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EDITOR-IN-CHIEF’S NOTE

Is there any salvation for Air India?

I

t’s ironical that an airline that took its first steps with the help of the Maharaja should be one of the elements in the drama at the Air India building at Nariman Point. It only reflects the precipitous fall that AI has taken in the last five decades, and the huge strides that Singapore Airlines has made in the same time. Today, AI wants to beef its operations with the help of SIA! But that’s not the point. The real reason for worry is not how AI is benchmarked against the many other Johnnies-come-lately, but the almost systematic downhill ride of the Maharaja. The new fleet seems to be of no help, the merger seems a monumental mistake, the load factors are dipping day after day, and the market share is laughable for the country’s national carrier. And worse, the top brass are busy fighting amongst themselves.

Will the exit of Raghu Menon help improve the health of the Maharaja?

Unlikely. At the helm — even temporarily — is another civil servant.

He is also handling the Ministry of Tourism, where he is the Joint Secretary and Financial Advisor, a position that he holds in the Ministry of Civil Aviation as well. So, in effect, he is a three-in-one person: one man handling three portfolios. Is it fair to Mr. Bharat Bhushan and, more important, is it fair

CRUISING HEIGHTS June 2009

to Air India, its passengers and employees?

While it may be facile to compare Satyam with Air India, the government response to the monumental fraud at Satyam, to get the IT giant back on its feet, has been well documented and roundly applauded. They got the best minds in the business to help restore confidence amongst investors, clients and the industry.

There has been no such fraud at Air India, but there is no denying that it is terribly run, and the Maharaja has to constantly look over his shoulder to seek approval from the Ministry of Civil Aviation for every little thing. How can any company survive and prosper under such circumstances?

What Air India needs is an independent Board, with full authority to lead the company out of the present tailspin. But will anyone ever do that?

Then what will happen to the upgrades, the free rides when overseas, the freebies on board and the sundry other rip-offs that the airline business offers.

For over 50 years we have only been worried about these perks. Ho does it mater if the company is down by over Rs 4,000 crore, and fast heading towards oblivion? Make merry while it lasts.

Tell that to anyone at Rajiv Gandhi Bhawan and they won’t agree. As far as they are concerned, AI’s recovery is just around the corner!

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Green, the Swedish way While the world talks of going green, SAS, the Scandinavian carrier, is doing so with a vengeance. Its planes land at Stockholm’s Arlanda airport without making much noise — unlike all carriers using the noisy reverse thrust — or circling around in a holding pattern for half an hour. SAS' computers handle the aircraft and help them to land safely, according to a report from The Irish Times.

The exercise is part of a project, called green approaches. It is actually the first working model of the plan which will be prevalent across Europe in a few years.

According to SAS’ Lars Anderson, the green approaches are like cruise control on a highway.

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contents

A SENSE OF DÉJÀ VU!

p34

There is a bit of chilli, coriander, saffron, mint and pepper and if you are still not satisfied you can add a dash of dill, a bit of cardamom and fennel. Well, we have only given you eight of the twenty names that adorn the SpiceJet fleet. As the airline celebrates its fourth birthday, there is a sense of déjà vu about things perking up. An indepth report.

The results are phenomenal: aviation fuel is being saved while carbon emissions are down.

In addition, SAS has also changed its operations systematically to curtail use of fuel. A flight departs only when it knows that it will not be delayed in the sky at its arrival destination. Of the six or seven air traffic control areas in Europe, the Nordic area aims to be the first green one. By 2012, 80 per cent of all landings at Arlanda will use green approaches. And with each aircraft saving up to 450 kg of fuel, payback for airlines will be just 12 months.

OFF THE RECORD

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With representation in seven of the eight IPL cricket teams, including four captains on its rolls, Air India has cause enough for excitement. If only the Maharaja could convert this excitement into the much-needed moolah for himself, perhaps through an IPL franchise!

CRUISING HEIGHTS June 2009

NEWS DIGEST

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The tough-talking Jet Airways’ CCO Sudheer Raghavan feels it’s time for appraisal and consolidation by airlines if they are to tide over the current downturn in the aviation industry. Plus: why foreign investors are shying away from putting funds into Indian airport development plans.

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

INTERVIEW

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CRUISING HEIGHTS Editor-in-Chief

K SRINIVASAN Managing Editor TIRTHANKAR GHOSH

Consulting Editor R KRISHNAN

Senior Editor

CARGO

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Infrastructure development, investment and industry status for air cargo is the only way to develop the struggling sector, feel industry stakeholders, as they come out with their wishlists for the new Dr Manmohan Singh government.

The acquisition of Worldspan was a logical move, according to J B Singh, CEO of the recently-combined ITQ/Calleo entity, who is optimistic about ITQ's growth despite a downward revision of targets to align with the global scenario.

RENU RANGELA

Reporter PUNIT MISHRA

Design RUCHI SINHA PRADEEP JHA RAVINDER GUSAIN

Photo Editor H C TIWARI

Director RAVI SHARMA

Gen Manager RAJIV SINGH

GM (Business Development) ANUJ SAHNI

Subscription

SPECIAL STORY

JAYA SINGH

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Executive Director

At the end of an exceptional period of financial and operational performance, the year-old GHIAL is now looking to a new scale of growth and development, with two major SEZs slated to come up around the airport.

GLOBETROTTING

A woman is suing Southwest Airlines for being thrown out of their plane by an irate attendant who seemed to have gone totally ‘out of control’.

BACK PAGE SNIPPETS

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Air Asia has tied up with Maybank and American Express to accept all American Express Cards to ease the convenience of travellers, while Air India has launched APEX fares to woo passengers. All this and more.

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The successful testing of R-R Trent 1000 engines on the wings of the Boeing 787 have finally paved the way for the aircraft to make its inaugural flight after months of delays.

CRUISING HEIGHTS June 2009

RENU MITTAL Editorial & Marketing office: Newsline Publications Pvt. Ltd. C-15, Sector 6, Noida 201 301 Tele: +91-120-4145555 All information in CRUISING HEIGHTS is derived from sources we consider reliable.

It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us.

Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase-I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase-I, New Delhi 110020 Volume IV No 2

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Need to change first

PERISCOPE

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If the opportunity is there and the policy is changed and there is a sustained policy with certain longevity, whether it is Emirates or anybody else, foreign investors will be interested in a number of things, of which ground handling is one thing.

Emirates Airlines president TIM CLARK on the possibility of Dubai-based Dnata investing in taking up ground handling activities at Indian airports.

Bad move Unless they (NACIL) get a common IT platform for the erstwhile AI and IA, any other business transformation would be futile.

LETTERS TO EDITOR

I am writing in reference to the cover story headlined ‘Just in Time’, by Tirthankar Ghosh (May, ’09). A picture caption of the article reads as “Misplaced priorities: Fedex and other major players have been focusing on taking India to the world and not bringing India to India.” I would like to bring your attention to the fact that the Bilateral Air Transport Agreement between India and USA does not allow a foreign airline to provide domestic services. Therefore, the issue of misplaced priorities does not arise in the case of Fedex, which is a registered foreign cargo airline. I hope you will carry a rejoinder clarifying the same to your readers.

Runa Badami (Fedex India), Mumbai May 2009

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Illustrations: Rajeev Kumar

Just in Time (May ’09), the cover story was worth reading. Capt Gopinath is truly a blue-eyed boy of the Indian aviation industry, who has broken new grounds. He has exhibited astonishing business acumen in taking Indian aviation to new heights. First, he pioneered the concept of low cost flying in India and got tremendous success, and now he is again back with a vengeance to pioneer air cargo logistics business in India. At a time when Indian aviation is reeling under heavy losses, he is preparing himself to swim against the tide. Best wishes, Capt Gopinath!

N Srinath, Bengaluru

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Bird Group executive director ANKUR BHATIA on NACIL’s RFP seeking bids to upgrade systems in commercial functioning of the airline.

The Cargo story, Downturn? What downturn? (May ’09) made some interesting points regarding air cargo industry in India. Indeed, Turkish Airlines Cargo has done a noteworthy thing by keeping the business well above average, notwithstanding the current recession in the industry.

Turkish Airlines Cargo has set an example for other air cargo airlines which are finding it tough to keep the business going. The story highlighted some very interesting points about how Turkish Airlines Cargo achieved this unique feat by applying a unique business model and undertaking continuous improvement in services.

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

Strategic expansion We have already saturated south Indian cities and now we want to leverage the infrastructure in the south by offering direct connectivity to other regions. With this, we will be having point-to-point passengers and those who travel via other cities.

Paramount Airways managing director M THIAGARAJAN on the airline’s move to connect cities like Kolkata, Guwahati and Agartala to the South.

Good sales Many travel agencies which do not agree with the position taken by the travel agent associations continue to sell our tickets and have enjoyed good sales for the recently launched promotional fares.

Singapore Airlines general manager (India) CW FOO on the continuing commission war with the travel agents.

Looking forward We are looking forward to working with Indian and neighbouring Boeing 737 operators on their airframe maintenance requirements.

Air Works’ chief executive officer FREDRIK GROTH on receiving Boeing 737 NG approval from DGCA.

No option We are temporarily suspending the Doha-Nagpur-Doha operations from May 15, due to poor load factor. However, as soon as we get a demand from passengers the operations will start again.

Qatar Airways regional manager NAVIN CHAWLA justifying the suspension of operations from Nagpur.

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Asian airports are world's best

of the world’s best airports — Singapore, Hong Kong, Denver, and Atlanta — were doing right.

Asia swept the survey, winning four of the five top spots: Seoul, Singapore, Hong Kong, and Nagoya, Japan. Nova Scotia’s Halifax was the only non-Asian airport in the top five.

These airports impressed more than 200,000 passengers at 126 airports from around the world who took part in the quarterly airport surveys.

They were rated on passenger experience from a list of more than 30 service-quality factors, including courtesy, cleanliness, and overall ambience

COLD STATS

It may be hard to believe but Asia has some of the best airports in the world. These hubs make the preflight hours more pleasant for passengers.

According to the annual Airport Service Quality Survey released recently by the Geneva-based Airports Council International, the world’s best airport is at Seoul.

For Seoul’s Incheon International Airport, this was the fourth straight year it won the first place. Two years before opening the $5 billion airport in 2001, airport administrators set up a task force that analysed what some

LOOKING GLASS

No way...

Find some place else for your planes. It’s TATA, bye-bye!

Right course Stopping that is a right direction. It will bring in equality amongst players.

Centre for Asia Pacific Aviation India CEO KAPIL KAUL on the DGCA decision to scrap the operating licence of any airline that trades seat-miles with regional carriers.

Unimaginable scenario We are looking forward to working with Indian and neighbouring Boeing 737 operators on their airframe maintenance requirements.

CAPA executive chairman PETER HARBISON, wiring in a May report.

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OFF THE RECORD

Jai Ho

AirIndia

W

hen Indian Premier League (IPL) Commissioner Lalit Modi announced some days back that beginning 2010, the IPL will have 10 teams instead of eight, there was much excitement in the air.

Logically, the most excited should have been Air India. After all, the Maharaja has 15 T20 experts on his rolls, and maybe it makes sense to have an IPL team, considering the dwindling revenues in its other SBUs. So why not have a VSBU (Very Special Business Unit) in the form of an IPL franchise and make some moolah? But as one very senior official at AI said: “Getting the team together will be the easiest part. The most difficult part will be to decide who will be the ED of this SBU, the GM and the Deputy GM, who stays in Delhi and who goes to Mumbai. That will be the real contest for the trophy.”

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

Anyway, here are the men from the Maharaja who did the country proud in

South Africa. Let’s applaud them, and let’s applaud AI for giving sports such a healthy push-up in their overall scheme of things.

Barring Kolkata Knight Riders, AI has representation in seven of the eight teams.

And two of them — M S Dhoni (Chennai Super Kings) and Yuvraj Singh (Kings XI Punjab) — captain their sides. The other players are: Suresh Raina (Chennai Super Kings), Irfan Pathan (Punjab Kings XI), VVS Laxman and R P Singh (Deccan Chargers), Harbhjan Singh and Dhawal Kulkarni (Mumbai Indians), Naman Ojha, Siddhartha Trivedi and Paul Valthaty (Rajasthan Royals), Pankaj Singh, Tejashwi Yadav and Rajat Bhatia (Delhi Daredevils) and Robin Uthapa (Royal Challengers). For the record, Tejashwi Yadav is Laloo Prasad Yadav’s son.

And it must be said to the credit of the lads that every time they have won, there have been huge job offers from state government outfits and other PSUs, but most of them have struck to AI. Harbhajan Singh, for example, was offered a Deputy SP’s job by the Punjab Police, but he said “no” to it.

They all love working for AI, and who doesn’t like a free ride? In Air Indian parlance, it’s called SoD (Staff on Duty)!

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Fraport – Airport Operations from Austria to Xi’an.

The Company Fraport AG is a leading player in the global airport industry. Following its initial public offering (IPO) Fraport has become the second largest listed airport company in the world, by revenues.

Fraport’s expertise is based on more than 80 years of aviation history at Frankfurt am Main, Germany. Frankfurt Airport (airport code = FRA) is located about 12 kilometers from downtown Frankfurt. A renowned pioneer for decades, FRA serves as Fraport’s home base and as a showcase for the company’s know-how, technology, products, and services.

With outstanding connectivity to all five continents of the globe, FRA is a intermodal hub with one of the largest catchment areas in the world and direct access to the German high-speed railway network. FRA is strategically situated in the heart of Germany and the European Union. Airlines can profit from high utilization rates and traffic yields.

Range of services The company prides itself in being a leadingedge provider of integrated airport services.

Besides managing FRA, Fraport AG and its subsidiaries provide the full range of plan-

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

Fraport worldwide Through investments, joint ventures and management contracts, Fraport is now active on 4 continents. Fraport served some 78.2 million passengers in 2008 and handled 2.1 million metric tons of cargo (airfreight and airmail) at the Group’s airports.

Fraport, which bids for airport management projects worldwide, was awarded a 30-year concession for operating, managing and developing Indira Gandhi Inter-national Airport (IGIA) in India. Together with staterun Airports Authority of India (AAI) Fraport AG has formed “Delhi Inter-national Airport Private Limited (DIAL)”. Fraport is the nominated “Airport Operator” and an Airport Operator Agreement concluded with DIAL –

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

From April, Air India plans to provide daily connections.

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

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OFF THE RECORD

R K Singh bids goodbye

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or those who know Rajesh Kumar Singh, it must have come as a complete shock that he has suddenly decided to say goodbye to the civil service and look for pastures afresh.

For the first five years that Praful Patel was at Civil Aviation, RK was what in football parlance would be called a mid-fielder, or in cricketing terms a sheet anchor. He handled key issues, drove the AI-IA integration process from the Ministry, was the points-man for most bilateral negotiations, sat on the AI Board, and was the face of continuity (he ran through four secretaries during the tenure — Roy Paul, Ajay Prasad, Ashok Chawla and now Madhavan Nambiar). To top it all, he had a rocking relationship

with Mantriji Praful Patel.

So why is it that RK, of all the people, was stopped from going to Montreal as India’s representative at ICAO (International Civil Aviation Organisation)? Twice, the case was rejected and twice, Mantriji wrote to the Prime Minister outlining the utility of having RK at Montreal, but to no avail. In fact, on the second occasion, if reports are to be believed, the PM’s Principal Secretary personally called Praful to tell him about the rejection and urge him not to press the case again.

There are many who believe that the prime reason why RK was stymied was bureaucratic, and that his ‘wellwishers’ in the service did him in. Now, why they did it, and how does it help

R K Singh

them is anybody’s guess. But it all happened between North Block, South Block and the Cabinet Secretariat.

So, in that one square kilometer lies the politics of the rejection. No, don’t look at Rajiv Gandhi Bhawan.

After all, Mantriji and Secretaryji fought his case tooth and nail.

A 360 Photo: H.C. Tiwari

degree effort (L-R) AAI’s Member (Finance) Satish Chandra Chhatwal, Capt Gopinath, GMR’s Kiran Kumar Grandhi and Deccan 360’s CEO Jude Fonseka.

S

ome call him a serial entrepreneur, others love the way he takes on the establishment, and still others love his unpredictability. But there is one thing they all acknowledge — and that’s the energy, unpredictability, and the zest that Gorur Ramaswamy Gopinath brings to the table.

Well, last week, just before the election results were out, Gopi was in town for the launch of his latest venture Deccan 360 — a logistics company that will literally move heaven and earth and is patterned on the lines of DHL. Praful Patel was to launch the new initiative, but he was caught up in the post-poll political garmi, and Gopi did the honours with GMR’s Kiran Kumar Grandhi, the low

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profile but highly effective Member (Finance) at the Airports Authority of India (AAI), Satish Chandra Chhatwal (who did a huge amount of work even during the launching of over 17 non-metro airports just before the polls) and Jude Fonseka.

Other than his energy, on the day of the launch, everybody present could not help but be floored by Captain’s candour and earnestness. He spoke about the project, but before he did that he told his listeners why he had contested the elections. It was his method of protesting all the wrongs: the attack on innocent hotel guests in Mumbai, the intolerant behaviour of the moral brigade, etc.

At the end of it all, Captain Gopi came across as a modern-day knight in shining CRUISING HEIGHTS June 2009

armour. That really created quite an impression among those from the air cargo trade who were present. Most of these air cargo wallahs are smart individuals who can judge people instantly; they deal with all kinds and are well aware of how the wheels move. For these persons, Gopi was a champion and a good human being who had his heart in the right place. Come to think of it: who doesn’t want to work with a champion?

Tailpiece: The short video put out by Deccan 360 and created by Grey Bangalore said it all so perfectly. Comparing Gopi and his dream project to people like tennis star Andre Agassi (who was almost written off but came back with a bang) and Apple’s Steve Jobs (who resigned but returned to make the company and its products No. 1 in the world) said it all.

Beg, borrow or steal the video: it is worth more than a second look!

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ONGC Petro additions Limited

To be a world-class petrochemical company, with dominant Indian presence and a preferred choice of customers in terms of quality and value...

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OFF THE RECORD

Rao’s L marching

orders!

ast week, Air India’s new Chairman and Managing Director Arvind Jadhav warmed the cockles of all old-timers with a series of tough decisions that sent the message that there is now a leadership at the top. He first issued instructions allowing K D Rao to continue with the position he was in London, and then 24 hours later reversed his own order with a detailed note on why he was cancelling his own fiat. The Maharaja’s men were delighted. For one, it showed that Jadav wasn’t afraid of taking a tough call, and if he has made a mistake based on erroneous facts, he would be the first to correct it.

The first missive was to K D Rao, a power into himself thanks to his connection with Manohar Parihar (he is apparently his brother-in-law). Rao was the Maharaja’s points man in the UK, and had returned to Mumbai just two months back on promotion and joined duty in the city. But he had never handed over charge in London, and even his return to Mumbai had been pretty reluctant. In fact, if anything, he wanted to be promoted ‘on location’. And there was huge pressure brought forth on the CMD. The final call came from Minister for

Civil Aviation Praful Patel. Patel, of course, wasn’t insistent that Rao be stationed in London, but he did ask the CMD to look into the matter. After all, what does he do when a dozen guys regularly petition him in favour of K D Rao? So, Jadhav issued orders permitting Rao to continue in London. And that was like setting the cat amongst the pigeons. The general inference was that Arvind Jadhav was ‘operable’. In other words, if you had a strong enough connection, you could use that to tweak things your way. But less than 24 hours later, delighted old-timers said that Jadhav had proved them wrong with his fresh order that reversed the earlier one.

Well, Rao had it coming. First, he wasn’t willing to relinquish charge and come to Mumbai on promotion. When he was told that his promotion (he was a Deputy General Manager promoted to General Manager) would stand cancelled, he just arrived in Mumbai without handing over charge and joined duty. Now, through a clever act of subterfuge, he was arranging to get back to London.

When all this was brought to the notice of Jadhav, he wrote a detailed note outlining how Rao had misled him with

Arvind Jadhav paid homage to Air India founder J R D Tata when he took over as Air India’s chairman.

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OFF THE RECORD wrong information, and cancelled his orders. Rao was asked to report immediately back to headquarters and assume his new responsibilities. Air India staffers are categorical that it is this sort of tough decision that can help turn the airline around.

For the record, it must be mentioned that ED (Commercial) Deepak Brara was for Rao’s continuance in London. Rao was in the thick of appointing more consolidators in London with the backing of Brara.

With fewer flights and a dwindling market, how was this going to help AI is anybody’s guess. Maybe Arvind Jadhav needs to look at the last 10 years’ figures out of London. It will help him separate the chaff from the grain.

C

lose to a decade and a half back, when the telephone regulatory authority (TRAI) was set up, they went shopping for office space, and their first point of call was their Maai baap — the Department of Telecom (DoT).

Officials there smiled, offered them a cup of tea, rejected their request and sent them packing. They said they were not interested in helping them set up shop.

Rightly so. Here was an organisation set up by the Department of

rooms to Aera at Safdarjung Airport and two floors at Airline House — the former headquarters of Indian Airlines and the registered office of National Aviation Company Ltd (NACIL). Now, doesn’t Aera have to deal with AAI and Air India tomorrow? Is it fair for them to allot space to the regulatory body?

Undoubtedly this has happened because of a fiat from the Ministry of Civil Aviation. But the Ministry should have known better.

Both AAI and Air India should talk to officials at Rajiv Gandhi

You aren’t a SoD!

Shutting shop As part of his cost-cutting exercise, Jadhav has asked all executives to travel economy class. The last CMD who travelled throughout his tenure by ‘J’ class was Probir Sen in the early nineties.

Next, he has decided to close 15 offices across the country. Jeevan Bharati, where AI has a huge office, is being wound up, as are offices in several other cities. In Delhi at least, most of these offices are moving to Airlines House.

The man in charge of properties at Air India, Amod Sharma smiles and says: “The Maharaja is shedding flab. He will be lean and trim and the envy of everyone.”

We are watching Amod.

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Photo: H.C. Tiwari

If that was one extraordinary effort, Jadhav stirred a hornet’s nest when he asked that two Executive Directors be charged from their salary for not flying on Air India (where they travel free as SoD — Staff on Duty), but instead choosing to fly with other full service carriers where the tax component is much higher.

If reports are to be believed, one of the EDs is from the Northern region and the other is from the Western region. Both are believed to have travelled on the country’s busiest trunk route for meetings, independent of their teams, at a cost to the company. So Jadhav is now saying that you “pay as you use”.

This has put the fear of God into most officials, who now have their tails between their legs and have quietly started travelling SoD. The ED (Headquarters) S Mukherjee is believed to have told someone that “we shall recover the money for sure. Just wait and watch.” But he declined to name who were the two officials.

Well, we are waiting and watching if there is a press note to the effect that the money has been recovered. That will tell us that what Mr Jadhav says, Mr Jadhav does.

SECOND INNINGS: Civil Aviation Minister Praful Patel being sworn in at Rashtrapati Bhavan on May 28, 2009, paving the way for Aera, finally, to move into operations.

Aera

Tales

Telecom to act as a watchdog over the policies that they were laying out for the sector, and they wanted to be DoT’s tenants. Rightly, to avoid ‘conflict of interest’, the DoT declined to host TRAI. After all, what matters is the public perception, and in the case of a regulatory authority, if the perception is that he is hanging on to the coat tails of the sarkaar then there is bound to be talk.

Unfortunately, the same mistake now seems to be repeating itself, with both Air India and AAI (Airports Authority of India) having agreed to give the Airport Economic Regulatory Authority (Aera) space in their properties. The AAI has already allotted three

CRUISING HEIGHTS June 2009

Bhawan and say that what is being asked of them is unfair.

Many years ago, when Jet Airways wanted the strategically located Indian Airlines Reservation Office at Safdarjung Airport, there was much pressure from the powers that be (much before Praful Patel), but Sunil Arora, who was heading IA then, stood firm and stopped that happening. Later, Jet had their eyes on the terminal IA that came up to replace the earlier terminal damaged by fire.

They wanted IA to share it with them. Again, Sunil Arora moved like greased lightining. He signed a deal with Kingfisher Airlines to undertake their ground handling and gave them space in terminal IA. The ultimate success or failure of Aera will depend entirely on how detached they are from the industry they are serving. If they are going to gobble two floors at Airline House and a part of Safdarjung Airport, it’s ‘conflict of interest’ at its worst.

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So the meeting for the Aera top brass has concluded, and the committee has made its choice. Reports are that there were still no finalists, since a message had gone out from Praful Patel to the Secretary that he should wait for him to take over before finalising the names. So Aera is held up for the moment. Maybe a fortnight from now, or three weeks down the line, the Regulatory Authority should be in place.

Praful Patel is going to the Paris Air Show. Mantriji has already made arrangements for his trip, since he had been told well in advance that he would be returning to Rajiv Gandhi Bhawan. If reports are to be believed, Secretary Madhavan Nambiar too has plans to be in Paris for the show.

Interestingly, who is this yoga teacher in Delhi’s South Extension where Mr. Nambiar takes his yoga classes? If reports are to be believed, the Yoga teacher is like a friend, philosopher and guide to the Secretary, and he holds great faith in the yogi’s pronouncements and his mastery of the ancient art. Reports are that many airline executives in the private and public sector are wanting to join these classes so that they can be close to Mr. Nambiar.

The farewell that Praful Patel held for officers of the Ministry and the Public Sector units under his charge has touched the officials in the Ministry so much that they simply don’t know what to say. But one of them did speak about it. “It was elegant, informal and classy. Both the Minister and his wife were exemplary hosts and each of us got a return gift

CRUISING HEIGHTS June 2009

for attending this exquisite dinner.”

