Ch march 2006 by Newsline

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BUDGET BLUES: IF YOU ARE ‘J’, YOU ARE TAXED!

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March 2006

Rs 60

SPEED

After a record breaking three years, messers Gopinath and Brady are plotting Air Deccan’s IPO and a 100-aircraft future

CERTIFYING AIRPORTS EMIRATES VS ETIHAD VS QANTAS VS SIA

THE ASHOK PAHWA INTERVIEW GOHAIN IS THE BOSS PL US ALL OUR REGUL AR FEATURES

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EDITOR’S NOTE

It’s got nothing to do with the agenda

ndian Airlines Chairman and Managing Director Vishwapati Trivedi has written to the Ministry of Civil Aviation to make it plain that there is plenty that is wrong with the Jet-Sahara deal. He speaks particularly about the allotment of slots across major airports in the country, of airport resources going to one player at the cost of others and clearly believes that the deal is more or less a ‘monopolistic’ situation. With Sahara effectively out of the picture, what Mr Trivedi is doing is questioning the rise and rise and rise of Jet Airways and the wholesome backing that it receives from the Civil Aviation Ministry and Minister Praful Patel. Meanwhile, DGCA Director General Satinder Singh (he retires by the end of this month) has written a long note to the Ministry of Civil Aviation, stating clearly that while the Air Sahara assets can easily be transferred to Jet on the completion of legal requirements and statutory formalities, it may not be the same as far as key elements, like parking slots, hangars, etc., are concerned. It is an issue that the ministry will have to take a view on, says Mr Singh. In other words, he has made it clear that he won’t lend his shoulder anymore. Some weeks back, Vijay Mallya raised the same issues and, in fact, went to the extent of forming an alliance with other new adventurers, like Rahul Bhatia, Jeh Wadia and Captain Gopinath (Gopi later left the group), and openly questioned what they described was a dangerous monopolistic situation. In fact, Mallya raised the same question that Trivedi is now raising-of slots and valuable airport assets tilting one way, the way of Naresh Goyal. On the other hand, the Department of Company Affairs has been unequivocal in stating that the deal is perfectly in order and there is no need for any investigation. When it comes from no less a person than the Minister for Company Affairs Prem Chand Gupta, CRUISING HEIGHTS March 2006

then one has to take it that he is aware of all the nuances. Civil Aviation Minister Praful Patel said that there was nothing ‘monopolistic’ about the deal and wasn’t Indian Airlines a monopoly for decades?. He described it as the natural evolution of the aviation sector. He is dead right. Market forces should be allowed to thrash out issues in the marketplace. But there are issues that cannot be thrashed out in the marketplace—the complex issue of government assets on lease to a company for its day-to-day operations. Can it pass these on to another entity simply because it stands sold or will there be a policy formulation on these issues? As Trivedi says, “(Sahara)cannot sell something it does not own.” With over two-thirds of the industry now questioning the wisdom of letting things go by default, it’s time the Civil Aviation Ministry got down to the task of formulating a transparent and equitable framework of allotting assets. One of the reasons why the airport privatisation became controversial was because far too many changes were made in the process after bids had been called in. The same drift is now evident in dealing with Jet’s acquisition of Sahara. In fact, there should be a clear-cut policy framework that should automatically be enforced in case of any further shakeouts (analysts say more than one is likely in the next two years).Of course,Jet’s requirements must be taken into account. But let the process be in the open. It’s all very well to question the motive of those who have written these letters. All right, for a moment let us grant that both Trivedi’s and Singh’s communication is ‘agenda’ driven, with the agenda being different from what is evident in their letters. Even if one concedes this point, how does it take away from the core issue they have raised in the letters? Does one gloss over issues simply because one isn’t sure of the letter writer’s agenda? Does it make for good policy?

Off the cuff

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Sauce for the goose... Two of India’s fastest growing international airports in the country are Pune and Nagpur. The other day Qatar Air’s Akbar Al Bakar announced that Nagpur was ‘hot’ and Qatar would soon be starting a service from that city. Air Arabia has already started one and don’t be surprised if Emirates, Indian and Air India all fall in line. Pune, too, has services to the Gulf and Bangkok, thanks to Indian and Air India. After all it is Maratha strongman Sharad Pawar’s hometown and a growing industrial hub, with a reputation that is growing day by day. And for those of you who didn’t know, Nagpur is next to Gondia, which is Civil Aviation Minister Praful Patel’s hometown. When you tell Praful that he is being partial to his boss and, of course, to himself at the cost of Indian aviation, he laughs you off. One must grant it to him: he isn’t irritated by criticism and is willing to defend himself on all issues. On the Nagpur flights, he says, Air Arabia is running to a hundred per cent load factor, and it won’t be long before it starts another flight. He promises that it will be the same on the Doha route. Perhaps it will be the same to Bangkok and elsewhere. All right, granted that it is his job to open up the country through a judicious process of new flights and new destinations. But why limit it only to the Gulf carriers or only to the public sector carriers. Where is the equitable playing field? If Emirates and Qatar can come in, why can’t Kingfisher and Air Deccan fly overseas? Similarly, why should Air India and Air Sahara not fly from Pune, Nagpur and Jaipur to countries in the Gulf, Far East and elsewhere? Why should Air India and Indian be the only ones to stretch their resources? Open up the country by all means. But let the inbound and outbound be equitable.

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contents ZOOMING AHEAD p24

In three years, Air Deccan has set a scorching pace becoming the fastest growing airline in the world. What’s the magic of this low cost carrier’s success? An in-depth analysis.

LICENCED

p34

Mumbai and Delhi airports have been licensed in a controversial move that’s angered the Airport Authority of India. A special report.

BUDGET BLUES

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It’s been a mixed Budget for civil aviation and tourism. Industry experts voice their opinion. CRUISING HEIGHTS March 2006

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

OFF THE RECORD

The centenary bash at Gondia

CRUISING HEIGHTS K. SRINIVASAN Editor

SNIPPETS

R. KRISHNAN

p42

Consulting Editor

Kenya’s Seven Safaris

ANAMIKA VERMA Editorial Coordinator

Aviation Digest p32

DUSHYANT PARASHAR Creative Director

Spaceport in Singapore

BHART BHARDWAJ Art Director

RAJESH KUMAR BHOLA Designer

RAJIV KUMAR SINGH Gen. Manager (Admn.)

Tourism Digest p38 Highway tourism from Haryana

INTERVIEW p40 Back page “We have to build on the momentum,” Ashok Pahwa, WTTC Secretary General, on the climbing tourism numbers

p48

Supping with George Bush

Editorial & Marketing office: D-11, Nizamuddin (East) New Delhi-110 014 Tel.: 41825251/50, Fax: 41825250 All information in CRUISING HEIGHTS is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Published and edited by K. Srinivasan for and on behalf of Newsline Publications Pvt Ltd. 4C Pocket IV Mayur Vihar Phase 1, Delhi 110091 and printed by K. Srinivasan at Kaveri Print Process, 114, Patparganj Industrial Area, Delhi. Vol 1 No 1

CRUISING HEIGHTS March 2006

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PERISCOPE

LETTERS TO EDITOR

The Special Report (Jet, Set, Go! February 2006) was a very interesting piece. An association of start-up carriers seems to be an interesting development and it goes on to show that the aviation industry is quite serious about safeguarding its interests. For now we can only wait and watch Mallya’s and Gopinath’s moves. Surinder Kohli, New Delhi

I read with particular interest you new column, Yeh Hai Duniya. It provided quite a few hilarious reads, especially the piece on the squabbling couple at the Nedumbassery airport, in Kerala. Pilot Disturbs… was also interesting. The editorial team is doing a fine job. Shabana Gupta, Mumbai

It is correct that Vishwapati Trivedi’s appointment to head Indian comes at a time when great things are happening there. I hope that the national carrier will thrive under his leadership and will go places with its new aircraft and fresh looks. Manmohan Patel, Vadodara

Striking air “The

strike is not over. Now we will strike by words and action much like a football player.” DIPANKAR MUKHERJEE CPM MP on the airport privatisation issue

Oranges ripen “The

airline will launch the flight with an Airbus A-319 aircraft that will offer 110 seats in each direction. The exact date for the launch of the service is yet to be firmed up. We feel Nagpur has huge potential and is underserved by both domestic and international airlines.” AKBAR AL BAKAR, CEO, Qatar Airways, on the new flight to Nagpur

My own wings “We

will be airborne anytime between July 1 and August 5 this year. We have decided to start the airline with purchased aircraft instead of leased aircraft, as was planned earlier.” BRUCE ASHBY President and CEO, InDigo

Fingers crossed “We do not foresee any problems in the deal being approved. It is the first time that such a deal is taking place here but around the world they happen all the time.” NARESH GOYAL Chairman, Jet Airways, on the Air Sahara acquisition

The article on Captain Ayesha Rabia Naveed (Back Page, February 2006) goes on to prove that women are equally good on both sides of the cockpit door. Vandana Zutshi, on email All correspondence may be addressed to Editor, D-11, Nizamuddin East (basement) New Delhi - 110 014 OR mail at newslinepublications@rediffmail.com

Vroooom... “We

are excited at the prospect of the fuel efficiency and performance of the GE engines. Our GE90-115B engines have performed extremely well since entering service last year, and we anticipate the GEnx engine to experience similar results when it enters service.” V. THULASIDAS Chairman and Managing Director, Air India, on the airline’s decision to plump for GE

CRUISING HEIGHTS March 2006

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COLD STATISTICS

It’s Boom Time in India There has been an increase of 12.6 per cent in the number of foreign visitors visiting India in the first two months of this year. The figure this year stood at 8,73,078, while in the corresponding period last year it was 7,75,341. The figure was pegged at 6,69,042 in 2004. Foreign exchange earnings, in rupees, also recorded a growth of 14.7 per cent during January and February 2006. The figure this year stood at Rs 5358.05 crore, while in the corresponding period last year it was Rs 4669.38 crore. The corresponding period in 2004 had earned Rs 4134.29 crore.

LOOKING GLASS

When you travel economy, you pay for the service

When you travel business, you pay service tax

Illustrations by Zahid Ali

You said it “We have communicated the purchase decision to

Airbus. The airline will place firm orders for 14 aircraft, while we will exercise options on another six.” U.K. BOSE CEO, Jagson on their plans

On the job “We are preparing a base paper on Alliance Air and it will be ready within a month. It will be sent to the government before a final decision is taken on Alliance Air.” DR VISHWAPATI TRIVEDI CMD, Indian, on the future of the subsidiary

CRUISING HEIGHTS March 2006

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OFF THE RECORD

SINGAPORE

Dash

“Civil Aviation Minister Praful Patel set a record of sorts when he flow in end and out of Singapore in less than 24 hours.”

t must have been the quickest trip to Singapore and back by a Mantri in recent times. But that’s what Civil Aviation Minister Praful Patel did recently when he flew all night to land at Singapore early in the morning. Guest of honour at an IATA function, which coincided with the Singapore Air Show, Praful couldn’t extricate himself from this commitment and decided that he better spend more time in the air than on the ground to fulfil his commitment to Giovanni Bisignani. In effect, he landed in the morning, attended the luncheon meeting and returned straight to the airport to get back to Delhi the same night. As he explained, “It was a commitment to IATA and I didn’t wish to cancel that; with Parliament in session, there was so much work here that I had no option but to return immediately.” But what he said there about Indian and Air India sure made headlines back home. There was talk of merger of the two public sector carriers when their IPOs are just round the corner. No surprise, Mantriji said he had been misquoted on that one. Now how many times have we heard that before?

Bzz…zzz.zzz ■ That the tourism ministry is looking at introducing a new policy in

collaboration with state governments to provide land at cheaper rates for hotels. The formula, according to sources, is being worked out and is likely to be announced in the next few weeks. That the long-awaited Civil Aviation policy may finally see the light of day later this month, if Rajiv Gandhi Bhavan sources are to be believed. Mantriji and his team are giving finishing touches to the document, and it is just a matter of weeks before it is unveiled. The question is would he like to place it in Parliament first or release it during the intersession break, customary during the Budget session.

CRUISING HEIGHTS March 2006

Sahara Woes THE AIR Sahara CRJ fleet is believed to have been grounded by the DGCA because of alarming stress on the landing gear. In any case the fleet, acquired at a whopping lease rent, is likely to be returned once the Jet-Air Sahara buyout is complete. Jet has a turboprop ATR fleet and has no use for the Canadian CRJs. Many of the CRJ pilots have already migrated to other airlines and it makes no sense to continue with them. The DGCA may have in fact done them a good turn by its directive. Interestingly, of the seven aircraft in the fleet, only one is operational and the rest are grounded. Three of them for major checks and two for stress on the landing gear. One aircraft has been grounded at Goa airport for repairs for over a year, but no action has been taken by the management to get it airworthy. Considering the hefty lease rent it pays, it is indeed baffling that a cash-deficit outfit like Air Sahara would allow this to happen.

■ That the long awaited Civil Aviation policy may finally see the light of day later this month if Rajiv Gandhi Bhawan sources are to be believed. Mantriji and his team are giving finishing touches to the document and it is just a matter of weeks before it is unveiled. The question is would he like to place it in Parliament first or release it during the intersession break customary during the budget session.

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Green signal for Gohain

ANU GOHAIN, the self-effacing Additional Director General at the Directorate General of Civil Aviation (DGCA), is all set to take over when Satinder Singh retires this month end. For all practical purposes, Gohain is the man in command, the UPSC has cleared his appointment and Mantriji is believed to have signed his file. There is now the formality of the matter moving up to the ACC for its formal endorsement of his candidature. He will have his plate full, with the DGCA restructuring top on the agendas, at Rajiv Gandhi Bhavan. In fact a complete overhaul of the DGCA is top of the minister’s

list of priorities for 2006, which he sees as a year of consolidation for civil aviation. The last time one saw Gohain in full public view-he is awfully media shy and in his own estimate prefers to work behind the scenes-was during the January fog mayhem at IGI airport when scores of flights were grounded and passengers didn’t know what to do. Gohain, on the explicit orders of the ministry, took charge in a desperate bid to clear the backlog and cool frayed tempers. At various times, angry passengers thought he was from one of the carriers and virtually geharoed him. Thankfully, he returned unscathed to his perch at the DGCA headquarters opposite Safdarjung Airport.

Taking CHARGE F

or a brief week, India’s Commercial Director (CD), Anil Goel, was in command at Airlines House. It so happened that Chairman Vishwapati Trivedi and Deputy Manet Paes were away in Toulouse for meetings at the Airbus headquarters. Sushma Chawla was on long leave, which meant that Goel was the senior most official at headquarters and holding fort while the boss was away. In case there is no change of policy on super annuation, this will be Goel’s penultimate month in office. But there are reports that the ministry is firming up a policy that could help retain some of the best and brightest people in the two public sector carriers from moving to greener pastures in the private sector. Meanwhile, Trivedi’s trip to Paris and onwards to the Airbus headquarters helped him meet up with some of the key honchos of the gargantuan

European manufacturer. He also spent a couple of days in Paris before boarding his

■ A new Joint Secretary arrives to

take the place of Naseem Zaidi at the civil aviation Ministry.Zaidi is now India’s representative at International Civil Aviation Authority (ICAO). This 1982 batch Madhya Pradesh cadre officer has been hand picked from several names sent to Praful Patel. At this moment the process of obtaining ACC (appointments Committee of the Cabinet) approval is in progress.

flight home. Last reports suggest that the airline has finalised the galleys of the new aircraft but is still to take a call on the seats. That will, of course, depend on the in-flight entertainment system that it will order for these planes. But that isn’t the only decision pending. The corporation has to also take a call on the wide-bodied aircraft lease, which is awaiting scrutiny and approval by the top brass. Indian’s global plans will fructify only when they take a call on the half-a-dozen responses they have received to their tender. Meanwhile a new A 319 will join thefleet next month to join the Indian fleet and severalnew routes are also likely to be firmed up by then.

