Ch july 2009 emagazine by Newsline

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EDITOR-IN-CHIEF’S NOTE

Wall of silence!

arely nine months ago, Jet Airways Chairman Naresh Goyal hogged the spotlight on day one of Aero India 2008 — the first ever civil air show in the country — when he announced a coming together of Kingfisher and Jet Airways to fight the severe downturn. As he was speaking in Mumbai, his senior officials handed out the pink slip to over 850 air hostesses and stewards, who angrily demonstrated outside the airline’s headquarters and demanded their jobs back. No wonder the spotlight turned bang on the mass sacking and the coming together of Goyal and Vijay Mallya. Even a normally unflappable Praful Patel was speechless at the turn of events. He flew back to Mumbai on the afternoon of the inauguration and the government informally made known its disapproval of the sacking: it was the worst kind of publicity they wanted six months before an election. But there was still more to come. The same evening, a teary-eyed Goyal (now isn’t that a scream!) was on television and described the hostesses and stewards as his own children and rescinded the sack order. The next morning, newspapers were full of pictures of the MallyaGoyal duo careening around Begumpet airport in a golf cart and Goyal’s tearful angst. The Aero show? Well, it could wait. What is it about the airline business that it drips with so much appeal…well sex appeal? Is it the big jets, smart young in-flight crew, somberlooking pilots and plenty of razzmatazz that makes for such irresistible copy and coverage? Or, is it something else? Looking at Naresh Goyal smiling at Kuala Lumpur, where the International Air Transport Association (IATA) held its 65th session, one is convinced that it is not just the visual appeal of the

CRUISING HEIGHTS July 2009

airline business but the sum total of the people who run it (at least in India) that seems to drive the news machine! Vijay Mallya can be late for an appointment by as many as a couple of hours, but journos still wait for him. Naresh Goyal can tweak the system to get it to clear the Great Wall of China’s application for cargo flights into India, so that he can get to fly to the US West Coast via Shangai. It’s another matter that he shut the route months later, and there wasn’t a whimper. He is praised for his courage. Imagine Air India taking a cold business decision like that! It all came back the other day when IATA’s feisty Director General Giovanni Bisignani released IATA’s ‘Wall of Shame’ that included two Indian airports: Delhi and Mumbai. As usual, Bisignani had not a good word for Indian airports and said they were adding to the complex woes of airlines by their increase in charges by ‘207 per cent’. Bisignani’s haranguing wasn’t a surprise. That’s what he is paid to do — be an effective and vocal spokesman for the airlines. What was astonishing, though, was the wall of silence in India. The airports — Delhi, Mumbai and Bangalore — had nothing to say. It was as if they had had a stroke. After all, they were being castigated globally and Naresh Goyal was watching and smiling. After having extracted every possible concession, including selfhandling, fewer flights, slots of his choice, Goyal watched as the fireworks began. There is a lesson in that for the country’s airport operators. It’s one thing to build a worldclass airport. But quite another to have a worldclass response mechanism in place. If their response time to Bisignani is the benchmark (their watery rejoinder to IATA arrived in my mailbox just as I was finishing this piece, a good ten days after the IATA jamboree), then God help them if they have a real emergency. There is much to learn from Naresh Goyal — best of all of on how to be a smart street fighter!

Off the cuff

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The hunt for Air France 447 The search for the ill-fated Air France plane, which vanished without a trace on its flight from Brazil to France, began within hours of its disappearance over the Atlantic. According to reports, these are some of the techniques and technologies used during the search: Narrowing the search area: Aviation authorities determine the plane’s last known position, using radar returns as well as data sent out by the aircraft's transponder. In the event of transponder failure, searchers are forced to rely on radar data, which can be inaccurate due to severe weather. Air search: Patrol planes fly a grid pattern over the search area, guided by GPS. They fly in parallel swaths over the ocean, in a process that pilots refer to as “mowing the lawn”. Flying at an altitude of 600 metres or less, pilots and crew watch for surface debris and fuel slicks. Listening underwater: Once searchers locate the crash site through surface debris, ships move in for the next phase — homing in on the wreckage with underwater acoustics. Airliners such as the Airbus A330 are equipped with at least two sonar “pingers” that emit an acoustic signal. The pingers are designed to survive at depths of upto 20,000 feet, and can be detected at depths of about 14,000 feet. Underwater search and recovery: Depending on the depth of the water, searchers may use side-scan sonar to take images of the bottom, to determine how scattered the wreckage is. The sonar “paints” debris by bouncing sound signals off underwater terrain. Once the wreckage is pinpointed, investigators attempt to recover data recorders and other components that may shed light on the crash.

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CHURNING, CHANGING!

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The Indian aviation industry is changing. From airlines to airports to aviation authorities, there is a massive churning being witnessed all around. A look at what this churning means to Air India, the Directorate General of Civil Aviation and Paramount Airways, and what role the man at the helm of affairs in each of them is playing in this monumental change.

IN-DEPTH NEWS DIGEST

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Despite some improvement in passenger traffic, domestic airlines are still far from being out of the woods. Plus: what the low cost carriers are doing to tackle their current woes. CRUISING HEIGHTS July 2009

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The search for the remains of the ill-fated Air France plane that mysteriously crashed into the Atlantic Ocean threw up more questions than it could answer. This is one mystery that shall continue to haunt mankind for a long time to come.

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

CHOCKS OFF

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CRUISING HEIGHTS Editor-in-Chief

K SRINIVASAN Managing Editor TIRTHANKAR GHOSH

Consulting Editor

CARGO

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Air India might be in deep trouble, but its cargo unit continues to be on a high, with optimism about better yields and better revenues as it expands and modernises itself further.

Air India is seriously ailing and in urgent need of a surgery, if not an amputation. Will the Government have the guts to do the needful, or will it resort to shortcuts once again?

GLOBETROTTING

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The 65th Annual General Meeting of IATA saw airports, governments, travel agents and others being subjected to a litany of complaints, mainly on account of their lack of support to airlines in their hour of crisis.

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Air India launched new flights and special promotions in an effort to revive its dismal fortunes, even as international airlines went all out to capture more of the Indian market. All this and more.

RENU RANGELA

Reporter PUNIT MISHRA

Art Director BHART BHARDWAJ RUCHI SINHA PRADEEP JHA RAVINDER GUSAIN

Photo Editor H C TIWARI

Director RAVI SHARMA

Gen Manager RAJIV SINGH

Asst. Manager (Corporate Affairs) AMIT SINHA

Asst. Manager (Sales) PINTU WAHENGBAM

Subscription JAYA SINGH

Executive Director RENU MITTAL

BACK PAGE

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Struggling to cope with growing air-traffic congestion, inconvenient parking, crowded check-in halls and undignified security procedures, the new generation airports are now looking to change the experience of air travel.

SNIPPETS

Senior Editor

Design Reacting strongly to the negative publicity for the emirate in recent days, Emirates CEO Tim Clark has come out in strong defence of the longterm health of Dubai.

SPECIAL REPORT

R KRISHNAN

Cover photos: M Thiagarajan/ Courtesy Paramount Airways; Arvind Jadhav/Courtesy Air India and Naseem Zaidi by H C Tiwari Cover design: Ruchi Sinha

CRUISING HEIGHTS July 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 Volume IV No 3

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Not the only one

PERISCOPE

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“This does not mean Air India (the merged entity) is the only airline losing money. But its losses are a little more than the others simply because its cost structure has always been traditionally higher.” Civil Aviation Minister PRAFUL PATEL talking to reporters after a NACIL review meeting.

Time to earn “I see demand for both domestic and international travel rising in India by 10-15 per cent in the next few months, a dramatic rise in these recessionary times. So fares will see some increase.”

LETTERS TO EDITOR

It is interesting to note that SpiceJet has, in such a brief period of time, emerged as one of the best low-cost carriers in India. The story, Voting for Change? (June ‘09) clearly illustrated that SpiceJet has done wonders to the Indian aviation circuit during its four-year journey. In the present ailing circumstances that have gripped the Indian aviation scene, the carrier has performed exceedingly well and attracted the imagination of some of the world’s best investment bankers like Wilbur Ross and Istithmar, which is truly remarkable. No other low-cost carrier has managed to attract such investment in these difficult times. Kudos to SpiceJet! Ram Madhavan, Chennai June 2009

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Illustrations: Rajeev Kumar

The special report, GHIAL on a new high (June ‘09) revealed some very interesting facts and figures about the airport. As a matter of fact, GHIAL has broken new grounds since its inception. As one of the first private sector Greenfield airports in India, it has set high standards for other similar airports to follow. Its “enthralling charm” has captured the imagination of people worldwide. It is also important to note that GHIAL has started making money in just one year of its existence. And it is already showing diversified attributes — such as the planned development of an Aerospace Park MRO. In the future, one expects the airport to continue to top the charts ahead of other Indian airports. Ali Zaffar, Surat

Travel Agents Association of India chief RAJINDER RAI on the need for airlines to stop bleeding and start earning.

Shameful indeed! “There is no room for this nonsense in our future. When demand drops, suppliers cannot divide the same costs among fewer customers. The shape of everything must change.”

International Air Transport Association (IATA) CEO GIOVANNI BISIGNANI on Delhi and Mumbai airports being put on the ‘IATA Wall of Shame’ for their steep hikes in fees.

Going global “We are almost done with our international long-haul restructuring and there will be gradual expansion here.” Jet CEO WOLFGANG PROCK-SCHAUER after his airline posted a profit of Rs 53 crore in Q4 of 2008-09 on the back of better showing on international front.

Right course “We have always believed in stimulating the market with attractive fares. This promotion will commence in the coming season.” SpiceJet chief commercial officer SAMYUKTH SRIDHA RAN on the airline’s decision to cut down fares.

What you have written in the Open Letter to Mantriji (June ‘09) is very important for the survival of the Maharaja’s Air India. I hope and trust Mr Praful Patel will give a free hand to the new Managing Director of Air India and will not disturb him like his predecessors who were shunted out before they settled down. A Rashid Khan, Chennai

No cause for worry

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

Rynair CEO MICHAEL O’LEARY feels that travellers had little to fear from the deadly Swine flu virus.

CRUISING HEIGHTS July 2009

“It is a tragedy only for people living . . . in slums in Asia or Mexico… But will the honeymoon couple from Edinburgh die? No. A couple of Strepsils will do the job.”

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Bag it for keeps One of the worst nightmares for any air traveller is losing a bag or two. According to reports, airlines mishandled 23 per cent fewer bags in 2008. It was not because the carriers had become efficient, but passengers travelled lighter to avoid fees. Of course, there was new technology which helped keep track of luggage. SITA, the world's largest provider of airline computer applications, said that the number of checked bags that were late, sent to the wrong place, damaged or lost entirely

COLD STATS

fell to 32.8 million from 42.4 million. The decline was the first since the group began publishing an annual luggage report in 2005. Airlines reduced mishandled luggage to 14.28 items per 1,000 in 2008 from 18.86 per 1,000 the year before. The number of pieces that failed to be recovered declined to 0.32 bags per 1,000 travellers from 0.57. SITA said the decline in complaints was caused by an increase in use of its tracking software that was in place at 73 airports in 2008, up from 50 in 2007.

LOOKING GLASS

Air India’s woes...Bleeding money up above and agitated staff on the ground

Matter of right “All of us have a lot of brand impact of doing ground handling…And to take away that ability to make an impact on the customer is not right.” Jet Airways (India) Ltd Executive Director SAROJ KUMAR DUTTA on the government’s move to implement the new ground handling policy.

Need to withdraw “The Government must revisit the policy and have it withdrawn. Implementing it will lead to job losses and reduce the quality of service.” SpiceJet CEO SANJAY AGGARWAL on the government’s decision to implement the new ground handling policy from July 1, 2009.

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Delhi and who goes to Mumbai. That will be the real contest for the trophy.” Another official summed it up beautifully: “Why should that be a surprise, in

Jai Ho

Air India

Photos: ????????

Kamal Choubey with Minister

that we are only emulating the BCCI (Board of Control for Cricket in India). After all, they are politicians par excellence and we can learn from them and become better politicians.” Anyway, here are the men from the Maharaja who did the country proud in South Africa. Let’s applaud them, and let’s applaud AI for giving sports such a healthy push-up in their overall scheme of things. Barring Kolkata Knight Riders, AI has representation in seven of the eight teams. And two of them — M S Dhoni (Chennai Super Kings) and Yuvraj Singh (Kings XI Punjab) — captain their sides. The other players are: Suresh Raina (Chennai Super Kings), Irfan Pathan (Punjab Kings XI), VVS Laxman and R P Singh (Deccan Chargers), Harbhjan Singh and Dhawal Kulkarni (Mumbai Indians), Naman Ojha, Siddhartha Trivedi and Paul Valthaty (Rajasthan Royals), Pankaj Singh, Tejashwi Yadav and Rajat Bhatia (Delhi Daredevils) and Robin Uthapa (Royal Challengers). For the record, Tejashwi Yadav is Laloo Prasad Yadav’s son. And it must be said to the credit of the lads that every time they have won, there have been huge job offers from state government outfits and other PSUs, but most of them have struck to AI. Harbhajan Singh, for example, was offered a Deputy SP’s job by the Punjab Police, but he said “no” to it. They all love working for AI, and who doesn’t like a free ride? In Air Indian parlance, it’s called SoD (Staff on Duty)!So why not have a VSBU (Very Special Business Unit) in the form of an IPL franchise and make some moolah? But as one very senior official at AI said: “Getting the team together will be the easiest part. The most difficult part will be to decide who will be the ED of this SBU, the GM and the Deputy GM, who stays in Delhi and who goes to Mumbai. That will be the real contest for the trophy.” Another official summed it up beautifully: “Why should that be a surprise, in that we are only emulating the BCCI (Board of Control for Cricket in India). After all, they are politicians par excellence and we can learn from them and become better politicians.”Indian parlance, it’s called SoD (Staff on Duty)!So why not have a VSBU (Very Special Business Unit) in the form of an IPL franchise and make some moolah? But as one very senior official at AI said: “Getting the team together will be the easiest part. The most difficult part will be to decide who will be the ED of this SBU, the GM and the Deputy GM, who stays in Delhi and who goes to Mumbai.the Deputy GM, who stays in Delhi and who goes to Mumbai.the Deputy GM, who stays in

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Fraport – Airport Operations from Austria to Xi’an.

The Company Fraport AG is a leading player in the global airport industry. Following its initial public offering (IPO) Fraport has become the second largest listed airport company in the world, by revenues. Fraport’s expertise is based on more than 80 years of aviation history at Frankfurt am Main, Germany. Frankfurt Airport (airport code = FRA) is located about 12 kilometers from downtown Frankfurt. A renowned pioneer for decades, FRA serves as Fraport’s home base and as a showcase for the company’s know-how, technology, products, and services. With outstanding connectivity to all five continents of the globe, FRA is a intermodal hub with one of the largest catchment areas in the world and direct access to the German high-speed railway network. FRA is strategically situated in the heart of Germany and the European Union. Airlines can profit from high utilization rates and traffic yields.

Range of services The company prides itself in being a leadingedge provider of integrated airport services. Besides managing FRA, Fraport AG and its subsidiaries provide the full range of plan-

ning, design, operational, commercial and management services for airports around the world. Fraport AG serves as a neutral partner to the world’s major airlines: offering a complete package of aircraft, cargo, passenger and other ground handling services. Outside Germany, the company has ground services operations in Austria. Other areas of Fraport expertise include cargo and ground handling, real estate development, airport retailing, IT services, intermodal concepts, environmental management, hub management, training, etc.

Fraport worldwide Through investments, joint ventures and management contracts, Fraport is now active on 4 continents. Fraport served some 78.2 million passengers in 2008 and handled 2.1 million metric tons of cargo (airfreight and airmail) at the Group’s airports. Fraport, which bids for airport management projects worldwide, was awarded a 30-year concession for operating, managing and developing Indira Gandhi International Airport (IGIA) in India. Together with state-run Airports Authority of India (AAI) Fraport AG has formed “Delhi International Airport Private Limited (DIAL)”. Fraport is the nominated “Airport Operator” and an Airport Operator Agreement concluded with DIAL –

under which it will be utilizing its extensive airport expertise developed over the past 80 years to assist with the operation, management and development of IGIA. Currently Air India offers three weekly passenger flights and Lufthansa offers daily passenger flights from Frankfurt to New Delhi. From April, Air India plans to provide daily connections.

Fraport AG Frankfurt Airport Services Worldwide 60547 Frankfurt am Main, Germany E-mail: marketing@fraport.de Internet: www.fraport.com www.frankfurt-airport.com Contact: Ansgar Sickert Vijender Sharma Fraport Airport Operations India Pvt. Ltd. Paharpur Business Centre Suite 302 21, Nehru Place New Delhi – 110 019, India Phone: +91 11 4120 7355 (AS) +91 11 4120 7334 (VS) Fax: +91 11 4120 7558 Mobile: +91 99 1038 2806 E-mail: ansgar.sickert@fraport.in vijender.sharma@fraport.in

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OFF THE RECORD

hen Indian Premier League (IPL) Commissioner Lalit Modi announced some days back that beginning 2010, the IPL will have 10 teams instead of eight, there was much excitement in the air. Logically, the most excited should have been Air India. After all, the Maharaja has 15 T20 experts on his rolls, and maybe it makes sense to have an IPL team, considering the dwindling revenues in its other SBUs. So why not have a VSBU (Very Special Business Unit) in the form of an IPL franchise and make some moolah? But as one very senior official at AI said: “Getting the team together will be the easiest part. The most difficult part will be to decide who will be the ED of this SBU, the GM and the Deputy GM, who stays in Delhi and who goes to Mumbai. That will be the real contest for the trophy.” Another official summed it up beautifully: “Why should that be a surprise, in that we are only emulating the BCCI (Board of Control for Cricket in India). After all, they are politicians par excellence and we can learn from them and become better politicians.”become better politicians.”become better politicians.”

A 360

degree

A 360

degree SIA380

hen Indian Premier League at AI said: “Getting the team together will (IPL) Commissioner Lalit be the easiest part. The most difficult part Modi announced some days will be to decide who will be the ED of this back that beginning 2010, SBU, the GM and the Deputy GM, who the IPL will have 10 teams instead of eight, stays in Delhi and who goes to Mumbai. there was much excitement in the air. Log- That will be the real contest for the troically, the most excited should have been phy.” Air India. After all, the Maharaja has 15 Another official summed it up beautiT20 experts on his rolls, and maybe it fully: “Why should that be a surprise, in makes sense to have an IPL team, consid- that we are only emulating the BCCI ering the dwindling revenues in its other (Board of Control for Cricket in India). SBUs. After all, they are politicians par excelSo why not have a VSBU (Very Spe- lence and we can learn from them and cial Business Unit) in the form of an IPL become better politicians.”become better franchise and make some moolah? But as politicians.”become better politicians.”So one very senior official at why not have a VSBU AI said: “Getting the (Very Special Business team together will be the Unit) in the form of an easiest part. The most IPL franchise and make difficult part will be to some moolah? But as decide who will be the one very senior official ED of this SBU, the GM at AI said: “Getting the and the Deputy GM, who team together will be stays in Delhi and who the easiest part. The goes to Mumbai. That most difficult part will will be the real contest be to decide who will be for the trophy.” the ED of this SBU, the Another official GM and the Deputy summed it up beautifully: GM, who stays in Delhi “Why should that be a and who goes to Mumsurprise, in that we are bai. That will be the real only emulating the BCCI contest for the trophy.” (Board of Control for Another official Cricket in India). After summed it up beautifulall, they are politicians ly: “Why should that be M Thiagarjan par excellence and we can a surprise, in that we learn from them and become better politi- are only emulating the BCCI (Board of cians.”become better politicians.”become Control for Cricket in India). After all, they better politicians.”So why not have a are politicians par excellence and we can VSBU (Very Special Business learn from them and become better politiUnit) in the form of an IPL fran- cians.”become better After all, they are chise and make some moolah? politicians par excellence and we can learn But as one very senior official from them and become better politiCRUISING HEIGHTS July 2009

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will be the ED of this SBU, the GM and the Deputy GM, who stays in Delhi and who goes to Mumbai. That will be the real contest for the trophy.” So why not have a VSBU (Very Special Business Unit) in the form of an IPL franchise and make some moolah? But as one very senior official at AI said: “Getting the team together will be

B S Shatharaju

Kiran Kumar Grandhi

the easiest part. The most difficult part will be to decide who will be the ED of this SBU, the GM and the Deputy GM, who stays in Delhi and who goes to Mumbai. That will be the real contest for the trophy.” Another official summed it up beautifully: “Why should that be a surprise, in that we are only emulating the BCCI (Board of Control for Cricket in India). After all, they are politicians par excellence and we can learn from them and

Rao’s gsfgd marching orders!

Sriniwas bommidalla in a IPL match

CRUISING HEIGHTS July 2009

become better politicians.”become better After all, they are politicians par excellence and we can learn from them and become better politicians.”become betteAnother official summed it up beautifully: “Why should that be a surprise, in that we are only emulating the BCCI (Board of Control for Cricket in India). After all,

P S Nair

they are politicians par excellence and we can learn from them and become better politicians.”become better politicians.”become better politicians.”So why not have a VSBU (Very Special Business Unit) in the form of an IPL franchise and make some moolah? But as one very senior official at AI said: “Getting the team together will be the easiest part. The most difficult part will be to decide who will be the ED of this SBU, the GM and the Deputy GM, who stays in Delhi and who goes to Mumbai. That will be the real contest for the trophy.” r Another official summed it up beautifully: “Why should that be a surprise, in that we are only emulating the BCCI (Board of Control for Cricket in India). After all, they are politicians par excellence and we can learn from them and become better politicians.”become better politicians.”become better politicians.”So why not have a VSBU (Very Special Business Unit) in the form of an IPL franchise and make some moolah? But as one very senior official at AI said: “Getting the team together will be the easiest part. The most difficult part will be to decide who will be the ED of this SBU, the GM and the Deputy GM, who stays in Delhi and who goes to Mumbai. That will be the real contest for the trophy.” Another official summed it up beautifully: “Why should that be a surprise, in that we are only emulating the BCCI (Board of Control for Cricket in India). After all, they are politicians par excellence and we can learn from them and become better politicians.”become better politicians.”becomebetter politicians.”Another official summed it up

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NEWS DIGEST

Rising, but still falling!

he domestic air traffic has shown Jet Airways owner Naresh Goyal has a marginal rise in May 2009, at said there is not even a slight indication 39.29 lakh (3.92 million) that things are improving in the domestic passengers over the skies. Air India Chairman previous month, but still 4.5 per Arvind Jadhav feels there is cent short of the 41.61 lakh neither a U-curve nor a V-like (4.16 million) passengers that curve being exhibited by the all the scheduled carriers flew industry in terms of any signs in May 2008. Even though of recovery. In fact, the rise in domestic airlines carried six passengers noticed during May lakh (0.06 million) passengers ‘09 was only a blip, said more in May ‘09 as against Jadhav. April ‘09, airline executives It is against this feel the industry is yet to come background that the Pranab Mukherjee out of the woods, and the plans aviation industry in made earlier to shrink capacity India is waiting need to be carried out. This is not anxiously to see if the 2009-10 withstanding the slight rise in international Union Budget of the UPA passengers flown out of India. government will take

measures to revive the industry. The industry expects the government to make an announcement allowing FDI from foreign carriers in the domestic Indian airlines, and also lowering the tax on aviation turbine fuel sold for domestic air operations. The first innings of UPA, from May 2004 to May 2009, saw a massive rise in passenger traffic, triggered by very low fares by the new breed of LCCs that were soon imitated by the full service carriers for survival. After recording plus 32 per cent growth in domestic air traffic growth successively, the industry went on a landing mode, as rising fuel prices put at least two of these carriers out of business, forcing them to be sold or bought out, depending on which side of the divide you are. Kingfisher Airlines picked up India’s first LCC Air Deccan, and Jet Airways bought out the ailing Air Sahara. Now, in

P Chidambaram

INFRASTRUCTURE

NEWS...