Alok Sinha has taken over as Joint Secretary. He replaces K N Srivastava who moved to the Archaeological Survey of India some months ago. Sinha’s file had been cleared

by Civil Aviation Minister Praful Patel some three months back, but for some strange reason it was held up in the Uttar Pradesh Secretariat; a NoC from the home cadre being mandatory. As Sinha was from the UP cadre, he had to get the Alok Sinha with his approval of daughter.

Behenji before beginning his central deputation. Finally, many phone calls later, the file was approved and Sinha — a keen golfer with an equally keen daughter who plays for India — is ensconced at RGB.

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NEWS DIGEST

D

From gung-ho to Sudheer Raghavan, Chief Commercial Officer of Jet Airways, neatly summed up the challenges faced by the Indian aviation industry, with his own airline not being any exception. They are as follows:(i) unsustainable low fares, resulting in higher break-evens; (ii) dropping yields due to

Jaiho!

slowdown in market and also excess capacity; (iii) high input cost structure compared to global standards; (iv) lack of infrastructure to cater to the explosive capacity growth; (v) lack of skilled manpower in areas like ATC, and (vi) new airports struggling with business models.

INFRASTRUCTURE

NEWS...

BIDAR AIRPORT COMMISSIONING STALLED

The commissioning of Bidar airport in Karnataka has been stalled, with the Civil Aviation Ministry yet to give the go-ahead.

With this, the Karnataka government’s plan to commission as many district airports as possible within the next few years has also received a setback.

According to reports, work on the Bidar B S Yeddyurappa Civil Airport Terminal was complete but it was now being felt that the airport was too close to the GMR Hyderabad International Airport. The Civil Aviation Ministry will decide on commencement of operations at Bidar only after taking a final call on the status of Tier-2 airports which were in the vicinity of major international airports.

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uring a recent interaction, Raghavan certainly talked straight when he said airport guys may be gung-ho, but he would not mind bringing them down to earth. In a similar vein, he also reminded us of the famous futuristic vision of Indian aviation painted in the K V Kamath days, before the financial crisis virtually coincided with Kamath’s elevation to the status of Chairman-Emeritus of ICICI, even as the Indian economy, including the aviation industry, was being pushed into the throes of a new crisis.

Kamath had stated that every $100 spent on air transport produced benefits worth $325 to the economy. A hundred additional jobs in air transport resulted in creating 610 new, related jobs, and it also had a huge socio-economic impact. Civil Aviation Minister Praful Patel went to the extent of saying that 40 lakh aviation jobs would be created over the next 10 years.

All this, of course, was during the boom time. So now that the boom has gone bust, what happens?

Let’s hear what Sudheer Raghavan has to say. Two to three years ago, the Indian aviation industry saw an unprecedented change in the lifestyle of many Indians, and the middle class actually saw a spectacular expansion. The airline industry in India bought aircraft “left, right and centre”, revolutionised ticketing, online booking was getting bigger and bigger, and mobile ticketing also began to make inroads.

But then, they were also the days of ‘zero fares’. The situation became so

Chief Minister B S Yeddyurappa has taken up the issue with the Civil Aviation Ministry, and has conveyed to the Union government that there is a clear distinction between an international airport and a Tier-2 city airport located at a district headquarters. Further, the Bidar airport is located in the sate of Karnataka, while the GMR airport is in the neighbouring sate of Andhra Pradesh.

The state government had started construction of the airport terminal at Bidar after taking permission from the Defence Ministry, as also the consent of the Civil Aviation Ministry.

Nearly 120 acres of land was acquired and construction of the civil airport terminal was completed at a cost of Rs 10 crore.

TERMINAL 1D STARTS FULL OPERATIONS

Delhi’s new terminal 1D has started complete operations, with all the remaining airlines, Jet, Jetlite and Spicejet, also shifting base from terminal 1B. However, the new terminal is yet to get a no objection certificate from the fire department. The fire department had recently said it would not issue an NOC to the terminal till all work was complete.

The old terminal 1B has now been decommissioned. The new terminal has a capacity of 7 million passengers per annum (mppa)

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ridiculous that such fares virtually meant flying at 10 paise per kilometer. “Can you even rent a bike for that?” asked Raghavan, going on to explain that’s how bad the so-called dynamic pricing became.

At the height of the crisis (not that it has ebbed), in November 2008, one saw a capacity growth of irrational proportion.

Mumbai-Bengaluru-Mumbai saw a capacity increase of 22 per cent for the industry as a whole, Mumbai-GoaMumbai 56 per cent, Mumbai-JaipurMumbai 44 per cent, Delhi-BengaluruDelhi 35 per cent, Delhi-Mumbai-Delhi 17 per cent and Delhi-Kolkata-Delhi 74 per cent, respectively.

Against this backdrop, Raghavan said from November 2008, the Indian aviation market had dropped by 22 per cent. Cathay Pacific registered a loss of one billion dollars, SIA withdrew aircraft and even told its staff to go on vacation. The financial year 2008-09, ended March 31, 2009, saw India’s aviation industry losing a staggering $3 billion (though some say it could be $1.5 billion), as against a global loss estimate of $8.7 billion. Thus, Indian carriers overall accounted for 2 per cent of global travel but nearly 30 per cent of global aviation losses. A very scary picture, indeed!

What this means is that a lot of restructuring, reorganisation, biting of bullets will have to be done by Indian carriers. Raghavan asked, “Are we doing enough? Are we doing anything right? And what about the great new airports?”

We asked Sudheer Raghavan if there was anything the airlines themselves

Page 15

could do to get over the present crisis.

“We need to create new segments, new markets,” was his response. He recalled that while working in SIA he could not sell Singapore as a destination more than once. Yet, he pointed out, Singapore, a concrete jungle, manages to attract 12 million visitors annually. India, on the other hand, is seeking an addition of five million tourists over the next couple of years. Considering a population of 1.2 billion and a burgeoning middle class,

reducing its capacity and also cutting financial losses. Jet Airways Executive Director Saroj Datta, in an honest assessment of the present scenario, said it was mostly because of the airlines’ own doing that they find themselves in the current crisis. His admission certainly adds a new dimension to the crisis, and hence to the possible solution, as, all along, the industry had preferred to blame others for its own woes.

As a way forward, Datta has suggested

Jet Airways’ CCO Sudheer Raghavan believes in talking straight and tough.

India is indeed a gold mine. In Japan, 90 per cent of the aviation business comes from domestic tourism.

But that may take time to happen. For now, airlines are adopting various means to tide over the prevailing crisis. Jet Airways is trying to tackle its problems by

New terminal ID is now fully operational.

and, along with terminal 1A, will be able to handle a total passenger load of 10 mppa. The present traffic is about 8 mppa.

Terminal 1D had become operational on April 19 when three airlines had moved operations here. The second phase of shifting was to take place in the next 10 days but due to issues like payment of common user terminal equipment charges and fire clearance, the transfers were held up.

DIAL affirms commitment to fire safety: Meanwhile,

that Jet Airways could effect substantial cut in staff cost, and options could include not hiring any further, not filling up vacancies, and cutting down the salaries for top executives. The airline has already postponed, by a year, the payment of medical claims to its employees.

DIAL has clarified that it has been following all fire safety norms (domestic as well as international) for all equipment and procedures. All necessary documents have been submitted to fire department and inspections have been carried out by the fire department, it said in a press release.

DIAL said all observations and suggestions made by the fire team have been carried out. Their report and observations following their recent visit to Terminal 1D are awaited, it added.

Listing some of the measures taken to ensure fail proof fire safety, DIAL said it had deputed 18 well trained firemen to patrol all areas of the terminals — like check-in area, airlines ticketing area, security hold, bussing gates, city side and airside.

More than 50 fire Fire safety remains topmost priority for DIAL. hydrant outlets have been deployed inside and outside the terminal for greater safety.

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NEWS DIGEST On the operations side, Jet Airways has Even before the markets tumbled, or for that matter other airlines, pay? We already leased nine of its wide bodied fares charged by airlines in India dropped are facing a situation where fares have Boeing 777-300 ERs and a couple of Airbus sharply, and in the process yields shrunk. It fallen, yields have dropped, and we are A330-200s to Gulf Air and Turkish Airlines. was in this context that Raghavan advised incurring mega bucket losses. On the If the situation worsens, Jet may even lease the airports to find more money from non- contrary, more progressive airports in the some of its Boeing 737s. The leasing of aeronautical sources. “We cannot have a world are giving 40-50 per cent discount wide bodied aircraft to foreign airlines has situation where the airports collect 80 per on parking and landing. A fancy fibre optic already started earning it some revenue to cent of their revenues from aeronautical system has been laid at some airport and I meet its critical expenditure needs. sources. Secondly, even today, airlines are am asked to pay when I am not even using According to Sudheer Raghavan, burning fuel unnecessarily over Delhi and it? Two guys are waiting outside my office though Jet Airways is not planning to Mumbai, where congestion has still not every day, wanting their payment. So this pull out of any international is my life.” route, it is certainly not So what is the financial adding any new routes other forecast for Jet? Jet Airways is than what it had already already suffering losses and decided, like new flights to would, in all probability, Kuwait and Dubai. The Jet continue to make losses in the Airways CCO said his airline next quarter.

Raghavan will review its stand on remarked, “If you are asking launching new routes if the me whether we will be making market recovers. As on date, losses, then in all probability it was time for consolidation, the answer is yes. I don’t he added. know of any carrier which is How serious is Jet Airways’ not.” financial problem is anybody’s Quite probably, what he guess. In early 2008, when said about other airlines is things were all hunky dory, Jet entirely true. The figures Airways won a huge plot at an Jet, like most other airlines, is suffering the impact of the global released by the DGCA for the auction by MMRDA. The meltdown. passenger traffic in the first airline submitted the highest bid quarter of the calendar year of Rs 826 crore for the 24,000 square ended. New airports are needed, but the 2009 and the last quarter of the financial meter plot situated at BKC, Mumbai. question is, can the promoters of these year 2008-09 show a drop, both in Earlier, MMRDA had set mid-September airports recover their money mainly from absolute numbers and percentage, 2008 as the first deadline to pay the airlines?” remarked Raghavan. including the load factors. The poll season amount to buy the plot on long lease.

Raghavan recently observed at a prevented the traffic from picking up.

Since Jet could not raise the funds, it seminar, “You are killing the golden Maybe all of us will just have to wait asked for an extension, which was given, goose. Forget new airports, even older till the generally predicted or expected and the deadline was postponed to March airports, after installing CUTE, are turnaround in the global and Indian 13, 2009. But even this deadline has been demanding a 1,000 per cent increase in economy begins from the last quarter of missed by Jet. cost per passenger. How will Jet Airways, 2009. Till then, Jai Ho. In addition, a high-tech and well-equipped Rosenbauer fire tender is positioned 24 hours just beside the terminal.

Besides, T1D also has the latest fire safety equipment installed. These include modern fire detection sensors, automated sprinkler and an extensive hydrant network. A fire control room has been set up, with 180 highly trained personnel on the job, armed with sophisticated imported firefighting and rescue vehicles and equipment.

In the meanwhile, DIAL has received a letter from CISF, stating that it is becoming increasingly difficult to manage three domestic terminals even with their enhanced manpower.

Undertakes medical screening: DIAL has set up counters for medical staff for screening of incoming passengers, as advised by the health ministry, following the swine flu scare.

DIAL and other authorities at the airport, including APHO, CISF Immigration and airlines, are working closely with Ministry of Health and Ministry of Civil Aviation, to communicate to incoming passengers about the screening facilities being provided at the airport.

Announcements are being made at regular intervals for passengers who may have visited / transited through US, Canada, Mexico etc. recently to report at the health desk. For the benefit

16

A DIAL check-up counter for screening of incoming passengers.

of passengers, DIAL has also displayed this message just before Immigration counters. Advanced Life Saving Ambulances for mobility on airside and city side are available with paramedics round the clock at the airport.

IGI airport now has the most modern Yellow Fever hospital and Quarantine facility available within the airport complex.

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‘Stuck on

F

the runway’

or Dr Manmohan Singh, who has just returned as Prime Minister for a second term and has been repeatedly emphasising on taking serious steps to hasten the pace of infrastructure development, the reaction of would-be foreign investors may not sound too sweet. We are talking of the issue of toning up and rebuilding the Indian airports in the non-metro cities. A sharp increase in the project costs for renovation and modernisation of the metro airports in Kolkata and Chennai could well act as a dampener for the non-metro airports.

State-owned Airports Authority of India (AAI) has virtually reached a dead end, in so far as efforts to raise fresh funds to execute airport modernisation projects are concerned. We already have the RBI Governor Dr Subba Rao saying that there can be no further macro economic stimulus package, as the fiscal imbalance in central finances needs to be restored, at least in the medium term.

With UPA-II promising some monetarily stupendous social welfare programmes, we don’t think the new Finance Minister Pranab Mukherjee will have money left for attending to even the immediate needs of the half-done nonmetro airport works. Also, the Planning Commission has said that since the cost of

Prime Minister Manmohan Singh

Finance Minister Pranab Mukherjee

LAND ACQUISITION AT KANNUR ON TRACK

The land acquisition process for Kannaur airport is well on track and the concerned officials have been instructed by the district administration to complete the formalities at the earliest. At a review meeting recently, the officials were asked to complete the acquisition by transferring money to land owners.

Proceedings for acquiring 441 hectares on a fast track basis had been completed. However, some landowners were yet to hand over their consent letters to the authorities, and many among those who gave consent letters had not yet handed over land documents. The landowners have been urged to hand over the consent letters and the documents at the earliest.

The Kerala Industrial Infrastructure Corporation (KINFRA) officials were entrusted with the task of registering documents that had already been examined. Steps to take possession of plots after registration of documents would be expedited, the meeting was told.

DABOLIM EXPANSION PLANS UNDERWAY

The Public Works Department (PWD) has sent its proposal for acquisition of about 20 acres of land in front of the Dabolim

18

renovating and modernising Kolkata and Chennai airports

by AAI was underestimated in the first instance, it had become inevitable to again revise upwards the total cost of modernisation of these two airports from the earlier figure of Rs 3,750 crore to between Rs 4,750 crore and Rs 5,000 crore. Thus, at an individual upgradation cost of Rs 2,350 crore to Rs 2,500 crore each, AAI will have to raise a minimum Rs 1,000 crore other than what it needs for non-metro airports.

With such tight money markets, AAI is currently finding it very difficult to raise money from banks and financial institutions. One of the avenues it is exploring is to float some kind of infrastructure bonds, with a possible taxfree status, to get the much-needed money and complete its big-ticket plans announced during the hey days of aviation, which existed till about three years ago.

So what is the status of the non-metro airports, which were originally designed on a PPP model, with the public sector, that is AAI, executing the air side of the project, leaving the terminal and city side (that is across the street) to the private sector. In pursuance of this policy, it even floated an EOI two years ago, and subsequently got responses to two airports — Amritsar and Udaipur. After vetting the EOI it shortlisted

airport as part of the airport’s expansion plans.

This was disclosed at a review meeting chaired by development commissioner and acting chief secretary S K Srivastava regarding the proposed development of Dabolim airport.

The meeting was informed that the Airports Authority of India (AAI) must deposit 25 per cent of the amount towards land acquisition. The south Goa collector will then forward the land acquisition proposal to the revenue department within a week.

Reports said additional land is required at Dabolim airport for ancillary facilities like cargo complex, for which the process is already on with the Dabolim airport gets ready for expansion. south Goa collector. Another about 16,000 square metres of land is required for relocating the existing residential quarters of the staff of the Airports Authority of India.

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five companies for this PPP job.

However, at that juncture, AAI refused to agree to the surrender of the terminal building in its non-metro airports to the private participants. After a long battle, it was finally agreed that the terminals will remain with AAI, and the private sector could only do some city side work, which is actually across the street from the entrance to the terminal building.

Ansgar Sickert, Managing Director of Fraport India, wrote a special article in the Wall Street Journal of April 29/30, 2009 titled “Is India’s airport expansion stuck on the runway?” Perhaps Sickert had no idea that even before his article had been published, a decision was taken that he, along with others who had responded to the EOI, could take a walk in any place of their choice across the terminal buildings, but not inside.

The Ministry of Civil Aviation (MOCA) has stated that India needed an infusion of no less than $8-10 billion for infrastructure upgradation and expansion of existing airports, as well as building new airports. Almost half that amount would come from the private sector, while the balance had to come from the Government.

The private sector had already completed airport work in Hyderabad, Bengaluru, Kochi, and was well on the way to upgrade and expand Delhi and Mumbai airports.

The Delhi airport would, by 2026, be in a position to handle 100 million passengers.

But with huge government borrowing of nearly $680 billon till March ‘09, the Government of India will be unable to

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Aviation Minister Praful Patel

AAI Chairman V P Agrawal

contribute in any significant way to changing the face of Indian airports, according to Sickert. In this context, the Fraport India chief said development of 35 non-metro airports had come to a standstill as AAI had no money.

Sickert said too much time and effort had been wasted by bidders, potential investors, government officials, aviation consultants and others to draft a Master Concession Agreement. The agreement was to serve as a model for the transparent and efficient award of the contracts, and equally important, for the swift development of the airports.

We had earlier reported in past issues of CRUISING HEIGHTS that Anil Ambani group’s Reliance Energy, L&T, Fraport AG, Tata Infrastructure and Lanco Infrastructure had been shortlisted from among two dozen companies that had taken part in EOI. The subsequent Request For Proposal (RFP), as its follow-up, had not taken place for nearly two years.

Sickert further wrote in Wall Street Journal that despite these five companies being shortlisted for the upgradation of Amritsar and Udaipur, and a wait of nearly two years, there was no word, as of now (April 29/30, 2009), on when or how the process would move forward. Sickert wrote critically of AAI unions and the Left Parties, and held them responsible for the hurdle “as they did not want any more of the AAI airports being given to the private sector.”

If one is to believe unofficial sources from AAI and MOCA, there is a likelihood of the bidding process being scrapped altogether. If the process is indeed scrapped, such an outcome would deal a major blow to potential foreign investors. And in the current economic climate, that is not something any

MUMBAI STRIVES FOR TOP GLOBAL RANKS

Mumbai’s Chhatrapati Shivaji International Airport (CSIA) is striving to be among the top 20 airports of the world by 2013.

“We were ranked 55th when we took over in 2006, and climbed to the 40th spot in 2007. We want to be among the world’s top 20 by 2013,” said Sanjay Reddy, Managing Director, MIAL, during a presentation to mark MIAL’s third anniversary as Mumbai airport operator.

MIAL expects 40 million passengers by 2014 and is confident Mumbai airport climbs in global ranking. that the new airport in Mumbai will come up fast to cater to the growing passenger traffic. “Mumbai is expected to hit the 40 million passenger mark by 2013-14 and if the new airport doesn’t come up fast, there will be problems,” Reddy said.

Ties up with Travel Food Services : Mumbai International Airport (MIAL) has tied up with the city-based

Huge potential for F&B development at Mumbai Airport.

Travel Food Services (TFS) for developing the food and beverage space in the two airports. “As part of the deal, TFS will develop 35,000 sq ft of space for F&B offerings at the

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NEWS DIGEST government should take lightly. What is clear is that the country still has a long way to go before its infrastructure can match China’s.

However, if one goes by Dr Manmohan Singh’s promise that he will implement a 100-day action plan to get the economy back on track, one would expect much investment in the development of infrastructure. The elections are over now, and Manmohan Singh has spoken, and so have the senior officials of AAI. Not wanting to be quoted, these officials say that the bidding process had been scrapped and it was wrong on the part of the Ministry of Civil Aviation to have allowed terminal building management to be with the private sector.

It is now all settled, and AAI will do all the work beginning the entrance to the terminal building in all the airports being upgraded by it. The private sector could do its civil works across the street, and from the taxi or vehicle parking side onwards. Obviously, however, no big name private sector would be interested, since even the private players are currently finding funds difficult to come by.

In any case, even if the private sector were to develop the city side, the question arises: who are the people and companies that would want to take advantage of, say, a hotel, shopping centre etc, in these nonmetro airports that are far removed from the cities they serve?

Not an attractive scenario at all, indeed, for potential foreign investors. At least at the moment.

It’s all about

money!

N

ow, when we were talking of Chennai and Kolkata airport modernisation, till some months ago it appeared that everything was hunky dory. The then Civil Aviation Minister Praful Patel, who continues to head the ministry in the second term of the UPA government, had joined Tamil Nadu Chief Minister Karunanidhi to lay the foundation stone for the modernisation of Chennai airport,

Chennai airport’s modernisation plans have been hampered by funds crunch.

where both the domestic and international terminals — called the Kamaraj and Anna terminals respectively — are virtually at hand shaking distance of each other. Later, Praful Patel also went to Kolkata to inaugurate the work for modernisation of Kolkata airport.

However, Patel did not have any idea then that the modernisation work would cost at least 30 per cent more than what

had been estimated earlier. The Cabinet Committee on Economic Affairs (CCEA) had approved the modernisation of Kolkata and Chennai airports in August 2008 at a cost of Rs 3,750 crore.

But a May 2009 meeting of the Planning Commission, where the work by AAI was reviewed, found that the funding was short by at least Rs 1,000 crore.

Now, AAI does not have this money, nor is the government going to give it to it on a platter. Though the AAI management is tapping every possible source for money, it has not so far succeeded.

According to Kolkata airport officials, the rising prices of steel and cement have led to serious cost escalation. AAI has informed the Committee on Infrastructure, which is headed by the Prime Minister and in his absence by the Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, that it will not be able to complete the Kolkata airport modernisation without additional funds, in view of the cost escalation.

The revamped project will handle 20 million passengers, or four times the present capacity, and its first phase, for which Rs 2,500 crore needs to be spent, will be ready by 2011. There is a

domestic and international terminals,” said Sunil Kapur, Chairman, TFS. The company will invest Rs 150 crore, funded by a mix of internal accrual and debt, in the next 18-24 months.

“According to our research, on an average, while passengers spend over Rs 120 buying food and beverage at the airports across the world, in India, the spends are limited to only to Rs 40. Therefore, we see a huge untapped potential in this space,” Kapur was quoted saying.

CHENNAI AIRPORT HAS NEW LOUNGE

Chennai airport has got a new 960-square metre lounge at its international terminal for passengers coming from or going to remote parking stands of aircraft by coaches.

Airport Director K Natarajan said all the five aero bridges at the airport are occupied during night. As a result, a couple of aircraft are provided space in the remote parking stands. Passengers, after completing immigration formalities and security check, can reach the new lounge, which is located nearly 200 metres from the Security Hold area. From there they would take a coach to go to the aircraft. Similarly, when passengers arrive, they can reach the lounge by a

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Chennai airport lounge gets a makeover.

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possibility of adding two more case in India, as the so-called phases to the modernisation Greater Noida airport may not plan, under which the terminal happen till political equations capacity will be increased to 39 change in UP and Delhi. million in the second phase Our airport story will be beginning 2016 and to 56.13 incomplete if we don’t update million in the third phase. you on the upgradation of the In the case of Chennai, it is one-year-old Bengaluru proposed to build two separate International Airport Limited. terminals — one for domestic and The airport Board has approved a another for international flights, proposal to add 26 new parking on either side of the existing stands in the airport, which will terminals. On being asked what take the total number of parking will happen to the existing stands from the existing 42 to 68. terminal on the domestic side, and Rising steel and cement prices have led to serious cost escalation in the Spread over 4,000 acres, the Kolkata airport renovation work. the one on the international side, number of parking stands as on which are virtually separated by a wall the Navi Mumbai airport project. So, date is enough for the present-day needs. only, an AAI official said, “we are seeing if Mumbai city will have a second airport — However, expecting to meet the rush that we can get the new Greenfield airport, a welcome development, as the existing could follow once recession is out of the planned at Sriprembudur, started.”

Chattrapati Shivaji Airport or MIAL, way, the airport managers have decided to An early suggestion for this was to see spread over Santa Cruz and Sahar, will increase the number of parking stands. if AAI could partner the Tamil Nadu saturate by 2014. According to the Besides, an increase in parking stands government (now DMK). But if this idea is Maharashtra Government, tenders and bid would help the airport seriously pitch for pursued, then, instead of building an documents for Navi Mumbai airport may new airlines, mainly domestic. BIAL airport, AAI could well end up building a be invited in early 2010. receives 27 domestic, international and political akhara, considering the politics Earlier, the environmental clearance cargo carriers, and has recently added two that comes into joint venture projects. The had been held back because 30 per cent of flights a week by Saudia. As of now, BIAL official also said should the Greenfield the proposed land for the airport fell under has only completed the first phase of airport airport not materialise for any reason, “then the Coastal Regulatory Zone and was building. Between May 24, 2008 and we can always demolish the existing covered by mangroves. Now all works can March 31, 2009, BIAL handled 8.7 million terminals in Chennai, and in their place begin once the bidding job is out of the way. passengers, which was lower than the raise and build brand new terminals.”

Since it is within 150 kilometers of the expected 9.2 million. The original Even as we are focusing on Chennai existing Mumbai airport, its promoter GVK expectation was it would be 10.5 million. and Kolkata, yet another Greenfield will have the first right of refusal to build In phase II, it is proposed to build a airport is being offered to the private the airport, subject to certain conditions like mirror image terminal on the opposite side, sector — Navi Mumbai airport. The the existing operator’s bid being within 10 and also add a second runway. An Ministry of Environment and Forests has per cent of the lowest bidder. Should this investment of Rs 3,500 crore would be finally given environmental clearance to process begin, then it could be the first such required for this, airport officials said.

coach and reach the immigration area without much problem, he said.

Under the existing system, the passengers have to use the spiral staircase to reach the ground floor for departures and climb it for arrivals. The new lounge has two escalators and a glass elevator besides the staircase. On the ground floor, toilets have been provided separately for men, women and persons with disabilities, he said.

Also gets new line maintenance building: The Airports Authority of India (AAI) has constructed a new building at Chennai for keeping tools and spares, and for providing office space for maintenance engineers of airlines.