Will India be ready for ticket less travel when the time arrives next year. Almost 80 percent of the tickets are still sold traditionally and there seems no changeover mood amongst most agents. Most airlines are now looking at a huge number of seminars and courses for staffers to get them ion board for the changeover. At least two competitors are thinking of calling in Capt Gopinath of Air Deccan to advise their staff on etickets. He should know. All his tickets are 100 percent electronic.

■

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Centenary celebrations VICE-PRESIDENT Bhairon Singh Shekhawat was there as were Sharad Pawar, Vilasrao Deshmukh, bigtime Congress and NCP leaders, Vijay Mallya, Venugopal Dhoot, Mukesh Ambani, Shah Rukh Khan, Sunjay Dutt, Suneil Shetty, Shilpa Shetty, Preity Zinta, Akshay Kumar, Hema Malini and a host of other Bollywood heavyweights. Well, they all flew in their aircraft-big, small and official-to attend the centenary celebrations of Manoharbhai Patel. For those of you who aren’t in the loop, the late Manoharbhai happens to be Civil Aviation Minister Praful Patel’s father. A bidi king and a top politician of the undivided Bhandara district (now Gondia), Manoharbhai set up the Gondia Education Society that runs a slew of institutions from primary schools to engineering colleges in the region. There were a huge number of functions during the three days of the celebrations, with the film industry heavyweights putting up two shows in two groups at Bhandara and Gondia. There were several prize distribution functions and the heavyweights from the world of business and finance participated in those events. Politicians, of course, came to pay their tributes to the most famous son of Gondia. Well. It’s wonderful to see a son remembering his father with gratitude. But, Mantriji, thanks are also due to the Airport Authority that spruced up the tiny airport at Gondia with an extended and re-carpeted strip and night landing facilities that helped many of the little jalopies land effortlessly. And thanks to the DGCA for giving the green signal for the flights to land.

CLOSE CALL IT WAS the big event this year for the World Travel and Tourism Council. In fact, the first big event after Messers Kakkar (ex-Thomas Cook) and Ashok Pahwa (ex-DG Tourism) sat at the helm of the WTTC. No, it wasn’t a retreat, but a get-together with some of the big guns of the industry at the Oberoi, Delhi, to interact and share some thoughts. Originally scheduled for January 30 (till someone told that it was Martyr’s Day-the day Gandhiji died. In the meanwhile, on January 29, Prime Minister Manmohan Singh decided to effect a reshuffle, in which Renuka Chowdhury moved from Tourism to Women’s Welfare and in came Ambika Soni as the new Tourism Minister. So the cards had to be redone, the dates changed and the new minister accommodated. So out went the thirtieth, as did the 31st because it was a Tuesday and in deference to non-vegetarians and those who like their glass of wine the evening concluded successfully on Wednesday, February One. Praful and Ambika attended and everyone had a great time.

CRUISING HEIGHTS March 2006

Udaipur drama! “Actually the Alliance 737-200 was on a ferry flight across the country” WHY DID it have to happen when the Minister for Civil Aviation was in Udaipur? Well, on hindsight you can ask that question, but the fact is that it did and he was fuming. Well, to cut a long story short, what happened was that Alliance Air’s flight to the city was delayed by several hours due to unavoidable circumstances. Actually the Alliance 737-200 was on a ferry flight across the country, from Delhi to Mumbai, with a spare engine for one of its 320s grounded in that city. Indian felt that it made more sense to get the Airbus flying and pulled out the Boeing (actually this particular aircraft has a cabin door that is wider than the others and can accommodate it without having to take it in a broken down condition). Most passengers were informed and taken for lunch, barring four or five, who spotted Mantriji and decided to tell him what they thought of his performance and that of Alliance’s in front of a sizeable VIP gathering, which had assembled for the foundation stone laying ceremony of the new airport building. He, in turn, took it on the Indian management, and the DGCA in a lightning-speed reaction ordered an enquiry. Last heard, DGCA had issued a warning to Alliance on flying to Bangalore without informing it (Alliance claims it was a ferry flight and there was no need to inform the DGCA) and was threatening more action. Well, the moral of the story is simple, Mantriji: your office should inform all concerned when you travel outside Delhi. Also, touch your heart and tell us what should get priority: An Airbus A320 or an Alliance Air flight? Well, you can say that IA staffers should have known when you departed Delhi. But, Mantriji, you left by a private charter. How many would notice you getting into the little plane after being driven to the tarmac?

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NEWS DIGEST

Open Sesame

Al Baker’s Thoughts

ATAR AIRWAYS Chief Executive Officer, Akbar Al Baker feels the Indian aviation industry may see a virtual convulsion as many new players enter the domestic skies. On a recent visit to India, he told aviation professionals in Mumbai, “What we have seen happening in India is a radical transformation of the skies from a monopolistic environment into a competitive market with a flurry of activities. While it was catalysing the economic growth, the Indian aviation scene seems to be mirroring developments in North America and Europe where consolidation had become the buzzword. Mergers, acquisitions, takeovers, you name it; this has been happening in North America and Europe and is now beginning to take place in India. I believe consolidation is inevitably an issue that will dominate the global aviation industry over the next few years. This is an industry saturated with players—some of whom jump onto the airline industry bandwagon or are real stalwarts keen to build a realistic business. Airlines with clever marketing tactics, powerful passenger loyalty schemes and a strong sales network will be the ones who will survive in the competitive battlefield.” Established airlines, national flag carriers and private operators will be forced to change their business models to compete more effectively with new entrants such as low cost airlines. “Government owned airlines have started to restructure through privatisation or change their business practices 180 degrees to remain competitive. I believe that in many parts of the world, airlines will have tailor made services on specific routes.” Akbar Al Baker further said, “In my region of the Gulf, we have not really seen consolidation because the market is not saturated with airlines. Yet we are in a market where demand for air travel far outstrips supply.” The industry will continue to see an influx of ultra long haul aircraft that will further open up a new era in air travel. Non-stop flights between Asia and the US are already possible. Additional non-stop capacity is being introduced on a number of points between India and Europe that would have a deterrent effect on the business of Gulf airlines such as Qatar Airways. “We at Qatar Airways find these changes very encouraging. They make us feel comfortable because in a new world, we have borders for air travel being relaxed and opened up to more competition which is good for travelling public. The future of the aviation industry looks rosy—very rosy indeed,” said Baker.

MAURITIUS MAY soon open its skies to Indian carriers—state owned and private. Mauritian Deputy Prime Minister Xavier Luc Duval indicated this during his recent visit to India that took him to Mumbai and Delhi. His talk of ‘near possibility’ of this happening has gladdened many well-known airline faces. “The country’s strategic geographical location advantage for the growing Indian outbound travelling traffic would be very soon passed to the Indian Government. This would pave the way for Indian public and private airlines to use Mauritius as a gateway for onward journey.” From April, Air Mauritius plans to not only increase the number of flights that it operates to India but also operate with bigger aircraft. It is proposing to deploy Airbus A340 aircraft on the Indian route. This will more than double the number of seats being offered on the route. The existing aircraft is able to carry only about 170 passengers. Air Mauritius plans to operate daily flights to Mumbai and increase its frequency to Delhi. To boost the travel by Indians to Mauritius, the Mauritian government is exploring the possibility of allowing Indian tourists to use Indian rupee when they visit the scenic island. The central banks of the two countries are examining

the issue. The idea, according to Xavier Duval, is that tourists do not have to constantly convert foreign exchange they are carrying on their visits. The proposal if accepted will be applicable only to tourists coming to Mauritius and not other Indians. In 2005, 30,000 Indians visited Mauritius and this figure will increase by 10 per cent in 2006.

ASEAN Skies! NEARLY 870 million passengers will be travelling, within and from Asia Pacific, by the year 2014 (just another seven years from now) making the region an important area in the global air transportation sector, according to Singapore Transport Minister Yeo Cheow Tong. Making this announcement at the six-day Asian Aerospace exhibition and IATA summit that got underway on February 21, 2006, in Singapore, he said by 2022, eight of the top 10 airports using large aircraft would be in Asia and nine of the top 10 big aircraft routes would serve Asia. Within Asia, rapidly developing aviation markets, such as China and India, will change the face of global aviation. Under the ASEAN Roadmap for integration of air travel sector, member nations of ASEAN have committed to exchanging unlimited third and fourth freedom passenger services between all member capital cities by December 2008 and unlimited third, fourth and fifth freedom passenger services between them by December 2010.

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Merger blues OUR OWN Civil Aviation Minister Praful Patel says state-owned Indian and Air India might be merged after their initial public offerings are completed. Let’s wait for the IPOs to enter the market. Considering the glitches involved, neither of the two—IA or AI—are likely to hit the market before the close of this fiscal on March 31, 2006, as against the earlier announcements. Even if they are to come out with their IPOs in the new fiscal beginning April 2006, the question is Should We At All Talk About Merger When We Don’t Know The Price or the USP Of The Two Airlines To Attract Investors Particularly Smaller Ones. Obviously buying a new fleet is no more a great attraction as the private airlines have already bought and inducted a large number of new jets and turboprops in 2005 compared to what Indian or Air India are planning to induct in a phased manner. Jet has 20 on order immediately, Air Deccan 10, Kingfisher 30 ATRs plus 10 A320s, Spice with 10 now and 10 later of Boeing 737-800s. As the years go, those among the private airlines, which have not completed the stipulated minimum five years and the requisite ASKMs, to be eligible for international forays will also go international. Perhaps Praful was right in thinking “United We Stand Divided We Fall”. But the way things are developing at least one of the two could fall as its market share shrinks.

SIAN ECONOMIES led by India and China are expected to fuel demand for the world’s largest commercial aircraft, the A380. From the start of the A380 programme, the fastest growth rates for air traffic in terms of passenger and freight has been Asia. According to Airbus Industrie Regional Communication representative in Singapore, Anthony Phillips, as per the regional outlook for 2006 suggests that there will be significant growth in India and China. The expectation is two new customers every year for A380. It would not be unreasonable to say that at least one new customer could come from the Asia-Pacific region, in particular from high growth markets like China and India. Seven of the 16 current customers for A380 are in the region— Southern Airlines, Kingfisher, Korean Airlines, Malaysia Airlines, Qantas, Singapore Airlines and Thai Airways, which together account for 49 of the 159 aircraft now on order. Meanwhile, an A380 will arrive in China during Zhuhai Airshow slated to take place in November 2006. The aircraft will also fly to Beijing, Shanghai and Guangzhou. China’s Southern Airlines, a major Chinese airliner has ordered five A380 aircraft, two of which will be delivered before 2008 and will be put in service prior to Beijing Olympics that year. China is one of the fastest growing markets for Airbus that is planning to start an assembly plant for its A320. As on date Airbus has only two assembly lines—one in France and the other in Germany. China, if and when it happens, will be the third and first outside Europe. Meanwhile the Airbus’ A380 (aircraft No MSN004) has returned from Iqaluit, Canada, where it successfully completed the cold weather test campaign, and then flew for the Asian Aerospace 2006 in Singapore. MSN004, the second A380 to fly, spent five days in conditions of up to minus 30 degrees Celsius to prove full

functionality of the systems under extreme weather conditions. Such trials included powering up the aircraft, the engines and hydraulic systems after a full 12-hour period at such low temperatures. The batteries were taken away overnight and kept in a warm area. The next morning, batteries were reinstalled onboard the aircraft for the tests. On the way back from Iqaluit, the A380 also carried out polar navigation tests. To date two aircraft, MSN001 and MSN004, are equipped with heavy test instrumentation. The third aircraft, MSN002, is receiving cabin installation in Hamburg. It will soon be joined by the fourth aircraft, MSN007, which will also undergo cabin and noise tests, as well as performing the Early Long Flights and later the Route Proving, together with further airport compatibility checks. The hot weather campaign is planned to take place in Africa this summer where the aircraft will be faced with a temperature of up to 40° Celsius. The three Rolls Royce powered A380s that have taken to the air have accumulated over 250 flights and close to 900 flight hours, yielding good results. The Engine Alliance GP7200 powered A380 MSN009 will join the flight test programme as part of the certification campaign by mid-2006. The full A380 test programme represents more than 2,500 flight hours. Upon completion of the certification process, the world’s largest commercial airliner will be delivered to the first operator, Singapore Airlines, in late 2006. The A380 is already a proven success story, with 159 orders from 16 customers. The company has also announced that in response to market demand for its newer aircraft ranges Airbus will progressively phase out the A300/A310 final assembly. This follows more than 35 years of successful marketing and production of Airbus’ original aircraft programme. The last A300-600 aircraft on order will be handed over in July 2007.

Asia tops in A 380

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NEWS DIGEST

IOL bags BIAL contract AN INDIAN Oil-led consortium has bagged the contract to build an aviation fuel facility at the new Bangalore International Airport. An open access model will be implemented for the first time in India. The consortium partners are Indian Oil, the Hamburg-based independent fuel supplier Skytanking Holding and IOC’s tanking joint venture Indian Oil Tanking. Five Indian companies with foreign consortium partners had bid for the closely contested

contract. The bidders were ONGC with Total SA of France, BPCL with Shell, HPCL with US company Chevron and Reliance with Bechtel. The open access model allows all other qualified fuel suppliers to use the Indian Oil facility against a fixed throughput fee and also allows airlines to get the best fuel prices available in the market. An agreement was signed between Indian Oil and BIAL. “Fuel prices have become one of the major cost factors of an airline operation. Airports have to offer airlines competitive fuel price structures in order to be an attractive destination for them. The implementation of a truly open access model is therefore of strategic importance to BIAL,” said Albert Brunner, CEO of BIAL. The investment of the consortium is Rs 90 crore and the duration of the contract is 20 years.

Tourism Contributes 38.6 million jobs WITH THE growing recognition of tourism as a source of employment and income creator in the country, improved understanding of what tourism is, its role in the economy and its relationship to other parts of the economy is important. The Tourism Satellite Account (TSA) is a new framework recently adopted by the United Nations Statistical Commission that provides an important platform for better understanding of the role of tourism in the economy. The Department of Tourism had, with this objective in mind, commissioned a study for development of the first TSA for India through National Council of Applied Economic Research (NCAER). An advisory Committee, chaired by Secretary (Tourism), with representatives of Central Statistical Organisation, Ministry of Statistics & PI, and Directorate General of Employment & Training, Ministry of Labour, Planning Commission and Reserve Bank of India, was constituted to advise the NCAER on various aspects of the study. After in-depth study by NCAER and deliberation by Advisory Committee and its sub-committee, the TSA report has been finalised. Major findings of the study are: Direct contribution of tourism to the GDP for the year 2002-03 is 2.78 per cent and when indirect effects are considered the share of tourism to GDP goes up to 5.83 per cent. Total direct employment in the tourism sector for the year 2002-03 in the country is 21.54 million jobs and when indirect jobs are also added, the employment figure comes to 38.6 million. The share of tourism in total number of jobs in India comes to 8.27 per cent. For every 100 jobs created directly in the tourism sector in India, 80 indirect jobs are created. Comparing the direct contribution of tourism to GDP of major tourist receiving countries in the world India’s figure of 2.8 per cent compares fairly well with developed nations like Canada (2.4 per cent), USA (2.2 per cent) and Japan (2.2 per cent). However, it is less when compared to countries like Spain (11.2 per cent), Australia (4.5 per cent), Switzerland (3.4 per cent) and Sweden (3.2 per cent). The direct contribution of tourism in total employment in India is 4.6 per cent. It is more than what has been estimated for countries like New Zealand (4.1 per cent), USA (3.5 per cent), Canada (3.5 per cent) and Japan (2.9 per cent). However, it is lower compared to Australia’s 5.4 per cent and Switzerland’s 5.2 per cent. Following the TSA statistical model, the corresponding estimates for 2003-04 are as follows: Contribution to GDP (5.9 per cent) Tourism sector’s share in employment (8.78 per cent) Additional jobs created in tourism sector in 2003-04 (3.2 million) NCJ/DT Others

Paramount expands CHENNAI-BASED Paramount Airways is planning to sign a Rs 2,250 crore or approximately US $520 million purchase deal with Brazilian aircraft manufacturer Embraer for 15 jets, Paramount Airways Managing Director M. Thiagarajan has said. Ten of the Jets—Embraer 195—will offer 15 first class and 63 business class seats. The remaining five would be Embraer 175 version with 11 first class and 64 business class seats. Paramount will soon, following the addition of one more Embraer, connect Bangalore, Hyderabad and Kochi taking the total offer to 24 services. Currently it offers daily service to Coimbatore and Delhi. Earlier, the airline had placed an order for five Embraer aircraft, costing Rs 840 crore. Of this, it has taken delivery of one aircraft.