AIRPORT CHARGES IN INDIA LOW: DIAL

closely by the Government of India and is not in the hands of the airport operators. Indian airport charges, he pointed out, were static since 2001, where after a nominal 10 per cent increase was allowed in February 2009. This is nominal, considering the rise of WPI of over 53 per cent since then, the vast change in quality infrastructure that the new airports are making available, and the huge capital outlays.

The Delhi International Airport Private Limited (DIAL) has reacted — finally — to the Delhi and Mumbai airports being put on IATA’s ‘wall of shame’. Responding to the IATA tag, Arun Arora, Associate Vice President — Corporate Communications, DIAL, said airport charges in India are extremely low as compared to other airports across the globe. For instance, said Arora, the aeronautical charges (including Landing, Parking, Terminal Navigation and PSF) levied on an A320 type aircraft in India is $769, as compared to $2,239 in Bangkok, $1,673 in Beijing, $1,245 in Singapore, $1,242 in Kula Lumpur, $3,166 at Heathrow and $3,018 at Frankfurt airport. This comparison is based on SDR (Special Drawing Rights - IMF) value. In fact, he pointed out, fixing of airport charges is regulated

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NORTHERN REGION CONCOR Looking To New Horizons

Think Container Think CONCOR The Northern Region encompasses all the major North Indian states including, Delhi, Punjab, Haryana, Rajasthan and parts of Uttar Pradesh. The Region enjoys a natural cost and transit advantage for rail movement due to long leads to the gateway ports and major consumption centers, and as much as 40% of CONCOR's throughput and revenues are contributed by this region. CONCOR has established terminals in the region, covering the cities of Delhi, Ludhiana, Moradabad, Jodhpur, Jaipur, Rewari, Phillaur, Ballabgarh, Panipat and Dhappar. A New terminal is coming up near Jalandhar (Suranassi). The combined traffic from these terminals make Northern Region the largest Region for CONCOR, both in terms of traffic handled, as well as in terms of the terminal network.

SALIENT FEATURES

Its ability to provide modal choice (rail, road, coastal shipping or air) according to the needs of the shipper. A distinct cost advantage offered by CON COR CFSs to users by virtue of their location in the ICD premises thus eliminating multiple handling and transportation.

Its strong relationship with Indian Railways.

A dedicated network of state-of-the-art terminals all across the country to capture traffic at its place of origin.

Excellent manpower resource; Professional management team; & Experts trained in multi modal logistics and information technology.

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NEWS DIGEST retrospect, the two — Dr Vijay Mallya of Kingfisher Airlines and Naresh Goyal of Jet Airways — are regretting the serious mistake they made by buying the two carriers, which have become a major drag on them. Perhaps, the two are paying the price for their avarice in a totally political Indian policy environment. They thought that since no new player will be allowed, they could just expand by cornering market share, and in due course also kill the LCCs. But what happened was the reverse. While the LCCs are surviving with some problems, Kingfisher and Jet Airways seem to have committed suicide by their silly acquisition of the two carriers. And instead of cornering market share, they ended up acquiring losses which have forced them to cut back their fleet strength in order to remain at earlier levels. Even in this desperate environment, the two seem to have differed. While Mallya has been scouting for FDI from foreign airlines, Jet CEO Wolfgang Prock Schauer says it is not required. It is against this intense lobbying that a divided industry is expecting the Union Budget for 2009-10 to do wonders for them. The closed user group of domestic airlines — Federation of Indian Airlines (FIA) — has requested the government to bring ATF under the declared goods category so that it attracts a uniform sales

tax of 4 per cent, which is now available only to aircraft with 80 or less seating capacity, that also get serious concessions and virtually nil landing and parking charges. FIA has stated that the sales tax charged by various states in the range of 29 to 35 per cent had made price of ATF sold in the domestic market to be

at least 75 per cent more than what it costs in the international market. Aviation sector has lost nearly Rs 9,000 crore in the fiscal 2008-09 and has not shown any signs of recovery. Out of a total $9 billion loss sustained by airlines the world over, the Indian carriers accounted for slightly over $2 billion — nearly 30 per cent of the global losses. The usual response to such a situation would be to cut various charges so that the industry does not get hit any more. But in India, we have done the

The world over, ADF charge imposition is allowed for a fixed period for developing airport infrastructure and is an acceptable charge as per ICAO principles, he added. According to Arora, unlike airlines, who have the flexibility to focus on profitable routes only, and also have enjoyed the advantage of falling fuel prices, airports are burdened with maintaining the same level of service and facilities irrespective of actual passenger numbers. Investment in airport capacity needs to be padded up well in advance with a 5-10 year future horizon to take care of future growth in traffic, he added.

DIAL LEASES OUT LAND FOR HOTEL

DIAL has leased out 4.55 acres to a consortium of Aria Hotels and Hyatt for Rs 200 crore to build a hotel. With this, DIAL — owned by a consortium led by GMR Infrastructure Ltd — has mopped up about Rs 900 crore in the first half of 2009 through realty transactions. The airport operator had earmarked 45 acres that it intended to lease out to developers for building hotels and conference centres. Of this, it had in March leased out five plots totalling around 17 acres to five hotel developers that included Accor Hotels, Bird Group-Dusit Thani Group and The

reverse by sharply increasing airport charges like landing, parking and navigation charges across the board. The rise has been an average 206 per cent if we take Mumbai and Delhi airports. Is it not strange that the same UPA government which had announced three rounds of rescue packages to the Indian industry in fiscal 2008-09 should treat the airline industry differently as if only the rich fly, when its own record in government during its first innings showed that even ordinary folks had begun to fly if the fares were affordable. Instead of allowing the multiplier effect of aviation industry to work through the economy, the government has chosen to remain silent. It is against this background the industry is expecting that the new Finance Minister Pranab Mukherjee will act differently from his predecessor P Chidambaram. It is in this context that the airlines expect the Finance Minister to, at least for starters, drop the FBT (Fringe Benefit Tax) which is now applicable to even routine travel/ accommodation of flight crew as well as passengers whose flights get delayed and have to be given accommodation. Secondly, they also expect Pranab Mukherjee to abolish the service tax on Business and First class travel, at least in the domestic carriage.

Lemon Tree Hotel Co. The lease agreement for these plots includes a fixed security deposit and an annual licence fee that would increase at least 5.5 per cent every year for the lease duration of 57 years. The hotels on the airport land were expected to be completed before New Delhi hosts the 2010 Commonwealth Games in October next year.

DABOLIM, MOPA AIRPORTS TO CO-EXIST

Trying to put all controversy on the subject at rest, Goa Chief Minister Digambar Kamat has said the proposed Mopa airport in north Goa would co-exist with Dabolim airport. He told mediapersons that Goa will have a new international airport coming up at Mopa in north Goa’s Pernem taluk, while the south Goa-based Dabolim international airport, now Digambar Kamat under Naval jurisdiction, would continue to be used for civil purposes. The Chief Minister, after making it clear that the Dabolim airport would be retained, took up expansion plans, following which the Government started land acquisition by

CRUISING HEIGHTS July 2009

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Low cost, low fare and low yields! was giving way to higher prices. So, after announcing low fares, Jet, within days, announced that all tickets purchased after June 18, 2009 would attract an additional Rs 400 as new fuel surcharge. This has since been followed by others. Thus, one day you are told that fares have been dropped and the next day they are raised again. However, there is nothing wrong in such back and forth movement if ATF prices go up and down. Perhaps it was in anticipation of these trends that Kingfisher transferred more of its own aircraft or flights to its LCC, or should we say low-fare arm Kingfisher Red, to improve its load factors. It even decided to go very slow on its international routes — the very alking of sagging morale of September ‘09. It was followed by LCCs reason for acquiring Air Deccan and the airlines, the inevitable is SpiceJet, Kingfisher, etc. renamed Kingfisher Red! Jet Airways, happening. As we said, the But unfortunately, the ATF prices rose whose total losses had clocked nearly Rs competition from low-fare sharply as a reflection of the increase in 961 crore in fiscal 2008-09 because of a carriers, as the full service carriers like Jet, international crude prices to nearly $68 per massive loss contribution by JetLite of Kingfisher would like to call them, and the barrel. Perhaps the days of very low ATF nearly Rs 550 crore, has aggressively LCCs (low cost carriers) as begun to increase its presence in the low farewallahs would the “low-fare” category of like to call themselves, has Indian travellers. Not only that, seen serious churning in the Jet has even begun to cut fares Indian aviation industry. in its Jet Premier or Business Suddenly, in the third week of class tickets to increase loads. June ‘09, all the three variants The global meltdown has also of Jet Airways, which caused it serious misery, and its included JetLite and Jet debts stand reportedly at $3.1 Konnect, announced sharp billion. Jet is already in talks with cuts in fares across sectors for Gulf, Oman Air for dry leasing of travel between July and Jet Airways has leased nine of its aircraft to Gulf, Oman and Turkish airlines. its four B777s and two A330s,

issuing a notification under Section 4 of the Land Acquisition Act, with an urgency clause to acquire land for the Mopa international airport.

CHENNAI AIRPORT SET FOR PBN

The Chennai airport is all set to get the Performance-Based Navigation (PBN) system from August. The system is a framework for defining navigation performance requirements that can be applied to air traffic route, instrument procedure or defined air space. It includes both Area Navigation and Required Navigation Performance specifications. The new system will provide a basis for design and implementation of automated flight paths as well as for airspace design and obstacle clearance. Once the required performance level is established, the aircraft’s own capability will determine whether it can safely achieve the specified performance and quality for operation. According to reports, nearly 125 staff members at the Air Traffic Control Tower have been provided training on this new system. The training included awareness programme, implementation and examinations. Besides helping in increasing the optimum use of airspace, the new system will enable

Anna International Terminal at Chennai Airport.

synchronisation of arrivals and departures, and lead to reduction in delay in landing and take-off. Furthermore, it will reduce workload for both, the operators at the ATC tower as well the pilots.

BIAL TO ADD 26 AIRCRAFT STANDS

The Board of the airport operator, Bangalore International Airport Ltd (BIAL), has approved a small, interim capacity addition at the apron.

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since the wet leasing agreement of these aircraft is coming to an end by OctoberNovember 2009. It is also planning to lease a few more of its Boeing 737-800s. As on date, Jet, which has a total fleet strength of 87 aircraft, has leased nine wide-bodied aircraft to Gulf, Oman and Turkish airlines. Jet is earning a monthly lease rental of $300,000 for B737s and 1.2 million for its B777s. At the recent IATA meet, Jet Airways chief Naresh Goyal announced that his airline has already cancelled its option to buy eight more of the B777s it had ordered during the good times. There are doubts if Jet will go ahead with the delivery of even the B777-300 ERs that it was scheduled to take in August 2009. It has already cut its network by 20 per cent, and may do so by

another 10 per cent in the coming months. According to Naresh Goyal, the year ahead is going to be very challenging in terms of sluggish demand for both domestic and international operations. It may be mentioned here that while the cost of operations of both Jet Airways and JetLite are the same, the yields of the latter are less than half of the former. Against a load factor of nearly 68 to 70 per cent needed by Jet Airways to break even, JetLite requires a load factor of 93 per cent to break even — an impossibility in the current climate unless airlines carry passengers free! Naresh Goyal has been reported in the press as saying, “We are all on ventilator in the ICU. We want to move to the general ward. We were lucky that we did

Bangalore International Airport is all set for capacity enhancement.

The Board has given the go-ahead to add 26 aircraft stands, increasing the airport’s capacity to take in more aircraft at a time, according to reports. This would take the number of stands at the 4000-acre airport from 42 to 68. It would also help BIAL to pitch for new airlines while enhancing the infrastructure for domestic carriers as the market starts turning

not increase capacity sharply in the last three years.” After joining the IATA Board, he said absence of regulator was causing serious problems in India. His remarks came even as IATA CEO Giovanni Bisignani said India was in IATA’s Wall of Shame following the very unreasonable hike in airport charges at a time when airlines needed oxygen and blood transfusion. Air India Chief Arvind Jadhav said once AERA was in place, all the airlines under the FIA banner would take up the issue of increased airport costs. Even as this tamasha continues, full service carriers Jet Airways and Air India are planning to sharply increase their presence in the LCC segment in India. The grapevine has it that Jet Airways is reconfiguring at least eight of its Boeing 737-800s, which were its pride once, into all-Economy class seating. It wants the job to be done “yesterday”, as it is unable to bear the pain of falling passengers and yields. Air India Express, which till now was the low-cost arm of Air India’s international operations with small domestic diversion or presence, is seriously considering launch of low-cost operations domestically. As on date, Air India Express flies 200 flights a week, of which 175 are overseas and 13 are on domestic routes, and another 13 are flying on behalf of Air India where it does not have the rights. Kingfisher Airlines has already dedicated more than 50 per cent of its fleet to low-cost operations, or should we say low fare operations?

around. It now receives 27 domestic, international and cargo carriers and recently added Saudi Arabian Airlines with two flights a week. The Bengaluru International Airport, the country’s third busiest airport, completes a year of commercial operations on May 24. It ended the 2008-09 fiscal year with a passenger traffic of 8.7 million, which was lower than the expected 9.2 million (down by nearly six per cent). Pre-launch and pre-crisis worldwide, BIAL officials had hoped the traffic to touch 10.5 million on the back of Bengaluru’s fast growing air traffic. Work on airport city to start in 2010: Meanwhile, BIAL has announced it will begin work on the proposed airport city (aerotropolis) in the first half of 2010. BIAL is holding talks with developers of the project, sources in BIAL, which operates Bangalore International Airport at Devanahalli, said, according to reports. BIAL’s decision to develop an airport city is in line with the increasing attention being paid to aerotropolises the world over. An aerotropolis is a city in which the layout, infrastructure and economy are centred on the airport. Reports said the airport city project has provisions for premium land for commercial real-estate development, such as office parks, retail, entertainment and hospitality, in addition to the land reserved for a rail link to the city.

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Bilateral tightrope walking

hat it should have done long back, the government (read Ministry of Civil Aviation) is doing now as an afterthought. It has put on hold bilateral air services agreement on select sectors. The Ministry recently turned down a request by SIA to grant a stop-over to its Super Jumbo A380 in Delhi or Mumbai for its flights to London from Singapore. This flight is

US and Middle East. The India-UK route at present is serviced by three Indian carriers, namely Air India, Jet Airways and Kingfisher Airlines. British Airways and Virgin Atlantic service these routes from UK. There is no third country carrier on this route. The three Indian carriers together have the right to 32,921 seats every week — the same as the British carriers have.

suffering from very low load factors, notwithstanding the fine product SIA is. The request for even smaller plane comparatively was not entertained. The current bilateral agreement India has with Singapore prohibits SIA to operate its flights beyond India to London,

It is widely feared by the industry that allowing SIA to operate India-UK route will wean away from Indian carriers Business class passengers originating in India and also Economy class passengers, as SIA could sharply drop fares. Though, on the face of it, this seems a very

VIZHINJAM, KANNUR AIRPORT WORK TO BEGIN SOON

Construction work of the Kannur International Airport and the Vizhinjam International Container Transhipment Terminal will start this year. This was stated by Kerala Chief Minister V S Achuthanandan at a panchayat meeting recently. V S Achuthanandan The Chief Minister said land acquisition for the airport was progressing. He said land for the Railway Coach Factory in Palakkad was being acquired and the acquisition would be completed soon to enable construction work to begin. Likewise, the construction work of the Vizhinjam terminal would also start this year. He said steps taken by the state government for the Vallarpadam project and the LNG terminal were also bearing fruit.

quality re-certification. The airport handled 10 lakh passengers during 2008-09, with aircraft movement (landing and take-off) being reported at 14,271 in the same period. The airport, that was earlier handling only domestic operations, recently began international services to Dubai, Singapore and Colombo. It has also expanded its domestic operations. A two-member team from Chennai-based firm GCAS, specialising in quality certification, did the pre-certification procedures, inspections and documentations, and also carried out the final procedures for recommending re-certification. Reports said the team was satisfied with the systems in place and was recommending ISO 9001 quality re-certification for the airport.

COIMBATORE AIRPORT HOPES FOR ISO CERTIFICATION

Having witnessed a major growth in aircraft and passenger movement, Coimbatore Airport is now all set to get ISO 9001

reasonable reaction, what is inexplicable is the great largesse being handed over to the Gulf-based carriers. Emirates has announced that it will “add 22 weekly flights as a support of Indian government’s ambitious growth plans to attract 100 million air travellers by 2010.” As on date, Emirates has 163 flights a week to 10 Indian gateways, which will be “strengthened” to 185 over the summer/winter schedule. For Emirates, the high demand routes are Ahmedabad, Chennai, Kolkata, Kozhikode and Thiruvananthapuram, which will be the chief beneficiaries of Emirates’ expansion in India. Emirates has already revamped its offering on Indian routes by including in-flight products that are in line with Indian regional preferences. We must point out here that Air India is indulging only in self-goal, goal after goal. Take, for instance, passengers in Chennai. Should they want to fly to the US, they will first have to fly to Delhi or Mumbai, and from there take a flight which will halt in Frankfurt and then fly to destinations like Chicago and Newark in the US. Unlike yesteryears, when Indian traffic largely comprised unskilled workers to the US, the Indians flying out of Chennai now are either parents or close relatives or highly educated persons etc. Most of them are either flying to the west coast or midwest or simply the eastern part.

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In a gross injustice, the airline wants these poor Chennaiwallas to first check in at Chennai airport three hours in advance before flying for two and a half hours to Delhi. They reach Delhi four hours before the scheduled flight from Delhi to Frankfurt. From Frankfurt they then fly to Chicago. The same story holds true should they want to fly to Newark via Mumbai from Chennai. Only a fool will fly on this useless schedule. But if you fly Emirates, you just take off from Chennai and land in Dubai, and from Dubai you fly non-stop to Chicago, San Francisco, LA etc. Already, Kerala has been completely vacated for Gulf-based carriers, and now even Tamil Nadu has been vacated for them. Look at Ahmedabad. Air India has started flights to Frankfurt from Ahmedabad using its jumbo Boeing 747-

400, which in turn will feed a smaller Boeing 777-300 ER in Frankfurt to fly the same destinations Chicago or Newark. So we are, on the one hand, seeing Air India adding stations, and on the other, not knowing what to do with its planes. This is the plain truth. Obviously, the rules of the games have been typically framed for the Gulfbased carriers, be it Emirates, Etihad, Air Arabia, Gulf Air, Oman Air, Saudia etc. All these carriers put together now have nearly 500 flights a week out of India — far more than our own Air India, Jet and Kingfisher. So, when SIA said ‘give me more’, MoCA bosses said ‘no more’. As for Emirates, from Chennai it will have triple daily flights with the addition of two more flights between October and December 2009. With this, Emirates will

become the largest international carrier to operate out of Chennai. So, why not rename Air India as Air Northndia?. ‘Yes’, MoCA will say, ‘we have AI Express that flies predominately from the South.’ Emirates Vice President for Commercial Operations-West Asia and Indian Ocean, Majid Al Mualla, in a significant observation, said, “The global slowdown is not yet over, but the outlook for the future is showing signs of improvement. When traditional European markets dried up, India was quick to refocus its trade and marketing efforts in targeting regions not severely affected by the economic slowdown, such as Middle East, East Europe, Africa and parts of South East Asia. In line with this, and also to compete with Air India city by city, Emirates has announced that it will serve Ahmedabad with double daily operations, adding six weekly flights to its existing eight flights a week service. Three flights have already been added in June ‘09, and three more will be added from October ‘09. From Kolkata, Emirates will increase its frequencies from seven a week to 12 a week. Kerala will have 37 flights a week by Emirates. Soon, UAE’s official LCC, FlyDubai will launch operations to at least four destinations in India — Chandigarh, Jaipur, Lucknow and Coimbatore. Perhaps this is why Air India Express is planning to increase its presence in India, rather than outside India which was the original idea of launching it. Now, wait a minute, who is the country’s official carrier?

Sauce for the goose only?

or once, Administrative Staff College of India (ASCI) could prove itself right. In its report to the Competition Commission of India (CCI), ASCI said mergers in aviation sector can lead to fare cartelisation. With mergers happening, there is already fare collusion at peak hours. Hence, CCI should monitor fares and exercise greater control over private airlines in choosing/allotting slots and passenger traffic. The recent decision of Jet Airways and Kingfisher Airlines to reach a code share agreement on its domestic operations needs to be seen in this light. Even though the code share agreement or alliance was announced in October 2008 at Hyderabad air show, no joint move has taken place in that direction

Administrative Staff College of India (ASCI).

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even eight months thereafter. In the interim, the ATF prices went up and came down sharply, before again rising from June 2009. In these eight months, the losses of the two airlines have jumped and the idea of an alliance has failed to take off. On the other hand, the pressure from recognised LCCs like IndiGo and SpiceJet has pushed the full service carriers further into a corner, forcing them to increase their own LCC component. Thus, even though ASCI has expressed legitimate fears, the fears have actually not materialised, largely because of some semblance of competition that is still existing. However, what was expected as part of the DGCA drive to force the airlines to quote one consolidated fare instead of showing a base fare of one rupee and loading the balance with fuel surcharge etc. has not happened. We understand that SpiceJet is not keen on consolidation of fare under one category. So far, DGCA has not come out with its official stand on compliance by domestic airlines. We now have the ASCI also complaining to CCI that fare cartelisation should be stopped. ASCI has recommended that ideally, there should be as many airlines as possible. But it is precisely in this area that the existing players, with lot of sympathy from the Ministry of Civil Aviation, have managed to keep newcomers out. Yes, one may ask why should newcomers come in when the industry is going down? But should it not be for the newcomers to decide if they should get into this business or not? See the serious contradiction. While babus do not want any new full service or LCC to enter the domestic airline business, they have had no hesitation in allowing big carriers, including the Emirates, SIA etc. to increase their market share in India. The point is if the entry of more domestic players will badly hit the existing domestic airlines, does the same not hold for increase in the number or frequencies of foreign players? Will not the entry of new foreign players seriously erode the market share of domestic carriers flying foreign routes? If excess capacity on domestic skies is a reason for the present crisis, then is not excess capacity on international routes also the reason for low seat factors in foreign flights of Indian carriers? Is the sauce not the same for both the goose and the gander? Frankly, we think it is.