The building measures nearly 1,750 square metres each on the ground and first floors. Nine airlines and the Air Worthiness wing of the Director-General of Civil Aviation have been provided space in the new building.

The new building has come up at a cost of about Rs 10 crore near the Air India Ground Support Division’s office on the southern end of the airport. The new building would enable airlines to easily bring their tools, spares and the engineers quickly to the aircraft, an AAI official said.

Cathay Pacific, Emirates, Lufthansa, Saudi Arabian and

Sri Lankan in the international sector and Jet Airways, Kingfisher, SpiceJet and Star Aviation in the domestic sector had taken up space in the new building, said the AAI official.

CII WORKING ON CHENNAI ‘AERO PARK’

The Confederation of Indian Industry (CII) is working on the establishment of an ‘Aero Park’ near Chennai. This was revealed by C K Ranganathan, Chairman, Tamil Nadu State Council.

Unveiling the agenda for the year 2009-10, the newly elected Chairman said that the proposed park, which requires around 4,000 acres, would facilitate an investment of Rs 45,000 crore till 2015 and provide direct employment to one lakh C K Ranganathan people.

The Park would attract global players and engage in the design, manufacture and maintenance of all types of aircraft for both the civil and military programmes, including training and education. “The Government is also keen on the project,” he told mediapersons.

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MROs aplenty, but where are

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apparently felt that civil construction of the MRO could not be initiated unless Air India invited tenders for it.

So the matter was referred to a wellknown firm of lawyers. They in turn got in touch with some former officials of the Ministry of Civil Aviation. Later, it was agreed that the MRO facility was being virtually donated for free to Air India.

Besides, the entire construction cost was being absorbed by Boeing, which in any case has its own laid down procedures like bids etc. even in the US. So why should Air India get into it?

Now here is what we gather was the response the concerned bodies got. It was stated that the project would be ‘build transfer’ and not ‘build operate and transfer’. So what Air India will have to do

simultaneously, or one B777 or B747. The facilities will be created for approximately Rs 80 crore, and the project is expected to be completed in 18 months. Air India has over 500 highly skilled engineers and technicians capable of undertaking maintenance of all aircraft and engines currently in its fleet.

According to an Air India media release, “The prime objective of Air India’s engine department is to maintain all aircraft in its fleet in a continuous state of airworthiness in order to secure a high level of safety. Air India’s engineering facility has already been recognised as certified repair shop by FAA, EASA, CAAS and DGCA.” It may be recalled that Air India already has line maintenance facility at the Thiruvananthapuram airport. So if all its MROs come into existence, then Air India,

Photo Courtesy: flightglobal.com

he Maintenance, Repair and Overhaul (MRO) business in the aviation industry has taken a serious hit following the global meltdown. When the Indian domestic aviation was booming, everyone even remotely connected with aviation was planning to set up an MRO. But none of them realised that the aircraft being inducted by Indian carriers were largely brand new, requiring only line maintenance like A and B checks and not major checks like C and D. When Air India and Indian finalised their aircraft purchase deal with Boeing and Airbus respectively, the two manufacturers, as part of the offset clause, had agreed to set up MROs. In pursuance of this, Boeing offered $100 million for setting up an MRO in JV with Air India at Nagpur. The land deal for this MRO has been signed with the Maharashtra Government and the work is in progress at the new multi-modal Nagpur airport, which will not only become a major MRO centre but also host a modern cargo facility.

On May 20, at its Board meeting, Air India approved the Boeing proposal of spending $100 million for setting up the Nagpur MRO and then handing it over to AI for running it.

We had earlier reported that EADS, in Joint Venture with Rajeev Chandrashekar’s Jupiter Aviation and Indian, is setting up a MRO in Delhi, with initial investment by all the three partners — EADS and Jupiter with cash contribution towards equity, and Indian staking its land, hangar facility, tools and equipment, besides manpower, as part of the equity. It is now learnt that Boeing has written a letter to the Ministry of Civil Aviation that it would be spending the entire $100 million on building the MRO in Nagpur, and once the civil construction etc. needed to set up the MRO is completed it will hand over the management of the MRO to Air India.

The Boeing Board had initially approved this, before the proposal was sent to the Government of India. Despite Air India getting the MRO virtually for free, with right to manage it independently, and even though the full details of the management agreement were yet to be disclosed, some bright guy in Air India’s so-called tender department (we don’t know if there is one but what we are referring to is Air Indians’ mindset)

theplanes?

The global recession has seriously impacted MRO business in the aviation industry.

is to staff it and take charge of the workers and the working capital.

Aviation industry watchers say Air India could not have got a better deal.

Even as Boeing MRO gets underway in Nagpur, Air India’s new Chairman and Managing Director Arvind Jadhav has just laid the foundation stone for setting up another MRO at GMR Hyderabad International Airport in Shamsabad. As part of its MRO development plan, AI has acquired five acres of land at the new Hyderabad airport, and the facilities it plans to have would include a hangar, where major maintenance of aircraft will be carried out, and an Annex Building to accommodate component overhaul shops and various engineering offices.

The Hangar will be large enough to accommodate two A320 aircraft CRUISING HEIGHTS June 2009

including Indian, will have two major airframe MROs in Delhi and Nagpur, a major maintenance facility in Mumbai, another in Thiruvananthapuram (mainly for Air India Express’ Boeing 737-800s) and now the latest one in Hyderabad.

Incidentally, Air India Express and Indian use CFM 56-7 and CFM 56-5 versions for their Boeing 737 and Airbus A320 family aircraft respectively. It is worth mentioning that Indian has already entered into a deal with Snecma for engine maintenance.

What we thus see in the merged Air India is a lot many MROs, both for airframes and engines. But what we don’t know is if there is going to be enough business for all of them. And looking at the press statement issued by Air India, as quoted above, we really do not know what it all really means! True, Air India

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Fix it,

W

Rajeev Chandrasekhar

e had reported in our earlier issue that DGCA really moved fast to appoint, temporarily at least, a number of personnel to handle and manage critical technical aspects of safety — the absence of which had triggered serious trouble, with the possibility of India being downgraded to Category II nation in the aviation world by FAA, whose team has visited the country twice in the past one year.

The FAA team is now again slated to come in June 2009, and before it arrives, DGCA has done some very quick ‘cut and paste’ jobs, knowing well enough that the problem will take its toll, if not today then tomorrow.

As per information available, FAA had pointed to 90 shortcomings in Indian airports, and wanted these to be fixed immediately. Failure to comply, it warned, would lead to India’s downgrade, and also a question mark over operation of Indian flights to the US etc.

DGCA’s quick, knee-jerk reaction has helped it save the day, perhaps, for India, but until and unless a permanent

arrangement is made, such threats will keep emerging. DGCA, as required, has constituted a Board of Flight Safety under the Chairmanship of the Director General himself to take periodic stock of safety and security developments.

FAA gives ratings based on minimum safety oversight standards of ICAO. A lower rating prohibits airlines from expanding their US routes and from changing the type or increasing the number of aircraft on those routes.

Downgrade could also impact the investment climate as well as freight traffic to the US. Despite knowing three years ago that it would require 700 critical positions to be filled, the DGCA failed to take necessary action. Now, even though a temporary arrangement has been made by drafting technical personnel from AAI and ATC, DGCA is also moving fast to recruit personnel to fill those 700 critical positions which have already been sanctioned by the Ministry of Finance. Further, it has hired consultants in areas such as flight operations, aerodrome and air navigation, as well as oversight functions.

Of the issues that still remain to be addressed, at least 10 relate to Airports Authority of India (AAI). It may be recalled that AAI has been perpetually suffering from shortage of ATC personnel and a high-level committee under a former Civil Aviation Secretary had made a series of recommendations, which included immediate recruitment of personnel and teaching of English language to the personnel. It is only recently, however, that AAI has decided to send at least 100 of its officers to the US, Europe and Singapore to undergo annual training in safety management, enforcement and surveillance systems. AAI has already appointed 55 new surveillance inspectors to monitor these areas.

DGCA chief Naseem Zaidi is literally firefighting to save India from being downgraded by FAA.

CRUISING HEIGHTS June 2009

Photo: H.C. Tiwari

needs to look after its own aircraft. But how can there be a business model for meeting internal demand?

Even as Air India goes on an MRO drive, another private company, Air Works, with its facilities now firmly established in Hosur near Bengaluru (sharing space with Taneja Aerospace), has received approval from DGCA for maintenance of Boeing 737 NGs aircraft — 600, 700, 800, 900 and 900 ER — fitted with CFM 56-7 engines.

Air Works would offer Boeing 737 NG capabilities, that include line maintenance, base maintenance up to and including “C” checks, and Aircraft On Ground (AOG) support. The company also holds DGCA consent for ATR 42/72 line and base maintenance up to and including “C” checks. It, in fact, recently performed a “C” check on an ATR aircraft of Kingfisher Airlines at its Hosur facility.

The CEO of Air Works, Fredrik Groth, has said that his company was looking forward to working with Indian and neighbouring Boeing 737 operators on their airframe maintenance requirements.

He said Air Works’ next objective was to become an EASA-approved JAR 145 repair station. Air Works’ hangar in Hosur is capable of housing two ATR 72 size aircraft or one narrow body. It has 13,000 square feet of office and back shop space.

GMR Hyderabad Airport Limited has also tied up with Malaysians (see Special Report: GHIAL on a new high) to set up a big MRO with facilities to repair airframes of both narrow bodied Boeing 737s and A320s, besides big birds like Boeing 777/747 and A330s. Perhaps, in a lighter vein we can say if that there is any threat of conflict we can at least park all the planes inside the hangars of these various MROs across the country. This seems like the new business model.

The thumb rule is an MRO must have an assured clientele of 250 aircraft to survive. As on date, India has a total of 400 such narrow and wide bodied aircraft, with trends more towards returning than acquiring aircraft, except perhaps for Air India/Indian. Besides these MROs, we also hear of MRO facilities being provided by HAL, Haymco etc.

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R Krishnan

he aviation industry in India has not shown signs of even remote recovery.

If you look at the traffic figures released by the DGCA for April 2009 — the first month of fiscal 2009-10, which is widely predicted to be the year of possible recovery from the financial meltdown — the possibility of recovery seems like a day dream.

The passenger traffic in April 2009, for instance, was actually 15 per cent less compared to April 2008, even though one noticed a slight rise in the number of passengers recorded by domestic carriers against the previous month of March 2009. As for freight traffic, taking both domestic and international cargo together, it fell by 4.5 per cent in March ‘09 compared to the same month of 2008. The only silver lining, if one could call it that, was a fall in domestic freight carried in March 2009 at 2.4 per cent, compared to 11 per cent in February AAI figures now show that freight traffic is rising in Chennai and Coimbatore. So we might be seeing a slight rise in domestic passengers carried, as also cargo, but the figures are still far below expectation, when analysed on year-on-year basis.

Is Indian aviation

ready for write-off?

If you say the government must bail out the airlines, one might well have to arrange for a bail-out of the government itself 24

So what does this mean? The bad times are far from over, and this is the scenario in which Civil Aviation Minister Praful Patel has once again taken charge, as compared to an entirely hunky dory situation when he took over for the first time as boss of Rajiv Gandhi Bhawan five years ago. All those who seemingly benefited from the earlier benevolent regime are in deep distress, and so is the state-owned, unable to merge AI-IA combine, which has re-phrased the well-known saying ‘united we stand, divided we fall’ as ‘even if united, we will still fall’.

I don’t want to list the agenda for the new minister. I think it is best to list the areas of danger where landmines are openly visible and have, in fact, become virtual time bombs with no control either in the government or private operators’ hands. This is one reason for my amusement at the oft-repeated offer by SpiceJet to buy any low cost players which may want to minimise the financial damage that it may sustain as a consequence of anticipated collapse.

Look at the so-called agenda points. The three full service carriers — Air India (both its domestic and international version), Jet Airways and Kingfisher Airlines are in complete CRUISING HEIGHTS June 2009

red. The losses they have reportedly sustained, including the LCCs, in the just gone by fiscal 2008-09, are to the tune of nearly Rs 10,000 crores. Add the working capital loan of these full service carriers that have been taken from banks and others, and the so-called time bomb debt balloons to nearly Rs 30,000 crores.

The seriousness of the situation is evident from the continuously rolled over working capital loan, whose limit in the case of Air India has been stretched by its Board beyond the agreed Rs 15,000 crore. Kingfisher Airlines also got its Board approval for an upper limit of Rs 7,500 crore, in so far as its working capital loan was concerned. Jet Airways has a working capital loan limit somewhat in the same region, apart from its LCCs. So, in aggregate, we have the domestic airlines with working capital loan outstanding or debt which is constantly rolled over at over Rs 30,000 crore. Taking the losses and working capital loan, besides other privately arranged loans, the total financial hole in the Indian aviation sky could be nearly Rs 45,000 crore.

Against such a situation, if you say the government must bail out the airlines, one might well have to arrange for a bail-out of the government itself, considering the kind of social

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IN THE RED: Full service carriers Air India, Kingfisher and Jet have accumulated such heavy losses as might spell the doom of Indian aviation.

welfare programmes the coalition leader Congress party had promised to the electorate.

One could, of course, argue that the red ink of all the domestic carriers together is only half of the farm loan waiver, or just about what the government may spend this year on the National Rural Employment Guarantee Act. But the number of passengers flying domestic carriers is miniscule compared to the many millions benefitting from the two decisions mentioned above. Surely, a politically strong constituency will have a greater claim on what the government should do than those who pay all the income or other taxes but have no claim, so to say, in a socially sensitive polity.

Does it mean we could expect to write off the aviation sector? Perhaps yes, if the UPA government in its second innings fails to attend to this issue. What I would like to emphasise here is that, while attending to this issue, this time at least we should take a nonpartisan view and ensure that the Ministry does not become the one in charge of either the state-owned Air India or the airlines run by the Goyals and the Mallyas. Ideally, one would prefer no tilt by the occupants of Rajiv Gandhi Bhawan. But then, don’t we know that ideology has no place in business.

Look yet again at the state-owned Airports Authority of India, which was entrusted with the task of modernising and upgrading the 35 non-metros, of which 25 were taken up in the first instance. As on date, only seven such

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non-metro airports have been upgraded, but without any private participation. Earlier it was to be done under the PPP model.

The PPP model became only the Public part of P when it was decided that the private sector will not be allowed to manage the terminal buildings in these non-metro airports.

(Read our News Digest column). Now, which private sector or real estate developer will sink money in city side development during recessionary times, when even land surrounding metro airports like Delhi has seen serious erosion in value, as evident from the bids received by GMR for the city side development around the Delhi airport?

There is speculation that AAI is seeking government help to find Rs 5,000 crore through any debt instrument, including taxfree, to part finance its plans to renovate, modernise and expand the two metro airports in Chennai and Kolkata, where costs have over-run by Rs 1,000 crore, and the remaining non-metro airports. That no private sector P will come in non-metro airports could become evident once AAI officially discloses that its earlier bids, invited for Amritsar and Udaipur airports city side development nearly two years ago when it included terminal management, have been scrapped.

One may fully agree with AAI claim of being systematically stripped of value, but the larger issue is where to find money, and who will find it on better terms. In short, for the government, the question is: if it cannot bail out the aviation industry, will it at least bail out Air India, which is reported to have made losses of nearly Rs 4,000 crore in fiscal 200809, that is four times the losses incurred by Jet Airways (consolidated or including JetLite)?

And if it cannot bail out Air India, will it at least bail out the Airports Authority of India, whose cream airports in Delhi and Mumbai have been taken over by private consortiums, and whose ‘quite cream’ Hyderabad and Bengaluru airports have been shut down to make way for Greenfield airports.

Going by the way Prime Minister Dr Manmohan Singh has indicated that his government will go full steam ahead to develop India’s infrastructure — mainly roads, ports and airports — we might see a small fallout effect, perhaps positive, on the airlines and AAI. Of course, this would depend on whether the efforts to deepen and widen the infrastructure are taken up immediately by the government in the first part of its second innings, or whether they are undertaken in the fag end to ensure a reminder effect, when it goes to polls again after five years. If the latter is the case, then we can write off India’s

aviation sector for the present.

(Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.)

CRUISING HEIGHTS June 2009

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SPECIAL REPORT

GHIAL on a

new high

The GMR Hyderabad International Airport has come a long way in just one year of its existence.

After making a huge success of the country’s first private sector Greenfield airport at Hyderabad, GHIAL is now all set to kick off another mega project in the airport’s vicinity — an Aerospace Park MRO which will raise Indian aviation to a new level, reports R Krishnan.

Photos: ??????????????

G

26

MR Hyderabad International Airport Limited (GHIAL) is seemingly on a high. If its admirers are to be believed, the airport, in the very first year of its commercial operation, has started making money. This is notwithstanding the fact that this airport receives only about 115 to 120 scheduled flights per day — much less than what its capacity could receive.

A multitude of factors speak volumes for its potential. These include the fact that it will have separate facilities for charter flights, cargo, and of course the bread and butter passenger terminal,

The fact remains that the very first Greenfield airport in the private sector in India has started making money CRUISING HEIGHTS June 2009

which exists even today but could be expanded in a modular fashion with another passenger terminal building — a mirror image of it — on the other side of the existing facilities.

So when we say it has started making money, we do not intend to confuse our readers with that expression as meaning profits. Nevertheless, the fact remains that the very first Greenfield airport in the private sector in India has started making money. And what we are talking of is enough money to pay for liabilities and charges it is expected to pay for, and still retain some cash in hand for other aviation related activities.

The fact that this world-class airport, the first of its kind in India, could attain such high levels of commercial and financial operations in a short time is by all means an extraordinary achievement. It is against this backdrop that we met the top officials of GHIAL who are involved in making a success of the two SEZs, spread over 250 acres each, on the two sides of the Rajiv Gandhi International Airport located at Shamsabad, about 33 kilome-

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“Despite the economic slowdown, there are over 350 aircraft in operation currently. We expect that more than 200 new aircraft will be headed for India in the next few years, with a possible ten-fold increase of 2,000 new planes in the next 10 to 15 years. All this makes us bullish about the future...”

— G M Rao GMR Group Chairman ters from the City Centre of Hyderabad.

Our focus is on the Aerospace Park, one of the two SEZs, the other being a multi-product SEZ. Top state officials in the Ministry of Civil Aviation that GHIAL could formally become the first international airport in India to have, amidst its expanse, a top-class super-specialty hospital with nearly 250 beds. The idea is to fly in medical tourists from any part of the world to this hospital and give them the best of international medical care. Officials connected with this PPP enterprise said it was possible that GMR might tie up with Apollo Hospital to provide world-class medical care to international medical tourists.

Alongside the hospital, a hotel will also be constructed to take care of people who accompany the patients from abroad.

So you literally land at Hyderabad, drive down to the hospital, get treated and drive in to the airport to fly back home. The idea is to provide medical tourists not just world-class hospital care but also the traditional Indian hospitality.

Now to the main issue of the Aero-

space Park. D Ravindran, Vice President GHIAL said, “When we started looking at ourselves as an airport operator with a huge land bank exceeding 5,000 acres, we got the unique idea of setting up this Aerospace Park SEZ on 250 acres of land, running parallel or adjoining the runway, and another 250 acres on the western side for setting up a multi-product SEZ. There is no point in merely having an airport and not providing value-added services, which would not only cut costs for the airlines using our airport but also increase our revenue stream.”

“We are the largest airport player in India, and between Delhi — which is also being modernised by GMR — and Hyderabad airports, we handle 30 per cent of all India airline traffic. So we decided on setting up India’s most modern and large MRO,” he added.

Initially, GMR was a 26 per cent partner in a MRO-JV with Lufthansa Technik, which held the balance 74 per cent. Just when the initial signs of an impending global slowdown started emerging, a scared Lufthansa Technik quit the MRO venture it was setting up at GHIAL. Later, GMR and MAS Aerospace Engineering (MAE), a wholly owned subsidiary of Malaysian Airlines, entered into a new JV agreement for setting up the MRO as equal 50-50 partners.

The agreement was signed on February 27, 2009. The JV company, known as MAS-GMR Aerospace Engineering Company Ltd, is being built on the eastern side of the Rajiv Gandhi International Airport, Hyderabad. GMR Group Chairman G M Rao said, “Despite the economic slowdown, there are over 350 aircraft in operation currently. We expect that more than 200 new aircraft will be headed for India in the next few years, with a possible ten-fold increase of 2,000 new planes in the next 10 to 15 years. All this makes us bullish about the future, and we are confident that the strategic location of Hyderabad, just two hours away from all the Indian metros and less than four hours from all the SAARC countries, will ensure that our country’s forex reserves receive a big boost.”

The MRO to be set up in phase I is likely to entail an overall investment of $50 million. Apart from, say, $12 million each and part equity in assets of Jet Airways, there is a possibility that the venture may also go in for debt within the overall permissible debt-equity ratio. One will have to wait and see, since, if it happens, it will be the first instance of such a financial framework being adopted in India.

While the Boeing-AI JV for Nagpur MRO has been G M Rao

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SPECIAL REPORT settled, the EADS JV with the Indian part of Air India for Delhi is yet to be decided.

The two MROs are for maintenance of airframes of Boeing and Airbus family aircraft, respectively.

Malaysian Airlines Deputy Chairman Sadasivan said, “Our aim is to position the JV company as a leading MRO player.

Our facility, catering to both narrow and wide bodied aircraft checks, will be up and running by the third quarter of 2010.

Built specially to service aircraft in the Indian sub-continent, we have the capacity to service between 60 to 80 aircraft annually. This will also give us a head-start and when the economy recovers we will add new capacity as needed.”

MAE is certified by 31 National Aviation Authorities and has 80 customers, including Lufthansa, Saudi Arabian Airlines, Jet Airways, Qantas, Austrian Airlines, RBS, AWAS and GECAS. The Hyderabad MRO facility will provide base maintenance services, starting with C-checks for narrow bodied aircraft like Airbus A32 family and Boeing 737 family in both classic and next generation categories. Since the Aerospace Park has been declared an SEZ, it will get attractive tax and other fiscal incentives like customs, additional excise duty and also service tax.

In fact, a number of airline operators had been complaining that in view of these high taxes, MRO jobs were pretty expensive in India. The housing of MRO in SEZ will indeed provide a very cost effective alternative to airlines, both within and outside India. The JV MRO is already in talks with Kingfisher Airlines, SpiceJet and IndiGo. Earlier, Naresh Goyal, promoter of Jet Airways, had remarked that any decision on equity participation would be taken only after the MRO at Hyderabad materialises.

However, now that all the paper work has been completed and the JV also firmed up, sources said Jet Airways will soon be taken in as a partner and its engine facilities and other related assets in Delhi, Mumbai and elsewhere will be treated as equity.

A draft proposal has already been sent to Jet Airways. For Jet, the oldest running private airline in the country, the Hyderabad-based MRO will be a blessing as the airline would not have to send its aircraft to Kuala Lumpur or elsewhere for repairs and maintenance. As sources pointed out, sending an aircraft for heavy maintenance currently meant sending the aircraft to Delhi or Mumbai, as the case may be, for DGCA approval, and to Customs for certain clearances before it goes to the MRO and returns as an empty flight. This need not be the case when GMR’s new MRO comes up in Hyderabad, and there will be

28

The Hyderabad MRO facility will provide base maintenance services, starting with C-checks for narrow bodied aircraft like Airbus A32 family and Boeing 737 family in both classic and next generation categories

CRUISING HEIGHTS June 2009

no need for any Customs clearance nor any need to fly back empty. Both ways it could be a full revenue flight.

Another important attraction is the low labour cost in India. In dollar terms, the per hour total labour cost, including fringe benefits and aerospace specific, stood as follows: direct labour in India was 1.90 against 3.90 in China, 5.80 in Mexico and 2.70 in Russia; in the case of support functions, Indian labour cost $3.70 as against $8.90 in China, $7.40 in Russia, $11.80 in Mexico and $35.30 in Brazil. As for Management personnel, it was $14.30 per hour in India, compared to $18.50 in Russia, $36 in China, $21.70 in Mexico and $41.90 in Brazil.

Thus, the average labour cost (including turnover/productivity and support functions/direct labour ratio adjustments based on 10 managers and 25 support functions for direct labour) for India works out to $3.53 per hour, as compared to $6.22 in China, $5.33 in Russia, $4.08 in Mexico and $5.95 in Brazil.

According to D Ravindran, the GMR Aerospace Park MRO vision includes an MRO for airframe (the one which is being built now), followed by MRO for CFM and other engines, engine test bed, MRO for components, MRO for business jets, parts distribution (Boeing, Airbus, business jets) and related services (like docu-

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ment management). Subsequently, it will go beyond all kinds of MROs and enter vital areas like manufacturing of components and sub-systems, Civil and Military OEM R&D and engineering, aviation training including pilot training, cabin crew etc.

The Aerospace Park will also host tenants such as Goodyear, Micelin etc. It is expected that nearly 10,000 to 12,000 high paying jobs could be created near the airport in 10 years. Those who have shown interest include Jeppesen, GE, Pratt Whitney, EADS, SAFRAN, Honeywell, CFM, Bombardier and Textron.

Ravindran refused to disclose who could be the possible JV partners for other activities, if need be. However, GMR has signed a Memorandum of Agreement with the world’s leading engine manufacturer, CFM International, for setting up a new CFM 56 Maintenance Training Centre to support all its customers in the South Asian Region. The training centre will be located in the same Aerospace Park SEZ. GHIAL will build the facility and lease it to CFM. According to GMR Group Chairman G M Rao, “This very important agreement with CFM will benefit India’s entire aviation industry and help Indian airlines to considerably reduce costs, conserve time and foreign exchange, and also create

Page 5

“There is no point in merely having an airport and not providing valueadded services, which would not only cut costs for the airlines using our airport but also increase our revenue stream.”

