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MDLR’s Gopal Goyal wants to reach for the skies

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EDITOR-IN-CHIEF’S NOTE

Hyderabad Blues

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ast week, I travelled on one of the LCCs from Hyderabad to Delhi. It was my first experience on board this airline — and I must say, I was disappointed. No, not with the flight.

The crusty British veteran in command seemed the only cheerful person on board. He had a freebie for the ladies (a free drink and sandwich) because it was international women’s day and didn’t have the monochrome tone and tenor that most commanders have when broadcasting on the public address system at 32000 feet. And I must confess, it was an uneventful comfortable flight that landed before time in Delhi because there was no traffic over the national capital!

The cabin crew looked like they were strolling at MG Road and giggling and laughing while they made up their minds on which movie to take in at the multiplex and where to jive once that was over. They were amateurish and downright tacky. I wouldn’t blame them for their demeanour. After all, what are you doing distributing sandwiches and litchi juice in your early twenties. It’s time to salsa and burn the floor and here they were working the aisles.

But the point is, most of them chose the aisle over the dance floor. The attractions of a glamorous job, zipping off to new cities each day and a comfortable pay packet has been too alluring and like Twenty20 cricket every young man (and woman) wants to have a taste of the magic. The consequences are there for everyone to see. Poor training and even poorer accent and pronunciation cause a huge mismatch between the travelling public and the people who are supposed to be their interface while on board.

What makes it worse is the changing demographics of those on board.

Many of them are shy, unsure and hesitant to reach out for help. It happened on the way out to Hyderabad, again, on an LCC, departing bang on time. While it’s good to leave on time, some allowance has to be made to get passengers seated. So, here we had the spectacle of a big jamboree from Andhra Pradesh (looked like a

CRUISING HEIGHTS May 2008

marriage party on its first trip by plane) desperately trying to find their seat numbers.

One of them shyly asked the passenger in front of my seat if he could take the middle seat in their row since that seemed his number.

Clearly, this gent, a seasoned traveller, had no desire to spend an hour and thirty minutes with a rustic next to him. He pointed towards the airhostess and fobbed him off. By this time the aircraft had started taxiing and there were still a good twenty odd people on the aisles searching desperately for their seats. Not wanting to compound the problem, the airhostess asked them to sit wherever they could.

So, there you were. Completely new in an alien atmosphere, sandwiched between strangers, not understanding the language or the signs above your head. Finally, when we were airborne and the seat belt signs were off, one of them gently got up and that was the sign for the rest to scamper around and try and place themselves with familiar faces.

Anyway, to come back to the return flight.

My colleague, a diabetic, would have preferred a low sugar drink to the syrupy Litchi mixture. But that wasn’t available. Neither were there any hot beverages on board. “While I was willing to pass the absence of hot beverages, I think its unpardonable to not account for diabetics,” he said.

“Why don’t you give us your feedback,” drawled the steward.

But the form never came and there was no feedback.

As we were getting down in Delhi, I asked him about the form.

“We ran out of stock,” he informed me cheerily and added, “We look forward to welcoming you again.”

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US seeks to reign in tarmac delays The US Department of Transportation will require airlines to include more complete data on tarmac delays in their monthly operational performance reports submitted to the government.

Starting October, US airlines will be required to account for tarmac delays incurred by flights that sit on the runway, return to the gate and depart later. Currently, airlines are required to report tarmac delays incurred only by flights that depart after sitting on the runway. Airlines will also be required to account for tarmac delays by flights that are cancelled after having left the gate and flights that are diverted to another airport. “Passengers should know whether it will take as long for their flight to get to the runway as it will to land at their destination,” said Transportation Secretary Mary Peters in a press conference.

The department is going to auction off more “slots” for airlines at Kennedy International and La Guardia airports as “a way to keep aviation competition alive in the free market capital of the world” and thus make flying cheaper as well as more efficient and pleasant, Ms Peters added.

Earlier, President Bush in 2007 had proposed new rules that promised passengers to get a more accurate picture of delays. For example, airlines could be penalised for an “unfair and deceptive” practice if they publish schedules that airplanes miss by more than 15 minutes, more than 70 per cent of the time.

We in India are a long way from something like this, but sooner or later, if we have to compete in this globalised world, we will have to become serious about being on time. Is anyone listening in the Aviation Ministry?

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contents

TIME TO SOAR FOR AIRCARGO p24 Start-up and home-grown aircargo carriers are going places now — thanks to an unprecedented boom in the cargo sector.

A close look at the buoyant industry and what holds it back.

OFF THE RECORD

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Top directors of Air India seem to have a thing for Delhi, for many operate from here instead of the headquarters at Mumbai. But, Civil Aviation Secretary Ashok Chawla would have none of it!

CRUISING HEIGHTS May 2008

NEWS DIGEST

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A specially formed parliamentary committee has repeated what several individuals, bodies and airlines have long been saying: reduce the taxes on ATF to raise the bottomlines of domestic airlines. A look at the ATF imbroglio.

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

CRUISING HEIGHTS Editor-in-Chief

K SRINIVASAN Managing Editor

TIRTHANKAR GHOSH Consulting Editor

CHOCKS OFF FOCUS

p32

Gopal Goyal strayed from real estate into the aviation business which has now become a passion for him.

A year after starting his MDLR Airlines, Goyal is now looking to consolidate and expand. A comprehensive report.

p22

Does one really need a high-powered Commission to understand why private airlines do better?

It is time government organisations relearn the manner of doing things.

R KRISHNAN Associate Editor

BIPIN SHARMA Copy Editor

AALOK SRIVASTAV Copy Desk

BIRENDRA KUMAR Layout Artists

RUCHI SINHA PRADEEP JHA Art Director

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BHART BHARDWAJ Co-ordinating Photo Editor

H C TIWARI

SPECIAL REPORT SNIPPETS

The suave Montek Singh Ahluwalia has rubbed none other than Aviation Minister Praful Patel for the lack of facilities at New Delhi’s Indira Gandhi Airport. A detailed report on the slugfest between the two high-power personalities.

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Jetairways’ Jetprivilege wins Freddie awards four years in a row. Delhi airport goes hi-tech. Air Arabia's doing well in India and a unique butterfly festival in Hampyeong, Korea.

BACK PAGE GLOBETROTTING

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Be careful about your mobile and other belongings at airport check-ins, for even co-passengers can sometimes pinch it. Elsewhere, a dutiful pilot gets fired for denying to fly a defective plane in the US.

p36

p48

Customers of the masterpiece Boeing 787 Dreamliner all around the world can now heave a sigh of relief as the aircraft’s production has now picked up speed.

CRUISING HEIGHTS May 2008

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RAJIV SINGH Executive Director

RENU MITTAL Editorial & Marketing office: Newsline Publications Pvt. Ltd. C-15, Sector 6, Noida 201 301 Telefax: +91-120-4257701-03 All information in CRUISING HEIGHTS is derived from sources we consider reliable.

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

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Owned and published by K. Srinivasan 4C Pocket-IV, Mayur Vihar Phase-I, Delhi 110091 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase-I, New Delhi 110 020 Vol II No 13

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Own it or fly it!

PERISCOPE

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In addition to outright purchase of aircraft, we will also offer the option of “on demand”. This model will allow usage of aircraft according to requirements without going into fractional ownership nor wasting valuable aircraft life through lack of utilisation.

Executive Director, Bird Group, ANKUR BHATIA on their plans for General Aviation.

LETTERS TO EDITOR

R Krishnan’s column (Consistently Inconsistent, April ’08) unfolded the mystery behind the change of guard of former CMD of Air India, V Thulasidas and the repercussions of this move. This change of guard has left some unanswered questions, which should have been answered by the erstwhile CMD of Air India, V Thulasidas. He should have discharged his responsibilities before handing over the reins to Raghu Menon. What he did was totally unprofessional. I only hope that Raghu Menon would do wonders in changing the fortunes of Air India.

Shyam Kapur, Ahmedabad April 2008

Rs 60

Illustrations: Rajeev Kumar

The cover story (Handling them on the Ground, April ’08) truly enlightened the readers about the pros and cons of the ground handling operations in India. The writer took stock of the reasons behind the ills of ground handling in India. Indian airports truly lack adequate ground handling facilities as can be gauged from the poor conditions rampant at airports. It is high time that the ministry of civil aviation restructures the ground handling policy and gives the much-needed fillip to the ground handling facilities at the airports.

Rahul Sood, Mohali

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The story on air cargo (Go east and west, April ’08) made interesting reading. Air cargo operations have increased manifold over the years. Indeed, the airports in India are brimming with them like never before. The story rightly took stock of the situation in India by throwing light on the opportunities thriving in the air cargo sector. It is encouraging to know that Indian cargo operators have located new markets abroad, which used to be the other way round. Air cargo operations hold great potential in India, What remains to be seen in the future is, how Indian cargo industry capitalises on the potential.

Ali Haider, Kota All correspondence may be addressed to Editor, Cruising Heights, C-15, Sector 6, Noida 201 301 OR mail to newslinepublications@rediffmail.com

Wise men at the top

The steering committee would consist of people whose opinions are needed to clear proposals, but such a process would significantly reduce the processing time for a new airport to come up.

Civil Aviation Minister PRAFUL PATEL on the committee that will oversee new airport approvals.

Airline woes We still expect a positive bottom line of $4.5 billion, but it’s turning out to be a very tough year. Soaring fuel costs and economic disquiet from the credit crunch have softened demand and hurt an industry that is constantly on the verge of intensive care.

IATA Director General GIOVANNI BISIGNANI on the woes of the industry.

Not in a hurry We will not do a distress sale.

We will hold the rights issue till the stock market settles.

Jet Airways Chairman NARESH GOYAL on the airline’s long pending stock offering.

Namasteji!

I would like to assure them (employees) that as far I am concerned, I come with no baggage of either being a part of erstwhile Indian or Air India and I am more than willing to talk to all the employees directly or through the unions and see that their problems are resolved to the extent possible.

Air India CMD RAGHU MENON on his relationship with employees.

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According to latest figures from the

Airports Authority of India (AAI), traffic in the domestic market has decreased by a full 100 per cent in December and January when compared to the same period last year. At that point it was well over 30 percent! Among India’s busiest airports, only Cochin (+39.8 per cent) and Jaipur (+38.2 per cent) achieved domestic growth of over 20 per cent in January.

COLD STATS

International traffic growth that had been around 15 per cent and 20 per cent for most of 2007, also showed more realistic figures in December 2007 and January 2008 and was hovering around 11.6 per cent and 10.6 per cent respectively. In January, the country’s two busiest airports — Mumbai and Delhi — grew by just 4.9 per cent and 6.6 per cent, respectively. Top of the heap was Ahmedabad whose international traffic was up almost 90 per cent.

Finally, you are hitting realistic numbers in the sky!

LOOKING GLASS

“I came to the airport to get a close shave” We shall see Once the policy is in place we will also abide by it. We have to compete with other airlines.

JITENDRA BHARGAVA, Executive Director, Air India.

How does it matter if you are enjoying a drink on the ground or 30000 feet above it.

Unnamed frequent flyer.

It will lead to a rise in incidents of drunken misbehavior.

Former National Commission for Women Chairperson GIRIJA VYAS.

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OFF THE RECORD

SELECTIVE Anup Srivastava

POSTING! R K Singh

Sushma Chawla

S

S Chandrasekhar

ome weeks back, Civil Aviation Secretary Ashok Chawla had a meeting with Air India top brass where he said that all the directors would have to relocate to Mumbai. His argument was simple — if Air India has to run well, it has to run from its Nariman Point Headquarters. There is no point faffing around between Delhi and Mumbai. Good point Mr Chawla, but if you had a review of senior directors’ tour programmes of the last one year, you will find that more people have been travelling from Mumbai to Delhi, either for meeting with R K Singh or DGCA or with Airports Authority of India or with Consultative Committee or Standing Committee or COPU or with Unions or Mantriji.

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Ashok Chawla

Other PSUs have setup corporate office in Delhi explicitly to deal with Government because they are government owned and they need to be at the beck and call of their Mai Baaps. Touch your heart and tell us, is it any different from Air India. Not really! In any case, if indeed you want to ensure that Raghu Menon, Anup Srivastava, Anita Khurana and Chandarsekhar must relocate to Mumbai, then what about sundry others who still stay put in Delhi.

Here’s a list, in case you do not have one. Anita Mitroo, ED (Coordination) is supposed to operate from headquarters, but she continues to manage affairs from Delhi, running headquarters from the national capital! Sushma Chawla, the airlines’ seniormost employee is also working out of Delhi. S Lahiri the ED (Procurement) is in Delhi and the entire inflight operations are out of Safdarjung Airport!

Would it not make sense for all of them to shift to Mumbai or is it going to be a situation where depending upon the level of your pauva to decide who stays here and who goes to Mumbai!

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OFF THE RECORD

BILLO RANI

AT MDLR!

Om Parkash Chautala

ast month was interestnot. Getting a regional license is ing. Kiran Rao of Airbus like bagging an IPL franchise as far was in Delhi and so was as he is concerned! How did M/s Boeing’s Dinesh Keskar.

Rao and Keskar’s meeting with While Dinesh was in Gopal and his team go? While the town to attend FICCI meeting, he Keskar meeting was a sedate and also had other business as well. One straightforward affair the meeting of which was a meeting with Gopal with Kiran Rao was another thing.

Goyal of MDLR (for the unaccusIt was held with plenty of tomed, MDLR stands for Murali Scotch flowing and Billo Rani at Dhar Lakhi Ram) airlines.

Gopal’s palatial farmhouse. No, no, A real estate middon’t get us wrong! It dle weight in Haryana, was not the original Billo this lad from Sirsa is trapeizing around at the related to Om Parkash farm house, but a seducChautala (his sister is tive set of Billo Ranis’ apparently married in gyrating to the hit song Chautala’s family) and as Gopal showed the Airhas recently been given bus team a facet of India license to operate a an hospitality they had regional airline. He is probably never experinow desperate to get it enced before. According off the ground. He to one of those present, Gopal Goyal loves the glamour of for Kiran, it was an the airline business, the magic of entirely new experience "Let me flying, smart airhostesses and what put it this way. Kiran was not nerv-

ous, Kiran was not delighted but Kiran went through a new experience," said one of those present.

For the record, it may be mentioned that both Airbus and Boeing have so far, not finalised any deal with the airline. With the general downswing worldwide in the aviation business — thanks to rising fuel costs — they are waiting and watching to see if Gopal Goyal has the moolah to go the full steam.

With the big-ticket operators trimming their acquisition plans, they wonder about Gopal’s ambitions!

One of Gopal’s favourite quotes, "give them Rs 50 crore and book 20 planes," does not cut much ice with either Airbus or Boeing. For them, Rs 50 crore is peanuts. What they are looking for is a man’s muscle for a long distance marathon. So, for the moment, the meeting was nothing but a good evening of fun and frolic! Watch the space for further updates.

L

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Kiran Rao

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OFF THE RECORD

U K Bose

Anil Goyal

BOSE VS GOYAL

A

nil Goyal, the crusty battlesscarred veteran from Indian Airlines is the new CEO at MDLR. Gopal has brought him after plenty of hits and misses. He started with former Vayudoot CMD, Harshvardhan as his main advisor.

But apparently, that did not work out. Goyal has now taken over as day-to-day head of the airline. However, there is plenty of confusion in the ranks, with another socalled mathadheesh Uttam Kumar Bose, who did a good job busting Air Sahara in the distinguished company of Alok Shar-

STICKING

TO TIME! I

s Nusli Wadia a stickler for time? Well, one should ask this of Jeh Wadia or one of the other members of the VIP party that travelled to Chandigarh recently, with the Bombay Dyeing patriarch. They travelled on the special GoAir flight from Mumbai, to watch the Punjab Kings XI in one of the early IPL matches. The flight scheduled to leave around noon from Chhatrapati Shivaji Airport, finally left an hour behind schedule because it is not easy to convince VIPs to come on time.

But Wadia senior was bang on time with wife Maureen and other members of the family. In an apparent show of irritation, he asked Jeh to close the doors and get rolling. In fact,

Jeh Wadia

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Ness Wadia

ma (the two were at daggers drawn throughout their tenure at the airline.

While Bose upped and left, moved to Jackson Airline where he promised a 50 aircraft wonder service, flopped and finally moved to MDLR. Alok Sharma is completely out of the aviation business. And last heard was busy doing Sahara Pranam) also claiming that he is the man in command! So who does what? By all means, Goyal is the man in command and he has brought in seasoned veteran P K Gupta, ex-Indian Airlines, as head of the engineering, to try and get some systems in place.

The airline had announced with much fanfare, a flight to Kulu some weeks back as a launch pad to get the media to taste their gourmet, all vegetarian affair and also have a feel of the MDLR experience.

However, the flight was cancelled at the last moment. Now we are wondering what happened. Was it bad weather, bad planning, aircraft issues or something else?

Well, why reveal everything! We should make our own intelligent conclusions. But if someone checks at the DGCA, they will tell you what the issue was.

according to onlookers, he told the pilot to get going! But his younger son, who is wise to the ways of the world, apparently calmed him down and asked the pilot to take it easy and finally had the aircraft airborne when all friends, relatives, acquaintances and well wishers had arrived.