A fruitful US sojourn

Madhavan Nambiar, Secretary, Ministry of Civil Aviation meeting Randolph Babbitt, who was appointed recently as Administrator, FAA.

“I

t was a most useful trip. We had an opportunity to interact with our counterparts, get a first hand feel of the latest developments and consolidate our cooperation,” said Airports Authority of India Chairman Vijai Prakash Agrawal on his recent trip to the US. Agrawal was there as a part of a delegation led by Secretary (Civil Aviation) Madhavan Nambiar and including, amongst others, Naseem Zaidi, DG, DGCA; R P Shahi, Joint DG, DGCA; S K Kakkar, Executive Director, AAI; V Somasundaram, ED, AAI and Ajai Kumar Sangal, GM, AAI. The delegation was in Washington as part of the Aviation Cooperation Programme (ACP) held during a high-level interaction during June 10-12, 2009. An agreement was signed between the US Trade and Development Agency and the Directorate General of Civil Aviation of India to fund a number of projects under the ACP. The two sides also agreed that the next India-US Aviation Summit would be held in the US on mutually convenient dates in December 2009. Although the objective of the visit was to review the progress in implementation of the Open Skies Agreement signed in April 2005 and the ACP signed in June 2007, and to discuss issues of mutual concern, the real thrust of the meetings was two-fold. A prime concern was to get the downgrade threat from the US Federal Aviation Administration (FAA) aborted. CRUISING HEIGHTS July 2009

This threat had come about after the FAA team, during its visit to India earlier this year, pointed out serious flaws in the working of the DGCA, including equipment and manpower, and threatened a downgrade that would have put major overseas operations in a tizzy. Talking about the visit, Naseem Zaidi, a very circumspect and matter of fact officer (see interview elsewhere in this issue), said : “We have had a very useful and successful visit. The FAA was most understanding and cooperative and we have achieved most of the objectives that we had set out to achieve.” In other words the downgrade threat was over. The DG briefed his US counterparts on the huge number of proactive steps that had been taken over the past few months and they were reasonably satisfied at the pace of progress. According to inside information, the DGCA has moved to meet over 80 per cent of the critical conditions laid down by the FAA in an assessment it conducted in March 2009. Had it not met these conditions, the US would have curtailed flights from India and imposed more stringent security checks. The DGCA has now also constituted a Board of Aviation Safety under the chairmanship of the Director General to take periodic stock of safety and security developments. The FAA team is scheduled to visit India in July. The AAI team, according to Agrawal, Continued on page 26

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AI Chairman V P Agrawal gave details on the PBN. In conventional navigation, an aircraft utilises ground-based nav-aids for position determination, and fly from departure point to destination with reference to various ground-based navaids. The flight paths, therefore, are not only fixed but operationally not flexible. However, in the Performance Based

with the burgeoning fleet size of airlines and the induction of new generation modern aircraft. These have necessitated the need for quick and rapid upgradation of facilities, procedures and infrastructure. The ICAO mandate for the implementation of PBN procedures, both en route and in terminal area, have come as a boon towards optimising airspace utility and efficient management of terminal

PBN: Hi-tech initiative with a global approach One of the discussions that the Indian delegation had in the US centred around PBN. What is it all about and how will it help Indian aviation?

Navigation (PBN) system, an aircraft derives position information from navigation satellites like GPS/GNSS and uses the advanced on-board navigation system and flight management computer to fly on an efficient and flexible trajectory to its destination. The PBN procedures take advantage of the enhanced airborne capabilities and satellite technology for efficient aircraft operations. The PBN’s two essential components are the Area Navigation (RNAV) and Required Navigation Performance (RNP). The major reasons for Indian civil aviation to move towards PBN are the high growth rates in the recent past, coupled

airspace at the country’s two busiest airports — Mumbai and Delhi — which were the focus of traffic growth. The Chairman also outlined the benefits of PBN implementation. He said that the PBN procedures exploit on-board navigation capabilities, coupled with operational procedures to benefit aircraft and airspace users through: Improved airspace utilisation through enhanced airspace capacity; Improved management of air traffic leading to enhanced air safety; Enhanced safety by de-conflicting arrival and departure routes with predictable flight paths;

CRUISING HEIGHTS July 2009

Repeatability of flight path resulting in minimised tactical radar vectoring, thereby enhancing operational efficiency of the controllers and pilots; Significant reduction in controllerpilot communication; Reduced fuel burn due to shortened flight legs as compared to conventional SIDs, leading to significant environmental benefits in terms of reduced emissions; and, Reduced reliance on ground-based navigation infrastructure since navigation guidance is obtained from navigation satellites. At Mumbai and Delhi — both airports handle the bulk of the arrival and departure traffic in the country — PBN implementation has been considered and implemented with the primary objective of achieving enhanced safety, efficiency, environmental and operational benefits for aircraft operations. According to Agrawal, an integrated approach was adopted towards implementation of PBN procedures, which involved close collaboration with stakeholders, such as airlines, pilots, regulator, air traffic controllers and airport operators. Since India manages one of the largest airspaces in the Asia-Pacific region and also a large number of airports, the long-term strategy for implementing PBN is to develop inhouse capability for airspace analysis/ design, PBN procedure design, safety assessment and training. India has adopted a collaborative approach, he informed CRUISING HEIGHTS, to develop in-house skills. M/s Mitre Corp from the US has been a strategic partner in this endeavour. The process of development of PBN procedures and implementation framework for Mumbai and Delhi airports was done through the Mitre experts with the active participation and involvement of our own experts with hands-on training. With the implementation of PBN procedures at Mumbai, Delhi and Ahmedabad in August 2008, India became one of the few countries in this region to have successfully implemented PBN. PBN RNAV-1 arrival and departure procedures for Chennai airport have been developed and will be implemented shortly. In compliance with the ICAO Regional Implementation guidelines, a PBN roadmap of India has been prepared. The roadmap provides detailed strategy of PBN implementation in en route, terminal and approach phases of flight.

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IVRCL, a Rs 3,000 crore group, is a name to reckon with in infrastructure, construction and real estate sectors in the country. IVR Prime Urban Developers Limited is a 100 per cent subsidiary of IVRCL and has successfully completed the prestigious Hill Ridge Township at Gatchi Bowli, Hyderabad. Many other projects are in various stages of implementation at Bangalore, Chennai, Hyderabad and Pune.

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

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

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

2, 3 & 4 Bedrooms Appartments with highend specifications

Development of IT SEZ at Sector 144

IVRCL INFRASTRUCTURES & PROJECTS LIMITED

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Officials of the Federal Aviation Administration (FAA), the Department of Transportation (DoT) and the US Trade & Development Agency (USTDA) with the Indian delegation.

had a most useful trip and spent a considerable amount of their time in looking at key operations in New York, Washington and New Jersey. They spent some time at the JFK ATCT (Air Traffic Control Tower) understanding the intricacies of handling operations in one of the busiest airports in the world. They also visited the William J Huges Technical

Center at Atlantic City. The centre offers a wide bouquet of expert services and R&D to airports across the US, including areas like navigation, engineering services, test and evaluation services, surveillance and capacity analysis, airport technology R&D, wildlife mitigation, rescue and firefighting and the unique airport pavement testing facility.

CRUISING HEIGHTS July 2009

In Washington, the other meetings included the Joint Aviation Steering Committee (JASC) Airports Joint Working Group meeting. There are several sub-groups in this including one on air traffic. Amongst the other in-depth meetings held were those on Airport Safety and Standards, Air Traffic Strategy and Air Traffic Technical operations.

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V P Agrawal, Chairman, Airports Authority of India (right) with Randolph Babbitt.

There were detailed discussions on Performance Based Navigation known as GAGAN in India (see box accompanying this story). Chairman Aggarwal said that one of the most satisfying portions of the trip was to the Air Traffic Control System

Command Centre (ATCSCC).This is like a central nervous system for the whole US traffic network and can pinpoint exact delays, both on the ground and in the air. The command system helps the FAA track and manage effectively and efficiently the air space over the US.

CRUISING HEIGHTS July 2009

On a formal level, Secretary Nambiar recalled the steady increase of air traffic between the two countries since the signing of the Open Skies Agreement stimulating the bilateral economic partnership and strengthening people-topeople contacts. The two sides discussed the future direction of the bilateral cooperation and agreed to work towards making ACP more productive for India in its efforts to modernise the civil aviation industry and to meet the challenges of its rapid expansion in terms of safety, technology and communication support and air space management. The Indian delegation held useful meetings with officials of the Federal Aviation Administration (FAA), the Department of Transportation (DoT) and the US Trade and Development Agency (USTDA), apart from site visits. This is the first senior-level official visit from India after the parliamentary elections and reflects the leading role of the civil aviation sector in the commercial and economic relationship between the two countries. Over 2004-07, India imported more than $11 billion worth of aviation-related products from the US.

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R Krishnan

have said many times in the past that Air India is poor but Air Indians are rich. It now seems even Air Indians will become poor if they don’t get paid their wages and Productivity-linked incentives (PLI). True, one should get paid for productivity. In which case, even the organisation in which these productive people are working should be productive, and by definition, should not lose money even if it doesn’t make it. What we are seeing today is that Air Indians are getting higher pay packets after the merger of the two state-owned carriers — Air India and Indian — into one entity National Aviation Company of India Limited (NACIL), but the merged airline, under Brand Air India, has become so poor that it needs at least three billion dollars to bail it out. It may be recalled that back in the early 1980s,

Or else, why should we have two national carriers, after a forced merger, bleeding so badly that an immediate amputation seems the only solution? Can he do it? Does the PM have the guts to do it in a coalition government — though there are many more numbers from the Congress side of the coalition this time around? Perhaps, he will not, for politics sake, which in the first place is also responsible for the sad state of the Maharaja. Forget about dealing with Air India, the government does not even have the guts to implement its ground handling policy, which remains in cold storage despite the cabinet clearing it in early 2008 and also notifying it. This is because some private airlines feel they will be in trouble and will have to retrench personnel, which may not go down well with the government, that had reacted

AI in need of drastic surgery

Forget about dealing with Air India, the government does not even have the guts to implement its ground handling policy… 28

India, under Indira Gandhi as Prime Minister and late President R Venkataraman as Finance Minister, sought loan from the World Bank to the tune of three billion dollars to meet India’s forex crisis. India, as a nation, had to agree to certain conditions imposed by the World Bank. A leading journalist then broke the story saying India had agreed to secret conditions in order to avail of the World Bank loan. it was Indira Gandhi, Chandrasekhar, Manmohan Singh or PV Similarly, in early 1990, Whether Narasimha Rao, each of them, at some time or the other, had to surrender to when former Prime Minister IMF-World Bank diktats in exchange of loans and other facilities. late Chandrasekhar asked his Finance Minister Yashwant Sinha to seek Strucnegatively to retrenchment by private airlines tural Adjustment Loan from IMF-World Bank, soon after the global meltdown hit the aviation India had to agree to certain conditions. That govindustry. Now, if the government is so scared ernment even pledged the gold of RBI. of implementing its own ground handling poliSoon thereafter, the present Prime Minister cy, even if it has been formulated based on Manmohan Singh, who was then Finance Minisconsiderations of the security of the country, ter under late Prime Minister P V Narasimha Rao, will it have the guts to reform Air India? approached the Fund-Bank for some structural The question then is, should the Governadjustment facilities. India had to again agree to a ment of India be bothered about loss of jobs in number of conditions, which included liberalisathe private airlines, which are answerable to a tion of India’s forex market on the current different set of shareholders, or should it be account, besides delicensing of industries, easier more concerned about itself, being the 100 per FDI regime, etc. cent shareholder of Air India? After all, Air At that time, the usual response of Dr ManIndia’s ground handling company in Joint Venmohan Singh to questions on this issue was that ture (JV) with Singapore Airport Terminal Ser‘there are no free lunches’. True, there are no free vices (SATS) —which itself is a separate story luncheons and whatever we had in the past as free — was supposed to be a separate business unit, luncheons have come back to haunt us at present. expected to make profits. But while not impleCRUISING HEIGHTS July 2009

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menting the ground handling policy for fear of loss of jobs in the private airlines, can the UPA Government headed by Prime Minister Dr Manmohan Singh dare to sack employees from the government-owned Air India? It must be stated here that nothing short of a drastic surgery, including large-scale retrenchment, can help Air India. Should the government opt for the not-so-easy option of pay cuts, then the sheer presence of disgruntled Air Indians will prevent efficient Air Indians from performing. Is it not true that one bad fish can spoil the entire pond? Air India, on its part, has set up a committee to work out wage adjustments and cuts to save for itself at least Rs 500 crores annually. This should be insisted upon as a condition for giving any financial assistance to Air India, as after all it is tax-payers’ money which the government may use to rescue Air India. Charity begins at home, and this time it has to begin both from South and North Blocks, which house the Prime Minister’s Office (PMO) and the Finance Ministry. MoCA (Ministry of Civil Aviation) babus created the mess, or at least did not prevent it from being created, and watched the silent near-disintegration of AI. Hence they need to be kept out, for Air India’s sake and not for Air Indians sake. And like India agreed to IMF-World Bank

conditionalities, Air India will have to agree to Government of India’s conditions. India agreed to Fund-Bank conditions even though the FundBank did not own it. Then why cannot the Government of India impose certain conditions on AI, which it does own? As for the option to sell Air India, I can only say that Government should not fall into the trap, as there are some who are waiting like vultures to take over Air India for the price of a song. P.S. At the time of going to press, we received reports about Praful Patel’s meeting with the PMO. Addressing the press after the meeting, Patel said that Air India would submit a monthly progress report about what it has done to come out of the mess and that it would be monitored by a Committee of Secretaries, headed by Cabinet Secretary with Finance Secretary Ashok Chawla and Civil Aviation Secretary Madhavan Nambiar as its members. The moves that Air India is expected to take include a possible downsizing, cut in salaries

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and allowances, etc. The first such report is likely to be submitted after a month. Praful Patel was candid enough to say that there was no question of any divestment or privatisation of Air India based on its present balance sheet. In this context, I would like to recall what happened in Air India. More than two-and-ahalf years ago, during a visit to the Air India headquarters at Nariman Point in Mumbai, before the merger of Air India and Indian into NACIL became a reality, Jitendra Bhargava, at present Executive Director, Corporate Communications, had told me: “The writing on the wall is very clear. Air India finances are in such a mess that it will go under anytime.” He had earlier written a letter to the then AI CMD V Thulasidas that the way Air India was signing agreements with various sections of its employees/ officials based on productivity had actually corroded the organisation from within, because the agreed quantum of productivity was never delivered even though Air India was making higher pay-outs. The Air Corporation Employees Union (ACEU) has now stated that nearly 80 per cent of the carrier’s employees get only 30 per cent of Air India’s total wage bill. It may be recalled that in 2000, a presentation made by then management of Air India showed that nearly 18 per cent of its employees, which mainly included the pilots, flight engineers, ground engineers, etc, together were polishing off 45 per cent of Air India wage bill. Today, pilots, engineers, etc from Indian have also joined the Air India pilots and engineers. That, in a way, is a double whammy for the Maharaja. Significantly, Thulasidas agreed with what Bhargava wrote and reportedly recorded his comments on the letter as “Agree”. In yet another such instance, the former Director Finance of Air India, Suresh Punhani had refused to sign certain wage agreements with sections of Air India employees. These were signed only after he retired in September 2007 from NACIL. God alone knows how many such agreements have been signed in Air India. Even after knowing that such things had happened, why did the Air India management continue to dole out money when it was not making any? Secondly, why did it not monitor any of the productivity clauses when making huge pay-offs to its already fattened employees, mainly the pilots, engineers and cabin crew? Most important of all, the blows were delivered from the Ministry of Civil Aviation itself which went about distributing bilateral rights to foreign carriers, mainly airlines from the Gulf. (Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.) CRUISING HEIGHTS July 2009

Like India agreed to IMF-World Bank conditionalities, Air India will have to agree to Government of India’s conditions 29

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iovanni Bisignani is the sort of feisty, straight from the hip kind of Sherriff that the International Air Transport Industry (IATA) needs at this point in time. Airlines worldwide are reeling under huge losses and there seems no light at the end of the tunnel. And as Bisignani waved the red flag and launched a tirade against governments and airports for causing pain to his members, there was a general sense of hope that maybe this time next year, things would have changed for the better. But at this Annual General Meeting, the 65th in IATA’s chequered history, it was a litany of complaints against airports, governments, travel agents and who have you. Perhaps many of the complaints are fair and just, even as some are questionable. As Bisignani himself admitted, aircraft ordered when the industry was on a high are now being delivered, when the industry is in recession. Two of India’s top airline superstars — Jet Airways’ Naresh Goyal and Kingfisher’s Vijay Mallya — strutted around Bisignani when he visited India three years back. They just couldn’t have enough of him. Both ordered big fleets and both are caught severely in the recession and both have leased out their aircraft. In fact, Mallya didn’t even pick them from Tolouse, he sold them outright.

A SHAMEFUL

STATE OF AFFAIRS! The 65th Annual General Meeting and World Transport Summit in Kuala Lumpur saw a critical and vocal Giovanni Bisignani, IATA CEO, demanding a major re-sizing and reshaping of the entire air transport value chain. Asking governments and all stakeholders to use the present crisis as an opportunity to build a stronger industry, the IATA chief blamed airports, governments, travel agents, etc. for not supporting airlines in this hour of crisis. A report. 30

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So, if airports prepared to receive these aircraft are suddenly told that the airlines have reduced their flights and are shelving plans for the next 12 months and are in fact leasing out their existing aircraft, where are airports to go with the infrastructure? Surely they can’t lease it out to somebody in Timbactoo? Both Delhi and Mumbai airports are strongly contesting Bisignani’s claim that they are part of the Wall of Shame. If anything, they say they have been dynamic and flexible in dealing with the airlines (see story in News Digest). Interestingly, two other CEOs — JetBlue Airways’ president and CEO Dave Barger and Qantas Group CEO Alan Joyce — profusely thanked aircraft manufacturers Airbus, Boeing and Embraer “for being so accommodating to these required changes.” Part of JetBlue’s cost-control measures is the deferral of aircraft deliveries. “We planned to take 36 aircraft this

Courtesy: Daylife.com

1. Senior Vice President of International Air Transport Association (IATA) Thomas Windmuller (L) shakes hands with Malaysian Prime Minister Najib Razak at the 65th IATA Annual General Meeting in Kuala Lumpur, Malaysia, on June 8, 2009; 2. Managing Director and CEO of Malaysia Airports Holdings Berhad Bashir Ahmad (L) receives the Eagle Award for Best Airport from Bisignani; 3. Lim Kim Choon (L), Director General & CEO of Civil Aviation Authority of Singapore (CAAS), receives the Eagle Awards of the Best Air Navigation Service Providers; 4. (L-R) IATA Senior Vice President Thomas Windmueller, Chief Executive of Malaysia Airlines System Idris Jala and Giovanni Bisignani, listen during the IATA Annual General Meeting; 5. Japan Airlines CEO Haruka Nishimatsu listens to a question from a journalist; and, 6. American Airlines Chairman and Chief Executive Gerard Arpey sits during the Oneworld Alliance media briefing on the sidelines of the Meeting.

If airports prepared to receive these (new) aircraft are suddenly told that the airlines have reduced their flights…where are (they) to go with the infrastructure? CRUISING HEIGHTS July 2009

year, but we will now only be taking nine. And we planned to take another 36 next year, but we will only be taking three,” Barger explained. He added his thanks to Airbus and Embraer. Joyce, on his part, thanked Airbus and Boeing for their help in delaying deliveries for both his airlines, Qantas and Jetstar. Joyce, who was CEO of Jetstar before his elevation to his current role, highlighted staff retention as a vital element to get through the crisis. “It might be less costly in the short term to let someone go, but in the long term, keeping hold of high quality personnel will pay dividends. What’s more, you’ll have the key people in place when the upturn comes for the company to take the best advantage.” Anyway, to get back to Kuala Lumpur (Incidentally, host Idris Jala of Malaysian Airlines has been a remarkable CEO who has completely turned around the airline and raked in record profits), CEOs from around the world were optimistic that things

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SPECIAL REPORT

SOME MORE BASTA! Last year Giovanni Bisignani said Basta, and the year before too he said Basta. It was no different this year. It was another generous helping of Basta!

umbers can tell powerful stories. $10.4 billion is the amount we lost last year. The ground shifted and our industry was shaken. Skyrocketing oil prices dominated the first half of 2008. Global recession was the story of the second half. 2009 will also see massive shifts. We expect the industry fuel bill to fall by $59 billion. But rising oil prices anticipating recovery are a great risk. Greedy speculation must not hold the global economy hostage. Failure to act by governments would be irresponsible. On top of this, an even bigger negative number is on the horizon: $80 billion .That is the total revenue that will disappear with falling demand, collapsing yields, broken consumer confidence, and pandemic fears. The landscape is harsh. Airlines will lose $9 billion this year. How long must we travel the desert of global recession? There is no modern precedent for today’s economic meltdown. Cargo remains a good leading indicator. Its 23 per cent freefall in December was a clear sign that the global economy was collapsing. It has been stable at that level for five months.

This may be the bottom but recovery is difficult. Banks are still not able to finance business. $1 trillion is still needed to re-capitalise. Our customers don’t have confidence. They need to reduce debt, and that means less cash to spend. Business habits are changing and corporate travel budgets have been slashed. Video conferencing is now a stronger competitor. Optimists see growth by the end of the year, but pessimists view this as a mirage and expect an L-shaped recovery. I am a realist. I don’t see facts to support optimism. Our industry is in survival mode. Whether this crisis is long or short, the world is changing. Even if we try to look beyond the crisis, we must recognise that it will not be business as usual. We must also fight to adapt our businesses. We are a resilient industry as a result of our ability to change. Some amazing numbers quantify our achievements over the last decade. We have seen a 71 per cent increase in labour productivity, a 20 per cent gain in fuel efficiency, and a 7-point improvement in load factors. Despite these great achieve-

would improve. Providing a view of the crisis from the airport side of the fence was Jim Cherry, President and CEO of Aéroports de Montréal and Chairman of the Airports Council International (ACI) World Governing Body. Advocating greater dialogue between airlines and airports, Cherry chose to quote President John F Kennedy, who, addressing the Canadian Parliament in 1961 during a low ebb in relations between the US and Canada, stated, “Geography has made us neighbours. History has made us friends. Economics has made us partners. And necessity has made us allies. Those whom nature hath so joined together, let no man put asunder. What unites us is far greater than what divides us.” “If ever there was an industry for which those sentiments are appropriate, it is this one,” Cherry declared.