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Bilateral news India and Italy: The two countries have agreed to increase the number of air services between the two countries but also allow more than one airline from each country to operate flights. This has been firmed up in the Air Services Agreement between the two countries which allows designated airlines to operate 24 flights a week in each direction including a three times a week flight on the Rome-Delhi or return sectors. Besides the designated airlines from Italy have been allowed to operate a daily flight from and to Kolkata. In addition the Italian airlines have been allowed to take passengers from Mumbai to either Bangkok or Yangon. Similarly, Indian carriers have been permitted to pick up passengers from Italy and take them to Vienna, Geneva, Zurich, Prague, Paris, Brussels, Frankfurt, Dusseldorf, Copenhagen, London, Montreal, Ottawa, Vancouver, Boston, New York, Chicago, San Francisco and Los Angeles. India and Thailand: The new Air Services Agreement allows for increased frequency between the two countries. Thai government has also allowed more Indian carriers to fly into Thailand.Also the Thais have got a right to fly to the Andamans with the reciprocal destination being Phuket.Private Thai carriers are expected to come to India in a big way by 2008.

More planes for Spice SPICEJET WHICH has ordered 20 Boeing 737-800s received its first owned next generation Boeing 737-800 which has a blended winglet technology that will help save over 75,000 gallons of fuel per year. Perhaps fares could also come down because of that. Spicejet currently has five-leased Boeing that will progressively be replaced by company owned aircraft of which the first arrived in New Delhi on Feb 16, 2006. Spicejet, which started operations in May 2005, hopes to make net profit during the last quarter ending May 31, 2006. “We are already making operating profit and hope to be profitable on a net basis during the last quarter of the first financial year. Said Ajay Singh Spicejet Director. It currently flies to 11 destinations and has already raised funds for pre-delivery payment of these aircraft through an FCCB issue late last year. As the airline takes delivery of more aircraft, Spicejet will examine a variety of options including looking at financing through Exim Bank, leaseback of aircraft and other finance based options. The attempt is to keep as many aircraft on its own books as possible. Spicejet is also talking to Boeing for freezing an order for 10 Next Generation Boeing 737-900 that can seat up to 215 passengers. To expand its sales reach, Spice is also taking to State Bank of India for a co-branded credit card. A formal announcement in this regard could come in March.

Composite future THE GROWING sophistication of aircraft in both military and civilian segments is compelling researchers everywhere to induct novel materials that lead to weight reduction, maximisation of fuel efficiency and at the same time maintenance of aerodynamics balance for aircraft. Composites will be the answer for stronger aircraft materials because they are lightweight, flexible and resistant to high temperatures—all key characteristics aircraft designers look for, according to Frost & Sullivan Research Analyst Vijay Shankar Murthy. Once composites offer a more favourable cost-to-benefit ratio, they are likely to emerge as strong candidates for retrofitting heavier aluminium or steel structural components in existing civilian and military aircraft. Researchers are also focusing on incorporating carbon nanotubes to make stronger and stiffer composites. While this technology has yet to leave labs, carbon nanotubes could find their way into A380s or Boeing 747s by the year 2020. Dupont Electronic Technologies of the US is working on composites to replace conventional bulky round wires and cables in spacecrafts. Not only will they effect saving in large volume space but also make spacecraft light, durable and highly environment resistant. Similarly, major companies are focusing on more multi-functional primary flight displays that not only increase flight safety but also improve overall navigational capabilities. Honeywell International’s low-cost Enhanced Ground Proximity Warning System (EGPWS) provides pilots with different colour codes according to the terrain’s elevation and gives audible and visual alerts in case of an imminent collision. NASA is studying advanced concepts that will allow pilots to fly and land safely in extremely low-visibility conditions that will lead to increase in number of flights in poor weather, reduce terminal delays and cut costs for the airline industry. Efforts are also on to cut engine noise and pollution following the Kyoto Protocol. CRUISING HEIGHTS March 2006

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NEWS DIGEST

IRLINES HAVE lost US $42 billion since 2001 and we expect another US $4 billion in losses again this year. Something is wrong with the air transport industry,” said Giovanni Bisignani, Director General and CEO of the International Air Transport Association, at the opening of the Second IATA/Asian Aerospace Aviation Summit in Singapore recently. “While Asian passenger traffic is expected to grow at 6.5 per cent and cargo at 8.5 per cent each year until 2009, growth is not profitability. Some of Asia’s carriers are among the industry’s most profitable, yet the average margin is two per cent—far from the seven to eight per cent needed to cover the cost of capital,” said Bisignani. Boosted by the fast expanding markets of India and China, Asia is home to the industry’s greatest potential markets. “Turning growth into profitability will be the challenge,” said Bisignani. Bisignani identified three threats to the industry. “Low cost competition is adding a new dimension to competition in Asia. With an average cost of US $0.06 per ATK on routes over 1,500 km, Asia’s carriers have some of the lowest costs around. But Asia is also home to the low cost carriers with the lowest costs. There is no finish line in the race for efficiency,” said Bisignani. Bisignani further added that “avian influenza is the wild card”, and that IATO was working closely with the WHO to make sure that the transport industry is well prepared. Relentlessly, the IATA DG focussed on areas critical to Asia: safety, simplifying the business, value for

Bisignani’s theme song

money and commercial freedom.” These are the themes he has reiterated time and again. “The agenda for a successful airline industry is not complicated. But it has three dimensions—airlines, partners and governments. If these three dimensions are correct, the chances are better for safer, more secure, environmentally friendly industry that produces a US $6 billion profit in 2007. That is still only a 1.5 per cent margin—but will signal a move towards a more stable industry,” he said.

Business as usual

CENTRE FOR Asia Pacific Aviation (CAPA) has released its annual Outlook 2006 report, which predicts that Asia Pacific airlines, airports and tourism operators should experience relatively benign, ‘normalised’ market conditions in 2006. “Passenger traffic growth should maintain certain high levels, broadly in line with capacity increases. But that depends upon continued economic strength, as the effects of high fuel prices percolate through the system, adding a larger-than-usual level of unpredictability for the year. In any event,

2006 may be the lull before the storm—a rare opportunity for the aviation sector to consolidate, ahead of the challenges likely in 2007, as fleet deliveries escalate, new products enter the market and pressures intensify on manpower costs, competition, capacity and yields,” says the report. Meanwhile the Sydney-based organisation has joined hands with Airports Council International, Airports Council International (ACI) and airport financial services consultancy—IJK and Associates, to present a conference and series of master classes over five days in late August/September in Singapore. “Airport Development 2006 will be the biggest and the most significant airport financing and strategy conference ever held in the region,” claims CAPA. It has also announced the staging of the second annual India and Middle East Aviation and Tourism Investor Summit on April 27-28, 2006, in Mumbai. The first one was held in Mumbai at the same time last year. CRUISING HEIGHTS March 2006

Hello-goodbye for Asian Aerospace in Singapore THE 13TH edition of Asian Aerospace at the Changi Trade and Exhibition Centre was to be the biggest, with 900 exhibitors from 43 countries and 21 national pavilions, up from 759 exhibitors from 37 countries in 2004. But a falling-out between Reed Exhibitions and the Singapore government meant that Reed, which owns the rights to the name Asian Aerospace, is taking its show to Hong Kong in September 2007, while Singapore intends to maintain the tradition of a biennial event with the launch of the Singapore Air Show in February 2008. India could easily have bid for the show with Reed looking for a big-time partner. Unfortanately there wasn’t much interest from either the public sector or the government and the show has now moved further Eastwards—to busy bustling HK.

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If you are , you are taxed! This year's Union Budget has sprung one more surprise-taxing business and first-class passengers. Is it a please-the-Left move or is it one more measure that hasn't been well thought out? R. Krishnan looks at the pros and cons of a tax that could well turn out to be a headache both for the taxman and the carrier.

inance Minister P. Chidambaram has made some changes in the Union Budget 2006-07 that will impact high-end international travellers rather hard that could well translate into lesser revenues for several carriers. But airlines have been given a sop—they will not shell out more for leasing aircraft. Hard pressed for revenue to meet various grand social schemes, as outlined in the National Common Minimum Programme and also, perhaps, to humour the Leftists, the FM has imposed a 12 per cent service tax on high-end international travellers. To be precise, the list of services attracting service tax has been expanded to include transport of passengers embarking on international journey by air other than economy-class passengers. Essentially what this means is all such international passengers who fly either business or club or executive or first class

He will have fewer issues. The tax on business class flying is the only sticking point. He must be breathing easy.

CRUISING HEIGHTS March 2006

will now have to pay an additional 12 per cent of the published fare besides two per cent on such service tax payable as education cess. A business class ticket with a published fare of, say, Rs 1,00,000 by Singapore Airlines between Delhi-Singapore-Delhi will cost at least Rs 12,500 more following the imposition of service tax. Should such a traveller fly by first class, which costs more than double of the business class’ depending on the kind of airline they fly, the hit will be even more. For instance, a ballpark calculation shows that it will cost at least US $850 more for flying to Europe from India and US $1200 to the US by either business or first class. Off-season fares on the India-US route are as low as US $1000 for a round trip economy ticket. It is as much as US $4000 for business class in low seasons. But when the season peaks, the same business class tickets cost as much as US $6,000 for a round trip between India and the US. A first class ticket actually costs a bomb even during lean seasons.

Finance Minister P. Chidambaram has made some changes in the Union Budget 2006-07 that will impact high-end international travellers rather hard that could well translate into lesser revenues for several carriers. Service tax can be levied for services provided in India and from India. However, it is not known if it has extraterritorial applicability. For instance, those who buy their ticket abroad or come from abroad, at least that leg of flying into India, say, from either the US or Europe, will not attract the service tax and hence not payable. But what happens when the same passenger flies business or first class on his return. How will they pay service tax on the ticket that has already been paid for abroad or in the place of origin? Secondly, airlines do not have a standard business or first class fare. For instance, Singapore Airlines or British Airways charge much more for the business or first class, as the product offering is far superior, say, compared to Air Indiaâ&#x20AC;&#x2122;s. In that event the published fare will also be higher. Thus will the business class or first class passengers of BA or SIA out of India be forced to pay more or be penalised for choosing a superior carrier than Air India or even Indian? What will be interesting to watch will be how the new service tax on business or

For a legacy carrier that prides itself on its business class, Jet has a problem with the tax. But their have a formidable lobbyist in Naresh Goyal.

CRUISING HEIGHTS March 2006

first class travel impacts Jet Airways, which built its product in India based on very superior international class offering compared to the state owned Indian and others. When Jet launched its London, Singapore flights it again tried to carve out a share for itself based on its product. For instance, an A340-300 flight to London from Mumbai and Delhi has six first class and 33 business class seats and the rest, economy. Globally, if an airline is able to fill up its first class and business class, it has virtually made money even if the seat factor is about 50 per cent in the economy. Take the case of Air India and SIA Jumbos. While an Air India Jumbo (747-400) carries 420 passengers, its first class has 12 seats and business class, 28 seats. Taking the two together, the first and business class in Air India account for 40 seats while the remaining 380 are economy class. The same Boeing 747-400 of SIA has a total of only 379 passengers, of which the first class is between 18 and 20, while the club or business class is 55. Thus on the higher

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Sobbing Sops FOR THE tourism sector, this Budget, like several previous Budgets, has been nothing but a sob story. They have relentlessly pursued a reduction in service tax, from the present 10 per cent. In fact, they were looking for a complete abolition of this tax for the tourism industry, failing which they wanted it reduced by nothing less that 50-70 per cent. The Finance Minister has, instead, obliged them by increasing the Service Tax rate, from the present 10 per cent to 12 per cent for all, including tour operators. In the case of Fringe Benefit Tax, though the FM has decreased it, from 20 per cent to five per cent, only on three items—tour and travel (and also in case of airline and shipping companies), hospitality and use of hotel accommodation—several others, such as hospitality, telephone, advertisement, branding, etc., still bear the onslaught. Perhaps the FBT dilution should be seen as no victory for the tourism sector. In fact, a reduction in this tax is the formidable lobbying by mainstream industry that found it wholly unacceptable. In fact, stalwarts like Deepak Parekh and Rahul Bajaj have been badgering the minister for a long while to get rid of this evil. As far as increasing Budget allocation for tourism goes, the Finance Minister allocated only Rs 830 crore against the Rs 2000 crore demand from the industry. Last year, the tourism allocation was Rs 786 crore. So why is it that the tourism sector and the Ministry continue to receive a casual treatment from North Bloc. One reason could be the unprecedented boom in both civil aviation and tourism.

side, SIA jumbo has 75 first and business class seats and the remaining 204 are economy class. Besides, the fare charged by SIA is also higher than Air India’s, the first class of which attracts none and comprises mostly of upgraded passengers from business class. This raises yet another issue. What happens to passengers who are upgraded? How do you charge service tax from them? Ask Air India or Indian, most of the passengers who are upgraded are the Sarkari free loaders. They get upgraded from economy to business class and from business class to first class. Recently, an Indian High Commissioner’s wife, with a name greatly popularised by a hit Hindi movie and also closely related to a Union Minister, had to use the good offices of the Civil Aviation Minister to get upgraded to first class. Is it not prophetic? When Chidambaram was asked after he presented last year’s Budget about the non-applicability of FBT on government servants, he said, “Government cannot tax itself.” Perhaps the same logic will now apply to its servants who get upgraded. The levy of service tax on high-end global travellers will also hit Jet Airways badly. It remains to be seen if Naresh Goyal is able to lobby

You can’t get a hotel these days for love or money, and it is apparent that hoteliers are ranking in the moolah. And as far as policy planners and hotels concerned means the five-star variety, that’s all that’s visible to them. “I am surprised and disappointed that the minister hasn’t seen tourism holistically. There is so much of domestic tourism and lots of overseas visitors who are backpackers and budget travellers. Why tax them?” said Subhash Goyal, one of the most vocal spokesmen of the industry and President of the Indian Association of Tour Operators. Goyal and his ilk have plenty to be concerned out. There are any number of associations that are key drivers for the travel and tourism industry. There is TAAI, TAFI, WTTC (India Chapter), HRFI and a slew of other bodies that petition the Finance Minister each year. It’s time these associations got together to ponder on why they have failed. Perhaps it’s also time for them to bid goodbye to the Confederation of Indian Industry, which does have a tourism and civil aviation committee, but hardly does anything barring a few conferences every year. It’s time the travel and tourism industry got together to create its own powerful lobbying arm that will represent the industry forcefully in the corridors of power. At that point in time both the Tourism Ministry and the Finance Ministry will look at them seriously. And let’s not blame Ambika Soni. She has been in tourism for just about six weeks. It’s too short a time to expect results.