— D Ravindran

Vice President GHIAL

CRUISING HEIGHTS June 2009

huge employment opportunities within India.

Paul Andre Chevrin, CFM International’s Vice President for India said the new training centre will mirror CFM facilities currently operating in France and the US, besides China, and would initially provide advanced course in line maintenance and inspection of CMF56-5B and CFM 56-7B engines, which power the majority of Airbus A320 family aircraft and all Boeing 737s respectively. Once the facility becomes fully operational, it will be capable of training up to 500 engineers each year.

As per an optimistic scenario, GMR expects to have two to three large facilities and seven to eight smaller facilities over the next five years in the Aerospace Park, leading to creation of nearly 4,000 jobs.

These will occupy only about 20 acres in the Park and existing benchmarks show that design and engineering facilities typically have 350 employees per acre.

The proposed layout of the airframe MRO facility envisages the setting up of the unit in an area expandable from a minimum 15 acres to 25 acres. There will be two workshops — the first will be with two maintenance lines in the same direction for narrow bodied aircraft, and another a hangar much wider to accommodate a wide bodied aircraft, or alternatively two narrow bodied aircraft. The aircraft types to be serviced initially include A320, B737, B777 and A330.

The new JV expects to get certification from the DGHCA, FAA, EASA, Malaysian DCA etc. To start with, the facility will require around 150 staff, and currently, 72 trainees are undergoing practical training in Malaysia. Most of these trainees already have relevant qualification and could be developed into fullfledged licensed aircraft engineers with type ratings.

According to Ravindran, typically, for a Full Service Carrier, maintenance costs 10 per cent of its overall cost. However, in the last few years, when fuel prices started rising, maintenance as a percentage of total cost came down to reportedly around 7 to 8 per cent.

“The reason why we are setting up this modern MRO is that India today has MROs which typically cater only to Air India-Indian planes and are in Delhi and Mumbai. There is no third party MRO facility in India. We will not only meet the Indian needs but also third party requirement from abroad. This is very crucial for heavy maintenance, and as I said earlier, it will also cut time delays, and cost involved or opportunity cost in lost rev enue,” Ravindran added.

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n a recent survey, India was found to have the maximum number of road accident fatalities per annum. Without any intended black humour, I sometimes think that the air-sides at most of our airports are the inadvertent flag-bearers of this dubious distinction.

On an average day, you are likely to find news of passenger coaches, fork-lifts, highloaders… anything with wheels, bumping into each other, into airplanes, mowing down people — regardless whether they are passengers or workers, in every other sundry nook and cranny of our chaotic airports.

So do we have a problem here?

Yes, and a huge one at that. It has been my consistent observation that our aviation growth has been skewed. Ramp incidents are on the rise, employee turnover stunningly high, and margins for operators wafer thin.

Given the current financial distress of our airlines and airports, efforts to improve operational safety on the ground through regular

ramp has deteriorated is alarming, and if not corrected, will seriously endanger the travelling public and those working at the air-side.

Over the decades, the industry has worked to alleviate the consequences of ramp damage, but growing financial pressures on airlines, quicker turnaround times, and ramp congestion still cost the industry millions annually. According to a study by the Flight Safety Foundation, each dollar of direct costs related to aircraft damage on the ramp is equal to three to five times the cost of indirect costs from issues such as: Lost ticket sales and cargo shipments; Passenger re-routing, lodging and food in case of cancellation, delays, diversions; Replacement labour and overtime, including management time; Employee relations and morale; Incident investigation.

An adoption of an industry-wide “Best Practices” for ramp operations will significantly reduce ramp costs for our struggling

Safety on the Ramp

Getting out of

fashion?

Each dollar of direct costs related to aircraft damage on the ramp is equal to three to five times the cost of indirect costs 30

The largely ignored issue of ramp safety needs urgent attention, if Indian aviation is to grow on the right track towards a future that shall no longer be susceptible to cyclical industry downturns of the kind being witnessed now, feels Pran Dasan. and better training, with greater attention paid to quality, have mostly been stymied, leaving the ramp area vulnerable.

The good times that the aviation industry enjoyed over the past five years were punctuated by haphazard growth at break-neck speed. Airlines mushroomed, while essential ancillary and support services, especially those related to training and human resource development, either lagged far behind or were treated more as an after-thought.

Indeed, the extent to which safety on the CRUISING HEIGHTS March 2009

aviation industry, which could result in savings of millions of dollars, bearing in mind the very high procurement costs of all kinds of aviation equipment.

The Ministry of Civil Aviation has been working towards the establishment of an Aera — Airport Economic Regulatory Authority. It’s an opinion that I have often voiced that the ‘A’ in Aera should stand for ‘Aviation’ rather than ‘Airports’, which drastically curtails the scope and range of its capabilities. The Aera (in either form), or in

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its absence the DGCA, must, in turn, champion the cause of establishing a new and revised set of minimum standards for ramp operations, with airports taking the lead in its implementation — after all they are the common denominator of all parties concerned.

A panel of experts with the proven technical experience and understanding of air/ground safety (and not from the IAS) needs to create a framework for standardised licensing, training and certification for ramp operation procedures, whether they be vehicular movement, aircraft tow and pushback, or aircraft refueling.

A moot point that industry executives agree to is that the key reason ramp incidents are on the rise is the lack of adequate training of front-line personnel. This is exacerbated by the fact that low wages and benefits and little prestige means that the quality of The aviation industry incurs heavy losses every year due to ramp congestion. labour that it attracts is often very poor. However, along with wages, equally solutions, rather than resort to knee-jerk important to attract quality workers are: the reactions to save costs, like the ubiquitous employer’s approach to develop team spirit, and easily done employee lay-offs, additionjob pride and a clear path for career progresal surcharges and user development fees, sion — all unfortunately ranked very low in which often recoil disastrously back on the importance in our industry in India. industry itself (like now!). Starting with The lack of experienced supervisors to areas like safety on the ramp, DGCA India train and mentor new ramp personnel has should focus on: Establishing a set of minimum standards further compounded the problem. Even the for ramp operations whose implementanumerous aviation training institutes that tion is led by airports. have mushroomed seem to focus on churning Adopting standardised licensing, trainout “air hostesses” (cringe!!!) rather than on ing, and certification for safe vehicle other vital areas of the industry, such as the operation on the ramp for ramp operaramp. There exists an urgent need for these tors. institutions to take the lead and tap into Adopting a system operator certification retired and experienced personnel, with the programme. technical knowledge and expertise in ramp Licensing institutions and instructors safety, to guide new entrants into the induswho qualify to conduct these courses. try, rather than leaving the responsibility to For all the doomsday predictions, India’s cash-crunched airlines that are unable to aviation industry can take heart from the fact replenish skilled personnel quickly enough that our economy is comparatively better off due to retirements, downsizing and cutbacks. (and growing faster) than most other large Currently, our airport terminals have economies — a situation that is expected to moved forward and introduced the concept continue for a couple of decades at least. The of common use terminal equipment (CUTE), present cumulo-nimbus cloud, into which the where different operators use a common industry has flown, too has a silver lining. platform of equipment for various functions We need to use this downturn as a breathing like passenger check-in, baggage handling space to take a better stock of our aviation etc. A similar model of operation, that could opportunities, and this time around, plan and be termed common use of ramp equipment build the future on a framework that will be (CURE), could be a possible solution for our more resilient and less susceptible to the airports by not only significantly enhancing next cyclical downturn that must definitely safety, but also saving costs and generating

come sooner than later. higher efficiencies out of both personnel and equipment.

(The writer is Manager, Sales & MarketIn conclusion, our industry needs to ing (Passenger) of Kuwait Airways in India.) invest NOW, for long-term cost efficient

We need to use this downturn as a breathing space to take a better stock of our aviation opportunities

CRUISING HEIGHTS March 2009

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FOCUS

A 100 per cent

growth Pawan Hans is flying high, quite literally. Having posted exceptionally good results, and wooing politicians in a big way during the recent elections, the company is now all set to expand its horizons to newer pastures…in the air of course!

H

e is low profile, always keeps under the radar, but if his results are anything to go by, then Pawan Hans CMD R K Tyagi deserves a generous round of applause. The operating profits have tripled, there has been a hundred per cent increase in operating revenue, there has been an upping in the fleet usage by 6,000 hours. And when the serviceability of the fleet is over 80 per cent, that isn’t a surprise.

Tyagi’s greatest contribution, though, hasn’t been the almost incredible leap that Pawan Hans Helicopters Ltd (PHHL) has taken under his leadership, but the thrust that the corporation has adopted to become a multi-dimensional outfit that offers a bouquet of services across the board. They are there with ONGC, they are there in the north east, and they were all over the place during the elections.

It’s a complex operation, and virtually every helicopter in the country was busy during the elections, but the strength of your fleet or your reliability is when you are the first choice of the netas. Both Pranab Mukherjee and Laloo Prasad Yadav are reported to have stated during the polls that they only wanted to travel by the PHHL choppers.

There was a war room in the corporation’s headquarters, manned by a senior

32

officer, that virtually mapped, on an hourly basis, the movement of their choppers. And the unique system of the fleet continuing to fly with the netas was simple: pay an initial deposit and keep topping up as you fly. If your balance dips, the rotors don’t move, you top up and you keep moving.

More recently, Tyagi made a presentation to the Lt Governor of Delhi on the huge potential that a rotor wing craft offers in key functions like policing and

There was a war room in the corporation’s headquarters, manned by a senior officer, that virtually mapped, on an hourly basis, the movement of their choppers (during elections) CRUISING HEIGHTS June 2009

Pawan Hans has expanded its wings to scale exceptional growth and is now looking forward to a better innings.

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Performance Snapshot Operating Profit

Flying Hours

3000 30

26732 20.60

2500

15 Rs in Crore

21582 Hrs.

10

2000

19290

6.21 5

1500

2.78

1000

0 2006-07

2007-08

85%

Operating Revenue 301.54

300

2006-07

2008-09

250

208.83

220.11

70%

2008-09

Fleet Serviceability 81%

80% 75%

Rs in Crore

2007-08

74% 66%

65%

200

60% 150

55%

100

50% 2006-07

2007-08

2008-09

2006-07

2007-08

2008-09

VVIP movement. His target is the Delhi Police. He is working to have them set up the country’s first airborne surveillance unit, that will be a huge help during key events like the Republic Day. That apart, he is also working to have a network in place for the ferrying of dignitaries during the Commonwealth Games.

Sources close to Tejinder Khanna said the LG was most pleased by the presentation and is pushing with the state government and North Block to give PHHL a free hand to put up another first in Delhi. His argument is simple: once the flying police fleet comes up in the capital, state governments are bound to follow suit. It would be best if the opportunity of the Commonwealth Games is used for this purpose.

Meanwhile, the Kedarnath Dham yatra from Paha and Agustmuni has started in full swing, and the feedback, according to PHHL sources, has been very very very good.

“Last year was exceptional, we shall do even better this year,” said one excited employee.

It seems that the CEO’s vision has percolated right down to the grassroots.

CRUISING HEIGHTS June 2009

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COVER STORY

HAVING SUCCESSFULLY TIDED OVER THE WORST OF THE DOWNTURN IN INDIAN AVIATION, POPULAR LCC SPICEJET NOW SEEMS TO BE LOOKING AT SOME BIG CHAN — INVOLVING A POSSIBLE NEW FLEET TYPE AND POSSIBLE PARTNERSHIPS — TO REMAIN AHEAD IN THE RACE IN THE EVENT OF A POSSIBLE CHANGE IN THE GOVERNMENT’S FDI POLICY. AN INDEPTH REPORT BY R KRISHNAN AND K SRINIVASA

VOTING FOR

CHANGE? 2007

Amid spe c managem e selling an y deal, there sharehold e er Airlines r a

2006 SpiceJet signs a $1.1 billion de al back agreemen t, covering 16 br for sale and lease and new Boeing craft. In its first in ai Tata group pick vestment in the aviation sector rs up a 7.5 per ce , the nt stake in Spic for less than Rs eJet 100 crore. The st through one of the group's finan ake was acquired cial investment arms.

2005

34

Founded in May 2005, Sp iceJet was earlier known as Royal Airways, a reincar nation of ModiLuft. It commenced operation wit h its first commercial flight on May 23. The com pany had a start-up investment of $25 million with Bulu Kansagra as the biggest stakeholder wit h 12.91 per cent.

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HANGES TO VASAN.

2008

SpiceJet a schild an ppointed investm d showed Sons Ltd to rais ent banking firm in N e Istithmar terest after losin funds. Anil Amb M Rothg Air Dec ani wanted to shares a can to M expand t a the scen a premium. Fina its holding or se llaya. lly, Wilbu e: He is ll off the white r knight in Ross arrives on shining a rmour!

2007

mid specu la anagemen tion of a possible acquisitio t informed n, ling any s s take. Follo taff that promoters SpiceJet al, there w wing the were not Kin as reholders speculation that s gfisher-Air Decca n Airlines a were in talks with ome SpiceJet J nd Param ount Airw et Airways, Kingfis ays to sell h their equit y.

e s.

O

n May 23, India’s fifth largest airline, SpiceJet went on a freebie spree.

It gave four free complimentary tickets to all its 20,000 passengers to commemorate completion of four years in Indian skies. The tickets were part of a gift kit containing the return tickets across its network of 18 destinations, along with a complimentary holiday voucher for a four-day stay at resorts across India. In flight, SpiceJet guests received four praline chocolates. It was time to celebrate.

The airline’s market share has grown from 7.9 per cent in September, 2008 to the current 12 per cent. There are no debts on the books, they are planning to hire over 500 new employees at their headquarters this year in Gurgaon (the airline already has some 2,500 employees). In the last three months, several senior positions have been filled, that include Shilpa Bhatia (Vice-President, Sales Strategy and Corporate), Anish Srikrishna (Senior Vice-President and Head of Marketing), and Sarabjeet Kaur (Head of Customer Service).

In March, the airline announced the launch of a breakfast menu available for sale on all flights that depart before 9.30 am. To the delight of passengers, they also offered the option for passengers rounding their breakfast with hot tea/ coffee (served with cookies) for an additional payment of Rs. 20.

But SpiceJet has been in the news of late more for reasons other than its freebies.

It has been in the news not so much to do with flying solo, but rather with whom it would pair to fly alongside.

The last couple of years have not been actually comfortable for those running airlines. The combined losses of private carriers, as well as the state-owned loss-maker CRUISING HEIGHTS June 2009

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COVER STORY On the doomsday predictions for the Indian aviation scene

36

‘PEOPLE MAKE THE DIFFERENCE’ SANJAY AGGARWAL, CEO, TALKS ABOUT WHAT MAKES SPICEJET DIFFERENT.

Photo: H.C. Tiwari

Our perspective is that times are tough, but tough for every single business.

Are times tougher for aviation? I don’t believe so. Aviation fuel is somewhere near the best levels one can expect it to be. Are we seeing a slowing in demand? Absolutely.

Everyone is. Whether you are in retail, real estate, telecom, media, you name it…

Everyone is seeing a slowdown.

So, do we just sit and throw our hands up in the air and say it is a slowdown and we are going under? Or, should we say let’s figure it out, and let’s take advantage of the opportunity to tighten our belts, to become more innovative, to find out how we can use technology to become smarter, and how we can run a smart airline and get through the next nine to 12 months — I am an optimist — when we will begin to see the turn.

So, why don’t we treat it (the downturn) as an opportunity to become lean, mean, smarter, so that when the economy does turn we come out winner as an industry, and say, okay, we learnt from the bad times and now we are going to take advantage of the good times?

So, if you say, do I share the same opinion? (I would say) Yes. The times are bad and I would agree with that. But are we coming down? I don’t think so. When you talk about the situation in airlines, I can tell you abut SpiceJet. We are current on our oil terms. We are current on our airport bills.

We are current on our lease payments. These are the three biggest expenses — nearly 7080 per cent of our expense categories. We are current in all our payments and we have cash in the bank. And we are not burning cash at alarming levels.

Yes, times are tough. However, we still need to remain focused on running a good business and we feel pretty good about where we stand financially. I could feel better if the demand was behaving a little bit better. If I could go back just a little bit: The 25-30 per cent growth rate that aviation saw was unsustainable. If you think about it, aviation grows anywhere between 1.2 to 1.8 times the GDP. That’s they typical rate of growth for aviation around the world for the last several decades. Now if you are seeing the rates being anywhere near three times the GDP, there is something wrong with that.

Now, what should we expect in the next 10, 15 or 20 years? In developing economies, where aviation is still taking off, (such a growth) cannot continue at 30 per cent for the next ten years. There were people who were making assumptions that aviation would continue to grow at unrealistic rates. Now we know that the demand of 5-7 per cent is stabilising, and going forward,

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the developing countries can see growth at 1.8 times the GDP, while the mature countries can see 1.2 times.

So, let’s pick 1.5 times for India, and at a 9 or 10 per cent GDP growth, you are looking at a 13-15 per cent growth rate, which is still a very healthy growth rate for any industry.

The question then becomes the differentiation between full service and low cost.

Five years ago, the low cost carriers did not exist. Today, low cost carriers are 50 per cent of the Indian market. So, as aviation grows 13-15 per cent, LCCs will see a disproportionate share of growth. So, LCCs may grow 17-20 per cent while full service carriers will grow 10-11 per cent.

So, we feel good about where we stand today. Not only about how we run the business, but we are optimistic about the future.

And it is not a gut feeling but is based on some quantitative analysis, and some optimism about the future of India...overall, not just aviation, India is emerging.

On tweaking his strategy Our market share in September 2008 was 7.9 per cent. We were operating a 14-airplane schedule. Today, we are running a 19airplane schedule. Our market share in February 2009 was 12.4 per cent, in March 2009 it was around 12.4 per cent. We are continuing to add more flights. If you look at our traffic in the first quarter of 2008 and (in the same period) in 2009, we operated the same number of airplanes and the same number of flights. However, the passenger traffic is up 11 per cent year-on-year. What we are seeing is the shift — even though the overall industry numbers are down — that our loads are up in the year-on-year figures.

The question people ask is: If your loads are up, why are we still not rolling in cash? The problem is that yields are down.

People ask me what is your breakeven load factor? The breakeven load factor depends on the yield. If I make Rs 5,000 per ticket, my breakeven load factor would be 60 per cent. There are other things that come into our breakeven picture, like fuel. The other big thing which people often do not take note of is the exchange rate. Around 70 to 80 per cent of our cost is tied to the US dollar even though we work in India. All these payments, maintenance reserves, most of the maintenance costs like C-checks, engine overhauls, etc. and then, of course, fuel is tied to the dollar. So, directly or indirectly, about 75 per cent of our costs is tied to the US dollar.

On the lease costs Usually, the lessors — specially when they are going into an economy like India — have less of a tolerance for exit clauses. We

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have explored every opportunity — I could get the same planes for a third less — and asked the lessors an honest question: would you consider it (bring down the costs) and they have told us... they paid a certain price for the airplane — these are sale, lease back — their financing costs have not come down. They have a fixed cost, plus they have depreciation on the airplane, which is actually higher than what they are recovering in the lease.

On the loyalty factor Advertising. There is a lot of research available around the world that the companies that continue to advertise during an economic downturn are 30 per cent more likely to come out winners than the others. The customers perceive that the company which advertises during such times must be doing relatively better than the others because everyone thinks that the first few things that companies cut during economic downturns are: training, staff and advertising. It creates a perception for the customers.

It is hard to figure out why a LCC should advertise on TV. It is not prudent because the people who are flying are those who read newspapers. Our experience is that the print media is very effective for us.

The other thing which is also effective is SMSes. It is a low-cost thing but it works for ‘call to action’ type of job.

On the brand differentiator Customer loyalty takes time. The Indian LCC space is relatively young and the LCC space is still attracting a lot of first-time flyer, who are flying just because they got a good deal. Next time they would still go by train. You don’t have the seasoned air-traveller who only flies. The flying population is pretty small and that population has been so intertwined with Jet Airways, or in some cases Air India, that it will take us a little bit more time to differentiate.

Right now, if you ask someone what is the difference between Indigo and SpiceJet, he will say it is Rs 100 lower or there is a Rs 50 difference. He won’t tell you why he should pick one over the other. That differentiation has not been created yet. So, we need to work to create that brand differentiation to say why we are better and why you should choose us above others even if SpiceJet is Rs 50 more expensive than the others.

In order to bring about brand differentiation, the first two things that need to be in place are the product and the people. Otherwise, what we will do is bring the customer over, they’ll come to SpiceJet, get disappointed and never come back. So you cannot launch a brand differentiation campaign without cleaning your house and get the CRUISING HEIGHTS June 2009

housekeeping in order. Once people are disappointed they won’t come back.

That is where we are focused for the last five months, and I can give you numerous examples of the little things we have done. All the carpets on the airplanes have been replaced. The seats have been spruced up from special cleaners: they were not looking as clean and sharp as they should.

We have spent a lot of money on the cabin interior, just making it look nice and fit. We have not changed the side panels or the lighting yet, but given what we have, we have at least made it look that it has been taken care of. Customers look at a dirty food tray and say, “Is that how you maintain your image still?”

I asked my people, “Why don’t we serve tea?” (They replied) “No it’s a problem. We don’t have boilers.” Then we started thinking: can we do it? I said I want the boilers back. It took us four weeks to get the whole thing organised. It is working like a charm. People feel, “Khana miley na miley, ek cup chai…”

I was talking of being customer-centric and getting our house in order. Everyone we talked to would say, “Chai, coffee toh chaiye”, for a 7 am flight. Then we heard a customer say, “Saat baje cheese sandwich kaun khayega?” So we thought we will give you a choice of cheese sandwich but you can also have flavored yogurt, croissants, a little fruit and some juice. We did that. Then we heard a customer say he needs cotton for the pressure difference. So we got small little pouches of cotton balls on our planes. These are some areas we are willing to invest in if it will improve customer experience. If it is important to a customer, it is important to us.

They way I look at it is they give you a low airfare but then the nickel-and-dime way. When we started coffee service, my guys came and said Nirula’s sells this for Rs 45 at the airport, so we can charge Rs 40 or 50 for this cup of tea.

My logic was we are not in the business of running a restaurant at 40,000 feet. Our goal is to service the customer, provide them good value for their money. It costs us about Rs 18-19. So how do you create that differentiation… little things that matter; lot of people said we should offer meals on our flights; I said the day we start meals, Indigo, Go, every one will start meals, the differentiation is again gone and we have spent another Rs 30 crore a year on the meals.

When I was growing up in India I used to see — I don’t know if there are still those signs — ‘Customer is God’. I said don’t forget the customer that is standing in front of you is writing your pay cheque. If that customer — no matter how much he paid — did not fly SpiceJet, we wouldn’t have

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COVER STORY jobs, we won’t have the pay cheques.

Just keep that in the back of your minds and it will change your perspective on how you will treat that customer. It sounds simplistic, but it needs to be reinforced, reminded time and again, and it will stick. Why is Southwest such a successful airline around the world? It is the people. Every one can replicate that model today. Every Tom, Dick and Harry can say: one fleet type, point-topoint flying and keep your costs low. At the end of the day, it’s the people that will create the difference. That you will remember, that act of kindness, that compassion. Those are the things that go far more than a Rs 150 lunch that you may give.

On the consolidation in the industry I believe consolidation will happen. But some of the airlines have too big an ego to just fold up. They will keep losing money over a period of time and coming back on.

I think we will lead the path for consolidation. A year ago the story was ‘Who is going to buy SpiceJet?’ and now I’m saying, we will be interested in buying someone. Now we will not be stupid and just go buy any airline. We wouldn’t be here if that’s how we wanted to run our business.

We are smart about how we spend every

penny of our money. And those activities are my second priority. My number one priority is to run a good business better than anyone else. People say our desire is to be the best airline in India. We want to make a brand promise that this is what SpiceJet is about: safe, reliable, quality, on-time value travel proposition.

planes. When the economy is good, everyone is saying, ‘I need more airplanes’, but by the time those airplanes come, the economy has already started to take a downturn. Now, what do they do?

They have too much capacity. This happens around the world — not only in India.

On the airline mania, circa 2005-06

On the soothing blues and bright reds

There are three things that people want to do when they have made money: Start an airline, become a politician and produce a movie. They think any of these three things will bring them visibility and fame. Historically, one of the difficult things in aviation is to make money.

There are a lot of people who have no business to be in aviation but they think it is cool to own an airline. They hurt themselves....

The other joke that goes around is how do you make a small fortune in aviation? Start with the big one! — they lose their money and they make everyone around them also lose money. They bring the fares down and the routes that everyone has to compete with.

The second problem with aviation in my mind is: the lead time to get the air-

What Airbus has done is that they have gone for a clinical white interior. Boeing has opted for a ‘warmer’ interior. The only thing that is red inside our airplanes is the bulkhead. That’s easy to change… I feel the same way about the interior of Airbus planes, which is brighter.

There are some areas where we will make the investments. If it improves safety of the airline — absolutely — there is no guessing in that. And we have the money to make that change. If it improves passenger comfort or experience we will be willing to make that investment. If it makes our employees life easier — they don’t have to walk 15 extra minutes a day — get them an office closer, we are not interested in spending the money (laughs). We have certain priority areas about how you go and spend the money.

FREEBIES GALORE : SpiceJet has been wooing travellers with a host of attractive schemes.

Air India, rose from an estimated Rs 6.8 crore about two years ago to more than Rs 10,000 crore as on date. Perhaps even this figure may be an understatement.

Most big boys wanted to restructure themselves, get loans if possible, and cut costs, even as they were exercising various options. Meanwhile, the great Indian traveller began to slowly go back to the great Indian Railways, as he could not keep pace with the rising fares triggered by rising fuel prices.