IATA Chief Executive Giovanni Bisignani (right) chats with Jet Airways Chairman Naresh Goyal, (left) while Singapore’s former Prime Minister Lee Kuan Yew (centre) looks on.

CRUISING HEIGHTS July 2009

ments, we are now in survival mode. Without compromising safety, security or environmental responsibility, conserving cash and cutting costs are at the top of the agenda. We don’t need a fortune teller or a magician to know that the assumptions of our past are no longer valid. After September 11, 2001, revenues fell by 7 per cent. Almost immediately, we returned to growth that was fueled by strong economies. This time, we face a 15 per cent drop with a global recession. It’s a different world. Our future depends on drastic resizing and reshaping by governments, partners and airlines to be even safer, greener and profitable. Already some strategies are clear: Cash is king. Industry debt is high at $170 billion. But some of this has bought a $70 billion cash cushion that helped us avoid major bankruptcies. Partners help. Major mergers — KLM-Air France, Lufthansa-Swiss, Delta-Northwest, JAL-JAS, Cathay Pacific-Dragonair — created stronger competitors. Manage capacity. Our US colleagues cut quickly. As a result they are

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stronger. But international load factors are down 3 points. Each airline must make its own decision, but we must all better match capacity to falling demand. Remember history. Once again, aircraft ordered in good times are being delivered in recession. About 4,000 aircraft are scheduled for delivery over the next three years, which is 17 per cent of the current fleet. Finding customers to fill them profitably will be a challenge. There are many other challenges. Using them as opportunities, we must move the industry forward. For labour, we cannot reshape without flexibility. This is not the time for salary increases. To protect jobs, we must modernise work practices and we must all do more with less. For our 60,000 travel agents, the clock cannot be turned back. Travel is more accessible than ever in price and purchase options. To survive in the global online market you need to reshape your services and your business models to provide greater value that travellers are willing to pay for. Airlines expect the same from all suppliers and manufacturers. They must reshape their products to reduce their costs and ours. Look at the global distribution systems. We cannot accept that those in the West charge around $4 per transaction when China TravelSky does the same job for $0.50. This must change. Now let me spend some time on one of my special subjects. Eleven per cent

Overall, the industry took a few remarkable positive steps: Two years ago, IATA set a vision to achieve carbon-neutral growth. They took a major step forward by committing to a global cap on emissions in 2020. After this date, aviation’s emissions will not grow even as demand increases. The commitment to carbon-neutral growth completes a set of three sequential goals for air transport: (1) a 1.5 per cent average annual improvement in fuel efficiency from 2009 to 2020; (2) carbon-neutral growth from 2020 and (3) a 50 per cent absolute reduction in carbon emissions by 2050. IATA also honoured Singapore’s Minister Mentor Lee Kuan Yew with its Global Aviation Leadership Award (GALA). The IATA GALA was established in 2002 to commemorate the 100th anniversary of the Wright Brothers’ first flight. It is given to outstanding

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Giovanni Bisignani

of your revenues goes to monopoly suppliers. Airlines pay over $54 billion to airports and air navigation service providers. Some are sharing the burden of change. To name just two in this region, Malaysia Airports reduced charges by 50 per cent for two years and Singapore reduced charges by 25 per cent. The growing list of partners delivering good results includes the air traffic

Both Delhi and Mumbai airports are strongly contesting Bisignani’s claim that they are part of the Wall of Shame CRUISING HEIGHTS July 2009

control providers for Ireland, Bulgaria, and Vietnam, and airports in Dallas/Fort Worth, Geneva and Thailand. These helped us achieve cost savings of $357 million last year. But now, my special subject becomes your nightmare. The bill that you paid to happy monopoly suppliers grew by $1.5 billion last year. In the first six months of 2009, as the industry crisis worsened, it grew by another $1.5 billion. For the worst contributors to this increase, we have a special place on the IATA Wall of Shame: BAA and the UK CAA for London Heathrow’s 86 per cent increase Delhi and Mumbai airports for their 207 per cent increase Quiport in Ecuador for its 79 per cent increase ATNS (South Africa) for proposing a 44 per cent increase The Eurocontrol States of Denmark, The Netherlands and Poland for proposing charges increases between 27 per cent and 32 per cent. What can I say? BASTA (Enough)! There is no room for this nonsense in our future. When demand drops, suppliers cannot divide the same costs among fewer customers. The shape of everything must change. This includes the comfortable position of our happy monopoly suppliers. I invite all of you to join me in a strong declaration from Kuala Lumpur to all of our partners contemplating increases. Once more, BASTA!

individuals for exceptional contributions that have helped shape air transport. “Minister Mentor Lee’s unique vision and leadership founded one of our industry’s strongest carriers and most efficient airports. This became a shining example of how aviation — with effective government policies — has played an important role in building the foundations of a country respected for its efficiency and economic achievements. To Minister Mentor Lee, operating an airline just to show the flag on the tail was not an option. The airline had to be competitive and self-supporting or be shut down. This has shaped Singapore Airlines into a commercial success without government assistance,” said Bisignani. Amongst the other interesting events was the Eagle awards, an IATA ritual to honour airports and air navigation service providers (ANSPs). No surprises that Kuala Lumpur won the best airport award.

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COVER STORY

An Emperor without his clothes The Indian aviation industry is in the midst of a churning. Consolidation, expansion, transparency, revival, divestment — there is talk of all this and more as airlines and aviation bodies try to come to terms with the changing scenario in the industry, within and outside India. And at the centre of this churning are men who will transform the aviation industry of this country — for the better or for the worse. This is the story of three of India’s top aviation industry bosses. One is Arvind Jadhav, the CMD of Air India, which he is struggling hard to save and to keep afloat amid mounting losses. The other is Paramount MD M Thiagarajan, who, interestingly, is following the contrarian line by going into a major expansion mode even in these negative times. And the third is the Director General of DGCA, Naseem Zaidi, whose priority, at the moment, seems to be to put his house in order, beginning with the introduction of more openness and more transparency in the much-criticised body that he heads. Let’s begin with Air India, which, says R Krishnan, seems caught in a situation where it is unlikely to find any takers, even if the Government of India were to decide to sell off the loss-making airline.

ir India used to make a profit of one crore rupees a day in 1991-92. Those were the days when Air India, for the first time, was headed by a CEO from outside both Air India and Babudom. That CEO left office within a couple of years of the Harshad Mehta stock scam coincidentally hitting the scene, in which some PSUs were hauled up for unsolicited portfolio investment leading to some losses. This outside CEO set the ground rules for professional management before he got caught in the famous Air India web and thought it better to return to the corporate world. Soon, the appointment of IAS babus began once again, to steer Air India into “trouble”, as they had been doing, with some exceptions, before and later. That is not to suggest that every babu mismanaged, but some of them certainly did, as it was purely a most comfortable sinecure, with the shareholder (Government of India) himself allowing the pleasure posting. The situation has become so serious today that Air India’s unpaid overdraft taken for paying salaries and working capital expenses has exceeded Rs 16,000 crore, and its losses on books, notwithstanding all window dressing (including taking benefit of

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advance sale of tickets), has nearly reached Rs 5,000 crore in fiscal 2008-09. What will happen in the current fiscal 2009-10 is known to everyone, but nobody would want to guess as there is still a great debate going on within and outside the government about the gravity of the problem. The babus in the Ministry of Civil Aviation want the Maharaja to wear new clothes, and if possible, prior to that wear no clothes at all so that a total inspection of Air India can be undertaken to help in arriving at the truth and the bankruptcy claims. What is totally perplexing is the strong recommendation earlier to merge the two loss-making state-owned carriers Air India and Indian, which made a combined loss of Rs 750 crore in the first year of their unholy union, which has risen to nearly Rs 5,000 crore in the third year. This is not to suggest that had they been separate they would have been better off. The merger of Air India and India has rewritten the famous slogan — ‘United we stand, Divided we fall’. After two years of merger, it can now be: ‘Divided we fell, United too we fall’! Following the famous Accenture advertisement (Incidentally, it was Accenture which had won the mandate to complete the merger of Air India and Indian, and even offered to do hand-holding operations for the next two years before the merged entity was fit to take off on its own), where we see

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the golf clubs of the famous Tiger Woods being consumed by the crocodile, Air Indians have consumed Air India, with considerable help and expertise of Accenture! It is no wonder that the babus, their netas, and even Air India management feels that Air India cannot afford to pay the socalled productivity-linked incentive payment when there is no productivity at all, either at the level of the staff or at the level of flight operations. True, it may be argued that during the present difficult economic situation, everyone is making losses and Air India cannot be an exception. But is SIA not making profits, albeit reduced? And there are others as well who are making some money. But a majority airlines, both domestic and foreign, are making losses, and in line with that, have also responded by staff retrenchment, cost cutting, pay cuts, allowance cuts etc. Air India, even when it was making only marginal profits (in 1994-95), introduced the famous ‘fly less, earn more’ (FLEM) system where the senior pilots’ earnings were protected and could not go below that of juniors, should the latter fly more and earn more than the seniors. Since the seniors had to do executive duties, they could not fly more. Therefore, a system was evolved under which the seniors were compensated for not

flying, and were paid equivalent to the amount their juniors flew or logged flying hours. As for the non-flying staff, including the cabin crew, since Air India and Indian management could not arrive at a wage settlement, it was decided that there should be a system of Productivity-linked incentives (PLI) which compensated the airline employees more than their base pay as protection of wages. Though, in principle, this system was reportedly a replacement of wage agreement till such time that the agreement was signed, the fact that PLI began to drive employees and not their wages clearly suggested that Air India and India had got into a totally lopsided deal which benefited only the employees and not the airline. Today, a merged Air India’s total wage CRUISING HEIGHTS July 2009

bill is nearly Rs 3,500 crore and it also has to pay an additional Rs 4,500 crore towards lease rentals and insurance, besides fuel etc. Its expenditure is thus far above what it earns. Is it, then, any wonder that Air India is permanently grounded? The FLEM-led PLI spelled the worst disaster for Air India and Indian separately and together after merger. Often in the past, the press wrote that such a system would kill Air India completely, but none listened and the babus inside and outside AI were not bothered. Today, the babu tribe says Air Indians wages should be cut, and PLI even more drastically sliced. The AI employees may not accept a wage cut, especially after a bankrupt government, in terms of high fiscal deficits, has started giving out high salary hikes to central government employees, armed forces, other PSU staff etc. Being a 100 per cent owner of Air India, the Government of India must face the problem head-on. It cannot say that Jet Airways should not retrench staff and force its owner Naresh Goyal to address a press conference announcing the withdrawal of the retrenchment order, and then recommend the same for its own employees, though informally, through the media. Air India CMD Arvind Jadhav has expressed the possibility of looking at various other options to save money. In an impassioned letter, the CMD exhorted Air Indians to rise to the challenge and make Air India fly again. He reminded the employees that they had not felt the impact of problems confronting the aviation industry — thus far — because they had been receiving their wages/salary and PLI, month after month, even when people in the industry in the country and abroad had lost jobs or seen their emoluments take a dip. “We should therefore consider ourselves fortunate that we have been insulated from the adverse impact of the economic meltdown so far,” he told them, giving examples of international carriers like Singapore Airlines, Delta and others. “The time has come for us to face the moment of truth in Air India,” he wrote. The CMD went on to state that loans from financial institutions at high rates of interest could not be availed of endlessly to meet working capital expenditure. Hence, the carrier had approached the government, as the owners of the airline, for infusion of funds both by way of equity and soft loans. “This is an hour of crisis for all of us. It is a fight for survival. The survival of our own airline. I am looking for every single employee of our airline to rise to the challenge and demonstrate that we not only have more experience in running an airline as compared to others, but also have the ability to overcome the crisis and emerge

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COVER STORY with flying colours. The experience and commitment to the company will be of no gain, if we cannot demonstrate this. We have to show our critics that all of us can make Air India fly high again!” he wrote. One can only hope that the employees listen to his pleas. Other than that, the CMD has started looking at rescheduling of the planes ordered by Air India. The carrier is going to receive seven Boeing 777s, both 300 ERs and 200 LRs, for its long-haul operations. These will begin to arrive from the second week of July ‘09. Meanwhile, Air India has also finalised, separately, its agreement with IDBI for one billion dollar loan syndication to finance the purchase of some Airbus A321, 320 and 319 aircraft from Airbus Industrie as a follow-up of the pre-merger agreement signed by Indian. Last month, Air India also finalised yet another deal with J P Morgan (85 per cent) and StanChart (15 per cent) for nearly $2 billion loan syndication for financing the purchase and deliveries of the remaining Boeing 777s. The exercise for Boeing 787 Dreamliners is yet to begin as the manufacturer itself is yet to test flight it. According to Air India officials, the delay in delivery of B787s has certainly come as a blessing in disguise for Air India, as it not only promises a compensation payment for each of the delayed delivery of 787s but also postponement of India’s own misery in acquiring aircraft with no place to fly them. But there is a serious danger in postponement of taking delivery of 787s, as it would mean Air India will have to forego compensation, which is more than the lease rental equivalent of what one pays for a leased wide-bodied aircraft! So, Air India is now faced with the Hobson’s choice. In any case, a strike by employees in response to their delayed salary payment at lower levels, and an unannounced go-slow by senior executives in response to no salary for July ‘09 could worsen things further. So what can Air India do? Many things. For one, it can simply close down in order to cut costs, as all its plans announced so far have more to do with cost cutting than any revenue generation plan. To cite a personal example, flying by a LCC to Chennai recently, on tickets purchased about six days in advance, worked out to Rs 3,000 cheaper than what it would have cost to pay for Air India domestic flight. Interestingly, the LCC (SpiceJet) sold meal packets for Rs 130 on board. Indian (oops Air India), on the other hand, offers only standard fare like sandwiches, either on post-breakfast flights or evening pre-dinner flights. Even flying on mileage points would have cost more on Air India than what one

had to pay to the LCC concerned for a very comfortable flight. What one does not understand: Is Air India flying for the benefit of only Air Indians, who in any case are earning more while Air India is earning nothing? The situation of the organisation (Air India) earning less than its employees could obviously not be sustained for all times. So, the new CMD, acting very unbabu-like despite being a babu, has shown employees the empty purse and asked them to sacrifice for the sake of Air India. In a personal message to the employees, as publicised by AI’s PR department, Jadhav referred to edits written in two dailies — Times of India and Business Standard — which advised the government to divest / privatise Air India. On November 1, 1998, on a return trip from Bangalore as it was then called, then Prime Minister Atal Bihari Vajpayee, in response to a query, “Air India ka maamla bada gambhir hai. Kuchh karna hoga.” Vajpayee followed up on this in his second innings from September 1999 with an elaborate plan to disinvest Air India totally in favour of private companies. Many bids, including from the TATASIA combine, were received. At the end of it all, only TATA-SIA combine remained on the scene to buy out Air India. As part of the discussions with the government, Ratan Tata said the government must guarantee that it will not grant any new bilaterals to any foreign carriers (those were the days when there was no home-grown foreigngoing domestic carriers), and that Air India’s bilateral rights will be protected for seven years. However, the plan fell through as, for reasons best known to the Congress government that came thereafter, its allies saw to it that Air India was “saved” from disinvestment, only to see that it now needs three billion dollars in aid for survival. Ironically, the same Congress-led UPA government actually went around, left, right and centre, granting bilaterals to many airlines, such as Emirates, Etihad, besides SIA, BA, Lufthansa, Air France etc. This was also done to accommodate new

What is the guarantee that Air India will begin to fly successfully again and make money for its new owners...? CRUISING HEIGHTS July 2009

entrants like Jet Airways and later Kingfisher. Soon, in fact, it will have to enter into more bilaterals to accommodate the likes of SpiceJet and IndiGo, should they also complete the five-year rule. After all, the government cannot backtrack from implementing its own cabinet decision, taken on December 24, 2004, by which the domestic carriers were allowed to fly foreign routes if they completed five years of continuous domestic flights. Six years after the decision was taken, Air India CMD Arvind Jadhav has now raised the bogey of possible divestment / privatisation of Air India and has appealed to its employees to show to the world that they know more about aviation and running an airline than anyone else in India. Frankly, had this been true they would, all this while, have been running Air India much more professionally, and to better results, than they have actually done. In fact, instead of running the airline professionally, they have ensured that all high-end and middle-end Indian passengers run away from Air India, as is evident from its shrinking market share. The question now is, if it is to be sold outright, then who will buy Air India? It has no USP and its bilaterals are worth nothing as Jet and Kingfisher also possess the same, with further possibility of SpiceJet, IndiGo and Paramount also getting rights to the same destinations. There is no way the Ministry of Civil Aviation can ignore the rights of these airlines, irrespective of whether they would want to fly or not. The only asset that Air India has is its properties at Nariman Point in Mumbai and in some other cities. In any case, to a potential buyer of Air India, neither planes nor the staff are of importance. As for the land, only the Nariman Point building is of some significance. And with no exclusive bilaterals, let’s see the government try to sell Air India! We are sure it will get bids from Emirates and SIA, which want to fly direct from India to long-haul destinations in the US and Far East, which they are unable to tap now as they have to fly to India first and then back to their home base before flying to these long-haul points. But it is very unlikely that they will pay a billion dollars to a bankrupt airline which owes three billions to banks and others in terms of working capital loans, as well as the loans it has taken for financing its brand new fleet. More than anything, what is the guarantee that Air India will begin to fly successfully again and make money for its new owners when even the present owners believe that it cannot? Otherwise, why should anyone even entertain the thought of selling the Maharaja, even if he is not wear ing any clothes — new or old?

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All in the open now! DGCA Director General Naseem Zaidi is a man in search of more openness, more transparency and better public interface for the Authority. He talks to R Krishnan and K Srinivasan about his plans to improve things in the DGCA, beginning with the recently introduced open house concept.

Q A

: You have recently started the open house concept at the DGCA. Why open house? : In my visits to various sections, I noticed that on any afternoon, 200300 persons are present, and they are not being very satisfactorily attended to, and end up running from pillar to post. So then I thought, let me hold open house where I will have officers from medical, licensing, flying clubs, flight inspection and administration. Also, when 200-300 persons come, they overcrowd our already congested offices. So work is affected, productivity is affected. And then I got the sense that I need to talk to them in an open fashion, and I also need to reorient my officers in dealing with people because, after all, the public is our most important client. Therefore, I decided that now is the time to hold this open meeting with visitors, two days in a week (Monday and Thursday — 3.304.30 p.m.), where we will hear all the visitors and their grievances will be registered. On the spot solutions, wherever possible, will be given and wherever it requires seeing files, they will be given a particular date when they will come for the resolution of their grievance. Secondly, we will act as friend, philosopher and guide to advise the youngsters and whoever is coming with their problem. And thirdly, there is a big issue of ready documents to be sent to pilots because sometimes they don’t get it on time and sometimes they are given to understand that they have to come and collect it themselves and all these undesirable things happen. Friend, Philosopher and Guide? That’s the last thing the DGCA has been so far! It’s the very anti-thesis of that! I have to keep my fingers on the public pulse, that includes noticing the orientation of my officers. Today, in the open house, many officers followed what I had in my mind. So they definitely showed CRUISING HEIGHTS July 2009

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COVER STORY positive signs. I think we will gradually go to that system. It is just the beginning. All this is fine as far as these issues are concerned. What about airlines, how are you going to deal with them? Commercial issues are involved. What I can emphasise is that my civil aviation requirements (CAR) are available on my website in a transparent manner. I will work within that framework. But at the same time, if our civil aviation requirements require tuning, to keep abreast with the modern developments, the technological developments and various other developments in the sector, the process will be reviewed in a transparent manner. And towards this end, I have set up a group called Aviation Regulation Advisory Panel under my Chairmanship, where I have invited all the representatives of the industry to nominate their personnel.

‘If our civil aviation requirements require tuning…the process will be reviewed in a transparent manner’

affect the financial viability of the airlines covering longer routes, burning fuel etc. Therefore, when we have to take a decision, we have to take a very balanced look. I think this will have to be considered by all concerned. I alone probably can be just one of the participants. The point I was going to make is that we will probably have to look at the practices that are being adopted in far more nuclear advanced countries, which are also major players in aviation (industry). How have they evolved and addressed such issues? At this point in time, the government as a whole will have to look at such practices. The DGCA has a personnel problem. In fact, the Minister did acknowledge it the other day, although he claimed that it wasn’t the regulator’s fault if it didn’t get enough people. My question, though, is why was it allowed to happen anyway? You had two parts in your question. First, why did it happen? I think if you can spare me the response to the first part, I can respond to what I have to deal with. It is true that there were ICAO findings that the DGCA should be adequately staffed. This is what FAA is also saying — that you are understaffed, you should be

What are the issues that airlines face where there is a perception that DGCA is for one and not for another, and smacks of favouritism? I will comment on this only when I have suggestions. What has provoked me is that I have been getting general feedback from the industry that our regulations were framed in the early part of the de-regulation regime (early 1992), and since then a lot of water has flown … Though there has been slight tinkering here and there, there has not been any one-time serious effort to recast it. India is strategically placed between Europe and Southeast Asia. Are there any plans to enhance route capability from nofly zones to fly zones to add to the revenue potential? There are very few no-fly zones in the country, the most recently added was Kalapakkam.

Photos: H.C. Tiwari

With the nuclear deal, when new plants are set up, you may have more no-fly zones. How do you deal with that? We keep receiving requests for having more and more no-fly zones in the country. We have received from Petroleum Ministry — no flying above the refineries; we have received from Defence (Ministry) and also some religious places. While we have the security and defence of the country supreme (in our minds), we also have to have consideration for the international civil aviation operations because, as you said, strategically located means a large number of international routes are flying. So if you have many of such zones, you will have kinks in the international routes, which will lead to inefficiency. This will

ALL SET TO ROLL: At the launch of Deccan 360, Capt. Gopinath (second from left) poses with Aviation Secretary Madhavan Nambiar and Naseem Zaidi (third and fourth from left) inside a freighter.