Tourism deserves plenty of tax breaks. None are available. She will have to get people to change their mindset

CRUISING HEIGHTS March 2006

with Praful Patel in getting Chidambaram neutralised. But Chidambaram has not done that badly. He has exempted the withholding tax on aircraft lease rentals. Clause 15A of Section 10 provides for exemption from income tax of lease payment received in respect of a lease of an aircraft or aircraft engine by the government of a foreign state or a foreign enterprise from an Indian company engaged in the business of operation of aircraft. The exemption was available till April 1, 2006. The Finance Minister has now extended this exemption for agreements reached before the end of March 31, 2007. This will benefit a whole lot of airlines, be they in the private or public sector. Some of the major beneficiaries could include the state owned carriers, Air India and Indian, besides private carriers like Jet, Spice, Air Deccan, Kingfisher, etc. But the Coimbatore-based Paramount Airways will benefit a lot as its real expansion with the induction of the new Embraer is all set for in fiscal 2006-07. InDigo may not be able to enjoy a lot of benefit as even its first aircraft A320 is yet to arrive. Considering it has ordered 100 aircraft may be it will need 10 years’ exemption to escape the payment of withholding tax.

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SPECIAL REPORT

Warren Truss fought fiercely to keep Emirates from further eating into Qantas’ market, which was swamped by flights from Dubai.

Sheikh Al-Maktoum has relentlessly expanded into India in the last three years. It’s the key driver to Emirates’ expansion worldwide.

Maggie White says India is hot. No wonder, Qantas wants more flights and more destinations directly.

Al Bakar says Qatar has been growing at a rapid pace in India, and is the closest competition to Emirates in India.

Dow Jones and Avmark, have already expressed serious fears that the overcapacity, especially in the Gulf region, could severely impair the market in this part of the world once the economies slow down. More importantly, the fact remains that be it Emirates, Qantas or Etihad, they all want a big share of the great Indian pie. These consultants believe that the Middle East was the world’s most buoyant airline market last year, but now runs the risk of overheating as Arabian Gulf airlines and airports push through ambitious expansion plans. According to industry watchers, the build-up of services by carriers, such as Emirates Airlines, as they take delivery of new aircraft, could produce a glut of plane seats and outstrip growth in passenger traffic. This overcapacity could hit airline profitability, while airports might also find there is too little traffic to go round, they say.

CRUISING HEIGHTS March 2006

But with authorities willing to look the other way, why wouldn’t they rack up the numbers? While Qantas managed to ward off Emirates’ demand to double its frequencies to Australia from Dubai via India, Dubai, etc., as also from SIA to fly to the US from Sydney, their open skies with India will help them push up the numbers directly. When most of these big carriers are able to convince their governments to protect their own markets, how come we in India are bent upon killing our own carriers in the name of access? Rather than Emirates or Etihad growing at breakneck speed, why not Jet or Indian or, for that matter, Kingfisher and Spicejet. Why hold them back on some pretext or the other. It will only mean they are creating a launch pad elsewhere, as Deccan is doing from Sri Lanka and Kingfisher wants to do from America.

THE A TEAM: (from left to right) Warwick Brady (Chief Operating Officer), Captain Gopinath (Managing Director), Captain Preetham Phillips (VP, Operations), Captain Rajiv Kothiyal (Chief Pilot), John Kuruvilla (Chief Revenue Officer) and Andy Daines (Head, engineering).

COVER STORY Air Deccan has completely rewritten the rules of aviation in India. As the Bangalore based LCC prepares for its first public offering, K SRINIVASAN and R. KRISHNAN take a close look at a company that’s growing at a scorching pace.

JUST FLY, 24

SIMPLY! CRUISING HEIGHTS March 2006

orur Ramaswamy Iyengar Gopinath? For most of you who haven’t heard of him, he could well be a Mridangam player, Veena vidwan or a violin maestro. But Gopi, as his friends call him and Captain Gopi as his most of his colleagues address him, isn’t in the music business. This Tamil Brahmin from Karnataka (like fellow Kannadiga Jayalalitha Jayram in neighbouring Tamil Nadu) is bang in the spotlight most of the time these days. Not in politics, not in music, but with a different kind of symphony in low cost travel that has seen prices tumble almost every second week and more Indians take to the skies than ever before. Frankly it’s been an extraordinary journey for Air Deccan, the low cost carrier that Gopi and a few of his friends set up in 2003 to tap the opportunities in the booming aviation business and create a different type of market for a different class of people who travelled to places other than Delhi and Mumbai. The first flight took off on August 25, 2003, and in the two years and seven months since the Deccan magic has been nothing short of being incredulous: it has 30 aircraft in its fleet, including 19 turbo props and 11 Airbus A320s. It touches 53 airports in the country and in 2005 flew a million passengers. This year, it plans to fly over three million passengers, which works out to 15 per cent of the total number of airline passengers. Its cost per seat km is around Rs 2.8, which is the lowest among all domestic airlines in the country. At the moment it has a 13.1 per cent share of the market that makes it number three in the domestic skies behind leaders Jet Airways and Indian. But in the two years and seven months it has been in the business, it has established several firsts: it connects the most cities in the country and is the fastest growing airline in any part of the world. Was the first to offer hundred per cent e-tickets and the lowest price for a ticket anywhere in the country: Rupee one, if you please. And this for a company that actually set out to tap an opportunity in helicopter charters is nothing short of being remarkable.

CRUISING HEIGHTS March 2006

JUST FLY, 24

SIMPLY! CRUISING HEIGHTS March 2006

CRUISING HEIGHTS March 2006

WE ARE THE AGENTS OF On the Deccan dream For me the billion mouths wasn’t a curse, I looked at them as a billion hungry consumers. It became for me the biggest dream: a billion seats. The moment you say that, you need 50,000 seats a day. But what we had when I thought of Air Deccan was 450 flights a day. On the acquisition plans We have thirty aircraft and we have been in operation for 30 months. That’s one aircraft a month. We shall be getting one a month for the next 100 months. In our case it is no MoU, we have paid hard cash as deposit. You must have one type of aircraft. In our case, we changed that low cost model and we have two types of aircrafts, we have the Airbuses and the ATRs for the small towns—I am convinced you can’t build a great economy from just Mumbai and Delhi. India lies in cities like like Salem, Nasik, Dehradun and Tuticorin. On the danger of a glut Today we have 800 flights a day. We have 185 aircraft all put together. China

Undoubtedly, Gopi and his friends were in the right place at the right time. When the parent company, Deccan Aviation Private Ltd, was floated in 1996, the skies were open. India had opened up though the mad scramble hadn’t yet begun. The four of them—Gopi, K.J. Samuel, Vishnu Rawal and Jayant Pooviah—were childhood buddies having joined the National Defence Academy the same year. All four joined the air wing of the army and three of them went on to fly choppers, the exception being Gopi because of his eyesight. It’s another matter that now he is the only one that gets to be called captain (the rank at which he quit the armed forces)! “Coincidences can do the strangest of things,” recalled Jayant Pooviah, the raconteur amongst the four and the one who tells the Air Deccan story best, sitting in the company’s first office at Jakur, where the helicopters are based, and added, “We were close friends, but had dispersed and doing our own thing in different parts of the country. I was back in Bangalore on holiday and met Gopi after 18 years.” By a pleasant coincidence, Vishnu Rawal, working then for the UP government, was also in the city on a maintenance mission with a state government chopper.Rawal,though,was the last to join the team.He chipped in with some money and later brought in an angel investor in the form of Sumant Kapoor of Golden Ventures,London.After several years in Macau,he finally came back to Bangalore when the company started growing and the

PREETAM PHILLIPS: Spends long hours juggling crews and sticking to a 13-hour routine.

JOHN KURUVILLA: If you have an idea that can make money for Air Deccan, Kuruvilla will love you. CRUISING HEIGHTS March 2006

has close to a 1,000 aircraft. We are ten years behind China. Where does the question of a glut arise? The question of more players is like Rahul Bajaj saying don’t give licences to too many people. Today, Bajaj has only 40 per cent of the market share, when he had ninety-five per cent. At that time, he was then manufacturing 50,000 scooters, but he now does 2.4 million scooters and there is no waiting list. The infrastructure constraint Ok, infrastructure is a constraint. But if you were to say let’s first have the roads and then the cars, I don’t think you will have either the roads or the cars. The existing airports were dormant or underutilised and governments typically do things that are perceived as politically correct—good for the poor and the middle class. Airports were never considered good for them. That’s where we have helped break the stereotype. Forty per cent of Air Deccan travellers are first timers. It is now established that aviation is not just for the rich, but for the middle class and

needed all the hands they could find. Gopi was a thriving farmer at that time. He had won the Rolex award for his ecofriendly farming methods and success in sericulture and ran a landscape outfit in the city apart from the farm. The three friends met and chatted and Rawal dropped Gopi and Pooviah at the farm on his way back to Lucknow. “As the chopper flew away, Gopi looked wistfully at it and said, ‘we must have a machine like it,’” recalled Pooviah. Meanwhile Samuel, who was in regular touch with Gopi, was sick of the long hours away from family flying for private companies. Gopi’s advise to him was simple: the only way it can change is for you to quit what you are doing and start what you want to. He had seen Gopi do it and thought it was a good example to follow. One fine day he did just that and landed at Gopi’s doorsteps. “I have quit,” he simply said. Deccan Aviation was a consequence of Samuel taking the walk. They were lucky that the Japanese leasing company they approached liked them and gave them the chopper. It was the first of the many lucky breaks that came their way in the next ten years. Samuel piloted the helicopter all the way from Singapore to Bangalore with a non-flying Gopinath as a companion in the journey over the land route of Thailand, Myanmar and Kolkata and then down to Bangalore. Today Deccan Aviation’s Charter division has 10 helicopters, of which nine are Bell and one Eurocopter. The youngest is about eight years and the

CHANGE lower middle class people as well. It is no longer peripheral, but integral to the growth of our economy. The way the economy is growing at eight per cent, if we need to be a developed economy, we need to fuel this dream. On the possibilities America is selling 700 million seats for a population that is one fourth of ours. Norway, with a population of five million, is selling 20 million seats. China is selling 80 million seats. We need to dream big. As entrepreneurs we need to become the agents of change. As entrepreneurs one can’t be cynical, one can’t despair that things are bad in this country. On the equitable distribution of infrastructure Nobody is denying that the Airport Authority can do it. But there is a systemic problem. Does the airport director ever come running to Bangalore to meet me? Ever? Has it ever happened in the history of this country? Here, the Bangalore International Airport (BIAL) Chairman

oldest is 24 years that has been leased to Cairn Energy for Surat Offshore operations. Soon the company will be placing a helicopter with ONGC for Bombay High operations. But their biggest angel investor and the man who really set them on course to be the company they are today arrived right in time for Deccan Aviation Services to take off. S.N. Ladhani, Coke’s biggest bottler in India and the MD of Brindavan Beverages, is a low profile, publicity shy individual. Ladhani came to Deccan via M.G. Mohan Kumar, his tax consultant. Kumar, in turn, had met Gopi and Samuel just a few months earlier when ICICI ventures put the duo in touch with him. “I was very impressed with them. Straightforward decent guys who were desperate to get the helicopter company off the ground,” recalled the chartered accountant, now Gopi’s right-hand and the Director (Finance) of Air Deccan. He prepared their business plan and when the finances failed to materialise he reluctantly decided to broach the subject with Ladhani. Reluctant? “You know, as a matter of rule one shouldn’t recommend businesses to clients. If it clicks you are a hero, but what if it fails?” said Mohan Kumar. Reluctantly, all right, but he did make the move and put Gopi and Samuel in touch with Ladhani. The rest as they say is history. “I took an instant liking to them when I met them, they were honest, they had a vision. I had money for them whenever

sought an appointment 15 days back to come and see me. He wanted to know what our requirements were. And he is doing the same with other airlines. Can you expect that from the Airport Authority? And the way they are structured, he isn’t going to be rewarded for bringing in more revenue, he is not going to personally benefit. They behave like government and, therefore, can’t be good in business. The Air Deccan ambition To take away a modest five to ten per cent of train passengers—the upper end of the economy income group of travellers. The number comes to about 1.8 million a day considering that 18 million travel by train each day. Eighteen lakh passengers is a modest number. If we can wean them away, it is a huge number that is available to me from the present 20,000 seats a day. The total number of seats being sold today is close to 90,000. We are best positioned to cater to them. I don’t think anyone else is in a position because we are specially focused on costs, so focused on train passengers.

THE COMMON MAN: R.K. Laxman's immortal common man is Air Deccan's mascot. It is an identity that has a pan-India recall. CRUISING HEIGHTS March 2006

On the spat with Vijay Mallya We are not embarrassed about our brand as Vijay Mallya is. Today he is openly saying that low cost airline will not work in this country .Why? And he is also saying that he is not only going to put business class but first class seats on his plane with 46-inch seat pitch. The people whom he meets don’t travel in Kingfisher, but on Jet Airways. He is embarrassed about his product, not us. On the Air Deccan traveller There are three categories of travellers on Air Deccan. One: the first-time traveller. A retired man whose son-in-law has sent him a ticket. Second: small-time businessmen who travels maybe once a month. The third category: professionals who travel Air Deccan during their private travel. On his global plans Whenever the government gives us permission, we’ll do the inner circle—Dubai, Singapore and all counties in the neighbourhood. And we have configured our aircraft in such a manner that there won’t be any payload penalties.

they required it. Captain Gopi could call me at midnight and ask for one crore or two crore rupees, the cheque would be ready the next morning, no questions asked.” Ladhani says the singular reason for the success of the company is the down to earth attitude of the promoters and their commitment to a long term vision.`` But it was tough when the helicopters first came,`` he recalls and added,`` We gave children an aerial tour of Bangalore at Rs 500 just to keep the machines busy. The fuel cost more. But they were always optimistic. And it has paid off. `` The odyssey moved a notch further when Deccan Air Services acquired two Swiss made Pilatus PC 12 from a South African company. The idea was to tap opportunities at the backend of their charter operations with the likes of Cairns and other multinational behemoths that were operating in the hinterland. “We travelled to Zimbabwe and South Africa and had our first experience of an LCC operation. It set Gopi’s mind ticking. He wanted to replicate it in India,” said Pooviah about the trip that changed the course of air travel in India. And so the Air Deccan story began. It has a staff strength of 1,750 that expects to grow to 3,000 by the time our fleet expands to 50 aircraft. That would be close to 60 persons per aircraft—the lowest for any operator in the country. The carrier has a huge number of foreign pilots ($8000 for the captain and $10,000 for the check pilots) who cost a packet, but there are some areas where the company has changed the rules of the game. There is no pick for any of the staff. Cockpit and cabin crew get