The Wadia hospitality is legendary and it was on show during the twohour flight with a full service meal for the guests and plenty of bonhomie. Well, to cut a long story short, the only dampener for what was the most exciting afternoon was that the Kings XI Punjab lost the match and Nusli and Maureen flew back to Mumbai on another aircraft the same very evening. But Jeh and company stayed back and left the next afternoon by another special flight. This one, though, left bang on time!

Maureen Wadia

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NEWS DIGEST

Capt. Gopit Nath

schedule or lease their planes till such time that things improve in India.

The earlier Sale Lease Back (SLB) route to raise moolah is slowly shrinking for some airlines as their fleet size rises.

This is because it is easier to manage a smaller fleet than bigger one. Our market gossip suggests that Indigo that has 100 aircraft on order has already taken delivery of 18 and the SLB route is not really helping it when other costs are rising fast. In the case of SpiceJet, it is reported to be taking much lower amount for its SLB route as it thinks that way it will be able to contain losses.

The buzzword is Spice apparently has on date, the lowest losses on ASK (Average Seat Kilometer). As for GoAir, despite this, it is not too keen to acquire quickly its proposed 33 Airbus A320 aircraft. Perhaps this is a novel way of

Jeh Wadia to cut back losses.

The earlier game of getting their airlines valued has once again started.

Jet’s Saroj Datta has stated that Jet will add only 10 per cent to its fleet and at the current understanding Jet will acquire five ATRs and two Boeing 737-800s while JetLite will add only two aircraft in 2008. Kingfisher has already slowed taking delivery of A320s. Instead, in its anxiety to beat Jet, it has plumped for A340s that even its advisors have said may not be very helpful for non-stop India-US route.

Luckily for Air India, it will get some money from Boeing for the delayed delivery of Boeing 787 Dreamliner but it has not been able to get decent wide body aircraft to meet the gap. The opportunity cost in terms of saved expenditure or postponed expenditure is proving to be

Plenty of uncertainty A

business confidence survey by National Council of Applied Economic Research (NCAER) for the post-budget period has shown a decline due to financial market volatility, inflationary pressures, an impending tighter money market condition, etc.

Even as this engages attention of India Inc, the latest figures from IATA suggests that load factors in international carriers are also falling.

At a recent FICCI meet on airports, the ever optimistic Captain Gopinath said loads in his Deccan — even though he may not even be distantly related to it — now had begun to fall based on year on year data. If the loads are falling then yields are sought to be raised by hike in fares that in any case, have become inevitable with skyrocketing ATF prices.

So we have business travellers who are weary of travel and the u and me kinds who are not exactly happy with rising fares and hotel tariffs.

The impact is already being felt on airlines which, on the one hand, want to hold on to traffic by retaining some low fare buckets as compared to many more in the past and hike fares on other buckets to maintain a semblance of balance. This has not exactly bailed out the private carriers be it Jet or Kingfisher, Spice or Indigo, GoAir or Paramount and of course, reluctant starters in regional airlines. Already, some carriers are trying to slow down their acquisition delivery

more than what it would be incurring had it begun plugging the gap with leased or perhaps even wet leased aircraft. The season has arrived and everyone is flying into the clouds without knowing what lies ahead.

The immediate casualty of all factors including those mentioned above, is the definite delay in Air India’s fancy plans to acquire more than 100 aircraft. It may be recalled that few months ago, there was pressure from Rajiv Gandhi Bhawan that Air India should get on with the job of evaluating more aircraft for deliveries beyond 2012, once the deliveries of 111 aircraft currently on order from both Air India and India are completed. We had reported in our last issue that the focus within the Maharaja had shifted from the American and French to the Brazilians and Canadians.

Now it is learnt, even that will not happen.

At a recent meeting, the Secretary Civil Aviation held with industry officals, it was clarified that the Ministry is not keen on any acquisition now or at least till the term of this government ends in April-May 2009. If the two public sector airlines (now one) could not acquire aircraft for over 16 years can you expect them to do it in 11 months.

Obviously not, and this is what Secretary Ashok Chawla apparently impressed upon those who wanted to know the government’s mind.

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Where is the moolah?

N

INFRASTRUCTURE NEWS 14

Amit Mitra

Photos: H C Tiwari

otwithstanding all that we have said, FICCI Secretary General Dr Amit Mitra continues to exude confidence. Chairing a meeting on Airports in the Capital, he said domestic air traffic rose 36 per cent to 317 lakh passengers in 2007.

The Federation was optimistic that the Indian domestic traffic could grow by 25 per cent till 2010 while international traffic could rise by at least 15 per cent. The Mumbai-Delhi air corridor was the sixth busiest in the world and Indians could not have dreamt of it few years ago.

USD 9 billion is likely to be spent on modernisation of airports in India by 2010 and already, large numbers of Asian LCCs are eyeing India. Mitra feels there will be greater fertilisation within Asia and therefore, aviation sector, be it airports, airlines, cargo, etc will all go up but the shortage will be in the areas of ATC and safety related personnel. May be there will be need for exclusive air cargo airports.

However, the issue is what will happen if slowdown happens. One CEO of a major Gulf based carrier told us some months back: “Even if your government screws up, the Indian GDP growth will not come below 7.5 per cent and that is very good for

Vijay Mallya

New foreign carriers from Bangalore Several new foreign carriers — Air Mauritius, Tiger Airways, Oman Air and Dragon Air will commence operations from the new Bengaluru International Airport (BIA).

These carriers will be in addition to other existing European and Asian airlines flying currently to Bangalore, such as Lufthansa, British Airways, Gulf Air, Air Arabia, Air France, Sri Lankan Airlines and cargo carriers like Etihad, Transmile and Qatar Airways. Emirates, Thai Airways, Singapore Airlines and Malaysian Airways have requested for increased weekly frequency from the new airport. As per the domestic flight schedule at the new Bengaluru International Airport, approximately 29 per cent of flights have been given better flight timings. The

our business.” But what will be good for Indian business. Already, Private Equity Investors have disappeared from the airline scene. No private investor is keen to look at Indian carriers. Otherwise, Mallya would not be talking of raising debt and yet not raise it and Naresh Goyal constantly talking of raising $ 400 million through debt or rights issue but not clinch the issue as valuations hover at lower levels than what they were a year ago.

In such an environment, it will become really tough to keep investor interest alive in India's infrastructure for long. If you remember, when the initial round of privatisation happened in the early 90s, many new airlines came up and existing metro airports built many more parking bays. When many of the new airlines died, many of those parking bays were available for the asking. Once the economy began to boom, those bays were taken over by the existing big boys and the new entrants (second round) found it difficult to get airport facilities. Thus started the airport expansion through the PPP route as well as the Greenfield airports.

Even as these are on track, the airline industry is getting into an air pocket.

domestic airlines that could not get preferred flight timings at the current airport due to capacity constraints have now been accommodated during the time requested for.

The airline frequency at the new BIA will increase, with the total number of flights touching 1595 per week, of which, domestic flights will comprise 85 per cent while international flights will comprise 15 per cent, informed the official spokesperson. With these carriers showing interest in flying international routes from the new airport, BIA is confident that South India’s connections to the Far East, Europe and North America will improve substantially in the near future.

More compensation for air accident victims The Lok Sabha has passed the Carriage by Air Bill that enhances the compensation amount to victims of air accidents or for damage caused to baggage or cargo, bringing it on a par with international rates. The Bill was adopted by voice vote after Civil Aviation Minister Praful Patel said it was necessary for India to ratify it as part of an international protocol — the Montreal Convention 1999.

The legislation would enable payment of higher compensation to air travellers in the event of death or injury and prevent Indian passengers from discrimination. Under the Bill, the amount of compensation for death or injury has been increased to 1,00,000 Special Drawing Rights or $20,000. The choice of jurisdiction has been expanded to

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Committee Speak W

ith the turbulence in the aviation business at the moment, the just released recommendations of the Parliamentary Standing Committee on Transport, Tourism and Culture assumes importance. The Committee has joined a long list of individuals, bodies, associations and airlines, to

Finance Minister P Chidambaram

include the place of domicile of passengers and provisions made for advance payments for death or injury. “Though the Convention covers international travel, we have some amount of compensation for domestic travellers as well. We will also consider enhanced compensation for domestic passengers,” Praful Patel said. He said that there would be no difference in compensation as far as class of travel is concerned, plus it would not lead to an increase in domestic airfares.

‘Night eye’ lined up for Bagdogra Take-offs and landings at night, and along with it international flights can commence at Bagdogra airport by Pujas this year, a survey by an Airports Authority of India (AAI) team has indicated. The three-member team of the AAI site selection committee from Delhi felt that the installation of Instrument LandBagdogra airport

demand a reduction in the tax on ATF in the interest of domestic airlines. In its report of the committee, it said ATF charges applicable on domestic operations continue to be significantly higher than international operations. “The cost of ATF goes even further due to high rates of sales tax levied by state governments and UTs varying from 25 per cent to 30 per cent, which affects the viability of domestic airline operations said the 32-member committee headed by CPI (M) member Sitaram Yechury. Though, Kerala and Andhra Pradesh have cut sales tax on ATF to just four per cent, many other states continue to keep the rates high.

The committee said since the cost of fuel is an important component of cost structure, reduction in taxes on ATF will definitely have an impact on airfares. It has, therefore, recommended to the Finance Ministry to approve the Civil Aviation Ministry proposal to notify ATF as “declared goods” under Section 14 of Central Sales Tax Act, so that sales tax on ATF could be continued within the maximum rate of four per cent.

ing System (ILS) and approach lights “are feasible at Bagdogra airport”. For international airlines to operate from an airport, the availability of Category 1 ILS facilities is a must. Installation of Cat 1 ILS, approach lights and, if necessary, acquisition of land for ILS installation were discussed.

“It was suggested that the AAI, which would procure and install the ILS, should carry out a feasibility study within a month and submit a report to the ministries. The local Indian Air Force authorities will extend full cooperation in this regard,” informed Bagdogra airport director K K Bhowmik while talking to journalists.

Bagdogra is an air force base that doubles as a civilian airport. Civil Aviation Minister Praful Patel had promised international flights from Bagdogra by 2008. “Once night landing facilities are installed, a lot of options such as International flights to Southeast Asia, even Kathmandu, could operate at night, while domestic operations continue during the day,” pointed Bhowmik.

Nod for Cayman Island firm’s airports proposal The government has given its approval to a proposal from a Cayman Islands based company, Agam SPV Six Ltd, to set up new airports and upgrade existing ones in the country with foreign direct investment of up to $300 million. A meeting of the Cabinet Committee on Economic Affairs, presided over by Prime Minister Manmohan Singh, gave the approval subject to the sectoral regulations notified by the Civil Aviation Ministry.

“The special purpose vehicle (or the holding arm) should make

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he FICCI seminar had some interesting moments. Secretary Civil Aviation Ashok Chawla praised the clairvoyance of Amit Mitra for organising airports seminar and fixing a date much in advance, as if he knew that the government would approve major changes to the airports policy, particularly the Greenfields Airport Policy — just days before that date.

Last four years have been seeing doubling of every indices, be it passenger growth—domestic and international, airports infrastructure, aircraft numbers, helicopters, general aviation, etc. The next four to five years may see another doubling of various aviation related indices. Chawla referred to the presentation of Boeing Commercial Airplane company’s Senior Vice President -Sales Dr Dinesh Keskar, who said India may grow at an average 5.9 per cent annually till 2026 and would need many more planes, airports, ATC facilities, etc.

Responding to it, Aviation Secretary noted that it will have a huge impact on air transport which has wide linkages.

Even today, Aviation growth is three

THINKING MINDS: At the FICCI meet on Indian airports, Civil Aviation secretary Ashok Chawla (second from right) with FICCI’s Amit Mitra, Boeing’s Dinesh Keskar and civil aviation joint secretary K N Shrivastava

times that of the GDP. But then, even a multiple of 1.5 of GDP is very high. “I don’t think in terms of three times the GDP for 20 years. It is neither possible nor desirable. But it certainly offers a

full disclosures of its source of funds,” an official statement issued after the meeting said. “The approval will result in foreign direct investment amounting to $300 million being received in the country,” the statement added.

The decision on Agam’s proposal comes just a week after the government approved a new airports policy that summarily bars any new project within a 150 km radius of existing ones. Proposals for airports within 150 km radius are to be decided on the merits of each case. The new airports policy was necessitated by the recent strikes by the employees of the existing airports in Bangalore and Hyderabad. They protested the closure of the two airports to make way for the two greenfield projects nearby.

NCC, Maytas to build Gulbarga, Shimoga airports Hyderabad-based construction and infrastructure development companies — NCC Infrastructure Holdings Limited and Maytas Infra Limited — said that they had signed a Project Development Agreement (PDA) with the Infrastructure Development Department (IDD) of Karnataka to develop and operate airports proposed at Gulbarga and Shimoga in that state on the basis of BOT (build, operate, transfer). The Infrastructure Development Department of the Government of Karnataka had selected a consortium of NCC Infrastructure Holdings Ltd (NCCIHL), Maytas Infra and VIE India Project Development and Holding LLC (VIE) to develop and operate the greenfield airports in public-private partnership (PPP) mode.

great opportunity and a greater challenge”. The policy changes that have been made in the very recent past would go a long way in meeting the challenge, participants agreed.

PMO to keep an eye on Arunachal In the wake of Prime Minister Manmohan Singh’s visit to Arunachal Pradesh in February, the Prime Minister’s Office (PMO) is personally monitoring the creation of infrastructure in the state, including the construction of civilian airports there.

Arunachal Pradesh borders China and it may be recalled that China had protested against the visit of the Indian Prime Minister to the state since China regards Arunachal as part of its territory.

The Indian government is now according “top priority” to creation of infrastructure in the state.

The government is planning construction of greenfield airports at Itanagar and Tawang (where Indian troops are based) apart from two other airports at Passighat and Teju. These airports will be used for landing and take-off of small ATR Prime Minister Manmohan Singh aircraft. Incidentally, the government aims to construct airports within Arunachal Pradesh itself. Sources said the civilian airports would also be of immense strategic significance since it could be used by military aircraft as well. Defence minister A K Antony had visited Tawang in Arunachal Pradesh recently and had declared that “infrastructure development in the Northeast is now a top priority for the gov-

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XXng moments. Secretary Civil Aviation Ashok Chawla praised the clairvoyance of Amit Mitra for organizing airports seminar and fixing a date much in advance as if he knew that the government would approve major changes to the airports policy particularly the Greenfields Airport Policy — just days before that date.

Last four years has been seeing doubling of every indices be it passenger growth-domestic and international, airports infrastructure, aircraft numbers, helicopters, general aviation etc. The next four to five years may see another doubling of various aviation related indices.

ernment”. There have been reports of China building military infrastructure rapidly on its side of the border while India’s infrastructure in its region bordering China is largely seen as inadequate.

Kingfisher to open cabin crew training centres Kingfisher Airlines will open 24 training centres by 2010 to groom cabin crew, a top official of the airlines has said. “In next two years, aviation and hospitality industry will displace Information and Technology (IT) sector from the position of top job creator,” said Kunal Vasudeva, project head of Kingfisher Training Academy at a press conference. “However, the booming industry is witnessing a paucity of quality crew members, as most airhostess training institutes don’t have an understanding of the market. In order to overcome the hurdle, we had to foray into training cabin crew,” he said. Besides the one year old institute that the airlines has in Mumbai, Kingfisher plans to come up with three academies in Delhi, and one each in Hyderabad, Pune, Kolkata, Nagpur, Jaipur and Indore by May 15.

The academy offers two types of courses — a six-month training program in aviation and hospitality and a 12-month programme in hospitality in hotel industry, aviation and hospitality training. The courses cost Rs 1,00,000 and Rs 1,25,000 respectively. “Each batch will have 30 students coupled with one centre proficient enough

18

Chawla referred to the presentation of Boeing Commercial Airplane company’s Senior Vice President -Sales Dr Dinesh Keskar who said India may grow at an average 5.9 per cent annually till 2026 and would need many more planes, airports, ATC facilities etc.

Responding to it Aviation Secretary noted that it will have a huge impact on air transport which has wide linkages. Even today Aviation growth was three times that of the GDP. But then even a multiple of 1.5 of GDP was very high. “I don’t think three times the GDP for 20 years. It is neither possible nor desirable. But it certainly offered a great opportunity and greater challenge”. The policy changes that have been made in the very recent past would go a long way in meeree times the GDP for 20 years. It is neither possible nor desirable. But it certainly offered a great opportunity and greater challenge”.

The policy changes that have been made in the very recent past would go a long way in meeree times the GDP for 20 years. It is neither possible nor desirable. But it certainly offered a great opportunity and greater challenge”. The poli-

to run 40 batches in a day. Each batch would have at least five trainers,” explained Michael Tan, general manager training of Kingfisher Training Academy.

Pilot training to 30 tribal youths The Jharkhand government has decided to provide pilot training to 30 more tribal students after an earlier group of 24 students landed jobs with leading airlines. The pilot training is being sponsored by the state welfare department. “The 24 tribal boys, mostly from poor families, were provided pilot training. Most of them are employed with Indian Airlines, Air India, Air Deccan and Jet Airways,” said U K Sangma, secretary of the social welfare department while briefing the media.