CRUISING HEIGHTS July 2009

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adequately staffed, particularly in the area of surveillance. It is also true that there are no established international norms on what should be the ideal number. Each nation has to judge its own number. We had the Kao committee that examined everything and came up with a number. They have done a very good job. And they have said that the DGCA, over a time frame, should have 700 staff to deal with the regulatory issues in a satisfactory manner. So it took its own time to be addressed, and following the ICAO audit and FAA insistence, we have, in the past few months, very vigorously pursued things on this front. Vigorously pursued means, in the first week of April a meeting was held at the level of the PM’s office. We posed the problem and we (Ministry and DGCA) said we have a great threat of being downgraded. I must say — all the ministries were there — the PMO cleared all our outstanding demands in terms of manpower. All positions, all revival cleared at one go across the table. What was your requirement? Creation of 431 technical officers’ positions, besides revival of another 130 odd. So all this was approved for creation and revival. And with the existing strength, I will now have the full complement of people that you will need. This is a budgetary allocation. Creation and approval is one thing, now filling up is another big challenge…it is a time-bound action plan. In consultation with the ministry, I have prepared an action plan and we are dealing with it in a very systematic manner. I have set up a group because a large number of these positions are new — Aerodrome Directorate, Air Navigation Directorate, Space Management Directorate — all these new positions are coming, so I have hired ex-DGCA DG Kola and one more officer to review the recruitment rules and frame the new recruitment rules. Mr Kola will give me a report on June 30. So our recruitment rules, laying down own qualifications, competency, skills, experience which are expected of DGCA personnel in current times, will be matched. Secondly, one of the weakest areas is FID (Flight Inspection Directorate). So very soon, I will have appointments of 12 new inspectors — full-time government employees. Thirdly, for the revived positions which the government has approved, recruitment will take its own time. So I am going to hire about 75 consultants (retired and working) to fill the gaps of those technical positions. Then we are launching a special drive to provide promotions on the new positions, requisitions to UPSC, and we have done the

phasing also. So I think the process is on. We would have 700 people in the next one to two years. Another area I am focusing on is that I must de-centralise. Because new positions have come and I will have a dozen Deputy DGs, I want to strengthen five regional offices. Full-time Deputy DGs will head these regional offices. He will have an Air Worthiness Directorate, he will have an Operations Department and one on Air Safety. And all matters of day-to-day routine, lower level matters for which people come to the headquarters, will be attended to by the regions. Recently, I have done de-centralisation like endorsement of permit and several others like ETOPS… everything has been delegated to regional offices. Right now, these offices are headed by Directors. Plus, I have given financial de-centralisation. I was receiving files for Rs 1,000Rs 2,000! Coupled with that, I have sought further delegation to DGCA itself at a higher level... I have asked for higher level of delegation. So once I receive it, I will delegate more to my regional offices. I have started with a limit of Rs 1 crore. In the current time, that is okay. That will serve our purpose. To run this organisation, I think the budget is Rs 22 crores. This will be immediately doubled with the proposed increase in staff etc.

‘Creation and approval (of staff posts) is one thing, now filling up is another big challenge…it is a time-bound action plan. In consultation with the ministry, I have prepared an action plan and we are dealing with it in a very systematic manner’ CRUISING HEIGHTS July 2009

What about turning DGCA into an Authority? ICAO policy worldwide is to promote financially and administratively autonomous civil aviation authorities. A large number of countries have set up civil aviation authorities. Even in our neighbourhood we have civil aviation authorities. One, it gives you financial autonomy, administrative autonomy and in some countries, where you have so-called interference, that is also taken care of. So far, somehow, this view has not prevailed over here. Taking the cue from ICAO assembly resolution and trends internationally, this has now been approved (by the government). We have already assigned this study to ICAO….a feasibility study for setting up the office of civil aviation authority in India. This study should be available to us by the end of the year. You have started publicising on-time performance. What action are you taking at the ground level? We are examining the bottlenecks — bottlenecks that are airport operator related, ATC related. Constraints which can impact the on-time performance. There is a task force set up here and we are meeting with all airlines and all operators.

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COVER STORY The young 31-year-old M Thiagarajan, promoter of Paramount Airways, has every reason to be proud of his airline. By achieving the top on-time performance of 89 per cent among all domestic carriers, and with high load factors, he has said so much without really saying so — that his nearly fouryear-old domestic airline Paramount Airways has arrived. Powered by five 70-odd seater Embraer jets, Paramount has now stepped out of its home in Chennai and launched flights to Delhi, Mumbai and Kolkata, besides smaller towns in these regions. The calibrated growth path which Thiagarajan has chosen seems to confirm his own gut feeling — that slow and steady indeed wins the race but not necessarily in the LCC mode. For instance, he does not believe in the LCC model, and says you don’t gain anything by not serving meals. In fact you will gain everything by serving it. In his own planes, he has introduced the concept of ‘no middle seats’, and all of them are either First or Business class, giving full elbow freedom to every one of his passengers. He also has four cabin crew to attend to these 70 passengers, the highest cabin crew to passenger ratio among any Indian carrier. The five Embraer 170/175 family aircraft in service with Paramount operate 52 flights daily in direct services,

Paramount MD M Thiagarajan poses with one of his Embraers. At the recent Paris Air Show, Paramount booked 10 Airbus A321s, which he will use for flghts abroad.

which include connecting primary metros across the country. The aircraft also have three spacious galleys that provide enough room for preparing and serving a full four course gourmet meal on board. Ahead of its flying international routes on completion of five-year domestic operations in October 2010, Paramount has signed a MoU with Airbus Industrie for acquiring 10 Airbus A321s. It signed this MoU at the recently concluded Air Show in Paris. We understand one of the reasons for signing up with Airbus Industrie was its offer to finance 100 per cent the acquisition cost of the 10 A321s, which Paramount wants to use for its Gulf and South East Asia operations. Boeing refused to offer such a deal to Paramount, even though Thiagarajan was believed to have discussed the possibility of a similar deal for Boeing 737-900. With the international aviation market not likely to come out of the woods soon, it is not known how and when Paramount will fly the Gulf and South East Asian routes, where there is huge competition. It is one thing to fly with a fleet of five aircraft and quite another to fly with a fleet of over 25 aircraft that may include both Embraers and Airbus A320 family aircraft (A321 in this case). We have heard Naresh Goyal telling his close confidants that he was a very happy man with a smaller fleet and his problems multiplied as his fleet size increased at a time when global economic crisis hit the scene. Moreover, if the government decides to extend a uniform 4 per cent sales tax to sale of ATF domestically, irrespective of the size of the aircraft, then one wonders what kind of competition will Paramount face? In any case, we wish Thiagarajan all the best in his expansion plans.

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No short-cuts, please! M Thiagarajan does not believe in short-cuts. As he told R Krishnan and K Srinivasan, “What we believe in is managed growth, not explosive growth.” It’s a philosophy that has yielded rich dividends for his airline, as it takes a big leap in its strategy to become pan-India.

Q A

airport gives you that opulence which goes very well with the product positioning of what we are trying to do. So I guess that is what made us come to Delhi.

: How have you come to Delhi? : It is part of our strategy to become pan-India. After having saturated and dominated the south — we have the highest load factor in the country, highest market share in the south — the next logical step for expansion was to look from the point of view of the southern traveller. We found that they wanted to go to Kolkata, Mumbai, Delhi and a couple of other destinations. So we first started with western India. We went into Goa, Pune, Ahmedabad. People from Cochin, Coimbatore and Thiruvananthapuram wanted to travel to these cities (but) they had very bad connectivity. They also wanted to go to Kolkata and the Northeast. They did a lot of travel between Chennai and Guwahati, even from Cochin and other places as a matter of fact. So we extended flight services to that region, and finally into Delhi as well. So, this way we could cater to the requirements of the people of the south more holistically. We have a new terminal 1D, which also matches the aspirations of a person wanting to fly back home. The

What next? The next logical course of expansion in our ultimate idea to be a pan-Indian carrier is to increase frequencies from Delhi, not only to Chennai, but also to other cities like Cochin, Thiruvananthapuram and Coimbatore. All these will follow. Once the base in Delhi is strong, I think we will be flying to destinations around Delhi and make Delhi the second hub. And today, the situation is also conducive because of the expansion taking place at Delhi airport.

‘First and foremost, we need to have a strong domestic audience and network… once we do that, I think we will go international’ CRUISING HEIGHTS July 2009

You will be competing with full service carriers like Jet on the one hand and LCCs like SpiceJet on the other. How will it help your cause to have higher overheads by moving to grander and grander terminals? In Delhi, we have been told T3 will be grander than 1D. So why should we stick to 1D? As a premium carrier, if we find that T3 is much more elegant than where we are already operating from, we’ll prefer that anyway. We are also told T3 will have aerobridges. That further enhances the experience of Paramount since 1D does not offer that facility. So, we have found that this is the right time to expand the operations from Delhi and tie Delhi to the link. The time is also conducive in terms of parking space availability, slot availability and the new runway that came up several months back. Last month, we had one of the highest ontime performance records in the country. And that became possible because we are not over-ambitious in terms of doing very short turnarounds in airports, where there will definitely be a delay. We have buffer systems built in, so that the customer perceives that the flights are on time. Are you looking at enhancing operations on the same aircraft? Same aircraft. We are focused on air-

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COVER STORY craft with less than 80 seats, as we feel this is the right capacity — at least for the time being, and it has paid off in a lot of ways. If you have the right number of seats, you are not under pressure to discount your seats and can sell your seats at a premium rate. Today, Paramount has the highest yield in the country. We have natural advantages such as Sales Tax being 4 per cent for aircraft less than 40 tonnes. We have no landing or parking charges for aircraft less than 80 seats. We do have lot of these things factored in. Even if it is a uniform 4 per cent, still the number of seats would definitely be able to play a difference. Also, we believe in high frequency model. We believe a customer should not be kept waiting. He should be able to choose his time of departure. So, even in sectors like Madurai-Chennai, we have four flights a day. Ideally, the mission here is that a person should be able to go on our breakfast flight and return on the lunch, high tea or dinner flight. They should be given the option. What are your plans for north India? We are looking at the entire belt. To start with, we will be expanding to the secondary column. Out of Delhi, going all the way up to Kashmir, covering Haryana, Chandigarh, Lucknow, Patna, Bhopal, Jaipur. It will be quite comprehensive. Our aircraft have the flexibility to land on short-haul runways as well. We can look at Shimla also. I think, by the end of the year, by December, it will be fair to say we will be having about 5-6 planes positioned in Delhi. And what about the aircraft? We are looking at 80-seater aircraft. As of now, we are committed to Embraers, unless of course somebody else comes along and gives us a fantastic deal. But our thought process is pretty much with Embraers. By the end of 2010, we will have a fleet strength of twenty. What we believe in is managed growth, not explosive growth. That is not the answer. We believe in sustained growth. Slow and steady has taken us where we wanted. Whatever footing we have covered is strong footing. We never had to look back. And probably, we are the only airline that did not break our business model. And all the focus was on implementing and executing commands. If you look at it today, I see LCCs suddenly offering food on board, I see premium carriers suddenly saying ‘we are not going to offer food on board’. People are, therefore, confused. For the first time in the world, we have seen LCCs saying food for all.

‘What we believe in is managed growth, not explosive growth. That is not the answer. We believe in sustained growth. Slow and steady has taken us where we wanted. Whatever footing we have covered is strong footing’ CRUISING HEIGHTS July 2009

But you have to pay for it. You say you are a low-cost carrier because you are able to offer fares at lower rates. Because you don’t serve food. Otherwise what is the cost differentiation, you tell me? Everybody is flying the same aircraft. Nothing is a low cost pilot or a low cost engineer. All that being the same, the only difference was in the food expenses. We don’t serve food and keep a bare bones approach. We keep operations simple, no logistics and no headache. And we give no food, so we are low cost. Today, what we see is all these carriers going into the ‘frills’ model. The minute you say I will offer food for certain passengers and no food for certain passengers, it is nothing but getting into a complicated system of logistics. And then, there is absolutely no difference in your cost from that of a full service carrier. You still have to have a catering agreement and all those things. And then, on the other hand there are the full service carriers like Jet who suddenly go and say Jetlite…No food. You were at one time looking at Airbus and Boeing, is that all on the backburner now? Nothing has gone on the backburner. We thought about Airbus and Boeing for our long-haul international operations, post 2010. First and foremost, we need to have a strong domestic audience and network that will feed our international routes. Once we do that, I think we will go international. When you talk long-haul, are you talking like Air Asia X, going to London etc, or are you planning to just keep to the four-

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five limits, which means the Gulf and South East Asia? Our approach would be again a very sustained and steady one. Take the neighbouring countries, connect the Far East and the Middle East, and probably in the second phase look at Europe and fly into Australia and Japan. And eventually, the final step would be flights to the US and South America. With Airbus, we are evaluating the 350s, with Boeing we are evaluating the 787s. Both these aircraft are obviously not going to come (to us) in 2011.So there will be an interim step -that both the manufacturers have offered. This will be a stop-gap arrangement till the time we get what we ordered.

the month you have only carried 78,000 passengers based on an average of four or five frequencies to destinations each day. Don’t you want to be a big player? To all this I have only one answer: top line is vanity, bottom line adds sanctity to what you do, and cash flow is the actual reality. If you go for market share, you will soon be bankrupt. This is evident…history has repeated itself time and again in aviation and other industries. I am in business to have a healthy bottom line, I am not running a show business, I have not come here to gain mass popularity, neither I am here to do social service. It is a business that I am running and my growth will be bottomline-based. I am not saying I need to carry 10 million passengers tomorrow or have 40 aircraft, that’s not my cup of tea. But I will get there with my own growth that will stand the test of time. Also, innovation is of no use unless acceptability is there. For that you need to make the innovation affordable. Paramount is not a Silver Jet or an Eos or a Maxjet, because we did not say Business class at Business class pricing as Eos did. We have said that we will provide cost-effective service excellence, and if I am able to make you perceive and accept that this is indeed costeffective excellence, you will come and fly with me. A customer flying Paramount has seldom migrated elsewhere.

Is the process complete? It is at an advanced stage. I am in no hurry really. Now is the time to do the shopping. But the 787 will be launched next year, while the A350 will take at least five years to get off the ground. So are you looking at the Americans or the French? Moreover, your business plan for an 80-seater may really not work on a 140-180 seater, nor will the short-haul aircraft business plan work on wide-bodied long haul aircraft. So how are you going to manage the situation? The business plan of an airline goes beyond equipment. We don’t make plans based on equipment. The Embraer aircraft, in my opinion, even with a four per cent uniform Sales Tax across the board for all aircraft, is the right capacity for India, excepting for the trunk route early morning flights. For every other sector, if an airline wants a healthy bottom line, then an 80-seater is the answer. People who have gone with the 144-180 seaters simply could not make ends meet. That’s the reality of the situation. International again depends on what segment of the market one is looking at. If you look at Asia, the focus is different, Europe is different and the non-stop is a different ballgame. So, it is important that you select the equipment that meets your requirement. There is no one standard solution for all. I cannot say I have this aircraft, this fits all requirements. Each and every type of mission requires a different aircraft to service it. So, obviously we will be looking at multiple fleets, multiple capacities. But the basic business philosophies will not change. The same thing will be carried forward on the international long-haul flights. Today, Paramount is in the top 200 brands in the country. But critics will argue that you have only five aircraft, seating 80 each, and at the end of

‘It is important that you select the equipment that meets your requirement. There is no one standard solution for all. I cannot say I have this aircraft, this fits all requirements. Each and every type of mission requires a different aircraft to service it’ CRUISING HEIGHTS July 2009

Have you been able to wean away the Business class passengers of Jet Airways that even Kingfisher hasn’t been too successful with? Recession has actually helped us do it. Lot of companies asked their executives to stop Business class travel. Assuming you are a frequent flier used to the Business class, you would not like to walk past Business into Economy. These core loyalists of Jet and Kingfisher and Air India are today making a beeline to Paramount. Though they fly elite, they perceive the comforts of Business class and the company is happy because they get a much cheaper bill! You have much more personalised service here. With all the fine dining experience, with fine crockery and silverware, from soup to dessert, everything is there. You end up paying Rs 8,000. So why would anyone fly for Rs 22,000? And no middle seat. What are your losses? We have been profitable from day one. Are you talking about operating profits? I know only one profit, that is the profit at the bottom of the balance sheet after tax.

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AVIATION SCORES AT

Paris Air Show 2009 Shorn of the usual hype and sparkle due to a variety of reasons, the Paris Air Show 2009 underscored the fact that aviation may be down but will never be out. To top it all, the rivalry between the two major aircraft manufacturers continued unabated, with Airbus scoring over Boeing — at least in this outing. A report from our correspondent. Rewind to 2007: The Paris Air Show became a virtual party place, what with champagne corks popping and a host of international airline CEOs, Ministers and royalty flitting in an out of aircraft manufacturers’ chalets. They were the toast of the show: ordering new aircraft by the dozens. That was the year when every airline executive had the biggest smile. The sector was growing steadily and airline accountants were rubbing out the red ink to usher in the black — the first signs of good health —

since the deadly blow from September 11, 2001. Fast forward to 2009: It almost seemed that the dark and gloomy days — post 9/11— were back to haunt the Paris Air Show.

Unlike the last few years, there was very little of India CRUISING HEIGHTS July 2009

hen the 2009 Paris Air Show was formally opened at the small Le Bourget airport outside Paris by French Prime Minister Francois Fillon, the grey skies

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Minister for Civil Aviation Praful Patel with French Transport Minister Dominique Brussereau at Paris.

Glimpses of the Paris Air Show 2009.

overhead and the rain seemed to speak louder than the record 2,000 exhibitors from 48 countries. It was the 100th anniversary of the famed show (actually it was only on its 48th edition because it alternates every other year with the Farnborough International Air Show outside London), but the mood was anything but celebratory. To begin with, there is the whopping loss totaling $10.4 billion that the worldâ&#x20AC;&#x2122;s airlines faced in 2008. Add to that the forecast that the carriers are all set to lose an additional $9 billion this year; passenger and cargo volumes will drop by 8 per cent and 17 per cent, respectively, this year, according to the International Air Transport Association (IATA). As if to compound the situation, there was the June 1 crash of the Air France Airbus A330-200, which left 228 dead. Manufacturers Airbus had to contend with questions about the A330s safety. Even so, the show did carry on. One person who usually made waves in past shows but remained out of the spotlight this year was Steven F Udvar-Hazy. The worldâ&#x20AC;&#x2122;s biggest customer of planes, Udvar-Hazy, the CEO of International Lease Finance Co. (ILFC), has had trouble acquiring short-term loans after its parent insurance major, AIG failed. Incidentally, AIG has been trying to get funds for ILFC to repay part of the $182 billion

Unlike the previous air shows, where Indian carriers usually made a splash ordering planes big time, this time around, the only Indian airline that ordered planes was Paramount CRUISING HEIGHTS July 2009

it owes US taxpayers. On the first two days of the show, total orders and commitments for plane-makers amounted to more than $9.5 billion. In comparison, the Farnborough Air Show in 2008 saw total orders and commitments for Airbus and Boeing alone amounting to more than $64 billion, with new announcements for 186 firm orders worth $26.39 billion. By the time the show ended, Airbus had chalked up quite a few orders. Leading the list was Qatar Airways, which signed an order for 24 A320-family aircraft from Airbus worth about $1.9 billion. The contract included four orders for A321 planes announced last year, and 20 new orders for A320 aircraft. That was followed by Vietnam Airlines making a firm order for 16 A321s worth $1.4 billion and a provisional order for two A350-900s worth $480 million. On its heels was Malaysian low-cost airline AirAsia, which ordered 10 A350900s worth $2.4 billion, with an option for five more worth $1.2 billion. Among the others was Cebu Airlines of the Philippines, which ordered five Airbus A320s. Unlike the previous air shows, where Indian carriers usually made a splash ordering planes big time, this time around, the only Indian airline that ordered planes was Paramount. In fact, the airline surprised

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SPOTLIGHT

many when it signed a Memorandum of Understanding (MoU) with European consortium Airbus Industrie to purchase 10 Airbus A-321 aircraft. The total deal will be worth $1.5 billion at list prices. Paramount Airways Managing Director M Thiagarajan would start taking deliveries of the A-321s from October 2010, in a phased manner, to enable the airline to embark on international routes from India to Southeast Asia, West Asia, Far East and the Gulf region. Incidentally, Boeing did not receive any orders. Apart from Boeing and Airbus, Canada’s Bombardier announced it had won, confirmed and converted a total of 35 orders for its CRJ1000 NextGen jets by Spanish regional carrier Air Nostrum, in deals worth a total of $1.75 billion. Among others, there was the Dutch regional airline KLM Cityhopper, which firmed up seven options to buy Embraer 190 jets. Japan’s Fuji Dream Airlines, part of Suzuyo Group, ordered an Embraer 175 jet to add to two Embraer 170s ordered in November 2007. The Russian plane manufacturer Sukhoi too got orders. Avialeasing firmed up orders for 24 Superjet 100s in a deal worth about $715 million. In another deal, Hungarian national carrier Malev signed a letter of intent for 30 Superjet 100 aircraft, a contract worth up to $1 billion. Among the engine-makers, the biggest order went to US industrial conglomerate GE, which would supply Etihad Airways with engines for 35 Boeing 787s and 10 Boeing 777s, along with a maintenance contract in a deal totaling $3.9 billion. Unlike the last few years, there was very little of India. While there was very little Indian participation — there were no flight demonstrations by Indian planes, something which has been happening since 2003 — there were no buyers.

Slowdown in the jet race

nternational air shows have always deliver between 480 and 485 planes. been happy hunting grounds for top Clearly, the show was not for shopaircraft manufacturers Airbus and ping. While John Leahy, Airbus’s Chief Boeing to target customers. This year’s Operating Officer, has gone on record to show at Le Bourget was different. Both forecast that 2010 would not be very difwere desperately trying to cling on to the ferent from 2009, as far as his company’s orders they had. output of aircraft was concerned, ChicaAirbus Chief Executive Officer Tom go-based Boeing had not come out with a Enders made this quite clear to the press projection till the time of filing this when he said that his “priority is not to report. However, it is certain that manuget new orders but to maintain those we facturers — Boeing or Airbus — will have and turn them have to trim delivery into deliveries.” He schedules. According was backed by Randy to IATA Chief ExecuTinseth, Boeing’s tive Officer Giovanni Marketing Head, who Bisignani, there could pointed out that carribe 30 per cent drop in ers were grounding plane deliveries in planes “faster than 2010. they are taking delivIf reports are to eries for the first be believed, AirTom Enders and Randy Tinseth time in at least 10 bus would be years.” slowing its monthly output from OctoA look at the order books says it all. ber this year of A320-series by two Take Boeing, for example. While the man- planes: from 36 to 34. Even the proufacturer managed to sign 65 purchase duction of its popular wide-bodies, agreements for new airplanes, it also saw A330s and A340s, will see a stoppage. an equal number of cancellations. Across the Atlantic, Boeing will cut its As for competitor Airbus, it was left production of the 777 by 29 per cent to with 11 orders after 21 were dropped. five a month, starting sometime in the Even so, the company has planned to middle of 2010, and even halting the make 480 deliveries this year (last year it increases it had planned for its 767s completed 483). Boeing has decided to and 747s.

