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EDITOR-IN-CHIEF’S NOTE
Getting to be inclusive
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FTER TWO-AND-HALF years of having his way on most issues in the business of civil aviation, Praful Patel hit a roadblock in both Kolkata and Chennai. The Leftists were unequivocal that they wanted AAI to modernise the Kolkata airport, and in a double-whammy Tamil Nadu chief minister M. Karunanidhi had an all-party meeting to approve the modernisation of Chennai airport and the construction of a greenfield airport at Sriperumbudur by AAI. AAI has plenty to thank Dayanidhi Maran for this gift from the South. The brash young man (who, his publicists claim, was on par or better than Praful Patel, as far as ministerial performance went — an interpretation that, one is sure, will not amuse Mantriji) fought with his cousins, exhibited a brand of ambition that angered his grand uncle, and sent his political, ministerial and airport ambitions crashing and left AAI chairman K. Ramalingam a delightful present. If that wasn’t enough, Behen Mayawati announced that the Taj Expressway project for an international airport was being resurrected and she wanted the airport fasttracked. What does it mean for Praful’s oftrepeated claim that no international airport can come up within a radius of 200 km from an existing one? Can the UPA afford to say no to Maya memsaheb? So far, at least Praful Patel has been hugely fortunate that he has been able to ram through his agenda without a blip. There are many reasons for his 30-plus months streak of luck. Foremost, of course, is his own dogged perseverance. He can be one hell of a focussed person when he gets down to getting what he wants, even if it means a long, long haul. The V.K. Verma (AI’s director commercial) case is a classic case in point. He spent two whole years pursuing it, and again pursuing it, and again pursuing it patiently and relentlessly.
CRUISING HEIGHTS June 2007
Advantage Number Two for Praful is the deputy chairman of the Planning Commission. He has a great benefactor in Montek Singh Ahluwalia, who thinks like him, speaks like him and reacts like him. (If there is any one difference between the two, it is that Montek has a passion for the game and Praful doesn’t play golf. Maybe he is passionate about other things.) In nine things out of ten, Montek has gone along with Praful and sometimes even stuck his neck out for the minister. Most of all, there has hardly been any debate on issues. The minister has got away in most cases with his version — uncontested and without debate. The merger is another classic case in point. If indeed the two airlines were to merge, why weren’t their fleet plans revised in keeping with the decision? Why was Indian given a new livery? (AI, too, had spent some money refurbishing its own livery.) And why was there all this talk about an IPO for Air India and one for Indian, appointment of consultants, etc.? Why this sham? One argument that is given in defence of Praful is that the enormous amount of positives that he has achieved in civil aviation wouldn’t have been possible if he hasn’t been dogged in pursuing his agenda with singleminded passion. Maybe the argument is valid. Without doubt he has been able to transform the industry, rejig it and energise it. But does he want to be just a good minister or a great minister? Greatness comes when you have the ability to be inclusive, allow space for differing points of view and yet live in reasonable harmony. After all, isn’t he the product of such a system? A Gujarati blooming in Maharashtra and blossoming in Delhi!
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Move for cleaner skies The International Air Transport Association (IATA) recently backed the idea of emissions trading for the global airline sector and said it proposed the plan to the United Nations. “We’re very enthusiastic about global trading for the airlines industry to reduce emissions blamed partly for global warming,” Philippe Rochat, an IATA environment official, said. “We support the concept but only as a part of a global approach,” he said, recalling that the aviation industry must work on multiple fronts to reduce its carbon-dioxide (CO2) emissions. “We intend to propose the concept to ICAO, when ICAO meets in September,” he said. “We’ll be pushing governments to step up investing in alternative technologies.” A CO2-emission trading market would be combined with a fuelefficiency programme at the airlines’ operating level, which, according to IATA, included a maximisation of air routes and a reduction in waiting times before landings. The airline sector is banking on a 25 per cent reduction in fuel consumption by 2020 through measures already available. With this target, the sector’s emissions would rise to three per cent of the global total from the current two per cent. International airline executives agreed they were losing the public relations battle over their industry’s role in global warming. At the recent IATA annual meeting, the airline executives were optimistic about carbon emissions trading, but only because it was viewed as less punitive than alternatives such as carbon taxes. IATA, which represents airlines with 94 per cent of the world’s scheduled flights, said that aviation produced only about two per cent of the world’s CO2 emissions and that would grow to only three per cent by 2050, even with expected strong growth in passenger and freight traffic. Executives of some non-European airlines complained that with the issue of airline pollution being most hotly debated in Europe, there was a danger that the region would dictate how all airlines deal with emissions reduction. IATA said it was developing an industry plan for trading emission credits.
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MAHARAJA MERGER
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The Maharaja has a new avatar. With the merger of Indian and Air India, the aviation sector is in for a major paradigm shift and some sweeping changes in the players’ setting. The new entity is likely to emerge as a more robust and stronger airline.
GREAT WALL PROBLEMS p35 NEWS DIGEST The Great Wall Airlines’ plan to operate its freighters to India has been grounded due to the security reasons. But against the background of rising exports and the target of doubling the volume of bilateral trade to $40 billion, isn’t it time to have a fresh look at such orders, based on the sensitive issue of national security? CRUISING HEIGHTS June 2007
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With a market share of five per cent, Jeh Wadia’s GoAir is on new high after posting highest load factor this year. But what’s in a load? Ask the Indian’s air hostesses, who have been asked to check their rising waistline. Also read about Qatar’s golden run and record profit made by SIA.
Photos: H.C.Tiwari
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ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS TRAVEL & TOURISM PROFILES NEWS DIGEST
CRUISING HEIGHTS K. SRINIVASAN Editor-in-Chief
TIRTHANKAR GHOSH Managing Editor
R. KRISHNAN
INTERVIEW DINGFISHER—A BOLD GAMBLE p6 Dr Vijay Mallya has done it again. On an acquisition spree, after having bought over Whyte and Mackay, Kingfisher has taken a stake in Air Deccan. With that, the two airlines together would become a formidable force in the private aviation sector.
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On the occasion of its first AGM in India, at the verdant land of Kochi, CANSO’s chairman, Ashley Smout, talks about his plan to improve the overall performance of the global ATM network.
Consulting Editor
MONAVAR ALAM Copy Editor
SUNIL BHASIN Editor (Quality)
SHIVANGI SHARMA Editorial Coordinator
RUCHI SINHA PRADEEP JHA Layout Artists
BHART BHARDWAJ Art Director
H.C. TIWARI
Consulting Photographer
RAJIV SINGH
Gen. Manager (Admn.)
GLOBETROTTING CONTOURS OF CANSO
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A special report from the sidelines of CANSO’s first AGM in India. Take a close look at this global voice of the ANSPs and its future agenda.
Go globetrotting and take a look at celebrated Bollywood filmmaker Mira Nair hanging in the air, or look at how rats wreak havoc in MIA or a passenger slugging the pilot.
PERSPECTIVE BACK PAGE
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While other airlines are facing shortage of good pilots, a Norwegian pilot put up his services for auction on Ebay.
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International airports in the country are in for great facelifts and revamps. With SEZs coming into their folds, their fortunes are likely to get major upswings.
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RENU MITTAL Executive Director
Editorial & Marketing office: Newsline Publications Pvt. Ltd. C-15, Sector-6, Noida-201301 Telfax.: +91-120-4257701-03 All information in CRUISING HEIGHTS is derived from sources we consider reliable.It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Published by K. Srinivasan 4C Pocket-IV, Mayur Vihar Phase 1, Delhi 110091 and printed by K. Srinivasan at Nutech Photolithographers, B-240, Okhla Industrial Area, phase-I, New Delhi 110 020 Vol II No 2 Cover photos: H.C. Tiwari
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Soaring spirits
PERISCOPE
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“There is no real ostensible reason why it should not be allowed. In the past, we did allow alcohol in domestic sectors. International flights do have it on board. Especially, when there is no ban on drinking on ground before getting on board. … The Directorate General of Civil Aviation will have to take a call on this. If it notifies, it can be allowed.” Civil aviation minister PRAFUL PATEL on can liquor be served in domestic flights.
High hopes “Airlines are not built on any one individual. They are built on solid foundations, and if tomorrow even I am hit by a truck, the company can continue.”
LETTERS TO EDITOR
TURBULENCE HITS AIR DECCAN EXPRESS SECTOR BOOMS
I READ WITH great interest the wordy duel between Vijay Mallya and Capt Gopinath, published by you in Perspective (May 2007). So, finally Venus and Mars have come together? I remember, many days before the deal was inked, the captain had remarked, “We are from different planets; he is from Venus, I am from Mars,” and a few days later he had added, “Men and women may be from Mars and Venus, respectively, but they get into bed together, though they fight.” Was he prophesying? So now can we see ‘Dingfisher’ flying to the US next year? After all, Air Deccan completes five years in 2008. Did Vijay Mallya have Deccan in mind while ordering the A380s? I look forward to you bringing out the inside story for us. Rajeev Sharma, Mumbai May 2007
THE KINGFISHER-DECCAN episode augurs well for the Indian aviation scene. Instead of airlines getting at each other’s throats and finally crashing, it is better to consolidate. Moreover, consolidation has become the norm today. We have fresh examples of Air IndiaIndian and Jet-Sahara in the Indian skies. After all, it is better than going belly-up. Seema Kulkarni, on email
Illustrations: Rajeev Kumar
I HAVE BEEN a regular reader of your magazine for the last six months, and I must tell you that you are doing a real great job. This issue appeared to be a bantering, or shall I say battering, one. While DN and IT bosses slugged it out, your Back Page (May 2007), too, featured a smart war of hoardings. I liked it, as it came as a light one, in addition to the column Globetrotting, in an otherwise serious magazine. Nice one. Shreya Goyal, New Delhi All correspondence may be addressed to Editor, Cruising Heights,C-15, Sector-6, Noida-201301 OR mail to newslinepublications@rediffmail.com
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Air Deccan MD G.R. GOPINATH on his COO, Warwick Brady’s possible departure.
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Rent-a-quote Kaul “The ministry of civil aviation will need to continue to work with state and central government departments to rationalise airport user charges which should be in line with international levels.” On exorbitant airport user charges levied at Indian airports.
“The execution and interpretation of these rules is an issue (in the case of MDLR) but there are enough provisions... for the regulator to implement.” On air charter licence norms being reworked to prevent misuse.
“This is a big business opportunity. Freighter conversion will cost much less in India than Europe because the cost of labour is cheaper, technology is cheaper.” Commenting on the talks between EADS and Jupiter Aviation to build freighter-conversion facility in India.
“At this stage of the industry (in India), restrictions on the airlines are not warranted for. You pay for preferred seating and anything additional. That’s how the low-cost model works the world over.” On the DGCA directive making it compulsory for all airline companies to issue seat numbers to passengers before boarding. KAPIL KAUL, CEO, South Asia and Middle East, Centre for Asia Pacific Aviation (CAPA).
Go India “After promoting Singapore for the last 60 years, Singapore Airlines is now keen to promote India as a tourist destination. As part of this effort, passengers will be enticed to fly to India.” Singapore Airlines Vice-President, Public Affairs STEPHEN FORSHAW on increasing tourism ties with India.
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Old is not gold
Around 300 aircraft operate in the country, of which 123 are over 20 years old.
The global average for aircraft fleet age is 180 months, or 15 years.
Of these 123 aircraft, 38 are registered with public sector operators and 85 with private operators.
The average age of Air India fleet is 16.23 years.
There are 14 scheduled operators in the country, comprising one cargo and 13 passenger airlines.
Singapore Airlines, Jet Airways and Emirates have an average fleet age of 6.25 years, 5.3 years and 5.1 years, respectively.
In the 12 months to March 31, 2006, Indian airlines carried 25.5 million domestic passengers (up 27.9 per cent year-on-year).
British Airways and Lufthansa have an average fleet age of 10.6 and 10.3 years, respectively.
COLD STATS
In the Indian skies
LOOKING GLASS
Prepare to go West, Captain!
Maharaja’s new clothes “The choice of colours namely red for “Flying Swan” and orange for “Konark Chakra” are meant to signify vigour and advancement. Further the colours also have a strong association with the two carriers thereby retaining the earlier imagery of traditional hospitality and service.” PRAFUL PATEL
“The airhostesses will sport specially designed Ritu Beri outfits in red and orange, while the men will wear black Pierre Cardin.” Air India CMD V. THULASIDAS on the new livery and uniforms for the new entity, Air India
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INGFISHE A BOLD GAMBLE
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ll those gimmicks of free tickets and zero fares are going to go away; that’s good for the industry,” Paramount Airways managing director M. Thiagarajan’s spontaneous comment summed up the mood of the Kingfisher-Air Deccan marriage. In real terms, though, what does the deal give UB (United Breweries) boss Vijay Mallya? Here are the bare facts:
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Kingfisher-Air Deccan group becomes the largest domestic airline with a fleet of 71 aircraft, comprising 41 Airbuses and 30 ATRs. The combine would cover all segments of air travel, from low fares, to premium fares and offer the maximum number of 537 daily flights, connecting 69 cities. The Air Deccan deal will cost UB Rs 550 crore and gives it the rights to bid for another fifth of Deccan Aviation. It gives Mallya an airline with 43 planes and 22 per cent market share, by passengers. Air Deccan operates 350 flights to 61 destinations daily. Kingfisher (11 per cent) and Air Deccan will have a 33 per cent share of all Indian domestic passengers, inching ahead of Jet (22 per cent) and Sahara (9 per cent), based on April figures. Air Deccan will allot 26 per cent by way of preferential allotment of new shares at a price of Rs 155 a share. Air Deccan’s net sales for the nine months till March stood at Rs 1,271 crore. It posted a net loss of Rs 246 crore. The company’s FY06 figures stood at Rs 1,236.4 crore with a net loss of Rs 340 crore. There was not much leeway with the pricing, as it was Sebi-mandated. Analysts feel Rs 155 is a throwaway price and UB Holdings was able to get management control at a very low price. The market cap of SpiceJet is Rs 1,811.48 crore, which is 0.81 times its sales, while the market cap of Jet Airways is Rs 6,642.11 crore, 1.44 times its sales and Air Deccan’s market cap is Rs 1,465.62 crore is two times its sales. The open is expected in the range of Rs 160 for 20 per cent and likely as soon as it is necessary under the law. In May 2006, Deccan Aviation raised Rs 363 crore through its IPO. In
When Dr Vijay Mallya acquired 26 per cent of Air Deccan, he knew he had served an ace. His move has made the Kingfisher-Air Deccan combine the largest domestic airline. With a fleet of 71 aircraft, ‘Dingfisher’ will cover all segments of air travel.
