transport modes like roads, it is a matter of time that aircargo industry takes giant strides towards growth. Over the last few months, fuel prices stifled this industry, but now the sit-

uation is changing. If the aircargo industry adopts IT in a significant manner to rationalise processes and attract more customers, it will fuel further growth. India spends about 13 per cent of its gross domestic product on its logistics systems, versus 8 per cent for developed nations. That does not mean cheap transportation, moving or storage. What is your response, keeping in mind the survey findings? Well, it is no secret that we

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In order to ensure that the aircargo handling processes are superefficient, there has to be complete understanding of the market and its profitability

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Five years down the line, what kind of growth do you see in the logistics industry? Will it be more in aircargo? With the current uncertainties in the world economy, it is tough to make predictions. However, one

INDUSTRY SET TO TAKE

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IT-ROUTE Kale Consultants, is an optimist. He told Tirthankar Ghosh that logistics companies CRUISING HEIGHTS January 2009

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INTERVIEW fact remains: goods will have to move, as opposed to travel, which can be replaced by video conferencing or tele-conferencing. So our view is that five years from now, globally the logistics industry will continue to grow at a steady rate of 6-7 per cent. In India, if we continue with the right governance and right policies, this industry will see a strategic inflection point and can continue to grow at about 12-13 per cent to satiate the demand of

“

Technology is expected to remove gross inefficiencies in the operations and will soon become the business driver for the logistics companies in India

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the growing young population across the country. Aircargo will also continue to grow at about 11 per cent. Relegated to the backburner for a long time, what are the changes that we will witness in the Indian logistics industry now that you have forecast some big changes? The Indian logistics industry is undergoing a sea change. The world is looking at India not only as a sourcing destination for

skilled work force and raw material but also as a large consumer market. More specifically with regards to the supply chain, shippers are increasingly outsourcing their logistics activities to specialist logistics service providers (LSPs) to concentrate on their core activities and control logistics costs. In doing so, shippers are demanding that their LSPs provide them with the visibility, flexibility, agility, transport cost optimisation, and lower risks.

SIMPLIFYING PROCESSES: Kale Consultants’ programmers busy at work

IT penetration in the logistics sector is low. The use of IT is limited to only larger players who hardly account for 10 to 12 per cent of the entire market. Lack of availability of quality applications/infrastructure to support distributed applications has also resulted in the low use of IT. How will all this be tackled? As indicated earlier, companies that are completely dedicated to Travel and Transportation and have huge international experience are keen to use their know-how to bring in the best of automation in the industry. We have already developed applications for what is known as the bottom of the pyramid. In fact, providers who work with the entire cargo value chain, like shippers, forwarders, carriers, airports, container depots etc, can develop solutions that can optimise the entire supply chain in the region, and today we have such players working closely with some industry bodies in India. Creating awareness about IT and convincing the players who have never used IT to use the same is a seemingly daunting task. But with clear benefits and business cases for such solutions, it is achievable. SaaS model is a true weapon for IT proliferation and it will have to be used by the IT vendors effectively. CRUISING HEIGHTS January 2009

LSPs are awakening to the realisation that — what will eventually differentiate the also-rans from the successful players is the effective use of technology. Moving from “nice to have” to being “the necessary devil”, the Indian logistics industry is seeing a transition in the way technology is being perceived. Technology is expected to remove gross inefficiencies in the operations and will soon become the business driver for the logistics companies in India. Influx of capital in the logistics value chain will also depend on the ability of the stakeholders to deploy technology in improving their processes and functions. Investment in technology is expected to result in higher utilisation of assets like truck fleet, warehouse, coordination of movement of cargo, etc. This underlines the fact that improved customer satisfaction using new-generation technology will shape the growth of the logistics industry.

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GUEST COLUMN

Path to a more accurate information exchange Nicole German Coulter

Air freight ship management processes, at present, are extremely complex and costly. Nicole German Coulter talks about the need for automation and standardisation of the air freight shipment management process to reduce the complexity and cost of compliance, and thus deliver significant gains in efficiencies and security.

T The Web is providing a number of opportunities for forwarders to automate and standardise freight shipping and increase global visibility 44

he air freight industry is faced with escalating freight costs, increasing supply chain complexity and the increased demands of globalisation. Adding to these challenges is the need to address more complex cargo security issues, more government and industry regulations/compliance demands, and shipment monitoring and accountability. Even today, the air freight shipment management process, for the most part, is manual, making the job of addressing all these issues more challenging than ever. While businesses are faced with spending more time managing increased government and industry compliance requirements, they must also respond to growing customer demand for speed and accuracy in global sourced shipments. Although the air freight industry may feel it is in the middle of a tug of war, automation and standardisation of the shipment management process can play a key role in reducing the complexity and cost of compliance, and thus deliver significant gains in efficiencies and security.

The role of technology automation Compliance and standards The Web is providing a number of opportunities for forwarders to automate and standardise freight shipping and increase global visibility into what is being shipped where, by whom, and its precise location at any given moment. When one combines this real-time visibility with performance management, reporting and alert messaging, forwarders can make great strides in increasing the security and screening of all aircargo shipments at a relatively affordable cost, while improving productivity. Automation and coordination of trade community partnerships, government agencies and international regulatory bodies can play a key role in securing those relationships and the safety of shipments between countries. Integral CRUISING HEIGHTS January 2009

to efficiency is having the knowledge of shipments, their source and their destination to meet various compliance and regulatory requirements. Technology has also been a driver behind standardisation. Air freight stakeholders are now beginning to automate and standardise the shipment management process so that both carriers and freight forwarders around the world are not reinventing the wheel every time a ship-

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ment occurs. Ultimately, automated standardised processes result in improved efficiencies, accuracy and productivity. We are also seeing a similar trend to standards adoption with industry bodies. One example of note is the International Air Transport Association (IATA), whose Cargo2000 and eFreight initiatives are accelerating education and adoption of automation and standardisation in the industry. The objective of Cargo2000 is to implement processes, backed by quality standards that are measurable and supported by data, thereby improving the efficiency of aircargo, enhancing customer service levels and reducing operational costs. The eFreight initiative is designed to eliminate the need to produce and transport paper documents for air cargo shipments by moving to a simpler, industry-wide, electronic, paper-free environment.

Shipment monitoring Any electronic-based initiative for the industry must rely on real-time access to information on shipping status at any given time. With this information in hand, not only can forwarders and carriers improve compliance activities, they can also improve their customer service. Tools are now available that allow freight forwarders to monitor the status of shipments at any time in the process and easily communicate that information in real-time to all the required parties.

The Global Logistics Network Message Management Ocean Carriers User Defined Alerts

Billing Engine Trucking Corp

Communications Layer

Airlines (Cargo)

Data Transformation

Reporting Services

Message Management Centre

Value-added Services Booking and Reservations Activations & Messaging Contract and Rate Management Customs Filing & Compliance

Business Rules Engine

Intermediaries

Retailers

Message Processing

Multimodal Track & Trace Shipment Management Transportation Management Fleet Management

Manufacturers

Customs and Regulatory Agencies

This capability also enables organisations to improve operational efficiencies since they can plan for arrivals or delays based on accurate and timely information. If, for example, a shipment is delayed by a few hours at customs, measures can be taken to adjust pickup schedules and notify the customer of the delay. This not only improves customer service, it also helps reduce wait time and wasted asset utilisation.