THEIR FARES ARE STUPID! Warwick Brady comes with a huge reputation from Ryanair where he was the Deputy Director (operations) for the London end.He hopes to make Air Deccan one of the great airlines of the world. Excerpts from an exclusive nterview. On similarities between Ryanair and Air Deccan The similarities? Well, Ryanair was expanding at about 20-25 per cent a year. We were inducting approximately 30 aeroplanes a year—over two a month. From the growth point of view it is very similar—in a sense it is perhaps higher, but in terms of planes it is lower with one-and-a-half planes a month. Ryanair had 15 bases across Europe, we have six across India. The geographic spread is quite similar in terms of how Ryanair or Easyjet would be structured in terms of the bases. The commercial operation at Air Deccan is reasonably similar in that aeroplanes are based at one place and they always come back at night to the same base, so we avoid crew overnights. It also makes engineering look after ‘their’ aeroplanes. One has a sort of ownership over their planes and they look after it. We have six bases and we will probably have 12-15 bases over the next three to five years. We have got roughly 5-6 at each base. There are two reasons for that: strategic, in that we want a national spread and a national brand over India. Secondly, each base is a unit in itself, they have two shifts a day. We fly between five in the morning and midnight and do the maintenance at night. On pricing There are enough people who want to fly. The question is what price are they going to pay? If you give away fares at Rs 499, people are going to fly. The question is how are you going to make money? The only way you can do that is by coming with a cost structure that supports your operation. If we can be the lowest cost operator in the business that means finding airports that will give us that will provide a significant cost advantage .Delhi Hyderabad, Bangalore and Mumbai are all going to come up with international airports—that will instantly make secondary airport (I know there are restrictions about the distances of other airports away from the new airport) more attractive. Can India grow without air transport? Probably not. The drive to Hyderabad takes ten hours, you nip off in a plane in an hour and ten minutes. The idea, therefore, is to focus 100 per cent on the costs and manage the revenue. In the next two years, we should go up to about 55-60 aeroplanes;

we should have seven or eight bases. But the real question is what is the competition doing, how many people are they adding? The one question is on the infrastructure that is going to support it. There are other airports like Nagpur, Ahmedabad and Pune where one can park and design a schedule where the aircraft comes back to base. Can I have loads from these centres? The problem is not filling the planes; it is how much to to charge to fill the aircraft. On the LCC Philosophy We are very serious about our revenue management. The game is to make sure that we have on the Airbus X revenue and load factor. Our costs are the lowest in India, lowest number of people per aircraft, lowest cost per askm (available seat km) on any airline in India. Therefore, it’s a bit like Wal-Mart or Tesco, the only thing being that the guys who are going to survive in this business are those with a structure and a mindset. At Ryanair, for a 45-aircraft operation in one base we had 70 line engineers. BA would have about 400. That’s the difference. It depends on your mindset. As long as you are well managed you can deliver much better cost savings than the others. If you look, for example, at Indian, everyone has a helper. Try getting rid of this at IA, Jet or Sahara. It will take a long time. On the Gopi hard sell Yeh, he sold Air Deccan to me. The X factor for me was the growth, taking a 20 aircraft operation to a 150 aircraft operation. Where do you ever get an opportunity to ever do that as the boss—. As one of the pivotal guys in the organization on how its structured, how do you manage the revenues, how do you structure the costs, where are you going to take it was a unique opportunity. We want Air Deccan to be another famous airline in the worldss—a South West or a Ryanair or an Air Asia. The reality check Gopi gave me the right picture. What I had obviously not understood was the constraint you are in under in terms of shortages—licenced engineers, licenced pilots. So you are operating under infrastructure constraints. It is like running around with one leg off trying to create a very efficient organization. There are ATC issues—they are half as efficient as American or European ATCs for the same runway capacity with the same runway constraints. So those are restrictions that are difficult. I have transformed the operation to quite an efficient one. We are over 90 percent on time. I am trying to improve that all time. It’s just been frustrating that I haven’t been able to do it as quickly as I wanted to. But there is a big light at the end of the tunnel. On shakeouts I see more happening. In the next 12-18 months, you’ll see some more bloodshed. I would be very surprised if there wasn’t. One of the reasons for this is the people are not going to be able to sustain stupid fares. It could be a low fare, low cost airlines. When I say stupid fares, it’s on their costs— Indian, Jet, Go, not Spice funnily enough. From the industry point of you, you are going to see significant pressure on the market, only the fittest will survive. The price war We have a very dynamic pricing. We want to make ten percent plus on revenue over expenditure. Given the fuel prices and the airport costs that are high, hedging in fuel is one way forward.

a transportation allowance and they travel home on their own. With each aircraft returning to its respective base each evening, there is virtually no layover expenses or costly investments in infrastructure or lease rents for transport and accommodation. “But it’s a situation that will change in the next couple of years,” says Samuel who shares a cubicle with Vice President (operations) Preetham Phillip at the carrier’s office near Bangalore airport. Perhaps it’s this down-to-earth attitude of the promoters where Samuel is happy clicking away on his laptop and sourcing pilots to fuel the company’s ambitious expansion spree while sharing space with a colleague that underlines the Air Deccan philosophy. Everyone travels economy (even when they take a legacy carrier) stay in company accommodation and constantly look at the big picture. And there are pilots from all over—Africa, Europe, Southeast Asia and even South America. Gopi is unfazed by all this talk about expats. “We have a growing aviation industry and what’s wrong with ex-pats. If Singapore Airlines can employ Indian pilots and engineers, why can’t we employ talent from other nations? “The funds generated by the IPO, now postponed to sometime after the fiscal year comes to a close, will be used to institutionalise long term requirements. “As a first step we will set up a flight academy for pilots, engineers, cabin crew and flight dispatchers. We are going to install one flight simulator for A320 and another one for ATR that will together cost $25 million. We are looking at Hyderabad or Bangalore for locating the academy,” said Mohan Kumar and added, “The academy will not only host the simulators, but also have space for library, recreation, cafeteria, hostel, etc., as those seeking training will be required to stay for six weeks. Each simulator has a capacity to train for 5,000 hours a year. We are looking for 25 acres and it will be a world-class facility.”

K J SAMUEL: Sources the world for pilots to fuel the expansion. “My laptop is full of CVs,” he says.

THE KEY PLAYERS: Gopi with Mohan Kumar, who manages the Air Deccan finances and is the most important member of the core team. As he says, “Mohan is indispensable and you don't find them everyday.”

S.N. LADHANI: The man put who put them on the road to success with his ‘blind’ cheques.

R. KRISHNASWAMY: Driving the asset creation in terms of hangars, slots and engineering services. CRUISING HEIGHTS March 2006

What Air Deccan hopes to offer is something beyond mere simulator training. “The flying clubs are shut in many places. We will provide flight training and simulator for both basic and advanced training. It will be able to simulate training for 120 pilots a year based on a 40-hour simulator-training requirement. Our requirement is for only 60 to 70 pilots to be trained on A320 simulator and the same for ATR simulator for equal number of pilots. As on date we have 240 pilots. Besides we have 60 pilots who are ex-pats stationed in six bases. Besides the simulator, the jet academy, inclusive of land, will cost Rs 70 crore,” said the man who counts the Air Deccan moolah. While that’s the future, Phillip has a plate full of issues to sort out as Samuel brings in the pilots and Mohan Kumar provides the money for the planes. Phillip’s great headache is to bring the crews back to base without overshooting the FDTL (flight duty time limit). That would mean overlays and extra crews that will add to the cost. “But the way traffic is rising in Delhi, Mumbai, Bangalore, etc., the turnaround time is rising, leading to a cascading effect. Assuming we increase the aircraft utilisation to 15 hours, it would mean three sets of crew per plane will be needed daily. It is not possible to use the plane for 15 hours in view of the traffic congestion and consequent pressure on flight duty time limitations, etc. We do have five sets of crew per aircraft and could think of the sixth set once these constraints are not there. Notwithstanding all this we have ensured that pilots, both commanders and copilots, are available to operate the aircraft within the FDTL,” said Phillip. It’s this two-shifts-a-day philosophy that has prompted Air Deccan to widen its bases across the country. From the present six it hopes to move to 12 in the next three years. “I came from Thiruvananthapuram to Bangalore. There are no flights before 11 am and none after 4 pm. This is a fully untapped market. Between the two cities, there are six trains a day. Hotels are expensive so why not fly passengers in the morning and fly them back in the evening,” said R. Krishnaswamy, the company Director (planning) who moved to Air Deccan after retiring as India’s Regional

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CHILDHOOD BUDDIES: Jayant Pooviah (left) and Vishnu Rawal, who run the day-to-day operations at Deccan Air Services. Director in the Gulf, and adds, “We have done it between Bangalore and Coimbatore where we have deployed two ATR 72-500s. With four frequencies both ways and carrying capacity of 70 passengers per ATR flight, we are doing 280 passengers in both direction. None saw this happening in July 2003. We can now think of deploying A320 as well in some of these pairs. It is easier to get overnight parking bays in Thiruvananthapuram, Nagpur, Ahmedabad and Jaipur, where we have already been allotted a parking bay. I can move an ATR 72-500 to Jaipur. Overnight parking is not expensive, say, Rs 300 per night. Besides airlines are also allowed free parking for six hours. After that the relevant slabs begin to apply. Therefore we want to start early morning and return to the base by, say, 2300 hours so that we can give our engineers full six hours to carry out the engineering and minor repairs. We do not want to do night flying.” The IPO will also help set up a brand new hangar in Chennai. AAI has allotted the hangar space that is likely to be operational by end 2006. It will have full fledged maintenance facility for A320 like A, B and C checks. The hangar will have 60,000 square feet space or 1.5 acres. While the hangar alone will cost Rs 20 crore, all the other utilities once fitted will take the total cost to Rs 45 to 50 crore. “It will not be an MRO and therefore will not keep major components or do major damage repairs and landing gears, etc. It will only do periodic line checks. It must be understood that all checks cannot be done in the open condition,” said Krishnaswamy. Krishnaswamy is also excited about Deccan Lanka, a company Air Deccan is preparing to launch from Colombo later this year. Air Deccan has 48 per cent equity in the

ANDY DAINES: Wants to make sure engineering will match everyone else in keeping the machine ticking perfectly. CRUISING HEIGHTS March 2006

venture. “We should be in the launch mode perhaps in the next three to four months. We can even think of Air Deccan offering wet lease to Deccan Lanka. As of now we cannot fly to any metro and major metro in India by Deccan Lanka because of the bilateral between Sri Lankan and Indian government restricts any other carrier in Sri Lanka from going to these destinations in India except perhaps for Kolkata and some smaller places like Kochi,” said Krishnaswamy and added, “This restriction will remain till 2007. This is part of the Emirates (that manages Sri Lankan) agreement with Sri Lankan government and runs out in 2007. But out of Sri Lanka, we have the rights to go to the Gulf. Gopi is more circumspect. He acknowledges that the airline will be launched in the next six months and Air Deccan could be leasing aircraft to this company. Meanwhile with over 140 cities on their target, Air Deccan has its task cut out. John Kuruvilla, the company’s Chief Financial Officer, who generates the innumerable revenue streams for the LCC, is excited at the options, “We are hugely flexible and the options are unlimited. Why, just today I completed a deal for a multinational to advertise on our aircraft,” said Kuruvilla, an ad agency veteran who crafted the company’s ad and marketing policy from the outside till he became an insider some years back. One classic deal that he struck is with Café Coffee Day that has seen Air Deccan completely outsourcing its onboard sale of food and beverages. Apart from the deal making money for the carrier, it has the cabin crew earn a hefty sum each month as commission on sales. The average sales are close to Rs 60 per person. The expats are also joining the back end in droves. Well Rayanair is a favourite poaching ground and the latest recruit is Andy Daines who is getting the engineering to meet the most complex of requirements. They have also got a quality induction from Aer Lingus to look at the yield management. At the moment several bright IIM graduates are heading this charge, but the company is seriously looking at moving the entire process online with sophisticated backend software that will help make their fares even more dynamic. Kuruvilla says the options are unlimited and no one agrees with him more than Captain Gopinath.Getting R K Laxman to let Air Deccan use the common man as a maswcot was a master stroke.The identification is immediate. He believes the best is yet to come. And some of these remarkable ideas come each morning as the fauji-turnedfarmer-turned-entrepreneur walks from his Vitthal Mallya Road (Ironical! The legenday Vitthal was Vijay Mallya’s father) through Cubbon Park to his Cunningham Road office. As they say, Simplifly.

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AVIATION DIGEST

Spaceport in Singapore US COMPANY Space Adventures Ltd plans to build a US $115 million spaceport in Singapore in a venture with a Singapore-based consortium. The flights to be offered at the spaceport would travel about 100 kilometres above ground, but would not reach speeds needed to sustain a continuous orbit around the Earth. It would be up to five minutes of continuous weightlessness, while “gazing at the blackness of space set against the horizon of Earth. The spaceport will also provide training for travellers at an astronaut-training centre. The project will be partially funded by the Crown Prince of Ras Al Khaimah in the UAE. Space Adventures is best known for sending the first three space tourists to the orbiting international space station for a reported $20 million per person.

Airport collects $167,000 in fine money

Illustrations by Zahid Ali

DUE TO the protests on airport noise by residents living in Willow Glen and the Rose Garden, airplanes landing during curfew hours—between 11.30 pm and 6.30 am—have been facing fines of $2,500 per violation. Mineta San Jose International Airport has so far collected $167,000 in late fees since the programme was put into effect two years ago. The airport is now researching ways to use the money. One suggestion is to see the money spent on additional noise-monitoring programmes, such as Fly Quiet, which San Francisco International Airport uses. Another suggestion is to see the money spent on an air pollution monitoring station. But the airport states that monies coming into the airport and that are generated by the airport cannot be used for purposes unrelated to the airport.

Malaysia Airlines encourages whistleblowers MALAYSIA AIRLINES is encouraging its staff to reveal any fraud, corruption and negligence, and the airline’s new managing director, Idris Jala, has set up a Whistle-Blowers Independent Committee, assuring staff they won’t be victimised for registering suspicions or complaints. It was not mentioned as to what kinds of alleged malpractices was Idris referring to. The MD’s memo to the staff assured them they would not be required to prove their allegations, but merely expected to provide information. Staff can also report actions that compromise air safety and security and abuse of position. The memo further mentioned that any attempt to retaliate against whistleblowers or intimidate them would be dealt with by way of disciplinary action. Mismanagement, rising fuel costs and growing competition has largely been blamed for the carrier's losses. The airline operates one of Southeast Asia's largest passenger plane fleets with about 100 aircraft.

Electronic equipment interfere with plane navigation A NEW study by scientists at the Carnegie Mellon University shows that interference caused by mobile phones may create more interference to aircraft navigation systems than previously thought. The Carnegie study, carried out with support from the US Federal Aviation Administration, showed that phones and other portable electronic devices, such as laptops or games consoles, can interfere with critical aircraft electronics. While standard airline safety warnings inform passengers to keep their phones switched off during flights, this has long been dismissed as an unnecessary precaution. The Carnegie tests are likely to be welcomed by many passengers opposed to the idea of introducing cell phone services on flights. A recent CNN Business Traveller survey of more than 1,800 people showed that 82 per cent objected to the idea. CRUISING HEIGHTS March 2006

First airline cancellation compensation awarded A BRITISH passenger has become the first to succeed in a court case based on new European Union regulations concerning compensation for cancelled flights. David Harbord and his son were booked on a Thomas Cook flight from London Stansted to Vancouver, but they were told that the flight had been replaced by a flight operating the next day from Manchester. The Harbords then rebooked their trip on another airline and claimed compensation of 600 euros plus a refund of the original fares in a small claims court. Thomas Cook refused the claim and said it had not cancelled the flight as the departure from Manchester had the same flight number, and it had made the required arrangements to meet passengers’ requirements. A judge at Oxford County Court ruled that the fact that the same flight number was used has no bearing on the issue. He said the time differential of 24 hours was more indicative of a cancellation than of delay. Small claims court judgements do not set legal precedents and it does not follow that a judge would be obliged to come to the same conclusion in a different case. Thomas Cook is considering an appeal. If it were to lose in the High Court, the ruling would set a legal precedent and more passengers would be encouraged to claim.