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T WAS IN faraway Vancouver, at the sidelines of the IATA (International Air Transport Authority) annual general meeting, that the ‘common man’ image of Air Deccan finally vanished into thin air. Here was a meeting of pinstriped CEOs of the airline industry. They abhorred the lowcost model, hated them for what they were doing to the airline business. And here was finally a bloke who had actually belled one of them. For Vijay Mallya, standing in the spotlight and waxing eloquent is like changing skin. Click a button and you have a new avatar. And there he was puffing on his cigarillo and telling the world about what he would do with Air Deccan. “We are considering swapping or switching the orders,” he told journalists and added that both Kingfisher and Air Deccan would “revisit their fleet plans” in coordination with each other to rationalise the fleet structure. In a sense, that is at the heart of the UB plan for Air Deccan. Or at least Part A of its plan: flying abroad and setting up global footprints for the Kingfisher brand. Mallya waxed eloquent in Vancouver that he was “very optimistic”
that the Indian government would soon give approval to operate international services. Strictly speaking, under existing rules, Kingfisher may not be able to operate on international routes until 2010; Air Deccan would be eligible from the second half of next year. Having begun operations in 2003, it breaks the five-year ceiling at this time. “For all practical purposes, we will be one entity. We will have an internal arrangement to lease out high-capacity Kingfisher aircraft to Air Deccan to maximise the benefit of overseas routes,” he told an interviewer. “The combined revenue of the two airlines in 2007-08 is estimated at Rs 6,000 crore. Initially, the two airlines will continue to be run independently as a premium service provider and a low-cost airline, but would work out an optimal route strategy, wherever possible. In terms of volume of passengers, the combine will have the largest market share,” Mallya told an interviewer. That apart, the two airlines hope to save over Rs 300 crore in the first full year of operations through synergy. The savings are likely to accrue through the sharing of engineering services, spares, employees, pilots, and other crew and
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ON THEIR BATTLE: I don’t think there is any point in going down the track of who is from which planet because right now, Kingfisher and Air Deccan are on the same planet. ON THE CONSOLIDATION: Kingfisher and Air Deccan are unique in that they have exactly the same fleet of aircraft, the same equipment in terms of engine, in terms of brakes, in terms of avionics. So there is a huge opportunity on saving in engineering and maintenance cost. Quite apart from ground-handling synergies, there is a whole host of items where duplication is completely unnecessary. ON HIS MOTIVES: It was a completely financially-driven issue for us and whether the legal merger or otherwise stood in the way was actually
ground-handling facilities. In real terms what is the roadmap ahead for ‘Dingfisher’, if one could call it that for the moment. Both airlines have orders placed for about 90 aircraft with Airbus Industrie. Kingfisher’s orders include the A380, the first of which is slated for delivery by 2011. It has also ordered A340-500s, A330s and A350s. There are also more orders at the Paris Air show. “There will be another wide-body order. I am looking for aeroplanes that can go non-stop from India to the East Coast of the United States. We already have on order aircraft [Airbus A340-500s] that can make it to the west coast, so this is the next requirement,” Mallya told an interviewer. It is clear that orders will be pruned, swapped and reconfigured. But even a combined airline simply cannot accommodate another 90 to the present strength of 71. It’s hugely unrealistic. One likelihood is Mallya slowly getting rid of the Air Deccan fleet and replacing it with the video on demand, high-end Kingfisher product over a period of 18-24 months. Slowly but surely, there will be a reorganisation of routes. It is inevitable that there will be better frequencies with more parking now available to the combined entity. Industry analysts believe that at least on the major routes, Kingfisher will try and establish a dominant posi-
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secondary. Achieving economies of scale and creating the Kingfisher-Air Deccan combine as India’s largest and the most competitive carrier with the lowest cost was a priority in an industry that required consolidation—these were the prime drivers as to why I decided to make a very substantial investment in Air Deccan. ON THE FUTURE: He (Gopi) had other options but I think he saw a lot of merit in my option; I am delighted because this is probably the most significant consolidation play opportunity in the country. These are two large players and the Kingfisher-Air Deccan group is now the largest airline group in India and the connectivity and the number of flights and everything that goes with it is hugely value accreted.
Both airlines have orders placed for about 90 aircraft with Airbus Industrie. Kingfisher’s orders include the A380, the first of which is slated for delivery by 2011. It has also ordered A340-500s, A330s and A350s. CRUISING HEIGHTS June 2007
September 2006, the company raised Rs 440 crore from advance sale and lease back of aircraft, of which it has already recorded Rs 271 crore as income. The total cash available works out to Rs 634 crore. However, Deccan Aviation has recorded an operational loss of Rs 657 crore over the past four quarters. Counting the interest outgo, cash-loss is Rs 700 crore. Deccan Aviation has recorded a net loss of Rs 247 crore in the past three quarters of the fiscal (it follows a JulyJune financial). Why is the net loss lower than the operational loss? Simple. Because of the other income of Rs 357 crore and Rs 271 crore was from the advance sale and lease back transaction. Air Deccan has chalked out massive expansion plans over the next few years. It plans to add 10 aircraft in 2007 and 14 in 2008 and is expecting 81 to be delivered over the next 6-7 years.
tion to beef up the load factors and increase the revenue. That would mean less Air Deccan flights that could be deployed to stations like Ranchi, Jabalpur, etc. But what they seem to be forgetting is the fact that using Air Deccan bays for Kingfisher would mean packing the LCC aircraft off to other airports. Would it be viable? The Rs 300 crore figure is also debatable. At this rate, a merger of Kingfisher, Air Deccan, Go and IndiGo will provide better savings. The fact is, spares are the same, but they don’t come free. Of course, the engineering is indeed common. What will be the merger cost as and when it takes place? Many analysts state that the costs are indeed so prohibitive that a savvy operator like Naresh Goyal decided to keep the Air Sahara operations separate from Jet and name it JetLite. If Mallya goes for one Kingfisher brand, does it mean the end of the LCC road–a complete overhaul of the Air Deccan fleet and all that goes with it? With fares bound to rise in the near future, as indicated by virtually every CEO in the business, what would happen to the LCC model and travel for the common man, as propounded by Captain Gopinath? Some time ago, Vijay Mallya had given a stinging riposte to Gopi before their deal took place: “Those who
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Over the next two years, it has marked an investment of Rs 200 crore that includes the construction of an A320 hangar in Chennai and an ATR hangar in Kolkata, a training centre and installation of simulators. Deccan will have to charge Rs 600 per ticket to break even, analysts said. ATF prices have also been cut, so the break-even price may go down to Rs 400. Mallya said: “I think it is more of a negotiated settlement. We took into account the financial needs of Deccan, at this point of time, and have just found the best way to meet those aspirations. UB has always tried to create value by making the most out of any business combination and out of any investment. We are confident to do that here as well.” The bourses reflected the sentiment: SpiceJet shot up nearly 21 per cent, to Rs 61 each, while the Jet share added 1.36 per cent to Rs 769.35.
run an airline on other people’s money do not know its value,” he said. As he explained his airline owns 28 aircraft and has over 350 flights daily. “Our cost per kilometre is as high as Rs 4,269 per seat,” he said, “It is easier for Capt Gopinath to say that he is from Mars and I am from Venus, but we are doing far better than them.” With valuation of Kingfisher being enhanced following the acquisition, it is evident that Mallya would not be interested in selling the shares of Kingfisher cheap at this stage, and would much rather wait for the right time. But he made it clear that an IPO would take place sooner rather than later. “No airline can do without an IPO. Sooner or later we have to float one,” he told journalists. It is clear that this could happen over the course of the year as the valuation gets better, the swap ratio for an Air Deccan share gets better and the private equity infusion becomes attractive. That is Part B of the plan. The real test, perhaps, for the liquor baron, if indeed he has to become an airline tsar, would be to manage a company that will be huge in terms of assets, but with equally huge and complex problems of merger, assimilation and uniformity of service. Within the industry, Kingfisher Airlines has a reputation for being run by a mercurial boss, who is hands-on and
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ON VIJAY: He [Mallya] said he would allow me to have my dream of building the airline and to become profitable and keep the identity. At the same time he is going to invest and then we can still, without merging, have all the benefits of sharing the resources. ON FARE HIKE: Even if Kingfisher Airlines had not joined us, Air Deccan had to increase fares. It was not that Air Deccan was losing and all others were in profit. Every other airline in the country is in loss. It is because of a certain excess capacity, everybody is panicking and there is a downward spiral. Also, there is a consumer shift that needs to happen on a much larger scale than what you are witnessing. It is the beginning of social
With valuation of Kingfisher being enhanced following the acquisition, it is evident that Mallya would not be interested in selling Kingfisher share cheap at this stage, and would much rather wait... CRUISING HEIGHTS June 2007
demographic shift on a tectonic or a seismic scale. Right now, you need to have a strategy where you do not burn cash and at the same time cut our cost. ON A MERGER: I cannot speak whether it is going to happen or not, anything is possible but for the present, I think there is an extraordinary great arrangement and there is a very strong robust scalable both in the top line—and the bottom line—business model. ON HIS FUTURE: It is high time that I shifted (from day-to-day operations), I had already decided long ago that I will bring in a new chief executive officer and restrict myself to the responsibility of an entrepreneur as the company has grown really large.
takes all the decisions himself. How much will he professionalise and how much leeway will he give his managers, will perhaps make or mar the prospects of the airline. Towards the end, Gopi was keen to completely professionalise the set-up and get into the investor’s role. Unfortunately, the financial crunch was debilitating and his core shareholders, including the most important S.N. Ladhani, felt they had run their course and it was time to move on. Does it mean the end of the road for Gopi? Unlikely. Industry sources say that the good captain, who is sure to make over Rs 200 crore on his ten per cent in the company, will focus his energies on Deccan Aviation and turn the helicopter business into a big-ticket operation. He will look at the possibility of a training school and MRO as independent business ventures. Already the executive chairman of Air Deccan has been silent for some time. Coupled with the fact that he has now given the centrestage to Vijay Mallya, it must be hurting deep below. It won’t be long before Mars and Venus realise they are separate planets. Unfortunately, Captain Gopinath won’t be able to fly home on Air Deccan! If that happens, it will be a sad day indeed. It isn’t everyday that one sets up an Udipi Hotel in the sky!
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PERSPECTIVE
SEZs to boost fortunes OF INTERNATIONAL AIRPORTS International airports around the country have planned out a host of ancillary facilities to boost their fortunes. The creation of special economic zones within the airport complex or nearby—in Hyderabad, Nagpur and Kochi—will ensure the economic growth of the region.
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ITH MARCH 2008 as the deadline, the work at Hyderabad’s new airport continues apace. The airport, with its good infrastructure, will have the potential to become a convenient operational hub for airlines. Incidentally, the present airport in the city is one of the busiest airports in the country. It has been witnessing a whopping rise of 49 per cent in the traffic flow among the six metro airports of the country in the last nine months. The rising volumes have prompted GMR Hyderabad International Airport (GHIAL) to seek out methods to ensure full utilisation of the airport within a year of its commissioning in March 2008. The GMR Group has tied up with IMRB International to base its strategy on the potential for passenger traffic and cargo movement, specifically from the catchment region. IMRB has specialised units
RACING TO COMPLETION: Artist’s impression of Hyderabad International Airport
AIRPORT UPDATE
Lockheed on congested airspace
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Lockheed Martin has offered to operate its latest navigation system in Mumbai on experimental basis to deal with the crowded Indian airspace. The system is an adaptation of the satellitebased Advanced Technologies and Oceanic Procedures (ATOP) system. Operational since March at Anchorage Air Route Traffic Control Centre in Alaska, it provides safe separation of aircraft in oceans and other areas that are outside radar coverage or radio communication. In addition, the system also detects conflicts between aircraft, provides satellite data link communication and information to ATCs, providing them the flexibility to provide direct fuel-efficient air tracks over long oceanic routes as well as large land masses. The offer comes in the wake of Air India having placed large aircraft orders with Boeing, and Lockheed Martin had formed a strategic alliance with the US aircraft manufacturer to have aircraft systems, avionics, simulation and trans-oceanic communication equipment placed in the planes produced by it.
AAI ties up with FAA In yet another move to ease air traffic congestion at Delhi and Mumbai, AAI has tied up with US Federal Aviation Administration (FAA) to develop satellitebased navigation system for managing the ever-growing traffic in these places. To be implemented in a year, the new system is expected to lead to significant increase in capacity, and, if all goes as planned, even lower flying time to these cities. Currently, planes are directed by ground-based navigational aids. Therefore, they go from one tower to other and after reaching the next tower, they are told the route they have to take. This leads to a rather circuitous path. On the other hand, Global Positioning System (GPS) navigation will lead to the path being defined on take-off itself and that would lead to a slight reduction in flying time. The move is also expected to ease communication congestion between cockpits and ATC towers, as clearly defined paths would reduce the need to talk very frequently. The new system,
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for consumer research, qualitative research, business-to -business research and research on customer satisfaction. The consultants will focus on the macroeconomic trends as well as insights from consumers and businesses in the region to suggest measures to achieve full utilisation of the airport. The new Hyderabad International Airport, with its modular design of the passenger terminal, will initially cover 1,00,000 sq metres of floor space, which would ensure rapid transit between its domestic and international concourses. In addition, the airport complex will have a dedicated ‘airport village’ with a local flavour complete with shops and restaurants. There will also be a business hotel adjacent to the terminal building. In addition, the GMR Group has acquired about 240 acres for the establishment of an airport-based special economic zone (SEZ). Planned on the lines of similar free-trade zones in Dubai and Hamburg, the Hyderabad SEZ will house aircraft component manufacturing industries as well as high-end aircraft engineering support activities. Besides, the SEZ will also have top-of-the-line electrical and auto-component manufacturing facilities, software units, high-precision and pharmaceutical equipment manufacturing, etc. The SEZ will be in addition to a cargo hub and special bonded warehouses within the airport. According to GMR sources, there could also be road and rail links to inland container depots (ICDs) and container freight stations in the western region, apart from air connectivity. At present, 11 international airlines and 10 domestic airlines operate from
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Planned on the lines of similar free-trade zones in Dubai and Hamburg, the Hyderabad SEZ will house aircraft component manufacturing industries as well as high-end aircraft engineering support activities
known as performance-based navigation, will be introduced at other airports after Delhi and Mumbai.
Airport gets ISO certification The Thiruvananthapuram airport has turned environment-friendly and has become the second airport in South India to secure the environment management system compliance certificate under ISO 14001 : 2004. The certificate, issued by the Joint Accreditation System of Australia and New Zealand, comes a month after the airport acquired the Director General of Civil Aviation’s (DGCA) Aerodrome licence. The airport is the fourth in the country, after Ahmedabad, Jaipur and Mangalore airports, to obtain the ISO certificate. With this, the airport authorities and the user agencies would have to practise the Environment Management System (EMS) policy for achieving an environment-friendly atmosphere in and around the airport.
Bihar to develop 21 airfields In order to tap tourism as well as improve air connectivity within the state, the state government has decided to develop 21 airfields in its jurisdic-
Hyderabad, flying to over 35 destinations. Industry experts believe that an airport SEZ would be a logical extension of the greenfield airport project. Currently, for instance, domestic airlines fly to Frankfurt or Singapore for components. A component facility within India would help airlines and other industries cut costs. Meanwhile, GMR has awarded the contract for managing the automated parking management system at Hyderabad airport to the Malaysia-based Tenaga Group for a period of three years. The main objectives of the parking management systems would be to provide quality parking service and facility to customers, facilitate quick entry and exit from the parking points, reduce dwell time and build MIS systems to support future planning and development. Tenaga Parking would perform, implement and execute the management services for efficient and customerfriendly management of the parking facility. Besides, GHIAL would develop the car parking facility with necessary equipment and technology, including surfacing of entire car park area, internal roads and provision of utilities, such as electricity and water. The SEZ at the new Hyderabad airport would not be the only one in the country. While the Maharashtra Airport Development Company (MADC) has planned to develop an SEZ at the Nagpur airport, the Cochin International Airport (CIAL) has also approved a 480-acre land utilisation plan for an aircraft maintenance facility, an aviation academy and a golf course, among other things.
tion. Prior to bifurcation, there were 34 airfields under the state government’s domain. Although no navigational or meteorological support is available at any of these 21 airfields, the government has agreed in principle to convert all airfields having kutcha runway into metalled ones and also construct boundary wall and rest rooms, apart from refurbishing the existNitish Kumar ing infrastructure at aerodromes under it. The development of ‘smaller aerodromes’ would be done in a phase-wise manner over the next four years.