Accountability With standardised processes and end to-end visibility, there is little room left for error â&#x20AC;&#x201D; or excuses. Forwarders know where the goods are, who is in control of those goods at that point in time and the anticipated arrival of the goods. Ultimately, this means that organisations must assume full accountability for their service commitments and communicate regularly and more effectively. Although all of these factors â&#x20AC;&#x201D; security, government and industry regulatory demands, the need for greater visibility and accountability â&#x20AC;&#x201D; appear to add complexity to the entire process, the underlying infrastructure to support them in fact simplifies it. By leveraging Web-based technology portals and global networks, it is relatively simple to apply valueadded applications to route and format available data to meet specific administrative needs. It is now possible to expand capabilities to a multi-modal portal so that end customers can also have visibility into their goods at any point in the supply chain. Despite all the complexities air freight suppliers face today, standardisation and Webbased access to and delivery of services can play a key role in making it all a great deal simpler and more efficient. (Nicole German Coulter is Vice President, Marketing & Communications for Descartes Systems Group, suppliers of logistics software solutions. The article appeared in TIACA Times, the magazine of The International Air Cargo Association) CRUISING HEIGHTS January 2009

Any electronicbased initiative for the industry must rely on real-time access to information on shipping status at any given time 45

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FINNAIR

FLYING INTO THE

FFUTURE UTURE

n over a century since its publication, H G Wells’ ‘The Time Machine’ (1895) has inspired millions to consider seriously the innovative concept of travelling forward in time. It's a fascinating concept that has stimulated the imagination of the scientist and the common Departure 2093: Five man alike. It's the same concept that is the inspiration behind ‘D visions of future flying' — a book compiled by Christer Haglund, Senior Vice President, Public Affairs and Corporate Communications, Finnair. The book is Haglund's commemoration of Finnair's 85th anniversary this year, with a look 85 years into the future, instead of 85 years into the past. What will the world be like in 2093? How and what will we be flying in the future? The possibilities are fascinating, to say the least. And some of them may even sound unbelievable at this point in time, just as flying seemed an impossible vision not too far back in history. Futuristic images and scenarios, aircraft that resemble flying saucers, cruises in the air, space travel, moon vacations…..this is just a glimpse of the future of flying that Haglund has encapsulated in the book. And here's a glimpse of some of most captivating highlights of the book, which was launched recently at a ceremony jointly organised by the Confederation of Indian Industry (CII) and Finnair. So what happens in 2093? ‘By 2050 flying has become almost emission-free. In 2093 flying is part of people’s everyday lives; people travel from place to place mainly by air. Aircraft — or airships — might be completely different from what they are at present.' That's what the book says, though some differ. It's a subject open to debate.

CRUISING HEIGHTS January 2009

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My passion--the future of flying “The keys to successful fusion energy production will be found by 2030. ….. Progress will also be made in the development of entirely new engine types. ……..The thrust and traction of these zero-emission engines will not depend on their environment; they will work just as effectively in submarines, cars and aircraft. “The first solar power plants in space will be built between 2020 and 2030. … Moreover, the development of very light and strong materials will increase energy efficiency — even carbon fibre will be heavy and brittle compared with these new materials. “Intercontinental flights will be made with aircraft flying at an altitude of 30 to 40 kilometres and four to five times the speed of sound. … New technology will facilitate the appearance in the skies of cruising airships. “…Time spent in airport terminals will shorten to about a third of what it is now. Safety technology will be devel-

oped and expanded. “…Aircraft construction materials will be 100 per cent recyclable… New technology will facilitate humankind’s longstanding dream of being able to fly easily, quietly, cleanly and with a small investment directly from their own backyard to the summer cabin.

“Space travel will start up on a big scale between 2020 and 2040. A 15-hour stay in a space hotel will be obtainable for a sum equivalent to two months average salary.” Kauko Helavuo Graphic Designer and photographer Studio Kauko Helavuo

FIVE DISCUSSION OPENERS The book has been divided into five sections, in which experts from different fields envision the future of air travel from their individual perspectives. Future researcher, Professor Sirkka Heinonen encourages us to consider the future of air travel from the perspective of the human need to move. Airbus vice president, market strategy Pascal Huet gives his views on the future growth of aviation. Professor Atte Korhola and doctor of technology Sanna Syri acquaint us with the environmental impacts of flying, and IATA’s director of aviation environment, Paul Steele, comments on the emission-free target set for the airline industry. Airbus experts Henrik Roesner, João Frota and Ingo Wuggetzer visualise the development of aviation technology, and images of futuristic aircraft created by artist Kauko Helavuo give flight to our imaginations, where we can continue all the way to space in the company of journalist Heikki Haapavaara. The airline industry’s future and the significance of creating visions of the future in corporate strategy work is examined by Sirpa Juutinen of the auditing firm PricewaterhouseCoopers. Airbus head of cabin innovation & design Ingo Wuggetzer also contributes his view on the subject. Finally, Salla Salokangas of communications agency Miltton ponders flying from the perspective of a trend researcher and Miltton’s head of international operations Fredrik Heinonen takes a stand for creativity.

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FINNAIR

“In 2093 the experience will be totally different. There will be an integrated travel life experience. Travelling will be one part of your life, not simply a process for moving from A to B. “The journey can begin at your home, completely relaxed without queues or stress. You just walk into your garage and find your personal capsule that is equipped to suit your preferences, perhaps fitted with business or relaxation equipment... The capsule can be used like a car on the ground or you can fly with it — it is your personal mobile device. It doesn’t really matter then if you are going downtown, to the airport or to Melbourne. “In the air, we will see something a little bit similar to today’s cruise ships on the sea, where you spend a week onboard and enjoy yourself. You can take a swim in the pool, look at the coral reefs below or discuss with your boss via video conference. “The materials of the cabin will be natural fibres instead of plastic… There will be no pollution because of the optimal speed achieved, as well as energy harvesting and renewable energy sources. “Human beings will make the difference, even in the future... You will always be grateful for that flight attendant who attends to you, talks to you, reacts to you and comes to your assistance.” INGO WUGGETZER Head of Cabin Innovation & Design Airbus Engineering (Interview by Christer Haglund)

Future aeroplanes are intelligent adapters “The main environmental concern today is global warming… But I’m convinced that the concerns we have today will no longer be the same in 50 or 85 years from now. In the future, the use of land will become an increasingly important issue. The use of air will solve the problems we have with the use of land.

“IF YOU HAVE TARGETS, VISION, YOU USUALLY REACH IT” Christer Haglund, Senior Vice-President, Communications, Finnair on ‘Departure 2093: Five visions of future flying’, the book that takes a sneak peek at flying in the not-toodistant a future. Cruising Heights: Did Finnair’s 85th birthday prompt you to start thinking about the future? Haglund: Yes, that was actually what inspired me. I started thinking about how we should celebrate our 85 years and then I told myself that we should not write a history book …that would be a bit boring. You would probably do it when you are a hundred years but not when you are 85 years old. Then suddenly the idea struck me, because when I was a school student I used to read a lot of science fiction. Also, in my columns (Haglund was a journalist), I have emphasised the importance of decisions made today and their implications on the future. (I have also emphasised) how important it is for us to have visions and

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Dreams of travelling around the world and wants to become a fashion designer.