He said: “The state government spent Rs 1.1 million on training the students. Considering the success saga of the 24 tribal boys, we have decided to sponsor pilot training for 30 more tribal boys.”

The students are selected through a written examination subsequent to which they are sent to various training centres. The entrance examination for the second batch of students will be conducted by July. The training for the first batch was completed in 2006.

“There’s a condition that the tribal stuMadhu Koda dents, after getting jobs in airlines, will sponsor the education of two tribal boys of their village till the graduation level,” said Sangma. Besides, the state social

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cy changes that have been made in the very recent past would go a long way in meeree times the GDP for 20 years. It is neither possible nor desirable. But it certainly offered a great opportunity and greater challenge”. The policy changes that have been made in the very recent past would go a long way in meeting the challenge participants agreed.recent past would go a long way in meeree times the GDP for 20 years. It is neither possible nor desirable. But it certainly offered a great opportunity and greater challenge”. The policy changes that have been made in the very recent past would go a long way in meeting the challenge participants

Words 779

agreed.recent past would go a long way in meeree times the GDP for 20 years. It is

Saroj Dutta

Naresh Goyal

neither possible nor desirable. But it certainly offered a great opportunity and greater challenge”. The policy changes that have been made in the very recent past would go a long way in meeting the challenge participants agreed.recent past would go a long way in meeree times the GDP for 20 years. It is neither possible nor

welfare department is sponsoring other vocational training to tribal boys and girls. More than 200 tribal girls have been provided training as nurses.

Modernisation of Amritsar, Udaipur airports The Airports Authority of India has shortlisted five bidders for the modernisation of the Amritsar and Udaipur airports. These include Reliance Energy (REL), Tata Changi consortium and the Rahejas, according to sources. As many as 24 infrastructure firms, including GMR, GVK, Essar and Reliance Energy had bid for development and modernisation of the airports at Udaipur, while 23 bids were submitted for the Amritsar airport.

The development and modernisation plans are only for the cityside of these non-metro airports, and are expected to be completed by 2010 through public-private partnership (PPP). AAI will take care of the air-side development of the airports. The

20

desirable. But it certainly offered a great opportunity and greater challenge”. The policy changes that have been made in the very recent past would go a long way in meeting the challenge participants agreed.recent past would go a long way in meeree times the GDP for 20 years. It is neither possible nor desirable. But it certainly offered a great opportunity and greater challenge”. The policy changes that have been made in the very recent past would go a long way in meeting the challenge participants agreed.recent past would go a long way in meeree times the GDP for 20 years. It is neither possible nor desirable. But it certainly offered a great opportunity and greater challenge”. The policy changes that have been made in the very recent past would go a long way in meeting the challenge participants agreed.recent past would go a long way in meeree times the GDP for 20 years. It is neither possible nor desirable. But it certainly offered a great opportunity and greater challenge”. The policy changes that have been made in the very recent past would go a long way in meeting the challenge participants agreed.recent past would go a long way in meeree times the GDP for 20 years. It is neither possible nor desirable. But it certainly offered a great opportunity and greater challenge”. The policy changes that have been made in the very recent past would go a long way in

government wants the consortium of the selected bidder and the AAI to commercially operate the airports and maintain their terminal buildings. It would also be responsible to develop and operate cargo facilities at these airports, besides undertaking the city-side development. The airport modernisation process is part of the upgrade process of 35 non-metro airports in the country by 2010.

AAI shortlists six cos for airports revamp The AAI has shortlisted six companies, including domestic major L&T, for executing the Rs 3,800 crore Chennai and Kolkata airports modernisation projects. About 15 international construction majors had approached the AAI to get these projects. According to sources, the shortlisted companies include ITD (Hong Kong), Ssangyong (Malaysia) and M/s TAV Tepe Akfen (Turkey). L&T, which has bagged contracts for modernising Delhi and Mumbai airports from GMR and GVK, is also in the race for Kolkata and Chennai. The foreign companies have Indian partners for their airport JVs. AAI is learnt to have shortlisted three companies for being appointed as project management consultants, who would oversee the implementation of these two projects on a turnkey basis. Leading firms like USbased Louis Berger Group are among the shortlisted companies.

The global names included Greece’s AEGEK General Construction; Malaysia’s Muhibbah Engineering and Britain’s largest privately owned construction firm Laing O’Rourke.

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One needs to question the very basis of the recommendation when everyone knows that most private carriers could not have set up shop without active political support and a benevolent helping hand from a compliant bureaucracy 22

HE BEST JOKE of the Year Award should go to the Parliamentary Standing Committee on Transport and Tourism, which in one of its latest reports has stated that the Government commission a study on the functioning of private airlines including the financial freedom they enjoy and their thrust on efficiency as well as customer service.

With due respect to the two August houses of Parliament, the reports and recommendations of its Standing Committees — both in the past and at present — were and are merely acknowledged by the Union Government and its related Departments/Ministries. This was due to the non-binding nature of the various recommendations that may or may not be implemented. It is a sort of admission by the Committee when it said: “Government may commission a study on the functioning of the private airlines…”

One needs to question the very basis of the recommendation when everyone knows that most private carriers could not have set up shop without the active political support and a benevolent helping hand from a compliant bureaucracy. True, there were instances where concerned bureaucrats differed but were promptly asked to take off.

Let me take you to the early days when the private airlines were just learning to fly.

There were innumerable instances of poaching by private carriers from the only scheduled domestic carrier: state owned Indian Airlines. This soon got legitimacy when the private air taxies were allowed to convert themselves into scheduled domestic carriers.

As an afterthought, the Ministry of Civil Aviation instructed the DGCA to issue orders for seeking NOC before any poaching was permitted. However, one minister was waiting anxiously for a senior commander of then Indian Airlines to retire before he made an

When will the shadow be

CAST OFF? Naresh Goyal

Vijay Mallya

Raghu Menon

He has unlimited powers to do what he desires. No CAG, no CVC, no CBI over his head. If he decides to buy Boeing aircraft, he can go ahead without any questions being asked. He is not subject to vigorous lobbying by officials in power as is usual in governmentcontrolled organisations.

Sarkari CEOs who have done a wonderful job of their companies have had to go because of various reasons but Mallya can continue to lose money and expand. No questions are asked. What the public and shareholders might have known about Deccan earlier is now shrouded in secrecy after the buy-back

by Mallya.

At the drop of a hat, this career civil servant will have to run to Rajiv Gandhi Bhawan for approvals, permissions, sanctions, discussions, coordination and green signals and that will include such stuff as where Air India should fly, what its colours should be, etc.

If he happens to get around all these, he may attend to Air India.

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At the end of his tenure, Civil Aviation Minister Praful Patel will be judged on, perhaps two or three issues. One is, of course, his drive to better infrastructure.

But the merger of Air India and the subsequent turbulence in the airline could well be the albatross around his neck. If the merger succeeds, Praful is sure of a place in history. But if it fails, the captain will have to take the flak.

At the moment, the airlines is passing acute turbulence.

Patel knows that. The point is: What is he going to do about it?

offer on behalf of a well-known private airline. This Minister personally studied the private airline and decided to utilise the services of the pilot of the state-owned carrier for private enterprise.

With the passage of time, the tribe of private carriers blossomed but soon crashlanded in the mid-90s before they began to blossom once again, at least outwardly, for the second time from 2003-04. This time, the private carriers enjoyed far more freedom.

But after this second phase came into being, two private carriers (one legacy and one LCC) were taken over by two competing legacy carriers. While the legacy carrier taking over the other legacy carrier — Jet taking over Sahara and rechristening it as Jetlite — is beginning to hurt Jet’s finances severely, the case of the other legacy airline Kingfisher taking over LCC Air Deccan has strained its finances further, necessitating a fresh round of massive borrowing.

While Jet quoted in the stock market took over unquoted privately-held Air Sahara, the unquoted Kingfisher took over Air Deccan that was quoted in the stock market. Therefore, what we have today is grey opacity: while the public gets to know partly what is happening in Naresh Goyal’s Jet through its mandated disclosures to SEBI and BSE, what the public and shareholders might have known about Deccan being a quoted company earlier is now shrouded in secrecy after the buy-back by Kingfisher boss Vijay Mallya.

In the first case, it is an instance of shutand-open with everyone to see that the finances are not exactly that rosy. In the second case of open-and-shut, the finances have actually become a mystery with the virtual delisting of Air Deccan. In that sense, if one were to take the committee recommendations seriously, there should be no objections to the government being asked to set up a commission. Obviously, it cannot be under the Commission of Inquiries Act. Had it been under that or if the yet-to-be-empowered Competition Commission looked into any such merger or takeover, an entirely different picture would have emerged.

So what does an official carrier need to learn from a private airline? I can tell you

that without any need for any Commission.

But then, that can happen only if the government (successive ones at that), politicians and bureaucrats are ready to unlearn. Why should the Ministry of Civil Aviation decide everything from posting a peon to the CEO? Why should a District Collector or his equivalent in a State Government after being pitchforked to New Delhi suddenly acquire all the knowledge to decide where Air India should fly and how many frequencies, what its colours should be, what kind of coffee mug and coffee and kind of wines it needs to serve on board, etc?

When it comes to buying aircraft, the bureaucrats look up to their minister who in turn looks up to his party, which in turn looks up partly at the government to know the foreign policy implications of going the French or the American way. Already two more choices have been added to menu — CRJ from Canada’s Bombardier and Embraer from Brazil. None of these are issues with private carriers. Naresh Goyal decides that he will buy Boeing aircraft and that is it. Mallya decides he will buy Airbus aircraft and that is it. Being exposed to the glamour world they know what high-end customers want and what the impact of a scaled-down version of a similar product on the economy class, etc would be. In the officialdom, there will be vigorous lobbying for a plum posting, either in Air India or DGCA or ICAO or even within the Ministry, to handle important subjects.

It took nearly 15 years for Air India and Indian Airlines (now merged) to get their new aircraft acquisition delivery schedule approved by the government. In these 15 years Jet Airways has grown nearly bigger than Air India and Kingfisher is becoming bigger in less than four years. You don’t require a Commission to study the functioning of the private airlines that in any case are not studied by the CAG, PAC, PUC, etc. For the state-owned carrier to take off, there is need for a hands-off policy rather than a

hands-on policy.

(Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com) CRUISING HEIGHTS May 2008

When it comes to buying aircraft, the bureaucrats look up to their minister who in turn looks up to his party, which in turn looks up partly at the government to know the foreign policy implications of going the French or the American way 23

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IRCARGO IN THE country has, for a long time, been neglected and hence the happy hunting grounds of a few. However, all that is soon going to change. Waiting in the wings are a few home-grown aircargo carriers that have at last found their wings, thanks largely to what the world over has come to be known as the “India story”.

In its country report presented at the 35th Executive Council Meeting of the Federation of Asia Pacific Air Cargo Associations (FAPAA) a few days ago, the Air Cargo Agents Association of India (ACAAI) pointed out that the “Indian Air Cargo Industry, amidst the present economic scenario, is soaring to great

24

UP,STILLUP BUT NOT AWAY...

Aircargo in the country is experiencing phenomenal growth — and this, despite the infrastructure hurdles. New cargo carriers are setting up shop while the old warhorse, Air India, is chalking out plans to take a major bite of the aircargo pie. Tirthankar Ghosh reports on how aircargo is slowly and surely planning to steal the thunder from the passenger carriers.

CRUISING HEIGHTS May 2008

CRUISING HEIGHTS May 2008

heights and its functional significance has magnified in today’s rapidly evolving era of globalisation… International trade has continued for years, but India’s booming economy has helped the Indian aircargo industry rapidly usher in globalisation, which, in turn, has shifted the world’s focus on the country.”

In turn, airplane manufacturers are upbeat. Airbus, in its Global Market Forecast (GMF) has predicted that domestic India FTKs (Freight Ton Kilometres) would increase at 17 per cent per year average for the next 20 years and that freighter aircraft purchases would outstrip passenger aircraft purchases in the country.

Witness the growth: the express market in the country, for example, has risen to

25

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IRCARGO IN THE country has, for a long time, been neglected and hence the happy hunting grounds of a few. However, all that is soon going to change. Waiting in the wings are a few home-grown aircargo carriers that have at last found their wings, thanks largely to what the world over has come to be known as the “India story”.

In its country report presented at the 35th Executive Council Meeting of the Federation of Asia Pacific Air Cargo Associations (FAPAA) a few days ago, the Air Cargo Agents Association of India (ACAAI) pointed out that the “Indian Air Cargo Industry, amidst the present economic scenario, is soaring to great

24

UP,STILLUP BUT NOT AWAY...

Aircargo in the country is experiencing phenomenal growth — and this, despite the infrastructure hurdles. New cargo carriers are setting up shop while the old warhorse, Air India, is chalking out plans to take a major bite of the aircargo pie. Tirthankar Ghosh reports on how aircargo is slowly and surely planning to steal the thunder from the passenger carriers.

CRUISING HEIGHTS May 2008

CRUISING HEIGHTS May 2008

heights and its functional significance has magnified in today’s rapidly evolving era of globalisation… International trade has continued for years, but India’s booming economy has helped the Indian aircargo industry rapidly usher in globalisation, which, in turn, has shifted the world’s focus on the country.”

In turn, airplane manufacturers are upbeat. Airbus, in its Global Market Forecast (GMF) has predicted that domestic India FTKs (Freight Ton Kilometres) would increase at 17 per cent per year average for the next 20 years and that freighter aircraft purchases would outstrip passenger aircraft purchases in the country.

Witness the growth: the express market in the country, for example, has risen to

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soaring heights. In a recent conference, Blue Dart Managing Director Tulsi N Mirchandaney, speaking about the aircargo growth story, showed how the express market had grown. Internationally, the express sector had 3.5 per cent market share of international air cargo in 1991. In 2005, that jumped up to 11 per cent. Internal estimates by Blue Dart have thrown up some interesting figures. The size of the express industry in the country is Rs 4,175 cr and the average annual growth is estimated to be 17.2 per cent. As Bangalore-based start-up aircargo player Quikjet’s CEO Natesan Ramesh puts it: “From a low base of a few hundred million rupees, the current express market is estimated at around Rs 27 billion (about US $650 million) and growing at a blistering 25-30 per cent per annum. “The past four years,” he points out, “has witnessed a spectacular rise in the express business due to high flow of Foreign Direct Investment and MNCs migrating businesses or setting up business in the country.”

Even with the open skies policy, as far as cargo is concerned, there are opportunities that still remain untapped.

Ramesh is forthright when he says, “We believe that the market is sufficiently underserved.” Naturally, whether it is express or plain air cargo, all newcomers

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BOOSTING GROWTH : AAI has gone in for machinery for storage of export ULDs at all airports

“ The size of the express industry in the country is Rs 4,175 cr and the average annual growth is estimated to be 17.2 per cent — Tulsi Mirchandaney Managing Director, Blue Dart

”

CRUISING HEIGHTS May 2008

hope to take a major bite of the pie.

Promoted by AFL Private Limited — a leading logistics company and a pioneer in the express courier sector and Singapore’s Cardinal Aviation — Quikjet would like to be known as a merchant air cargo carrier which is keen to open up capacity to all players in the market.

Ramesh believes that Quikjet would achieve what the low-cost carriers have done in the Indian market. “Like the lowcost carriers, we are trying to open the cargo space,” he says.

If Quikjet has plans to tap the market, Capt Mukut Pathak, with his yet-totake-off Delhi-based Aryan Cargo Express (ACE) — the first flight would be sometime between mid-August and mid-September this year — is optimistic about the growth in the sector. Talking to Cruising Heights, Capt Pathak said, “Today, India has about 400 million people in the middle income group. This figure is likely to touch 550 million by 2015 as a result of India turning into a major manufacturing base.” The retail boom in the country, said Capt Pathak, is yet to arrive and when that does, it will spurt the demand for movement of cargo by air. “The aircargo growth in India has accelerated in the last four years primarily due to the strong growth in the economy,” the captain emphasised. His ACE, he said, was “entering a segment of air cargo industry that does not have any India-based operator. We are more international oriented than domestic,” he said.

More interested in connecting India to foreign nations, Capt Pathak added: “We are looking at the SAARC (South Asian Association for Regional Cooperation) nations — India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives, Bhutan and Afghanistan — to be our main market and plan to provide connectivity within SAARC and markets like China, Far East, SE Asia, ME, CIS and Europe. We will have a domestic network, but that will be only to feed our international network.” For such vast operations, Pathak’s ACE has worked out a plan to fly with a combination of A310/ 300-600Fs and MD11Fs. He, along with his partner promoter Rishiraj Singh Dungarpur, has signed the lease for two MD11s from Skyholding. “We plan to launch with three leased aircraft and grow to 12 aircraft within 14 months to acquire a network stability and realise the full potential of our network. We do not foresee much of a problem at airports because we will operate at night, within the Indian airspace and during the day, we will vacate this airspace for international flights.”

“We’ll be competing with big boys” Capt Mukut Pathak, Director of Aryan Cargo Express (ACE), is upbeat about his aircargo carrier and though no flights have taken off yet, he is ready to grapple with the big-timers.