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Advanced airport management in Mumbai
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ECENTLY, Mumbai International Airport Pvt Ltd (MIAL) announced that it was going live with India’s first modern airport management system. The system has been installed at the Chhatrapati Shivaji International Airport (CSIA), Mumbai. The airport management system has been installed by the global provider of airport IT solutions, SITA. The innovation heralds a significant turning point with a shift from the manual systems to IT-driven automation, enabling end-to-end management of airport resources in real time. CSIA, which is India’s busiest airport, has witnessed a huge growth of passenger and freight volumes over the last five years. For April 2006-March 2007, passenger traffic at CSIA was 22.25 million, up 21 per cent over the corresponding
The airport management system installed by SITA heralds a turning point with a shift from the manual systems to IT-driven automation, enabling end-toend management of airport resources in real time
Port Blair airport is international The Centre has approved the proposal of declaring the Veer Savarkar Airport (VSA) as an international airport. On its part, the Airports Authority of India (AAI) would construct more infrastructures here to take VSA at par with the other international airports and make it compatible to handle greater volume of traffic in home and abroad. Japanese forces built the lone airstrip of Port Blair during their regime in these islands from 1942 to 1945.
Grant for Kolkata airport
The civil aviation ministry has sanctioned Rs 200 crore keeping in view the growing importance of the airport. The Kolkata ATC controls flight movement in three zones—till Myanmar in the east, Visakhapatnam in the south and Raipur in the west. There is no back-up radar for these zones. About 1,000 planes overfly the ATC daily and during peak hours, an ATC officer has to handle take-off and landing of 12 flights. State-of-the-art LCD monitors will replace the seven radar monitor sets at the airport, which have been in use for almost 10 years. Surface movement radar, which
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period in the previous year. According to Sanjay Reddy, managing director, Mumbai International Airport, the installation of the new management system was in line with MIAL’s vision of making CSIA a world-class airport. SITA’s Airport Management Solution would lead to improved performance across the whole spectrum of the airport’s activities including more efficient allocation of resources, such as departure gates, aircraft slots, check-in counters and baggage carousels to airlines and creating a state-of-the art flight information display for passengers. It would, he pointed out, enable effective coordination and real-time availability of information to airport managers and ground-handlers. According to Francesco Violante, SITA CEO, SITA has been involved in the development of air transport in India and the new system would benefit airlines. “It will give them real-time oversight of the billable services provided by the airport. It will also address any revenue leakage, which might otherwise be difficult to pinpoint. The solution provides efficiency and transparency for both airline and airport alike.” The installation of the new system was as significant as the introduction by SITA of the first CUTE, or Common Use Terminal Equipment, for airline check-in at Indian airports in 1998. SITA would also be announcing details of a major expansion in the air-ground VHF communications network that it had begun building in India 12 years ago and which was now an important part of the shift from reliance on voice communications to datalink. The full suite of SITA IT applications, included in the airport management
reduces flight delay because of fog, will also be acquired under the scheme. At the city airport, the aircraft are currently guided from the parking bay to the runway by special jeeps during fog. The process is time-consuming. Once the surface movement radar is installed, the ground movement of the flights will be smoother and faster. Delhi airport has this facility. The airport will also get software to automatically feed aircraft code and call sign information into the radar system. Major airports in the country have the software.
CAI to advise on Nagpur airport After various ventures in China, Russia and the Middle East, Changi Airports International (CAI) has clinched a three-month contract, extendable for a further nine months, to advise Maharashtra on developing its Nagpur airport. To increase its chances, it tied up with Tata Group.
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PERSPECTIVE system for MIAL, comprises Airport Central (airport operations database), Airport resource manager (a resource management system) and Airport Vision (flight Information display system). While Airport Central provides a centralised database and automated functions for receiving, processing and distributing consolidated operations data, Airport Vision is based on the latest Internet technology with multimedia capability for the attractive display of key flight information, weather, and other travel information on airport monitors throughout the terminals for the travelling public.
BIAL’s woes
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roubles do not seem to end for the controversy-prone Bangalore International Airport that is coming up at Devanahalli, about 30 km from the city. This time, fingers have been pointed by the civil aviation ministry, which, incidentally, had approved the project, based on build, own and operate (BOO) system. The ministry recently pointed out in a letter in the second week of May that many aspects of the airport were wrong, technically as well as aesthetically. This, after the structure, which the ministry has now found to be lacking in international standards, is almost 90 per cent complete. The airport, with its runway capable of taking the world’s largest airliner, A380, is to be ready for operation by April next. According to a statement released by Bangalore International Airport Limited (BIAL), the letter with recommendations on the technical and aesthetic aspects of the new airport had been received from the
STYMIED: Artist’s impression of Bangalore International Airport
Troubles do not seem to end for the controversyprone Bangalore International Airport that is coming up at Devanahalli, about 30 km from the city
Aircraft threat to Khajuraho Tourism and culture minister Ambika Soni recently informed the Lok Sabha that there were apprehensions that vibration caused by low flying aircraft may adversely affect the historic temples of Khajuraho. The issue was taken up with the airlines as well as the Airports Authority of India, which has initiated corrective measures like changes in landing and departure procedures and various amendments in the ATC procedures that would minimise the possibility of aircraft flying over these monuments.
AAI booked The Gujarat government recently booked the Airports Authority of India (AAI) for using erratic and irregular weighing machines at the city airport. According to a release by Controller Legal Metrology and
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civil aviation ministry. “The letter states that these remarks (on the flaws in the airport) are suggestions and could be points of consideration… Through the concession agreement, BIAL holds the responsibility to build, own and operate the new Bangalore airport. We try our best to incorporate suggestions that come to us, which could make an impact on the passenger service and experience. These suggestions are also being evaluated carefully against the budget and time line available. Work at BIAL is on schedule and the airport will be ready for operations in April 2008,” the statement added. In fact, in 2006, the civil aviation ministry had pointed out the faults in the design of the airport. BIAL had subsequently made alterations and had them approved. With only around 10 months for the airport to start operations, it is unlikely that any alterations would be made.
Director Consumer Affairs of Gujarat Government, a surprise check revealed that eight weighing scales kept at the international departure terminal were erratic and irregular and not conforming to the Weights and Measures Act and Rules. The government has launched a prosecution case against the AAI for violating the Weights and Measures Act, 1985.
AI inks JV with SATS Air-India has inked a 60 : 40 joint venture agreement with Singapore Airport Terminal Services Ltd (SATS) in Chennai recently to provide ground-handling services at the upcoming Bangalore International Airport. The estimates for the ground-handling project in Bangalore will work out to around Rs 70 crore. This is the second agreement between the national carrier and SATS, the first being a JV agreement signed last year for providing cargo-handling services at the Bangalore International Airport. The airline’s total ground handling business is in the region of Rs 1,200-1,500 crore, of which over Rs 500 crore worth of services is contributed by other airlines.
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AT A GLANCE
Boeing abandoned on road
Passenger slugs pilot
MUMBAIKARS WERE IN for a surprise one fine morning when they found a decommissioned Boeing 737 abandoned on a busy road. The fuselage of the decommissioned Air Sahara aircraft, with the engine, wings and tail removed, was being driven through the city when the driver apparently took a wrong turn and found himself facing a flyover that was too low for him to take the plane under. Seeing no way out, he simply abandoned the vehicle. After five days, the aircraft simply vanished from the site.
A NON-STOP HONOLULU, Hawaii-bound Delta Air Lines aircraft had to be diverted to San Francisco when a female passenger became unruly after smoking in the lavatory. The woman hit the pilot in the chest after he left the cockpit to check on her. She appeared to be out of her mind, and hit the pilot when he threatened to handcuff her if she didn’t calm down. The flight was then ordered to turn around and land in San Francisco. From there, she was taken to a hospital and the flight then departed again for Hawaii.
Well done
T
HIS SCENE TOOK place on a British Airways flight between Johannesburg, South Africa, and London. A white woman, about 50 years old, was seated next to a black man.Very disturbed by this, she called the airhostess and asked, “You obviously do not see it. They’ve placed me next to a black man. I did not agree to sit next to someone from such a repugnant group. Give me an alternative seat.” “Be calm please,” the hostess replied. “Almost all the places on this flight are taken. I will go to see if another place is available.” The hostess went away and then came back a few minutes later. “Madam, just as I thought, there are no other available seats in economy class. I spoke to the captain and he informed me that
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A harrowing tale
there is also no seat in business class. All the same, we still have one place in first class.” Before the woman could say anything, the hostess continued. “It is not usual for our company to permit someone from economy class to sit in first class. However, given the circumstances, the captain feels that it would be scandalous to make someone sit next to someone so disgusting.” She turned to the black guy and said, “Therefore, Sir, if you would like to, please collect your hand luggage, a seat awaits you in first class.” At that moment, the other passengers, who’d been shocked by what they had just witnessed, stood up and applauded. Well done, British Airways (We noticed this story doing the rounds in the aviation industry and found it too good.)
WHEN SUBASH KOCHHAR (61), from Pune, and his wife, Navilla, boarded a British Airways flight for London, they could never have imagined, in their wildest nightmares, what awaited them. They landed at Heathrow to take the connecting flight to Toronto (Canada) to meet their daughter there. At Heathrow, a Canadian Immigration Officer (IO) apprehended and detained Kochhar for travelling on a fake and forged passport and then handed over to the IO (UK). He was made to sit on a bench at the immigration office while his wife was permitted to continue with the journey. Incidentally, the IOs of both Canada and UK refused to divulge their names. Hours later, the IO (UK) returned and instructed him to get a clearance as to the authenticity of his passport from the Indian High Commissioner. With very limited foreign exchange with him, Kochhar, wearing only a thin cotton shirt and trousers, had to spend the cold night near the Indian High Commission, as the office had closed by then. The next day, Kochhar met the consularin-charge of the Indian High Commission, who certified that his passport was indeed genuine. When he handed over the clearance to the IO (UK), according to Kochhar, the IO (UK) candidly agreed that his Canadian counterpart had certainly made a mistake. Kochhar has demanded an unconditional apology from the Governments of Canada and UK, as well as British Airways. In addition, he has demanded that $10 million be paid to him as compensation for the illegal detention, wrongful confinement, infringement on his rights and humiliations his wife and he were forced to suffer.
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Ginger’s day out Illustrations by Mita Roy
IT WAS A special day for Ginger when he took a jet ride, free. The three-year-old Canadian cat sneaked into the suitcase of her owner, Mary Martell, before she flew off for a business trip. The suitcase was not fully closed, allowing him to jump in. When baggage scanners spotted the odd shape in the suitcase, Mary convinced security officers it was a coat. The suitcase was cleared unopened and loaded onto an Air Canada jet for the two-hour trip to Toronto. Several hours later, when Mary finally unpacked, she found Ginger grinning at her.
Southwest goes nuts THE AIRLINE HAS recently resumed serving honey-roasted peanuts after a two-year absence because its supplier became able to provide them for the same price as the dry-roasted variety. It had abandoned the honey-roasted variety in 2005 to cut costs. Kanan Enterprises, in Ohio, has been providing peanuts to Southwest Airlines since 2001. Kanan’s King Nut Cos. installed new equipment allowing it to cut Southwest’s cost for the sweeter nuts by about $250,000 a year. King Nut provides nuts to seven of the eight largest US carriers, and Southwest is its biggest airline customer. Dropping the honey-roasted peanuts in 2005 wasn’t Southwest’s first cost-cutting snack move. In 2000, the airline had its vendor remove three nuts from each bag to save $300,000 a year.
ATC succumbs to nature’s pressure TWO AIRLINERS HAD to circle for 18 minutes and a plane ferrying human lungs for transplant was briefly delayed when the lone air traffic controller, who had been on duty at ManchesterBoston Regional Airport about two hours and 40 minutes, had to go to the loo to attend the call of nature. Before making the trip, the controller notified FAA’s Boston consolidated terminal radar approach control, or TRACON, that he was taking the unscheduled break. Boston TRACON assumed responsibility for the airspace and placed two aircraft in a holding pattern until the controller returned. FAA said the controller, who had handled 60 aircraft during the first three hours of his shift, acted responsibly by waiting until a slow period before taking his bathroom break. The break lasted 12 minutes.
Fiji soldier pees on co-passenger THE FIJIAN SOLDIER was returning from peacekeeping duties in Sinai when he flew from Japan to Fiji. No one knew why the following happened. On the Air Pacific flight, he exposed his private parts to a young female Japanese tourist and urinated on her. All came to know of the incident when the hapless victim screamed. The crew rushed to her aid and provided cleansing cloths, antiseptic, a change of clothes from the in-flight duty-free sales materials. She and her travelling companion were also provided compensation. The soldier was taken into custody on arrival of the flight at
Nadi airport. Meanwhile, the lady has apparently accepted the apology in a traditional Japanese manner and attached no blame to the airline.
Rats wreak havoc in MIA TO THE 89,000 PASSENGERS scurrying around Miami International Airport everyday, an uncountable number of rats and mice give unwelcome company. When one passenger apprised a security guard about the rodents, he just laughed. It is not that the airport is not aware of the problem. To combat the problem, MIA hired an exterminating company. The company has installed 700 bait stations—weatherproof and tamperproof boxes that lure rodents with the promise of food—at about 50 to 100 foot intervals. In addition to food, the rats and mice get a bite of poison, an anticoagulant, that makes them internally hemorrhage and die. Yet they don’t die immediately; the rodenticide takes four days to work. This is so because quick deaths would make the rats suspicious. Further, there are 30 traps, called multiple catch units, inside the airport, where passengers cannot see them. Up to 30 mice can be trapped and killed in the units, which are cleaned out once a week. The total cost of the rodent project comes to $205,000 a year.
Mira Nair hangs in the air EVER SINCE DIRECTOR Nitin Chandrakant Desai has opened his sprawling hi-tech film studio in Karjat, on the outskirts of Mumbai, the whirlybird has become the favourite medium of transport for the time-challenged film industry. So when he invited Mira Nair to Karjat to see his studio and suggested she take a chopper to save time, she agreed. The ride was smooth enough till she reached Karjat, and then the drama began. The pilot didn’t know where to land and kept circling over Karjat for an hour. Meanwhile, she kept getting calls from Nitin saying, “Come down, we can see you”. But the pilot had no clue. Finally, they had to head back to Mumbai as they were running low on fuel.