“Eighty-five years is as long a time as my grandfather has lived. I believe that in the future the world will be more modern and a much better place; the machines will have replaced humans in many activities. Aeroplanes will be supersonic.” RHEA GINWALIA, 10 From Mumbai, India

“In the future, there will be a wide variety of aircraft, big and small. Some models will be supersonic, some slower, some very flexible…What will the wings of the future be like? If you look at a blended-wing body for example, the wings blend into the fuselage, which itself has a different shape from what we are familiar with today. Major improvements in overall aerodynamic efficiency as well as wing structure are likely in the future. The ‘flying wing’, for instance, would be able to carry more than 250 passengers. “Aircraft 85 years from now will be

CRUISING HEIGHTS January 2009

“

Downtown, to the airport Or even to Melbourne

very adaptive, incorporating sensors and much improved system technologies that allow material characteristics to change. Designers will be inspired by nature. “Another thing we are already looking into is a technology whereby materials can change shape and return to their initial form. Such materials might be metals that have a ‘memory’ or just a skin of a material that carries a system that instigates a change of shape.” JOÃO FROTA Engineer, Future Aircraft Concepts Airbus (Interview by Christer Haglund)

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that happen. And there are projects of setting up space stations and space shelters. I think that is realistic. When it comes to emission-free aircraft, I really think that is a must. We must get emission-free aircraft, like we have to get emission-free industry and emission-free car traffic, because climatic change is important. scenarios, good and bad. Because if you have targets, if you have vision, then you usually reach it. But if you do not have vision, then you are just flailing around without any direction. Also, what I believe in and want to emphasise is the importance of inspiring people to have a similar debate (like the one we had in Finnair), no matter which organisation you are working for. Probably your organisation also has some sort of a plan for at least one year ahead, or two or three or four. That is important. What is your vision of the future? Well, at least it would be possible for me to travel to space, probably because one can do it already and we have seen that there are tickets (available) for space (flights). But they (the prices) are actually dropping quite speedily and there are many projects for space flights already. That is a good thing because competition always makes

“

How do you see the present situation? I think that the coming roughly 15-20 years or 50 years will be tough for airlines and many airlines will not succeed. In order to survive you have to have very modern fleets, because fuel prices, even though they are now going down again, will always be quite high. What will the world do with the old planes? Well, they will be recycled. They will go to Arizona and then…Everything has to be recycled, of course, since we don’t have that much raw material in the world. But after that, I think that with so much new technology in place, aviation will change quite a lot. Everybody will understand the importance of it. Think about it in this way. What if there was no air traffic to London. The city would suffer… not only London, the

Wants to become a soccer player.

“”In 85 years the world will become awesome. The buildings and the cars will be of awesome shapes... There will also be awesome round aeroplanes. Certainly there will be a playroom in an aeroplane.”” YOUNG-JAE KIM, 8 From Seoul, South Korea

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A business trip “Liisa Li registers herself in Departures at the Helsinki Space and Airport. She throws her bag on to the compressed air conveyor and moves on the levitation track towards the north traffic terminal. At her gate she slows, starts walking and trots inside Finnair’s small, only 150-seat shuttle. The take-off acceleration of the small shuttle is comfortable. “The Station, which floats above the northern regions, is not entirely new. Even so, has been considered over the years to

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UK, but the entire world would have another crisis if the aviation industry were to shut its services to London. If you think in these terms you understand how important this is. But right now, we have to get rid of all the old aircraft. We have to look after our profitability in the airline business. You have to be profitable enough to invest in new technology. How is Finnair getting ready for the future? We believe that you have to improve your efficiency, no matter if times are hard or good. You have this risk all the time. We have improved our efficiency from 2001 till this year, and it is now above 90 per cent. We have almost doubled our efficiency and that is what you have to do. Because when you go into a recession like this…if you can’t make profits during the good years, then you will go back during the bad years. You have to have a sound economy. During recession, you have to make necessary cuts if the demand is weak in order to ride through the storm with a sound economy. Another point I would like to mention is that soon after the difficult times are about to get over, it is time to be really quick and adjust because that is when you can make your market share offensive — when you see things turning around. You cannot lead unless you have the money. Cash is always king! (Interviewed by Tirthankar Ghosh)

Wants to work with technical things like computers and such.

“The world may be deserted 85 years from now, by then I guess we can live on the moon or Mars. There’s probably no air to breathe here, because they tear down the rain forest -- and that is no good. Aeroplanes are replaced by space shuttles.” TARJEI IVERSEN HERLAND, 10 From Tromso, Norway

bear the stamp of genius. “Now the Station is buzzing with activity. People even have holidays there. The holiday section of the station revolves, the movement creating artificial gravity. Here there are colleges, hotels and some of the ultra-clean laboratories and production facilities… The holiday spas are also here. There is also a workshop that is currently producing precision components for the Station’s particle accelerator, which will be built outside the gravity of the large heavenly bodies. “Liisa Li floats with her bag effortlessly towards her workplace, to the huge weightless space of a hospital, which already houses humankind’s largest skin disease and skin CRUISING HEIGHTS January 2009

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injury medical facility. Moreover, the latest research indicates that weightless late pregnancy and birth give new hope to millions of women on Earth who are at risk during pregnancy. Liisa is a midwife in the children’s clinic of the Station.” HEIKKI HAAPAVAARA Journalist Chairman of the Finnish Association of Aviation Journalists (Heikki Haapavaara has already purchased his own ticket into space. Heikki is one of three space tourists who will be the first Finns to travel into space on the ship of the EADS Astrium company in 2012.)

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GLOBETROTTING

AT A GLANCE

Dog-gone reason for

Welcome to Pet Airways WELCOME TO PET AIRLINES! We're glad you found us, and we hope that we change the way you travel with your pets. Until now, unless your pet was one of the fortunate ones that could fit under your seat, it had to be shoved into the cargo-hold of the plane. I don't think we need to go into details, but try sitting in your car on an average day and see how hot it gets. Now

imagine you're in the belly of an aluminum plane for several hours. As pet lovers, we realised we needed a better solution. So we created Pet Airways — a ‘Pets Only’ Airline, where pets fly in the main cabin, not in cargo! The opening message on www.petairways.com: With plenty of pet lovers, there is plenty of hope that this company will make the cut!

And what about my sweetheart!

he internet is full of funny letters. Here is one really funny one. This is from a lady moving to Las Vegas and worried about taking her dog on the flight. “First, about the dog: She’s a 9-year-old Australian/Sheppard mix. And she’s never been on a plane before in her life. She hates vacuum cleaners, but loves car rides. I have no idea if the plane will freak her out. I know a woman who took her dog out to LA from DC and she believes her dog had a stroke on the plane. I have an airline approved pet carrier and can get all the necessary paperwork together. The question is what to do?” She got plenty of answers. Sample these two: Opinion 1 : “On my one and only trip putting my cat below (had 2, they forced me to put one under even though I’d purchased two tickets), I found they left the cat

outside on the cart facing the plane as it moved into the gate. The folks on the tarmac wear ear protection for a reason and my cat had nothing, and that was before being loaded on the plane and the flight itself. He was definitely affected by the experience and it took a month or two for him to totally settle down — who knows if he ever truly recovered.” Opinion 2: “One mistake by an airline cargo person, and your dog could arrive dead. I read of a lot of animals dying from the cargo-hold being too hot in the summer, either by malfunction, extended ground delay, where they shut down the main air conditioner, or a mistake by the ground crew. Especially now, when the airlines are trying to save as much fuel as possible.” The lady’s decision: “I’m going to do the drive. Thanks for the opinions, everyone!” CRUISING HEIGHTS January 2009

WHEN A DOG ARRIVED on the runway at the opening of the third runway in Delhi, there was uproar. Here is an update from one of the world’s busiest airport at Boston: Choochy, the poodle, escaped at Boston’s Logan Airport, holding up flights while officials chased the pooch. The “fast and elusive” poodle scampered across runways and taxiways at Logan International Airport, evading airport personnel for more than 17 hours

One-Way Tickets Home NOW THAT’S REAL American hospitality. While US airlines are busy downsizing and scrimping on amenities, one carrier is offering its passengers leather seats, ample legroom and free food. It's a different matter that frequent fliers are not likely to buy a ticket for what may be the fastest growing “airline” serving Central America. This carrier is run by US Immigration and Customs Enforcement, the federal agency responsible for finding and deporting undocumented immigrants. A crackdown on illegal immigration has led to a spike in deportations and the creation of a de facto airline to send the deportees home. The air service, called

Repatriate by air-traffic controllers, is known simply as ICE Air to agency employees. Its planes have headrests emblazoned with ICE's name and seal. In-flight service is polite. “For a lot of these immigrants, it has been a long journey to the US,” said Michael J. Pitts, chief of flight operations for deportations and removals at ICE. “This is going to be the last impression they have of the United States. We want to provide good service.”