Industry experts have predicted a 20 per cent-plus growth in the next 5-10 years. What is your response to that?

We agree to this projection. Today, India has about 400 million people in the middle-income group. This figure is likely to touch 550 million by 2015 as a result of the strong growth of Indian economy and India turning into a major manufacturing base. The retail boom in India has yet to arrive and the SEZs being set up all across India will spurt the demand for movement of cargo by air. Unlike a passenger airline where the travellers can choose an alternative mode of travel, aircargo has

Among the other players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots. They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo. The carrier resumed operations from the middle of 2007.

Lad, the Chairman and Managing Director of Crescent Air, was upbeat.

Pointing out the linking of Coimbatore with Mumbai, he said: “As we pioneer new routes that expand our global reach and add convenience to industrialists, the Chennai-Coimbatore-Mumbai daily service will offer many important options for business and cargo agencies.”

According to Crescent’s CEO, Capt Murali Ram, Crescent will shortly be starting its freighter operations on the Visakhapatnam-Chennai-Kolkata sector.

“Our services would be immensely beneficial for the growing markets of shrimp, tuna exports, garment industry and other perishable goods,” he said.

With one Fokker 50 freighter that has a capacity of seven tons, Crescent plans to expand slowly.

As for the expansion of the fleet, Lad pointed out that two more Fokker 50

to move by air only.

How will Aryan Cargo Express be different from the similar aircargo carriers in the country?

ACE is not India-specific in operations. We look at SAARC as our main market and plan to provide connectivity within SAARC as well as in markets like China, Far East, SE Asia, ME, CIS and Europe. We will have domestic network, but that will be only to feed our international network.

What would the composition of your fleet be?

We propose to have a combination of A310/ 300-600F and MD11F to serve the network. We plan to launch

“ The Airports Authority of India has already taken up work to develop cargo infrastructure in the airports around the country — V P Agrawal

Member (Planning), AAI

”

CRUISING HEIGHTS May 2008

three leased aircraft and grow to 12 aircraft within 14 months to acquire network stability and realise the full potential of our network. We do not foresee much of a problem at airports because we will operate at night within the Indian airspace and during day time, we will vacate this airspace for international flights.

We will have Delhi as our main hub, however, we will also create smaller hubs at Chennai and Kolkata.

We are going to operate in a very different segment compared to these operators. We will be competing with the real big boys of this game like Fedex, DHL and UPS.

freighters would be added by June 2008.

“By then,” said the Chairman, “Crescent Air will not only be able to tap the potential in the niche segments of the domestic air cargo markets but also extend services to neighbouring countries. Being a nonscheduled cargo operator, we will also serve international sectors to increase commercial ties between nations, providing a convenient transport option for the Indian industrialists. This will help to boost the country’s vibrant economy.”

Some may snigger at the thought of new air cargo carriers coming in but those who are on the starting block, remain unfazed. Capt Pathak of ACE was candid when he told Cruising Heights, “There is enough sky under the sun for everyone.”

Unlike a number of industry pundits who have been saying that there is a boom, he believes that “the aircargo boom in India is still couple of years away. We do see that for the next 10 years, the growth of cargo will ensure success for all the players.” He is quick to point out that will happen “unless the industry gets hit by some rogue players who, for their foolish ideas and motives, may create problems.”

As for the challenges, Natesan Ramesh is equivocal: “Our air cargo infrastructure is quite poor and, therefore, a constraint.” He points out that these constraints include Air Traffic Control, freeing up of air force-controlled airspace, congestion at airports, etc. Other infrastructure, in terms of warehousing, good access to airports, and facilities such

27

Cargom cover story:Cargom cover story.qxd

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Page 4

COVER STORY

soaring heights. In a recent conference, Blue Dart Managing Director Tulsi N Mirchandaney, speaking about the aircargo growth story, showed how the express market had grown. Internationally, the express sector had 3.5 per cent market share of international air cargo in 1991. In 2005, that jumped up to 11 per cent. Internal estimates by Blue Dart have thrown up some interesting figures. The size of the express industry in the country is Rs 4,175 cr and the average annual growth is estimated to be 17.2 per cent. As Bangalore-based start-up aircargo player Quikjet’s CEO Natesan Ramesh puts it: “From a low base of a few hundred million rupees, the current express market is estimated at around Rs 27 billion (about US $650 million) and growing at a blistering 25-30 per cent per annum. “The past four years,” he points out, “has witnessed a spectacular rise in the express business due to high flow of Foreign Direct Investment and MNCs migrating businesses or setting up business in the country.”

Even with the open skies policy, as far as cargo is concerned, there are opportunities that still remain untapped.

Ramesh is forthright when he says, “We believe that the market is sufficiently underserved.” Naturally, whether it is express or plain air cargo, all newcomers

26

BOOSTING GROWTH : AAI has gone in for machinery for storage of export ULDs at all airports

“ The size of the express industry in the country is Rs 4,175 cr and the average annual growth is estimated to be 17.2 per cent — Tulsi Mirchandaney Managing Director, Blue Dart

”

CRUISING HEIGHTS May 2008

hope to take a major bite of the pie.

Promoted by AFL Private Limited — a leading logistics company and a pioneer in the express courier sector and Singapore’s Cardinal Aviation — Quikjet would like to be known as a merchant air cargo carrier which is keen to open up capacity to all players in the market.

Ramesh believes that Quikjet would achieve what the low-cost carriers have done in the Indian market. “Like the lowcost carriers, we are trying to open the cargo space,” he says.

If Quikjet has plans to tap the market, Capt Mukut Pathak, with his yet-totake-off Delhi-based Aryan Cargo Express (ACE) — the first flight would be sometime between mid-August and mid-September this year — is optimistic about the growth in the sector. Talking to Cruising Heights, Capt Pathak said, “Today, India has about 400 million people in the middle income group. This figure is likely to touch 550 million by 2015 as a result of India turning into a major manufacturing base.” The retail boom in the country, said Capt Pathak, is yet to arrive and when that does, it will spurt the demand for movement of cargo by air. “The aircargo growth in India has accelerated in the last four years primarily due to the strong growth in the economy,” the captain emphasised. His ACE, he said, was “entering a segment of air cargo industry that does not have any India-based operator. We are more international oriented than domestic,” he said.

More interested in connecting India to foreign nations, Capt Pathak added: “We are looking at the SAARC (South Asian Association for Regional Cooperation) nations — India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives, Bhutan and Afghanistan — to be our main market and plan to provide connectivity within SAARC and markets like China, Far East, SE Asia, ME, CIS and Europe. We will have a domestic network, but that will be only to feed our international network.” For such vast operations, Pathak’s ACE has worked out a plan to fly with a combination of A310/ 300-600Fs and MD11Fs. He, along with his partner promoter Rishiraj Singh Dungarpur, has signed the lease for two MD11s from Skyholding. “We plan to launch with three leased aircraft and grow to 12 aircraft within 14 months to acquire a network stability and realise the full potential of our network. We do not foresee much of a problem at airports because we will operate at night, within the Indian airspace and during the day, we will vacate this airspace for international flights.”

“We’ll be competing with big boys” Capt Mukut Pathak, Director of Aryan Cargo Express (ACE), is upbeat about his aircargo carrier and though no flights have taken off yet, he is ready to grapple with the big-timers.

Industry experts have predicted a 20 per cent-plus growth in the next 5-10 years. What is your response to that?

We agree to this projection. Today, India has about 400 million people in the middle-income group. This figure is likely to touch 550 million by 2015 as a result of the strong growth of Indian economy and India turning into a major manufacturing base. The retail boom in India has yet to arrive and the SEZs being set up all across India will spurt the demand for movement of cargo by air. Unlike a passenger airline where the travellers can choose an alternative mode of travel, aircargo has

Among the other players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots. They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo. The carrier resumed operations from the middle of 2007.

Lad, the Chairman and Managing Director of Crescent Air, was upbeat.

Pointing out the linking of Coimbatore with Mumbai, he said: “As we pioneer new routes that expand our global reach and add convenience to industrialists, the Chennai-Coimbatore-Mumbai daily service will offer many important options for business and cargo agencies.”

According to Crescent’s CEO, Capt Murali Ram, Crescent will shortly be starting its freighter operations on the Visakhapatnam-Chennai-Kolkata sector.

“Our services would be immensely beneficial for the growing markets of shrimp, tuna exports, garment industry and other perishable goods,” he said.

With one Fokker 50 freighter that has a capacity of seven tons, Crescent plans to expand slowly.

As for the expansion of the fleet, Lad pointed out that two more Fokker 50

to move by air only.

How will Aryan Cargo Express be different from the similar aircargo carriers in the country?

ACE is not India-specific in operations. We look at SAARC as our main market and plan to provide connectivity within SAARC as well as in markets like China, Far East, SE Asia, ME, CIS and Europe. We will have domestic network, but that will be only to feed our international network.

What would the composition of your fleet be?

We propose to have a combination of A310/ 300-600F and MD11F to serve the network. We plan to launch

“ The Airports Authority of India has already taken up work to develop cargo infrastructure in the airports around the country — V P Agrawal

Member (Planning), AAI

”

CRUISING HEIGHTS May 2008

three leased aircraft and grow to 12 aircraft within 14 months to acquire network stability and realise the full potential of our network. We do not foresee much of a problem at airports because we will operate at night within the Indian airspace and during day time, we will vacate this airspace for international flights.

We will have Delhi as our main hub, however, we will also create smaller hubs at Chennai and Kolkata.

We are going to operate in a very different segment compared to these operators. We will be competing with the real big boys of this game like Fedex, DHL and UPS.

freighters would be added by June 2008.

“By then,” said the Chairman, “Crescent Air will not only be able to tap the potential in the niche segments of the domestic air cargo markets but also extend services to neighbouring countries. Being a nonscheduled cargo operator, we will also serve international sectors to increase commercial ties between nations, providing a convenient transport option for the Indian industrialists. This will help to boost the country’s vibrant economy.”

Some may snigger at the thought of new air cargo carriers coming in but those who are on the starting block, remain unfazed. Capt Pathak of ACE was candid when he told Cruising Heights, “There is enough sky under the sun for everyone.”

Unlike a number of industry pundits who have been saying that there is a boom, he believes that “the aircargo boom in India is still couple of years away. We do see that for the next 10 years, the growth of cargo will ensure success for all the players.” He is quick to point out that will happen “unless the industry gets hit by some rogue players who, for their foolish ideas and motives, may create problems.”

As for the challenges, Natesan Ramesh is equivocal: “Our air cargo infrastructure is quite poor and, therefore, a constraint.” He points out that these constraints include Air Traffic Control, freeing up of air force-controlled airspace, congestion at airports, etc. Other infrastructure, in terms of warehousing, good access to airports, and facilities such

27

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COVER STORY

Getting Air India future ready

A

nita Khurana, Director Commercial & SBU Head Cargo, National Aviation Company of India Ltd, had been spearheading the erstwhile Indian’s moves in the air cargo sector.

She was instrumental in bringing in automation for the carrier’s cargo and till today, Indian is the only state-owned cargo carrier that provides track and trace facilities. Shippers booking on Air India do not have the facility.

Now, with the Air India and Indian

merger, she would like to enhance operations and expand the reach of Air India cargo. The capacity Air India is offering to shippers now is 1300 tons/ day on the network. As she put it, “The annual international freight movement into and out of India is over 1 million tons and has grown at a CAGR of 13.7 per cent during the period 2003-07 and 2006-07.”

According to the Planning Commission, this would grow at a CAGR of over 11.5 per cent from 2007-08 to 2011-12.

Air India’s plans for freighter operations (2009-2016)

From Nagpur to the world

as power and utilities are also not adequate to sustain the high growth rate of cargo. Ramesh believes that real growth will be experienced when “policy challenges” are addressed. Also, only once the states start understanding how air connectivity can be a catalyst for economic growth, can air cargo flourish in real terms.

What then are the essentials that will help sustain the growth? A symposium aptly titled, “Revitalise Aircargo: Imperative to Grow India’s Global Trade” held under the aegis of the Air Cargo Agents Association of India (ACAAI), V P Agrawal, Member (Planning), Airports Authority of India, assured the freight forwarding community that the Civil Aviation Ministry, through the AAI, had already taken up work to develop cargo infrastructure in the airports around the country. Among the most notable was the establishment of an integrated Cargo Complex at Kolkata and Chennai, a cargo complex and a centre for handling perish-

28

“ AI’s ranking has jumped from ninth position in Sept ’07 to No 1 in March ’08, for exports ex-Delhi — Anita Khurana

Director Commercial & SBU Head Cargo

”

CRUISING HEIGHTS May 2008

The demand for Air India’s services has seen it being awarded the ‘Emerging Cargo Airline of the Year’. An upbeat Ms Khurana said, “AI’s ranking has jumped from ninth position in September ’07 to number one in March ’08, for exports ex-Delhi.” In such circumstances, Air India would require its present six freighters (two Airbus 310s and four Boeing 737s). Her plans for 2008-09 include offering more freighter capacity at competitive rates. In addition, she is pushing ahead for more technology and that would include not only booking and tracking on the net but also EDI connectivity and implementation of bar-coding and a pallet tracking system.

All these moves would fall into place when Air India starts hub operations at Nagpur for both domestic and international operations by September ’08 in the first phase. She points out: “Nagpur being centrally located will provide excellent scope for further movement of goods to every nook and corner of the country, either by air or any other logistics mode (road & rail).”

If all goes according to plan, Nagpur, between 2009 and 2016, would be the link for Air India, between 13 domestic cargo destinations and 15 stations abroad from the present Mumbai/ Bangalore/Chennai to Dammam and Frankfurt.

able cargo at Amritsar and interim facilities for handling international cargo at Indore.

Along with that, Agrawal also said that the time had come when the freight forwarding community, along with the civil aviation department, should work together to reduce dwell time at airports and make it at par with international standards. On its part, the AAI was going ahead to provide modern warehousing facilities, an efficient support system that would include transshipment tracking and a simple paper-free process, automation in operations and services and lastly, enhance infrastructure by putting up a Cargo Hub or at least a Cargo Village.

The move to set up a cargo village in the country has been gaining ground. At the recent ACAAI symposium, many delegates pointed out that the growth in aircargo could be sustained over a longer period of time if proper infrastructure was provided. A key component in the infrastructure would be a cargo village, which

”

CRUISING HEIGHTS May 2008

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Page 8

COVER STORY

“We’re offering just the air component”

30

Ramesh Natesan, CEO, Quikjet, believes his freighter service is on track to cater to the rising demands What will make Quikjet different from similar aircargo carriers?

We are the only carrier that is “neutral” and are offering capacity on a first-come-first-served basis to all. We are not affiliated or aligned with any one who is offering end-to-end supply chain logistics solutions. We are offering just the air component in the supply chain, and we expect that there will be many companies, both global and local players, who will want to leverage our air connectivity to offer competing services in a market that is dominated by a single multinational player. Air cargo operations are global in nature and we are building QJ to serve customers who cherish global standards of service and reliability. We are the only one offering both overnight domestic and daytime service to regional destinations. So, we will be doing both domestic and international flights. As a regional freighter, we will be able to offer connectivity within SAARC and to other nearby destinations that is presently not available.

What kind of a fleet do you foresee in the coming years?

We are a scheduled carrier, so we will be going up to five aircraft within the next year. We believe that the market is sufficiently underserved, so we expect to garner a fair share of the cargo market/ loads. We are running overnight connectivity between the metros and offer the capability for integrators to do deliver-

guaranteed-next-day delivery to their clients.

Are you going to have a hub-andspoke principle?

We are not contemplating hub and spoke principle at this juncture, as that requires high volume and throughput of cargo tonnages. For the time being, we are a point-to-point operator but we anticipate, in about two years, we may contemplate the hubbing principle as we expand into the Tier-2 and Tier-3 cities.

What about competition?

We are a ULD/ pallet cargo operator and believe that gives us a unique positioning and competitive advantage in the market. Customers are looking for reliable on-time service with cargo integrity.

ULD shipments minimise the shippers concerns on that front. The competition’s business model is different from ours.

We are a ‘merchant freighter’ offering capacity on a ‘first-come, first-serve’ basis and assure clients of our neutrality in the end-to-end supply chain. Others have related businesses that are doing more than just pure airport-to-airport connectivity and therefore cannot be completely neutral in offering capacity.

We believe there will be other companies that will enter the market, which is to be anticipated in a large market like India. We are focussed on customerfocussed reliable service which comes due to the experience within our management team, most of whose members come from major cargo airlines such as UPS, TNT and Blue Dart Aviation.

The six metros account for 90 per cent of total airfreight. The Indian aircargo market has registered the second-fastest growth rate in the world after China, with international volumes growing at an annual rate of 19 per cent and domestic cargo at 34 per cent.

The growth rate of the aviation sector in the next 10 years is expected to be not less than 25 per cent. According to the Planning Commission, India’s air cargo movements would grow at over a CAGR of 11.5 per cent from 2007-08 to 2011-12.

CRUISING HEIGHTS May 2008

would have under its roof, a singlewindow clearing mechanism comprising airlines, freight forwarders, customs house agents, customs, regulatory agencies and airline ground handling agents.