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Go J
gets going
EH WADIA’S GoAir is on a new high. During the year ended 2006-07, this Mumbai-based low-cost airline, or should we say low-fare airline, sold 1.5 million seats, flying 396 weekly flights to 11 destinations in the country. Since it launched operations in November 2005, GoAir has captured a market share of five per cent, posting highest load factor for January (78 per cent), February (80 per cent), March (77 per cent) and April (79 per cent) this year. According to Wadia, the airline, in the last four quarters, registered a 60 per cent rise in revenues and 17 per cent rise in load. It may be recalled that last year, GoAir indicated it would not be averse to selling stakes to shore up its finances that were badly needed to fund its aircraft-acquisition programme. However, it was to be only a minority stake sale. Jeh Wadia has now again raised the subject. In the last week of May, he said GoAir was looking at either going public or roping in an investor. The airline has already received proposals to buy a certain percentage of the airlines’ equity and it was being evaluated. The potential buyers are in the form of financial and strategic investors. Jeh, however, made it clear that if at all he decides to sell stakes, it would be on his terms, based on the value of the company. If market talk is to be believed, GoAir has received
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proposal from high net worth individuals (HNIs), FIIs and others with aviation experience. The buy-outs range from 26 per cent to 45 per cent. In any case, as Jeh Wadia clarified, the airline will remain with the Wadia Group. This is just what Captain Gopinath said while selling 26 per cent stake to the man from Venus, Vijay Mallya of Kingfisher Airlines. It must be pointed out here that Wadias are far more cash rich, unlike Gopi who made the com-
cent stake in Air Deccan, or is it Deccan Aviation, he can certainly use his veto power in the board to reject any special resolution seeking to launch a cargo arm. Now we find Jeh Wadia also talking of launching GoCargo in the next six to seven months, besides activating his long pending MRO, for airframes in joint venture with Singapore Airlines Engineering Company (SIAEC) in 13 locations spread across India, a proposal the same SIAEC had drawn up for its failed JV with Indian Airlines. The only difference was that Indian had a huge fleet in a captive market, while GoAir will have to depend on the same aircraft type (A320) as those of competing airlines, such as Kingfisher-Air Deccan combo, Indigo, Jet or SpiceJet. The latter, however, appears to be a remote possi-
Jeh Wadia
M. Thiagarajan
mon man fly but got grounded in the process. Before he sold 26 per cent stake to Mallya, Gopi announced he would launch a cargo airline and even sought out a CEO from Australia. However, with Mallya holding 26 per
bility in view of the MRO being set up by Boeing itself at Nagpur airport in alliance with Air India and perhaps ST Aerospace. Even Indian Airlines’ MRO JV with Jupiter Group, of former telecom
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boss Rajiv Chandrashekar, has been allotted land in Hyderabad’s upcoming airport at Shamsabad. It may be noted that GoAir has only five leased aircraft as of now and the first of its proposed and owned 33 A320s will be joining its fleet formally in October this year. The fleet size would rise to 18 by March 2009 and 33 by March 2011. In all fairness to Jeh Wadia, his fleet-induction programme seems to be manageable, unlike that of Air Deccan’s, which was too fast and too soon, virtually leading him to sell out, even though only 26 per cent for now. And just as we were going to the press, news came that Paramount is interested in acquiring GoAir. According to newswire reports, sources close to the developments said the investment bankers of Paramount Airways have expressed their interest and initiated discussions with GoAir representatives. The talks, however, have not made much headway as yet as GoAir is reluctant to move ahead. Paramount Airways, which currently operates only in South India, has firmed up plans to enter the western region. GoAir has only four leased aircraft, but Paramount is more interested in its slots, parking bays, pilots and other infrastructure, sources said. That was what Jet said when it first spoke of taking over Air Sahara. Go Air had earlier indicated its plan to dilute 26-40 per cent equity through private equity placement. Paramount Airways Managing Director M. Thiagarajan was not available for comment, while GoAir chief Jeh Wadia denied any such development. “This is baseless speculation. We are going ahead with our expansion plans,” Wadia told journalists. Wadia had said earlier that GoAir was working on a flexible fleet management plan to achieve growth. The airline is scheduled to receive the first of its 20 new aircraft in October. “We plan to expand our current fleet to at least 18 by March 2009 and to 34 by March 2011,” he said. GoAir operates Airbus A320 aircraft with 180 seats, while Paramount operates Brazil’s Embraer aircraft with 60 to 90 seats. The business models of the two airlines are also different. GoAir is a low-cost carrier competing with Air Deccan, SpiceJet and IndiGo, while Paramount Airways is positioned as a high-value carrier, with only business class and first class seats. It is competing with full-service carriers, such as Jet Airways and Kingfisher Airlines. But if Mallya can waltz with Gopinath, anything can happen in Indian aviation.
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What’s in a load? FINALLY AFTER YEARS and years of trying to get their airhostesses to fall in line, Indian (Airlines) struck paydirt when Delhi High Court ruled thus. IA said that justice had been done after the court ruled that the state-run domestic carrier had done no wrong by grounding overweight airhostesses last year. Justice Rekha Sharma said in her ruling that there was no merit in the case brought by several hostesses, who contended that being grounded for being heavy was unreasonable and demeaning. “If by perseverance the snails could reach the Ark, why can’t these worthy ladies stand on and turn the scale?” she said. “It’s a question of justice being done — that’s all,” a delighted Ashok Sharma from Indian told the media, and added, “There are some rules and regulations that have to be abided by.” The women were hired on the condition that they maintain their weight within certain limits prescribed by the company’s weight charts, the court said. The regulations required a 165-centimetre woman over age 45 must keep her weight between 55 and 64.6 kilos. The lead petitioner, long-time airhostess Sheela Joshi, was grounded for hitting approximately 69 kilos. “If the airhostesses are asked to battle their bulge, control their girth and keep at desired level the affluence of their body weight as per the norms, it is not understood how it is in any way unfair, unreasonable and insulting,” Justice Rekha Sharma said in the ruling. The public sector carriers,
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who’s in-flight crew has been the butt of scores of jokes for years, faced militant action from the airhostesses, in particular, who went to court at the drop of a hat to make sure they had their way. Slowly but surely, courts are waking up to the fact that this is no gender bias by
the airline’s, but simply a question of being competitive and firm on rules in a hugely competitive and cut-throat business. But why did the airhostesses go to court on being grounded. After all they weren’t losing their jobs. S.L. Rao, former director-general, National Council for Applied Economic Research, provides the answer in a perceptive article in Kolkata’s Telegraph recently. Rao said, an airhostess at age 20 probably earns around Rs 30,000. In contrast, a young person with a good academic record, after five years’ slogging to earn a PhD, might get a job in teaching or research in India at between Rs 8,000 and Rs 12,000 per month. And the more she flies the more she earns. Carrying all this weight on terra firma is no use. Sheela Joshi and her ilk want to carry this entire payload while cruising!
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Record profits for SIA SINGAPORE AIRLINES LIMITED (SIA) registered a 71.6 per cent jump in profits during the fiscal year 2006-07 ending March 31 due to strong performance by the parent airline and one-time gains. Net profit for the year rose to Singapore $2.1 billion (US $1.38 billion), while its total revenue rose by 8.6 per cent, to Singapore $14.5 billion (US $9.5 billion). SIA’s earnings were boosted by a one-time write back of Singapore $247 million (US $162.6 million) and another Singapore $421 million in gains from the sale of the SIA building in the city-state and the sale of its stake in Singapore Airlines Leasing Enterprise. The fuel costs totalled Singapore $4.5 billion (US $2.96 billion). SIA flew a record 18.346 million passengers in the just concluded financial year, which was nearly eight per cent
higher due to healthy demand for air travel. The key challenges being faced this year are the limited capacity growth arising from the delayed delivery of the A380, high price of ATF and uncertainty of the US economy’s continued strengthening and its impact on the global economy. SIA expects to receive its first A380 in October this year. Such fantastic performance by an airline that was launched with the help of Air India more than three decades ago speaks volume of how to run an airline. If you
Freighter business WITH THE ARRIVAL of its two A 310s, reconfigured as freighters by EADS at a cost of approximately US $7 million each, Air India plans to launch its cargo carrier by the middle of this month. Air India was flying its cargo service earlier, but closed it down in 1996 after it made huge losses. The revival of its cargo fortunes at a time when it is merging with its domestic cousin, Indian, has raised
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new hopes for the Maharaja. Air India’s cargo operations will see its A310 freighters flying to Paris and Frankfurt. The cargo will be aggregated at Nagpur, which is fast developing into India’s cargo hub. From there, the international cargo will be ferried to Mumbai for onward global destinations. The two A310s are part of the six A310s of Air India that will be progres-
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look at it, the revenues of SIA, even after adjusting for the one-time gains, nearly exceeds the combined revenues of Indian IT icons — TCS, Wipro and Infosys. No wonder Naresh Goyal wants to fly his Jet Airways into the SIA zone. sively converted into freighters. Air India will also convert a couple of its Boeing 747-300 combis into freighters. Sources said, after being converted into freighters the A310s are expected to have a minimum residual life of 10 years. Air India hopes to generate at least Rs 800 crore in revenue from cargo operations in the current fiscal year. Soon, five Boeing 737200s, belonging to Alliance Air, the subsidiary of Indian, will also be converted into freighters and will join the Air India cargo fleet. It may be recalled that after Air India withdrew its A310s from the Kerala-Gulf sector, there was a complete stoppage of cargo carriage, as the new Boeing 737800s, belonging to its own LCC, Air India Express, had no belly space because of the preference to carry passengers. Air India Express is recording loads of over 90 per cent from Kerala to the Gulf. The proposed Boeing 737-200 freighters can be used not only for ferrying cargo within India, considering the explosion in the retail trade, but also to the Gulf, which has a huge NRI population and needs Indian eatables, mainly perishables. Vijay Mallya is planning to launch his own King Cargo, which means the demise of Air Deccan’s cargo dream. Jet Airways is hoping to launch its cargo version by the end of this year.
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Qatar’s golden run
I
S IT THE Emirates story once again? Tell that to the Qataris, notably Akbar Al-Baker and he will say Qatar Airways is in a class of its own. To a large extent, he is right. Qatar Airways has set a scorching pace from the time it began operations some years back and this month when it flies to the United States for the first time, it will get into the next level. The flights to New York, starting June 26, and Washington DC, beginning July 19 will boost the airline’s international network from its hub in Doha to beyond 75 destinations worldwide. Qatar will fly, deploying the A340, four times a week between Doha and Newark Liberty International Airport, which is the
gateway to New York City on the US east coast. The flight will operate via Geneva, which is the airline’s second destination in Switzerland, following its successful services to Zurich, also operated four times a week. The airline will be the only Middle East carrier flying daily non-stop between Doha and Washington’s Dulles International Airport. Naveen Chawla, Qatar Airways Regional Manager India, said that the launch of the US flight is the highlight of Qatar Airways’ route expansion programme during 2007. Flights to the US are a historic move for Qatar Airways in a year that has seen the airline already launch services to Dar es Salaam, Lagos, Bali, Ho Chi Minh City and Chennai. “Qatar Airways operates a total of 42 flights a week from India to Qatar—daily from Mumbai, Delhi, Hyderabad, Kochi, Thiruvananthapuram and Chennai. And later this year, daily flights to/from Ahmedabad will be added, making it seven cities in India and 49 flights a week,” said Chawla. Close on the heels of the Qataris are the guys from Etihad, who are determined to move into India at a rapid clip and follow the same slam-bang model of their neighbours, Emirates. It has started its three-flights-a-week service from Abu Dhabi to its latest destination, Thiruvananthapuram.The flights form part of a major expansion plan in the Indian market, which includes Etihad’s New Delhi service going daily from May 30 and the launch of flights to Kochi. The new services boost Etihad’s India operations from 10 to 21 flights a week, which will increase to 28 flights a week in October when the Kochi and Thiruvananthapuram flights go daily from Abu Dhabi. What it means is more sweat and competition for Air-India, which will have to work real hard to meet the onslaught of the
Gulf carriers. But it also means more options for Indians keen to travel to the Gulf and onwards. Meanwhile the airline has signed a memorandum of agreement (MoA) to buy 80 of the all-new Airbus A350XWB aircraft. The agreement was signed by Qatar Airways Chief Executive Officer Akbar AlBaker and Airbus President and CEO Louis Gallois at the Elysée Palace in Paris in the presence of His Highness Sheikh Hamad Bin Khalifa Al-Thani, Emir of the State of Qatar, and Mr Nicolas Sarkozy, President of the French Republic. This will make the airline the largest customer for the A350XWB to date and the first one in the Middle East region. This agreement supersedes an earlier one signed in 2005 for 60 of the original A350 aircraft. “The first deal was about $13 billion and now with the 20 A350-1000s, it will rise to just over $16 billion,” Al-Baker told Reuters in an interview. The 80 aircraft include 20 A350-800s, 40 A350-900s and 20 of the largest in the family, the A350-1000. Deliveries will begin from 2013. Qatar Airways will use the A350XWBs to complement its A330s and A340s on regional and long-haul routes. The purchases are not surprising considering Qatar and Airbus have shared a long relationship that goes back to the time the airline was launched. But coming as it does days before the Paris Air Show it is indeed great news for a beleaguered Airbus. Al-Baker also mentioned that the airline expects to make its first profit by 2010 and could sell shares to local and foreign investors three years after that. “We will be privatised in the first half of the next decade and the IPO will be offered to local and international companies,” Akbar Al-Baker told Reuters. The IPO will not exceed 49 per cent of the company’s stock, so existing agreements between Qatar and other countries would not be compromised, said Baker, adding that he expected the airline to hit a profit by 201011. “We should be able to go to an IPO by the time of the delivery of the A350s,” he said.
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MERGER BLUES THE RUNWAY HAS BEEN CLEARED AND THE FLIGHT IS READY TO TAKE OFF. THE BRAND NEW SAGA OF THE INDIAN AVIATION SECTOR, AIR INDIA — THE SECOND COMING, HAS BEEN SPECIALLY SCRIPTED AND DIRECTED FROM RAJIV GANDHI BHAWAN. BUT BEFORE THE STORY BEGINS, THERE ARE A NUMBER OF GLITCHES THAT NEED TO BE IRONED OUT. K. SRINIVASAN PIECES TOGETHER THE COMPLEX AI-INDIAN PUZZLE AND PROVIDES A SNEAK PREVIEW INTO THE FUNCTIONING OF THE NEW AIR INDIA IN THE INDIAN SKIES.