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Boston flight delay at

Take an enema! BE SURE, AND DO what publishing mogul Rupert Murdoch supposedly does before every long-haul flight. Take an enema. Michael Wolff, whose biography of the billionaire, The Man Who Owns the News is out now, said the billionaire “takes an enema before a long-haul flight”.

No love lost here

What the…!

THAT THE PILOTS are a necessary evil, insufferable, vain, arrogant is the universal feeling across continents, across airlines. At least that’s what insiders state. A brief observation of the differences in the management messages only highlights that: At the end of its weekly update on negotiations with the Association of Professional Flight Attendants, American Airlines wrote: “We look forward to our talks next week.” At the end of its weekly update on negotiations with the Transport Workers Union, American Airlines wrote: “We look forward to our talks next week.” At the end of its weekly update on negotiations with the Allied Pilots Association, American Airlines wrote: “Negotiations are scheduled to resume December 15, to continue discussions on these administrative items and several other topics.” Maybe, by the time the pilot talks resumed on December 15 in Washington, D.C., American had begun to look forward to it.

THERE IS nothing to beat Aviation Dally when it comes to phony news. Now this is what one would call a masterpiece: Ryanair CEO Michael O’Leary has announced plans to take his airline to court over “excessive and silly” lawsuits against the EU, Aer Lingus, the Irish government, airports operator BAA and the Queen of England, among others. It had to be done, said O’Leary. “We are spending too much (expletive deleted) money on these (expletive deleted) lawsuits that we always lose,” he asserted. “The only way we can stop this (expletive deleted) foolishness is to sue ourselves and put an end to the (expletive deleted) lawsuits once and for all.” The money spent on lawsuits could be put to better (expletive deleted) use, said O'Leary. “We could buy a fleet of 787s, add service to more than 100 (expletive deleted) new cities or even spend it chasing after more money from the (expletive deleted) airports we already serve,” he (expletive deleted) noted. The EU, Aer Lingus, the Irish government, airports operator BAA and the Queen of England all declined comment when contacted by The Dally.

In Concorde’s footsteps IT IS ALMOST five years to the day that Concorde approached Heathrow airport under much fanfare and nostalgia on its last official flight before heading off into retirement. In a move, which for some people signalled a step backwards for technology, the Anglo-French aviationengineering masterpiece touched down, carrying with it the last chance for people to experience supersonic air travel. But now, an American firm is on the cusp of reimagining the supersonic dream and confidently plans to have supersonic commercial aircraft back in the skies as a reality by 2015. The Aerion Supersonic Jet may not have the same grace and style and the size of the great Concorde, but the Aerion group are so sure that the plane will fly that they have pencilled in test flights for 2012, with trans-Atlantic testing to follow soon after. Reaching a top speed of Mach 1.6, the jet will once again put New York within three hours' flight time of London.

Illustrations by Rajeev Kumar

and delaying at least eight flights. Gideon Lester, who was headed to New York, watched from his window aboard his 11 a.m. US Airways flight, which sat on the runway for 25 minutes as five Massport vans drove in circles trying to corral Choochy. The poodle “seemed to be having a good time,” said Lester, artistic director of the American Repertory Theatre. “They looked like they were running cattle.” The dog was treated for minor injuries and released to its owners, according to some of the stories about the incident.

Safe in the loo! IT MAY BE a bizarre first in reasons for flight delay. A JetLite flight bound for Delhi returned from the runway after a 22-year-old passenger locked himself up in the washroom and refused to come out. It happened in Kolkata! The plane was ready for take-off and the cabin crew were conducting routine pre-flight checks when they noticed the washroom occupied. They knocked on the door and got a muffled response from inside. They repeatedly requested the passenger to return to the seat but he refused to come out. The take-off was aborted and the plane taxied out of the runway for security reasons. Airline security personnel forced open the door and found a mentally challenged youth huddled inside. His parents said he had shut himself in as he did not want to go to Delhi. The family was off-loaded and the plane took off around 3.45 pm, an hour behind schedule.

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CARGO JOTTING Gati looking at Chinese companies LOGISTICS MAJOR GATI is on an expansion spree. It has identified three cargo companies in China and may be willing to buy any one of them for up to $5 mn. According to a senior official of the company, Gati was looking at a hybrid model, which includes operating with own offices and through a partner to widen its footprint. The Chinese companies that have been shortlisted are in Shanghai and Guangzhou, both major cargo hubs. Hyderabad-based Gati already has offices around the world: in China, SinMahendra Agarwal, gapore, Thailand and Hong Kong. It only Gati’s MD, CEO makes sense for the company to buy a foreign company which would enhance the logistics major’s overseas operations. The news about the expansion comes at a time when Gati’s domestic business has dropped 10-12 per cent due to the slowdown in economic activities. Its international air-freight business has als fallen by 6-8 per cent.

India could look at 10 per cent rise in foreign air cargo AMIDST THE GLOOM, a ray of hope. According to Gloria Whittington, managing director, DAX-Dependable AirCargo Express, an air freight forwarder that specialises in US-Asian and South Pacific trade, 2009 will be a challenging year and India will be among the few pockets of growth. “Greatest growth, on the order of a 10 per cent increase, is expected to be in US-Indian air cargo as that nation continues to expand its production base in a number of hi-tech and traditional industries.” She also pointed out that China, the perennial leader in cargo growth, will fall behind India in its growth rate to about eight per cent, down sharply from its usual doubledigit increase, as production in that nation Gloria Whittington slows, reflecting lower demand from outsourcing manufacturers.

Coming: Pharma zones at airports BY THE END of this year, Delhi, Mumbai and Hyderabad international airports will have special infrastructure to handle export and import of medicines, according to the Ministry of Health and Family Welfare. The facilities will follow the establishment of special pharmaceutical zones that will comprise cold-chain facilities. According to Dr Surinder Singh, the Drug Controller General of India, the design to set up the first three pharmaceutical zones had been prepared. In addition to storage and transportation, these zones would have drug-testing facilities to ensure quality. In addition, each zone would have a good manufacturing practicecompliant centre and facilities to test materials during transit in controlled conditions. The move to set up these special zones follows demands made by the domestic pharmaceutical industry. The country exports medicines worth more than Rs 25,000 crore — 35 per cent of total domestic production — and these zones would go a long way to ensure that drug consignments are not rejected due to mishandling at airports.

Frankfurt route has been a success but the one on the India-Paris route was not commercially viable due to high operating costs involved. AI cargo officials maintain that the India-Paris route still holds good promise. Once the third and fourth A310s start flying, AI could revive operations on the route, subject to the commercial viability of such an operation. Meanwhile, the option of commencing freighter services to other airports in Europe and also in the Asia Pacific region with A310 freighters remains open. With fuel prices coming down, the proposal to revive the services has gained momentum. In addition, the carrier is also studying some markets and would be able to come out with a concrete plan sometime Air India hopes to overcome downturn blues soon. AI teams have, in 2009 by enhancing cargo flights to more incidentally, visited foreign destinations various markets in the US, UK, Europe, Africa, Australia and the Asia-Pacific region and have come up with recommendations to operate to most of these markets.

DHL delivers Flame of Hope to India LEADING EXPRESS and logistics company DHL recently delivered the Flame of Hope for the Special Olympics to New Delhi, as part of the sixth stop of the Global Law Enforcement Torch Run. The torch was welcomed by a team of over 150 law enforcement officials, Special Olympics athletes and volunteers. “The Flame of Hope’s historic trip around the world is symbolic of our global mission to deliver inspiration and hope to Special Olympics athletes and their families, break down barriers to equality that still exist and create awareness for social change worldwide. We are fortunate to be able to deliver the Flame and everything it stands for: Hope, Courage, Opportunity, Inspiration and Equality,” said Craig Grossgart, Country Manager, DHL Express India. The Flame of Hope began its journey on November 12, 2008 with a lighting ceremony in Athens, Greece. In accordance with Olympic tradition dating back to the Ancient Greeks, the Special Olympics’ torch was lit by the sun’s rays near Olympia, Greece, and will remain lit until the end of the games on February 13, 2009.