It is certain that manufacturers — Boeing or Airbus — will have to trim delivery schedules...there could be 30 per cent drop in plane deliveries in 2010 CRUISING HEIGHTS July 2009

However, the country was represented by Minister for Civil Aviation, Praful Patel. He utilised his time at Paris to take up the issue of the recent discriminatory treatment of Indian nationals, in transit at the Charles De Gaulle Airport, with the French Transport Minister Dominique Brussereau. During the meeting, held on the sidelines of the air show, France agreed to be a partner country at the India Aviation Air Show 2010 to be held at Hyderabad in March 2010. Patel also held meetings with CMDs and CEOs of Airbus, Eurocopter, Bombardier, Augusta Westland, Rolls Royce, Air France and the Government of France. It was also decided that the two governments would work closely in the air safety programme. Minister of State for Defence M M Pallam Raju was also at the show. He met French Defence Minister Herve Morin and senior officials of leading international defence companies. The sparkle that is usually associated with such air shows was missing because neither Airbus nor Boeing had any new plane for display this year.

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CARGO

The positive side of

Air India The crisis gripping Air India notwithstanding, its cargo unit is going full steam with its plans for growth and expansion, reports Tirthankar Ghosh.

ir India’s problems continue to hog headlines. In the circumstances, one would have imagined that the cargo section of the national carrier would have to lie low. Indeed, the ambitious plans chalked out and publicised around a year ago by Anita Khurana, Director Commercial & SBU Head Cargo, National Aviation Company of India Ltd, were put on the backburner. There were a variety of reasons: the fuel price hike, the merger of Air India and Indian and, of course, the global downturn. Despite the fact that cargo was a big revenue earner, Air India cargo had to curtail operations. In fact, the A310 freighter service from Bengaluru to Paris had to be withdrawn “because that was not making enough money”, as Khurana put it. At that time, Air India sought proposals for leasing of two of its Airbus A310s, which were converted to freighters. Khurana had announced at around that time that the losses incurred by Air India from diminishing passenger traffic would be offset by cargo. The card that was up her sleeve was the launch of the carrier’s domestic cargo service with a hub at Nagpur. Today, almost a year later, the Cargo head is still exuberant as ever. Her plans to take Air India cargo into the next decade are under implementation, and if everything goes according to AT THE CLICK OF THE MOUSE: AI’s cargo unit has one of the best automated tracking systems.

CRUISING HEIGHTS July 2009

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schedule, we could very well witness a renaissance of sorts. The prime mover in the erstwhile Indian’s (Airlines) cargo automation, Khurana had virtually ushered in a new era in the staid corridors of Airlines House. Obviously, she had hoped that, with the merger, not only would international cargo operations receive a boost but the automation bit would be at par with the best in the world. Talking to CRUISING HEIGHTS, she had said that “the annual international freight movement into and out of India is more than a million tonnes and would grow at a CAGR (compound annual growth rate) of more than 11 per cent from 2007-08 to 2011-12.” Her plans for 2008-09, to begin with, had included offering more freighter capacity at competitive rates. All this, however, would come with more advanced technology, which would have to include booking and tracking on the Net as well as EDI connectivity, implementation of bar-coding and a pallet tracking system. A confi-

Page 3

Highlights of the USP system

Cargo booking, pricing and AWB printing; Cargo booking and AWB printing through Internet, for the cargo agents; Printing of Bar Code labels; Distribution of the capacity amongst the various categories of cargo to optimise revenue; Complete operations from booking till delivery of cargo; Tracking of cargo on the Internet; Revenue accounting; Online filing of the manifest with Indian Customs; Interface with the ground handling agencies through EDI messages; and, MIS.

‘In today’s fiercely competitive cargo industry, there is constant and increasing pressure on airlines to provide high quality service, coupled with best tracking information that should be available at the click of a mouse.’ — Anita Khurana Director Commercial & SBU Head Cargo, NACIL CRUISING HEIGHTS July 2009

dent Anita Khurana said that she believed in providing nothing but the highest quality of services. As she put it: “In today’s fiercely competitive cargo industry, there is constant and increasing pressure on airlines to provide high quality service, coupled with best tracking information that should be available at the click of a mouse. In an effort to provide the best service to the customers, airlines have started using technological solutions for cargo, which gives them utmost control of the sales and operations.” As the person responsible for ushering in automation, Khurana knows what she wants for the national carrier. “I wanted the latest state-of-the-art technology that would be as friendly to the agent as it is to the customer.” Prior to merger of the two carriers, Indian (Airlines) was using a new generation integrated cargo solution for its cargo operations, CSP, which is web-enabled and uses open technology. At that time — and till today — Air India uses USAS cargo, a mainframe-based solution for cargo, and rather outdated. Once the merger of the two airlines came through, Anita Khurana was in the forefront of the move to synergise the operations, and to provide identical services to the customers. It was decided then that CSP would be the ideal solution for the merged entity. “What I am trying to do is bring both the carriers to a common platform, which is the reservation platform. Air India’s USAS system is very old and an outdated one, while the CSP from Kale Consultants for Indian is user-friendly and up-to-date.” Work, she pointed out, was on in Air India. “It will take another six months for phase-wise implementation, and by April 1, 2010, both Air India and IC (Indian Airlines) will be on the CSP system. We could begin from January 1 next year…by then we should have a

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CARGO

A head-on from IATA

ay back in December 2006, during the IATA Cargo in Emerging Markets Conference in India, the IATA’s Global Head of Cargo, Aleks Popovich had decided that a country-specific Industry Action Group (India IAG) be formed. The group was given the task to find out the needs of the Indian air cargo sector and what needed to be done to bring it up to world standards. The IATA also suggested to the Group, of which Anita Khurana — Director Commercial, Indian Airlines — was a part, to take inputs and support from stakeholders like customers, the government, commercial bodies, the Customs department, members of the supply chain and members of the air transport industry. The suggested agenda for IIAG was outlined. Among the points to be discussed were: Giving a voice to the customer, Promoting industry awareness, Education and training, Accelerating e-freight and Improving security and safety, Introducing Cargo 2000 and Sharing services The first IIAG meeting was held on April 5, 2007 in New Delhi and discussed at length on issues like facilities at airports and space constraints, the prices and taxes of Aviation Turbine Fuel (ATF), industry recognition for freight forwarders and requirement of bonded warehouses outside airports.

number of stations done,” she said. A year from today, cargo agents using Air India will not have to make harrowing trips to airports to book their shipments. Instead, all they have to do is enter the details on their computer from their place of work and get everything done on the Net. The system, once it comes into force, will be beneficial to the cargo agents. It would enable the authorised cargo agents “to book their cargo, print the AWB through the Internet from their own locations”. Imagine, she said, when the agent will not have to call the airlines sales office for space booking. The agents can then print the Bar Code labels from their own locations and hand over the cargo at the airline warehouse in a ready-for-carriage con-

Aleks Popovich, IATA Head of Cargo.

A few months later, another meeting was held in which other pressing issues were raised like uncertainties about trans-shipments at airports, and the development of air freight stations to enable better handling and movement of cargo and the decongestion of the airports. According to IATA, the work done by IIAG has not only been helpful but also on track with its aim to successfully achieve the industry’s requirements through interaction with government agencies and regulatory bodies. In these times, especially, there is an urgent need to have more interactions of the kind that IIAG has done. According to industry watchers, such interactions can bring about a closer relationship between all stakeholders and reduce costs to a great extent.

A year from today, cargo agents using Air India will not have to make harrowing trips to airports to book their shipments CRUISING HEIGHTS July 2009

MORE REVENUE: Mangoes and other perishables are the new sources of revenue for AI’s cargo unit.

dition. As the Bar Coded labels on the parcels have been made mandatory by ground handlers in the country, the facility to print these through the Internet would not only be extremely useful but also time-saving. The system would also enable the cargo agents to have details of their shippers and consignees pre-recorded in the system, so that these can be used whenever bookings are made without the need to put the information in again. Since each operational activity would be carried out through the system, the customer/agent can track the various stages of their cargo on the Internet. The USP will be interfaced with the cargo system of the ground handler at international and domestic stations. Result: the status of the shipment would not only be updated but can be tracked, even though the system at the destination could be varied. “Our system will allow track and trace using the house

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Courtesy:Akhil Bakhshi

airway bill number. This is one facility that others do not have,” emphasised Khurana, “and it is going to be a major achievement for us.” Other than the automation, the Cargo chief has moved on to create new sources of revenue for the flailing carrier. And, in this depressed market, she has got results. As she told C RUISING H EIGHTS , “Inspite of the recession, AI cargo has seen an increase. Yields and revenues have increased.” A large percentage of the revenues have come from mangoes and perishables. “For the first time, we have started promoting mangoes on our non-stop flights from Mumbai to New York.” She agreed that the infrastructure at the country’s major airports was not conducive for perishable exports. Even so, 40 per cent of Air India’s cargo was made up of perishables. On the domestic front too, markets have opened up. At the recent Tulip Festival in Srinagar, Jammu and Kashmir Chief Minister Omar Abdullah hoped that the state’s

Other than the automation, the AI Cargo chief has moved on to create new sources of revenue for the flailing carrier. And, in this depressed market, she has got results CRUISING HEIGHTS July 2009

flower farms would be able to export tulips and other flowers in a big way by next year. “It is then that AI’s 737 freighters would come in handy,” said Khurana. “We will use the capacity available to link up various states wherever perishables are ready to be moved.” For the moment, however, AI’s cargo head is content with the progress she has made. “We have done very well in the current season: the carriage figure for mango for the current season — both domestic and international — by AI is 2,500 tonnes.” Next year, she plans to venture to uncharted territory — at least as far as Air India and perishables are concerned. “I might even go to Tokyo,” she said. “If we have to promote the carriage of perishables it would be at a low rate. We do not have a freighter operating to New York, but now that our Frankfurt hub has come up, we could use the line flights to promote exports. The freighters could then focus on the express markets,” she said. The downturn has not affected the cargo division. “Our revenues have been pretty good. The February figures showed practically an 8 per cent increase from last year. As for mail, we have done very well over last year.” Air India, incidentally, had not been carrying mail at all but Britain’s Royal Mail is using the national carrier and Khurana said, “we are happy with the progress we have made in mail carriage.” Her target is to complete the automation by March-April 2010. Once Air India is on the system, she would concentrate on making the domestic side paperless “in preparation for Cargo 2000”. The international operations would take a while longer since we would have to depend on a number of other agencies like Customs, the Airports Authority, etc.” The next six months could be exciting times, despite the difficulties that Air India is going through. Her vision is one which positions Air India as a national carrier. “I am not thinking so much on commercial lines,” says Khurana. “AI,” she says, “has a major role as a national carrier. Of course, we should not lose money but moving perishables from the furthest corners of the country at competitive rates should not be viewed as a commercial proposition per se.” India can do with a lot more freighters, she said in a parting shot. As if to emphasise, she pointed out, “The availability of air carriage space has not been tapped at all in the country.”

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GUEST COLUMN/AIR CARGO

Value additions can help air cargo survive Cyrus Katgara

Hamstrung by the lack of infrastructure and high costs, the air cargo industry in the country can survive â&#x20AC;&#x201D; and prosper â&#x20AC;&#x201D; only if it takes a serious look at enhancing its services. he air cargo industry is the index of the economic development of any country. It grows at twice the rate of the GDP of a country. The sector has a multiplier effect on the economy. The present situation in the Indian air cargo industry is highly volatile and turbulent. The major reasons for the prevalent situation are: Recessionary trends in the economy Capacity under-utilisation High airport and fuel cost High transaction cost High lease cost Stiff competition from shipping lines The global economy is reeling under the impact of a credit squeeze, liquidity crunch and collapsing financial infrastructure. All these factors have led to a squeeze in the global demand, the collapse of the housing bubble and a general deceleration in industrial activity. The long and extended period of boom in the global economy, which was unprecedented, has led to irrational resource allocation. A glaring example is the excess capacity in the airline industry and irrational exuberance, leading to a drop in yield and profitability. The overall cost structure of the air cargo industry is, therefore, unsustainable and not adding value to business. To top it all, the air cargo industry in the country is hamstrung by the disproportionately high tax regime prevailing in Indian airports. This is seriously impacting the bottom lines of the air cargo industry, in particular, and the airlines in general. High costs and lack of quality infrastructure have contributed to the overall transaction costs at our airports. This is detrimental to the competitiveness of the air cargo industry in the country. This is quite unlike the Western economies, which have separate infrastructure for air cargo industry, thereby increasing the competitiveness of the industry by enhancing its productivity and growth. The infrastructure deficit in India is responsible for the slow growth of the industry. Rough estimates confirm that the high logistics cost of

The overall cost structure of the air cargo industry (in India) is unsustainable and not adding value to business 54

CRUISING HEIGHTS July 2009

operating in India due to infrastructure bottlenecks and archaic regulatory regime - in India, the cost is 12 per cent, which is higher than efficient Western economies, where it is 8 per cent of the total GDP. The biggest threat to the airfreight industry is from the highly competitive sea freight that has been focusing more on time-definite deliveries. The new direct services introduced by the

Unlike in Western economies, the air cargo industry in India suffers from the problem of high costs and lack of quality infrastructure.

shipping lines across the world have posed severe challenges to airfreight. These serious challenges have compelled the industry to look for enhanced value additions. (The writer is a freight forwarder and is partner of Jeena and Company, one of the countryâ&#x20AC;&#x2122;s oldest freight forwarding concerns.)

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CARGO JOTTINGS Deccan 360 appoints HK handling agents THE Capt Gopi-led Deccan 360 has announced the appointment of Asia AirFreight Terminal (AAT) as its freight handling agent, and of Singapore Airline Terminal Services (SATS) as its flight handling agent for its freight operations at Hong Kong International Airport. Deccan 360 started cargo services to Hong Kong from Delhi on May 27, 2009 and has also appointed Courier and Freight Express (CFX) as its GSA in Hong Kong.

Jude Fonseka (fifth from left) with representatives of AAT, SATS and CFX at the Hong Kong International Airport.

Jude Fonseka, CEO Deccan 360, said that Deccan 360 was the first Indian wide-bodied all-cargo carrier to provide overnight deliveries from south China through Hong Kong to Delhi the same day. “The Delhi-Hong Kong corridor is a busy freight forwarding hub and we are geared to corner a sizeable share of the business pie. Our Hong Kong operations are a critical link in our business strategy,” said Fonseka. Deccan 360 has also commenced operations connecting India to Dubai from June 20, 2009. The carrier has deployed an Airbus A310 freighter aircraft to serve these routes and will extend its operations to connect Delhi and Chennai to Dubai.

FedEx is No 3 FEDEX Express has been ranked third in the 2009 Great Places to Work Survey (GPTW) in India. FedEx was also awarded the special category award for Best Company for Leadership Development. For six successive years, FedEx has been the only express transportation company to rank among the top 20 best places to work. The annual GPTW survey is conducted by the Great Places to Work Institute in association with The Economic Times, and covers as many as 373 companies across India. “People are the cornerstone of FedEx ‘People-Service-Profit’ philosophy,” said Taarek Hinedi, Managing Director Operations, FedEx Express. “We invest a sigTaarek Hinedi nificant amount of time and effort to gather feedback from our employees and ensure that appropriate measures are taken to address concerns.” Globally, FedEx has consistently been placed in the list of best companies to work for. The company was also awarded the Platinum Award for Excellence in People Management in 2007 for its consistent ranking.

DHL support to World 10K race DHL was the official logistics partner for the second edition of the Sunfeast World 10K run, held at Bengaluru on May 31. The event saw a number of celebrities, great athletes, enthusiastic runners, corporate houses and NGOs come together for the

sporting phenomenon. With an estimated turnout of 25,000 people, the race is now looked upon as one of the most anticipated sporting events to be held in Karnataka. This year’s event was supported by the Government of Karnataka, Department of Youth Services & Sports (DYSS), Karnataka Athletics Association, several leading corporate houses and the media. Commenting on DHL’s partnership with the Sunfeast 10K, Craig Grossgart, Country Manager-DHL Express India said, “DHL stands for speed, reliability and precision, and the Sunfeast 10K is a good platform for us to associate. The Bangalore 10K exemplifies DHL’s ‘Can Do’ spirit, with over 1,000 employees training to participate in the race.” As the logistics sponsor of the race, DHL handled onground logistics prior to the race. From carrying sensitive RFID running chips for the runners, to transporting over 5 tonnes of broadcast equipment, DHL had 30 vans plying to supply water, medical supplies and provision for runners. Green move: In another related event, DHL Express launched ‘My Green Day’ — an initiative designed to raise environmental awareness among employees. By turning off the lights in their offices for one hour, DHL employees around the world were encouraged to commit to a more conscious use of energy, and hence a greener lifestyle at work and at home. In addition to the lights-off initiative, DHL also encouraged staff to make personal commitments, starting June 5, to adopt more environmentally conscientious habits and use resources, such as paper and water, responsibly.

Lufthansa Cargo receives “Customer Care Award” LUFTHANSA Cargo AG has earned recognition for its outstanding performances once again by winning another important award. In the “World Air Cargo Awards” of the trade journal “Air Cargo Week”, the freight airline took first place in the “Air Cargo Industry Customer Care” category and was thus able, in the area of customer service, to establish itself ahead of the other finalists Etihad, Emirates and Qatar Airways, according to the votes of readers in an online poll. The prize-giving ceremony

took place in front of more than 600 guests on the fringes of the “transport logistics” trade show in Munich. “It has been shown once again that our efforts to provide high quality and service are paying off. We are delighted about the recognition as a reliable and professional partner of our customers worldwide — especially in difficult economic times,” said Dr Andreas Otto, Executive Board Member-Product und Sales at Lufthansa Cargo.

CRUISING HEIGHTS July 2009

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GLOBETROTTING

AT A GLANCE

Now that’s called an emergency!

Titanic continues to tantalize

HE was obviously desperate. And so he assaulted a flight attendant as he rushed to use an airplane bathroom. But Joao Correa is not going to be charged as he has reached a deal with federal prosecutors. Correa was flying aboard a Delta Airlines flight from Honduras to Atlanta when he suffered a bathroom emergency but found the coach aisle on the Boeing 737 blocked by a beverage cart. The flight

HERE’S a website that helps travel writers and high-profile travellers come out with their real feelings about places, flights, meals, airports, toilets and the like where they have been. TitanicAwards.com talks about what “A good vacation… doesn’t make a very compelling travel story,” says Doug Lansky, the freelance travel writer who launched the site.

attendant said Correa grabbed her arm and twisted it as she tried to block his rush to reach the lavatory in Business class. The 43-year-old businessman has agreed to complete a three-month pretrial diversion programme and has acknowledged in the agreement reached that he did not handle the situation as well as he should have.

A costly switch BUT for an alert passenger, he might have got away. As it is, the switch proved costly for a US Airways employee, who has been charged by FBI with helping his roommate get a concealed, semiautomatic handgun onto a plane departing Philadelphia. Customer service agent Roshid Milledge switched black carry-on bags with passenger Damien Young at the gate so that Young could board the flight to Phoenix with the unloaded 9 mm weapon, the FBI said in an affidavit. An alert fellow passenger saw the switch and, sensing that Milledge seemed “fidgety”, raised concerns. Young, who was already on the plane, allegedly denied to a US Airways manager that he had

‘Dubai, sweet Dubai!’

mirates CEO Tim Clark has come out in strong defence of the long-term health of Dubai in the wake of the recent negative publicity. Dubai’s fortunes have come under microscope after being hard hit by the economic downturn. In the latest issue of Emirates’ public affairs journal, Open Sky, Clark says: “If you believed the recent rash of bad press and rumour mongering on Dubai you would be forgiven for thinking our city is all but a ghost town; tumble weeds rolling down Sheikh Zayed Road.” “I argue that much of the recent reporting and overly negative focus on Dubai is both disproportionate and often wildly inaccurate. As the manager of Dubai’s largest airline, Emirates, I have an interest in defending my town, but also more insight than Germaine Greer secured from her four-hour bus ride that

formed the basis of her recent anti-Dubai column in the UK,” he says. “Dubai is a city that has confounded many pundits before. They said two Gulf Wars would ruin our tourism sector. It didn’t. SARS would decimate our trade with Asia. A short-lived blip. Middle East uncertainties would make the West wary of investment. They weren’t. Today’s headlines are just as negative and alarming. The facts, however, are different.” Clark does acknowledge Dubai faces challenges: liquidity remains tight, property excesses and speculation have left some exposed, while like other major cities such as London, New York and Beijing, there have been job losses and company failures. “But which of these great cities will be the first to show signs of emerging from this funk? I would put my money on Dubai,” says Clark. CRUISING HEIGHTS July 2009

switched bags with anyone. The plane then started to taxi, but was soon called back to the gate so Young could be removed. He then admitted the bag was his and both men gave statements, the FBI said. Milledge told agents he had grabbed the wrong laptop bag from their Philadelphia home that morning and was switching it back. The gun is registered to Young, and he had a valid permit to carry it, authorities said. US Airways Flight 1195 departed Philadelphia several hours later.

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Ryanair CEO still stuck on toilet fee

It’s time now

APPARENTLY, he is still standing firm on his decision to levy toilet fee on his flights. The CEO of Ryanair has said that the airline definitely intends to start charging customers to use the restroom during flights. The Guardian of London said that CEO Michael

O’Leary indicated that it will cost one pound, which is about $1.65, to use the facilities. O’Leary has not set a firm date, but has told reporters that he is very serious about the proposal and hopes it will happen in the next two years.

UNITED Airlines is looking for proposals from airplane makers Boeing Co. and Airbus for a major jet order to replace its widebodied fleet over several years, as well as its Boeing 757s. Unlike other carriers that have at least kept their toes in the new-jet pool, United has held back on ordering new airplanes. It has been shrinking to try to match the flying it does with remaining demand, and it’s working on eliminating its Boeing 737 fleet altogether. Glenn Tilton, chairman and chief executive of Chicago-based United, told employees in a message that it has had ongoing discussions with both Boeing and Airbus over several years, but decided to hold off on new planes “until we believe we can generate a return on our investment.” “The analysis we have conducted for more than a year suggests that time may be now,” Tilton said.

the site, her hobby of buying and photographing lost luggage is turning into an obsession. “I’d gone along to buy one just out of curiosity and then I just couldn’t stop buying them,” she told CNN. “It feels quite naughty. I guess it’s like rifling through someone else’s handbag or their wardrobe if you went around to their house. It’s just something you’re not usually allowed to do,” she added. Laboo’s hobby started in March 2008 when she watched news reports of thousand of bags piling high at the problem-plagued opening of Heathrow’s Terminal 5. At the time it was estimated that more than 20,000 bags had been lost in the system. When she first started buying bags — she now has 11 — Laboo didn’t intend to parade their contents on the Internet. That came later when she realised how much they revealed about the person inside.