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“The merger brings in more synergies and cost savings, and makes it more serviceable for the debt… I just want to say India should have a top-class, world-class airline and it should be an airline which should be able to take on the best.” — Civil aviation minister Praful Patel on the Air India-Indian merger
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N JULY 15, when the new National Aviation Company Ltd starts functioning under the banner of Air India, check-in counters, kiosks and signages at all major airports across India are expected to transform from the half-a-century-plus Indian (Airlines) orange into the new Air India format. That will be the first welcome that passengers of the gargantuan new national carrier will receive. But there is a glitch. As they check in, they will continue to receive their boarding cards with IC code, which has been the trademark Indian (Airlines) code for over 50 years. Their flight will come out of Indian’s reservation system; the passengers will accrue points on the flying returns programme of the national carrier and they will fly in an aircraft that will continue to carry the Indian logo. Of course, the welcome message on board will tell them they are on an Air India flight. That’s not all. Now suppose an Air India passenger is coming in from Frankfurt en route Mumbai to Hyderabad. The passenger would do the domestic leg on an Indian A320 (it will, of course, be part of one fleet), but because the reservation systems aren’t integrated, the flights will continue to be earmarked on two different carriers, AI and IC, and the Mumbai-Hyderabad leg will be completed on a ‘code-share’ basis. And the passenger will get points both on Air India and Indian as part of their FFP (Frequent Flyer Programme). And then you have the air operator’s certificate. Every airline has to have that certificate in order to have a code and fly. That would mean having at least one aircraft in the kitty. What would happen when Air India and Indian merge? There would be no Indian, so how can the IC code be used? Director general Kanu Gohain, of the Directorate General of Civil Aviation (DGCA), has an answer to the problem. He states that the new company will get the certificate of both Air India and Indian and will be allowed to share two codes till the time they have one unified system. Gohain said they were aware of the complexity of the problem and were working to make it as easy as possible for the new airline to get going without added complications. Close to twenty working groups are involved in a variety of exercises within the commercial department of both Air India and Indian, trying to iron out the enormous disparities in the two systems and the two environments and get it going by the deadline. But will that be possible? Insiders state it is impossible. “At the very minimum, integrating the two reservation systems and getting into a
COMING UP IN THE AIR INDIA STORY May 29: V. Thulasidas appointed as chairman and managing director. Vishwapati Trivedi to be deputy managing director. June 15-16: Praful Patel to hold meeting with top officials of the two airlines to review the progress towards the merger. June 20: Creditors of two carriers to meet airline management at FICCI Auditorium, New Delhi. July 15: Indian ceases to exist. It is simply Air India.
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An alliance for the common man
f the big boys can unite, why not the jets will be deployed on point-to-point small ones? In tune with the Air India- services in the regional market. Indian merger, Air India Express and The new Air India Express has forIndian’s low-cost subsidiary, Alliance Air, mulated major plans to fly to the farthest have become one. While Alliance Air will corners of the country. It will start looktake on the new name, Air India Express, ing at the smaller airfields in Tiers Two it will also have to change its logo to the and Three towns, such as like Hubli and one that is being used by Air India Dehradun, as potential markets. While Express now. V. Thulasidas pointed out, the medium-haul routes would be con“Alliance Air and Air India Express will nected through regional jets with 70 join as one company, called Air India seats, instead of the 100-seaters at presExpress, which will operate as a low-cost ent, the management plan is to allow the carrier on domestic as well as interna- new low-cost carrier to work on a hubtional routes.” and-spoke principle with the larger The new low-cost carrier will eventu- merged entity of Air India and Indian. On ally have 25 aircraft by next year, includ- the anvil are moves to change the ticketing some leased ones. Air India Express ing into an Internet-based distribution will also take on four ATR aircraft from model, scale down in-flight catering and Alliance Air and there are plans to induct ensure optimum utilisation of crew. New more regional jets and ATRs in the flights will be introduced to connect future. With the large fleet, Air India regional routes. Express would, according to Thulasidas, But there are several issues that provide “competition to one and every have not been reckoned with. What happens to the Alliance Air airline” in the country. As for the routes, Air India Express will fly both domestic staff, which is entirely on contract? How will it become part of the new and international routes and even fly on entity? the Delhi-Mumbai What sort of metro sector. Air India Express operations will Alliance Air India has Established in May 2004; Air undetake: low cost, already brought seven started operations on April no frills (like Air Decnew Boeing aircraft — 29, 2005. can), low cost with frills and four more are Fleet (May 2007): (like JetLite) or an coming in — for the entirely different modlow-cost operations, 14 Boeing 737-800 el? but the carrier wants Will it do both to give the best to its Alliance Air domestic and internalow-fare-paying pasEstablished in April 1996; tional flights? In case, it sengers: there will be will also do domestic, leather seats and instarted operations on June will it be limited to the flight entertainment. 21, 1996. Northeast and CategoAlliance Air curFleet (March 2007): ry-2 sectors or will it rently has a fleet of 11 1 ATR 42-300 work in tandem with Boeings and four 3 ATR 42-320 the domestic wing of ATRs. It currently flies 10 Boeing 737-200 Air India? about 120 flights a 1 Boeing 737-200C Of course, the week, most of them problems of codebeing in the Northeast share, two reservation region. In fact, Alliance systems and sundry Air has floated tenders other issues that affect to lease seven ATR 42the merger will also 320 fitted with PW 121 affect this marriage. engines. These small
I
The new low-cost carrier will eventually have 25 aircraft by next year, including some leased ones. Air India Express will also take on four ATR aircraft from Alliance Air and there are plans to induct more regional jets and ATRs in the future.
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seamless domestic-international transfer would take close to 15 months. And that is if we work in harmony and without any turbulence along the way,” said one senior Indian staffer. An AI staffer in Delhi agreed that it was a ‘gigantic’ task to ask for integration in just 15 months, but conceded it could be done. That the groups are meeting regularly and officers at the senior-most levels are in communication virtually on a day-to-day basis, which gives the impression that things are being ironed out at the highest level. Will there still be a hub-and-spoke operation with Air India continuing its traditional run into Delhi and Mumbai or will it look at new options to drive the domestic leg? Will the huge number of hopping overseas flights turn into point-to-point service or will they continue to hop, step and jump? Will something new emerge in the Gulf operations now that the two carriers will be one or will it continue to be a simple case of ‘readjustment’? One seasoned employee was candid enough to admit that he was ‘disappointed’ at the manner in which the entire exercise was being carried out. The advisors,
The advisors, Accenture, had “simply no idea of the complexity of the business” and kept coming back to the two airlines with a “you-tell-us attitude”. The merger had been a case of what AirIndia and Indian had brought to the table and how best they could rejig the priorities.
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Accenture, had “simply no idea of the complexity of the business” and kept coming back to the two airlines with a ‘you-tell-us attitude’. The merger, he explained, had so far been a case of what Air India and Indian had brought to the table and how best they could rejig the priorities. “I think this whole effort is wrong. Take the Gulf, for example. Indian and Air India both fly to the Gulf. Where is the question of how many flights do Indian or Air India operate and then putting the pieces together? In my opinion it should be a clean slate, with the new merged entity deciding what is in their best business and national interests.” In his opinion, that wasn’t happening anywhere, down the line, in the whole merger process. There is also the huge cost of repainting the Air India and Indian aircraft. On the day of the merger, the airlines will have six different types of livery — new and old Air India, new and old Indian, Alliance Air and AI Express. Getting the aircraft repainted is going to be a gigantic task. While there will be no issue with the new aircraft being inducted, the present fleet will have to undergo a paint job that will cost close to $50,000 per aircraft. Assuming a
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Who will get the nod? ith the top two jobs in the new National Aviation Company Ltd (NACL) out of the way, the focus within Air India and Indian (Airlines) is on who will get the other big responsibilities. The Accenture report, which the ministry of civil aviation is treating as the bible, had spoken of the merged entity having a chairman and managing director (CMD) with four full-time directors, comprising director finance, director HR, director strategy and, perhaps, director commercial. The six business units will be presided over by a CEO each and all of them would be on the board of the merged entity along with the CMD and the four directors. The first departure has been in the appointment of a joint managing director. With Vasudevan Thulasidas, the senior of the two CMDs, appointed as the chairman and managing director of the new entity, the government has decided to create space for Vishwapati Trivedi as the joint managing director. What next? What will be his job profile, his responsibilities and where will his headquarters be? Will he be directly responsible for certain business units? Will the ministry specify his role or will it be left to the CMD? The other big development of the month has been the approval of V.K. Verma’s long pending candidature as the commercial director of Air India. Verma’s appointment to the post (he was Number One on the PESB list) has been in the works for close to 18 months, and it has finally been clinched just weeks before the new company came into being. Does it mean he will be the next commercial director of the merged Air India? Industry insiders state unequivocally that Verma will be on the board but not sure whether he will be one of the four directors or a CEO of one of the business units. That would mean a jostle for the other three top jobs — finance, HR and strategy. It still isn’t clear which business unit will be headed by whom. Within Indian (Airlines) the fear is that, with the merger process being Air India driven, the appointments could be tilted in favour of the Maharaja, but government sources are categorical that there will be an equitable distribution of work and all the whole-time directors will have major responsibilities. As on date the senior director finance is S. Punhani of Air India
W
Sushma Chawla
V.K. Verma
Anita Khurana
Anup Srivastava
Deepak Brara
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and he is slated to retire in September. The immediately next in seniority, if the two airlines are taken together, is M. Chandrashekar, recently appointed as director finance of Indian. How can the decision makers overlook his claim? The other contender for the post can be S. Venkat, who is only an executive director and not yet elevated to the post of director finance by PESB. At the moment the amalgamated unit is expected to have eleven whole-time directors (it could be twelve if they decide to keep the deputy managing director as a separate position), and there would still be two positions that would need to be filled from amongst those not whole-time directors but executive directors overseeing key functions in the two entities. At Indian there is the former CMD, Sushma Chawla, and Alliance Air ED Deepak Brara. Will they get a look in? At Air India, there is Jitendra Bhargava, Air India Express COO P.P. Singh and the man who oversees the Maharaja’s publicity, S. Venkat. Who will get the nod? We should know soon. There is wide speculation that the retirement age may be raised to 60. But why should Praful do it or allow it to be done? The minister has himself gone on record (at the ceremony to welcome Indian’s A319 in Taj Palace) stating that integration is a problem only at the top. By raising the retirement age, he would be inviting a host of problems. “It will ensure disintegration rather than integration,” said one official. The bigger issue is when will the retirement policy be in place? Before Punhani retires or later? Officers are also wondering where they will work. Will all the six CEOs work out of Mumbai along with the whole-time directors or will they be divided equally between Delhi and Mumbai? One stream of thought is to have domestic operations, cargo and HR operating out of Delhi and the rest being posted at Nariman Point. In that case will the deputy managing director work out of Delhi? ? Most indications are that Trivedi will operate from the capital and oversee all domestic operations. Ask Praful Patel all this, and he smiles and says, “Arre baba, you will know all this in good time.”
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conservative 50 aircraft in the first lot, that means a cool $2.5 million. If this is one aspect of the merger woes, there are a huge number of other complex issues that officials in both airlines are still grappling with. Personnel, for example, is a mind cruncher. Air India is still to settle with two of its unions — engineers and cabin crew. It has already settled with the pilots, officers, executives and technicians. But at Indian, they are right in the midst of crossfire. The airline has settled with the engineers and has an agreement with the officers, executives and flight engineers. But the ministry is yet to give its approval for both the officers’ and executives’ agreements. This is surprising when it had itself set an April 30 deadline for completion of all negotiations and settlement with the unions. But the biggest personnel hurdle is the settlement with the ACEU (Air Corporation Employees Union). Close to 13,000 of IA’s 20,000-strong workforce belongs to this union, and it has been involved in marathon negotiations with the airline management to arrive at some consensus. From a high of Rs 573 crore, which was the demand of the unions in terms of arrears since 1997, negotiations brought down the figure to nearly
The biggest personnel hurdle is the settlement with the ACEU (Air Corporation Employees Union). Close to 13,000 of IA’s 20,000-strong workforce belongs to this union, and it has been involved in marathon negotiations with the airline management.
Rs 230-odd crore. The ministry has to approve the sum now. This is a remarkable achievement indeed, considering that the ACEU had pitched it at around Rs 470 crore. But it finally settled for Rs 267 crore. The accounts report, annexed to the main annual report of Indian, shows the arrears at Rs 1,031 crore and accordingly makes provision for it. Any reduction in the arrears payout will surely be the advantage of Indian not just for fewer outflows but also for a better balance sheet. Within Rajiv Gandhi Bhawan, the perception is that Indian (Airlines) is the problem, not Air India. As far as it (Air India) is concerned, there are lesser issues coming in from Mumbai and, therefore, things are much easier in their dealings with Thulasidas. Tell this to any Indian Airlines’ employee and they will give you a litany of complaints on the “shabby manner” in which they are being treated. The very fact that Air India has been chosen as the name of the new airline, the Maharaja has been retained, the headquarters will be in Mumbai, the CMD is from Air India, so it is they who are calling the shots.
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Navigating at Kochi Civil Air Navigation Services Organisation (CANSO) held its first AGM in India at Kochi (May 20-23). A special report on the event.
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T WAS THE desire to visit God’s Own Country that prompted the AAI to heed the call of its fellow CANSO members and hold the eleventh AGM of the world’s premier air navigation system (ANS) institution at Kochi. For AAI’s Dr K. Ramalingam, hosting the meet was indeed high privilege. India had joined the global body just a few years back and for Ramu, as his colleagues at CANSO prefer calling him, to be on the executive of the global body and to be able to swing the party India’s way is indeed a top achievement.
Absent Praful Now why in the world would Praful Patel want to absent himself from such a bigticket event? Those in the know state he had originally said yes to the event, but cancelled out at the last moment. Secretary
30
For AAI’s Dr K. Ramalingam, hosting the meet was indeed high privilege. India had joined the global body just a few years back. CRUISING HEIGHTS June 2007
Ashok Chawla, too, was busy elsewhere and finally the government ended up being represented by additional secretary Raghu Menon. But who would replace Praful bhai? Well, Mantriji himself came up with the solution, and chose a former Sharad Pawar acolyte and now minister for overseas Indian affairs Vayalar Ravi for the task. Ravi was, of course, delighted to be present. Kerala is his home state and he was being offered the charge to inaugurate an international conference. Boy, wasn’t he delighted. “I am sorry I am having some difficulty in pronouncing your names just as you have in pronouncing mine,” said Ravi disarmingly. As usual, Ramalingam reeled out statistics after statistics to bolster the case of AAI and the yeoman service it was performing. But he had several important points to add. While AAI is looking at upgrading future
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aviation meteorology, a committee has also been set up by the Indian government to examine the needs of future navigation systems (FANS) in the country. AAI, in coordination, with the met department, is preparing a road map for the upgrade of met facilities at airports. This would include provision of new upgraded equipment, webbased met information and interfacing of met computers with ATS-automation system at Delhi and Mumbai. Incidentally, ICAO has set new standards for meteorology. AAI proposes to switch over to a new system in 16 airports, including all metros, where runway-based sensordependent CWIS will enable weather display in the met office, ATC tower and approach control units. The first phase of installation is likely to be completed before the end of 2007. This year’s (2007-08) budget is Rs 140 crore and under the proposed three-phase plan, it will extend to all the 35 non-metro airports. AAI is spending over $1 billion on new ATM programmes. While additional air traffic controllers (ATCs) have been recruited and are being trained, new simulators and other equipment have been delivered to the civil aviation training college at Allahabad. Radar surveillance is proposed for the entire terrestrial airspace at 25,000 feet and this involves integration and networking of various radars and surveillance sensors.