It may be worthwhile to mention that ACAAI has formed a Civil Aviation Core Group (CACG) Committee, which directly interacts with the Ministry of Civil Aviation to study the challenges and needs of the Air Cargo Industry and to provide solutions. Among the proposals the CACG has put forward to the Civil Aviation Ministry, are the creation of world-class infrastructure, bonded forwarders’ terminals, cargo village concepts, industrial level EDI and searching and creating trained manpower.

The demand for a cargo village, it seems, has been heard — in Bangalore.

Among those who pushed forward the initiative were the Bangalore Air Cargo Club (BLRACC), the Bangalore chapter of ACAAI and the Bangalore Custom House Agents’ Association Ltd (BCHAAL).

The Mysore Sales International Limited (MSIL), which used to handle cargo operations at the HAL airport has been given 7.5 acres of land near Devanahalli to build a cargo village. MSIL had earlier bid for cargo operations at the Bengaluru International Airport but lost the contract to the Singapore Air Terminal Services/ Air India and the Bobba Group/ Menzies Aviation group. Bangalore’s freight forwarders believe that the city is in dire need of a dedicated cargo village, simply because the volume of cargo has been growing by leaps and bounds. In addition to IT, the city’s exports comprise telecommunications, automotive, biotechnology, textiles, engineering, perishables and flowers.

As for the creations of cargo villages, we could take a leaf out of Changi in Singapore or Dubai. Industry watchers often point out that Changi’s growth is directly

Aircargo business has overtaken ocean and rail freight by expanding at nearly 19 per cent in the last three years, as against 10.3 per cent growth registered by ocean freight and 9.2 per cent by railways.

Photos: H C Tiwari

related to air cargo. Almost every year, the airport sees a new cargo building coming up with the latest being the Cargo Megaplex building. As a result, Changi now has a capacity of three million tons of air cargo per annum, with another 180000 tons at the dedicated courier centre. In fact, the entire Changi Airfreight Centre operates as a Free Trade Zone with eight airfreight terminals, two dedicated express and courier centres, four cargo agents’ buildings, 12 freighter aircraft parking bays, one airmail transit centre and 24-hr customs check point.

The annunal airfreight movement is around 1918159 tonnes. This, despite the fact that Changi commenced operations only in July 1981. Incidentally, the airport is the 11th largest cargo airport in the world, according to figures released

by Airports Council International (January-December 2007).

In a similar fashion, Dubai — ranked the 13th largest cargo airport in the world — has been seeing growth. In fact, along with port enhancements, the Dubai Airport Free Zone with an annual capacity of 1500000 tonnes has been created. The tonnage will be enhanced to 2700000 tonnes by 2018. As for capabilities, the Dubai facility sees goods moving from ship to plane in four hours.

There are 56 truck docks with seven of them specifically segregated for sea-air.

The annual airfreight movement is around 1668506 tonnes.

The all-round growth has seen the rise of aircargo startups. While on one hand, the move can be said to be worth-

DISCUSSING PROBLEMS OF PLENTY: At a recent symposium, the ACAAI office-bearers — (L-R) Bharat Thakkar, Keshav Tanna, J Krishnan and Hemant Bhatia — with P V Bhide, Secretary-Revenue, Ministry of Finance (third from left)

“ There is money in the aircargo business, provided it is carried out after research. War, for example, translates into good money for aircargo — Vinoo Kashyap Former Deputy MD, Indian Airlines

”

CRUISING HEIGHTS May 2008

while, on the other, there are industry experts like Vinoo Kashyap who feel that the new carriers would not be able to do well if they remain basic carriers ferrying goods from Point A to Point B. What most customers — at least the domestic ones — want is delivery to the last mile. Blue Dart has the first mover advantage in this and is doing exceptionally well. Others have not been able to make a significant dent in the market.

Kashyap, however, pointed out that there is money in the aircargo business provided it is carried out after research.

Referring to an oft-quoted saying in the aircargo industry that war and misery anywhere in the world translates into good business and money, he said that Indian cargo carriers would do well internationally if they ferried goods to Iraq or Darfur. Chinese carriers and a few lesser known aircargo companies, for example, are reaping huge profits doing just that.

Industry experts believe that the aircargo market could see a major consolidation. The small players would probably be eaten up by the large ones in a few years. The long-distance runners would be the express industry. According to figures put out by The Economist, as in the USA where the express industry grew to keep pace with the GDP, in India too, we could well see the number of cargo aircraft in the country rising from just a handful to a whopping 66 by 2015, when the GDP is estimated to be US $2,092 bn

from US $1,147 in 2007.

31

Cargom cover story:Cargom cover story.qxd

5/13/2008

6:30 PM

Page 8

COVER STORY

“We’re offering just the air component”

30

Ramesh Natesan, CEO, Quikjet, believes his freighter service is on track to cater to the rising demands What will make Quikjet different from similar aircargo carriers?

We are the only carrier that is “neutral” and are offering capacity on a first-come-first-served basis to all. We are not affiliated or aligned with any one who is offering end-to-end supply chain logistics solutions. We are offering just the air component in the supply chain, and we expect that there will be many companies, both global and local players, who will want to leverage our air connectivity to offer competing services in a market that is dominated by a single multinational player. Air cargo operations are global in nature and we are building QJ to serve customers who cherish global standards of service and reliability. We are the only one offering both overnight domestic and daytime service to regional destinations. So, we will be doing both domestic and international flights. As a regional freighter, we will be able to offer connectivity within SAARC and to other nearby destinations that is presently not available.

What kind of a fleet do you foresee in the coming years?

We are a scheduled carrier, so we will be going up to five aircraft within the next year. We believe that the market is sufficiently underserved, so we expect to garner a fair share of the cargo market/ loads. We are running overnight connectivity between the metros and offer the capability for integrators to do deliver-

guaranteed-next-day delivery to their clients.

Are you going to have a hub-andspoke principle?

We are not contemplating hub and spoke principle at this juncture, as that requires high volume and throughput of cargo tonnages. For the time being, we are a point-to-point operator but we anticipate, in about two years, we may contemplate the hubbing principle as we expand into the Tier-2 and Tier-3 cities.

What about competition?

We are a ULD/ pallet cargo operator and believe that gives us a unique positioning and competitive advantage in the market. Customers are looking for reliable on-time service with cargo integrity.

ULD shipments minimise the shippers concerns on that front. The competition’s business model is different from ours.

We are a ‘merchant freighter’ offering capacity on a ‘first-come, first-serve’ basis and assure clients of our neutrality in the end-to-end supply chain. Others have related businesses that are doing more than just pure airport-to-airport connectivity and therefore cannot be completely neutral in offering capacity.

We believe there will be other companies that will enter the market, which is to be anticipated in a large market like India. We are focussed on customerfocussed reliable service which comes due to the experience within our management team, most of whose members come from major cargo airlines such as UPS, TNT and Blue Dart Aviation.

The six metros account for 90 per cent of total airfreight. The Indian aircargo market has registered the second-fastest growth rate in the world after China, with international volumes growing at an annual rate of 19 per cent and domestic cargo at 34 per cent.

The growth rate of the aviation sector in the next 10 years is expected to be not less than 25 per cent. According to the Planning Commission, India’s air cargo movements would grow at over a CAGR of 11.5 per cent from 2007-08 to 2011-12.

CRUISING HEIGHTS May 2008

would have under its roof, a singlewindow clearing mechanism comprising airlines, freight forwarders, customs house agents, customs, regulatory agencies and airline ground handling agents.

It may be worthwhile to mention that ACAAI has formed a Civil Aviation Core Group (CACG) Committee, which directly interacts with the Ministry of Civil Aviation to study the challenges and needs of the Air Cargo Industry and to provide solutions. Among the proposals the CACG has put forward to the Civil Aviation Ministry, are the creation of world-class infrastructure, bonded forwarders’ terminals, cargo village concepts, industrial level EDI and searching and creating trained manpower.

The demand for a cargo village, it seems, has been heard — in Bangalore.

Among those who pushed forward the initiative were the Bangalore Air Cargo Club (BLRACC), the Bangalore chapter of ACAAI and the Bangalore Custom House Agents’ Association Ltd (BCHAAL).

The Mysore Sales International Limited (MSIL), which used to handle cargo operations at the HAL airport has been given 7.5 acres of land near Devanahalli to build a cargo village. MSIL had earlier bid for cargo operations at the Bengaluru International Airport but lost the contract to the Singapore Air Terminal Services/ Air India and the Bobba Group/ Menzies Aviation group. Bangalore’s freight forwarders believe that the city is in dire need of a dedicated cargo village, simply because the volume of cargo has been growing by leaps and bounds. In addition to IT, the city’s exports comprise telecommunications, automotive, biotechnology, textiles, engineering, perishables and flowers.

As for the creations of cargo villages, we could take a leaf out of Changi in Singapore or Dubai. Industry watchers often point out that Changi’s growth is directly

Aircargo business has overtaken ocean and rail freight by expanding at nearly 19 per cent in the last three years, as against 10.3 per cent growth registered by ocean freight and 9.2 per cent by railways.

Photos: H C Tiwari

related to air cargo. Almost every year, the airport sees a new cargo building coming up with the latest being the Cargo Megaplex building. As a result, Changi now has a capacity of three million tons of air cargo per annum, with another 180000 tons at the dedicated courier centre. In fact, the entire Changi Airfreight Centre operates as a Free Trade Zone with eight airfreight terminals, two dedicated express and courier centres, four cargo agents’ buildings, 12 freighter aircraft parking bays, one airmail transit centre and 24-hr customs check point.

The annunal airfreight movement is around 1918159 tonnes. This, despite the fact that Changi commenced operations only in July 1981. Incidentally, the airport is the 11th largest cargo airport in the world, according to figures released

by Airports Council International (January-December 2007).

In a similar fashion, Dubai — ranked the 13th largest cargo airport in the world — has been seeing growth. In fact, along with port enhancements, the Dubai Airport Free Zone with an annual capacity of 1500000 tonnes has been created. The tonnage will be enhanced to 2700000 tonnes by 2018. As for capabilities, the Dubai facility sees goods moving from ship to plane in four hours.

There are 56 truck docks with seven of them specifically segregated for sea-air.

The annual airfreight movement is around 1668506 tonnes.

The all-round growth has seen the rise of aircargo startups. While on one hand, the move can be said to be worth-

DISCUSSING PROBLEMS OF PLENTY: At a recent symposium, the ACAAI office-bearers — (L-R) Bharat Thakkar, Keshav Tanna, J Krishnan and Hemant Bhatia — with P V Bhide, Secretary-Revenue, Ministry of Finance (third from left)

“ There is money in the aircargo business, provided it is carried out after research. War, for example, translates into good money for aircargo — Vinoo Kashyap Former Deputy MD, Indian Airlines

”

CRUISING HEIGHTS May 2008

while, on the other, there are industry experts like Vinoo Kashyap who feel that the new carriers would not be able to do well if they remain basic carriers ferrying goods from Point A to Point B. What most customers — at least the domestic ones — want is delivery to the last mile. Blue Dart has the first mover advantage in this and is doing exceptionally well. Others have not been able to make a significant dent in the market.

Kashyap, however, pointed out that there is money in the aircargo business provided it is carried out after research.

Referring to an oft-quoted saying in the aircargo industry that war and misery anywhere in the world translates into good business and money, he said that Indian cargo carriers would do well internationally if they ferried goods to Iraq or Darfur. Chinese carriers and a few lesser known aircargo companies, for example, are reaping huge profits doing just that.

Industry experts believe that the aircargo market could see a major consolidation. The small players would probably be eaten up by the large ones in a few years. The long-distance runners would be the express industry. According to figures put out by The Economist, as in the USA where the express industry grew to keep pace with the GDP, in India too, we could well see the number of cargo aircraft in the country rising from just a handful to a whopping 66 by 2015, when the GDP is estimated to be US $2,092 bn

from US $1,147 in 2007.

31

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still not away...

Aircargo in the country is experiencing phenomenal growth — and this, despite the infrastructure hurdles. New cargo carriers are setting up shop while the old warhorse, Air India, is chalking out plans to take a major bite of the aircargo pie.

A

IRCARGO IN THE country has, for a long time, been neglected and hence the happy hunting grounds of a few. However, all that is soon going to change. Waiting in the wings are a few home-grown aircargo carriers that have at last found their wings, thanks largely to what the world over has come to be known as the “India story”.

In its country report presented at the 35th Executive Council Meeting of the Federation of Asia Pacific Air Cargo Associations (FAPAA) a few days ago, the Air Cargo Agents Association of India (ACAAI) pointed out that the “Indian Air Cargo Industry, amidst the present economic scenario, is soaring to great heights and its functional significance has magnified in today’s rapidly evolving era of globalisation… International trade has continued for years, but India’s booming economy has helped the Indian aircargo industry rapidly usher in globalisation, which, in turn, has shifted the world’s focus on the country.”

In turn, airplane manufacturers are upbeat. Airbus, in its Global Market Forecast (GMF) has predicted that domestic India FTKs (Freight Ton Kilometres) would increase at 17 per cent per year average for the next 20 years and that freighter aircraft purchases would outstrip passenger aircraft purchases in the country.

Witness the growth: the express market in the country, for example, has risen to soaring heights. In a recent conference, Blue Dart Managing Director Tulsi N Mirchandaney, speaking about the aircargo growth story, showed how the express market had grown. Internationally, the express sector had 3.5 per cent market share of international air cargo in 1991. In 2005, that jumped up to 11 per cent. Internal estimates by Blue Dart have thrown up some interesting figures. The size of the express industry in the country is Rs 4,175 cr and the average annual growth is esti-

32

BOOSTING GROWTH : AAI has gone in for machinery for storage of export ULDs at all airportst AAI has gone in for machinery for storage of export ULDs at all airportst e of export ULDs

CRUISING HEIGHTS May 2008

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Page 3

mated to be 17.2 per cent. As Bangalorebased start-up aircargo player Quikjet’s CEO Natesan Ramesh puts it: “From a low base of a few hundred million rupees, the current express market is estimated at around Rs 27 billion (about US $650 million) and growing at a blistering 25-30 per cent per annum. “The past four years,” he points out, “has witnessed a spectacular rise in the express business due to high flow of Foreign Direct Investment and MNCs migrating businesses or setting up business in the country.”

Even with the open skies policy, as far as cargo is concerned, there are opportunities that still remain untapped. Ramesh is forthright when he says, “We believe that the market is sufficiently underserved.”

Naturally, whether it is express or plain air cargo, all newcomers hope to take a major bite of the pie.

Promoted by AFL Private Limited — a leading logistics company and a pioneer in the express courier sector and Singapore’s Cardinal Aviation — Quikjet would like to be known as a merchant air cargo carrier which is keen to open up capacity to all players in the market. Ramesh believes that Quikjet would achieve what the low-cost carriers have done in the Indian market. “Like the low-cost carriers, we are trying to open the cargo space,” he says.

If Quikjet has plans to tap the market, Capt Mukut Pathak, with his yet-totake-off Delhi-based Aryan Cargo Express (ACE) — the first flight would be sometime between mid-August and mid-September this year — is optimistic about the growth in the sector. Talking to Cruising Heights, Capt Pathak said, “Today, India has about 400 million people in the middle income group. This figure is likely to touch 550 million by 2015 as a result of India turning into a major manufacturing base.” The retail boom in the country, said Capt Pathak, is yet to arrive and when that does, it will spurt the demand for movement of cargo by air. “The aircargo growth in India has accelerated in the last four years primarily due to the strong growth in the economy,” the captain emphasised.

His ACE, he said, was “entering a segment of air cargo industry that does not have any India-based operator. We are more international oriented than domestic,” he said.

More interested in connecting India to foreign nations, Capt Pathak added: “We are looking at the SAARC (South Asian Association for Regional Cooperation) nations — India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives, Bhutan and Afghanistan — to be our main market and plan to provide connectivity within

‘Our dedication will take MDLR Airlines places’ Gopal Goyal, MDLR Airline's chairman, is focussed on developing an organisation of excellence and service.

Now that the airline has been functioning for a year, how do you see the future?

We are positioning MDLR as a fullservice carrier. The dedication and commitment of our team has seen us obtain “scheduled” status and today our operations on a scheduled basis have already commenced. This, we have achieved in a period of just one year. It is all due to our emphasis on organisation building, induction of a professional team and the creation of a strong professional organisation.

A number of carriers are going in for new planes. What are your plans?

We have three aeroplanes — British Aerospace regional jets — these are fourengined jet aircraft with 70 seats in a twoclass configuration: economy and executive. These aircraft offer a very high degree of comfort. In the economy class, seating is six abreast and the seat pitch at 32 inches. To add to that is the fact that we have been operating from Terminal 1A at Delhi and that enables us to offer much better standards of ground service.

One of the major plus points of our service is our food. We serve only vegetarian cuisine and that is in keeping with my vision and belief. The meals are all gourmet quality.

As for acquisitions, we are in a dialogue with several aircraft manufacturers and are likely to finalise our fleet plans soon. By the end of 2010, we plan to have a fleet of 15 aeroplanes. Another focus area is our non-scheduled or charter operations.

Do you plan to add more destinations in the coming months?