However, in the last six to eight months, fuel prices began to drop, which first prompted domestic carriers to drop fares somewhere in January-February 2009.

38

Unlike the full service giants, SpiceJet is in a far more comfortable position

By March 2009, when the figures of flying Indians were compiled, fewer Indians were seen to be flying, compared to the same period of the previous year. A small change for the better was noticed in April 2009, when all the airlines posted a rise in the number of domestic air passengers.

While this was not really enough to turn things around for the airlines, for SpiceJet there was a silver lining. Unlike the full service giants, SpiceJet is in a far more comfortable position: suppliers have been paid on time and their costs are almost 25 per cent lower than the competitors for most things excepting fuel. Close to 50 per cent of the carrier’s passengers fly for business, driven primarily by the carrier’s mix of cities. And to this you can add that they were the first to connect Tier II cities and start a night flight to Vizag.The airline is also aggressively promoting a corporate programme that allows for ticket cancellation and refunds, and has some of the best and brightest corporates like Infosys and Dabur on their roster.

Last year, soon after he joined the Board of Spicejet and injected much-needed cash into the airline, Wilbur Ross, in an interview with The Economic Times, said: “All airlines in India are burning cash. Our strategy was to put in enough so that SpiceJet could last several years, even if oil stayed at $130 per barrel (though we actually believe it will be lower).”

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“No other private airline in India has that much staying power. India has a large land mass, long distances between major cities, difficult ground transport and improving airport infrastructure. Yet it ranks ninth in aviation versus fourth in size of economy. Therefore, the market is very unsaturated and will grow more rapidly than the economy. The low-cost model is excellent because, while per capita income is rising, it is still low, and therefore afford-

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In line with the rest of the sector, SpiceJet also registered a small improvement in April

SPICEJET TODAY....TOMORROW!

SpiceJet is operating 115 daily flights with a fleet of 19 Next Generation Boeing 737s, 14 737-800s and five 737-900ERs (extended range). Fourteen aircraft are leased from Babcock and Brown, four from GECAS, and one from ILFS.

At present, the fleet is at optimum utilisation, and further route expansion has been ruled out till new aircraft are inducted, which will commence from February 2010. Between 2010 and 2012, SpiceJet will induct 12 Boeing 737-800s into its fleet, at the rate of four aircraft every year. Three delivery slots have been sold.

Market share has increased to 11.8 per cent in January, 2009. Overall, Low Cost Carriers (LCCs) had a 49 per cent market share and Full Service Carriers (FSCs) had 51 per cent. However, the Ministry of Civil Aviation reported that SpiceJet’s passenger numbers fell 1.8 per cent year-on-year in April, 2009 to 3,87,000. The LCC reported a reasonable load factor of 68 per cent.

With a capacity of 300 tonnes per day, SpiceJet has also targeted a doubling of cargo revenue to five per cent of total revenue. A recent partnership with IBS Software to implement their iCargoLite cargo management system highlights SpiceJet’s resolve. However, SpiceJet CEO Sanjay Aggarwal is clear that SpiceJet would not let cargo growth affect its passenger business.

SpiceJet would focus only on cargo that permitted the airline to maintain its quick aircraft turnaround policy.

SpiceJet will be completing its mandatory five-year minimum shortly, and will explore international operations as soon as fleet capacity and market conditions permit. In keeping with its fleet norms, SpiceJet will limit itself to ASEAN and the Middle-East, or a 4-5 hours route.

Alarmed by the increase in online fraud, SpiceJet enhanced customer experience with real-time verification of credit card transactions to alleviate security fears. It studied the various strategies employed by fraudsters and mapped out its own security requirements accordingly. One such rule was that they would review every transaction made for booking a ticket five hours before the departure of a flight.

CRUISING HEIGHTS June 2009

ability of ticket price is a major issue,” Ross added.

In line with the rest of the sector, SpiceJet also registered a small improvement in April, and its market share showed a marginal rise — enough to boost its confidence.

Whether it was in anticipation of it, or because it felt it had the lowest losses for the first nine months (April-December 2008-09), SpiceJet Chief Executive Officer Sanjay Aggarwal began to hint that his airline would, if all other variable factors remained “constant”, be in a position to break-even from 2010.

“I have no benchmark in India... When I joined I found the attitude was ‘Chalta hai’ (casual). This is dangerous as there was no recognition for good work and no punishment for lapses...I will change it,” he told a wire agency in an interview.

Hardened in the rough and tumble of the US market place, Aggarwal brings to the SpiceJet table the ‘gung ho-can do’ variety of energy, even in the most low-visibility scenario. Prior to joining Spicejet, Aggarwal was working with private air travel services provider Flight Options (an airline timeshare in the US) as CEO and chief strategy officer. Previously, Aggarwal had worked as senior director of Marriott International, and had also been Manager of Financial at US Airways.

On his appointment, Wilbur Ross said: “Of the many candidates, Sanjay was by far the most impressive. He is precisely the right person to lead the existing highly capable management team in turning SpiceJet around.”

Quite understandably, since the airline industry was in serious turmoil, and there were more players than what the market could justify, Aggarwal spoke of consolidation soon after he joined. In February 2009, in his first interaction with the media, Sanjay said that he expected consolidation in the airline industry over the next 12 to 24 months, and would look at serious buying opportunities.

“The next 12 to 24 months can see some consolidation in the industry, as the landscape is too small for so many players.

If the right opportunity is presented, SpiceJet could be a buyer, and we could look at consolidation opportunities,” he remarked.

At the same time, SpiceJet also formed a team, headed by Aggarwal himself, for projecting a five-year growth plan. Among other things, this team was also to go into the issue whether SpiceJet should continue to fly only Boeing 737 aircraft or should switch to Airbus A320 aircraft family as its expansion plans get underway, not just within India but also to overseas destinations. The airline is scheduled to fly overseas from May 2010, when it would

39

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COVER STORY complete the mandatory five years of continuous flying in the domestic skies.

Aggarwal also hinted that the airline would look at plans to set up a new subsidiary, which will provide regional air connectivity in the domestic market. Aimed at consolidating market share, the new subsidiary will operate as a feeder airline, connecting smaller cities and towns to the major cities where SpiceJet flies currently.

The idea of evaluating all options, Aggarwal said, was to “increase our presence in the aviation sector, and a feeder service is one of them. It makes sense to have smaller aircraft to take care of regional operations, while our bigger fleet will be utilised for long-haul flights and the international operations, scheduled to start from May 2010.”

Going forward, SpiceJet, in anticipation of the possible consolidation in the Indian airline industry over the current fiscal 2009-10 and further in 2010-2011, also indicated that it was looking at buying opportunities.

These macro statements were soon followed by specifics like `SpiceJet may buy GoAir’ and/or `acquire 7.5 per cent stake in the slightly-bigger-in-terms-of-market share LCC IndiGo.’ Later, not only both GoAir and IndiGo clarified that they were not wishing to sell, SpiceJet itself had to inform the BSE that there was no truth in such reports. At the end of it all, the media was blamed for incorrect reports.

Whatever the truth of the matter, the

fact is that all these reports did help some in the airline industry gauge the mood of rival airlines. How else does one square up the two statements of wanting to buy a domestic airline and wanting to sell strategic stake to a foreign airline, should they be allowed to buy into the domestic airline industry.

So, at least in terms of positioning itself, SpiceJet has done a pretty good job.

Even as these issues continued to engage the company’s attention, in yet another statement in the press in February 2009, Sanjay Aggarwal said that if any foreign airline comes on board as a strategic partner “we will certainly welcome them, but they should, however, allow SpiceJet to expand its footprints and add synergy to its network”.

In the same month, he was quoted as saying that SpiceJet had enough cash in hand and was yet to fully utilise the $80 million funds received from US-based investor W L Ross in September 2008.

But is it that simple? Yes and No. You may be first in the queue, but a change in the FDI policy allowing foreign carriers to invest up to 49 per cent in domestic carriers could well widen and deepen the Indian aviation industry, and the policy change, per se, could lead to much greater choice.

So, SpiceJet may be the first in the queue but there may be many others who would like to participate in India’s expanding economy, at a time when every economy of repute, be it Japan or Singapore, has contracted by between 14 and 17 per cent in the

“If any foreign airline comes on board as a strategic partner we will certainly welcome them, but they should, however, allow SpiceJet to expand its footprints...”

ALL IN RED: Ajay Singh (centre, sitting) is flanked by SpiceJet’s first CEO Mark Winders and Bulu Kansagra

40

CRUISING HEIGHTS June 2009

last quarter.

Maybe even Singapore Airlines could revisit its Indian domestic airline flying plan, which it tried earlier without success.

Perhaps, like Robert Bruce, who succeeded in his seventh or eighth attempt in the ‘Robert Bruce and the Spider’ story, it might yet become successful in its plans.

SIA’s first attempt was during the Congress regime in the mid-90s, which spilled over to the United Front rule and then to the BJP-led NDA government, before it finally dropped its plan to go with Tata to launch a domestic airline in India.

It is interesting to note that Tatas have just under 10 per cent shareholding in SpiceJet, and even though Tata Chief Ratan Tata has said that his group will not foray into the airline business, it is possible there could be a change of heart. We don’t know, or perhaps even Ratan Tata does not know, for now. But if there is a swing in the economy, things could change.

It is precisely here the story of W L Ross unfolds, especially in the context of the debate within SpiceJet to possibly switch from Boeing to Airbus fleet, if it becomes necessary and the terms are favourable. Already, SpiceJet has spoken to its aircraft type manufacturer to check if there could be a further cut-back in the aircraft price. Though the price had been frozen and no change was anticipated, it was after this that SpiceJet CEO spoke of the five-year plan and possible change in aircraft-fleet type to be flown by the airline.

But the question is: why should they even think of replacing the Boeings with Airbus?

Much before W L Ross brought in his $80 million into SpiceJet, there were wild rumours that global steel magnate L N Mittal was keen to buy out SpiceJet. People were wondering as to why Mittal should seek a business that was totally out of sync with his own business. It was later discovered that following his acquisition of Europe-based Arcelor Steel, the world’s biggest steel mill, Mittal had got a seat in the Board of Directors of EADS, which is the parent company of Airbus Industrie.

Being a person very well versed with India and also South East Asia, particularly Indonesia where he has few coal and other mines that feed his steel mills in Europe and other places, he tried to play an ambassadorial role for selling Airbus aircraft in Indonesia. But then, the market was already sold out to the rival manufacturer. Later, he tried in India but even here it was sold out to both the manufacturers, and the crucial sales to Air India and Indian had been tied up and they were waiting only for the deliveries.

But why should W L Ross’ investment into SpiceJet make it look to a change in its

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Photos: H.C. Tiwari

(Clockwise from top left) Former Tourism Minister Renuka Choudhary releasing the first e-ticket at the launch of SpiceJet’s services and SpiceJet cabin crew and attendants

fleet. Maybe, as speculation in the market suggests, after Mittal failed to push Airbus aircraft in Indonesia and later in India, he might have asked his friend and fellow member on the Arcelor Mittal Board, W L Ross, to see if SpiceJet could be impressed upon to look at Airbus aircraft. Or at least use a combination of aircraft types, which is not uncommon provided there is a minimum of 25 aircraft of one type in use by an airline. And since there is no likelihood of SpiceJet going up to 50 aircraft in the near future, there could be a vote for change, one shouldn’t be surprised considering that easyjet, the iconic UK-based low-cost carrier started with 73 Boeing 737s and one solitary Airbus and now has 37 Boeing 737s and 107 airbus aircraft.

Industry watchers also want to see if the Ross’ investment of $80 million to buy out the holders of FCCBs (Foreign Currency Convertible Bonds), like Istithmar and Goldman Sachs (SpiceJet has been raising new capital from financial investors at regular intervals to part finance its fleet expansion. In December 2005, it raised $80 million through an issue of foreign currency convertible bonds to Goldman Sachs and Istithmar. Istithmar had earlier that same year invested $12.5 million in SpiceJet equity. Then, in January 2007, the airline operator issued another $71 million worth of equity to a consortium of investors, including the Tata Group, BNP Paribas and Goldman Sachs), will result in his becoming the highest equity holder in SpiceJet, once the conversion option of FCCB is over by the end of 2009. It is reported that Ross may end up owning close to 32 per cent of SpiceJet. The other big stakeholder, UK-based promoter-director Bulu (Bhupendra) Kansagra (The Kansagra family owns 12.91 per cent in the airline) told reporters some time back: “Everyone has flirted with the airline but no one has gone down on his knees to ask for a hand in marriage. The

Aggarwal hinted that the airline would look at plans to set up a new subsidiary, which will provide regional air connectivity in the domestic market CRUISING HEIGHTS June 2009

day they come to me with something that can be discussed and signed across the table, we are open to it.” That was before Ross entered.

Also, if the new policy allowing foreign airlines to pick up 49 per cent in domestic Indian carriers gets the green flag of the new UPA government, we could very well see the return of SIA and a change of heart on the part of Ratan Tata, so that they are able to come together to run an Indian airline allowing Ross to cash out.

Now, is it not a strange coincidence that SpiceJet, running on Ross’ money, wanted to buy out GoAir first, and later take some stake in IndiGo, if not form a strategic alliance with either of them? The idea probably was that the two big LCCs together could control 25 per cent of the Indian airline market.

The very thought of such a possibility has forced Jet Airways to launch its own version of LCC, Jet Konnect, and made Kingfisher Airlines rethink and enlarge the destinations it will serve with its so-called Kingfisher Red — its low-cost arm.

Finally, why Spicejet is doing all this could also be because it has the lowest loss of any quoted airline company. And, interestingly, the airline has also evidently taken the precaution of raising the flag in favour of an entry barrier.

That’s surprising, coming as Aggarwal does from the Mecca of Competition — the US of A. That’s the line that Jet Airways boss Wolfgang Prock Shauer toes, reflecting his master Naresh Goyal’s voice, who has always said there is no need for FDI by foreign carriers in India at present, as that might lead to fare wars and predatory pricing.

What has happened in the last five years that has virtually led to the demise of Jet, Kingfisher and Air India is there for everyone to see. But then, no foreign carrier has done this. It’s a problem that has

been made and baked at home.

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DOWN J B Singh — or JB as he is popularly known in the trade — has taken over as the President and CEO of the recently-combined ITQ/Calleo entity. While ITQ is part of InterGlobe Enterprises, one of the country’s foremost official distributor of Travelport’s GDSs — Galileo and Worldspan, Calleo Distribution Technologies, now part of ITQ, is the sole distributor for Worldspan in nine countries, including the Indian sub-continent, Mauritius, Australia and New Zealand.

In three years, Calleo has expanded its regional network to seven countries, 20 locations and 95 cities. Over 370 airlines, 45 low cost carriers, 30 car rental companies, 12 rail suppliers, 40 tours, cruise and specialty travel suppliers and 91,000 hotel properties worldwide can be accessed on Worldspan. Globally, Worldspan is the largest transaction processor for online travel agencies, processing 40 per cent of all GDS online air transactions.

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“ THE TRAVEL INDUSTRY GOES

AND REVIVES EQUALLY FAST

“

VERY FAST An optimistic J B Singh, CEO of ITQ, spoke to Tirthankar Ghosh.

Q

: Let’s talk about the recent takeover of Worldspan by ITQ. Was the acquisition the right move?

Oh yes. I think it is important that while there is a downturn in the industry, and we believe that the downturn is temporary in nature — that is one side of it, ITQ is continuing to invest in its business as it has done in the past. The acquisition of Worldspan also was a logical move for ITQ. One of the key reasons was the acquisition that Travelport had done of Worldspan globally.

It was important that ITQ also aligns it position which is in line with the global vision that Travelport had. These acquisitions do bring in service and efficiency, and give ITQ a flavour of operating in markets outside India. Part of the acquisition has also been launching an ITQ subsidiary in Sri Lanka.

You speak of a global vision. In this recessionary market, have you had to lower your targets?

In any business scenario —

whether it is a downturn or an upturn — you always have to view the real picture of how the market is moving. We have to internally adapt to that situation.

That is the most competitive way to operate. Yes, targets have been looked at more cautiously this year than they have been done in the past because the (down)trend only started in the middle of summer last year. One got into the middle of the year and then saw the downturn happening. I think we are better prepared now. We are viewing the targets realistically, though for ITQ we expect to grow.

There is a continuous process of reinventing to face challenges — and, today, we understand that there are challenges in the marketplace even if they are temporary in nature, in addition to the fact that the whole market is going through a process of evolution. The change is from being a market which is so scattered, to a market which will consolidate. You will see more new players coming in.

From ITQ’s perspective, we have people coming in and looking at our special initiatives. We are today focused to see how we can deliver products in this evolving market to our cus-

tomers to enable them to make their businesses more efficient, so that they can cater to their customers’ demands more specifically and in turn become more profitable.

The downtrend has impacted numbers — primarily airline bookings. What kind of numbers are we talking about?

The market currently is tracking 20-25 per cent below last year.

That is huge. But we have to remember that the market was also growing last year at the same time. So, when you see a month-on-month trend, it is huge. But the moment we cross the summer, the month-onmonth trend will start to shrink because it started to go down last year in summer itself. Currently, the gap is wide when we view numbers over last year.

But once we cross the threshold of summer, we will see the gap lessen.

However, to answer your question on how we have done year-on-year or from April to March, the industry is expected to shrink from 4 to 6 per cent.

For our own business, however, we expect to grow this year because of the variety of initiatives that have been taken. We

CRUISING HEIGHTS June 2009

We are today focused to see how we can deliver products in this evolving market to our customers

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INTERVIEW expect our business to grow marginally this year.

We are witnessing the churning that is going on in the aviation sector today. Obviously, it would hamper your growth. If fewer people fly, organisations like yours will find it difficult to grow.

Sure. It is not just the airlines but also customer-demand. For the last three weeks or so, there

Interglobe and ITQ have always responded to changing market needs and the reforms that are needed

44

is the swine flu that has come up and that is taking its toll. We are watching that closely. Having said that, the good thing about the travel industry is that while it goes down very fast, it revives equally fast. (I believe) it must pick up equally fast…

Do you have any predictions?

Well, I guess everything currently is linked to the economy.

The economic indicators, the

What are ITQ’s plans for the future?

big economic gurus … well, you do not seen anything dramatic happening (this conversation took place a few days before the election results were announced) to bring about a change in the current scenario.

In the present scenario in India, how many airlines is ITQ handling?

All the airlines that are operating in India can be booked on our system except the LC carriers. We are trying to rope in the LC carriers… it is a continuous effort and it is important that the LCCs come on the GDS… it is important for their business and it is important for the industry.

Speaking from ITQ and InterGlobe’s perspective, Interglobe and ITQ have always responded to changing market needs and the reforms that are needed. The reason for that: it is extremely professionally driven and always wants to gear itself and adapt itself to a new scenario, and to run its business efficiently to service its customers efficiently so that they in turn can service their customers efficiently.

We have brought in some new management changes. We have got Mark Paul Rizzuto. He has joined us as DirectorStrategic Initiatives. So, we are currently looking at a lot of strategic initiatives that will help us increase our portfolio from just the pure GDS offering, and a couple of other things that we do, and make it wider for the future.

I can’t tell you about these offerings, which are all on the drawing board now The best on offer for the world : A screen grab of the ITQ GDS. and will be of interest to our competitors.

We still haven’t figured out what interventions we will make, but What really happens when they will largely provide additional revenue opportunities to the you come on to a GDS is that travel industry. you come on to a common marSimilarly, Raja Natesan has joined us as the Chief Commercial ketplace. And whenever you Officer. Now, with the acquisitions, our geography has become operate in a common marketvery big. And as we go into the next quarter, we will find that the place and not in an isolated one, work scope for us is enhanced, and we will be dealing with mulit does impact your yields. Curtiple markets, multiple cultures. rently, the LCCs operate in a marketplace which is not a (From left common one. The demand that to right) they see may not be the true J B Singh, Mark Paul demand that is happening in the Rizzuto and marketplace.

Raja Natesan.

For improvement in yields, and for an improvement in their share of the corporate travel market, the LCCs must come to the GDS. To be able to play in a global market, which means — suppose an LCC in India wants to sell tickets in some other country, for example — having that kind of a reach and a capability to interline and move customers in an international market, they have to participate

in the GDS.

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"

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CARGO

H

ope is in the air — once again.

As the new government led by Dr Manmohan Singh takes over, freight forwarders, airlines and almost everyone associated with the cargo industry in the country is looking forward with optimism. This time around, most feel the sector will witness development on a much bigger scale than what was seen during the previous regime.

Shesh Kulkarni, President of UT Worldwide, and a prominent member of the Bangalore Air Cargo Club (BACC), could not have summed it up better when he told CRUISING HEIGHTS, “The overall mood in the country is positive, thanks to Indian voters for sending a clear message and making their choice clear. Could India have asked for anything better? Having Dr Manmohan Singh as Prime Minister is a very positive indicator for the industry and the economy as a whole.”

The optimism can be witnessed by the encouraging trends from the air cargo sector. Indeed, a faint glimmer of hope has been seen. According to figures from the Airports Authority of India (AAI), domestic freight traffic, which had fallen around 11 per cent in February this year, saw the number decreasing to only around 2.4 per cent. That, however, does not mean that the industry is out of the woods: figures indicate that international and domestic freight handled by the country’s airports went down by 4.5 per cent to around 1.5 lakh tonnes in March 2009, compared to the freight handled in March ‘08. As for exports and imports, international freight traffic registered a decrease of 5.5 per cent during March 2009.

Adding to the optimistic environment is the launch of Captain G R Gopinath’s Deccan 360, the country’s first express logistics venture, which aims to provide end-to-end logistic solutions to corporate customers. Deccan 360 has plans to reach out to 75 cities in India. It will shorten the time span for cargo delivery by using aircraft, and at the same time bring down the cost of warehousing, logistics and transportation.

Given the prevailing situation, stakeholders from the airfreight industry are looking up to the government to come out with a slew of measures that will not only boost the trade but also ensure the economic growth of the country. As Capt.

Gopinath pointed out, “Nothing fundamentally has changed in the country, but what has changed is the perception of the market — which in turn brought down the stock market and the financial crisis. It has had an impact. Otherwise, the country’s economy is as robust as ever.”

Adding to that note of hope is Vipul

46

Infrastructure. Investment.

Industry status.

Stakeholders in the air cargo community have held out their wishlists for the new government to Tirthankar Ghosh, and pointed out that concentrating on the three ‘I’s’ would help revamp the air cargo sector and boost the economy.

Jain, CEO & MD, Kale Consultants Ltd. He observed: “The current logistics industry is highly fragmented, with the presence of a large number of unorganised players, including transporters, express cargo movers, courier companies, freight forwarders, container companies and shipping agents, spread across the country.”

According to Kale’s Technology Survey for Indian Logistics Industry-2008, the Indian logistics industry is set to grow at a CAGR of 11 per cent to reach levels of Rs 4,100 billion by 2013. Logistics service providers are looking forward to the growth of organised retail industry, in addition to the continued growth of other CRUISING HEIGHTS June 2009

sectors such as automotive, electronics, metals, textiles, chemicals and pharmaceuticals. Technology is expected to be a key enabler to support the logistics sector in its growth. Kale’s survey also reveals that the current market for IT solutions in this sector is estimated at Rs 400 crores and set to grow to a level of Rs 1,000 crores by 2012-13 (growing at CAGR of 20-22 per cent).

Taking up the cause of the logistics industry, Shesh Kulkarni pointed out, “One can expect that with the clear mandate, the Prime Minister would continue to initiate the same game-changing initiatives to further the prospects of this

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SHOWPIECE: The air cargo terminal at Hyderabad International Airport.

WORLD-CLASS IN THE MAKING: The Nagpur air cargo hub under construction.

country. While one knows that industries such as power, aviation, infrastructure, rural development, agriculture, science and technology and a few others would get adequate attention, one is curious to see what specific plans this government would draw to support, improve, accelerate growth in the logistics industry.”

He went on to mention that with the growing visibility of the aviation industry, “it was heartening to hear Aviation Minister Praful Patel talk about cargo at many forums.” Kulkarni hoped that the new government would recognise logistics as an industry and give it the necessary recognition. The minister has to lead and look into the needs and requirements of this industry, he said, and in turn, the trade would have somebody to engage with and

“

Some major airports in Asia have announced relief packages to tide over airlines and operators affected by the global economic downturn. These are in the form of reduction of landing and parking fees by up to 15 per cent interest-free deferred payments on rentals, rental rebates and cargo incentive schemes.

Charges levied to us, on the contrary, have been increased substantially.”

Tulsi Mirchandaney, MD, Blue Dart Aviation

connect and work on development plans.

“With significant initiatives in the area of privatisation of airports and ports, it is only imperative that these moves are complimented by a strong vibrant logistics ministry, which in turn can work towards growing specific value initiatives for Indian industry,” he said. He went on to underline the fact that countries that have evolved and developed have understood the importance of logistics, and it is time India does so too!

The wishlist that the airfreight industry has prepared for the new Minister for Civil Aviation and the government is long but one that has, according to many in the trade, been long overdue. An optimistic freight forwarding veteran Pukhraj Chug hoped that the government would “have the time to concentrate on core issues like development of infrastructure to help develop the air cargo industry to its full potential.”

Commented senior Air Cargo Agents Association of India (ACAAI) member J Krishnan: “The new government has committed itself to spruce up the infrastructure.” To begin with, he said that “an umbrella ministry for infrastructure, with a capable and senior minister, would be a step in the right direction”. This, he

“

One can expect that with the clear mandate, the Prime Minister would continue to initiate the same game changing initiatives to further the prospects of this country. While one knows that industries such as power, aviation, infrastructure, rural development, agriculture, science and technology and a few others would get adequate attention, one is curious to see what specific plans this government would draw to support, improve, accelerate growth in the logistics industry.”