Air India wants to increase cargo business OUR INTERNATIONAL carrier — Air India — continues to be the largest carrier of cargo from Mumbai. It had started three weekly frequencies to Frankfurt and one-weekly frequency to Paris when two A310 freighters were inducted. The freighter on the India-

DHL shows off its ‘Flame of Hope’ with Akshay Kumar.

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DOMESTIC AIRLINES Jet’s route restructuring to cut costs IN AN EFFORT to overcome the current crisis, resulting from the global economic slowdown, Jet has restructured its route network. This is part of the various internal measures undertaken by the airline to cut costs. Among the key measures initiated by Jet to meet the current challenges are: route rationalisation, reducing frequency and capacity in line with demand, pruning long-haul expansion plans, renegotiating contracts and payment schedules with vendors, pushing back new aircraft deliveries, leasing out surplus aircraft, letting go of excess foreign pilots in accordance with the terms of their contract, trimming executive ranks by reducing expatriate executives in India and overseas, reviewing and rationalising

perquisites and allowances across the company, enforcing a general freeze in recruitment, eliminating overtime, identifying and eliminating wasteful activities and expenses, eliminating spends on expensive hotels, etc. Besides, all employees earning a gross salary of over Rs 75,000 per month have been requested for a graduated wage cut over the next 12 months. For pilots, this will be in the form of a combination of wage cut and allowance rationalisation, which will bring the contribution of pilots in line with the other employees in the company. The top management team has taken a voluntary cut of 25 per cent, effective December 2008. Reintroduces Mumbai-Coimbatore service: Jet has reintroduced its daily flights on the Mumbai-Coimbatore sector aboard its Boeing 737-800 aircraft. Jet CEO Wolfgang ProckSchauer said, “The re-introduction of Jet Airways’ daily MumbaiCoimbatore service is in keeping with the airline’s decision to connect more cities across its network to its gateway cities, offering passengers seamless connections to several cities across North America, Europe, Asia and the Gulf.” Announces ‘Companion Free’ offer: To cater to the holiday season traffic on these routes, Jet introduced a special ‘Companion Free’ offer for the airline’s Première passengers travelling to Singapore, Malaysia (Kuala Lumpur) and Thailand (Bangkok). Under this offer, valid for travel up to December 31, 2008, Jet’s Première passengers could travel with a companion for the cost of a single return ticket on the given sectors. The offer required that both passengers must complete the outbound journey from India together, though the inbound journey could be on different dates.

Agrees to give 3 per cent commission: To help the travel industry tide over the current difficulties, Jet has agree to three per cent commission on gross fare (defined as basic fare plus fuel surcharge) of domestic and international tickets sold in India. The agreement followed intensive dialogue with the Travel Agency Associations to find solutions acceptable to the airline and the partners in the travel trade. The commission scheme replaces the transaction fee model recently introduced. JetLite will continue with the practice of transaction fee model in line with the practice adopted by the other Low Cost Carriers (LCCs).

Air India cuts fuel surcharge AIR INDIA reduced fuel surcharge for all domestic sector flights by Rs 400 with effect from December 2, 2008. The fuel-surcharge was earlier Rs 2,350 for sectors below 750 kms and Rs 3,100 for sectors over 750 kms. The average reduction in fuel surcharge came to over 14.5 per cent. The cut-back in fuel surcharge was a consequence of the reduction in ATF prices from September 2008 onwards, including the reduction announced by oil companies for December 2008. Domestic air travel demand has been sluggish in recent months, and the reduction in fuel surcharge is expected to stimulate domestic air travel market during the winter peak season. Air India Chairman and Managing Director Raghu Menon said, “We have decided to bring down the fuel surcharge, now that crude prices have fallen globally, thereby bringing down ATF prices. Although crude prices are still volatile, we hope it will stabilise at the current levels, so that there is a short to medium term relief in ATF costs. This decision takes into account the reduced prices of

Happy times for Air India passengers.

ATF announced for the current month by the oil companies. While the airlines are no doubt going through difficult times, it is necessary for us to react positively to pass on some concession to passengers and generate demand.”

SpiceJet enhances flight frequency GEARING UP for the holiday season, SpiceJet has added new flights, re-opened stations and added frequency to the network, with attractive inaugural fares on some of these new flights. SpiceJet Limited’s Chief Executive Officer Sanjay Aggarwal said. “We are optimistic about the future and are offering excellent timings and connectivity that will help passengers in the coming holiday season. With these new connections, there will be a 20 per cent increase in our overall capacity. There are some attractive inaugural fares that will help more and more people to fly.”

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SNIPPETS Gears up for fog: Further, to help passengers in all possible ways during the holiday season, SpiceJet has worked out, in close coordination with DIAL and other airport operators, an extensive fog plan. The plan seeks to ensure best possible customer care at all levels, in weather conditions beyond anyone’s control. To enable real time information, SpiceJet has introduced Interactive Voice Response system to enable all passengers to get

updated flight information by simply dialing 09871803333 or 1800-180 3333. Customer Care operators have been made available round the clock to attend to calls under the system which is equipped to handle over 120 calls simultaneously. SMSs with updated information are also sent in advance and personal calls are being made to the passengers to inform them of any changes in the flight schedule to the fog. Selects Contract (India) as its ad agency: SpiceJet has selected Contract Advertising Agency as its Agency on Records. Contract will work on a national mandate for refining the communication across all media including outdoor and online. SpiceJet Chief Executive Officer Sanjay Aggarwal said. “Our researches in the past have shown that brand SpiceJet has a good recall. However, we want to take it to the next level. We were looking for an agency that will be able to provide the right blend of strategic insight, cutting edge creative and innovative thinking and a passion to excel. We believe that Contract will be able to partner us best in this endeavour to position ourselves as the best LCC in the Indian skies.”

Club One Air names Deepak Khajuria as COO (West) CLUB ONE AIR has announced the appointment of Deepak Khajuria as Chief Operating Officer, Western Region. Khajuria will be responsible for overseeing strategic planning and complete operations of Club One Air in Western Region. He shall have the additional responsibility of heading Sales and Marketing — India. Deepak, who started his career with the telecom industry, joined Club One Air in 2006 as Vice President Marketing and Sales, where he worked on the different onset of clients spread across India. He has more than 19 years Deepak Khajuria of work experience in Sales, Marketing and Operations.

now conveniently linked to Madurai. Madurai is also linked to Thiruvananthapuram, Cochin and Hyderabad. A new frequent flier programme, ‘Paramount Royale’, has also been launched, which offers several benefits and value-added services to celebrate the loyalty of frequent fliers. Besides routine upgradation and mileage redemption, Paramount Royale members can also avail of golf club memberships and spa services. Frequent fliers can enroll by registering online at www.paramountairways.com.

IndiGo introduces double daily flights

INDIGO HAS expanded its existing network in Mumbai with the addition of new round-trip nonstop double daily flights to Ahmedabad and additional flight on Hyderabad route. With this expansion, the airline now offers its seventh daily service on the busy Mumbai-Del-Mumbai route, operating 121 daily flights connecting 17 destinations IndiGo President Aditya Ghosh said, “We understand that these are extremely challenging times for not just Mumbai but for our entire nation. But we also feel that this is the time for us to be resilient, united and reaffirm our belief in India and Mumbai. IndiGo is proud and pleased to connect the commercial capital of India with vibrant Gujarat with double daily service from Mumbai that will provide more convenience to our Mumbai customers by providing them affordable travel options on this important business route. Our 7th daily service on busy BOM-DEL-BOM route will now provide added flexibility to our regular travellers and will facilitate the business travellers to experience the affordable fares, hassle-free and on-time travel promise of IndiGo. This is a small but significant gesture of IndiGo’s support to the city of Mumbai.”