Presently, we are operating flights between Delhi, Chandigarh, Dharamshala, Ranchi and Kolkata. By June this year, SAARC and markets like China, Far East, SE Asia, ME, CIS and Europe. We will have a domestic network, but that will be only to feed our international network.”

For such vast operations, Pathak’s ACE has worked out a plan to fly with a combination of A310/ 300-600Fs and MD11Fs. He, along with his partner promoter Rishiraj Singh Dungarpur, has signed the lease CRUISING HEIGHTS May 2008

we will be adding Jabalpur, Amritsar and Srinagar. These are the immediate plans.

We have plans to connect new destinations like Ludhiana and Renukoot though that will depend on the availability of airfields, etc. Jamshedpur is also in our plans but right now with our limited capacity we can either do Ranchi-Kolkata or Ranchi-Jamshedpur. Since RanchiKolkata has been going on for quite sometime, we do not want to vacate that slot but once we have more capacity, we will start flying to Jamshedpur, too.

There is a lot of scope for charter operations. We are going to focus on that as well as helicopters. We have set up a helicopter division and we already have a chopper with us. Two more copters will be acquired soon which will be used basically for charters and for pilgrimages.

You spoke about commitment and dedication. How do you plan to find professionals who are committed and dedicated?

One of our prime focus areas is - and that is because of expansion and growth in the industry — the need for qualified professional manpower. We — in fact, the whole industry — needs persons trained in aviation and hospitality. We have always been in hospitality…the real estate and hospitality sector are key areas for us. The airline business is rather small compared to the other two but even so, we have decided to set up a training organisation, which will impart professional training in various areas of aviation and hospitality. MDLR's plan is to have an organisation of high standard and professional excellence. The areas we would like to cover are: passenger services, cabin crew, reservations and ticketing staff, customer relations and pilot training. In fact, we are exploring to set up a pilot training institute also. These centres will be set up at Mumbai, Chandigarh, Delhi and Gurgaon. for two MD11s from Skyholding. “We plan to launch with three leased aircraft and grow to 12 aircraft within 14 months to acquire a network stability and realise the full potential of our network. We do not foresee much of a problem at airports because we will operate at night, within the Indian airspace and during the day, we will vacate this airspace for international

33

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FOCUS

‘Onus of extending services should not be on us only’ Anil Goyal, MDLR's CEO, is upbeat about the future after celebrating a year of service.

As the first start-up regional carrier, do you feel that MDLR Airlines has the first-mover advantage?

The regional carrier concept is to increase connectivity. The number of cities on the airmap of the country is still very small and the large carriers tend to focus on the high-density routes. There is not enough focus on the development of new routes.

One of the main aspects of the development of aviation is “extensification” of air services. Growth and volume is one aspect and the other is taking air connectivity to those places where it does not exist. It is probably with that objective in mind that the concept of regional carriers has evolved.

What do you think are the factors that could lead to the growth of regional carriers?

Regional carriers, however, have some route restrictions on their operations. The idea is to confine them to new and emerging routes. There are several issues that arise. First, it is a developmental task and there is a cost that is attached to it. The cost of development should not be the burden of a new and emerging regional carrier but should be shared by other stakeholders too, like the state government, the tourism department, the hospitality industry and even general business and industry…

Operation on these lean routes is not commercially lucrative as on high-density routes. There are, therefore, questions of viability for a regional carrier. The restrictions imposed by way of route entitlements have an impact on the viability. I will give you an example: if we start operations to Ludhiana — which is not connected by air today — we will improve air connectivity and bring a new destination on the airmap. In aviation, there are no end-to-end markets: Ludhiana will have traffic for Mumbai, Kolkata and so on. However, we are allowed only the limited operation of flying to Ludhiana and back from our only metro base in Delhi. For my Delhi-Ludhiana flight to become viable, it is also important that we develop Ludhiana into a destination and cater to all traffic flows into and out

34

of that city. We are not allowed to operate to Mumbai or Kolkata as a regional carrier. That actually constricts my ability to develop a new destination. If I interline and send my passengers from Delhi on other airlines to their destinations, it is not viable for us. So, there are constraints as far as route restrictions are concerned.

Second, there is a grey area whether we can fly to non-metro stations of other regions. As a regional carrier of the northern region, there is a question of whether we can fly to non-metro stations of the South, East or West. Even if there is a need to put some restrictions because of congestion at metro airports, till such time that such congestions exist these restrictions can be there as a temporary measure for metro to metro flights. If we want to operate from Delhi to Pune, Goa or Bhubaneswar, we do not see the need for such restrictions.

Also suppose we want to create a new link like Delhi-Nasik. Since Nasik is in the western region, we do not qualify because we are a regional carrier of the north. This grey area exists.

We understand that there are some areas of operation of regional carriers that still need to be looked into?

Yes, one of the aspects that we are concerned about is the concessions available in the cost of fuel. A concession is available if the maximum takeoff weight of the aircraft is less than 40000 kgs. Now, with the newer jet aircraft (with higher seating capacity than the usual 50-seater) coming into the market, the take-off weight crosses the 40000 kg limit. If we bring in a new aircraft that is modern, is a better product and delivers a better quality of service, more fuel-efficient and has more passenger appeal, then the concession is not available for us although it is more costly for us. There is, therefore, a need to urgently review the criteria and not relate the concessions to the weight of the aircraft. This concession is skewed in favour of the older generation of turboprops and the regional aircraft of the older generation. Today, since100-seater regional jets are common in the world, the concession should be made available to such aircraft. The criteria should be delinked from the take-off weight and should be based on seating capacity.

CRUISING HEIGHTS May 2008

flights.”

Among the other players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots. They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo.

The carrier resumed operations from the middle of 2007.

Lad, the Chairman and Managing

“ The size of the express industry in the country is Rs 4,175 cr and the average annual growth is estimated to be 17.2 per cent — Anil Goyal MDLR’s CEO

”

Director of Crescent Air, was upbeat.

Pointingagencies.”

Among the other players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots. They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo. The carrier resumed operations from the middle of 2007.

Lad, the Chairman and Managing Director of Crescent Air, was upbeat.

Pointingagencies.” Among the other

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BOOSTING GROWTH : AAI has gone in for machinery for storage of export ULDs at all airportst AAI has gone in for machinery for storage of export

players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots. They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo. The carrier resumed operations from the middle of 2007.

Lad, the Chairman and Managing Director of Crescent Air, was upbeat.

Pointingagencies.” Among the other players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots. They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo. The carrier resumed operations from the middle of 2007.

Team up Anil Goyal: CEO of MDLR, Goyal retired from Indian Airlines as Director, Commercial. He was also member of the Board of Directors of the airlines as well as Managing Director of Alliance Air, a wholly-owned subsidiary of Indian Airlines. With over 37 years of experience in the aviation industry, Goyal brings professionalism to the startup airline. He has seen all sides of the airline business and has won a number of awards for his acumen, including the honour of being hailed as the Best Civil Aviation Man in 2003, among others.

Uttam Kumar Bose: An engineer by profession, the COO of MDLR Airlines, U K Bose headed Air Sahara. Well-known for his aggressive sales and marketing plans, he was one of the first to launch Apex/Advance Purchase Fares as well as dynamic pricing in the country.

Capt D V Sharma: Former director of Operations and Flight Safety in Indian Airlines, MDLR's Advisor, Flight Operations, is well known in Indian commercial aviation circles. He possesses more than 16000 hours of flying experience and has flown a wide range of aircraft: from DC3 to Airbus A 300.

S K Jain: A mechanical engineer, MDLR's Executive Director (Engineering) possesses vast experience in different fields related to aircraft maintenance. Jain was General Manager (Engineering) with Indian Airlines and later Executive Director (Engineering) with Alliance Air. Koustav M Dhar: Experienced in the hospitality industry, MDLR Airline's Executive Director, Marketing and Planning, holds a degree in human resources. For the last eight years, he has handled airlines sales and marketing as regional head for Sahara and later as Senior Vice-President, Global Strategy, for Jagson Airlines.

CRUISING HEIGHTS May 2008

Lad, the Chairman and Managing Director of Crescent Air, was upbeat.

Pointingagencies.” Among the other players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots. They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo. The carrier resumed operations from the middle of 2007. and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots. They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo.

35

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SPECIAL REPORT

still not away...

Aircargo in the country is experiencing phenomenal growth — and this, despite the infrastructure hurdles. New cargo carriers are setting up shop while the old warhorse, Air India, is

A

IRCARGO IN THE country has, for a long time, been neglected and hence the happy hunting grounds of a few. However, all that is soon going to change.

Waiting in the wings are a few home-grown aircargo carriers that have at last found their wings, thanks largely to what the world over has come to be known as the “India story”.

In its country report presented at the 35th Executive Council Meeting of the Federation of Asia Pacific Air Cargo Associations (FAPAA) a few days ago, the Air Cargo Agents Association of India (ACAAI) pointed out that the “Indian Air Cargo Industry, amidst the present economic scenario, is soaring to great heights and its functional significance has magnified in today’s rapidly evolving era of globalisation… International trade has continued for years, but India’s booming economy has helped the Indian aircargo

36

CRUISING HEIGHTS May 2008

industry rapidly usher in globalisation, which, in turn, has shifted the world’s focus on the country.”

In turn, airplane manufacturers are upbeat. Airbus, in its Global Market Forecast (GMF) has predicted that domestic India FTKs (Freight Ton Kilometres) would increase at 17 per cent per year average for the next 20 years and that freighter aircraft purchases would outstrip passenger aircraft purchases in the country.

Witness the growth: the express market in the country, for example, has risen to soaring heights. In a recent conference, Blue Dart Managing Director Tulsi N Mirchandaney, speaking about the aircargo growth story, showed how the express market had grown. Internationally, the express sector had 3.5 per cent market share of international air cargo in 1991. In 2005, that jumped up to 11 per cent. Internal estimates by Blue Dart have thrown up some interesting figures. The size of the express industry in the country is Rs 4,175 cr and the average annual growth is estimated to be 17.2 per cent. As Bangalore-based start-up

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Page 3

away...a aircargo player Quikjet’s CEO Natesan Ramesh puts it: “From a low base of a few hundred million rupees, the current express market is estimated at around Rs 27 billion (about US $650 million) and growing at a blistering 25-30 per cent per annum. “The past four years,” he points out, “has witnessed a spectacular rise in the express business due to high flow of Foreign Direct Investment and MNCs migrating businesses or setting up business in the country.”

Even with the open skies policy, as far as cargo is concerned, there are opportunities that still remain untapped.

Ramesh is forthright when he says, “We believe that the market is sufficiently underserved.” Naturally, whether it is express or plain air cargo, all newcomers hope to take a major bite of the pie.

Promoted by AFL Private Limited — a leading logistics company and a pioneer in the express courier sector and Singapore’s Cardinal Aviation — Quikjet would like to be known as a merchant air cargo carrier which is keen to open up capacity to all players in the market. Ramesh believes that Quikjet would achieve what the low-cost carriers have done in the Indian market.

“Like the low-cost carriers, we are trying to open the cargo space,” he says.

If Quikjet has plans to tap the market, Capt Mukut Pathak, with his yet-totake-off Delhi-based Aryan Cargo Express (ACE) — the first flight wouldbe sometime between midAugust and mid-September this year — is optimistic about the growth in the sector. Talking to Cruising Heights, Capt Pathak said, “Today, India has about 400 million people in the middle income group. This figure is likely to touch 550 million by 2015 as a result of India turning into a major manufacturing base.” The retail boom in the coun-

try, said Capt Pathak, is yet to arrive and when that does, it will spurt the demand for movement of cargo by air.

“The aircargo growth in India has accelerated in the last four years primarily due to the strong growth in the economy,” the captain emphasised. His ACE, he said, was “entering a segment of air cargo industry that does not have any India-based operator. We are more international oriented than domestic,” he said.

More interested in connecting India to foreign nations, Capt Pathak added: “We are looking at the SAARC (South Asian Association for Regional Cooperation) nations — India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives, Bhutan and Afghanistan — to be our main market and plan to provide connectivity within SAARC and markets like China, Far East, SE Asia, ME, CIS and Europe. We will have a domestic network, but that will be only to feed our international network.” For such vast operations, Pathak’s ACE has worked out a plan to fly with a combination of A310/ 300-600Fs and MD11Fs. He, along with his partner promoter Rishiraj Singh Dungarpur, has signed the lease for two MD11s from Skyholding.

“We plan to launch with three leased aircraft and grow to 12 aircraft within 14 months to acquire a network stability and realise the full

potential of our network. We do not foresee much of a problem at airports because we will operate at night, within the Indian airspace and during the day, we will vacate this airspace for Photos: H C Tiwari CRUISING HEIGHTS May 2008

37

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SPECIAL REPORT

An open letter to Mantriji Dear Mr Minister, I have been associated with Airports as Chairman of International Airports Authority of India and later with ICAO and UNDP as Management Adviser.

Based on my experience in India and 16 other countries where I worked, I am inclined to concede that your statements about undue delays in Government institutions including Planning Commission and other bodies, have led to stunted growth of the aviation. Here is a fast-changing scenario that requires speedy decision-making but unfortunately most of the red tape prevalent in government is not meeting the requirement of a rapidly transiting business world.

Whether it is fleet acquisition by the airlines or expansion of airports, all the decisions are made so late that by the time these are taken, the ground reality and financial parameters have changed. I remember that in 1987, I was told by the then Minister of Civil Aviation that Late Shri Rajiv Gandhi, then Prime Minister, was keen to start the new terminal in Calcutta (the new domestic terminal). I quickly got approved the plan in the AAI Board but since the power of the Board at that time was only Rs 25 crore and the project exceeded it marginally, it had to be sent to Planning Commission and PIB (Public Investment Board).

For one year nothing came out, inspite of follow up and interest of PM and the Minister. One day, finally, an exasperated Minister (Jagdish Tytler) called me and asked about the progress of the terminal. I told him the proposal is with PIB. The Minister rang up the concerned people, which he had done earlier too, without results. I told him that if he wants, I will start the work by next week provided, he keeps his eyes closed to my cutting corners. He smiled. I withdrew the proposal from the Government and sanctioned the amount within my powers and started the work. My officers asked: ‘What about the additional money?’ I told them we will cross the bridge when we reach it. The terminal in Calcutta got completed well in time and passengers were relieved.

I can say with confidence that the Airports Authority of India has all the expertise and competence to make and manage world-class airports. It is the government that is the interpolar. The only alternative to be out of Government control was to privatise the airports. Even this took ten years and nothing was done to the plans already made on prospective needs (of various airports) as the decision was hanging fire. I congratulate you for at least finally getting it through and work has begun.

No one in the government has ever fixed responsibility for the delays that have brought us to this state of congestion and reputation of having the worst airports. Who was the hurdle to this modernisation and expansion and who finally is leading the AAI to its final end? Who is bringing (about) the fall of airlines (Air India) that too will face privatisation as the government will fail to do much?

The policy and even the regulation should not be the prerogative of a few officials but the nation should tap the vision and wisdom of all those who can contribute to give this country their very best (experience) in aviation.

But in the government, it is the coteries that are ruling. National assets need national input and concern. These are issues on which there should be public debate to bring change if we have to compete in the global race. I hope you will initiate measures to change the thinking and the outlook in the government.

Kind regards Prof N K Singh

38

CRUISING HEIGHTS May 2008

international flights.”

Among the other players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots. They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo.

The carrier resumed operations from the middle of 2007.

Lad, the Chairman and Managing Director of Crescent Air, was upbeat.

Pointingagencies.”

Among the other players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots. They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo. The carrier resumed operations from the middle of 2007.Lad, the Chairman and Managing Director of Crescent Air, was upbeat. Pointingagencies.”

Among the other players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a checkered career. Based in Chennai, the airline was established in June 2000 by airline pilots.

They could not operate it and the company was taken over by Santosh Lad, an industrialist with interests in mining, software, real estate development, the entertainment industry and now, air cargo. The carrier resumed operations from the middle of 2007.

Lad, the Chairman and Managing Director of Crescent Air, was upbeat.

Pointingagencies.”

Among the other players is Crescent Air Cargo, which, after many fits and starts, has started operating daily Fokker flights linking Coimbatore, southern India’s major industrial hub, to Chennai and Mumbai. Crescent has had a in mining, software, real estate development, the entertainment industry and now, air cargo. The carrier resumed operations from the middle of 2007.

Lad, the Chairman and Managing Director of Crescent Air, was upbeat.

Pointingagencies.”

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Page 7

IVRCL, a Rs 3,000 crore group, is a name to reckon with in infrastructure, construction and real estate sectors in the country.

IVR Prime Urban Developers Limited is a 100 per cent subsidiary of IVRCL and has successfully completed the prestigious Hill Ridge Township at Gatchi Bowli, Hyderabad.

Many other projects are in various stages of implementation at Bangalore, Chennai, Hyderabad and Pune.

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

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

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

2, 3 & 4 Bedrooms Appartments with highend specifications

Development of IT SEZ at Sector 144

IVRCL INFRASTRUCTURES & PROJECTS LIMITED

Corporate Office : 8-2-596, 4th Floor, IVRCL Towers, Road No. 10, Banjara Hills, Hyderabad - 500 034 Ph.: +91-40-2335 2961 / 2962 / 2963 Fax: +91-40-2335 4482 e-mail: info@ivrinfra.com Delhi Regional Office : P2, Ist Floor, Green Park Ext., New Delhi-110016 , Ph.: 011-41001049

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GLOBETROTTING

AT A GLANCE

Landing on a mountain!