Shesh Kulkarni, President, UT Worldwide

CRUISING HEIGHTS June 2009

emphasised, “would ensure an end to petty inter-ministerial squabbles over loss of turf to individual ministries.”

Krishnan also pointed out that the new government should foster and encourage the “role of regulators”. That would be ideal “for private capital to flow in and also usher in transparency of pricing”.

Additionally, he cautioned that “cross subsidy in railways and airports has distorted the real pricing and has rendered our export uncompetitive”.

Elaborating further, Krishnan urged that the role of the Tariff Authority for Major Ports (TAMP) must be revised to cover all ports. “Road projects,” he said, “have seen a great lull in the past few years and needs to be kick-started and held on a fast track mode under the direct supervision of the Prime Minister if our infrastructural woes need quick redressal.”

Veteran freight forwarder and a longtime ACAAI member S L Sharma had infrastructure at the top of his wishlist, like many of the others from the industry. Said he: “At present, there is slow progress in logistics-related infrastructure projects like the Dedicated Freight Corridor, modernisation of ports and airports, highways and power sector, etc. Rapid development in

“

With a stable government in power, we expect better foreign investment regulations, which would be a major driving force behind the market for logistics services. The government should ensure that the privatisation and development programmes undertaken in the country are on track…While the growth story of the air cargo industry has been considerable, there are issues that need to be addressed urgently.”

Vipul Jain, CEO & MD, Kale Consultants

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CARGO

“

First, the new government must invest in infrastructure for the cargo fraternity. We would like Bengaluru International Airport to provide more facilities and better quality so that customers can be serviced in a better fashion, which in turn will benefit us.

That will also bring in more revenue for everyone concerned. Above all, the cargo fraternity is looking for industry status.”

“

It is good to see a comparatively stable government coming to power…from the business perspective, it should translate into action: higher spending and FDI in infrastructure, capital availability at lower cost, better fiscal discipline and rational economic reforms. We would like to see Industry status for the air cargo industry, continued development of Special Economic Zones and more bonded trucking and warehousing.”

Pukhraj Chug, MD, Group Concorde

Nirmal Sandhu, President, BACC

these sectors will make our logistics companies globally competitive.”

Kale’s Vipul Jain, however, was more elaborate. He said, “The government should ensure that the privatisation and development programmes undertaken in the country are on track. These would boost investments made in information technology by the logistics sector.” He mentioned that while “the growth story of the air cargo industry has been considerable”, there were issues that needed to be addressed urgently. For one, he said, “challenges exist both within organisations as well as across the industry”.

At the macro level, one of the key limiting factors is the poor infrastructure plaguing the country. “This,” said Jain, “has a direct and serious implication on the industry’s growth”. At the micro level, companies face challenges within their own organisations, whether they are strategic issues such as lack of real-time access to data or an inability to track tactical parameters such as resource utilisation and productivity, said Jain.

Most stakeholders in the logistics sector believed that the new government should go ahead to attract investments.

Krishnan said investments would come if the government started considering the development/expansion of airports, ports through the Special Economic Zones route

with, what he referred to as “a liberal tax deferment.” “That would ensure adequate investment flow and the much-needed economic stimulus could be addressed.

Indeed, any infrastructure project generates sustained employment for many years,” he added.

Pointing out that the half-hearted attempts at privatisation of airports needed a thorough review, Krishnan was of the opinion that performance guarantees must also be demanded from these private players. “The current system is opaque,” he declared.

One of the key limiting factors is the poor infrastructure plaguing the country. This has a direct and serious implication on the industry’s growth

A SMALL STEP: The Bengaluru Airport cargo terminal.

48

CRUISING HEIGHTS June 2009

“

The new government has committed itself to spruce up the infrastructure. An umbrella ministry for infrastructure, with a capable and senior minister, would be a step in the right direction. This would ensure an end to petty inter-ministerial squabbles over loss of turf to individual ministries…

Investments would come if the government started development/expansion of airports, ports through the Special Economic Zones route…”

J Krishnan, ACAAI

Echoing similar concerns, Kale’s Jain said that “with a stable government in power, we expect better foreign investment regulations, which would be a major driving force behind the market for logistics services.”

Nirmal Sandhu, President of the Bangalore Air Cargo Club, was more concerned about the facilities available at Bengaluru from where he operates. He said that the new government must “provide more facilities and better quality at the Bengaluru International Airport, so that customers can be serviced in a better fashion which will benefit us. That will also bring in more revenue for every one concerned.” “Above all,” said Sandhu, “the cargo fraternity is looking for industry status”.

Pukhraj Chug, fellow forwarder and a veteran from the freight forwarding community, was enthusiastic about the new government. While it was good to see a comparatively stable government coming to power, from the business perspective, he emphasised, “it should translate into action: higher spending and FDI in infrastructure, capital availability at lower cost, better fiscal discipline and rational economic reforms.”

Reverting to the industry mode, Chug detailed a few points that he said were “a must” for the government to look into with seriousness. Among these were: Industry status for the air cargo industry; Continued development of Special Economic Zones, but with a number of fundamental services provided; Smoother movement of goods across state borders by elimination of “chungi” constraints and rationalisation of CST; More bonded trucking and warehousing; and, More seriousness on completing the Golden Quadrilateral project and development of other highways.

To that, Kale’s Jain added one more.

Viewing the technological shortcomings that prevail in the logistics industry, Jain reminded that the country spent around 13 per cent of its GDP on logistics, which was higher than the US (10 per cent), Europe (11 per cent) and Japan (10 per cent). In financial terms, this translated to

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“

There is a need to do a deeper analysis of the various factors that are affecting our exports… It is well known that multiple agencies, as well as complex and not very user-friendly procedures are imposing a very heavy cost in terms of time, money and resources on exporters. There is, therefore, an urgent need to revamp the various procedures for processing and approvals by various governmental departments.”

S L Sharma, MD, Skyways Air Services

around Rs 150,000 crores in operating costs for the economy and, therefore, “loss in capital formation”. The new minister could initiate steps, said Jain, to ensure that the country does not miss out on 1 to 2 per cent of the GDP. This can be done only when there is significant improvement in supply chain efficiencies through the effective use of technology.

An important point was made by S L Sharma. The forwarder pointed out that most of the countries competing with India in exports were doing better than us. “There is a need to do a deeper analysis of the various factors that are affecting our exports,” he said. Topping his wishlist was a request to the government for an urgent and immediate need to push forward a stimulus package for exports.

“That would make our exports globally competitive,” he said.

Echoing the others, Sharma said that it was “well known that multiple agencies, as well as complex and not very user-friendly procedures are imposing a very heavy cost in terms of time, money and resources on exporters. There is, therefore, an urgent need to revamp the various procedures for processing and approvals by various governmental departments.”

Most of the air cargo stakeholders said that while the government has shown initiative in improving the existing infrastructure at various airports, especially the passenger side, the cargo section, unfortunately, has not received similar attention. Minus the right focus and attention to the cargo section, Indian shippers, many felt, had been suffering, both in terms of increased time and money. It is about time that India created practices which are global in nature and created an easy access to authorised people of the freight and logistics fraternity into use of bonded infrastructure.

“Today,” said Shesh Kulkarni, “the cost of imports per kg from countries like Germany, UK and elsewhere from Europe ranges between Rs 18 to Rs 20 per kg.

Similarly, if India were to export to the same destinations, our cost works out to Rs 45+, which is almost double. This makes the value of the goods for the

READY FOR AN UPGRADE: The Chennai cargo terminal.

Indian shipper that much more expensive, particularly when one is competing in the global market.”

“The only reason import freight is cheaper is because of our access to the Bengaluru cargo village (Kulkarni’s base), where forwarders have access to bonded areas and have freedom to do cargo mixing and building pallets, and this consolidation of cargo saves big money! By creating the right infrastructure, even the airline industry will benefit, as they don’t have to create additional infrastructure to build pallets and manage and maintain the cost of same,” he said.

The last word, however, came from Tulsi Nowlakha Mirchandaney, Managing Director, Blue Dart Aviation. She had a specific point on her wishlist: ground handling. The implementation of the new ground handling policy, she said, would adversely impact the quality of “our operations, costs and employees”. Her reasons: “Air cargo is very different from air express operations. Our business model is based on an integrated, seamless service of a very high quality and processed within a short time window. Any intervention that would fragment the process would destroy the service offering and render it uncompetitive. We have trained people, dedicated

Most air cargo stakeholders felt the government has shown initiative in improving infrastructure at various airports CRUISING HEIGHTS June 2009

to ensure fast, secure and safe operations within the limiting constraints of our various airports. Moreover, the ground operations teams are loyal and committed, most having been with our company since inception, and possessing the requisite skills, experience and security clearances.”

She made it quite clear: “We don’t see the rationale of having to start afresh with new, inexperienced people who our employees would have to train, only to have themselves replaced by them…The ground handling agencies’ investments in assets are expected to be leveraged over the smaller number of freighter aircraft operating in the India market, evident from the enormous difference in costs between the domestic passenger and cargo operators. Apart from being unfair, the move would add between 13.3 per cent to 16.8 per cent to our direct operating costs, excluding the write-off on assets we have invested in over the past 13 years. This is a significant impact in normal times, and more so under the current, uncertain economic environment.”

Mirchandaney also pointed out that the new government, as well as the civil aviation ministry, must review the increases in navigation charges and lease rentals of operational facilities at airports. “Some major airports in Asia have announced relief packages to tide over airlines and operators affected by the global economic downturn. These are in the form of reduction of landing and parking fees by up to 15 per cent interestfree deferred payments on rentals, rental rebates and cargo incentive schemes.

Charges levied to us, on the contrary, have been increased substantially.”

The list is ready, and so are all those involved in the air cargo sector. This is the right time to move. Who will be the first mover? CRUISING HEIGHTS will keep

you informed.

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CARGO

Beating downturn through excellence The ACE survey of international freight carriers and airports sends out a clear message. Airlines and airports around the world are getting their act together to achieve consumer satisfaction through quality.

T

his is one annual survey that the international air cargo industry waits for. Conducted by Air Cargo World, an internationally acclaimed authority on air cargo and transport news, the fifth annual Air Cargo Excellence (ACE) Survey brought out some significant facts about the industry, which is buffeted by the global meltdown. Airlines were rated by freight forwarders on Customer Service, Performance, Value and Information Technology, while airports were rated by airlines on Performance, Value, Facilities and Regulatory Operations.

Emirates SkyCargo impressed freight forwarders the most, narrowly displacing Lufthansa to top the overall global index for air carriers, followed by Singapore Airlines, KLM and Virgin Atlantic.

Airports that were rated highest by airlines and forwarders included Memphis in North America, Frankfurt in Europe and Singapore in Asia/Middle East in the one-million-or-more tonnes category. In the below half-a-million tonnes category, the top scorers were Dallas Fort Worth, Cologne/Bonn and Osaka. For the smaller airports category, Washington Dulles and Stockholm both jumped to the top spot in their regions, with Buenos Aires and Bahrain having the highest index ratings in South America and Asia/Middle East respectively.

Delta Cargo, Qantas and Qatar Airways were among a number of airlines the

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What is significant is that there are only two airlines and two airports from India in the survey findings... the country is almost at the bottom of the tables

CRUISING HEIGHTS June 2009

index ratings of which showed a ‘significant improvement’ over last year, while Shanghai made the biggest improvement in the mega-airport group and Milan Airport jumped from the twenty second to the second place in its category.

Perhaps what is significant is that there are only two airlines and two airports from India in the survey findings. Additionally, on both counts, the country is almost at the bottom of the tables.

The rankings apart, at Air Cargo Europe — a premier exhibition and conference for the global air cargo business — which took place on May 13-14, 2009, at Munich, while there was talk about the global meltdown, stakeholders showed optimism about the future. Among the leading industry experts who spoke at the seminars were Michael Kerkloh, CEO of Munich Airport, Ulrich Ogiermann, President of Cargolux Airlines International, Ram Menen, Director of the Cargo Division at Emirates Airline and Andreas Otto, Board Member of Lufthansa Cargo. The themes they tackled were ‘Economic outlook — How to cope with the economic situation?’, ‘Emissions trading in the EU: How we will prepare?’ and, ‘Where will be the location of the next major logistics hub — Eastern Europe, Gulf Area, China, Central America?’

The dominant theme for the sector, as witnessed from the lectures, was basically on how to overcome the economic crisis.

2009 could well have been a good year — air cargo volumes had risen significantly in 2008. But from November 2008, the economic crisis sent waves and the result: a downturn in business. Along with the longterm trend of continuous expansion, the air cargo market has been characterised by a high degree of volatility. The level of general economic activity strongly determines the volume of goods to be transported. It is for this reason that the sector is seen as a key indicator for future economic development.

The traffic results from IATA for January 2009 — a drop of 23.2 per cent over the same period in 2008 — illustrate very clearly the drastic downturn in global freight volumes. These figures could lead to a decrease in revenue, in the air cargo sector for 2009, of US$35 billion to US$500 billion.

Indeed, IATA chief and CEO Giovanni Bisignani recently warned that air cargo

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Top cargo carriers of the year Air Carrier

Customer Service

Performance

Value

Information Technology

Overall

Emirates Sky Cargo

127

130

125

132

128.3

Lufthansa

128

130

118

135

127.7

Singapore Airlines

125

127

119

129

124.7

KLM

125

122

117

124

122.0

Virgin Atlantic

126

124

118

117

121.2

Qantas

122

120

117

119

119.3

Korean Air

118

123

118

118

119.2

Swiss WorldCargo

125

118

117

117

119.2

FedEx Express

117

118

112

129

119.0

Cathay Pacific

117

119

116

120

118.2

Qatar Airways

116

117

119

114

116.7

Southwest Airlines

119

118

115

112

116.2

American Airlines

113

114

113

122

115.5

Kingfisher Airlines

98

94

94

100

96.5

Air India

85

86

88

89

86.8 Source: Air Cargo World

Criteria Definitions: Customer Service: Claims handled with expedience, problems solved in a prompt and courteous manner, professional and knowledgeable sales force.

Performance: Fulfills promises and contractual agreements, dependable, accomplishes scheduled transit times.

Value: Competitive rates, rates commensurate with service level you require, value-added programmes.

Information Technology: Tracking and tracing of shipments, Internet, electronic commerce capabilities.

Where do our airports stand?

Airports Asia & Middle East - 500,000 to 999,999 tonnes

Performance

Value

Facilities

Operations

Mumbai, BOM

90

89

80

83

Airports Asia & Middle East - 100,000 - 499,999 tonnes

Performance

Value

Facilities

Operations

New Delhi, DEL

99

115

111

103

Criteria Definitions: Performance: Fulfills promises and contractual agreements, dependable, prompt and courteous customer service, allied services—ground handling, trucking, etc.

Value: Competitive rates, rates commensurate with service level you require, value-added programmes.

Facilities: Apron, warehousing, perishables center, access to highways and other modes.

Regulatory Operations: Customs, Security, FTZ.

demand “has fallen off a cliff”, and projected that revenue generated by airlines from cargo in 2009 was likely to drop 9 per cent year-on-year to $54 billion. Air cargo, which represents about 10 per cent of airline industry revenue, is 35 per cent of international trade by value. IATA forecasts a 5 per cent contraction in air cargo traffic year-on-year in 2009, a significant decline considering that it followed a 4 per cent contraction in 2008.

However, despite the current uncertainty in the global economy, air freight volumes are expected to return to their longterm upwards trend, according to industry estimates. For 2020, the German airports

Despite the current uncertainty in the global economy, air freight volumes are expected to return to their long-term upwards trend CRUISING HEIGHTS June 2009

association, for example in Europe, is predicting that German airports will be handling 6.8 million tonnes of air cargo.

The general feeling coincided with the long-term forecasts for the global market: in the next two decades the worldwide air freight business is set to grow by an average of 5.8 per cent per year, according to Boeing. That simply means international air freight traffic will treble by 2027, and the global air freight fleet will rise from 1,950 aircraft today, to around 3,900 in 20 years’ time. With the trend towards larger aircraft, by 2027, 35 per cent of all cargo planes will be bulk carriers, compared to a figure of 26

per cent in this category now.

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FIREWALKERS INC

As fuel prices touch the stratosphere, airlines owners get edgy. It’s like walking on hot coals: they are cutting costs, dropping routes and wondering what to do next

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FIREWALKERS INC

As fuel prices touch the stratosphere, airlines owners get edgy. It’s like walking on hot coals: they are cutting costs, dropping routes and wondering what to do next

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CARGO JOTTINGS

Capt Gopi launches Deccan 360

D

eccan 360, India’s first cargo airline to launch international freight operations, took to the skies from New Delhi’s DIAL Airport (Cargo Terminal) on May 27, 2009. The inaugural flight from New Delhi to Hong Kong by Deccan 360’s Airbus A-310 freighter aircraft was flagged off from New Delhi’s DIAL Airport by Dr Naseem Zaidi, Director General, DGCA

At the small ceremony to launch the Deccan 360 brand name, (from left to right) Capt Gopinath lights the lamp, while S C Chhatwal, Member (Finance), AAI; Kiran Kumar Grandhi, Chairman, GMR Airports, and Jude Fonseka, CEO, Deccan 360 await their turn.

(Directorate General of Civil Aviation) and M M Nambiar, Secretary, Ministry of Civil Aviation, in the presence of Capt G R Gopinath and other dignitaries.

Speaking at the flag-off, Capt G R Gopinath, Chairman and Managing Director, Deccan 360, mentioned that India

54

Deccan 360’s operations will offer innovative solutions to the increasingly complex scope of logistics across multiple industry verticals, such as automotive spare parts, textiles, pharmaceuticals, machinery and heavy equipment, banking and organised retail.

Speaking on the occasion, Captain Gopi said: “For India to become an economic powerhouse, opportunities and markets have to spread across every part of the country — from Delhi and Bengaluru to towns like Saharanpur and Kota and Bellary. At present, over two per cent of our GDP output is either lost or wasted in the absence of storage and cargo delivery facilities. Unlike the West, or even other BRIC nations such as China, manufacturers in our smaller cities, traders in the interiors or farmers in villages and on cash crop plantations are unable to compete in the international market because of limiting conditions of transportation and connectivity. It is therefore critical that we create a logistics infrastructure that integrates the whole country seamlessly on a transportation and delivery network.”

The core of Deccan 360’s hub and spoke model is the state-of-the-art hub being developed across a total area of 100 acres at MIHAN, Nagpur. Work has already begun on constructing this facility, which will handle majority of the shipments moving on the Deccan 360 network.

Photos: H.C. Tiwari

A NEW BEGINNING IN AIR CARGO HISTORY: (L-R) Capt Gopinath, M M Nambiar, Secretary, Ministry of Civil Aviation and Dr Naseem Zaidi, Director General, DGCA at the flag-off ceremony at Delhi airport.

currently had only seven cargo aircraft, offering a combined capacity of just 120 tonnes, while China, on the other hand, has over 100 dedicated cargo aircraft. “The Indian logistics industry is severely limited in terms of reach and infrastructure, and if supply chain is the backbone of economic growth then we need to build scale and connect India’s hinterlands and production areas with major domestic and global markets. Our mission is to be able to deliver cargo in a day across 75 cities, creating unprecedented access and growth opportunities for Indian industries, entrepreneurs and agriculture. In the future, we also plan to explore opportunities in the cargo charters segment, in Indian as well as in overseas markets,” said Capt Gopi.

A few days before the actual flight, Capt Gopi formally launched his Deccan 360 — in classic Gopi style — on a low key. The small ceremony, attended by S C Chhatwal, Member (Finance), Airports Authority of India; Kiran Kumar Grandhi, Chairman, GMR Airports; Jude Fonseka, CEO, DEL and Capt Gopinath also saw the launch of the brand name Deccan 360.

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AI Cargo is the best

AIR INDIA Cargo became the proud recipient of the ‘Cargo Airline of the Year’Award for the year 2009 at the 26th Cargo Airline of the year award function held in London at the end of April this year.

This was the first time that Air India Cargo had won the award. Constituted by Air Cargo News magazine from the UK, the award is presented to top cargo airlines around the world that have contributed to the growth of the air cargo industry during the year.

(Centre) Anita Khurana, SBU Head, Cargo, Air India, receiving the ‘Best Air India Cargo won the Central Asia Cargo Airline’ award. award in the ‘Best Central Asia Cargo Airline’ category in recognition of its role in developing the air cargo market to/from the region. Anita Khurana, SBU Head, Cargo, Air India, accepted the award on behalf of the airline.

UPS SCS (India) ties up with AFL UPS SCS (India) Pvt Ltd recently signed a Memorandum of Understanding with leading logistics and domestic transportation service provider AFL. The agreement will expand UPS’s network in India, with plans to offer more than 130 field stocking locations, and extend UPS’s final-mile delivery service across India.

The expanded network will benefit UPS’s customers in the country by bringing them closer to field stocking facilities and a transportation network that supports same-day, Next Flight Out and next-business-day delivery for critical service parts. As a result, these customers will have the ability to service their endcustomers extensively throughout India and maintain visibility and connectivity to their global supply chain through UPS’s global Post Sales product offering.

This partnership follows the announcement of UPS’s first

strategic alliance with AFL in November 2007 for UPS’s international express delivery service in India. As part of the new partnership, the FSLs and final-mile delivery network in India will use UPS’s global Post Sales IT system. The IT system manages UPS’s customers’ forward stocking inventory at multiple locations throughout India, with the ability to view inventory in FSLs worldwide. The Post Sales model by UPS SCS also provides value-added services, such as inventory planning and returns management services, in India and globally.

Hyderabad airport becomes animal-friendly TWO ANIMAL quarantine stations were formally inaugurated at the Rajiv Gandhi International Airport at Hyderabad recently.

The first quarantine station is located at the International Arrivals, and the other at the Cargo Satellite Building.

GMR Hyderabad International Airport Ltd (GHIAL) has provided 10 sq. mtr space at International Arrivals and 40 sq. mtr space at Cargo Satellite Building for these stations.

In accordance with Live Stock Importation Act, the Government of India has issued a notification declaring Rajiv Gandhi International Airport as a port for disembarkation of: Pet dogs and pet cats along with accompanied baggage as permitted under baggage rules; Laboratory animals such as rats, mice and guinea pigs for research and development, etc.

The animal quarantine facility at the airport will not only help in facilitating clearance of pet dogs and pet cats etc, after carrying out necessary quarantine tests, but will also help the livestock and pharma industry for import of lab animals, etc.

The government of Andhra Pradesh has allocated 10 acres of land adjacent to the airport for creation of the animal quarantine and certification services. It has also placed the services of a veterinary doctor at the airport for quarantine and certification services.

Emirates SkyCargo on a winning spree EMIRATES SkyCargo has added four highly coveted accolades to its impressive trophy collection over the last couple of months.

Emirates’ cargo division won the premier prize at the prestigious Cargo Airline of the Year Awards, one of the leading events in the cargo industry calendar, hosted by Air Cargo News (ACN) in London.

The Dubai-based inter-continental carrier, which last won the ACN Cargo Airline of the Year in 2001, was also voted Best All-Cargo Airline and, for an incredible 21st successive year, Best Middle East Cargo Airline.

It also took the prize for Best Air Cargo Carrier-Middle East in the 2009 Asian Freight & Supply Chain Awards (AFSCAs) in Hong Kong. This is the 14th consecutive year that Emirates SkyCargo has won this award. Organised by Cargonews Asia, the AFSCAs are widely regarded as the most authoritative for the industry in Asia.

Ram Menen, Emirates’ Divisional Senior Vice President Cargo, who was in London to accept the three awards, said: “Emirates SkyCargo is truly honoured to have received these incredible accolades from our partners in the international cargo community. This recognition once again, coming at such a challenging time for everyone in our industry, provides the best possible acknowledgement of our continued investment and commitment to providing a world-class cargo operation.”

Phil Rawlings, Emirates Cargo Manager UK & Ireland; Ram Menen, Divisional Senior Vice President Cargo and Jacqui Evans McArthur, Cargo Controller take home three awards at the Cargo Airline of the Year awards in London.

Emirates SkyCargo won the awards at a time of continued development across its operation, with the recent arrival of its first Boeing 777F, joining its freighter fleet of seven Boeing 747-400F aircraft. Emirates SkyCargo will take delivery of a second Boeing 777F — the quietest and most fuel efficient freighter in the sky today — later this year, with a further two of the type on order.

CRUISING HEIGHTS June 2009

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GLOBETROTTING

AT A GLANCE

‘In fast jail’ over ‘fast money’ HE thought he’d make some big money… fast. But he ended up in jail faster. Patrick Robinski, a 21-year-old German, was caught with over 3 kgs of cocaine at Crown Airport as he prepared to board a flight to Germany.

The illegal haul was found in three cardboard packets, as well as five tins of rum cake, that were stashed in his luggage. In Scarborough First

Court the next day, he admitted that the lure of getting “fast money” had caused him to get involved in transporting illegal drugs. He, however, added that he had learnt his lesson. It turned out to be a tough lesson indeed, as he found himself at the receiving end of a ‘fast jail’, being sentenced to four years in prison.

What a mix!

SO what does a combination of pills, alcohol and lavatory hand soap do to people?

United Airlines is convinced it makes them bite. And not without reason!

Recently, the airline had to divert a flight bound for London after an incoherent and disruptive passenger, apparently woozy from the deadly mix, allegedly tried to bite a flight attendant in the leg.

Galina Rusanova, a British citizen, was charged with interference with a flight crew and assault and for allegedly dis-

Off flying, because of coffee

Out of control

T

hat’s what happened, quite literally, for 47-year-old Norma Steiner from California at the Nashville International Airport. Interestingly, and fortunately for Steiner, it was not the plane that went out of control but the staff on it.