Best Practice Award for Lufthansa First Class Terminal LUFTHANSA HAS received the “Best Practice Award 2006” from the Travel Industry Club for the successful planning and implementation of the logistics and service chain of its FirstClass Terminal at Frankfurt Airport. Lufthansa’s Carsten Spohr, Executive Vice President Services and Human Resources, received the award from Dagmar Wohrl, State Secretary, Ministry for Industry and Technology, at an official ceremony on the eve of the International Tourism Exchange (ITB) in Berlin. The prestigious jury comprised senior executives, economics correspondents, consultants and academics. Among the members of the Travel Industry Club jury, chaired by Steffen Weidemann, were Jens Brosel from DERTOUR, Professor Dr Christian Buer from Heilbronn University, Professor Dr Roland Conrady from Worms University, Thomas Edelkamp from the 2006 FIFA World CupT Accommodation Services, the tourist expert and former chairman of DER, Peter Landsberger, and the business editor of the Frankfurter Allgemeine daily, Hans-Christoph Noack. The Travel Industry Club is an independent network platform of senior executives in the travel industry and other companies in the process chain, who aim through personal commitment to help improve the public profile of the private and business travel sector. Aside from airlines and airports, tour operators and travel agents as well as hotel chains, consultants, Internet companies and industry associations submitted a variety of successful innovations in competition for the Travel Industry Club’s Best Practice Award. Alongside the winning Lufthansa entry, Lindner Hotels & Resorts, Marriott International, the German travel management association and eventcompetence+compagnie consulting company were shortlisted among the best five contenders. In all there were nineteen contenders for the award.

Rapid changes to Asia Pacific traveller habits DON BIRCH, President and CEO of Abacus International, Asia Pacific’s travel facilitator, recently shared his key predictions for Asia Pacific travel in the year ahead. “The growing number of travellers is fast changing the travel landscape in Asia. Their needs are becoming more complex and demanding. For example, mass travellers prefer the traditional travel agent service, competitive pricing and travel more often; while the elite travellers seek authentic experiences and customised itineraries,” he predicted. He went on to add that travel is no longer a luxury for most people throughout Asia, but is a necessity. According to a recent MasterCard survey, female travellers are becoming the fastest-growing sector in Asia Pacific. The survey claims that by 2010, an estimated US $13.4 billion will be spent by women in the four leading Asia Pacific destinations—Seoul, Hong Kong, Singapore and Bangkok. Moreover, women are not only shaping travel demand patterns by travelling independently, they are also the travel organisers and decision makers for the entire family, making around 70 per cent of all travel decisions, according to the Pacific Asia Travel Association (PATA). CRUISING HEIGHTS March 2006

CEOs travelling further afield for business ACCORDING TO the tenth annual Barclaycard Business Travel Survey, CEOs are this year travelling 841 miles per week, a rise of 342 miles on last year. The survey revealed that 41 per cent of the CEOs were travelling more for business; 45 per cent, due to increase in business expansion overseas; while 22 per cent cited expansion within the UK.

UK and Ireland received 75 per cent of the CEOs; Western Europe, 64 per cent; US and Canada, 35 per cent; China, 14 per cent; and both Asia Pacific and Eastern Europe received 12 per cent each. The survey forecasted that over the next 10 years increased technology use will cause a decline in shorter business trips, which, in turn, will reduce the number of days spent away from home. Currently, innovations in technology help over half (51 per cent) of CEOs to do this. Teleconferencing (28 per cent), video-conferencing (25 per cent) and remote access/virtual private networks (26 per cent) are all cited as key influencers. The level of miles travelled by CEOs is equivalent to approximately 44,000 miles a year which is nearly twice around the world.

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SPECIAL REPORT

CERTIFIED!

Mumbai Airport

The Airport Authority of India and the Directorate General of Civil Aviation have got into a huge tangle with each other over the icensing of Mumbai and Delhi airports. The AAI is crying foul, while the DGCA is emphatic that it is the right policy. Civil Aviation Minister Praful Patel has ruled in favour of the DGCA. A special report.

n a move that's seen the Directorate General of Civil Aviation (DGCA) and the Airport Authority of India (AAI) pitted squarely against each other, the Ministry of Civil Aviation has decided that the major international gateways will be licensed. And the licensing authority will be the DGCA. The AAI, already reeling under the privatisation of its two cash cows in Delhi and Mumbai, is up in arms at the move. The AAI is categorical that it is an entity representing the state and thus cannot be licensed; at best, it can be certified, which is what the International Civil Aviation Organisation (ICAO) has been demanding. DGCA contends that it represents the state, and not the AAI. “They are simply the service providers,” snorted one senior official at the DGCA. While the AAI is upset at the whole issue, it has, for the moment, complied with the instructions from Rajiv Gandhi Bhawan. The process of inspection at Delhi is complete and the licence is likely to be

The Ministry of Civil Aviation has decided that the major international gateways will be licensed CRUISING HEIGHTS March 2006

issued, but Mumbai is still under process and DGCA sources state that there are a few issues we “have asked AAI to sort out.” According to them, some areas in Mumbai had undergone re-carpeting (re-laying of the runway and the tarmac) and the marking were “wrong”. The AAI has been asked to rectify these mistakes so that the Mumbai licence, too, could be given to it before the deadline expires on March 31. Civil Aviation Minister Praful Patel, who has been upset with the Airports Authority for sometime now over the huge controversy over the privatisation of Delhi and Mumbai airports, is categorical that “licensing will be compulsory for all airports in India.” There are 454 airports/airstrips in the country. There are 454 airports/airstrips in the country. Of these, Airports Authority of India (AAI) owns 97, 158 are owned by various State Governments, 138 are owned by Ministry of Defence and 61 are private airports/airstrips. In fact, the Additional DG at the DGCA, Kanu Gohain, who is expected to take over on the superannuation of DG Satinder Singh at the end of the month, is believed to have

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AJAY PRASAD The Civil Aviation Secretary who has loyally implemented the Minister’s diktats ensured that the licencing took place smoothly

DGCA: Satinder Singh and his team are happy to licence the airports

FALLING OUT: Praful Patel is deeply uneasy with the top brass at the Airport Authority ever

since the privatistion process began. He believes that they have put up roadblock all along the way. The licencing of the key metro airports by the DGCA is seen as a move to put them in their place.

written a general note to the Civil Aviation Ministry sometime back, explaining the rationale of the licensing process and why his organisation should undertake it. The process would also mean more revenues for the DGCA, which is expected to make several crores from its licensing routine. The Airport Authority at first protested the move and even wrote to the Civil Aviation Ministry to give it its perspective. As a last-ditch effort, it decided to seek legal opinion, which seems to have deeply upset Praful Patel. In fact, he is said to have told the AAI that it had no business doing it without consulting the Ministry. In deference to his wishes, it chose to not go for a legal opinion, and the licensing procedure got underway. AAI sources state that if the DGCA had been “efficient and competent”, there would never have been an AAI. Delving into history they recall that originally there was only the regulatory authority and the I(International)AAI and N(National)AA wing of the Airport Authority only came being because the DGCA was “sloppy, unimaginative and poor in handling airport matters.” They said that the first time the DGCA tried to get licencing approved was during the tenure of Mr. Sivaraman as DG. “Now they have succeeded,” said one source.

DELHI AIRPORT: The Indira Gandhi International Airport has been licensed

CRUISING HEIGHTS March 2006

The DGCA rubbishes the AAI argument and states that they cannot be the operator and certifier rolled into one. “ Let us put it this way, if the AAI was good in its work, there would have been no privatisation and no licencing. They have brought it upon themselves.” Officials concede that most of the operational airports owned by AAI meet the standards set up by ICAO. Steps are continuously being taken to improve the standards at the remaining airports of AAI. The reasons for some of the airports not meeting the ICAO standards can be attributed to non-availability of land adjoining the airport boundary, uncontrolled development around the airport and rapid growth of airport traffic causing crowd at terminal building and car park area of various airports. If the licensing is one side of the story, the other side is the economic regulatory authority, which is likely to be placed before the end of the year. The Economic Survey for 2005-06, which was recently presented in Parliament, said that due to the monopolistic nature of the airports and their economic importance, efforts are afoot to set up an independent airport economic regulator for tariff setting and monitoring of performance standards.

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TOURISM DIGEST

AT A GLANCE Movenpick moves to India MOVENPICK HOTELS & RESORTS (MH&R) is all set to break into the Indian market. It has recently signed a management contract with MS Ramaiah Hotels for a business hotel in Bangalore. The project is located in a prime business and residential district of Bangalore, close to the upcoming new international airport. Both the airport and the five-star hotel are scheduled to open in 2008.

Ecotourism news

NEC Meet

HE LEISURE HOTELS chain has been awarded membership of The International Ecotourism Society (TIES) of the US for its eco-friendly luxury resort, Corbett Hideaway, situated in the heart of Corbett National Park, in Uttaranchal. During a recent auction of holiday destinations held by TIES at The Carnegie Institution in Washington, the 10-day holiday package— Tigers and River Ganges—at Corbett Hideaway was bought over several other global destinations. The Hideaway’s cottages provide maximum comfort while managing the illusion of being in the wilds. There are 40 guest rooms and double-room suites as well as a swimming pool and a spa. Leisure Hotels is one of the oldest in Uttaranchal’s tourism sector and has encouraged responsible travel to natural areas through greater appreciation of the ecosystem. In another case, the Asian Development Bank (ADB) is urging the Manas Wildlife Sanctuary, spread into India and Bhutan, to be developed into a world ecotourism model site. The park site is listed as a World Heritage in Danger List in 1992. The sanctuary, in the foothills of the Himalayas, is home to a great variety of wildlife, many of which are endangered species, such as the tiger, pygmy hog and Indian rhinoceros. The bank has further identified Assam, Arunachal Pradesh and Nagaland as ideal areas for the development of ecotourism. It further suggests development of a marketing strategy for handicraft products from the region. The International Union for Conservation of Nature (IUCN), under UNESCO, has pointed out Kokilabari as an ideal site for such project.

RECOGNISING TOURISM as an engine of growth, the North Eastern Council recently decided to establish a North East Tourism Development Council (NETDC) to coordinate organised development of the activity in the region. The meet, attended by governors and chief ministers from all eight states of the region, also resolved to accord due importance to industrialisation by launching innovative schemes aimed at attracting entrepreneurs from outside the region. The Council also decided that the schemes and incentives be unique in character to the region, so that investors remained attracted to the region. NEC has invested about Rs 7,000 crore, mainly in the transport and communication sector followed by power and health sectors, since 1972 in the region. It has also funded construction of 97 roads with a total length of 7,700 km with an investment of Rs 1,867 crore.

Illustrations by Zahid Ali

TN plans travel circuit programme

THE TAMIL NADU TOURISM DEPARTMENT is planning to shortly come out with Vivekananda tourist circuit programme, in addition to the recently launched Adi Sankara and Jain tourist circuits. Adi Sankara circuit covers places such as Kanchipuram, Tiruvottiyur, Chidambaram, Tiruchirapalli, Madurai and Tiruchendur, while the Jain tourist circuit covers about five Jain temples in the state. Tamil Nadu occupies the second position in attracting more number of foreign tourists. Of the total three million foreign tourists visited India in 2005, Tamil Nadu attracted one third. In the case of domestic tourists, it occupies the third position. Of its total 48 hotels in the state, Tamil Nadu Tourism Development Corporation has so far franchised around 15 hotels on a 15-25 year lease agreements. CRUISING HEIGHTS March 2006

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Tata Coffee launches Plantation Trails

Kerala's road show woos the French

TATA COFFEE LIMITED (TCL) has ventured into the hospitality sector by launching Plantation Trails, a cluster of well-appointed holiday homes in Coorg, Karnataka. Located in the idyllic coffee estates of TCL, these are original estate homes that were occupied by the planters of the company and have a unique style of their own. They offer a firsthand opportunity to experience plantation lifestyle just as the original planters did— a life far from the urban one—combined with personalised services in the middle of the vast coffee estates. With three-bedroom and double-storey bungalows that offer well-appointed and spacious rooms, Plantation Trails provides for a perfect holiday. Priced at Rs 2,500 to Rs 3,500 per room for two people (taxes extra), including breakfast, Plantation Trails Holiday Homes offer the holiday maker open-top jeep drives, biking, fishing and golfing.

A HIGH-POWERED 12-member delegation from the state tourism ministry, led by Tourism Minister K.C. Venugopal, Kerala, launched an aggressive marketing campaign in France with extremely well made presentations about what God’s Own Country had to offer to French tourists. The state is keen on promoting itself as a medical tourism destination, besides that of ecotourism. Kerala government is keen to promote quality in its offering and has, for this reason, launched a certification process where every tourist infrastructure or service provider had to meet certain quality standards. The delegation was accompanied by several private sector players as well, who were also extremely pleased by the response generated at the event.

Technology further reducing the need for business travel THE TENTH annual Barclaycard Business Travel Survey reveals that almost half of all business travellers (48 per cent) said that technology has reduced their need to travel over the last 12 months. The survey also reveals that many business travellers are choosing to communicate remotely or virtually rather than meet face-to-face. Emailing made 84 per cent remain in their office, with tele-conferencing (36 per cent) and video-conferencing (32 per cent) also reducing the need for business travel. Technology is also proving valuable for business people on the move. The most popular mobile technology includes laptops and mobile phone powerpoints, which two-thirds of all business travellers have used in the past year. The survey revealed that 66 per cent used laptops and mobile phone power points, 40 per cent used facilities to enable remote access to email, 29 per cent used wireless hotspots, 23 per cent entertained themselves by listening to portable music players and 10 per cent watched their portable DVD players when travelling. The research also highlights differences between the sexes. Men still appear to be the more hi-tech of the two genders, with only a third of women (33 per cent) claiming to have accessed email while on the move. Comparatively, almost half (43 per cent) of the men check their emails during business trips. On the other hand, 46 per cent of all business travellers believe that technology did not affect the need to travel and out of these 87 per cent feel face-to-face meetings will never be replaced.

Haryana to promote highway tourism HARYANA TOURISM and Forests Minister Kiran Chaudhary is all set to formulate a new tourism policy in the state, with an emphasis on highway tourism. She said special tourism zones would also be made on the proposed ManesarKundli-Palwal Expressway and efforts would be made to stan-

Nepal attracting more visitors NEPAL REGISTERED an impressive growth of 12.7 per cent in the numbers of visitors flying into it in February 2006. In comparison to last year’s corresponding period, 1,775 more visitors entered the Himalayan kingdom, thereby taking the total to 15,776. Arrivals from India recorded a growth of 34.5 per cent, while the non-Indian arrivals grew by six per cent. Compared to last February, arrivals from various markets have shown mixed performance. There has been an overall growth from Asian segment as arrivals were up from SAARC countries (31.8 per cent), Japan (129.9 per cent), South Korea (66.6 per cent) and Taiwan (169.1 per cent). Markets to decline from Asia were China (–3.2 per cent), Malaysia (–34.6 per cent) and Thailand (–7.8 per cent). The European market in itself declined by 13.5 per cent, contributed by major loss from the UK (–47.4 per cent), despite the growth in arrivals from France (8.2 per cent), Germany (7.2 per cent) and other markets, such as Austria (29.3 per cent), Belgium (17.3 per cent), Israel (66.7 per cent), Spain (63.1 per cent) and Switzerland (15.7 per cent). Danish (–4.5 per cent), Italian (–20.7 per cent) and Dutch (–29.2 per cent) markets, too, declined during the month. On the other hand, arrivals from the US and Australia both went up by 2.4 per cent and 9.4 per cent, respectively. However, the inflow was not a steady one. Visitors’ arrival started picking up only from the third week of the month. CRUISING HEIGHTS March 2006

dardise the dhabas on the highways. The government would also explore ecotourism and golf tourism besides promoting religious tourism, the minister added, and that the government would consider privatisation in the tourism sector for fund generation, if need be. Stressing the need for conservation of forests, Chaudhary said the forest cover in Haryana had reduced to 6.6 per cent of the total area, therefore as many as 4.5 crore plants would be planted over an area of 7,400 hectares.