Losing your mobile

A PILOT HAS successfully landed his plane in Germany’s highest mountain for the first time in 50 years. Pilot Tom Huber set his small Savage Classic D-MERG plane down on a 2600-metre-high (8530 feet) plateau on Bavaria’s Zugspitze. He was

MOBILES GO MISSING from airport security check ins daily. Most are left there by mistake. But this one at Kolkata airport was traced to a wealthy dealer in imported goods. A rich textile businessman from Mumbai was on his way home by Jet Airways. Clearing security and boarding the flight he realised that he had left his Samsung mobile on a tray at security.

He rushed back to the check-in counter looking for the mobile. The CISF officers registered a complaint and persuaded Hussain to board his flight

given special permission to land on the 2962 metre (9718 feet) mountain in Garmisch-Partenkirchen in a stunt marking the end of the winter season.

The last time a plane was successfully landed on the mountain was in 1958.

Better later than never

A

CAPTAIN FOR Gulfstream International Airlines, Kenny Edwards decided it would be best to be safe — rather than sorry — when he attempted to cancel a flight from Tampa to West Palm Beach in December.

A cockpit device, designed to warn of potential collisions (collision avoidance system) with other aircraft, wasn’t working, and the route called for flying through a busy student training area in South Florida, where a mid-air collision had recently occurred, killing two pilots. But his managers at Gulfstream International Airlines, which does business as Continental Connection, ordered him to make the hop. They said the airline was not required to have a working collisionavoidance device to legally dispatch Flight 9150, which had a crew of two pilots and 10 passengers on the manifest.

When Edwards refused to conduct the commuter flight in a Beech 1900 turboprop, his managers immediately fired him and

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called in another captain to take his place. “In 20 years in aviation, I’d never seen this before, where a captain makes a decision based on safety and he gets terminated for it,” Edwards, 42, of Phoenix, said. Shortly after being let go, Edwards filed a complaint with the Federal Aviation Administration, charging that Gulfstream International Airlines engages in a number of unsafe practices, including maintenance shortcuts and overworking its pilots. The FAA is investigating his concerns.

Edwards has also taken his plight to Congress, asking the House Transportation and Infrastructure Committee to look into how Gulfstream operates. Edward said he now has been “blacklisted” from finding another pilot job because of a federal rule that makes his termination open knowledge to other carriers. The biggest injustice, he said, is that Gulfstream ignored federal guidelines that call for the captain of a flight to be “the final authority” as to whether it can be conducted safely.

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A busy corridor THE MUMBAI-DELHI air corridor has emerged as one of the busiest in the world. According to Mumbai International Airport Ltd (MIAL) a survey done last year showed it was the sixth busiest corridor. The list was led by Barcelona-Madrid, Sao PauloRio, Jeju-Seoul, Sydney-Melbourne and Cape Town-Johannesburg sectors. The survey was conducted by an international organisation, Official Airlines Guide, in late 2007.

Airlines already find it hard to get a new slot for a flight to and from Mumbai. MIAL has ‘suggested’ that instead of 53 daily flights of mediumsize planes like A320 or Boeing 737, airlines be asked to operate fewer flights of bigger twin aisle planes.

“A twin aisle plane should fly for 16 hours daily to break even, something that’s possible only on international routes,” said Siddhanta Sharma, SpiceJet executive chairman.

Airlines also point out that instead of asking for financially unviable option of bigger planes, MIAL should cut down on the number of small aircraft — both private and regional jets.

The government is concerned at the situation in Mumbai. DGCA chief Kanu Gohain said: “We are taking all steps to maximise the use of existing runways. We are working on procedures to reduce both vertical and horizontal separation between aircraft and increase capacity without compromising on safety.”

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Causing panic A BANGLADESHI man who took out a knife to cut an apple caused a plane to make an emergency landing in Bangkok.

The 25-year-old will not face charges over the incident although airport authorities in the region are expected to be asking how he came to carry the knife aboard the plane. The incident occured on a GMG Airlines flight from Kuala

Carbon bill to burn a hole PROPOSED US emission-trading legislation could leave the country’s airlines with a crippling $9 billion annual bill in carbon costs in just over a decade.

Speaking at the recent Aviation & Environmental Summit in Geneva, Air Transport Association vice-president environmental affairs, Nancy Young said that should the front-runner LiebermanWarner Climate Security Act become law from 2012, the cap and trade proposals would be extremely expensive. “Our analysis, just for US airlines, shows it would cost $5 billion annually beginning 2012, escalating to $9 billion by 2020,” says Young.

Senators Joseph Lieberman and John Warner Jr introduced a bill in October to establish a domestic greenhouse gas trading scheme that would apply to transportation, electric power and manufacturing.

“What was required was a globally harmonised, sectorspecific approach to international aviation emissions. The problem is political inertia — governments are reluctant to compromise on aviation at a time when the global climate change policy debate remains unresolved”, says Young.

CBI ex-chief robbed at airport THE LATEST VICTIM of thieves at Mumbai airport is none other than former director of the Central Bureau of Investigation (CBI) Joginder Singh.

He was robbed of a digital camera worth approximately Rs 20,000 and an iPod worth about Rs 15,000. A MIAL official said that when a bag passes through a screening machine, the staff involved in the racket spot the valuable items. They then tell the loaders which bags to look out for. “Baggage screening is carried out by the airlines themselves in Mumbai. They

Lumpur to Dhaka, although there is some confusion as to the aircraft’s owner and colours.

Initial reports caused widespread confusion clai- ming a Malay man had been attempting to hijack the plane. Other reports said there had been a fight between a knifewielding passenger and the plane’s crew.

Illustrations by Rajeev Kumar

that was on the verge of taking off.

When the CISF officers scanned the CCTV footage they were horrified to see the passenger next in queue to Hussain quietly picking up the cellphone from the tray. He was traced to a SpiceJet flight to Bangalore that hadn’t yet taken off.

Ashok Kumar Aggarwal first said ‘no’ to the allegations. But collapsed once the CCTV footage was shown to him. He surrendered the stolen mobile and was placed under arrest.

outsource the loading activity to ground handling agencies.

Since the loaders work on a daily wage basis it is difficult to keep tabs on them,” said an official.

Speedpost services smugglers THE CARGO AIRCRAFT was Air India’s. It had been chartered by India Post. Flight IC-7901 carrying letters and parcels took off from Imphal for Kolkata via Agartala on Tuesday afternoon.

At Agartala, acting on a tipoff, a team of customs officials raided the aircraft. They seized 178 parcels, all of which had been booked by Speedpost at Imphal. They were found to contain raw leather, animal skins, ganja, foreign cigarettes, pirated Chinese DVDs and Chinese shoes — all smuggled or prohibited items.

An audacious and well organised smuggling racket, using entirely government owned channels, which are generally regarded as completely above board, has been busted, feel customs officials.

Most of the packets seized came from Moreh on the Indo-Myanmar border and a wellknown smuggling haven — yet postal department officials in Imphal never bothered to check their contents. As per postal laws, employees are not supposed to check the contents of packets,” a postal employee in Imphal told press.

The names and addresses on some of the packets make amazing reading. A number of them had been sent to ‘A Tamang, Airport Gate No 1’ and ‘S Chakraborty, Airport Gate No 2’. Obviously the addresses were fake.

Following the seizure, a full-scale blame game has begun.

Some of the postal employees point fingers at Air India. ``It is Air India that does the checking of the packets at the airport.

The cargo cannot be loaded unless the airline staff paste a green sticker on it,” said one employee of India Post cargo service at Imphal. “The aircraft in question was wetleased to the postal department. We only provide the crew and we are responsible for maintenance. Nothing more,” an Air India spokesman in Kolkata retorted.

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DOMESTIC AIRLINES

Jet Airways launches several new services in April 2008 Mumbai-Bangkok: Jet Airways, has now linked Mumbai with Bangkok by a daily service effective May 7, 2008. This will be its third service to Bangkok from India. Jet Airways already operates daily services to Bangkok from Delhi and Kolkata respectively.

INAUGURATION OF THE MUMBAI-BANGKOK DAILY FLIGHT: Sonalee Vaz, India Representative-West, Central & South, Tourism Authority of Thailand, lighting the lamp with Wolfgang Prock-Schauer, CEO, Jet Airways, at the inaugural ceremony at Mumbai’s Chhatrapati Shivaji International Airport on May 7, 2008

operating daily direct flights on the Kochi-Kuwait-Kochi and Kochi-Bahrain-Kochi sectors. The induction of Kochi-DohaKochi daily flights makes it the third destination linking Kochi to the Gulf. These flights will complement the airline’s present daily services from Kozhikode and Mumbai to Doha.

Delhi/ Mumbai to Abu Dhabi: The introduction of this new destination marks Jet Airways’ first foray into the United Arab Emirates, expanding the airline’s Gulf route network to five destinations. For the convenience of Jet Airways passengers connecting to Dubai and vice versa, the airline is offering a seamless transfer through scheduled bus services.

For Doha, Abu Dhabi and Bangkok, Jet Airways is using Boeing 737-800 with Premiere and Economy class configuration. Jet launched its operations to the Gulf in January 2008 and currently flies to four destinations in the region — Kuwait, Bahrain, Muscat and Doha.

JetPrivilege and Cathay Pacific Partnership: JetPrivilege has entered into a reciprocal frequent flyer programme partnership with Cathay Pacific with effect from May 1, 2008.

Jet Airways’ JetPrivilege members may now earn and redeem their JP Miles while travelling to Asia, Middle East, Australia, Europe and North America on eligible flights of Cathay Pacific and its sister airline, Dragon air. Similarly, Cathay Pacific’s Asia Miles members may earn and redeem Asia Miles on eligible flights of Jet Airways' over 380 flights daily to 60 destinations in India and around the world.

JetPrivilege wins Freddie Awards 2007: The airlines frequent flyer programme also won nine Freddie Awards at the 20th annual presentation ceremony of the Freddie Awards 2007,

Commenting on the launch, Wolfgang Prock-Schauer, CEO, Jet Airways, said, “Jet Airways’ services to Bangkok from Delhi and Kolkata have proved extremely popular with passengers.

This combined with strong passenger demand for a daily service connecting Thailand’s capital city with the financial heart of India, lead us to believe Partners Global Hotel Alliance: The that Jet Airways’Mumbai-Bangkok flight airline’s frequent flyer programme, Jetwill prove equally popular.”

Privilege has entered into a global hotel Mumbai to Hong Kong: The airline has partnership with Global Hotel Alliance, deployed its Airbus 330-200 aircraft with the world’s largest a two-class configuration, Première and alliance of independent Economy, on the new Mumbai-Hong hotel brands, effective Kong-Mumbai sectors. Jet Airways’ flight April 15, 2008. The timings on this route have been carefully Global Hotel Alliance planned to offer optimum convenience to encompasses 163 the business traveller with an early mornupscale and luxury hotels with over ing arrival into Hong Kong and return to 52000 rooms in 126 cities and across 42 Mumbai/India by end of day. With this different countries. With this partnerlaunch, Hong Kong becomes the 16th ship, Jet Airways’ JetPrivilege members international destination on Jet Airways’ can earn 500 JPMiles per eligible stay rapidly expanding international route map.

Kochi to Doha: Jet Airways is already

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CRUISING HEIGHTS May 2008

and additional benefits such as early check-in/ late check-out and upgrade to next room category for JetPrivilege Platinum members across all participating Global Hotel Alliance hotels. In addition, Leela Palaces, Hotels & Resorts will continue to extend the special privileges enjoyed by members at their hotels which include complimentary use of the health club, no double occupancy charges, upgrade to best room within the room category booked and a guaranteed late check-out.

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held in Wyndham Phoenix, USA on April 2008. This included the coveted ‘Program of the Year’ award for the second consecutive year. JetPrivilege, which competed for top honours in the intensely competitive Japan, Pacific, Asia and Australia region against some of the best-known airlines in the world, emerged victorious in seven categories and runner-up in two categories.

Jet Privilege won these highly coveted awards for Program of the Year, Best Customer Service, Best Elite Level, Best Affinity Credit Card, Best Bonus and Best Website. It received the second position in the categories of Best Member Communications and Best Award Redemption. With this, JetPrivilege is now a Freddie award winner four times in a row. The Freddie Awards recognise the world’s most outstanding frequent flyer programmes and are considered to be the ‘Oscars’ of frequent flyer programmes across the world. Each year, the Freddie Awards provides frequent travellers a chance to voice their opinions about their favourite frequent travel programs.

Deccan soars despite lean season DECCAN AVIATION posted a 33 per cent increase in turnover during Q3 FY08 as compared to Q3 FY07, despite it being a lean season. Deccan attributes this to a continued emphasis on improving operational reliability and on-time performance, which has in turn, led to higher guest confidence in Deccan. It also attributes this to its initiatives to improve customer experience with Deccan, which has been well-received and has provided substantial impetus to the airline’s positioning as a value-based carrier and its growth objectives going forward. The increase in revenue is primarily on account of improved yields. The average value per ticket saw an increase of 36 per cent to Rs 3,274 in Q3 FY08 from Rs 2,412 in Q3 FY07. A similar comparison for a nine-month period reflects an increase of 15 per cent to Rs 2,972 in FY08 from Rs 2,573 in FY07.

Air India Express makes rapid strides AIR-INDIA EXPRESS, the wholly-owned subsidiary of National Aviation Company of India Ltd, (NACIL), has made remarkable progress in terms of fleet and network expansion and number of passengers carried, since its inception three years ago on April 29, 2005.

Commencing operations with three leased aircraft, Air India Express (AIE) today has a fleet of 18 B737-800 aircraft — the most technologically advanced single-aisle jet aircraft. By the end of 2009, AIE proposes to have a fleet of 25 aircraft.

While AIE had carried 0.5 million passengers in its inaugural year, 1.8 million passengers travelled on AIE flights in the fiscal ending March 2008. AIE today operates 153 weekly flights between 13 Indian cities, namely, Kozhikode, Kochi, Thiruvananthapuram, Chennai, Trichy, Mangalore, Mumbai, Nagpur, Kolkata, Jaipur, Lucknow, Delhi and Amritsar and 12 International stations, namely, Dubai, Sharjah, Abu Dhabi, Muscat, Al Ain, Salalah, Bahrain, Doha, Colombo, Singapore, Kuala Lumpur and Bangkok on the network.

The success of Air India Express can be measured from the tremendous passenger satisfaction and the acceptance of the product by the travel trade, which has led to a continual demand for increased operations. It has become one of the most preferred low cost airlines flying to international destinations.

Mock crash exercise at IGI airport DELHI INTERNATIONAL AIRPORT (P) LIMITED (DIAL) carried out a “Full Scale Mock Aircraft Crash Exercise” at IGI Airport on April 23, 2008, along with all the stakeholders. This exercise was carried to observe the coordination of activities at the crash site and communications amongst the various participating organisations, agencies, services and units, and see the preparedness and training of all the staff at Delhi Airport. This exercise was done as a drill for handling procedures for aircraft crash within the Airport Fire Service Turn-out Area at IGI Airport. The exercise also helped practice the information management procedures and operating procedures of the Command Centre (CC), Crisis Management Centre (CMC), Emergency Response & Interaction Centre (ERIC), the Emergency Coordi-

nation Centre (ECC), Survivors Reception Centre (SRC), the Friends & Relatives Reception Centre (FRRC) and the Reunion Area (RA).The full scale mock aircraft crash exercise announcement was made by the Air Traffic Control (ATC) to check on the efficiency and response time of various departments, agencies and concessionaires at the airport, including Central Industrial Security Force (CISF), Bureau of Civil Aviation Security (BCAS), medical units, ambulance, hospitals, city fire service, airlines etc.

Delhi Airport goes Hi-Tech: DIAL has set up a state-of-theart Airport Operation Command Centre (AOCC) to streamline the airport operations and maximise the efficiency of resources available. The AOCC is located in the old ATC tower at the domestic terminal. It will be a high-technology asset, which will monitor and co-ordinate operations within the terminal, airside, cargo and other support functions of the airport.

The AOCC will significantly improve the resource allocation at the airport, which in turn will lead to greater efficiency in airport operations. Passengers will be greatly benefitted as it would lead to quicker processing for them in terminals and faster aircraft turnaround, thereby reducing delays. AOCC is being fed with realtime data from the ATC Tower, Passenger Terminals, Airlines, Ground Handling team, Cargo Terminals, Fire & Rescue Station & Maintenance facilities amongst others. This allows it to map these resources onto a single database known as the Airport Operational Database or AODB, a product of UFIS-AS, which will streamline daily operations by integrating information from multiple application systems. Siemens is the partner for the implementation of AODB, the heart of the Airport operations.