Nearly a year after the incident, a disgusted Steiner is now suing Southwest Airlines for more than $2 million. Not that the airline seemed to care much.

It happened last June when Steiner was on her way home from a two-week trip to Florida. According to her, she had just boarded her flight and was texting her friend back in Florida when a male flight attendant approached her, rudely telling her to turn off her phone.

Steiner said she immediately turned off her phone, but that didn’t seem to

56

satisfy the attendant, who seemed bent on throwing her off the plane. When he repeatedly threatened to throw her off the plane, in disgust she told him to do what he wanted.

To her surprise, they actually turned the plane back and got her arrested on a disorderly conduct charge. She spent three and a half hours in jail before she was released on a bond.

Less than a month later, Steiner was in court to face the charge. But the charge was dismissed and Steiner’s bail money was returned.

In the months that followed, her attorney contacted Southwest Airlines, which didn’t seem to care on being informed about the possibility of a civil suit. Southwest Airlines spokeswoman Marilee McInnis said the airline does not comment on pending lawsuits.

CRUISING HEIGHTS June 2009

FROM being a frequent flyer who used to visit her father in Kentucky several times a year, 8-year-old Payton Parkerson has suddenly developed an aversion to flying.

And all because of a ‘large’ coffee.

The incident happened recently, while she was flying Northwest Airlines from Louisville to Seattle, using its unaccompanied minor programme for an extra $100 each way. According to her mother, Heather Wood, during a layover in Detroit, the supervising Northwest employee took the child to Starbucks, asked her to order a large coffee and even made her pay for it. The attendant then loaded the coffee with cream and sugar, causing the child to vomit and fall ill. Fortunately, a pediatrician was on board and took care of her.

In a statement, the airline said, “We certainly regret that this child was ill on one of our flights as we take care of unaccompanied minors very seriously when they travel with us. We are continuing our investigation as the story you have provided us doesn’t match our records.”

But for the mom and dad, who live across the country from each other, there is a big problem. The girl no longer wants to fly, especially by herself.

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Quite a loadful!

‘Masked’ excuse NOW this is what one would really call a ‘masked excuse’.

Cathay Pacific Airways has declined a request by flight attendants to wear masks and gloves as a precaution against swine flu. The excuse offered is that the World Health Organisation (WHO) has not advised any such measures.

The airline’s flight attendant union asked permission for cabin crew to don protective gear when collecting meal trays on all flights from the US, where nearly 100 cases have been confirmed. However, the airline refused, saying, “The advice (from WHO) says one has to wear masks only when dealing with sick patients. It doesn’t say one has to wear masks on board.”

Quite understandably, the flight attendants’ union is angry.

“There are hundreds of people in a plane, we have no clue who might have infectious diseases,” said Becky Kwan, the union’s chairperson, adding, “What is wrong with wearing masks? It helps reduce direct contacts.”

Incidentally, the carrier has increased its stock of masks available on flights for passengers as a precaution.

‘Bye, bye’ A GWINNETT County woman was left speechless when she was virtually kicked off a plane along with her toddler son by Continental’s Express Jet Airlines recently. And all because her little baby would not stop talking.

“I was embarrassed, shocked, upset,” Kate Penland said, adding, “I was just, words cannot express, you know, I was already tired, I couldn’t believe what was happening.”

Penland and her 20-month-old son Garren were on their way from Atlanta to Oklahoma City to visit Penland’s father for Father’s Day. Weather delays forced them to sit in Houston’s airport for 11 hours.

When the flight finally left the gate late, Penland said Garren was talking about it, happily, along with all the adults on board, saying ‘bye, bye, airplane’ to the plane out of the window.

Penland said a flight attendant told her

A FEMALE flight attendant working for Great Lakes Aviation is under investigation following the discovery of two guns — one of them reportedly loaded — in her possession. The discovery came to light at Denver International.

Initial reports indicated the guns were not loaded, but now, according to a report in Denver Post, a police spokesman says

he can’t comment on that.

The woman has been released, but the cops are still investigating, and so is the TSA (Transportation Security Administration). The Denver District Attorney’s office is also investigating the matter.

Nobody is willing to say whether she had declared the weapons.

Illustrations by Rajeev Kumar

rupting United Flight 934 from Los Angeles to London Heathrow Airport, forcing the plane to land in Maine.

The Russian-born artist, actor and author could face up to 20 years in prison and a $250,000 fine. In a court hearing in Bangor, Maine, Rusanova agreed to be detained pending trial.

Court documents revealed she was returning home to UK after travelling to California to visit a man she had met over the Internet. Her attorney said she had mistakenly mixed prescription drugs with alcohol.

to get Garren to stop talking. “So, I asked her, you know, ‘Are you kidding?’ And she said, no, she was tired, she’d been stranded at the airport all day, and she did not want to hear it.”

An argument ensued and other passengers spoke up for Penland, but the flight attendant did not relent and asked the security to escort her and the child off the plane.

And that was goodbye for Penland, who now wants an apology for the airline…the least she feels they can do in the circumstances.

All for publicity VIRGIN group head Sir Richard Branson has defended using scantily clad women at product launches, saying it ensured media coverage.

In response to the charge from columnist Amber Petty that it was sexist to have women in bikinis trailing behind him, he wrote to Australia’s Adelaide Advertiser that “the problem with her argument is that if I promote a product and I line up with three male models, the photo won’t get into your paper and the new business won’t get talked about.”

Petty described Branson as “about as sexy as a pair of those socks you get on international flights” and said the only pay he could get in a photograph with beautiful women was to pay for the privilege.

Cut to size RYNAIR wants the top brass of rival airline, Aer Lingus, in which it owns 29.8 per cent stake, cut to size, quite literally.

Rynair has written to 4,000 shareholders of Aer Lingus to seek support at the former State-owned airline’s annual meeting for resolutions aimed at reducing the “fat cat” fees paid to its rival's directors. It has proposed that Aer Lingus chairman's pay be cut to €35,000, while nonexecutive directors should be paid €17,500.

It also wants shareholders to have the power to vote on any special exit payments that might be offered to Aer Lingus executives as compensation for them having to leave the airline following a change of ownership. Aer Lingus has allowed the resolutions on directors’ pay but has refused to put the motion concerning the exit payments on to the agenda.

CRUISING HEIGHTS June 2009

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SNIPPETS

DOMESTIC AIRLINES AI Introduces APEX fares EFFECTIVE April 17, 2009, Air India has introduced Advance Purchase Excursion (APEX) fares on 35 select domestic sectors in its network. An official release from the airline stated that to avail these special fares, passengers could book their tickets 10 days in advance for Rs 2,694 and 20 days in advance for Rs 2,494.

The one-way total fare was inclusive of Basic Fare, Passenger Service Fee (PSF) and Fuel Surcharge.

Passengers would have to pay User Development Fee AI woos passengers with special fares.

(UDF) as applicable in certain airports. These promotional fares are in addition to the Summer Special fares introduced earlier for purchase 30 days in advance.

AI Express starts Abu Dhabi flights: Air India Express has started its flights to Abu Dhabi, which is now the third foreign destination to be linked from Tiruchi by the low cost carrier. The Chennai-Tiruchi-Abu Dhabi flights (IX 613/614) would be operated on Thursdays and Celebrating the launch of AI Express’ Abu Saturdays.

The inaugural flight was Dhabi flights. marked by a simple function at the airport. Airport Director S

Paramount expands to more regions THE Chennai-based full-service carrier Paramount Airways Pvt. Ltd has now expanded its wings to other regions after establishing itself as a major player in the southern region.

In another step towards a national presence, the airline has launched flights to Kolkata, Guwahati and Agartala in the eastern and north-eastern region, as well as a few to north Indian cities. In mid-2008, it had made its entry into western India with flights to Pune. The airline also has plans to fly to Mumbai, Nagpur and Bhopal.

M Thiagarajan, managing director of Paramount Airways, said, “We will be connecting cities such as Kolkata, Guwahati

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Sreekumar, Deputy General Manager (Air Traffic Control) K Shivakumar and the Station Manager of National Aviation Company of India T H Radhakrishnan were present.

IndiGo launches operations from 1D INDIGO became the first airline to enhance the hassle-free experience for its outbound passengers with the launch of new Domestic Departure Terminal 1D at Indira Gandhi International Airport, New Delhi. IndiGo’s 6E 201-DelhiGuwahati flight was the first flight to depart from the newly inaugurated Terminal on April 19, 2009.

In keeping with IndiGo’s promise of offering always affordable and on-time flying experience, the airline has Enhancing the hassle-free experience for taken a slew of measures to its passengers. enhance hassle-free experience for its passengers. These include increase in check-in counters from six to eight, along with one counter for Excess Baggage Ticket (EBT); option to choose either of the two facilities for passengers carrying hand bags or no check-in luggage; IndiGo Q-Busters, a hand-held machine which instantly hands over the boarding pass to passengers, thereby minimising the hassle of long queues; and check-in through the self-operated kiosks installed at the new terminal for added convenience. and Agartala to south Indian cities. This was always the strategy — to enter region by region. Shortly, we will be connecting main north Indian cities.”

The fully business-class airline is to commence services to 35 more cities, increasing its domestic routes to 50 by the end of 2010. It is to launch services to the northern region, including Delhi, and to the western and eastern parts, too.

Paramount will also add another 10 aircraft to its existing fleet of six planes, and is currently doing a technical evaluation of aircraft. It is looking at acquiring either from Airbus Industrie or Boeing, under a Rs 4,000-crore deal, on an operational lease.

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Jet launches Kerala initiative

AS PART of its ongoing effort to boost tourism within India, Jet Airways has, in collaboration with Kerala Tourism, Department of Tourism, Government of Kerala, launched ‘Jet2Kerala’, a new domestic travel initiative.

Under the collaborative venture, Jet Airways and Kerala Tourism will leverage their respective brand equities to boost tourist traffic into ‘God’s Own Country’, as the southern Indian state is more M Sivasankar, Director, Department of Tourism, popularly known.

They Govt of Kerala; Dr Venu V, Secretary (Tourism), have designed a range of Govt of Kerala; Sudheer Raghavan, CCO, Jet and Praveen Balasubramaniam, Deputy complete Kerala holiday Airways GM-Revenue Optimisation, Jet Airways at the options, packaged with Jet launch of ‘Jet2Kerala’ initiative.

Airways tickets. Jet2Kerala will offer travellers these packages catering to a range of price points, from premium to value-travellers.

According to Jet CCO Sudheer Raghavan, “Jet Airways has always sought to promote tourism both internationally, as well as within India, by leveraging its unmatched pan-India and growing international network.”

Dr Venu V, Secretary (Tourism), Government of Kerala added, “With Jet2Kerala, we are delivering a product, whereby Kerala is more within the reach of the domestic traveller.”

Adds flights to SE Asia, Gulf: Using Mumbai as a strategic hub, and in an effort to maximise efficiency, Jet Airways is reworking its international flight schedule, mainly to the Gulf and South East Asian countries.

Recently, the airline started a second flight connecting Mumbai and Dubai. From June 14, it would add two more flights connecting Mumbai to Jeddah and Mumbai to Riyadh.

“We have developed an efficient hub out of Mumbai. Half a dozen planes (Boeing 737s) operate in the Gulf sector in the night and the same planes are pressed into domestic operations in the day to maximise efficiency,” said Rajshiv Kumar, vice president, revenue management, Jet Airways.

Signs code-share pacts: Jet Airways has announced a codeshare agreement with Virgin Atlantic with effect from May 6. According to a statement from Jet, with this new agreement, passengers would be able to book with Virgin Atlantic to travel with Jet Airways on their double daily service Jet expands its network. between Mumbai and London Heathrow. Virgin Atlantic decided to pull out from the Mumbai-London sector from May 4.

Further, Jet has expanded its code-share agreement with Brussels Airlines to add the European cities of Marseille, Toulouse, Geneva and Vienna to its existing international network. Services on the Brussels-Lyon sector have also been enhanced from three to six flights weekly.

Freddie awards for JetPrivilege: Jet Airways’ JetPrivilege was honoured at the prestigious Freddie Awards for the fifth year in a row. It emerged victorious again in the ‘Best Elite Level’ category for the second year in a row and received the honour at the 21st annual presentation ceremony of the Freddie Awards 2008, in Fort Lauderdale, Florida, US, on April 23, 2009.

JetPrivilege was voted the ‘Best Elite Level’ programme by flyers across the Japan, Asia Pacific and Australia region. The category is based on the various benefits that the Elite or Top tier

members get with any frequent flyer programme.

In addition to its victory in the ‘Best Elite Level’ category, JetPrivilege also emerged as the runner-up in four individual categories, including ‘Programme of the Year’, ‘Best Affinity Credit Card’, ‘Best Award’ and ‘Best Website’.

SpiceJet introduces special return fares SPICEJET recently announced another innovative programme by being the first domestic airline to introduce special return fares.

Travellers can now log on to spicejet.com to make return bookings and save up to Rs 500 per person for their trip. Tickets under this programme are available for all sectors and bookings can be done for travel up to October 25, 2009.

Announcing this, Samyukth Sridharan, Chief Commercial Officer, SpiceJet Limited said, “This will certainly encourage both business and leisure travellers.”

Engages corporates for FAM: SpiceJet has engaged a select set of corporates for a familiarisation tour. Potential partners keen on the SpiceJet Corporate Benefit Programme were flown to Goa on a SpiceJet flight for a weekend trip from February 6 to February 8, 2009. This was SpiceJet’s way of enabling the corporate to experience the superior SpiceJet woos corporates with a special services offered by SpiceJet, benefit programme. while reassuring them of a safe and dependable flight. Sixteen corporates from Delhi and Mumbai were approached, of which over 50 per cent of the selected companies signed up for the Corporate Benefit Programme.

Announces three key appointments: SpiceJet Limited has announced key senior level appointments to lead critical functions within the organisation. Sarabjeet Kaur joins as Head of Customer Care and Anish Srikrishna joins as Head of Marketing. Dr Anurag Jain comes on board as General Manager, Revenue Optimisation.

Sarabjeet Kaur joins with over 18 years of experience in Customer Services in various industries like Consumer Banking and Telecom. In her earlier assignments, she has worked with Bharti Airtel, Tata Teleservices, ABN AMRO Bank Anurag Jain Anish Srikrishna and American Express Bank, handling credit card operations and risk management.

Anish Srikrishna brings with him 16 years of experience in marketing and sales. His achievements include spearheading Samsung’s foray into sports marketing. In his last assignment as Head of Marketing for The Oberoi Hotels, he was responsible for global branding Sarabjeet Kaur initiatives for the luxury brand. He has also worked with Coca Cola India and Hindustan Lever.

Anurag has a Doctorate in Management and has experience in Aviation. He brings with him over 10 years of experience in Aviation and Petrochemical industries and academia. He has earlier worked with Kingfisher Airlines and Deccan Aviation.

Launches kids’ special: SpiceJet recently launched a special four-day summer promotion on bookings made for kids. Travellers could avail a 50 per cent discount on all tickets for their children (2 to 12 years) on bookings done through spicejet.com between May 15 and May 18, 2009. Parents could choose from 18 destinations connected through the airline’s network.

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INTERNATIONAL AIRLINES international connectivity to Sharjah and Dubai respectively from Nagpur.

Air Arabia takes off to Goa AIR ARABIA has launched a non-stop service to Goa from the carrier’s main hub in Sharjah, UAE. The launch of this new destination reflects Air Arabia’s growing expansion into the Indian market.

Roundtrip flights will operate three times a week between Dabolim International Airport in Goa and Air Arabia’s hub in Sharjah. Air Arabia is now the only UAE-based international carrier to offer direct flights to Goa from the UAE. Air Arabia is offering fares starting at Rs 3,653 from Goa to Sharjah, excluding taxes and other surcharges. The LCC will fly to Goa on Tuesdays, Thursdays and Saturdays.

Increases flights to Delhi: Air Arabia has increased its frequency of flights from Delhi to the UAE to nine flights a week. In addition to Air Arabia’s daily flights to UAE, customers now have the option of additional flights on Friday and Sunday.

Air Arabia flies directly from its hub in Sharjah to Bengaluru, Ahmedabad, Chennai, Jaipur, Kochi, Mumbai, Nagpur, Coimbatore, Thiruvananthapuram, Hyderabad, Kozhikode, Delhi and Goa. This represents the most comprehensive destination network in India of any Middle Eastern airline.

The carrier flies to 46 destinations throughout the Middle East, North Africa, South Asia and Central Asia.

Qatar Airways suspends Doha flights CITING poor load factor from the Dr Babasaheb Ambedkar International Airport, Qatar Airways has suspended its direct flight between Nagpur and Doha, which had been operating for the last two years.

Qatar Airways is the second airline to suspend its international operations from Nagpur after the government-run air carrier Air India, which suspended its Hyderabad-NagpurBangkok flight a year back.

The full-service Qatar Airways launched its twice-weekly Doha flight from Nagpur in September 2007. Initially, the flight received a tremendous response from passengers as it was the only flight with connections to cities like London, Washington, New York and Paris from Navin Chawla Nagpur. However, operators were badly affected following the global economic slowdown and poor load factor due to rising airfares.

Qatar regional manager Navin Chawla said, “We are temporarily suspending the Doha-Nagpur-Doha operations from May 15, due to poor load factor. However, as soon as we get a demand from passengers the operations will start again.”

Now, only Air Arabia and Air India Express are providing

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SilkAir to start Hyderabad operations SILKAIR, the regional wing of Singapore Airlines, will commence operations to Hyderabad on June 15, 2009, taking over from Singapore Airlines, which currently flies to the city three times a week. SilkAir will offer five times weekly services for a start.

This will be increased to a daily frequency during the northern winter schedule from October 26, 2009. The flights are subject to governmental approvals and slot availability.

“The frequency increase on this route will help meet the demands of travellers from around the world to reach this city, which is a modern hub of information technology and biotechnology,” Huang Cheng Eng, Singapore Airlines’ executive vice president (marketing and the regions), stated in a press release.

“The increased frequency will also provide customers with greater connectivity when they choose to travel beyond Singapore on Singapore Airlines or SilkAir connection,” Chin Yau Seng, SilkAir’s chief executive, said.

Sikorsky flies into India SIKORSKY AIRCRAFT Corporation unveiled the delivery of its first S-76C++™ helicopter to an Indian corporate house. Sikorsky is a subsidiary of United Technologies Corp.

The state-of-the-art S-76C++™ helicopter, delivered in a VVIP configuration, was the first of three helicopters of choice for this mission among Fortune 100 companies. The three deliveries are to separate customers who have not been identified.

The S-76C++ helicopter is the latest production model in the highly successful S-76 helicopter line, which includes more than 700 aircraft that have accumulated more than five million fleet flight hours worldwide. The S-76C++ delivers a comprehensive package of improvements, including more powerful engines, important safety features, a more comfortable cabin environment and a Health and Usage Monitoring System that records operational data for maintenance analysis.

Air France KLM, Travelport GDS join hands AIR FRANCE KLM has joined hands with Travelport GDS to announce a new, multi-year global distribution agreement, which will see full content provided to all Galileo and Worldspanconnected users worldwide until March 2013.

“We are delighted to have reached this agreement with Air France KLM and can guarantee full content to all our travel agency customers for the next four years,” said Matthew Hall, Travelport GDS’ Vice President of Airline Development, Europe, Middle East and Africa.

Henri Hourcade, VP Corporate and Distribution, Air France KLM commented: “Travelport GDS, with its Galileo and Worldspan systems, is an important distribution partner for the sale of Air France and KLM flights, and we are looking forward to working closely together over the coming years. The new agreement we have signed will enable us to give both Galileo and

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Worldspan users full global content until March 2013 and will further strengthen our position with those users.”

Emirates offers free Dubai stopover IN an incredible stopover package, Emirates’ First and Business Class passengers are being given the opportunity to stopover and experience Dubai for free. All First and Business Class bookings made for travel on Emirates Airline between May 15 and September 15 will be eligible to receive free accommodation, including breakfast, at the new and luxurious hotel — The Address Downtown Burj Dubai.

First Class passengers will be entitled to two nights free accommodation and Business Class passengers are eligible to receive one night accommodation.

The package not only includes free accommodation but also access to a number of the latest attractions in Dubai.

As part of the package, each First and Business class passenger who takes advantage of the offer will also receive a voucher booklet offering exclusive retail discounts at the Dubai Mall.

Launches family friendly holiday offer: In another attractive package, Emirates launched the ‘Kids Go Free’ promotion, offering families an incredible saving when they visit Dubai with Emirates.

Coinciding with Dubai Summer Surprises and running from May 15 to September 20, 2009, the promotion will see one child under the age of 16 years fly free, and up to a maximum of two children stay, eat and play in Dubai for free when travelling with two paying adults.

“We are incredibly excited about this exceptional deal — never before has Emirates launched such an innovative and competitive promotion. In these tough economic times it is important to provide families with a holiday option that allows them to escape and relax without the financial strain an international holiday can bring,” said Nabil Sultan, Divisional Senior Vice President, Revenue Optimisation and Distribution, Emirates.

Boosts Middle East services: The Middle East will once again get a boost from Emirates, with the airline announcing an additional 12 flights per week to major travel hubs in the region.

This brings the airline’s total number of weekly flights across the Middle East to 197.

Effective July 1, the 12 additional flights will serve five major Middle East cities, including Kuwait, Amman, Damascus, Sanaa and Doha, and all additional flights will be serviced by the Airbus A330.

Emirates will introduce two additional weekly flights to Kuwait, two additional weekly flights to Amman, three additional weekly flights to Damascus, four additional weekly flights to Doha and one additional flight to Sanaa, making it a daily service.

Opens third lounge in Germany: Emirates has given a new meaning to travel and tourism promotion, with the opening of its third and largest lounge in the country.

The latest dedicated lounge, measuring 700 square metres, sits in Dusseldorf International Airport and follows similar luxury travel sanctuaries in Frankfurt and Munich. The facilities are part of a multi-million US dollar push by the airline to offer the Giving luxury lounges a new meaning. ultimate in pre-departure comfort and convenience at key airports world-wide.

Germany is a major market for Emirates, with 49 passenger flights a week going into Dusseldorf, Frankfurt, Munich and Hamburg. The airline currently offers 20 dedicated lounges around its six-continent network.

AirAsia, Maybank, American Express tie up

IN a bid to boost travel, AirAsia has tied up with American Express and Maybank, whereby the airline will accept all American Express Cards for bookings done online and through its call centres and sales counters. This new Ashraf Ali Abdul Kadir, Executive V P & partnership will further ease Head of Cards & Payments; Tony convenience for both consumer Fernandes, AirAsia CEO; and Kula and corporate travel, and improve Kulendran, Senior V P & Head of Global Network Services, Japan/Asia tourism.

Pacific/Australia, American Express The partnership extends International unveiling the American world-class value-for-money trav- Express Card partnership. el benefits on AirAsia to all consumers who carry American Express branded cards. The partnership is expected to grow inbound and outbound travel by attracting high-spending American Express Card members to fly with AirAsia.

AirAsia is supporting the partnership by also extending its popular low fares to American Express Cardholders.

Virgin ties up with Travelport GDS TRAVELPORT GDS, one of the world’s leading global distribution system (GDS) providers, has announced a new multiyear full content agreement with Virgin Atlantic. The agreement gives all Galileo and Worldspan-connected travel agents access to the airline’s full published fares and inventory.

The global agreement, which also includes access to the airline’s lowest web fares, extends the long-standing relationship between the two organisations.

The new agreement takes immediate effect.

EU go-ahead for Berlin airport funding IN an important decision for the Capital Airport Berlin Brandenburg International (BBI), the European Commission has given the go-ahead for a 100 per cent government loan guarantee for its funding. The decision has been widely welcomed.

“We welcome today’s decision from Brussels,” said the governing mayor of Berlin and Chairman of the Supervisory Board of Berlin Airports, Klaus Wowereit. “The loan guarantee enables Berlin, Brandenburg and the government to secure a line of credit for the most important traffic and development project in the German capital region,” he said. The Minister President of Brandenburg now sees all systems go for the region’s biggest infrastructure project.

The CEO of Berlin Airports, Dr Rainer Schwarz, is also delighted at the positive response from Brussels: “The decision gives us and the numerous banks planning security. We now have a reliable basis for concrete negotiations. Our goal to successfully secure funding for BBI in the second half of 2009 remains.”

The first loan contribution is already available. The EIB and Berlin Airports have already signed a loan agreement worth 400 million euros. The EIB and Berlin Airports also intend signing a subsequent loan agreement worth 600 million euros.

Last year, Berlin Airports had changed their funding concept for the Capital Airport BBI. In view of the emerging financial and economic crisis, Berlin, Brandenburg and the Federal Republic had agreed with the airport company to guarantee the loan for BBI (2.4 billion euros) by means of a 100 per cent government loan guarantee.

In mid March 2009, the Federal Government officially submitted a notification brief to the European Commission after some preliminary talks earlier in the year.

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TRAVEL & TOURISM US pitches itself as Summer Destination 2009 LOOKING at the immense potential the Indian market holds for US tourism, representatives of the American travel and tourism industry held a seminar recently to showcase their products. The session, held for travel agents, was to educate them about the various available products. It focused on the ease of travel to the US and on encouraging more people to make it their summer holiday destination.

After the many visa restrictions that have been put in place, agents find it difficult to woo travellers to visit the US. Explaining how one could improve their chance of getting a visa, Vivek V

An American Centre representative with Vasudha Sondhi, Managing Director, Outbound Marketing at the US Tourism seminar held in Delhi.

Joshi, Second Secretary, Embassy of the United States of America said that it was imperative for all to follow the specified instructions involved in the procedure.

The many tourism products and cities that were showcased included New York and its various facets that could appeal to the Indian tourists. Sharing his views about the city, Joseph Fernandes, General Manager-India, AVIAREPS-India, representing the office of NYC & Company, said that it was the most vibrant city in the world, a perfect amalgamation of various cultures and people. “It’s a world within the world,” he added.