Excellent interaction One of the great advantages of such conferences is the instant feedback and elaboration that one receives on key issues from those present. S.P. Singh, of AAI, is a seasoned veteran of the Authority, who offered
AAI proposes to switch over to a new system in 16 airports, including all metros, where runway-based sensor-dependent CWIS will enable weather display in the met office, ATC tower and approach control units
some astounding insights on the way things were moving and the direction they would take in the coming years. He mentioned that India currently has ADS-C (Automatic Dependent Surveillance—Contact), which is a conventional system; the technology is fast moving over to ADS-B (Automatic Dependent Surveillance—Broadcast) notwithstanding the fact that some of the features are applicable in different areas. According to Singh, it wouldn’t be incorrect to say that both are emerging technologies in view of their application. ADS-C is mainly for light traffic or over-ocean traffic, where no other means of surveillance are available. As nearly two thirds of earth is water, it is not possible to instal surveillance aids and hence it has to be necessarily satellite-based navigation. It was ICAO that wanted a global-based satellite. When we talk about ADS-C, they are of two types—procedural and radar, with the latter being independent of anything. The dependent surveillance is wireless receipt and transmission of cockpit-based information. ADS-C can take inputs through INS (Inertial Navigation System) or IRS, where R stands for Reference or traditional system. At present, work is in progress on upgrading aeronautical telecom network globally in line with developments in digital communication. However, these involve huge costs that airlines will also have to bear. On the other hand, there is work progressing fast on ADS-B, where B stands for broadcast. In this case, an aircraft is broadcasting its position to everybody, including Continued on page 34
SPEAKERS AT THE CONFERENCE: Left to Right Dr K. Ramalingam, Raghu Menon, Dr Vijay Mallya
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“Peering Ashley Smout, chairman of New Zealand Airways, is also the chairman of CANSO. Articulate and precise, Smout spoke to CRUISING HEIGHTS on issues affecting the industry and the cutting-edge technology of the future. Excerpts:
Q
How does the rest of the world view the Airports Authority of India’s role in terms of CNS? How has it been? Well, I think, the scale of the task facing AAI can only impress the rest of the world. It is a huge country, huge infrastructure, and a huge leap forward that it has to make. So I don’t think anybody can be critical of the progress or the lack of it. I think the real issue is how does the industry, as a whole, and CANSO, in particular, support AAI and take on this challenge. It has got to modernise, upgrade and increase facilities. It needs to get lot more controllers in the system. We have all got some of these problems in our own countries, but here in India the problem is of larger scale and is probably similar only to China’s, probably even bigger than China’s in some respects.
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”
into the future of ANS Q
We are witnessing a fantastic boom in aviation. Has air navigation kept pace?
and what are you doing to push it? Well, I think the reason is, a lot of them are still non-separated. When you separate a regulator from a provider, as we have done in India, you tend to get the provider more focussed on delivery and performance. When you have got the regulator and the provider together, it is still an ICAO environment and they are very much focussed on the ICAO and its programmes. It is very difficult for them to see value in CANSO. So we need to come up with programmes whereby they can see that we can help them improve their performance and maybe, their technical performance first and then their operational performance. I think only by helping them operationally, will they start to understand what CANSO is all about. That is a big challenge for us.
I think if you ask the airlines, you would get a different answer. The airlines would say that the industry isn’t keeping up with the speed of change in the cockpit. That we need to do much more to take advantage of the abilities of the technology in the cockpit. I think there is a lot more that can be done, particularly in Asia, to open routes to get better efficiency and maximise the capacity of the routes. I think more work needs to be done.
Q Are the routes underutilised?
Q
Why was CANSO set up? What’s the agenda? We have come to a crossroad, and our mission is to be the global voice of air traffic navigation. We have three strategic objectives: first, to be the legitimate, consolidated voice of ANS, second, to support the performance and improvement of the global ANS industry and, third, to optimise the organisation’s effectiveness. Today, we are still a young organisation and our resources are stretched, but we are more and more credible in various forums, particularly in Europe — we are still very Europecentric. In Asia, we badly need to increase our membership. We have only India, Thailand and Japan as members.
Q What do you think is the reason
“
We have three strategic objectives: first, to be the legitimate, consolidated voice of ANS, second, to support the performance and improvement of the global ANS industry and, third, to optimise the organisation’s effectiveness
“
I think there are many bottlenecks. At the peak times when traffic flows are restricted and there is interoperability, work needs to be done on route optimisation. But that’s a global issue as well. In the Asian area, that’s what the airlines will say, the industry hasn’t kept pace. From an environmental perspective and also from a fuel perspective, it is important that we get route optimisation and start using the avionics better.
CRUISING HEIGHTS June 2007
Q
Now this conflict happens in many countries over difference in using airspace. Is it universally prevalent or is it in a special segment? It is a universal problem. It is a huge problem in China, it is a big problem in Europe, and is a big problem in India, too. The debate is very advanced in Europe and is one of the big issues for single European sky. It is a big issue in China. The military said we need it and in China the military owns ninety per cent of the airspace and controls it. Until we get to a situation where there is flexible use of the airspace and the military needs are interfaced with the civil aviation’s, it is very difficult to get the kind of efficiencies that we need. It has to be a political decision.
Q What is the real big transformation on the horizon?
I think ADS-B is generally touted as the next breakthrough. It will allow you to fly (on your own) because you know where everybody else is. You are virtually self-controlled from the cockpit.
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Continued from page 31
other aircraft. Both use approach surveillance radar (ASR) to update the position of the aircraft in four seconds. The nextgeneration approach route surveillance radar (ARSR) can do it in 12 seconds. While ASR has a range of 60 miles, the ARSR has range up to 250 miles. ADS-B was tried once in Chennai. It is yet to mature and only 15 per cent aircraft internationally are equipped with it. One issue with it is that the signals emanating from it go straight, while the earth is circular; as a result the range gets sliced. Nevertheless, ADS-B is the way to go and industry is moving towards it in Europe, the US and Australia. An ADS-B alliance has been formed to test the new technology. Over the next decade, there are chances to improve the performance even further. It is in this context, ADS-B has become a major element of Nav Canada’s long-term vision to provide direct routing everywhere it provides service. In 2006, the company had announced that it was deploying ADSB in Hudson Bay area of Northern airspace, which would save customers an estimated US $10 million a year in fuel costs. ADS-B is the way of the future. Nav Canada wants to make it part of its collective future across the North and ultimately across South Canada, where it will either supplement or replace conventional radar. ADS-B comes at only 10 per cent of the cost of radar and provides more accuracy. It is set to be operational by late 2008.
Raghu’s speech The additional secretary’s speech was a marvellous mix of statistics, hard reality and the intense debate in the government on how much to stretch the band. Here are a few nuggets.
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Considering that India is the fourth largest economy in the world, based on PPP, even if 10 per cent of its population were to fly, it would mean massive need for aircraft, airport infrastructure, etc CRUISING HEIGHTS June 2007
Considering that India is the fourth largest economy in the world, based on PPP, even if 10 per cent of its population were to fly, it would mean massive need for aircraft, airport infrastructure, etc. A ballpark estimate shows that for every one-dollar investment in aircraft, at least 50 cents would be required for constructing compatible airport infrastructure. By 2020, if $80 billion to $100 billion is going to be the value of aircraft orders placed, then $30 billion would be required for setting up the infrastructure. It is in this context that the constitution of a multi-disciplinary committee for all aspects of air navigation, including performancebased navigation, assumes importance. We need to address one issue — whether the ANS aspect needs to be made a commercial proposition or continue to be in the public domain. Menon asked the participants for their views on the subject and not answers. Does commercialisation reduce costs and increase safety, he wondered? Referring to costs, he said the common perspective was that commercialisation was synonymous for profits. Hence, the fear that cost might increase after commercialisation. Should that happen, a large number of airports in India would become unviable. What about social responsibility? After all, transport should not be only for the elite. Hence costs should be reasonable. Is it possible to do that? At the same time, the ANSPs should also not be at a disadvantage. Yet another aspect is safety. ANS (Air Navigation Service) in public domain is more careful as it is far more accountable. For instance, ANSPs in India are in the public domain and accountable to the government. He drew the audience’s attention that only public bodies come under RTI (Right to Information) but not private bodies. “I am not suggesting that private ANSPs are less effective from the point of view of safety and security. All I am saying is that don’t go just for the sake of change. Change. Financial pressures should not decide policy. ANS, in view of its nature, has to be a monopoly. Therefore, let’s debate the issue.”
Dodgy assessment Veteran journalist Tom Ballantine, who was at Kochi at the invitation of CANSO, spoilt the party, as it were, for AAI, when he spoke of the high airport charges and navigation charges, and even piled the congestion charges on Messers Ramalingam and company. They weren’t amused. Neither was Raghu Menon. Tom quoted a whole list of IATA facts. Is IATA the last word on these issues, Tom?
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China’s Great Wall stopped
Security considerations prompted the government to withhold permission to Great Wall Airlines from operating its freighters to India. With exports between India and China set to reach the $40 billion mark in the next three years, the government needs to take a fresh look at national security measures, writes Tirthankar Ghosh.
C
HINA’S OVERTURES notwithstanding, India has not given permission to Great Wall Airlines, of China, from operating its cargo flights to India. Great Wall Airlines had, amidst much fanfare, announced that it had applied to fly to at least two Indian cities at the end of May this year. The announcement did create a lot of interest, coming as it did after Prime Minister Dr Manmohan Singh and the Chinese President, Mr Hu Jintao, urged both nations in November last year to work towards doubling the volume of bilateral trade to $40 billion by 2010. The airline had applied for clearances from the Directorate General of Civil Aviation before it could start regular operations. The ministry of civil aviation, which was supposed to issue an NOC to the carrier, has now withheld the certifi-
China Great Wall Industry Corp had sanctions imposed on it by the United States Department of the Treasury for allegedly supplying missile technology to Iran CRUISING HEIGHTS June 2007
cate. The reason forwarded was security considerations. The government has its reasons. Great Wall Airlines is a Sino-Singapore joint venture cargo airline, based in Shanghai. Owned by Beijing Aerospace Satellite Applications Corporation (51 per cent — the stake was originally owned by China Great Wall Industry Corporation), Singapore Airlines Cargo Pte Ltd (25 per cent) and Dahlia Investments Pte Ltd (24 per cent), a wholly owned subsidiary of Temasek Holdings (Pte) Ltd, the carrier expected to get the NOC. However, after consultation with other ministries, the most significant being the home ministry, the government put its foot down. Apprehensions about the airline came after it was widely publicised that the US government had withdrawn the permission granted to it for flying into the US from the
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CARGO middle of August 2006, again because of security considerations. The carrier had to discontinue operations after its parent company, China Great Wall Industry Corp, had sanctions imposed on it by the United States Department of the Treasury for allegedly supplying missile technology to Iran. All aircraft were returned to Singapore Airlines Cargo. The sanctions on the carrier were lifted on December 13 last year and the airline resumed service in February. Since then, Great Wall resumed its scheduled services to Amsterdam and Incheon. It was supposed to fly into Mumbai/Chennai (thrice a week), but has not been permitted to do so. The ban on Great Wall by the US Administration actually came on June 22 last year, roughly a week after the treasury department designated one of its parent companies, the Chinese state-owned China Great Wall Industry Corporation (CGWIC), for supplying missile-related and dual-use components to Iran. According to the US treasury department, the components and technology supplied to Iran were to be used for missiles, with a range of up to 400 km and capable of carrying chemical weapon warheads. While the US Treasury Department did not give specific reasons for imposing sanctions against Great Wall Airlines in its August 25, 2006, announcement, it was reported that the suspension came when the US-based Boeing Company decided it could no longer provide Great Wall with technical assistance, or aeronautical charts. Boeing owns Jepperson Sanderson, which supplies almost all the world’s pilots with charts. Boeing had approached the US treasury department for a licence that would allow it to continue working with Great Wall Airlines, and the airline appealed its listing by the treasury department.
Temasek’s ambitions
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ay back in October, soon after the coup in Thailand, Singapore’s foreign investments came up for close questioning by authorities in many countries. According to a report in The New York Times, the investments made by Temasek Holdings started the coup-d’etat in Thailand. The company bought controlling stake in Thailand’s telecommunication set-up for a whopping $1.9 billion. Temasek Holdings is the Singapore government’s investment arm. Temasek bought the company from the family of the ousted Thai prime minister Thaksin Shinawatra, who is believed to be involved in corrupt practices. After the
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An NSC secretariat note also pointed out that if Great Wall Airlines was allowed to operate in the country or even to overfly, it would give the airline access to monitor the country’s nuclear installations, which are close to the two airports or lie on the air route coup, while Thai officials were busy finding out whether the deal was illegal or not, Temasek’s executives maintained the deal was above board. The coup brought into the limelight the low-profile Temasek. Over the last few years, after Singapore realised it was in direct competition for investment and trade from China and India, Temasek took upon itself to invest around Asia, particularly in China, where it is the largest foreign investor in the financial sector. According to Thomson Financial, Temasek’s portfolio, valued at $81.2 billion, makes it one of the largest stateowned shareholders in the world. Temasek's desire to win substantial holdings around Asia is part of its endeav-
CRUISING HEIGHTS June 2007
As far as India is concerned, Great Wall’s clearances had come up for discussion within the National Security Council (NSC). At the end of it all, the NSC had pointed out that licences should not be issued to the airlines to operate cargo facilities at and between Chennai and Mumbai airports. Reports mention that an NSC secretariat note also pointed out that if the airline was allowed to operate in the country or even to overfly, it would give the airline access to monitor the country’s nuclear installations, which are close to the two airports or lie on the air route. It may be pointed out that China Great Wall Industry Corporation, which holds a majority stake in the airline, is closely linked to the development of commercial space technology. In fact, the corporation works closely with the People’s Liberation Army, of China. The Chinese airline is not the first to face such a situation. Long before the Great Wall controversy, the NSC had warned against handing over Indian ports to Chinese companies. Soon afterwards, there was a report about granting of visas to 1,800 Chinese workers in the Reliance oil project. Industry watchers believe that in the absence of a clear policy, the government does not really know how to sort out the issue of Chinese investments in the infrastructure sector. The National Security Council has proposed rigorous screening requirements for investment from certain countries, but the government has brought in curbs that are sector specific. Until a few years ago, security matters did not play that important a role in bringing foreign direct investment (FDI) into the country. The NSC has been formulating a National Security Exception Act, aimed to arm the government with enough powers to suspend FDI whenever it is considered a
our to raise the status of Singapore. In 1974, the government set up Temasek as a holding company. It has stakes in about 40 companies now and earns an estimated $2.5 billion in annual dividends, part of which Temasek pays to the government as income tax and dividends. In mid-2002, Temasek appointed a new executive director to overhaul the company: Ho Ching, a Stanford-educated electrical engineer. She was at the top of Singapore Technologies and perhaps, what is more important, is the fact that she was the wife of the then deputy prime minister and now prime minister, Lee Hsien Loong, son of Singapore's founding prime minister, Lee Kuan Yew. Ho, incidentally, changed Temasek. She brought in investment
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threat to national security. The council has, in fact, worked out a detailed list of countries that are considered as security risks. In addition to Pakistan and Bangladesh, China, Hong Kong, Macau, Taiwan, North Korea and Afghanistan are on a list of FDI sources classified as security risks. So any investment from these countries is likely to go through a thorough screening procedure before approval. To top it all, the NSC has also asked for the opinion of intelligence and security agencies before investments from these countries are approved. Last August, for example, a contract to a consortium comprising two Chinese com-
panies, Kaidi Electric Power and China Harbour Engineering Corporation (CHEC), and Mumbai’s Zoom Developers for the Vizhinjam Deep Water International Transhipment Terminal, in Kerala, was not given the green signal. The reason: CHEC had built Pakistan’s Gwadar deep-sea port and naval base with Chinese investment. According to the NSC, the company had links with the governments of Pakistan and China. If the contract were to go through, the NSC pointed out, China would be able to monitor sea-lanes communications, as it has been doing from Gwadar and the Cocos Islands.