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INTERNATIONAL Lufthansa plans Pune-Frankfurt non-stop BEGINNING JULY, LUFTHANSA will introduce new non-stop flights between Pune and Frankfurt. The new, six weekly flights are operated by an Airbus A319, offering a total of 48 seats in an all-business class configuration. This new Lufthansa Business Jet service will be the first to link Pune non-stop to Europe, and will offer significant convenience for passengers. Currently, the majority of passengers have to take more than three hours to travel to Mumbai, the nearest international air hub, for departure to Europe. The new service will complement the current daily MumbaiFrankfurt flights, as well as the thrice-weekly MumbaiMunich flights, which commenced on May 5, 2008.

“We are pleased that India is the first country in AsiaPacific to be served by Lufthansa Business Jet service, strengthening Lufthansa’s leading position in the region. By being the first airline connecting the city of Pune to Europe, Lufthansa is providing a link to facilitate business ties and

Emirates assures travel with Bupa EMIRATES AIRLINES HAS SIGNED an agreement with UKbased insurer Bupa Travel Services to offer customers extra peace of mind when they travel. Travellers managing their Emirates flight bookings online via www.emirates.com, would be able to opt for travel insurance protection which has been specially tailored for Emirates’ customers.

These offers include: unlimited cover in the event of a medical emergency, credit card theft, and even kennel fees. Unlike most other offerings in the market, insurance cover can be purchased by almost all nationalities (except residents of USA, Canada and Switzerland) for various trip durations, and for travellers up to the age of 80.

Nigel Hopkins, Emirates’ Executive Vice President, Service Departments said: “Emirates’ customer base spans the globe and we needed a

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further exchange between the two regions,” said Uwe Mueller, Vice President Asia & Pacific, Lufthansa. “We are delighted to announce Pune as the newest destination in the Lufthansa India network and enhance our engagement across the country. We hope that this move will fulfill the increasing demand in one of the fastest-growing destinations in India. This service will offer even faster and more convenient access between Pune and Europe for business travellers in India,” said Werner Heesen, Director South Asia, Lufthansa. The flights will provide passengers with a maximum choice of 55 weekly flights between India and Germany, enhancing Lufthansa’s position as a leading international carrier in India. Together with SWISS, Lufthansa will offer 69 flights a week from India to Europe via its three efficient hubs — Frankfurt, Munich and Zurich. Since 2001, Lufthansa has almost quadrupled its flights to India, when the airline operated 15 flights per week to three destinations.

high-quality insurance partner with an international reach to match our own. We are confident we have found the right fit in Bupa Travel Services, and look forward to working with them to deliver and develop more such value-added travel services for our customers around the world.”

Kozhikode prepares for Emirates: Age-old trade ties between Dubai and Kozhikode — a port city in the Southern Indian state of Kerala that welcomed its first Middle Eastern traders in as early as the seventh century — are set to accelerate with the launch of Emirates Airline’s six-flights-a-week service, effective July 1.

Kozhikode, Emirates’ third gateway in Kerala after Kochi and Thiruvananthapuram, and its 10th in India, bears testimony of the airline’s long-standing commitment to this market and its robust expansion drive. A high-level Emirates delegation led by Salem Obaidalla, Senior Vice President, Commercial Operations, West Asia and Indian Ocean, and comprising Orhan Abbas, Vice President India and Nepal and senior executives from the airline’s home base in Dubai and its Indian Headquarters in Mumbai addressed a gathering of over 600 agents from Kozhikode and its surrounding districts, including Cannanore, Palakkad, Mallapuram, Tellicherry and Trichur.

Obaidalla noted: “Emirates is delighted to announce the launch of our services to Kozhikode in the summer of this year.

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Air Arabia sees demand soar

An estimated two million Keralites work and live in the Gulf region. Emirates has a robust presence in the Middle East, serving the region with 163 weekly flights to 12 gateways via its Dubai hub. The start of services to Kozhikode will enable Emirates to serve Kerala with an additional gateway and at the same time enhance connectivity between the state and the Middle East.”

AIR ARABIA HAS announced that its passenger average load factor — passengers carried as a proportion of available seats — for the first quarter of 2008 stood at 94 per cent across its destinations network in India. The airline served 246296 passengers on the Sharjah — India routes for the first quarter of 2008, an increase of 43 per cent compared to 172246 passengers during the same period in 2007. On-time performance achieved was in excess of 95 per cent across the company network in India.

Another key factor for the airline’s sucRohit Ramachandran cess in India is the great connectivity it offers to the Middle East, even from non-metro cities. Air Arabia, which currently provides direct services to Ahmedabad, Chennai, Jaipur, Kochi, Mumbai, Nagpur, Coimbatore, Thiruvanathapuram, Bangalore, Kozhikode and Delhi, represents the highest network on any Middle East airline to serve India and connects over 39 destinations internationally.” India is an important market for Air Arabia and we are committed on providing best value for money air travel” said Rohit Ramachandran, Regional Manager, India and Sri Lanka, Air Arabia.

Young Achiever's Award for Ankur Bhatia

Park hotels acquires land in G Kolkata APEEJAY SURRENDRA Park Hotels Ltd, owners of The Park Hotels, has won the bid for a plot of land on Eastern Metropolitan Bypass. This 3.35 acres of land has been acquired at a bid price of Rs 135.77 crore, while the reserve price was Rs 100 crore.

The Eastern Metropolitan Bypass, commonly known as the E M Bypass is a major road connecting the northern, central and southern parts of the city of Kolkata. This 21 km of road runs along the eastern rim of the city and represents the newly resurgent Kolkata. From plush resiPriya Paul dential complexes to top of the line medical facilities like Apollo Gleneagles, it has it all. This road is also the gateway to the IT hub of the city at Sector V, Salt Lake and the fast developing townships of Rajarhat, Newtown.

Priya Paul, Chairperson, Apeejay Surrendra Park Hotels Ltd says, “The acquisition is in tune with the continuing investment of the Apeejay Surrendra Group into developing West Bengal. The Park Hotels have dominated the hotel industry in the city of Kolkata for the past 40 years with its Park Street property located in the centre of the city. This prime location in Greater Kolkata will enable us to retain our leadership in the industry. We plan to build a 300 room luxury hotel on this land.”

The Park Hotels is India's first collection of contemporary luxury boutique hotels with properties in Bangalore, Chennai, New Delhi, Kolkata, Navi Mumbai and Visakhapatnam. A 280room hotel and retail development in Hyderabad is under construction and will open in 2009. Land has also been acquired in Jaipur and Pune for five star deluxe properties.

ANKUR BHATIA, EXECUTIVE DIRECTOR, Bird Group was recognised by the travel community for his contribution to the industry and the phenomenal success of the group of companies under his guidance. At a dinner commemorating the 15th South Asia Travel & Tourism Exchange (SATTE Openworld), one of the largest industry exhibitions in the country, he was presented with a special award for young achievers in the presence of a gathering of his mentors, peers and friends.

Ankur is widely regarded as one of the most successful and dynamic young entrepreneurs in the industry and expressed his pleasure at the recognition at such a prestigious event.

Speaking at the occasion, Ankur said “The longevity and growth of SATTE has helped it establish a great deal of credence, so I am particularly pleased to receive this award.

It's always a pleasure to be recognised by one's peers in the industry. I would like to thank everyone working hard to make Bird Group a large, growing and dynamic organisation that’s Ankur Bhatia respected in India and abroad.”

After pioneering the business outsourcing process revolution in the travel industry in India, Ankur Bhatia brought Amadeus, the global technology provider to the Indian subcontinent and has led it to the number one position as the technology provider to the travel industry.

One out of every two bookings made on airlines in India is made using Amadeus technology. As Executive Director of Bird Group, Ankur then went on to manage the group's ambitious and extensive portfolio diversification.

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TRAVEL & TOURISM the Parliamentary Consultative ComSecurity of historical monuments: mittee attached to her ministries, While no formal scheme to provide speAmbika Soni said efforts are on to cial security arrangement for important streamline the procedure of granting cultural and religious places in the counpensions to the eligible artistes so that try has been formulated, Archaeological there should be no delay in receiving Survey of India has deployed a mix of such payments. Lauding the role of the regular watch and ward staff of the ASI, zonal cultural centres, the Minister said private security guards and State police these centres are not only reviving and personnel for the security of 3667 censtrengthening the traditional performtrally protected monuments. The ing art forms but are also showcasing Tourism and Culture Minister, Ambika India’s rich, colourful and vibrant culSoni informed in the parliament that ture world over. Soni said the performCISF personnel have also been deployed ing arts are an integral part of cultural at selected monuments. It is the constant tourism. They promote ethnic and culThe Union Minister of Tourism and Culture, endeavor of the ASI to maintain these Ambika Soni and the Minister for Information, tural identity and foster a feeling of monuments in good shape through struc- Communication and the Arts, Government of national pride in the host community. tural conservation, chemical preserva- Singapore, Dr Lee Boon Yang being welcomed by She said in turn, cultural tourism leads Hodka artisan, Shri Bhasar Bhura Khoyla, at tion and environmental development, Singapore. to rejuvenation of local arts and crafts, which are taken up as per the requirere-establishment of vanishing ments on site, subject to availability of funds. Fencing of the lifestyles, re-discovery of ethnic identity and greater involveprotected areas has also been stepped up to prevent encroachment of communities. The Minister said, to sustain interests of ments. the youth towards the traditional performing arts, efforts have Zonal culture centres to be strengthened: The ministry is to be made to make these art forms economically sustainable. exploring if a corpus fund can be established for the welfare of Public-private partnership in the North East: The ageing folk and performing artistes associated with the seven Tourism Minister has informed that no proposal has been subzonal cultural centres in the country. Addressing the meeting of mitted by the Government of Assam or other North Eastern

Minister Speak

Mysteries of nature at Butterfly Festival THE BREATHTAKING greenery of Hampyeong and an array of Butterflies and balmy flowers become the perfect backdrop to the 10th annual Hampyeong Butterfly Festival being held from April 18, 2008 to June 1, 2008 in the north west coast of south Jeollanam-do province in Korea.

Amid Hampyeong’s green expanse of acres dotted with mustard, rapeseed and radish flowers, is witnessed the smooth flying of tens of thousands of butterflies suffused with elegant flower scents, strongly revoking the breathtaking vitality of nature.

Regarded as the best festival of Korea, the internationally promoted event combines environment, culture and tourism. The festival presents visitors an unforgettable and fantastic experience as the large-spotted butterflies, white butterflies, and yellow butterflies flutter among the yellow and purple flowers.

The year 2008 sees the butterfly festival expand as a World Butterfly & Insect Expo. Special experiences for the tourists at the event are Butterfly mosaic puzzle, use of chopsticks etc. The Eco friendly event holds various programme for the tourists such as, pavilions of herbal medicines, dragonfly fantasy tunnels, shampooing in water infused with sweet flags silk worms and natural dyeing etc.

The experience zone features the General Ecology Experience Hall which houses the Butterfly Ecology Hall where one can learn all about butterflies, from its birth till its maturity and much more about the insect. The hall features 120000 butterflies, and a variety of large spotted butterflies and insects including the Daedongang Korean Water Beetle and Dorcus hopei.

A folk festival can also be enjoyed which showcases, traditional folk games, butterfly pottery, traditional straw craft, rice cake cooking, traditional food exhibition and much more. There is a memory making Game Plaza where the tourists can play the

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traditional Korean Games such as traditional livestock chasing, mudfish catching, going through a labyrinth in a shape of a butterfly, etc. The exhibition held at the festival shows the knot craft works, wild flowers etc.

The festival started in the year 1999, at Hampyeong, which has the largest butterfly hill. Hampyeong has both, mountain ranges as well as plains, the climate here is hot and humid in the summers and dry and cold in the winter. With diverse weather conditions and variation in its geology, the place has a variety in Flora and fauna. Thus, considering the natural environment the place has been developed for organic farming and other eco friendly policies rather than an industrial city.

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(NE) States for a Public-Private partnership for setting up an international tourist destination in the heart of Bodoland, with a five star hotel-cum-casino in Gangtok. The Government of Arunachal Pradesh has forwarded proposals regarding a golf resort and air connectivity. However, these proposals could not be sanctioned as the required documents such as detailed project reports and source of funding by public financial institutions, etc. have not been submitted.

Foreign assistance for renovation of monuments: Ambika Soni has informed that the Government of India has obtained loan-assistance of 901 million Yen from the Japan Bank of International Cooperation, Japan for Phase-II of the project for Conservation and Tourism Development of Ajanta-Ellora region in Maharashtra. This is an integrated programme of structural

conservation, chemical preservation and environmental development of Ajanta, Ellora, Pitalkhora and Aurangabad Caves, Daulatabad Fort, Bibi-ka-Maqbara, Patnadevi Temple and Lonar group of temples.

World Monument Fund has deposited a matching grant of US $4,39,000 for the restoration and conservation of Jaisalmer Fort in Rajasthan.

Financial assistance has been provided by UNESCO for conservation of the Buddhist group of monuments at Sanchi and Satdhara in Madhya Pradesh.

A Technical Collaboration Project between ASI and M/s Janseen Pharmaceutica, Belgium for bio-deterioration research for Tipu Sultan Palace in Srirangapattana and monuments of Hampi in Karnataka is in progress.

Galileo teams up with Hong Kong Tourism INTERGLOBE TECHNOLOGY Quotient (ITQ), the national distributor of Galileo, a Global Distribution System (GDS) in India, has tied up with Hong Kong Tourism Board (HKTB) to offer special discount vouchers of the popular Hong Kong Transit Tour for Indian travellers. This arrangement would be exclusively offered to over 13000 Galileo travel partners in India.

A first of its kind technology collaboration between a tourism board and a GDS company in India, this offer is automatically integrated with the Galileo PNR at the time of booking the Hong Kong segment in the flight itinerary. eTracker for travel agents: Galileo has created a unique, web based solution, namely, the Galileo eTracker. This solution enables travel agents to record and view the current status of all electronically issued tickets (e-tickets), using its extensive search and sort capabilities. In addition to letting the user review current tickets, the tool’s powerful search function allows agents to produce detailed reports, which can be downloaded into applications such as Microsoft Excel for manipulation. Galileo eTracker is available in seven languages: Czech, English, French, German, Italian, Portuguese and Spanish.

The powerful search engine is accessible in all international markets which issue e-tickets and does not require additional software for loading. It is easy to use and does not even require an engineer on site to set up access. Galileo eTracker is accessible in a browser environment and a toolbar button provides easy access to Focalpoint, Viewpoint or Galileo Desktop. It can also be accessed through Focalpoint.

Galileo powers IAAI’s portal: ITQ has powered the IATA Agents Association of India (IAAI’s) portal i-Top8.

The MOU signed earlier between the two companies encapsulates the use of Galileo content and inventory, being made

Between now and December 31, 2008, Indian travellers booked via Galileo are entitled to a 15 per cent discount on the standard tour price.

The tour operates daily at 9.30am and includes the magnificent Tsing Ma Bridge, a walk along the Tsim Sha Tsui promenade to discover the magic of Hong Kong, movies at the Avenue of Stars, a ride on the famous Star Ferry across Victoria Harbour, home to one of the world’s most spectacular harbour view and a visit to the Man Mo Temple on Hollywood Road to experience Hong Kong’s unique living culture, among other things. available exclusively to all IATA agents in India.

As part of its first steps, Galileo has powered their portal, namely iTop8, designed and owned by IAAI. The portal is accessible to all IATA member agents and provides both air and non-air content across India. This portal has already registered 40 members, in less than two weeks of it going live.

This solution will enable any association member to go live with an online presence in a mere three working days after signing of the contract. The initiative is being seen as yet another step by Galileo to enhance its presence in the OTA market with all new features of Web 2.0 environment. In India, Galileo is the market leader in this segment with over 55 online travel portals to be powered by Galileo solutions.

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Finally, it gets moving!

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inally, assembly has begun on the long delayed Boeing 787 Dreamliner. Air India is one of the customers awaiting this long haul masterpiece from Boeing that is close to 30 months behind schedule. Boeing is getting several aircraft ready for the excruciating series of tests.

The assembly speed is now accelerating, thanks to the manufacturers receiving assemblies that are much more complete. For example, the second flight-test airplane had a 50 per cent reduction in the amount of incomplete work as compared to the first airplane.

After assembly is complete, this airplane will be fitted with an interior as part of the comprehensive flight-test program and certification process. When that happens around June this year, it will be the first time one will see the 787 in what is close to a final delivery configuration. The first airplane to fly is on track for “power on� in later June/early July.

Around the world, 25 airplanes are in various stages of production. This number includes the static and fatigue airframes, which will not be delivered to customers. Since its launch in April 2004 the 787 Dreamliner has amassed nearly 900 firm orders valued at $151 billion from 58 airlines.

The Dreamliner programme is about 15 months behind schedule, and the first planes that were supposed to be delivered this month have slipped until the third quarter of 2009. Boeing has said it is working with individual airlines about new delivery dates. However, delivery delays will be as much as twice that long for some customers that bought the fuel-efficient composite jet.

Boeing is drastically cutting 787 production, which accounts for

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why some customers won't get their planes for two years or more from the original deliver date. Boeing had planned to delivery 112 Dreamliners by the end of 2009. Instead, it will deliver just 25.

Boeing is also ramping up production much more slowly than first planned. Rather than hitting a production goal of 10 planes a month in 2010, that won't happen until 2012.

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