Paramount’s holiday bonanza PARAMOUNT AIRWAYS, India’s only premium airline, came out with a unique holiday bonanza offer, providing complimentary tickets and value-added services. As part of the offer, one only needed to buy an Elite Business class ticket to get a complimentary ticket* for one’s companion. (*Rs 1500/— payable for taxes and surcharge on the companion ticket). The offer was for travel during the peak holiday season and was aimed at giving reward aplenty to Paramount’s Elite travellers from Madurai, who had a choice of numerous vacation destinations. With the introduction of new flights in Western India, key cities like Ahmedabad, Goa and Pune are

IndiGo starts seventh daily service on Mumbai-Delhi-Mumbai route.

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INTERNATIONAL AIRLINES Emirates partners with Jet Airways EMIRATES AIRLINE and Jet have announced partnership plans spanning a unilateral code-share agreement and a reciprocal frequent flyer arrangement. The new arrangement came into effect on December 15, 2008. Under the arrangement, Emirates will unilaterally code-share on Jet Airways’ daily flights from Mumbai and New Delhi to Dubai, giving travellers better connectivity and an expanded range of services between India and Dubai. Emirates’ customers will have the option to travel on its four daily flights, as well as on Jet Airways’ daily service between Mumbai and Dubai. Likewise, on the New DelhiDubai sector, Emirates will offer its customers the choice of 25 flights per week on its aircraft and an additional seven flights per week on Jet Airways. To boost recovery services to Thailand: Dubai-based Emirates has decided to boost its ongoing initiatives to facilitate travel for passengers affected due to the closure of Suvarnabhumi Airport, Bangkok, by operating two additional, special flights to U-Taphao Airport. The airline had earlier operated a recovery flight each to U-Taphao Airport and Chiang Mai Airport, bringing back close to 600 passengers. It also offered passengers the option to reroute their travel from alternative airports in Thailand and other

Hasnan has been consistently recognised and awarded by state governments in Malaysia for his excellent track record. He will be operating from the Chennai office of Malaysia Airlines. Associated with the carrier since 1993, he has extensive experience in various capacities, from logistic supervisor, purchasing officer to sales representative, District Manager Alor Bin Wan Hasnan Setar Region and as Area Manager Northern Region, Malaysia Airlines Systems (MAS), Penang/Langkawi/Alor Setar, before assuming charge of the recent position. Posts net profit for 3rd quarter: Despite the downtrend, Malaysia Airlines posted a net profit of RM38 million for the third quarter ending September 30, 2008. For YTD08, it reported a net profit of RM198 million, with overall revenue increasing by 4 per cent to RM11.6 billion. The national carrier has delivered profits consistently for nine consecutive quarters despite the adverse environment, which saw over 30 airlines declaring bankruptcy. Despite the global economic slowdown and its fuel bill increasing by an astronomical 56 per cent or RM872 million to RM1.9 billion, Malaysia Airlines maintained its revenue at RM4.1 billion in Q3 ’08. Its revenue was sustained by its operating performance and non-fuel expenses, which reduced significantly by 14 per cent to RM2.2 billion. Passenger revenue was up 4 per cent to RM2.9 billion, while cargo reported a revenue of RM589 million.

David Atkins is Singapore Airlines’ S. India manager

The Emirates A380, equipped with Onboard Shower Spas, has been incorporated into the fleet of aircraft serving the Dubai-London Heathrow route.

South East Asian points such as Kuala Lumpur, Singapore or Hong Kong. Brings its own double-decker to London: With the arrival of its industry leading A380, Emirates has brought its very own brand of double-decker to London. The A380 deployed on the Dubai-Heathrow route is the third of 58 that Emirates ordered, making it by far the largest customer for the super-efficient super jumbo. Spread over two levels, the whole of the upper deck is dedicated to Premium Class passengers. Towards the front, First Class passengers can relax in one of 14 flat-bed, massageequipped Private Suites. These incorporate remote-controlled doors, a work desk, an electrically controlled mini-bar and the most advanced in-flight entertainment system, which is available to all onboard.

Malaysia Airlines appoints new area manager WAN MOHD EBRAHEM Bin Wan Hasnan has been appointed Malaysia Airlines’ new area manager for Tamil Nadu and Kerala market operations.

SINGAPORE AIRLINES has appointed Dr David Atkins as its new manager for southern India. Based in Chennai, Dr Atkins will lead the operations of Singapore Airlines in Tamil Nadu and surrounding areas, including the Union Territory of Pondicherry. His responsibilities will include growing Singapore Airlines’ business in the region. Dr David Atkins His last stint was as the Airlines’ General Manager for Scandinavia and Finland, based in Copenhagen. He has also worked as the Regional Marketing Manager Europe.

British Airways packages family travel in new scheme PACKAGING ITS EXPERIENCE in family travel, British Airways has come out with a single, easyto-access range of services and entertainment called Skyflyers. The package provides priority boarding for parents and children. It allows one to take small folding pushchairs right to the door of the aircraft at most airports. Using ‘Manage my Booking’, one can pre-book special children’s meals. These are specially prepared to be interesting

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SNIPPETS and filling, but importantly, are packed with things that children love to eat. These meals are served first, giving you enough time to get the children fed and settled before enjoying your own meal. To ensure that your child doesn’t get bored on the flight, the package includes superheroes SkyflyerBravo and SkyflyerAlpha, available to the kids on their own microsite on ba.com.

Foreign airlines’ staff challenge AAI, DGCA notification THE EMPLOYEE UNIONS of Gulf Air, British Airways and Saudi Arabian Airlines have challenged the notification issued by the Airports Authority of India (AAI) and Director General of Civil Aviation (DGCA) disallowing foreign airlines’ staff from handling ground services at any of India’s airports from January 1, 2009. The DGCA circular (dated September 28, 2007) and the AAI notification (dated October 18, 2007), which was to be effective January 1, 2009, laid down that alien airlines cannot employ their staff for ground-handling and cannot engage outside agency at the

Another milestone for Australia’s Project AIR 9000 NOTCHING UP yet another milestone in its Project AIR 9000, Australian Aerospace Limited has handed over its first locally assembled MRH-90 multi-role Helicopter to the Australian Defence Force (ADF). The ADF formally accepted the chopper from leading regional defence contractor, Eurocopter subsidiary. The formal acceptance ceremony in Brisbane was witnessed by distinguished Australian and overseas guests, comprising representatives from the industry (NHI*, Eurocopter, EADS, local aviation/aerospace companies), the Australian Defence Force, the diplomatic corps, the NATO Helicopter Management Agency (NAHEMA) and other NH90 customers. The MRH-90 is the Australian variant of the NH90 Tactical Transport Helicopter (TTH), the other version being the NATO Frigate Helicopter (NFH) developed by NH Industries. A total of 46 MRH-90s are being acquired under Project AIR 9000 Phases 2, 4 and 6.

Mega discounts from Singapore Airlines

six major airports, namely Mumbai, New Delhi, Kolkata, Chennai, Hyderabad and Bengaluru. The move is expected to render 50,000 workers jobless. The unions have challenged the notifications before the Bombay High Court as they prohibit self-handling system, wherein airlines employ their own staff for ground-handling tasks. Ground-handling work involves passenger check-in, cleaning, aircraft handling, fuelling, baggage handling, boarding and passengers’ disembarkment.