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INTERVIEW

RETIRED CIVIL SERVANT ASHOK PAHWA MADE A NAME FOR HIMSELF AS ONE OF THE PIONEERS OF HARYANA TOURISM. HE WAS LATER DIRECTOR GENERAL OF TOURISM AT THE CENTRE AND HAS BEEN A VOTARY OF PRIVATE-PUBLIC INITIATIVES TO BOLSTER INDIAN TOURISM. THESE DAYS, HE IS THE SECRETARY GENERAL OF THE INDIA CHAPTER OF WORLD TRAVEL AND TOURISM COUNCIL (WTTC). THIS LONDON-BASED INITIATIVE HAS CHAPTERS WORLDWIDE THAT SEEK TO PROMOTE TOURISM INITIATIVES IN THEIR HOME COUNTRIES. PAHWA, ALONG WITH INDIA CHAPTER PRESIDENT ASHWINI KAKKAR, SPEARHEADS THE INITIATIVES IN INDIA. EXCERPTS FROM AN EXCLUSIVE INTERVIEW.

TOURISM IS THE WINNER Q: The WTTC in India hasn’t done much barring a few retreats with a few high-profile people. Where has it taken you really? It’s all a ‘hail fellow, well met’ situation. Isn’t it? A: I am afraid, no. The retreat is an effort to bring together like-minded people; in this case the travel industry, with opinion makers in an atmosphere in which they can interact closely and understand each other’s perspectives better. We have had three retreats so far and they have been very successful. Members of the Council are now used to it. What I am now planning is a lot of get-togethers with a wide cross section of people, who are connected with the industry, like journalists, people who travel a lot, decision makers and the ordinary people, exchange ideas and help take the tourism process forward. Isn’t it strange that in the last few years every effort has been made to tell the decision maker about the potential of the industry in terms of its capacity to generate revenue and provide gainful employment. In fact, we have said it time and again that it is the maximum in this industry. The present government is concentrating very heavily, for that matter every government, on rural and urban employment. It is very strange that despite knowing the truth and having the potential, we aren’t tapping it. That’s one reason why the numbers don’t add up to much. Everybody says, it is a standard phrase, India has everything that a tourist

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possibly wants-right from snow peaks to beaches to deserts to beautiful countryside. In spite of all these, we receive just about four million tourists. As for domestic tourists, we haven’t really given it the kind of import we need to. We hope to help in the synergy between various agencies that will make this happen.

Yes, we have an agenda, to capture the minds of decision makers, make them aware of the importance of tourism

Q. What is the point of having WTTC, TAAI, IATO and so many travel-related organisations when you people simply cannot get things moving? You can’t even have the Service Tax on this sector lowered from its present high rate. A: I am afraid; an organisation cannot be marked for success or failure. We are here to educate, pass on the information and provide a platform. WTTC is perhaps the only organisation in India where the council members belong to the airline industry, travel sector, the hoteliers and people from other parts of the industry. As regards taxes, the government must be having some compulsions. Obviously, it has to raise resources and it finds it convenient to raise resources from this sector. But, with the Commonwealth Games scheduled to be held in Delhi in four years’ time, it is inevitable that our decision makers will have to relook some of their decisions. Q. Most civil servants, barring some, do not have any idea about the great potential of tourism… A: Let me put it this way; initially, civil servants or politicians have reservations on expenditure in tourism. But once they see the results, they change their mind. When they realise that the facilities that have come up are great incentives for tourism the word goes around, the perception changes all of a sudden. From my personal experience in Haryana, I can tell you the initial reaction was that all your resorts are going to be made into cold storages or orphanages. It changed only when they saw the work at the grassroots. This becomes far easier if private sector is also involved. Q: All these years, tourism has been considered a non-priority sector. Why is this perception continuing? A: We always think tourism is equal to high value tourism is equal to international visitor is equal to high value international visitor. That is wrong. World Tourism Organisation had mentioned a couple of years ago that larger the geographical area, greater will be the percentage of domestic tourists. The ratio is one international tourist is to 120 domestic tourists. They are going to looked after not by five-stars; they are going to be looked after by dhabas or by limited resort facilities, etc. It takes all kinds to make the world go. It is very easy

to spread and disseminate information about tourism in a small country. In a large country like India, when you have thousands of problems, it is very difficult. So the states have to take the responsibilities. If Haryana was the torchbearer at one time, the focus has shifted to Rajasthan, Kerala and Goa, where the private sector is also playing an important role. A good thing is that today the private sector is forthcoming, which was not the case about thirty years ago. At that time, they preferred premium opportunities. Fair enough. After all, the government is responsible for providing the infrastructure and other basic facilities, and only then the private sector has to flow in. After all, private sector is coming in to make profit. It is only the government that can develop an area.

Iinitially, civil servants or politicians have reservations on expenditure in tourism. But once they see the results, they change their mind. CRUISING HEIGHTS March 2006

Q. Do you have an agenda for the next year? A: Yes, we have an agenda. The agenda is to be able to capture the minds of decision makers, make them aware of the importance of tourism and work out a policy. It is very difficult because everybody, be it a minister or a bureaucrat, that comes has his own agenda. So, we need some leverage where all these ideas can be bound together and the result watched. It takes a little time, but it will happen. We will have a retreat, but we are two minds whether it should be in Jaipur or in Udaipur, but it will be in Rajasthan. We are not sure, but it will be either in September or October. Retreats are very well accepted, because if the decision makers can be brought together, more like captive audience, we will be able to plant some ideas in them as to what is to be achieved. We are still toying with the ideas, though. Q. What about Washington WTTC summit? What’s the agenda for this big event? A: Basically to find out what is happening in the developed and developing parts of the world, just to listen and interact with people. Get ideas about what is happening all around.

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DECCAN KHABAR New Flights: The airline has announced new flights beginning from March 1 to May 31, 2006. The routes are ChennaiPort Blair, Chennai-Ahmedabad and an additional evening flight, Chennai-Mumbai. The connectivity to Port Blair has a lot of significance, given the limited and time-consuming sea route. A 180-seater Airbus A320 has been deployed on these routes. ATR Bookings: The airline has opened bookings on all its ATR flights across India for travel between April 1 and May 31, 2006. It operates more than 150 ATR flights across India per day. SMS Bookings: The airline has also launched SMS-enabled ticket booking service. With the introduction of this firsttime-ever, SMS-enabled ticket-booking service, it believes it will usher in a revolution in its system of airline bookings. This service is primarily focusing on introducing the element of convenience for air travellers in India. “The launch of the SMS-enabled ticketing system is yet another step towards making air tickets easily accessible for the mammoth 62 million mobile phone users of India. While with our earlier initiatives we have successfully brought tickets to the doorstep of the consumers, with this new and innovative method, air tickets will be available on one’s fingertips,” said Deccan MD Captain Gopinath. The ‘Bata’ rate: The airline, in another move, announced one lakh tickets at Rs 999 (inclusive of taxes) for travel between February 20 and April 10, 2006. The bookings opened on February 12 at 8.00 am. One traveller described it as the ‘Bata’ rate (the popular shoe company that sells shoes often at Rs 99 or Rs 199 and so on). This fare will be applicable on select sectors, including Hyderabad-Ahmedabad-Hyderabad, Pune-Chennai-Pune, Mumbai-Hyderabad-Mumbai, Mumbai-Kolkata-Mumbai, Bangalore-Kozhikode-Bangalore, Bangalore-MangaloreBangalore, Chennai-Vijaywada-Chennai, Delhi-KolkataDelhi, Delhi-Amritsar-Delhi, Delhi-Mumbai-Delhi, KolkataGuwahati-Kolkata and more. When the sale proved a hit, the airline released a further 50,000 seats for the Rs 999 sale. Warwick Brady, Chief Operating Officer, said, “This is a relatively lean season for us and instead of carrying only 80 per cent loads, we want to carry 100 per cent loads at low fares. To celebrate the success of our last Rs 999 offer, for which we received terrific response from our passengers, we are offering another 50,000 seats priced at the knockout price of Rs 999.” Helicopter, too: Deccan Aviation, India’s largest private sector helicopter charter company, is adding yet another helicopter, a Bell 407 to its existing fleet, taking the unique experience of flying a step further. Its network of bases spans seven locations across the country. Promoted and operated by senior officers from the Indian Army aviation, Deccan Aviation was launched from the corporate base at Bangalore in September 1997. The company has a fleet of 10 helicopters and two fixed-wing aircraft deployed across bases at Bangalore, Mumbai, Delhi, Ranchi, Hyderabad, Surat and Katra (J&K). Shortly another two-three helicopters will be added to the company’s inventory. Deccan Aviation also revolutionised affordable air travel with India’s first low cost airline—Air Deccan—that currently has a fleet of 27 aircraft.

Bikhchandani joins MakeMyTrip board MakeMyTrip.com has announced the appointment of Sanjeev Bikhchandani as an independent member of the board of directors of MakeMyTrip.com. Sanjeev Bhikchandani, CEO of Naukri.com, is a veteran in the online industry and has established some of the most successful Internet companies in India. Deep Kalra, Founder and CEO, MakeMyTrip.com, welcomed Sanjeev Bikhchandani to the board.

MakeMyTrip.com integrates SpiceJet MAKEMYTRIP.COM, the No 1 online travel agency in India, has integrated SpiceJet reservation system with its unique search engine technology. This is the first time ever in India that the reservation system of an LCC has been married with that of the GDS on the same platform. This technological enhancement on MakeMyTrip will further empower the consumers to compare and buy tickets across various LCCs and full-service airlines. The flights reservation system of MakeMyTrip.com is already integrated with two other reservation systems-Abacus and Amadeus-besides the SpiceJet reservation system powered by Navitaire. MakeMyTrip.com launched its India specific site in September 2005 and has emerged as a leader in online travel e-commerce. The India website sells over 1,000 airlines tickets everyday and about 100 room nights are booked daily on the site. MakeMyTrip is booking tickets for all major airlines as of now and has a tie up with over 500 hotels in the country.

THE METROPOLITAN HOTEL NIKKO, New Delhi, hosted The Great Wine Festival at the Eden Court and several wine producers from across the world, wine lovers of every hue, as well as the cognoscenti and the beautiful from the Capital, mingled together in the heady atmosphere of wine tasting, sipping everything from Chardonay to Pinot Noir and Cabernet Sauvignon. The balmy spring evening and a live band added spice to the event. And, that’s not all; a wine fest without a grape stomp is no fun, so there was plenty of that as well.

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EMIRATES OFFERS for FIFA IN A unique move that will make Emirates Airline incredibly popular with football fans around the world, the airline is offering its passengers the chance to see 2006 FIFA World Cup™ matches live in Germany with complimentary tickets. As part of its commitment to its customers, Emirates is giving away thousands of match tickets with its exclusive packages to Germany. As an Official Partner of the 2006 FIFA World Cup™, Emirates has access to match tickets and is offering them on a complimentary basis to its passengers who book packages to Germany or other select European cities with the airline to see what many consider to be the greatest show on earth. The Emirates 2006 FIFA World Cup™ package offers include a return air ticket, which may be booked in economy, business or first class, airport and airline taxes and surcharges, hotel accommodation, taxes and service fees and a complimentary FIFA World Cup™ match ticket, all of which are subject to availability. The offer does not include visas, airport transfers or transfers to the football stadia. The offers are valid for all matches between June 9 and July 9, 2006, for all of the 64 FIFA World Cup™ matches, including the final, and passengers can opt to watch one or more of the matches in Germany, as long as they meet booking requirements and reserve their hotel accommoda-

tion through Emirates at the time of booking. Hamburg Bonanza: In a move that will be music to the ears of many of its customers eyeing travel to Hamburg, Emirates is offering complimentary accommodation and car rental on the launch of its daily services to the German city on March 1, 2006. The offer, valid from March 1 to May 31, provides travellers flying Emirates first class to Hamburg with three nights’ complimentary stay at the Raffles Hotel Vier Jahreszeiten plus a free day’s rental of a BMW 7 Series car or a weeks’ car rental in Hamburg. Business class travellers can enjoy two nights’ stay at the Raffles Hotel Vier Jahreszeiten or five days car rental; while economy class travellers can avail of one complimentary night’s stay or three days of car rental in Hamburg. The car rental option includes an Audi A4 (or similar) with unlimited mileage. Hamburg will be Emirates’ fourth gateway to Germany. The airline currently flies twice a day to Munich, Frankfurt and Düsseldorf. Germany is one of Emirates’ most important markets and its new daily service to Hamburg will further strengthen this position. Emirates Airline’s offer of complimentary tickets to the 2006 FIFA World Cup™ through its travel packages is a part of the airline’s commitment to its passengers, and its ongoing strategy for the event that sees the airline further establish itself as a truly global brand.

Gulf Air wins ‘Onboard Catering Excellence’ award… again Gulf Air has been named as the Best Airline for its ‘Onboard Catering Excellence’ in the Skytrax Awards. By winning the award, Gulf Air has repeated its winning streak, not just once, but three times. Last year, Gulf Air won the Skytrax World Airline Catering Awards 2005 for ‘Best Onboard Catering in First Class and Business Class’ and the PAX International Readership Award for ‘Best New Product Launch in Inflight Service’.

INDIAN NEWS INDIAN AIRLINES LTD has signed a contract for 43 Airbus A320 family aircraft. The deal was signed by the Chairman and Managing Director of Indian Airlines Ltd, Dr Vishwapati Trivedi, and Executive Vice President, Airbus, Dr Kiran Rao, in the presence of French President Jacques Chirac and Prime Minister Manmohan Singh. Indian has ordered 43 Airbus A320 family aircraft, comprising 20 A319s, four A320s and 19 A321s. The deal marks the first time that an Indian carrier has selected the Airbus A321. All of the Airbus aircraft will feature two-class cabin layouts and will be powered by CFM International CFM56-5 engines. Indian Airlines was one of the first carriers to recognise and benefit from the Airbus A320 family, of which it currently operates 50. With a large pool of pilots, engineers and

cabin crew that is already trained and experienced in operating the Airbus A320, it is well placed to add other family members to its fleet.

India’s most trusted airline: Indian has been ranked as the most trusted airline in the service brands category, for the third year running in the Brand Equity annual survey, published in the Economic Times. What is even more creditable is that in a special box, headlined ‘Cruise Control’ and reflecting the airline rankings, Indian is ranked first, followed by Air Sahara, Jet Airways, Kingfisher Airlines and Air Deccan, in that order. To quote from the Economic Times, “…Each brand was evaluated on relatedness, perceived popularity, quality connotation, distinctiveness/uniqueness of what it stands for, value for money that it offers and repurchase intent. The survey was conducted by the Economic Times, collaborated with AC Nielsen ORG-MARG, one of the most respected market research agencies.

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SNIPPETS

Focus on Family Holiday Excursion

JET NEWS

New Record in passenger numbers JET AIRWAYS has set a new record in the history of Indian civil aviation by flying 36,406 passengers, with a seat factor of 86 per cent on Wednesday, February 15, 2006. This is the first time an airline in India has flown 36,406 passengers from its available capacity of 42,522 seats on its domestic and international sectors. This achievement can be attributed to the seamless coordination between management, marketing and sales, aptly supported by the highly efficient revenue and yield management system.