discipline and global expertise. Temasek’s overseas investment drive is significant. Its Singapore subsidiaries, such as Singapore Telecommunications, or SingTel, bought Australian cellular operator Optus for $7 billion in 2001. Among the other investments is Singapore Airlines’ 49 per cent stake in Virgin Atlantic. Lastly, port operator PSA holds stakes in 20 ports in 11 countries, including five in China. While Temasek claims that the government is not involved in investment decisions, its board is appointed by the ministry of finance, which Lee Hsien Loong also heads, subject to approval by Singapore’s president. Temasek’s chairman, S. Dhanabalan, is a former foreign minister. One of
its two deputy chairmen is a permanent secretary in the ministry of finance. India has not been too happy with Temasek. The country rejected ST Telemedia's $390 million bid in 2005 for a 29 per cent stake in a cellular operator because SingTel already owns 30.5 per cent of Bharti. In 2006, India blocked Temasek from raising its stake in ICICI Bank because the government of Singapore Investment Corporation, which manages Singapore’s budget surpluses and foreign exchange reserves, already held three per cent. Temasek's critics abroad say resentment of Singapore’s affluence and perceived arrogance help fuel suspicion of the company’s motives. Singapore has become
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A month later, in September, Chennai and Mumbai Port Trusts were ordered to reject the bids by Hong Kong-based Hutchison Port Holdings for the construction of new container terminals at the two ports. So it is with Great Wall Airlines. According to those in the industry, flights by the Chinese cargo airline could pave the way for Indian (Airlines) to start regular services to Guangzhou in China. Initially, Indian planned to fly three times a week with an A321 aircraft. Currently, Air India and at least two airlines from China operate regular passenger flights between the two nations. Although trade relations
a haven for the fortunes of Asia’s new millionaires, and not all its neighbours are happy about this fact. Many Indonesians, for example, resent Temasek because of its excessive control of Indonesia’s cellular industry: ST Telemedia and SingTel control the country’s two leading operators. The US has also been wary of Temasek. In 2005, Temasek and Singapore Airlines took a 49 per cent stake in a cargo airline with China Great Wall Industry Corporation, a satellite launch company that, since 1991, has been repeatedly sanctioned by Washington for allegedly sending missile parts to Iran. Based at Shanghai’s Pudong Airport, Great Wall Airlines has been operating with a fleet of two Boeing 747-400 freighters.
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between India and China are growing, there are no direct air cargo services between the two countries.
Great Wall enters US
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ith the lifting of sanctions on the Great Wall, China and the US agreed recently on an effective ‘open skies’ policy for cargo services between the two countries. The two countries agreed to abolish all restrictions on cargo services by 2011. Both the countries have stated that “the agreement …will provide US cargo carriers with virtually unfettered access to Chinese markets by lifting all government-set limits on the number of cargo flights and cargo carriers serving the two countries by 2011.” At present, access to passenger routes by non-Chinese carriers is limited, with only 10 flights a day by the US airlines flying from the US. The agreement is part of the Strategic Economic Dialogue (SED), which is an on-going process of trade negotiations between the two countries. However, present market trends suggest that the market for cargo services is already well supplied. The Association of Asia Pacific Airlines, which includes many of the big players in the China cargo sector, such as Cathay Pacific, has reported a fall in utilisation rates, with demand in April 2007 increasing by 0.7 per cent but capacity increasing by 3.3 per cent, leading to a fall in ‘load factor’ of 1.7 per cent to 66 per cent. With all of the main express companies, amongst others, having major expansion plans already in place, the SED agreement only confirms the existing trends for the cargo market.
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T India and China are predicted to dominate the air cargo market in future. However, India’s air cargo growth can be in the 18-20 per cent region, based on the GDP growth forecast, and in China cargo growth is predicted to be around the 20-25 per cent mark. CRUISING HEIGHTS June 2007
he growth in air cargo between China and India will substantially impact the industry, according to Ram Menen, Emirates’ divisional senior vicepresident, cargo. “All airlines will be watching these regions closely over the next year,” he told CRUISING HEIGHTS in a recent interview. According to him, India and China are predicted to dominate the air cargo market in future. The growth in world air cargo in 2007 is predicted to be anywhere between four and five per cent. However, India’s air cargo growth can be in the region of 18-20 per cent, based on the GDP growth forecast, and in China cargo growth is predicted to be around the 20-25 per cent mark. Even though the Chinese government will try and slow down its economy, said Menen, it will continue to be a star performer, fuelled by the growth in domestic consumption. The inflow of FDI will continue to fuel the growth of new free zones, with migration taking more inland, and, as far as air cargo is concerned, increased deployment of air capacity could create a few challenges, as supply-and-demand equation might tip in favour of supply, putting increased pressure on yields. It is in such situation that the government must take some drastic measures. While security considerations cannot be kept on the backburner in a globalised economy, the country cannot wait to see China taking away the lion’s share. Any move, to suspend cargo flights, for instance, could send wrong signal to the world.
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AIRCARGO NEWS
CARGO Air cargo growth sluggish INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA) has released traffic results for the period January to April, which show year-on-year slow freight demand growth of 2.6 per cent, with average load factors at 75.4 per cent. According to Giovanni Bisignani, IATA’s director general and CEO, this signifies stability in the period. Freight demand showed much more price sensitivity than previously, and while the cargo business is still growing, competition with other modes of transport was severe. Sea shipping raked in a greater proportion of the benefits from the economic boom. Middle East airlines recorded 12.2 per cent demand growth, while Asia Pacific, at 3.9 per cent, was next in line. Europe saw a fall of 0.1 per cent, North America was stable at 0.9 per cent demand growth and Latin America dropped 5.5 per cent.
UPS embraces the world again UNITED PARCEL SERVICE (UPS) is launching next month a new around-the-world flight to further enhance service between Singapore and Middle East, Europe and the United States. The new service will allow UPS to enhance its service by improving pickup times and providing more airlifts in response to customers’ demands. Customers shipping from Singapore to Europe and Mumbai, for example, will gain a later pickup time of 8 pm each day. Come July, UPS will add, to its existing eleven around-the-world flights, five weekly frequencies that connect the world using MD-11 aircraft. Each week, the aircraft will connect Singapore to major trading markets in Europe, the Middle East and the US by flying from its European hub in Cologne, Germany. From there, the flight will touch Dubai, Bangkok, Singapore and Mumbai. The flight will also connect to the company’s international air hub in Louisville, Kentucky.
Shed outdated and unprofitable practices: Spohr Carsten Spohr, the new CEO of Lufthansa Cargo, has called for fundamental change in the air cargo industry to lift it out of outdated and costly practices and processes that hamper its financial viability. Speaking at the recent Cargo Network Services conference in San Diego, he stressed that the industry is poised for further growth, but this is no guarantee for financial success. He showed concern about overcapacity, as airlines have been boosting their freighter fleets drastically, supplemented by massive growth in bellyhold capacity. According to Spohr, it is not only some of the current freighter fleet that is out of date. Although the airline industry has long been at the cutting edge of technology development, the air cargo business is still mired in practices and processes from the past century — copying, stapling and folding stacks of paper, booking shipments by phone or fax and performing countless manual checks on the handling side. All these impede progress, cost the industry money and undermine its profitability.
Cargo is getting heavier STRONG OIL PRICES generated a rise in the transportation of oil and gas exploration equipment in 2006, and this situation is expected to continue this year but with more focus on heavier shipments. According to Volga-Dnepr, one of the major players in the field, the global air cargo market looks set to remain strong, prompting forwarders and major shippers to increasingly seek long-term contracts with carriers in order to secure sufficient capacity and more accurately budget the costs of such operations. There is also a trend towards heavier cargo shipments. Volga-Dnepr’s vice-president, Konstantin Vekshin, said that in addition to the increasing number of heavy-lift air cargo movements, the market was also seeing the size of those shipments tending to become larger. “Air cargo is getting heavier and heavier — and we need to be able to handle those heavier pieces,” he said. One of the key weapons in Volga-Dnepr’s future armoury for meeting that requirement, said Vekshin, would be the new-generation IL76TD-90VD freighter. Compared with older IL76s, the new aircraft has an increased payload of 50 tonnes, a greater range and meets all current international noise requirements, enabling it to operate anywhere in the world. Volga-Dnepr took delivery of its first IL76TD-90VD in mid-2006. Earlier this year, it operated the first US commercial flights with the aircraft. A second IL76TD-90VD, which the Russian carrier claims is “the only civil aircraft in the world in the 30-50 tonnes capacity sector capable of transporting outsize cargo to any airport”, is due to join its fleet later this year, probably in October.
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Defective EGMs delay processing drawback claims THE INDIAN MERCHANTS’ CHAMBER held a discussion recently on the ‘Delay and Defective Filing of Export General Manifests (EGM)’, which holds up processing of drawback claims by customs. The discussion was presided by K.M. Tiwari, chief commissioner of customs, Mumbai Port, and N Sasidharan, chief commissioner of customs, JN Port, and attended by shipping lines, shipping agents, custom house agents and other stake holders. Giving details about the delay and defective filing of EGMs, Tiwari said that till date 28,605 EGMs had not been filed. “We have 30,500 cases that have EGM errors, of which 20 per cent of the cases are container number errors,” said Tiwari, adding that if all the paperwork was complete, the claim would be settled in a month. The meeting concluded with the felicitation of the commissioners by Bhavna Doshi, chairperson of IMC’s Indirect Taxation Committee. Doshi urged all stakeholders, like exporters, shipping lines, shipping agents, CHOs and customs officials, to cooperate with each other and work more
Spohr, a newcomer to the air cargo sector after a long spell on the passenger side, has been 100 days in his office.
Lufthansa Cargo to market Jade Cargo capacity FROM 1 July 2007, Lufthansa Cargo will be responsible for selling the airfreight capacity of the Chinese cargo airline Jade Cargo International from Germany and Sweden to Shenzhen, China’s leading production centre. Jade Cargo International offers a weekly service from Shenzhen to Stockholm via Amsterdam, with a direct return flight to Shenzhen. The Shenzhen-Frankfurt-Shenzhen route is
The Duty Drawback meeting in progress
diligently to ensure submission of error-free EGMs and IGMs (Import General Manifests), strictly adhering to the prescribed time frame, so that the customs office would be enabled to process and disburse the duty drawback claims expeditiously.
operated thrice weekly by Boeing 747-400ER freighters. “Assuming responsibility for Jade Cargo sales in Germany and Scandinavia will enable us to offer our European customers an attractive direct service to the prospering Pearl River Delta in Southeast China,” said Dr Andreas Otto, Lufthansa Cargo Board Member Product and Sales. Jade Cargo International was founded as a joint venture between Shenzhen Airlines Company Limited (51 per cent), Lufthansa Cargo AG (25 per cent) and DEG — Deutsche Investitions- und Entwicklungsgesellschaft mbH (24 per cent).
Global fleet forecast to double in 2026 The global freighter fleet will more than double in size from 1,801 units now to 3,883 units in 2026, according to a forecast by the Air Cargo Management Group (ACMG). “In addition to freighter fleet expansion to meet the growing demand for air freight services, more than 1,100 existing freighters will be retired over the next 20 years,” said Robert Dahl, ACMG’s project director. “Taking both growth and replacement into account, ACMG predicts the need for more than 3,200 new and converted freighters through 2026, an average of 160 units added per year,” he said. “Interest in freighter aircraft has never been higher, as evidenced by a record backlog of orders for new and converted freighters. Over the next three years, three new wide-body freighter types will enter the market in the form of 777Fs, 747-8Fs, and A330-200Fs, all of which have enjoyed wide market acceptance. “The changes in the freighter market are most evident in the growing fleet of wide-body units, which now comprise over half of the world’s fleet of freighters, and which ACMG predicts will attain a 64 per cent share by 2026,” said Dahl. “In the narrow-body market, the long-awaited A320/321 conversion programme is moving forward, and will provide competition to the already successful 737-300/400 and 757200 programmes currently on offer.” CRUISING HEIGHTS June 2007
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NATIONAL Air Deccan News
SIA News
Bags two awards: Air Deccan has bagged two honours in succession from Frost & Sullivan for the year 2007. The airline has been awarded the 2007 Frost & Sullivan Company of the Year
Commencement of daily services in Bangalore: The airline has enhanced its flights to Bangalore to become a daily service. This increase will help enhance onward connection options for its customers. Rejoicing with children: Singapore Airlines Kolkata team recently spent a day with a group of children from Bess Crawford, a Kolkata-based voluntary organisation committed towards the education of disadvantaged children. The airline organised a fun-filled outing for around 50 children to an amusement park in Kolkata. The daylong programme was quite exhaustive and edutaining. Felicitates partners in Delhi: The airline’s Delhi station recently organised a felicitation function in appreciation of the support from various civil aviation and aeronautical agencies and partners in the area of customs, immigration and quarantine. The luncheon had many high-profile guests, including Calvin Eu, Singapore’s High Commissioner in India.
award in the area of Indian commercial aviation and Capt G.R. Gopinath, the LCC’s managing director, has been awarded the Frost & Sullivan CEO of the Year award. Issues monsoon advisory: The airline has issued its monsoon advisory for passengers intending to travel between June and September. It has activated a centralised 24-hour Monsoon Response helpline, number 39008888 (prefix city code) to enable passengers get the latest flight schedules. Regular SMS alerts on possible delays and cancellations will also be sent out to passengers throughout this period.
Amadeus partners with Air India AIR INDIA, India’s national air carrier, will offer Amadeusenabled e-ticketing service across all its domestic and international routes. Globally, Amadeus has 188 airline partners distributing e-tickets. According to IATA, converting to e-ticketing would allow the airline industry to save up to an estimated US $3 billion a year.
Kingfisher to introduce landscape camera IN A FIRST of its kind in the country, Kingfisher Airlines is all set to introduce landscape camera system onboard all its Airbus aircraft. Weighing about 4.5 kilograms each, the modification involves installation of two cameras near the nose landing gear. They will enable passengers onboard to get a bird’s eye view of the ground the aircraft flies over on their personalised screens. At present, landscape camera service is available internationally with a few airlines.
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INTERNATIONAL Nok Air comes to India THE THAI LOW-FARE AIRLINE has become the first Thai budget carrier to fly to Bangalore, with the launch of its first international flight. Tagged as the ‘Shopper’s Airline’, Nok Air flies to Bangkok, a shopper’s paradise. Starting from the first of this month, Nok Air is operating daily flights from Bangalore to Bangkok, using a 737-400, with a capacity of 150 seats. Reservations for flights can be made on the Nok Air website, www.nokair.com, and prices start from Rs 9,999 net for round-trip tickets.