Quite a leak

Child born, abandoned on flight

IF it hadn’t been for those pictures taken by Bartek Bachleda — a staff sergeant in the US Air Force — the lives of 300 passengers aboard a flight from Chicago to Japan might well have been in grave danger. The US Air Force did not release the name of the airline involved. Bachleda had to show the pictures, showing fuel leaking from a jet at 35,000 ft, to a stewardess before she would take him seriously. She then alerted the pilot and crew who diverted the flight to San Francisco. ‘I noticed the leak on the left side of the aircraft right behind the wing earlier during take-off,’ said Sgt Bachleda, a boom operator for the 909th Air Refueling Squadron. Sgt Bachleda said the captain and the crew said they had been trying to figure out how the aircraft was losing 6,000 pounds of fuel an hour — but hadn’t realised what was going on until he flagged up the leak.

THIS is a story to beat the most dramatic of Bollywood film stories. A woman who secretly gave birth on a flight from Samoa to New Zealand may face criminal charges after her baby was found alive in the plane’s bathroom. Police are inquiring into “the alleged ... abandonment of the child by the mother” after the flight landed in New Zealand, a police official said, adding, “A likelihood of this investigation is a criminal prosecution.” Some media reports said the mother left the baby in a bathroom waste bin on the Pacific Blue plane carrying 150 passengers, others said she was spotted with bloodied clothes in an immigration line. Police have declined comment on the reports. Officials later said the 30-year-old woman, who got off the plane at Auckland International Airport, has since undergone surgery at Auckland’s Middlemore Hospital and been reunited with her baby. Immigration officials are investigating what information the woman provided on her visa application and how she boarded the airplane at such an advanced stage of pregnancy, an airline spokesman said.

Is this your lost luggage? A NEW website called isthisyourluggage is turning out to be quite a hit. And for Londoner Luna Laboo, the brain behind

CRUISING HEIGHTS July 2009

Illustrations by Rajeev Kumar

“It’s far more entertaining to pull out the negative side of travel. It’s been neglected for so long.” Besides the Twittersize gripes, Lansky also posts YouTube videos of travel gone wrong, and combs travel lists for the also-rans and never-arrived, along with his world’s-worsttravel survey.

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DOMESTIC AIRLINES AI launches special promotion with ITDC AIR India has launched a joint promotion with India Tourism Development Corporation (ITDC). As part of the promotion, the airline’s Frequent Flyer Programme “Flying Returns” members can now avail 50 per cent discount on room tariff (from June 3, 2009 to September 30, 2009), 35 per cent discount on room tariff (from October 1, 2009 to March 31, 2010) and 25 per cent discount on Food and Beverage Services in IDTC hotels. Flying Returns members will be required to present Air India boarding card, along with valid Flying Returns membership card, at Ashok Hotels in Jammu, New Delhi, Bharatpur, Jaipur, Bhopal, Patna, Ranchi, Bhubaneshwar, Puri, Itanagar, Guwahati, Pondicherry and Mysore, to avail the discount on room tariff. FFP membership card is to be produced at the ITDC restaurants for discount on Food and Beverage services, for a table up to six persons. Introduces direct Ahmedabad-Frankfurt flight: Air India has introduced a daily direct flight between Ahmedabad and Frankfurt, providing convenient connections to Newark and Chicago at Frankfurt, the airline’s new international hub. Passengers coming in from Newark and Chicago will connect to Ahmedabad at Frankfurt via the new flight operated with Boeing 747-400 aircraft. Ahmedabad has also been connected through a daily flight to London via Mumbai. The Mumbai-London-Mumbai sector of this flight will be operated with the new state-of-the-art Boeing 777 aircraft. Lays foundation for MRO Facility at Hyderabad: Arvind Jadhav, Chairman and Managing Director, Air India, laid the foundation for the construction of MRO and engineering facilities at Shamshabad Airport, Hyderabad. As part of its development plans in MRO, Air India has acquired five acres of land at the new Shamshabad Airport in Hyderabad. The facilities at the new airport will consist of a Hangar, where major maintenance of aircraft will be carried out, and an Annexe building to accommodate component overhaul shops and various engineering offices. The size of the Hangar will be about 100 metres x 90 metres x 24 metres (height). The new Hangar will be capable of accommodating two A320 family aircraft simultaneously or one B777/B747 aircraft. The facilities will be created at an approximate

Arvind Jadhav, Chairman and MD of Air India, laying the foundation stone for construction of AI’s MRO and Engineering Facility at Shamshabad Airport.

cost of Rs 80 crores. Air India, which already has major engineering infrastructure in Mumbai and Delhi for maintenance of aircraft and engines, is aiming to emerge as a major Maintenance, Repair and Overhaul (MRO) centre in the Asian continent. The airline has over 5,000 highly skilled engineers and technicians capable of undertaking maintenance of all aircraft and engines currently in its fleet. Wins Reader’s Digest award: Air India has won the prestigious Reader’s Digest Trusted Brand Gold Award 2009 in the Airline category. The award was conferred on the airline at a function held at New Delhi on May 28, 2009. The award was received by Vipin Sharma, SBU Head (Engines and (L to R) Gautam Kanjilal presents the Components), on behalf of award to Vipin Sharma, while Ashish Air India from Gautam Bagga, CEO, India Today Group looks on. Kanjilal, Chief GM Delhi Circle, State Bank of India.

Jet introduces première fares to London JET Airways has introduced special première fares to London from several Indian cities. According to a statement, the airline has introduced a special limited period offer for passengers from Bengaluru, Chennai, Hyderabad, Kolkata and Pune travelling to London between May 29 and September 30. Première passengers who book their tickets between May 29 and June 1 may avail of a special return fare of Rs 60,000 to London via Mumbai. This offer also extends to travellers on the Mumbai-London sector. For passengers unable to complete their travel bookings in the specified time period, the airline also offers première travellers from Bengaluru, Chennai, Hyderabad, Kolkata, Ahmedabad and Vadodara a special return fare of Rs 89,000 to London via Mumbai. Jet woos passengers with premiere fares. Jet also offers première travellers from Ahmedabad, Vadodara, Pune, Goa, Bengaluru and Hyderabad a special return fare of Rs 94,000 to London via Delhi, for sale and travel. Travellers from Delhi may avail of a special return première fare of Rs 1,06,000 to London for sale and travel. Moreover, Jet Airways flies daily direct to London Heathrow from Mumbai and Delhi. Offers Bengaluru fest discount: As the official and exclusive airline partner of the Bangalore International Airport Shopping Festival, Jet Airways offered travellers flying to and from Bengaluru from May 15 to June 14, 2009, a 10 per cent discount on base fare for tickets booked on jetairways.com, as well as a host of other exciting privileges. These included a range of exciting offers for travellers on display of their boarding passes at partner outlets including Carbon, Deepika Govind, Odyssey, Café Coffee Day/Cookie Man, Secure Wrap, Baskin Robbins, Subway, My Baby ExcelDisney Soft Toys, Wowwee Electronic Toys and Gamez, Asmi, Nakshatra and D’damas. Also on offer were discounts on travel services to and from Bangalore Airport, courtesy travel partners

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Bangalore International Airport attracted a large number of people during the shopping festival.

Easy Cab and Hertz. Moreover, Jet Airways and JetLite passengers who made purchases above Rs 300 at the Bangalore International Airport Shopping Festival during this period received two lucky coupons, instead of the standard lone coupon, for entry into a lucky draw. The bumper prize at the lucky draw was a package for four aboard the Golden Chariot, the famed Southern Indian luxury train. Weekly prizes included Golden Chariot couple packages and Jet Airways international couple tickets, while daily prizes included KSTDC (Karnataka State Tourism Development Corporation Ltd.) couple packages. Partners with top hotels: Jet Airways’ JetPrivilege, India’s largest frequent flyer programme, has entered into a partnership with the Preferred Hotel Group, Harbour Plaza Hotels and Resorts, and WelcomHeritage-Palaces, Forts, Hotels and Resorts — three exclusive hotel groups with famed properties across India, Asia and the world. With the announcement of these partnerships, JetPrivilege has boosted its list of hotel partners to 20. JetPrivilege members will now earn 600 JPMiles per qualifying stay at any of the participating Preferred Hotel Group brands, including Preferred Hotels and Resorts, Preferred Boutique, Summit Hotels and Resorts and Sterling Hotels. During their stay at the Harbour Plaza Hotels and Resorts, JetPrivilege members will earn 500 JPMiles per stay at the participating hotels in Hong Kong and Chongqing, China, at the qualifying room types and rates.

With this partnership, for the first time JetPrivilege members will earn 250 JPMiles per night during their stay at the participating WelcomHeritage hotels. The package comes with a host of special benefits, including discounts on tariffs, food and beverages, laundry etc. Jet Konnect to add 30 new flights: Jet Airways Konnect, the all-economy service launched by Jet Airways recently, has enhanced its network to include 30 new flights to its current network of 62 daily flights across the country. A statement issued by the airline said that with the launch of these new services, Jet Airways Konnect will link Hyderabad and Thiruvananthapuram with Chennai, while enhancing current services on the Coimbatore-Chennai sector. Jet Airways Konnect will also introduce services from

Thiruvananthapuram and Mumbai to Bengaluru, while enhancing existing services on the Hyderabad-Bengaluru sector. This service currently links several destinations, including Kochi, Pune, Hyderabad, Coimbatore, Ahmedabad, Jaipur, Bhopal, Amritsar, Jorhat, Agartala and Guwahati with five major metros — Mumbai, Delhi, Bengaluru, Kolkata and Chennai. The Jet Airways Konnect service will operate with a fleet of 10 ATR 72-500 and three Boeing 737-800 aircraft on key domestic routes across India, the statement added. The airline started this service with six ATRs and two B737s on May 8. According to Wolfgang Prock-Schauer, CEO, Jet Airways, “The Jet Airways Konnect service has proved to be extremely popular with our guests. There continues to be latent demand for a quality, all-economy service on several key domestic routes. The launch of these new Jet Airways Konnect flights is in response to the same.”

SpiceJet launches Monsoon Mania

SPICEJET announced the launch of Monsoon Mania to encourage travel during these monsoon months. Travellers could purchase tickets at amazingly low fares through spicejet.com between June 10 and June 12, 2009 for travel between July 1 and September 15, 2009. This offer was valid for travel to all the 18 destinations on SpiceJet network on all direct flights. Samyukth Sridharan, Chief Commercial Officer, SpiceJet Limited said, “At SpiceJet we have always believed in stimulating the market with attractive promotions and fares. Monsoon Mania is our latest promotion which will be exciting for the guests. The all inclusive fares that are on offer include Passenger Service Fee and relevant airport charges.” Celebrates 4th b’day in style: On the completion of four years in Indian skies, SpiceJet gave each guest on board on all its 125 flights on May 23, 2009, a special gift kit containing four complimentary return tickets across its network of 18 destinations, along with a complimentary holiday voucher for four-day stay at resorts across India. In flight, SpiceJet guests received four delicious praline chocolates. Sanjay Aggarwal, Chief Executive Officer, SpiceJet SpiceJet staff offering a gift hamper to the Limited said, “This is our guests during 4th anniversary celebrasincere gesture of gratitude to tions on May 23, 2009. our guests — we are delighted to celebrate this landmark with them. Each guest can now use these free tickets to fly any of the destinations that we touch. And they can now get a hotel accommodation as well for their friends and families.” “From 4 flights to 125 daily departures, from 4 cities to 18 cities in the last 4 years — we have come a long way with the support of our 14 million guests. We have grown from strength to strength with their support, feedback and criticism. They have challenged us at each step and have enabled us to deliver better,” he added. Introduces new connections: SpiceJet has also announced a set of new connections that passengers can book on and travel through interconnecting flights within the SpiceJet network. These connections are on the existing flights within the network which can connect destinations that were not connected earlier. With these connections, SpiceJet now offers 72 unique city pairs connectivity to its passengers. To enhance the ease of travel, passengers will get two boarding cards at the time of check-in at the originating city. Their baggage will be checked in at the time of boarding the first flight, directly to the final destination.

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INTERNATIONAL AIRLINES Emirates expands India operations EMIRATES Airline has announced a further expansion of its India operations, deciding to add 22 weekly flights as a support for the Indian government’s ambitious growth plan to attract 100 million travellers in 2010. The existing service of 163 flights per week to 10 Indian gateways will be strengthened to 185 over the summer and winter periods. High demand routes — Ahmedabad, Chennai, Kolkata, Kozhikode and Thiruvananthapuram — will be the chief beneficiaries. Underlying Emirates’ continued investment in India, the airline’s expansion programme closely follows its ‘Journey through India’ campaign, which involved a major revamp of the in-flight products to meet regional preferences of India’s diverse populace. Orhan Abbas, Emirates’ Vice President for India and Nepal said: “The global slowdown is not over yet, but the outlook for the future is showing signs of improvement. When traditional European markets dried up, India was quick to refocus its trade and marketing efforts in targeting regions not severely affected

All in good taste.

enhancements create a comfort zone, which allows one to relate to one’s environment,” said Orhan Abbas, Emirates’ Vice President for India and Nepal. “The in-flight menu on all routes and in all classes has been changed to meet the regional preferences of Indian travellers,” he added.

AirAsia flies for free

Emirates wants more of India.

by the economic downturn such as the Middle East, Eastern Europe, Africa and parts of Southeast Asia. Emirates has a robust global network spanning over 100 cities in more than 60 countries and is well-placed to connect India to the world.” Posts 21st consecutive year of profit: The Emirates Group has reported its 21st consecutive year of net profit for its 200809 financial year despite unprecedented challenges for the airline and travel industry. The Group’s net profit of AED 1.49 billion ($406 million) for its financial year ending March 31, 2009, was down 72 per cent from the previous year’s record profits of AED 5.3 billion ($1.45 billion), showing the impact of the record fuel prices in the first six months of the year, and the impact of the global recession. At the same time, Group revenues of AED 46.3 billion ($ 12.6 billion), representing an increase of 10.4 per cent over the previous year’s AED 41.9 billion ($ 11.4 billion), reflected continued business growth. Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group said, “We have returned our 21st consecutive year of net profit, and although it is 72 per cent decrease on the previous year’s all-time record profit, under the circumstances this is a satisfactory result.” Chakh le, India!: What’s travel without good food? Realising the importance of keeping their passengers’ palates and stomachs satisfied, Emirates has rolled out a unique food campaign — ‘Journey Through India’. As part of the campaign, aimed at reaching out to Indian travellers, there are trolleys laden with Indian cuisine for starters. “Food is an integral part of any journey and it can make the difference to the overall experience. Minor

AIRASIA recently gave away one million free seats, with the promotional tagline ‘You pay the fee, we fly you for FREE!’ This promotion was featured in an ‘All-In-Fare’ policy which made booking plans easy and efficient. Under the promotion, kicked off from May 11 to 15, 2009 for travel between January 5 and April 30, 2010, seats will be provided free and guests only pay for airport tax and administration fee. AirAsia Regional Head of Commercial, Kathleen Tan said, “This newest 1 million free seats promotion is initiated to honour our guests for their utmost support and faith in our services all these years as, without them, we would not have achieved anything. For instance, winning the recent Skytrax’s Best Low Cost Airline 2009 award would not have been possible without our guests’ rating us as the best. This is our way to say thank you… From now on, we will also be introducing ‘All-In-Fare’ policy for the Malaysian market, making it easier for our guests to choose and decide.”

Flying free with Air Asia.

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Mahan enters Amritsar PRIVATELY-owned Iranian airline Mahan Air has launched non-stop scheduled passenger services to Birmingham from Amritsar, via Tehran’s IKA airport. While the non-stop TehranBirmingham service will operate three times weekly from July 2, the Tehran-Amritsar service will operate three times weekly from July 4. The launch of the services was announced at a glittering function in Jalandhar on June 13, 2009. These flights — all operated with wide-bodied Airbus 310 aircraft — will have onward connections via Tehran to Dusseldorf, Istanbul and Dubai in addition to Birmingham. Amritsar would be Mahan Air’s 14th international destination and second in India, after Delhi. Announcing the inauguration, Hossein Hosseini, Director, Marketing and Route Development, Mahan Air, congratulated HS Duggal, Managing Director of Minar Travels (GSA-India) and expressed confidence that the new route would satisfy the demand of travellers from Amritsar with its convenient morning arrivals to their destinations. The new services will be operated by two A310-300 aircraft, each with 204 seats including 16 new Business class seats. “These are significant route developments and demonstrate the continuing commitment of Mahan Air to providing opportunity for our passengers to access a broader network,” said Hossein Hosseini. To celebrate the new flights, Mahan Air is offering triple miles to its ‘Mahan & Miles’ members. Hosseini disclosed to CRUISING HEIGHTS that “Amritsar (ATQ) has been on our radar for years. We think this route is just a natural complement to our Birmingham route,” he pointed out. He had been monitoring this market very closely for five years now, and had seen “airlines enter and exit ATQ to UK route. With the current market conditions, we are expecting about 70 per cent load factor.” Mahan planned to stay in the country for a long time. As Hosseini put it, “When we enter a

(Top) H S Duggal and Mahan’s Director, Marketing and Route Development, Hossein Hosseini (right) share a moment during the function to launch the Amritsar-Tehran flight, while Bhangra dancers put up an exhilarating show; (alongside) Mahan’s cabin service; and (below) a Mahan Air Airbus landing.

market, we plan to stay for a long time.” As for expansion plans, Mahan has decided to put in additional frequencies for the summer 2010 to ATQ. “For Delhi, however, it is a different story,” said Hosseini. “Since there is a noticeable overcapacity offered by all airlines which does not match the current demand, we are keeping the frequency as it is.” To encourage travellers, Mahan has

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introduced some very attractive fares from Amritsar to Birmingham. Hosseini made it clear that along with the attractive fares, “we offer great service… In the airline business, fares are a function of demand. We hope we can stimulate the market demand and persuade more people from Punjab to travel to UK and Dubai.” The flights of the carrier to and from India will ensure transport of cargo. As Hosseini put it, “We have been very successful in carrying outbound cargo from Delhi and 2008 was a record year with 1,145 tonnes. With ATQ being a main gateway for Indian exports, we feel confident that Mahan will have the same level of success in ATQ as it saw A group photogaph of all the Mahan Air and Minar Travels staff during the launch of the flight. in the Delhi cargo market.” Perhaps, more than anything else, Mahan Air hopes to continuous rise since we started operations seven years ago and stimulate tourism between Iran and India. “We always promote reached 25,000 in 2008. We are also active in promoting Iran as the destinations that we serve and India truly deserved to be an attractive tourist destination to the Indian public,” said promoted. The number of Iranians visiting India has seen a Hossein Hosseini.

Etihad to sponsor Manchester City FC ETIHAD Airways, the Abu Dhabi-based national airline of the United Arab Emirates, has signed a three-year deal to be the official shirt sponsor and partner of Premier League side, Manchester City FC. The Etihad Airways brand logo will appear on Manchester City shirts from the summer. The partnership is initially for three years and was announced at the City of Manchester Stadium by Etihad Airways’ Chief Executive James Hogan, Manchester City FC Chief Executive Garry Cook and Sir Howard Bernstein, Chief Executive of Manchester City Council. As well as appearing on the world-famous sky blue shirt, the deal will see the Etihad Airways’ logo and branding at the City of Manchester Stadium, as well as on the Club website (www.mcfc.co.uk ) and match day programme and merchandise. The first occasion that the Manchester City shirt, bearing the Etihad Airways logo, will be shown to the world is on July 18, when City take on the Orlando Pirates in Cape Town in the first game of their pre-season tour to South Africa. Unveils new first class cabin suite: Etihad Airways has redefined luxury air travel even further following the unveiling of its new First class cabin suite at this year’s Arabian Travel Market (ATM) in Dubai. The new First class cabin contains 12 individual suites, which have been designed to provide First class customers with more privacy, greater comfort and increased storage. The new First class cabin has been developed following

The new-look first class cabin suite of Etihad.

extensive global customer research, including input from many of Etihad’s most frequent flyers. The cabin interior was created by craftsmen from some of the world’s top designers, including luxury leather upholstered by world-renowned Poltrona Frau, which also provides interiors for Ferrari cars.

Malaysia Airlines slashes fuel surcharge MALAYSIA Airlines has reduced its fuel surcharge from India and Bangladesh by 53 per cent to Kuala Lumpur and by 27 per cent to Australia and New Zealand. Both Karachi and Sri Lanka have witnessed a drop of 58 per cent in its fuel surcharge to Kuala Lumpur. Fuel surcharge on flights from India to Kuala Lumpur has been reduced by $53, resulting in a return airfare from India to Malaysia starting from as low as Rs 16,528, including taxes. Malaysia Airlines Regional Manager, South Asia, Azahar Bin Hamid said, “We are pleased to reduce the fuel surcharge and offer more competitive fares to benefit our customers, especially with the onset of the holiday season. We will continue to review our fuel surcharge which is benchmarked against our competitors.”

Singapore Airlines’ tiff with travel agents continues WITH the Travel Agents Association of India (TAAI) rejecting a productivity-linked bonus offer by Singapore Airlines, the stand-off between the airline and travel agents continues. “TAAI had demanded commission on tickets sold. In fact, we had asked all of our state committees to tighten their stand against Singapore Airlines with a slogan ‘Quit India’,” said, TAAI president Rajinder Rai, following the managing committee’s meeting in Kochi. Earlier, the airline had offered a productivitylinked bonus in which agents would get 2 per cent of total sales, provided they brought in business of at least Rs 5 lakh a month. “TAFI (Travel Agents’ Federation of India) members had overwhelmingly rejected the productivity-linked proposal since it is not the remuneration equal to commission,” said Ajay Prakash, National General Secretary, TAFI. This is the first time Singapore Airlines made an offer similar to other global carriers since it did away with a 5 per cent commission on each ticket sold. Of the 72 international airlines operating in India, at least 16 do not pay commission to travel agents.

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TRAVEL & TOURISM ‘ITC-Welcomgroup is the best’ A RECENT study conducted by The Economic Times has listed ITC-Welcomgroup among ‘The 14 Best Companies to Work For’ in India. It reinforces another recent listing by Hewitt Associates in partnership with Wall Street Journal, which recognised the group as the best ‘Employer in Asia’ in the hospitality category. Expressing satisfaction at these rankings, which are balanced by the perceptions of the 6,012 employees in the ITC Hotels Division, an ITC release pointed to its employees’ team spirit and the ability to work selflessly for long hours as key contributors to this achievement. Short-listed by a vast number of leading associations and publications, ITC-Welcomgroup has received many international and national awards in different fields. ITC’s 34-year old Hotels Division, commonly referred to as ITC-Welcomgroup, has over 100 properties spread across 90 destinations.