IATA challenges Europe on ‘SES by 2012’ THE INTERNATIONAL Air Transport Association (IATA) has challenged Europe to deliver a Single European Sky (SES) by 2012. In a keynote address to the European Air Transport Summit in Bordeaux, IATA Director General and CEO Giovanni Bisignani said, “After decades of talks and little action, failure to implement an effective SES is Europe’s biggest environmental embarrassment. In 2007, this failure resulted in 21 million minutes of delays and 468 million kilometres of unnecessary flight. This wasted 16 million tonnes of CO2. This crisis that is gripping the airline industry highlights the fact that airlines cannot afford the EURO 5 billion cost that this brings. And neither can Europe afford the impact on its competitiveness. This must change fast.”

IN AN EFFORT to combat the current economic crisis and the consequent slowdown in air traffic, Singapore Airlines has announced mega discount deals, ranging from 40 per cent to 60 per cent, on key sectors in South East Asia and Australia. Tickets on the return flight to Singapore have been slashed by 52 per cent to Rs 18,830. A to-and-fro ticket to a slew of popular South-East Asian destinations like Bangkok, Denpasar, Kuching, Kuala Lumpur, Penang and Lankawi will cost Rs 23,980, down by 42 to 59 per cent. A return fare to Perth, Brisbane, Adelaide, Sydney or Melbourne will cost Rs 41,350, a reduction by 44 per cent. All prices are inclusive of taxes and surcharge. “Bookings for the offer can be made from now till January 15, 2009 and will be valid for travel from December 29, 2008 to March 31, 2009 for Singapore and South-East Asia and from February 01, 2009 to June 30, 2009 for the Australian destinations,” said Singapore Airlines General Manager (India) C W Foo.

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TRAVEL & TOURISM Sakura opens its doors in Gurgaon SAKURA, THE RESTAURANT at The Metropolitan Hotel, New Delhi and pioneer in introducing authentic Japanese cuisine to India, has opened its doors as a stand-alone restaurant in Gurgaon. Located on the first floor of the Time Tower building on the main Mehrauli-Gurgaon Road, it offers the enlightened diners of Gurgaon another choice, as well as add to their repertoire of preferences and meet the needs of guests who had to drive a long way to reach Sakura at The Metropolitan Hotel.

Conceptualised along the same lines as the flagship Sakura restaurant at The Metropolitan Hotel, this stand-alone restaurant, with its chic yet simple décor, mirrors a contemporary dining experience, where the focus remains on the food and everything else adds to the overall experience.

Sarovar Hotels expand Delhi NCR portfolio SAROVAR HOTELS and Resorts have signed two new properties in Faridabad — Express Sarovar Portico and Park Plaza, thus expanding their Delhi NCR portfolio, which already has Park Plaza Gurgaon and the recently opened Park Plaza, Noida. Other hotels scheduled to open in Delhi and NCR are Optus Sarovar Premiere and Park Inn in Gurgaon and Mahagun Park Inn Shahdara CBD. These hotels will offer a range of accommodation options to business and leisure travellers in and around Delhi. Express Sarovar Portico will come up in Faridabad, Sector 39 with 70 guest rooms and interesting food and beverage facilities while Park Plaza, Faridabad would be located in Sector 21C, offering 80 guest rooms and food and beverage and banquet facilities. Services at both these hotels promise to satisfy even the most discerning global traveller. Comfortable stay with facilities matching international standards is the hallmark of both the hotels. Appoints Siddharth Chaudhry as GM for Puducherry hotels: Siddharth Chaudhry has been appointed the new General Manager at The Promenade & Le Dupleix, both Sarovar Premiere Hotel brands in Puducherry. Siddharth is a Delhi University graduate. He moved on to the United Kingdom to pursue higher studies and secure an MBA. He comes armed with a varied experience within the hospitality Siddharth Chaudhry

industry. His last stint was with Bar Risa/Jongleurs Reading, Birmingham as General Manager.

Thomas Cook appoints Avian Media THOMAS COOK has appointed Avian Media as its communications agency. Avian will be responsible for implementing its integrated Public Relations campaign and for promoting the Thomas Cook business across India. Avian Media will provide Thomas Cook with strategic public relations counsel as well as media relations. The agency will work towards building brand awareness for the company and it will also help facilitate industry comment from senior spokespersons, together with market analysis and statistics. Signs pact with Indian Ocean Cruises: Thomas Cook has signed a pact with Indian Ocean Cruises, wherein it will play a key role in marketing Cruise's destinations of Reunion, Rodriguez and Madagascar from Pristine islands. The marketing will be done by Thomas Cook through its agents across Mauritius, India and Europe. Launches 'My India, My Way': Thomas Cook (India) Ltd. has announced unique affordable, yet quality leisure holiday packages for the Indian travellers. “My India, My Way” is Thomas Cook's way of taking forward its brand image of a seasoned industry player. Thomas Cook India has allied with various domestic airlines to offer tour options. It has also partnered with IndiGo Airlines keeping in mind the budget conscious traveller. The tours are packaged keeping the profile and the current market trends in mind. The holiday packages are to key destinations across the country, in the states of Maharashtra, Goa, Kerala, Karnataka, Himachal Pradesh, Gujarat, Uttarakhand, Madhya Pradesh, amongst many more. Three-star upwards hotel accommodation, transfers, unconventional sightseeing tours and other frills are part of these value-for-money, meticulously planned holiday packages.

Yatra.com, Ticketvala.com among top ‘Red Herrings’ YATRA.COM has been declared as a winner of the '2008 Red Herring Top 100 Start-ups' in Asia — a prestigious award which recognises start-ups that will lead the next wave with innovative and potentially disruptive technologies. Ticketvala.com, a website owned by Travis Internet, is also among the winners of the Red Herring 100 Award. The list includes 100 most innovative private technology companies based in Asia. The Red Herring editorial board diligently surveyed the entrepreneurial scene throughout Asia and identified the top 100 out of more than 1,000 closely evaluated companies that are leading the next wave of innovation. The 100 winning companies were announced at the Red Herring Asia event in Hong Kong. Yatra.com Co-founder and CEO Dhruv Shringi said, “We are extremely delighted and humbled to be short-listed for this very prestigious category. Being the only Indian travel company to be awarded endorses our position as a leading player in the online travel space.”

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SNIPPETS Amadeus hotel network reaches 80,000

Spain celebrates India connect this X’mas

AMADEUS HAS announced that the number of properties in its Global Distribution System (GDS) has reached 80,000, providing a vast choice for travel agents and greater visibility for the participating hotels. Overall, hotel bookings made through the

THIS CHRISTMAS, Spain’s international value retail chain La Roca Village (Barcelona) and Las Rozas Village (Madrid) presented an eclectic cultural showcase with henna workshop, Bollywood dance session and more. Greeting the avid shoppers with razzmatazz of Indian cultural confluence, the La Roca Village (Barcelona) and Las Rozas Village (Madrid) part of international value retail chain, offered the best of India showcase. Encapsulating the Indian connection, and building on this colourful splash, both the villages offered the public an opportunity to exclusively participate for upbeat Bollywood dance session, henna workshops, tea-tasting, storytelling for the young... all set out in the Special Christmas unit set up in the complex. Adding fervour to the Indian connotations, designer Bibi Rusell presented designer products. The collection ranged from dress wear to accessories and decorative items, including exclusive pieces, which were on display for the first time in Spain this Christmas and only in La Roca Village (Barcelona) and Las Rozas Village (Madrid).

Amadeus GDS during the first nine months of 2008 rose by 7.4 per cent compared to the same period in 2007, generating close to 1.7 bn Euros for hotels using the system. In particular, there has been a significant growth in the number of independent hotels and smaller chains joining Amadeus GDS, demonstrating Amadeus' appeal among hoteliers not traditionally represented in GDS. Recent additions to Amadeus GDS include over 500 hotels through Hotel-Net.it and 200 Cuban hotels through a distribution agreement with the Cuban Ministry of Tourism. Amadeus has recently signed agreements with Boscolo in Europe, Yatra in India and Derbysoft in China, which will add even more non-GDS properties to the system.