KLM-Northwest-Air France open joint HO in Gurgaon
Malaysia Airlines on e-Ticketing route
THE TWO AIRLINES have recently integrated their local teams in the country and the corporate head office of both Air France and KLM-Northwest India is moving from New Delhi to Gurgaon to accommodate the combined teams in a new joint location. The office relocation from Delhi to Gurgaon will impact the all India customer service contacts of both airlines, as the sales and service centre for reservations and fares and the Flying Blue customer service centre for members of the joint Air France-KLM loyalty programme will also move to Gurgaon. Besides the change in numbers and mailing address, the airlines’ direct customers will not be affected by the physical relocation of the corporate head office to Gurgaon as both the Air France and KLM-Northwest ticket offices already operate from the Indira Gandhi International Airport, Delhi.
BA allows extra baggage BEGINNING JUNE 1 and up to October 31, students flying with British Airways can now carry an extra bag weighing 23
kilos. To avail this offer the tickets need be purchased before end-September. All they need to do is register on www.bapromo.co.in. By registering on the website, students also have the opportunity to win some exciting prizes.
MALAYSIA AIRLINES IS all set to roll out electronic ticketing (e-Ticketing) by September this year with the completion of its customer airlines’ check-in system cutover to the new SITA Departure Control System. This allows 15 airlines, including Jet Airways, Royal Brunei and Kuwait Airways, which are served by Malaysia Airlines as the ground-handling agent, to check in e-Ticket passengers along with paper ticket customers. This cutover for the customer airlines represents Phase One of Malaysia Airlines’ RM400 million Passenger Services System rollout to upgrade all IT infrastructure to facilitate the airline’s move to the International Air Transport Association’s (IATA) standard e-Ticketing.
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TRAVEL & TOURISM PM speak IN THE ‘Report to the People 2004-07’ on tourism and culture, released by the Prime Minister Dr Manmohan Singh, recently, the following points are mentioned. A new scheme of Creation of Land Bank for Hotels has been introduced to help meet the shortage of hotel accommodation all over the country, especially in view of the Commonwealth Games 2010. Long-term multientry tourist visas of five-year duration have been introduced for nationals of 18 countries.
rant, a bar, a health club and a swimming pool and conference facilities that include a large banquet hall, a number of meetingcum-board rooms and a business centre.
Emirates Holidays outlines expansion plans AFTER LAUNCHING ITS services in Hong Kong, Moscow, Cape Town, Durban and Johannesburg, Emirates Holidays, tour operator in the Gulf and the Middle East, is all set to launch specialist services in India and China later this year. In India, the tour
New secretary Dr Christy Fernandez (IAS, Gujarat Cadre, 1973) has taken over as the secretary, ministry of tourism, with effect from May 1. He replaced A.K. Misra, who retired on superannuation on April 30.
Fortune Select Global wins award FORTUNE SELECT GLOBAL, part of ITC Fortune Park Hotels, recently won the First Class Business Hotel of the Year award for the second year in a row. The awards have been instituted by the ITM Institute of Hotel Management, Mumbai. The 83-room hotel, launched in December 2004, is located within Global Business Park, in Gurgaon. The hotel features a multi-cuisine restau-
operator will appoint highly skilled specialist staff that will operate out of Emirates’ offices in Thiruvananthapuram, Kochi, Chennai, Bangalore, Hyderabad, Mumbai, Delhi and Kolkata to support the travel trade.
Sarovar Portico opens in Indore SAROVAR HOTELS HAS opened a three-star hotel, Sarovar Portico, in Indore. Located in the city centre in Treasure Island Mall, Sarovar Portico features 97 contemporary guest rooms and suites. In addition, the hotel will feature multi-cuisine restaurant, Rouge, and a bar, named Liquid. Other amenities in the hotel include a well-equipped business centre, conferencing and banquet facilities, a rooftop function area and a swimming pool. Sarovar Hotels manages, franchises and markets 36 hotels and resorts under the Park Plaza, Park Inn, Sarovar Premiere, Sarovar Portico and Hometel brands. The brand encompasses three-, four- and five-star categories. The chain is associated with the Indian School of Business, Hyderabad (Corporate Hospitality Services), and Club Mahindra Holidays (Alliance Partners). Geoffrey’s, Sarovar’s English pub brand, operates in 11 cities in India.
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Minister’s corner Development of Dandi: The minister of tourism and culture, Ambika Soni, has said that two projects-Destination Development of Dandi, costing Rs 380.27 lakh, and Rural Tourism project of Dandi, costing Rs 50 lakh have been approved for promoting Dandi as a destination. Budget hotels and accommodation: The minister has informed the Rajya Sabha that her ministry has requested state/UT government and other land owning agencies, like DDA, ministry of civil aviation, Indian Railways, etc., to allocate land for building hotels, especially in the budget category. Further, in order to increase the number of rooms in the budget category, a scheme for approval of guesthouses and Incredible India Bed & Breakfast establishments has been introduced. Conserving the Taj: Soni informed the Rajya Sabha that the Archaeological Survey of India undertakes the conservation of Taj Mahal strictly in accordance with the archaeological norms. Apart from conservation and preservation of the monument, the Archaeological Survey of India also undertakes development of its gardens and facilities for tourists. A total expenditure of Rs 2.86 crore was incurred on the above account during the last three years. She further informed that her ministry has taken up a project at an estimated cost of Rs 39.34 crore for Agra Revitalisation and Visitor Management for Taj Mahal. The integrated project is expected to be completed within a period of 36 months. Fiji FM visits: The finance minister of Fiji, Mahendra Choudhary, called on Ambika Soni recently and during their half-hour
The finance minister of Fiji, Mahendra Choudhary calls on the minister of tourism & culture, Ambika Soni, in New Delhi on May 14, 2007.
meeting, both the leaders discussed ways to boost tourism and culture ties between the two countries. The visiting minister said that there is an increase in tourist traffic from India to Fiji and to boost it further he held a fruitful meeting with Indian tour operators and is hopeful that they will promote tourism in Fiji through package tours. He also added that air connectivity between the two countries is an area where improvement is required.
Hilton comes with a bang GLOBAL ALLIANCES IN the hospitality industry are the new order of the day, and one of the first to take the dive is Hilton Hotels, which has chalked out plans to get into the country. The group is on an aggressive growth path, quite different from its last tie-up with Bharat Hotels. The Hilton Group, till two years ago, had virtually no presence in the country, though it is a worldwide chain. This time, the chain has chosen Lenny Menezes, formerly with TAS and a former president of Taj International, to lead the foray into India. Menezes quit TAS, joined Abu Dhabi National Hotels and then quietly entered the Indian scene again. Since joining Hilton in India, Menezes has tied up with Oberoi Hotels for its Trident brand, signed management contracts with hospitality companies and has completed a JV with DLF. The Hilton hotels in India have 10,000 rooms presently and expect to exceed 20,000 rooms by 2012.
Korea ready to sparkle IN AN EFFORT to transform itself into a tourism power house, Korea Tourism Organisation has come up with ‘Korea, Sparkling’. The re-branding of the destination has come following the buoyant growth and prominence that Korea has received from all over the world. The brand is aimed at promoting the country as an international tourist destination, attracting tourists to experience the unique culture, tradition and hospitality of the peninsula. ‘Korea, Sparkling’ is designed to redefine the image of the destination. The brand identity and logo for Korea Tourism is
developed on the basis of three core values: the people, place and culture. The new visual identity has been designed to demonstrate a sense of liberty and dynamism. Speaking during the launch of ‘Korea, Sparkling’, Kim Il Jung, deputy director, Korea Tourism Organisation, said, “Korea, Sparkling is a marketing brand for Korea Tourism, depicting the energetic and lively Korean culture and people, which can be experienced only in Korea. The term attempts to infuse a feeling of rejuvenation, vitality and harmony in its visitors who want to explore and unravel the various facets of the country.” Keeping in mind the competitive and ever-growing tourism industry, Korea Tourism Organisation is keen to position the country as a niche market for leisure and FITs from India. In 2006, Korea received 62,531 Indian tourists, witnessing an overall increase of 42.7 per cent as compared with 2005.
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Dubai set to improve infrastructure DUBAI WILL SPEND $12 billion for the development of its road and transport system. According to the Dubai Road and Transport Authority (RTA), the funds will be used to build 500 kilometres of new roads, 95 flyovers and 100 bridges. The investment will meet the needs of a projected growth in population to 5.3 million by 2020, from 1.3 million in 2005. Nine new ring roads will also be built as well as increasing the number of creek crossing lanes from 19 (in 2006) to 47 by 2008, and 100 by 2020 to tackle traffic problems. The RTA officials say that the creation of a livable city posed a significant challenge since land use planning didn’t support sustainability and the way communities were planned only helped increase automobile dependence. Currently, the share of all trips made by public transport does not exceed seven per cent of the total traffic. In response, the RTA will encourage communities to develop through integration of land use and transportation planning so that people could live and work more comfortably and have better leisure facilities. This will be achieved by providing Transit Oriented Development (TOD) near Dubai Metro, bus and marine stations. The RTA has developed and is implementing a comprehensive Strategic Transportation Plan, which covers Dubai’s
mobility needs up to the year 2020. Improving road safety is the other major issue, since the accident fatality rate in Dubai is around 20 per 1,00,000, compared with six in countries, such as the UK and Sweden. To reverse this trend, the RTA is developing a Comprehensive Road Safety Strategy and will implement ‘Safety Audit Standards’. This will include a number of safety programmes and campaigns, including minimum speed limits on certain high speed roads and the construction of 17 new pedestrian bridges at an estimated cost of Dh50 million, in addition to grade separate pedestrian crossings at 42 metro stations.
Etihad wins top honours at World Travel Awards
Peter Baumgartner, executive vice-president, marketing and product; James Hogan, chief executive, and James Rigney, executive vice-president, finance, all from Etihad Airways, celebrate winning three titles at the World Travel Awards in Abu Dhabi.
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ETIHAD AIRWAYS has won the highly coveted ‘leading airline’ award at the World Travel Awards (WTAs) for the Middle East and Africa. Votes for the WTAs were taken from nearly 1,70,000 travel industry professionals from around the world, of which 1,10,000 are travel agents. The airline drew particular praise at the WTA ceremony for building a global flight network of 42 destinations in as many months, which the awards’ organisers described as “an unprecedented achievement in the air travel industry”. James Hogan, Etihad Airways’ chief executive, said that the award was good news, “especially in the face of strong competition from some very good airlines, particularly those based in the Middle East”. Etihad was also presented with the awards for ‘Leading First Class Airline’ and ‘Leading Airline Website’ at the high-profile ceremony at Abu Dhabi’s Emirates Palace Hotel. The ceremony was presented by American TV stars Jamie-Lynn Sigler, from ‘The Sopranos’, and Chris Noth from ‘Sex and the City’.
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PATA woos Gulf travel and tourism leaders PRESENTLY, the air capacity between the Gulf and Asia Pacific is booming, with non-stop air seat capacity growing at an average of 11 per cent a year since 2000, PATA President and CEO Peter de Jong told travel and tourism leaders at an industry luncheon meet in Dubai recently. Addressing travel professionals from both the public and private sectors, de Jong said strong, two-way travel demand was driving the spectacular growth in seat capacity, expected to reach almost 3,65,000 seats per week by the end of 2007. “Since 2003, we have seen visitor arrival growth rates from the Gulf as high as 54 per cent to Macau and Malaysia, 43 per cent to Hong Kong and almost 30 per cent to Singapore. Last year, we saw over a million arrivals from the Gulf and we forecast that this is the beginning of a vast, new wave of travel in both directions,” he said. Highlighting PATA’s advocacy programme, de Jong said PATA was committed to breaking down barriers to travel growth, such as antiquated bilateral agreements, overzealous border controls and excessive taxation, while championing the development of sustainable, eco-friendly tourism.
DTCM Director General, Khalid bin Sulayem; PATA President and CEO, Peter de Jong; DTCM Executive Director Operation Marketing, Mohamed Khamis bin Hareb; PATA Regional Director - Gulf, Nicki Page
Attending the luncheon were PATA member destinations, such as Korea, Malaysia, India, Thailand, and leading hotels and travel companies. Before the meet, de Jong held talks with the senior management of the Department of Tourism & Commerce Marketing (DTCM), Government of Dubai, which joined PATA as an allied partner in 2006, and held a round-table briefing with local media.
Malaysia chalks out tourism plans SUPPORTING MALAYSIA’S LONG TERM and very successful tourism marketing efforts, The World Tourism Organisation (UNWTO) decided to organise a three-day world tourism conference in Kuala Lumpur in collaboration with the government of Malaysia. This Conference took place from June 4-6, 2007, and comprised one of the main events of ‘Visit Malaysia Year 2007’, which coincided with the country’s 50th anniversary of independence. The conference, themed ‘Tourism Success Stories and Shooting Stars’, was supporting Malaysia’s long-term, successful marketing efforts in the tourism sector. The main objective of the conference was to analyse the strategies for success, developed by leading destinations and organisations, as well as to learn from the other success stories. The key areas for discussion were sustainable growth, marketing, product development and partnership. The conference brought together a wide range of world leaders in tourism, high level policy makers, specialists and experts from both the public and private sectors to exchange experiences, put forward valuable ideas and provide guidance for future tourism development. Among those who participated in the conference were Dr Mahmood Shaugy, minister of tourism and civil aviation, Maldives; Geoffrey Lipman, assistant secretary-general, UNWTO; Christopher Rodrigues, chairman, Visit Britain, United Kingdom; Peter de Jong, CEO, Pacific Asia Travel Association, Bangkok; Moeketsi Mosola, chief executive office, South African Tourism, and many more.
Oberoi’s Nile cruiser to welcome guests in October CONTINUING THE TRADITION of offering the highest standards of hospitality and experiences that are unique and memorable, Oberoi Hotels & Resorts will unveil The Oberoi Zahra, Luxury Nile Cruiser in October 2007. This all-suite cruiser will offer the most spacious accommodation among boats on the Nile, with the 25 luxury suites spread over 30 square metres and the two grand suites over 50 square metres. The mutedly elegant interiors of the suites would be complemented by expansive views of the river framed by large windows in the suites and the en suite bathrooms. With separate living rooms, private terraces and jacuzzis, the grand suites will redefine the paradigm of luxury on the Nile.
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Pilot auctions himself
You are bidding on unlimited use of a male pilot (27) for one year Hi and welcome to this auction. I am auctioning my services as a pilot away to the highest bidder, what the winner gets is unlimited use of me as a pilot for one year. The winning bid will be my salary for the whole year in the winners service. Will go to anywhere in the world the winner requires. Except for the winning bid, the winner have to pay for shipping (the airlineticket from Norway to whereever the winner wants me), and accomodation througout the year in the winners service. And also a guarantee of aprox. 50 flying hours per month. In other words; potentially, depending on the bidding, a very cheap pilot-service!! Remarks: I have a unrestricted Norwegian passport. But I will require a work permit if necessary. And when I am not flying, I am usefull for other things too.
W
hile the aviation industry is facing severe pilot crunch and airlines are scrambling for pilots and desperately trying to hold on to the ones they have, Jonas Tind, a
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Norwegian pilot, recently put himself up for sale on Ebay in a bid to find a job and boost his flying hours. It sure was a re-enactment of Harishchandra, the king who always CRUISING HEIGHTS June 2007
spoke the truth, auctioning himself. Now news has come in that the bidding has been closed. Well, it is not clear as to who ‘purchased’ him and for how much.
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