Marriott enters Pune market MARRIOTT International Inc has forayed into the city of Pune with the launch of a chic and contemporary Courtyard by Marriott, Pune Hinjewadi. Located a kilometer off the Hinjewadi /Wakad junction on the

Third Fortune Hotel launched at Bengaluru ITC’s wholly-owned subsidiary Fortune Park Hotels Ltd. has opened its third hotel in Bengaluru. The 130-room ‘Fortune Park JPCelestial’, which is Fortune Hotels’ 29th operating hotel, is owned by M/s J P Group and offers a contemporary ambience, in keeping with the cosmopolitan mood of the city and is conveniently located. The hotel offers 64 Standard Rooms, 34 Fortune Club Rooms and 32 Suites, with décor that combines minimalist style with efficiency and a complete range of

From (L-R) Atul Chordia-Founder Chairman & CEO Panchshil Realty; Rajeev Menon-AVP, Marriott International-India, Pakistan, the Maldives and Malaysia; and Deepak Manocha-General Manager, Courtyard by Marriott.

Pune-Bengaluru highway, the 153-room Courtyard by Marriott, Pune Hinjewadi, is a one-stop destination for warm and excellent services, unique dining options and best-in-class amenities. Rajeev Menon, Area Vice President, Marriott International — India, Pakistan, Maldives and Malaysia, said, “Pune is an important growing market and we see tremendous potential in the city…The Courtyard by Marriott, Pune Hinjewadi is a step towards the fortification of our commitment of bringing the best to the Indian markets.” modern amenities to ensure a pleasant stay for the guests. The choice of dining facilities, includes Orchid — a 24 hour multi-cuisine restaurant, the Nevada Bar and a Tea Lounge. The hotel also offers multiple banquet facilities including state-of-the-art conference and banquet halls and four board rooms and an efficient business centre. Other facilities include a gym, a spa, a beauty salon and travel desk. Meanwhile, Fortune Hotels has also opened a property in Manipal. The 68-room Fortune Inn Valley View, Manipal, overlooks the Western Ghats, making it most suitable for a leisure holiday stay.

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SNIPPETS Makes your wedding dreams come true: Tie the knot this year…as Marriott brings for you a marriage package that promises to make the most significant moment of your life the most memorable experience ever! Have your dream wedding come true at any of the exotic Marriott properties across India and get yourself a complimentary romantic honeymoon package, an exotic 5-day stay, with the room cost being on the hotel at any one of its 10 properties across Phuket, Paris, Malaysia, Hawaii, Australia, London, Switzerland, Dubai, New York and Sydney. The package is valid till December 31, 2009. Manish Tolani joins Marriot Mumbai: Manish Tolani has been appointed to head the Sales and Marketing division for JW Marriott Mumbai. His responsibilities in his current position entail organising and directing all sales and marketing efforts towards achievement of objectives and operational goals for the property. Tolani, a veteran with the Marriott group, has been associated with the company in different capacities since 2003. Prior to joining Marriott, Manish served a successful stint with the Oberoi Hotels & Resorts, where he seamlessly integrated strategy and execution resulting in tremendous growth for the organisation.

Revel in spa magic at Oberoi THIS monsoon, embark on a journey of rejuvenation with Oberoi Hotels & Resorts. The July to September monsoon season is considered ideal to detoxify the body. Those who wish to revel in the magic of the monsoon with a spa vacation can avail of the special package that offers a twonight stay at The Oberoi Rajvilas, Jaipur for Rs 35,000, and The Oberoi Amarvilas, Agra and The Oberoi Udaivilas, Udaipur for

The Golf View, Pachmarhi, retains its heritage ambience, like all other properties of WelcomHeritage.

stone-clad with partially painted portions, while pillars, windows and door frames are all painted white. The Taradale Cottage at Ramgarh, also in Uttarakhand, is a charming getaway amidst orchards, with a stone façade, sloping red roofs and white painted pillars and door and window frames. In the Kangra District of Himachal Pradesh is Judges Court, located in the sleepy heritage village of Pragpur — India’s first notified heritage village. The Judges Court is very imposing and well-maintained manor with brick red and white painted walls, set within an orchard. In Panchmarhi in Madhya Pradesh is located Golf View, so named because it overlooks the green expanse of the Pachmarhi Golf Course. Here, the heritage ambience remains complete with tiled roofs, a front porch, gables and chimneys.

Sarovar Portico set to open at Ghaziabad

The Oberoi Udaivilas at Udaipur is offering a unique spa experience to guests.

Rs 36,500. The taxes on the packages are extra. The package, valid till September 30, 2009, includes accommodation for 2 persons for 2 nights in a premier room, additional room for up to 2 children (below 12 years) free, subject to availability, breakfast daily for 2 persons, round-trip car transfer between the local airport or railway station and the hotel, and 15 per cent discount on spa treatments.

Heritage through décor IN re-creating the mood of earlier times, each WelcomHeritage hotel strives to be different from the other, maintaining, as far as possible, the original mood and ambience of the owners while adding convenience features for the guests. Windsor Lodge at Ranikhet in Uttarakhand is a recreation of the colonial structure built as a hunting lodge in 1909 and rebuilt after a devastating fire in 1948. Pillars support the sloping red roof (earlier tiled) and the steps leading up to the front verandah. The façade is

GHAZIABAD’S Vaishali district will see the opening of its first Sarovar Portico apartment hotel by the end of the year. This is the first step towards completion of the group’s target to bring up seven hotels by the year 2010. Targeting both the leisure and the corporate travellers, the 127 hotel rooms are competitively priced. Commenting on the addition of this new property Anil Madhok, Managing Director, Sarovar Hotels & Resorts said, “With the burgeoning middle class in the country and its demand for quality accommodation in the NCR growing, we expect to receive a tremendous response for this 3-star hotel in Ghaziabad.”

Fall in air ticket, hotel prices, says study EGENCIA, the world’s fifth largest travel management company and part of Expedia Inc., the world’s largest travel market place, unveiled its 2009 Global Benchmarking Study, evaluating the current economic climate and its impact on travel management trends and the supply environment for corporate travel. The study focuses on top domestic and international corporate travel markets in Asia-Pacific, North America and Europe. Building further on Egencia’s 2009 Forecast and Negotiability Index released last November, this study analyses industry trends, supplier research and capacity implications for the rest of the year 2009. APAC has witnessed a substantial decrease in average ticket prices (ATP) for all major corporate travel destinations. Capacity cuts, consolidation/alliance coordination and the strength of the

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dollar have contributed upward pressure on air pricing, but declining demand, economic uncertainty and a sustained decline in oil prices have driven downward pressure. Decreased demand and cut-backs on meetings have contributed downward pressure on pricing of hotel lodging as well. Says Gaurav Sundaram, Country Director, Egencia India, “Indian enterprises increasingly understand the business reality that corporate travel represents the second largest controllable cost. According to our study, comparing Q1 2008 with Q1 2009, the average ticket prices (ATP) for top corporate travel destinations like Delhi and Mumbai have decreased by as much as 50 per cent. Bengaluru ATP too has witnessed a downslide of 35 per cent. This indicates that Indian enterprises can lean into the challenging market conditions, achieve greater control over their travel programmes and make significant savings on their direct and indirect travel expenses.” The study also indicates that the rapid growth in air capacity registered in APAC between 2002 and 2008 has now subsided, adds Sundaram. The Egencia study illustrates the impact of changes in ATP and ADR figures (in $), for the top corporate travel destinations in APAC, between Q1 2008 and Q1 2009: Destination ATP YOY ADR YOY Bangalore -35% -15% Delhi -50% -44% Mumbai -50% -38% Shanghai -36% -17% Melbourne -32% -24% Sydney -32% -33% Singapore -23% -35% Tokyo -9% -17%

Reservation System, Automated Ticketing and GDS Fares & Ticketing and Tally Financial Accounting Programme. Aviation Law and Dangerous Goods Regulation are among the courses in demand among professionals.

MP launches tourism promotion programmes CHIEF Minister Shivraj Singh Chouhan has said that tourism can become an important sector in the construction of new Madhya Pradesh. Chouhan said that a lot of work has been done in the field of tourism in the state during the last five years. He said that there are possibilities for better efforts in this sphere. He was addressing a function to mark the International Tourism Day. Chouhan said that the state government will highlight possibilities and potential of tourism in the state by organising a grand function at Khajuraho in October. He said that all possible measures will be taken to promote investment in the state’s tourism sector. On the occasion, the Chief Minister inaugurated the tourist welcome centres of Indore, Orchha and Neemuch through remote. He also distributed excellence awards to various agencies and persons associated with Tourist Department. Marketing Office Delhi received “Best Marketing Office” Award which was received by O V Choudhary, General Manager and Dr Mamta Pandey, Senior Liaison and Marketing Officer.

Bird Academy ties up with DU for special courses BIRD Education Society for Travel and Tourism has signed a Memorandum of Understanding (MoU) with Delhi University (DU) through Campus of Open Learning (COL). As a part of the MoU, the world-recognised courses in travel and tourism will be offered to all the affiliated colleges of Delhi University, as well as to students of School of Open Learning (SOL) and Non-Collegiate Women’s Education Board. The classes will be held at Centre for Professional and Technical Training, COL, Keshavpuram, New Delhi. In the light of continued demand from the industry at large, the courses have been designed to equip aspiring students with required skills to pursue careers in the travel and tourism domain. The certifications available are Travel and Tourism, Computer Reservation System (CRS) and Airfares and Ticketing. The seats available for each course will be a minimum of 15 students per batch and the total duration of these courses varies from 15 hours to 90 hours. The classes are scheduled to start from July ‘09. Launches state-of-the-art training centre in Mumbai: Bird Group has opened its first training centre in Mumbai for specialised aviation and hospitality courses. The courses offered by the academy are accredited by global bodies, thus ensuring high standards of education at par with world-renowned training institutions. The courses have been conceptualised with a view to provide in-depth understanding and technical skills in the fields of Aviation, Travel and Tourism, Information Technology and Hospitality Management involving Soft Skill Training. The other important courses are IATA Consultant and Foundation Course, Airport Handling and IATA Cargo Courses, Computerised

Madhya Pradesh Chief Minister Shivraj Singh Chouhan inaugurating International Tourism Day programme.

Minister for Tourism and Youth Welfare Tukojirao Puar said that the state has all the hues to attract tourists. He said the Tourism Department was contemplating to open its centres in Bangkok (Thailand), in addition to the one at Bengaluru. Special guest and Chairman of Madhya Pradesh Tourism Development Corporation Dhruv Naryan Singh said the constant increase in the number of tourists in the state is a good sign for its economic and community development.

New thrust on rural tourism promotion THE Madhya Pradesh Tourism Development Corporation, along with the Confederation of Indian Industries (CII), recently organised a seminar on Rural Tourism in Bhopal. The seminar attracted many participants from the sector that are practicing and implementing rural tourism practices in India. The seminar discussed new marketing strategies for better promotion of rural tourism sites abroad and in India. It also debated whether rural tourism sites were famous mainly because of the handicraft products developed by them or the complete rural experience that they offer. Speaking on the occasion, Leena Nandan, Joint Secretary, Ministry of Tourism, Government of India said that the Ministry was planning a renewed marketing plan for popularising the rural tourism sites in a more effective manner. There will also be a renewed focus on the home stays available at many of the sites. Around 139 rural tourism sites have been chosen, including the ones already operational, for this purpose. And each of these sites

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SNIPPETS will have a unique marketing need which will be met. Rural tourism being the essential essence of India, Secretary Tourism, Government of India, Sujit Banerjee insisted that the effort should be towards making rural tourism a standalone product. It should be developed into an itinerary that can be taken up individually and not as an add-on activity. It should be made so strong that the project should surpass the popularity that the Golden triangle circuit currently holds. “Even the existing itineraries should be linked to the rural tourism products in some way or the other. The whole experience of the place matters a lot, as it involves an audience who will be coming to discover and cherish an entirely new experience,” he added. Pointing out the two main points of cleanliness and connectivity, Ashwani Lohani, Managing Director, MPTDC said that though cleanliness is an issue at these sites, awareness is being created about the same at increasing levels. “The concern regarding connectivity of the areas with the mainland is another aspect being looked into actively,” he added.

Mauritius Tourism ‘Looks East’ WITH its strategic focus on the Indian market to enhance tourist arrivals, Mauritius Tourism Promotion Authority (MTPA) has announced its new destination marketing initiatives for India. Guided by its Look East Approach that focuses on integrated consumer branding and mutually beneficial business partnership with the Indian travel trade, MTPA has increased its overall India market budget allocation for destination promotion and marketing. Elaborating on the India market way forward and future

trade and hospitality partners, will offer luxury holidays at competitive price-proposition. Moving a step ahead to offer a customised destination experience, which is in-sync with the Indian traveller’s needs and comforts, Mauritius Swagat Programme is designed to “Greet & Assist” the travellers as per their customary way to make them truly welcomed at the island. This initiative is jointly launched in conjunction with Mauritius hospitality partners, service providers and the national carrier Air Mauritius.

‘Keep discovering Dubai’ is a hit ‘KEEP discovering Dubai’, the largest familiarisation initiative ever witnessed in Dubai, has successfully seen over 2,400 travel trade and media representatives experience the emirate in less than two months, helping to push tourism and further broaden Dubai’s international appeal. In partnership with a number of key stakeholders, including Emirates airline and Group, the Department of Tourism and Commerce Marketing (DTCM), Dubai hoteliers and Destination Management Companies (DMCs), the campaign included hosted visits of travel trade, MICE organisers and media. Travelling from a total of 62 countries across six weekends and incorporating The Dubai discovery campaign tremendous response from over 7,300 hotel room nights, evoked the visitors. the initiative has been a critical step in further extending Dubai’s reach in these challenging global economic times. Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates airline and Group said: “The Keep Discovering Dubai campaign is a shining example of Dubai’s key players working together to drive and sustain a positive and lasting image of Dubai. The unique mix of nationalities hosted from across the world has helped Dubai further position itself globally as a leading holiday destination, an important step in retaining market share within the current environment.”

Kesari Tours opens office in Delhi Mauritian delegates headed by Robert Desvaux, Chairman MTPA and Karl Mootoosamy, Director MTPA, along with TAAI members.

strategy, Robert Desvaux, Chairman, Mauritius Tourism Promotion Authority said during a recent visit to India that focusing beyond the regular under the new approach, Mauritius’ future tactical initiatives, joint marketing and destination branding will be specially customised for the Indian market target segment, which includes honeymooners, leisure and family holiday makers. India is the seventh most prominent tourism source market for Mauritius and 43,911 Indian tourists visited the country in the year 2008. Elaborating on India thrust and specific initiatives, Dr Karl Mootoosamy, Director, Mauritius Tourism Promotion Authority, said the destination marketing initiatives for Mauritius will be tactically driven by both product appeal and price, which is based on the new consumer branding of ‘Mauritius An Affordable dream’, bringing to the Indian travellers an international holiday experience at affordable prices for this aspirational getaway. Under this consumer campaign, Mauritius Tourism, along with its

MUMBAI-based Kesari Tours have expanded their tourism services to the northern sector of the country, with the opening of their first northern region office in Delhi. While the company has a significant presence in western India, it now wants to make it as strong in the northern sector too. Kesari, pioneered by Veena and Sudhir Patil, includes holiday destinations, and operates specialised domestic and international tours for senior citizens, women and students. Their tour programme ‘My Fair Lady’ is among the most popular tour that serves women travellers only.

All aboard for the EurailTravel.com launch! TRAVELLING through Europe by train has never been easier, now that Eurail Group GIE has launched an interactive new website, Eurailtravel.com. Full of colourful images, easy to navigate maps, detailed itineraries and city highlights, Eurailtravel.com aims to inspire those who want to experience the freedom of discovering the vast variety of countries that comprise the exciting European continent.

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The Eurail Pass, the preferred way to explore Europe for thousands of visitors, is celebrating its 50th anniversary this year and the launch of Eurailtravel.com is one of many worldwide initiatives being developed to better assist travellers. Commenting on the launch of Eurailtravel.com, Ana Dias e Seixas, Eurail Group GIE Marketing Director said, “We were looking for a clear and cost-effective way to inspire potential travellers to visit Europe and travel by train depending on their interests. We are looking forward to welcoming visitors on our site and increasing the interaction with and within the Eurail network. All you have to do is be there.”

Special packages for Jamaica JAMAICA is inviting Indian tourists to savour the ultimate in entertainment, luxury and adventure. With a variety of familyfriendly hotels, resorts and villas offering special packages and deals just for families, Jamaica seems to be the place to be in this summer. “This summer is a great time to travel to Jamaica, with special savings available island-wide. With options ranging from allinclusive to a la carte and from rustic to luxury, families are sure to find accommodations that suit their needs,” said John Lynch, Director of the Jamaica Tourist Board. “Plus, with more activities than any other Caribbean island, families will find a wealth of Jamaica is the place to be this summer. adventure in Jamaica beyond the walls of their rooms that is sure to suit the interests of every family member, no matter what age,” he added. Some of the resorts offering ideal vacations to families on discounted and special package rates this summer are Sunset Resorts, Iberostar Resorts, Beaches Resorts, Starfish Trelawny, Rondel Village, FDR Resorts, Half Moon, The Ritz Carlton Golf & Spa Resort, Round Hill Hotel and Villas and Jamaica Inn.

East, West meet again in Macau MAY was the month to be in Macau, as the Cultural Affairs Bureau of the Macau SAR Government presented its 20th Macau Arts Festival. The festival coincided with the 10th anniversary of Macau’s handover. Macau’s local artists made the most of this opportunity by showcasing their works that reflect the region’s performing arts tradition. Meanwhile, on the international front, the festival also reflected the latest creative trends displayed by artists from across the world. More than 70 performances by artists from Portugal, the United Kingdom, France, Germany, Italy, Spain, the United States, Canada, Singapore, Macau and Mainland China brought together theatre, dance, music, opera, cinema, multimedia arts, as well as lesser known Chinese traditions like Qinqiang opera and Guangdong folk song, on a single platform. From contemporary dance to kungfu and chamber opera, the Macau Arts Festival not only bridged the gap between the East and the West but also showcased and brought together the distinct

theatre cultures on a single platform. Under the enthralling itinerary of the Festival was the Silent Movie by Davy and Kristin McGuire of UK and Germany. Silent Movie is a multimedia performance that mixes projections and live acting.

Poland Tourism keen to get Indian tourists IT’S Poland’s turn now to look at India as a potential tourist market. One of the biggest reasons for Poland to come to India and participate in a prominent travel trade show was the sheer potential the India market holds in terms of the tourist numbers that can be generated from here. Poland is studying as to how the many other foreign tourism boards are coming into India and are being successful in Emilia Kubik making a mark on the Indian tourists. “We are trying to experiment and study the Indian market and see how well it responds to our tourism products,” said Emilia Kubik, Project Manager, Strategic Planning Department, Poland Tourist Organisation. Poland is most famous for its cities of Warsaw and Krakow, and is a country with long history, traditions and cultural and architectural beauty. “We have numerous UNESCO world heritage sites that are spectacular like the salt mines of Weiliczka, the historic city centre of Warsaw and the wooden churches of southern little Poland. Austwiz, an old town, is most famous for its Nazi concentration,” she said.

Tourism Malaysia gets new chairman Dr Victor Wee Eng Lye has been appointed the Chairman of Tourism Malaysia effective May 6, 2009. Dr Wee was the former Secretary-General of the Ministry of Tourism from August 2004 until he retired from the civil service in 2008. His appointment, according to the Minister of Tourism, YB. Dato’ Dr Ng Yen Yen, was based Dr Victor Wee Eng Lye on his vast experience in the tourism industry. He was also the Chairman and overall coordinator for Visit Malaysia Year (VMY) 2007 Campaign, which saw 19.5 per cent hike in tourist arrivals in 2007 compared to the previous year, as well as an increase of RM10.4 billion in tourist receipts. The VMY 2007 Campaign won a gold award from the Pacific Asia Travel Association (PATA). He is currently the Chairman of the United Nations World Tourism Organisation (UNWTO) Programme Committee.

Neito is Spain’s Tourism Counsellor MIGUEL Neito has taken charge as Tourism Counsellor, Director of the Tourism Department, and Embassy of Spain in India. Prior to his appointment in India, Neito served as the Tourism Counsellor of the Embassy of Spain and Director of the National Tourism office of Spain in México and Centroamérica since 2004. A Civil Service officer with Spanish Government, Miguel has been with the National Tourist Organisation of Spain since 1994. In 1999, Neito was appointed as Tourism Counsellor of the Embassy of Spain and Director of the National Tourism Office of Spain for Southeast Asia, Australia, New Zealand and India in Singapore. He was vested with the responsibility of setting up a new office and opening of new markets in the region. During his tenure in Singapore, Miguel frequently visited India and was instrumental in developing and initiating the first promotional Miguel Neito activity for destination Spain in India.

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But where are we heading?

o what will be the future of airports? Where are we heading? As the New York Times said recently: “for most of the 20th century, airports were designed to connect two modes of transport: the automobile and the aircraft. But as global air travel expanded, that seemingly simple function resulted in ever-larger and more complex airports. Most hub airports are now plagued by air-traffic congestion, inconvenient parking, crowded check-in halls and undignified security procedures.” So what’s the way out? According to Grimshaw Architects (who have built the infamous Terminal 5 at Heathrow, although they can’t be blamed for the mess that BA made of the arrangements), the next generation airport is a super hub, constructed offshore on a man-made island. And the high points?

All check-in and ticketing is carried out online. Smart-bag tags embedded with radio-frequency identification chips allow luggage to be conveyed directly from bag drops to the plane, with no manual handling, lowering the risk of lost baggage. At city rail stations, passengers will go through a security portal before boarding undersea high-speed trains to the airport. The airport is designed like a wheel: at the center is the control tower, rising above a central hub, encircled by the airport and airline offices and topped by gardens; the outside rim houses the terminals, which are connected to the central hub by spokes — thin, glazed concourses with moving walkways. The trains from the city circle the outside rim, making stops at each terminal; a monorail links passengers to different

terminals to meet connecting flights. Because the airport is on the water, runways with various orientations allow for takeoffs and landings to be adjusted according to flight paths and prevailing winds. And with no adjacent residential areas to be disturbed, the airport can comfortably operate 24 hours a day. Well, Grimshaw have the expertise to comment: They built Heathrow’s Terminal 1 (Star Alliance terminal), Terminal 3 and Terminal 5, they are building St Petersburg’s Pulkovo Airport, Zurich Airport, Manchester Airport Terminal 1 and the iconic Kuala Lumpur International Airport (KLIA). But how does it matter to us? We are so used to the West giving us red eye flights because their citizens mustn’t be disturbed in the night. We may modernise our airports, but what about our attitude. No Grimshaw can help us with that.

CHANGING FACE OF AIRPORTS: The next generation airports will have no congestion in the air and smooth handling of all operations on the ground.

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RNI NO. DELENG/2006/16897 Posting Dt. 3-4/07/09 Reg. No. DL(E) 20/5294/2009-11

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