Soni charts roadmap for Medical Tourism UNION MINISTER for Tourism and Culture Ambika Soni has said that the Ministry of Tourism, in collaboration with the Ministry of Health & Family Welfare, has initiated several measures to promote Medical Tourism. These include promotion in overseas market and production of publicity materials like brochure, CDs and films etc. and their distribution in target markets. Specific promotion has also been undertaken at various international travel fairs such as World Travel Mart, London and ITB, Berlin etc. In a written reply in the Rajya Sabha, she said that all the State Tourism Departments, Ambika Soni including Orissa, Jharkhand, Chhattisgarh and Madhya Pradesh, have also been requested to promote Medical Tourism/Ayurveda through suitable packaging of identified best hospitals and price banding for various specific treatments.

Airbus corporate foundation takes off AIRBUS HAS established the “Airbus Corporate Foundation”, aimed at facilitating charitable activities worldwide under one roof, within an international network of employees, associations and international organisations. The Airbus Corporate Foundation started its operations on December 1, with Airbus President and CEO Tom Enders being appointed President of its Board of Directors. The Board of Directors appointed Andrea Debbané as General Delegate of the Foundation. The Foundation aims to project, improve and increase awareness of the environment, and Tom Enders support projects with a particular focus on biodiversity. The Foundation will also help young people to develop the skills they will need later in life - in particular fostering cross cultural and global citizenship. The third theme of the Foundation is to provide aid and relief in cases of natural disaster and reach out to develop local communities where Airbus is present.

Malaysia is ‘value-for-money’ MALAYSIA WAS PLACED 7th for ‘Best Country Brand’ for ‘Value for Money’ in a global study conducted by FutureBrand. The survey was conducted in conjunction with public relations firm Weber Shandwick’s Global Travel & Lifestyle Practice. The report, Country Brand Index (CBI) 2008, also mentioned Malaysia as an example of a country brand that used a regional message to position itself in the global marketplace and set itself apart from other comparable countries in the region. The “Malaysia Truly Asia” tagline was

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different destinations in Malaysia and is valid from January to March 2009.

Aussies boost N Zealand tourism

cited as helping Malaysia gain equity in markets inundated with comparable countries. The study examines how countries are branded and ranked according to key criteria, and identifies emerging global trends in the world’s fastest-growing economic sector — travel and tourism, which accounted for $5.9 trillion of economic activity worldwide last year and more than 238 million jobs. The index for 2008 included rankings and trends as well as travel motivations, challenges and opportunities within the worlds of travel, tourism and country branding. ‘Special Incentive Scheme’ from Tourism Malaysia: Focussing on enhancing tourism yields from the India market, Tourism Malaysia board has announced its ‘Special Incentive Scheme’ for the travel trade in India. Tourism Malaysia had

AUSTRALIA IS HELPING boost New Zealand’s tourism industry in these tough times. As per the latest statistic from Tourism New Zealand, visitor arrivals dropped 4.2 per cent in November 2008, as against the arrivals for the same month last year. However, arrivals from Australia rose 1.8 per cent in November, making up for the losses from most major Asian markets. Overall, arrivals from Europe held reasonably steady, down 2.4 per cent only. “The arrivals figures for November are very much in line with expectations and again show the importance of the Australian market in the current economic climate,” said Tourism New Zealand chief executive, George Hickton. With campaigns running in the US, China and the UK, Tourism New Zealand is looking at a spurt in tourism this year. “With around 900 million people still travelling worldwide, there are enough people to fill New Zealand many times over. We just need to make sure we keep building our share of those travellers by keeping New Zealand's profile up so that people wanting a holiday will think of New Zealand,” said Hickton.

For Bulgarians, tourism is closer home FOR BULGARIANS, local destinations are emerging as the preferred choice. As per reports, while many Bulgarians chose short getaways in Macedonia, Greece and Turkey, the Black Sea resorts were flooded by tourists from Romania. Quoting tourist agency Alfa Tour, website investor.bg reported that there was a massive reflux from destinations such as Mexico or Thailand. However, according to the reservations made for the past holidays, the most popular destination was Egypt, where the price for a one-week holiday, depending on the hotel category, started from 450 euro a person, the agency said. Other popular destinations, according to Alfa Tour, were Lisbon, Paris and Prague, where the best Bulgarians could afford were three-star hotels. Many people drove to Thessaloniki and Halkidiki in Greece, a destination preferred for being attractive, cheap and close, the agency said.

WTTC president grieves Mumbai attacks

surpassed its target arrivals for 2008 by achieving more than half-a-million (501,563) Indian arrivals during JanuaryNovember 2008. The ‘Special Incentive Scheme’ is devised to stimulate the Indian agents to offer ‘Best of Malaysia’ with a value-formoney proposition, both for leisure and corporate travel segment. The agents will have to register with Tourism Malaysia in order to avail the benefits offered through this scheme, which are performance-linked. The scheme has been launched by Tourism Malaysia in association with the national carrier Malaysia Airlines. Alternately, agents participating in the scheme can also explore other carriers operating in the region. This incentive scheme is for 3 nights/4 days for

WORLD TRAVEL & TOURISM Council (WTTC) president Jean-Claude Baumgarten has expressed his sorrow for all the families of the victims and condemned the senseless acts of violence in Mumbai. On a recent visit from London to Delhi and Mumbai, he said, “We call on people and governments from across the world to support the travel and tourism industry at this time of crisis. It is not only important for the 240 million people employed in the tourism industry but also to showcase our solidarity and confidence in India. Security is of utmost concern Jean-Claude Baumgarten today and the tourism industry is following stringent security norms in doing all it takes to assure you that you will be safe in India. Life is back to normalcy in Mumbai — the resilience of the people is admirable.”

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Stimulating the Sixth Sense!

ensuality mixed with simplicity. Glitz combined with glamour. Enough to drive crazy the Sixth Sense…and more! From the exotic locales of the Six Senses Hideaways to the walls of the homes of a select few, Kingfisher's 2009 calendar is back to electrify the mind and the soul. With models from around the globe shot in all their shimmering beauty by ace photographer Atul Kasbekar at 'Six Senses Hideaway Resorts' at Koi Samui and Yao Noi in Bangkok, Thailand, this year's calendar is a visual treat to stimulate the senses. Six hot-shot models photographed in understated elegance and sensuality! Tamara Moss from Holland, Nargis Fakhri from Czech Republic, Mimi Blix who shuttles between Norway and Uganda; the Russian Katya Melnikova, Thailand's Sunisa

Jongsawat and the leggy lass from India, Moni Kangana Dutta are the six gorgeous faces that package this year's calendar into, to quote Kasbekar, “an extraordinary combination of beauty, fashion and lifestyle, which comes together to create a magical spa for the soul.” “The images this year have been photographed for a graphic layout that has two images per page. With the amazing locales, the calendar has come out very well,” he added. “I wanted the photographs to be sensual yet understated so I had briefed the photographer to work in a space that would create such images. The accent was on simplicity and working with natural elements,” Kingfisher Airlines Chairman Vijay Mallya said in a statement. “With our airline going global, this

was the right time to source some of the finest models from around the globe,” he added. This time around, the models sport swimwear from international brands like Alberta Ferretti, Jean Paul Gaultier, Diane von Furstenberg and accessories by Lanvin and Fendi. Next time you fly Kingfisher, do not expect the cabin crew to hand over one of the ‘hot’ calendars. The calendar is not on sale, with only a select few across the globe getting a copy directly from Mallya.

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