HIGHLIGHTING THE holistic appeal of Sri Lanka and encapsulating the family holiday concept, Sri Lanka Tourist Board, the nodal agency to promote the country, has unveiled its consumer trade promotion at Outbound Travel Mart (OTM) by highlighting the multi-facets attributes of the country, which offers ‘Something for Everyone to Indulge and Enjoy’. Sri Lanka, with its over 2,500-year-old history and cultural heritage, offers a wide range of tourism attractions, which blends in well with family tourist itinerary. From distinct tourist sites, which go beyond sun, sand and sea, the destination also offers wildlife parks and sanctuaries coupled with top-of-the-line properties with new tourism products. For those looking for sporty indulgences adventure sports there are other viable options to explore. Tourism industry is the fourth largest revenue earner for Sri Lanka economy, contributing to a greater number of tourism receipts to GDP. India is fast emerging as the significant market for Sri Lanka, contributing to an increased tourist arrival. In the year 2005, 1,13,323 Indians visited Sri Lanka, registering an overall increase of 7.8 per cent, as compared to last year’s figures.

Online checking: The airline has become the first to offer an online baggage tracing system for passengers. By means of this facility passengers can now check the status of their missing or delayed baggage through the worldwide computerised baggage tracing system, which can be accessed on its official website, www.jetairways.com, under the Product & Services section. Passengers need to report their missing baggage or delay in receipt of their baggage at Jet Airways’ airport offices. They will then be provided with a 10-character file reference. Passengers are required to insert this 10-character file reference and their last name on the website to get the baggage’s status.

‘DAE Airports’ will bid for slice of US $400 billion market

Skywards e-gate card SKYWARDS, THE frequent flyer programme of Emirates and SriLanka, is now offering its Silver Card members the opportunity to convert their cards into a multi-application card for speedy exit and entry through Dubai International Airport. Skywards Silver Card members resident in the UAE or in countries listed as visa-waivered, can obtain the card, which is combined with Dubai Immigration’s e-Gate Card, in exchange for just 5,000 Skywards Miles. The e-Gate Card, issued by the Dubai Naturalisation & Residency Department (DNRD), usually costs Dhs 150 (US $40) and is part of Dubai International Airport’s fully automated immigration control facility, which provides a fast-track immigration clearance using smart technology and biometric scans.

DUBAI AEROSPACE ENTERPRISE (DAE), the recently launched global aerospace company, today signalled the start of its commercial roll-out with the announcement of a partnership between its DAE Airports subsidiary and a six-strong consortium representing the premier league of the Emirate’s businesses. A Memorandum of Understanding (MoU), signed by each party to the agreement at the Asian Aerospace trade show in Singapore earlier today, will see DAE Airports take the lead in bidding for new business. The six consortium partners—Emaar, Dnata, Mercator, Emirates National Oil Company (ENOC), Amlak Finance and Dubai Airports Free Zone Authority (DAFZA)—will add their specialist expertise to the DAE Airports package to offer a commercial cutting edge in negotiations. The success of the consortium will be driven by an unprecedented growth of the Airport business. According to a study conducted by A.T. Kearney—the global management consulting firm—AsiaPac and Middle East Airport Markets are expected to grow by eight to nine per cent over the next 10 years. The partnership will target the US $400 billion airport development and operations market in the emerging economies, primarily in the Middle East, India and China.

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Rajasthan Tourism Club One launches Jet Card MAKING FRACTIONAL ownership of an aircraft even simpler, Club One Air, India’s first Aircraft Fractional Ownership Company, today launched a unique concept of ‘Jet Card’. The Jet Card Fractional Ownership programme is a smart card for ‘High net-worth’ individuals that aim to own an aircraft for at least a year. The card comes fully loaded with 25 hours of flying time, usable within a calendar year, that is encashed with every hour or minute used. And access to this extremely attractive card is a 25 per cent advance payment of the committed flying hours. The utility of this card is special in that it gives captains of industry and such high net-worth greater flexibility in managing their flying needs. Managing Director of Club One Air, Manav Singh, regarded this “as the next big step in Club One’s expansion and successful launch.” He further added that with the increase in fractional owners, “the launch of ‘Jet Card’ programme will not only add wings to an individual’s mobility, but will also help to expand the membership by catering to companies that have well defined corporate flying requirements for a year”. Club One Air is India’s largest non-scheduled operator and is the only company in India and Asia to offer Aircraft Fractional Ownership and first class air travel to corporates. Club One Air has been audited and certified by international Aviation Safety agencies like Wyvern of UK and Hart of Australia. Club One Air has been certified to have and follow international standards of operational safety.

DURING THE monthly meeting of the Association of Domestic Tour Operators of India (ADTOI) held in Delhi, Rajasthan Tourism Development Corporation Ltd (RTDC) participated and made an impressive audiovisual presentation before ADTOI members to promote tourism in Rajasthan and to showcase their various tourism products available to the visiting tourists. The RTDC team was headed by Gun Nidhi, Sr Manager, Marketing. During the presentation Gun Nidhi announced RTDC’s proposal to appoint marketing agents to sell their products and requested ADTOI members to extend their support in their efforts to promote tourism in the state.

Gun Nidhi, Sr Manager Marketing, RTDC, receiving memento from Sanjay Saxena, General Secretary, ADTOI. On his left is Mukesh Jaga, President, ADTOI.

IATO NEWS Cuba, here I come: To continue and sustain the increase in tourist arrivals from India, Mauritius Tourism, as part of its trade promotion activity, has kick started the year with Outbound Travel Mart. The need for expanding two-way traffic between Cuba and India was underlined and ways for it explored recently at a reception given in honour of the first-ever and all-woman tourism delegation from Cuba by Indian Association of Tour Operators (IATO). The delegation, led by Mariya Pinchet, comprised Yenisey Galindo, Dulce Maria Bencomo, Elurira Gonzalez and Tania Vazques. In his welcome address, Subhash Goyal, President of Indian Association of Tour Operators, urged the Cuban Ambassador to help create awareness among the Indian tourists about his beautiful country and also ensure that the prospective tourists, both business and leisure, faced no problem in getting visas. In her presentation, Maria Pinchet, ably assisted by Tania Vazquez, pointed out that from 1995 to 2005, tourism had made a 14 per cent growth in her country. In 2005, Cuba received more than two million tourists, particularly from Canada, Italy, the UK, Spain and Germany. About the excellent infrastructure in her country, it was further pointed out by her that there were 70 airports in the Caribbean and ten of them were in Cuba. Regular flights and charters by 93 airlines had access to her country, which was a round-the-year destination. Cuba has won the hearts of the visitors by its lovely beaches, health resorts, old cities, scenic beauty, besides its warm, hospitable, vibrant and educated inhabitants, who are its greatest assets. CRUISING HEIGHTS March 2006

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Oberoi tops again THE OBEROI SPA by Banyan Tree at The Oberoi Udaivilas, the luxury resort in Udaipur, has been rated among the best spas in the world by the readers of Condé Nast Traveller. The Readers’ Spa Awards 2006, announced by Condé Nast Traveller, UK, one of the leading travel magazines in the world, lists the world’s best spas rated on various criteria that range from ambience and treatment to cuisine and service. The Oberoi Spa, at The Oberoi Udaivilas, received a near-perfect overall score of 92.86, placing it ahead of The Spa at Mandarin Oriental, New York; Chiva-Som International Health Resort, Thailand; and The Spa at Chewton Glen, UK, among others. This recognition comes soon after The Oberoi Udaivilas was rated the best hotel in the world for service by the readers of the same magazine in its Gold List 2006— the ultimate guide to the finest hotels in the world.

Continental is Number 1 CONTINENTAL AIRLINES was rated the most admired US airline on Fortune magazine’s America’s Most Admired Companies airline industry list. Continental ranked No 1 in several key categories on the list, including quality of products and services, quality of management, innovation, and social responsibility. The rankings are determined in a survey of industry analysts, boards of directors, and corporate and airline executives. They survey eight areas, including quality of products and services, quality of management, innovation, social responsibility, financial soundness, employee talent, use of corporate assets, and long-term investment value. Southwest Airlines was ranked second on the list, followed by AMR, Alaska Air Group, ExpressJet Holdings, America West Holdings, Northwest Airlines, Delta Air Lines, UAL and US Airways Group. Continental Airlines is the world’s sixth-largest airline.

Another award for Le Passage

KLM Restructuring

TUI UK, formerly known as Thomson Holidays, presented a Special Recognition Award to Le Passage to India Tours & Travels’ Goa office, for the excellent handling of its charter traffic. TUI UK has been operating two weekly flights to Goa and will continue to do so till the end of April 2006.

KLM ROYAL DUTCH AIRLINES will restructure its flight schedule at the start of summer 2006, offering customers a wider range of frequencies and connecting flights. By better spreading peak load across the day, KLM will assure the Air France-KLM Group and Sky Team partners further room for growth at Amsterdam Airport Schiphol. Adjustment of flight schedules will ensure improved utilisation of the existing hub capacity in baggage systems on ramps, at piers and elsewhere. KLM has projected an over five per cent increase in available seat kilometre (ASK) capacity in 2006, compared with the current levels. It will strengthen its intercontinental network by maintaining its new services to Entebbe and Hyderabad, launched this winter, and by raising frequency to Dubai to two daily roundtrips.

Tracey Denman Hughes, Head Long Haul Traffic, presented the award to Reshma Alves in the presence of Arjun Sharma, Managing Director of Le Passage To India Tours & Travels Pvt Ltd. This award is usually given to a destination management company that has reached the highest international standards in professional service and performance. Le Passage to India Tours & Travels Pvt Ltd is India’s fastest growing destination management company and in a short span of time has already set new benchmarks in the industry.

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Kenya’s Seven Safaris

KENYA, HOME OF SAFARIS, took a progressive step forward in promoting and enhancing its visibility in the Indian outbound tourism market. Taking the initiative is the Kenya Tourist Board, which has announced ‘Seven Safari Attractions’ as a holistic and effective campaign to lure Indians at a specially concluded road show. The road show comprised of a Kenya delegation of nine large private tour companies exchanging views, ideas and business with more than 200 Indian travel companies. India is the largest tourism revenue generator for Kenya from Asia, ahead of even China. The country witnessed the highest ever Indian arrivals, of 32,030, a surge of over 31 per cent from the previous year. The destination is growing in its popularity and the tourist board anticipates an over 35 per cent growth from the current year from India. Dr Ongong’a Achieng, Managing Director, Kenya Tourist Board, said, “In Asia, India would be the next big thing for Kenya. Our long-standing history and cultural ties would provide us an edge to customise our products and strategies effectively in the market. Presently, the country receives majority as Free Individual Travellers (FIT) or small leisure groups from India. We would like to sustain a higher growth from these segments by undertaking numerous marketing initiatives. The country also offers numerous airline options directly and indirectly from more than five gateways from India. We hope Indian travellers can reap the benefits of specialised tour packages and itinerary, which will follow after this India road show.”

Kingfisher Airlines ties up with Galelio KINGFISHER AIRLINES has announced a tie up with Galileo International that will enable it to expand its reach and distribution. Galileo International is a leading global distribution system (GDS), and subsidiary of Cendant Travel Distribution Services (TDS). This agreement will ensure that Kingfisher Airlines’ fares and inventory are available on the Galileo global distribution system (GDS) platform. Under this agreement, Galileo, which has access to 65 percent of the IATA Travel Agent base in India and connects with 50,000 travel agents across the globe, will enable Kingfisher Airlines to further strengthen its width and depth of penetration, in both the domestic as well as the International markets and help the air traveler choose the best flight option in the Indian skies. This agreement is a first for any new generation True Value airline. “The travel agent plays an important role, in helping the air travelers choose his airline and with Kingfisher Airlines strong expansion plans, we are pleased to leverage Galileo’s GDS global reach and travel agents’ relationships”. Commented Dr. Vijay Mallya, Chairman and Managing Director, Kingfisher Airlines.

LEFT TO RIGHT: Mr Aso, Foreign Minister of Japan looking at the Sakura Book. Also in the picture are H.E. of Japan Y. Enoki and Mr. Vipul Gupta, Director Sunair Hotel Ltd.

Jap PM visits Nikko

LEFT TO RIGHT: Mr. Aso, Foreign Minister of Japan with Mr. Vipul Gupta, Director Sunair Hotel Ltd.

Bird’s new alliance BIRD INFORMATION Systems Private Limited (BIS) and Softec GmbH have announced a strategic partnership, wherein BIS will market and support Softec’s flagship ‘MonaLisa’ software for airline revenue accounting solutions and services in the Indian subcontinent. The product range of the ‘MonaLisa’ software package comprises financial as well as operational airline

solutions. The financial product range includes modules for Passenger Revenue Accounting, Cargo Revenue Accounting, Route Cost Analyser and Group sales. While the operational airline solutions portfolio on MonaLisa comprises solutions for airline operations like Crew Scheduling, Logbook Management and Charter Calculation.The possibility to combine these different solutions with each other according to an airline’s needs enables it to obtain an all-in-one solution from Softec, while all these program parts can also be run separately as stand-alone tools.

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Dubya dinner

Gopi’s supper

WHEN DUBYA came calling last month one of those invited to the President’s Moghul Gardens banquet in honor of the US President was Civil Aviation Minister Praful Patel. In the last two years, there have been several historic collaborations with the Americans-notably the open skies policy and the Air India deal for Boeing aircraft and the Indian Air Force decision to go for the BBJs (Boeinng Business Jets) for their VVIP fleet. No wonder Indian aviation is hot in the eyes of the Americans. Well, as far the dinner goes we don’t know what Bush said to Patel or vice versa. But if George Bush’s body language is anything to go during his three day trip to India, he could well have said: ‘you kinda seem a nice fella.’

AT ANOTHER dinner just a week preceding the Bush blitz, the common man’s flying machine had its chief representative, Captain Gopinath, at the same Mughal Gardens for dinner with Jacque Chirac. Now with a hangar full of ATRs and Airbuses, it makes sense for the French to fawn over Gopi. But knowing their preference for subtlety, Chirac could well have said, “Uhm… mmm… good plane. Very good plane.”

Big ticket agreement THE BIG ticket agreement, however, was the one inked by Indian Chairman and Managing Director Dr Vishwapati Trivedi with Dr Kiran Rao of Airbus for 43 brand new Airbus aircraft for the country’s national carrier. This was at Hyderabad House in the presence of Chirac and Dr Manmohan Singh. This deal comes nearly two decades after Indian (then Indian Airlines) had signed a historic deal for the A320s. As a footnote one may add that it was the launch customer for this bestseller and Trivedi’s predecessor, Sunil Arora, relentlessly pursued the present deal for the A 319s, 320s and 321s.And on this Mantriji had no difference of opinion with him.

Cheers

CRUISING HEIGHTS March 2006

NO SURPRISE that with Kingfisher Air Chairman Vijay Mallya Jacque Chirac decided to clink glasses and raise a toast for confirming an order for the turbo prop ATRs. The 15 new planes come at a cost of $270 million and are in addition to the 20 ordered earlier. The signing ceremony took place at the residence of the French Ambassador on the first day of Chirac’s visit in end February. A flamboyant Mallya signed the agreement with officials from Avions de Transport Regional (ATR) and said that the deal would give a boost to air travel in the country. “In these days of high fuel prices, the ATR 72500 is ideal for us to exploit these opportunities in the most economical manner,” he added. For the record Mallya prefers the comfort of a Boeing for his personal travel.

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