Other famous landmarks showcased included the Las Vegas Convention and Visitors Authority, represented by country manager Vani Singh, who rightly said that this was the best place for conventions.

San Fransico Convention and Visitors Bureau was represented

by Sheema Vohra, Saartha Marketing Consultants, which offers a multitude of attractive leisure options for the small district.

The event saw representatives from the carrier Continental Airlines, the world famous Walt Disney World Resort and Disney Land Resort, hotel chains Marriott Hotels and Choice Hotels providing a range of affordable to luxury accommodation in the US.

TAAI brings foreign national tourist offices together AS PART of its efforts to bring together all the foreign national tourist offices (NTO) in India, thereby facilitating a smoother communication flow between agents and tourist offices, TAAI recently organised a workshop to educate agents about European destinations.

The workshop, which was part of TAAI’s Vision 2020, was aimed at providing training on various destinations and product marketing of various European destinations.

The half-day programme saw presentations from VisitBritain, Switzerland Tourism, San Francisco Convention and Visitors

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Bureau and Niagara Tourism and Convention Corporation, MSC Cruises and Globus & Cosmos, besides wholesalers such as Open World Holidays, Aman Worldwide, DewanHolidays.com and Narula Travels, along with the national carrier Air India.

The workshop spoke about micro level itinerary planning. A presentation by Devesh Khanna, General Manager-Marketing, Open World Holidays, underlined the need for agents to keep their basics brushed up when planning an itinerary. He also insisted that agents must go beyond ticketing to include sale of add-ons like cruises, show tickets, accommodation etc, keeping in mind the budget and the time the client can afford.

Pramajit Bawa of VisitBritain spoke about their new website that helps agents remain updated with the latest developments in major cities in Britain, and also assists them in building a better itinerary.

There were similar destination presentations by Puneet Dhawan, Key Account Manager — Northern & Eastern India, Switzerland Tourism; Sheema Vohra, Director, Saartha Marketing Consultants, besides presentations on San Francisco Convention and Visitors Bureau and San Francisco International Airport as well as Niagara Tourism and Convention Corporation.

MSC Cruises was represented by Aman Bhatia, Manager India, who revealed that MSC Agency India was planning to add more cruises to its current portfolio of about eight cruises.

Diana Lewis, Business Development Manager-North India, Globus & Cosmos talked about the various packages available with them for Indian travellers. Sandeep Roy Choudhury, District Sales Manager, Air India spoke of the facilities provided by AI to travellers, and the economical fares the airline offers to various destinations.

Egypt expecting fewer tourists from India EGYPT has remained one of the most visited countries in the world in recent years. The global recession, however, has hit the inbound tourist numbers in Egypt. There were about 90,000 Indian tourists who visited Egypt last year, said Magdi Selim, the newly appointed director of Egypt Tourism in India.

“We have been strong in the Indian market, but with recession hitting so badly, we are actually expecting a slight dip in the tourist numbers from India,” said Selim, when asked about his prediction for the Magdi Selim tourist numbers for this year.

“As we try to fight the recession, the cut in air fare by major airlines providing direct connections between Mumbai and Egypt has come as a boon. At present, there are four weekly flights to serve the traffic,” he added.

“There is no denying that recession has definitely made everyone more time-rich, if not money-rich. We have decided to cash on this time and will be doing a study of eight cities, which include Bengaluru, Kolkata, Delhi, Mumbai, Pune, Chennai, Hyderabad and Ahmedabad, in India. We will try to understand the consumer behaviour and their travel needs and demands, to create suitable brand awareness campaigns for these cities,” said Selim.

“We want to reach more number of cities in India in the coming years,” he concluded.

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Jaipur travel bazaar attracts huge participation

IT turned out to be one of the best attended travel shows in the country. The Great Indian Travel Bazaar, Jaipur (GITB) — a popular international tourism conference and exhibition — was a successful partnership effort between the Department of Tourism, Rajasthan, and Federation of Indian Chambers of Commerce and Industry (FICCI).

The show witnessed the participation of 80 foreign tour operators from around 25 countries, along with 1,500 tourism professionals. A highlight of the event was a MoU signed between the Department of Tourism, Rajasthan, and FICCI to hold GITB every year, alternately in Jaipur and elsewhere, till 2017.

Secretary Tourism, Ministry of Tourism, Government of India, Sujit Banerjee announced at the inaugural session that the central GITB Jaipur brought together travel and tourism representatives from around the government was very world. close to awarding infrastructure status to the tourism industry. Getting infrastructure status would benefit the Indian tourism industry positively in the current times, when it is facing the double threat of being unsafe and being underdeveloped, he added.

“We want to make Jaipur a hub for travel and tourism. We would like to see GITB grow on the lines of ITB Berlin and other similar fairs,” said Sajid Mohammod, National Head, Sales, Svelte hotels and Personal Suites, and on the committee for GITB.

Uttarakhand gets ready for tourist season Having already received a grant from the Asian Development Bank and an action plan from the World Tourism Organisation, Uttarakhand is now getting ready for the tourist season on a new high.

A K Diwedi, Uttrakhand Tourism, said they planned to launch a brand new promotional campaign soon, focusing on and highlighting the upcoming Kumbh Mela to be held in Haridwar in 2010. “We will be promoting the event nationally and internationally with the aim to attract tourists in large numbers,” he said.

The WTO action plan suggests a few new airstrips to come up at Gauchar, Pittoragarh and Pantnagar. “Under the plan, we will now be working more actively towards maintaining the Chardham road that leads to the four pilgrimage places of Badrinath, Kedarnath, Yamunotri and Gangotri,” said Diwedi.

As the tourism infrastructure is growing, Taj Ginger Hotels have decided to increase the number of hotels in the state. The group will be opening hotels in Almora and many other destinations in the state in the next few years, he revealed.

Uttarakhand Tourism launches new ad campaign.

New MP tourism campaign to stress on heritage IN an effort to further boost tourism in the state, Madhya Pradesh Tourism Development Corporation (MPTDC) is all set to launch a new promotional campaign for the coming season.

While the theme of the campaign remains the same, it will have a stress on heritage, off-beat and more expensive destinations, said G S Chahal, Executive Director, MPTDC. There will be new print campaigns, videos and radio spots. The exercise is only to re-emphasise on the brand and invite more tourists, he added. The UNESCO world heritage site of Khajuraho is now directly connected with a railway station, thus improving accessibility, he pointed out.

When asked if the national parks in the state were getting overcrowded with tourists, Chahal said that the wildlife parks can still handle more people. There is a huge capacity and more traffic can be accommodated, he said, adding “We are also taking care of the ecological sustenance aspect and maintaining a balance.”

Chahal informed that the department was exploring new markets like China, Korea, Russia and Brazil, which have shown interest in the state’s products.

Jharkhand boosts employment through tourism JHARKHAND, being a relatively new state, is dealing with serious employment problems. The state’s Tourism Department has now found a solution to this problem by expressing its preference to employ local population. The tourism department is willing to provide training to these locals and then recruit them in the service industry, said Alok Prasad, Officer on Special Duty, Jharkhand Tourism Department.

Prasad said that Jharkhand, being a nature-rich state, offers great variety for adventure tourism, which the department has

now decided to promote in a big way. As per the promotional plan, each of the state’s 24 districts will have an adventure tourism office that will look after training and conduct of adventure tourism activities. With the help of the Jharkhand Adventure Tourism Institute, the locals will be provided training in this regard and then put on the job of manning the centres.

It has also been decided to promote tribal tourism, which will help involve the locals in tourism.

According to him, two villages have been identified in every district to showcase the rich and Jharkhand goes on tourism promodiverse tribal life of the state. The tion spree. villagers will be involved in planning, capacity building, home stays etc. in order to benefit from tourism.

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SNIPPETS India emerging as next MICE destination

GROWING opportunities in the segment are drawing people towards India as the next big MICE destination. To discuss these opportunities and the business potential for various stakeholders — including organisers, suppliers, national and international organisations, government organisations and convention venues etc. — a two-day conclave was held in Hyderabad in early May. Conventions India 2009 focused on the emergence of India as the preferred choice for meetings, incentives, conferences and events, besides offering great options for leisure. It is probably the best time for the Indian travel industry to concentrate on this sector because other sectors are facing a slump, and MICE, being a recession proof sector, will only help the industry.

One of the greatest reasons for the development of MICE in India is attributed to the fact that India is now getting increasingly accessible. Secondly, there has been a rapid development in all spheres. The country has become aware of the potential of its tourism products. There has been a regular infrastructure growth, further leading to creation of more facilities in the country.

Speaking at the convention, Rajiv Kohli, Vice Chairman, India Convention Promotion Bureau said that India is a growing economy and that is what we need to reflect positively.

The travel industry has always promoted the Jane Vong Holmes, Regional Director, Asia Pacific, International Congress and Conventions Association; (bottom) the ICPB Team.

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last few months of the year as the best time to visit the country, but actually, except a few cities, the country by and large has a moderate climate. Not to forget that India is a safe country to visit, he added.

Giving an international perspective was Jane Vong Holmes, Regional Director, Asia Pacific, of The International Congress and Conventions Association, who spoke of the huge potential for more such meetings to be held in India. At the moment, she pointed out, most such meetings taking place in the Asian region are confined to Singapore.

On why India is not being able to reach its potential, Robin Lokerman, President, Asia Pacific and CEO, Institutional Division MCI said that there was a lack of right talent. People with special trade qualifications are needed, he said, adding, “There is surely enough business waiting if the right course is taken.”

The state of Haryana has already shown interest in hosting next year’s ICPB conference. “Haryana has seen significant development of convention centers and we wish to develop the state as one of the best convention places in the country,” said Keshni Anand Arora, Principal Secretary Tourism, Government of Haryana.

Currently, the state has several convention centers, such as Surajkund Convention Centre, which has a capacity to host 800 people, and the convention centre at Tilyar Tourist Complex in Rohtak, which has a capacity to host 1,000 people. “Both convention centres have accommodation facilities,” she added.

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InterGlobe Air Transport gets new president

INTERGLOBE Enterprises, a leading aviation and travel technology company, has announced the appointment of Siddhanta Sharma as President of InterGlobe Air Transport. He will be taking over Ashok Fenn’s current role and responsibility, while Fenn assumes a new role of Corporate Advisor-Travel Services to InterGlobe Enterprises. These changes will be implemented with effect from October 1, 2009.

Siddhanta Sharma will continue to hold his position as Executive Director (Corporate Affairs), InterGlobe Enterprises, along with his new role. He joined InterGlobe Enterprises in August 2008 as Executive Director-Corporate Affairs, with the objective of being their principal interface with Industry and Government authorities across all of InterGlobe’s businesses.

Prior to this, he was the Executive Chairman of SpiceJet Ltd. The next five months will see Ashok and Sid work closely to ensure a seamless leadership transition. Sid will be completely involved on all matters related to IGAT during this period, according to a press release.

Dubai tourism goes on marketing blitz in India AS PART of its continued plan to further strengthen its presence in India, the Department of Tourism and Commerce Marketing, Government of Dubai (DTCM), embarked on a marketing blitz through several high-profile marketing initiatives.

The DTCM participated at one of South Asia’s largest B2B Travel & Tourism Expos — South Asia Travel & Tourism Dubai Tourism representatives at SATTE. Exchange (SATTE) from April 24 to April 25, 2009.

The participation by DTCM Head Office and its representative office in Mumbai was the culmination of an aggressive fourmonth campaign launched in January 2009. The campaign aimed to promote Dubai as a multi-faceted year-round holiday destination that provides safety and security for the family in a worldclass cosmopolitan city.

Co-participating at SATTE 2009, along with DTCM, were leading destination management companies and hoteliers from Dubai, including Accor Hospitality Middle East, Arabian Explorers, Arabianlink Tours, Destinations of the World, Dubai Marine Beach Resort & Spa, Dubai Trade Centre Hotel Apartments, Grand Hyatt Dubai, Intercontinental Hotels Dubai Festival City, Lama Desert Tourism & Cargo, Orient Tours, Sea View Hotel, Southern Sun Hotel, Travco Travel and White Sands Tours & Travel.

Madrid revels in India flavour A PREMIER of Indian musicals in Madrid has sparked unprecedented interest in India among the people of the Spanish capital. The recent edition of ARCO, one of Europe’s major contemporary art fairs, was seeped in Indian flavour as India was the guest country this year.

The growing closeness between India and Madrid is also evident in the evergrowing number of artistic expressions President of India, Pratibha Patil, with Mayor of Madrid, Alberto Ruiz-Gallardón during her visit to with an Indian theme. Spain, leading to further bonding between the two The wide range of countries.

cultural and entertainment options offered by the city are further complemented by several multi-disciplinary shows based on Indian customs and traditions.

The city of Madrid is home to several annual festivals celebrating the customs of this millenary nation, offering Madrilenians a closer look at Indian gastronomy, music, dance, craftwork, fashion and films. Last year, Madrid held the first edition of Bollymadrid, and this year the Indian Film Festival ‘Imagine India’ will be celebrating its eighth edition, having screened 350 films throug the years, with the collaboration of Madrid City Council.

Priceless holidays from Mauritius Tourism OFFERING the best of ‘Mauritius PriceLess Experience’, Mauritius Tourism, together with the national carrier Air Mauritius, is offering an all-inclusive package.

Starting from Rs 40,000 for 6 nights/7 days, from New Delhi and the surrounding feeder cities, the package includes return economy airfare, airport transfers, accommodation in star category hotel with breakfast and dinner.

It also features three-day sightseeing options to North Island (Port Louis, Candaun Water front, Pamplemousses Botanical Gardens) South Island (Trou-aux-cerf, Curepipe, Chamarel and Grand Bassin) and tour to Ile-aux-cerf island.

Alternately, the travellers can also explore a series of optional activities at an additional cost for their customised experiences, which include water activities like undersea walk, diving, subscooter ride, walk-with lions, zipeline rides at sugar estates, quad biking, helicopter rides, golf and spa.

As a duty-free port, Mauritius has a reputation of being a vast shopper’s paradise. Additionally, the destination has top-of-line golf courses and renowned international spas, with a buzzing nightlife and casinos for the keen leisure travellers to explore.

Dubai hosts World Travel Awards THE tourism industry’s highest accolade, ‘The World Travel Awards’, was held in Dubai on May 5, 2009. The event, which has been hailed as the “Oscars of the Travel Industry” by the Wall Street Journal, celebrated the travel and tourism industry’s best practices by recognising achievements from over 100 travel and tourism brands from across the Middle East.

This year’s event was the most hotly contested ever, as leading players addressed the global downturn by raising their standards even higher.

The World Travel Award recognises leading airlines, hotel operators, hotel developers, tourism boards, travel media, destination marketing campaigns, MICE businesses and several other companies that make a difference in the quality of travel and tourism.

Thailand is favourite spa destination TOURISM Authority of Thailand (TAT) New Delhi office has announced that Thailand was awarded the readers choice “My Favourite Spa Destination” in Asia at the AsiaSpa Awards held in Gurgaon on April 8, 2009.

The award was given as a result of a survey conducted by AsiaSpa Magazine and validated by Grant Thornton, one of the world’s top five audit companies.

The awards were organised by AsiaSpa India Magazine, and recognised outstanding spas and related services in several categories.

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SNIPPETS Holiday contest to mark Al Maha’s 10th anniversary EMIRATES Hotels & Resorts has announced a major, firstclass holiday competition in celebration of Al Maha Desert Resort & Spa’s 10th anniversary and the opening of Wolgan Valley Resort & Spa later this year.

This unique opportunity will be open to all Emirates Hotels & Resorts guests who stay for a minimum of three nights at either Al Maha in Dubai or Wolgan Valley in Australia between October 1 and December 31, 2009.

The winner will receive a five-day stay for two people on a full board basis at the sister resort. The prize also includes two First Class return tickets with Emirates airline from anywhere in the world within its global network, private airport transfers, two treatments at the Emirates Hotels & Resorts’ Timeless Spa and two leisure activities per day.

The prize is worth an estimated $30,000 and is valid until October 1, 2010. The winner will also have the option to extend the dream trip to explore more of the United Arab Emirates or Australia.

Tony Williams, Senior Vice President, Resorts & Projects, Emirates Hotels & Resorts, said: “The competition will enable the winner to experience a different world-class conservation-based resort, with all the trappings of a luxury holiday.”

Opened in 1999, Al Maha provides a secluded haven just 45 minutes from Dubai International Airport, where travellers are assured privacy within the tranquility of the stunning Arabian Desert.

Building on Al Maha’s success, and scheduled for ‘soft

Cool treat from Club Renaissance BEAT THE summer heat with cool treats for tired feet and parched skin at Club Renaissance from May 15 to June 15.

Pamper yourself this summer at the Renaissance Mumbai Hotel and Convention Centre with special treatments designed to keep you cool and refreshed.

Energise your day with a wide range of stimulating spa rituals, like a relaxing and cooling body massage with a peppermint oil blend which soothes and calms your senses and helps to relieve the stress and tension from your body and mind.

The Renaissance experience also offers a relaxing feet massage with a cooling peppermint cream to refresh your tired feet and legs. Or one can restore the skin’s natural moisture and nourish overactive dry skin with mango/ watermelon scrub and a relaxing aroma lymph drainage massage.

Al Maha Desert Resort & Spa gets ready to celebrate its 10th anniversary in style.

opening’ in October, Wolgan Valley is located within the heart of the Blue Mountains World Heritage Area.

Occupying just two per cent of a 4,000-acre conservancy reserve, the resort will be Australia’s first luxury conservation-based property and is less than three hours’ drive from Sydney International Airport.

Svelte set to open in Pune, Kolkata TAKING further its successful ‘hotel in mall’ concept, Svelte Hotels and Personal Suites is set to launch two new hotels — in Pune and Kolkata. The two projects are expected to be operational by the end of this year.

Elaborating on the concept, Sajid Mahmmod, Sajid Mahmmod Head of National Sales, Svelte Hotel & Personal Suites and General Manager Delhi property, explained that if a guest staying at the property decides to have a particular cuisine he can very well order the house chef to cook it for him at his apartment. He further said that since the concept is targeted at making the guests’ stay comfortable, constant innovations in services are required.

“Svelte has plans to have properties in Chandigarh (Mulapur), Dehradun and Mysore soon, and is looking at a total room count of 815 rooms in all properties,” he added.

Leela Palace Kempinski Udaipur opens ONCE again reflecting its environmental consciousness, the Leela Kempinski Palace Hotels and Resorts has opened a new hotel in Udaipur.

The Leela Palace Kempinski Udaipur, built on the banks of Lake Pichola in Udaipur, is a 72-room property with eight suites, which not only gives a spectacular view of the lake and the hills surrounding the hotel but also protects it. Tamir Kobrin, General Manager, Leela Palace Kempinski Udaipur said Tamir Kobrin that the hotel management has decided to invest in protection of the lake, which will include regular cleaning of the lake.

He also revealed plans to rope in other hotels in the area, including the HRH group and the Taj, to carry forward this environmental initiative.

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Sarovar Hotels joins hands with IndiGo

Sarovar Hotels and IndiGo have announced a special marketing tie-up for frequent travellers. The terms of the tie-up will benefit both, the guests staying at Sarovar Hotels and frequent Indigo flyers with exclusive privileges.

The arrangement allows guests staying at select Sarovar Hotels across 26 destinations in India to avail an exclusive 10 per cent discount on their next travel booking with IndiGo. Indigo flyers can avail exclusive up to 25 per cent discount on published room tariff, 10 per cent discount on holiday stay packages and 10 per cent Guests at Sarovar Hotels now have more to look for. discount on restaurant dining at select Sarovar properties. Sarovar will extend these exclusive privileges to all frequent IndiGo flyers effective May 10, 2009 till September 30, 2009.

Sarovar Hotels manages a portfolio of 35 hotels across 29 destinations in India and oversees.

Unveils Park Inn at Jaipur: Sarovar Hotels & Resorts has announced the opening of Park Inn in Jaipur. The hotel is strategically located on the Jaisingh highway at a convenient 2 kms distance from the city centre, 13 kms from the airport and just 1 km from the railway station.

Park Inn, Jaipur Jaisingh Highway, offers 70 elegantly furnished guest rooms to suit the needs of both business and leisure travellers. The rooms are equipped with modern amenities, including tea/coffee maker, private mini bar, electronic safe, writing desk, LCD television and wireless internet connectivity. Guest facilities also include room service and express laundry services.

The hotel also offers a choice of dining options. ‘Colors’, the multi-cuisine restaurant, offers Indian, Continental and Chinese

offer 70 guest rooms in addition to restaurants, lounges, meeting rooms, banquet halls and other facilities required for a good threestar hotel with international standards.

The colourful city, popularly referred to as “Rangilu Rajkot” is one of the most popular tourist destinations in Gujarat. It is home to numerous national landmarks like Aji Dam, Ramakrishna Ashram, Swaminarayan Temple, and most importantly is also Gandhiji’s ancestral home. Rajkot has heavy and small scale industries and is also famous for its jewellery market, silk embroidery and movements and mechanisms for watches.

Fortune Select Metropolitan opens in Jaipur IN LINE with its plan to have 100 hotels by the year 2010, the Fortune group recently opened its second property in Jaipur.

The Fortune Select Metropolitan will cater to both leisure and business travellers. The hotel’s 90 rooms include 40 standard rooms, 35 Fortune Club rooms and six suites.

To ensure the best of facilities for the business traveller, the hotel is wi-fi enabled, with a business centre, conferencing facilities and two meeting rooms along with a banquet hall for parties. Zodiac, the 24-hour coffee shop, and Nostradamus, the bar and lounge, will suit both leisure and business travellers.

Environmental month at Courtyard by Marriott

Sarovar’s Park Inn at Jaipur is strategically located.

cuisine, while ‘Aqua Grill’, the rooftop restaurant, serves Indian, bar-be-que and grills, complemented by the panoramic views of the Aravalli hills. The rooftop lounge, ‘Riva’, allows guests delightful views of the cityscape with a selection of Continental cuisine and finger food on the menu.

Signs Sarovar Portico in Rajkot: Sarovar Hotels & Resorts has announced the signing of a Sarovar Portico in Rajkot with Marasa Hospitality Private Limited. This hotel will be Sarovar Hotel’s second property in Gujarat after Sarovar Portico Ahmedabad, and will add to Sarovar Hotels’ domestic portfolio of 35 hotels in India.

The proposed hotel, scheduled to open by 2011, will be located on Dr Rajendra Prasad Road, Limda Chowk (approximately 5.5 kms from the Rajkot airport). The hotel will

IN LINE with Marriott International Awareness Month, Courtyard by Marriott Hotel in Chennai launched their yearly activity ‘Spirit to preserve’ initiative for the month during April this year. The initiative was marked by a series of events and programmes aimed at engaging staff participation, for providing education around key environmental issues.

Crowning Glory: Quan Spa at the JW Marriott Mumbai has been recognised with two prestigious titles — ‘Best Hotel Spa in India’ and ‘Best Spa Therapist’ at the recently held Pevonia AsiaSpa India Awards 2009. The spa has been conferred with the Best Hotel Spa in India for the second consecutive year, a validation of the spa’s commitment towards creativity, originality and excellence.

The award-winning Quan Spa, Chinese for ‘the source of pure water’, incorporates the best of Oriental wisdom. The spa draws from age-old wisdom when mankind harnessed the energy of water for his well-being and benefit. This detail in design, the experience, and the confluence of Indian culture with Chinese wisdom Quan Spa at JW Marriot Mumbai gives Quan the wining edge, making it is a treat for the senses. a name synonymous with luxury and bliss.

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BACK PAGE nation of bleed air. Modern jet engines normally “bleed” hot, compressed air from the engine and put it to work on useful tasks such as de-icing the wings, running pneumatic actuators and pressurising the cabin. On the 787, which flies around with 1.5 megawatts of power, the tasks that required bleed air can now be handled by electrically driven compressors.

The bleedless engine eliminates a long list of pneumatic components from the plane, which has both weight and maintenance implications.

For the first time in commercial jet history, both engine types will use the same standard interface with the airplane, allowing any 787 twin jet to be fitted with either engine at any point in time. Engine interchangeability makes the 787 a flexible asset that can easily be moved among carriers, an attractive feature for financiers, leasing c companies and airlines.

The 787 is a family of three airplanes, all of which will use the same engine type.

The baseline version will carry 217 passengers in threeclasses of seating with a range of up to 8,500 nautical miles (15,700 kilometers). The shorter-range 787 will carry 289 passengers in two-class seating on ranges up to 3,500 b nautical miles (6,500 kilometers). The stretch version of REVVING THE ENGINES: a. Dreamliner engine starts; b.The smoke gets the 787 will carry 257 passenthicker; and c. The smoke dissipates. It usually happens whenever an gers in three classes with a engine is started the first time, the oils and the casings spill out smoke as range of 8,300 nautical miles the machine moves and the systems fall in place. Nothing unusual.In fact, perfectly normal.

(15,400 kilometers).

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ngineers tested the R-R Trent 1000 engines on the wings of the Boeing 787 Dreamliner aircraft for the first time on May 21. The successful test, at Boeing’s plant at Everett near Seattle in the US, paved the way for the aircraft to make its inaugural flight after months of delays. The first four 787s will be powered by Trent 1000 engine. During initial engine runs, the engines are started and operated at various power settings to ensure all systems perform as expected.

So what’s special about these engines?

For starters, Boeing has selected two engine types, the General Electric GENX and Rolls-Royce Trent 1000, for the Dreamliner.

The biggest enginerelated change is the elimi-

a

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RNI NO. DELENG/2006/16897 Posting Dt. 3-4/06/09 Reg. No. DL(E) 20/5294/2009-11