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EDITOR-IN-CHIEF’S NOTE

Do we want to improve?

D

uring a recent discussion with some friends from the airline business we got talking about the Federation of Indian Airlines (FIA) — the collective lobbying arm of the airlines so to speak. And the debate was if FIA indeed had any use, had it achieved anything or was it just a cosy club that met routinely not too regularly, offered photo ops and nothing very substantive.

Not too surprisingly, the broad consensus was that FIA was no good. And would tend to agree with that. How can it be when the entire agenda for the setting up FIA is geared towards just one motivation — how can the airlines be benefited. Agreed, a platform like FIA must speak for the airlines, but surely it understands that the airline business is a complex and multi dimensional business that involves several other elements to it. And unless you look at the whole, the parts are never going to come good.

Just take a look at the FIA website (www.fiaindia.in). The last update in the news section has been in November 2007 and the last major policy pronouncement is the former FIA President, V Thulasidas’ (Former Chairman and Managing Director Air India) speech at the state aviation minister’s conference on January 18, 2008. If you are looking for their perspective on the fuel issue or on AERA (Airports Economic Regulatory Authority) or their take on the new airports or on doing those unprofitable flights in the North East you can forget it. It’s a dry and barren sight. They have nothing to offer. They have nothing to offer on the great ‘Dostana’ of recent times — the bonhomie and cooperation between Naresh Goyal and Vijay Mallaya.

In the section ‘about us’, FIA talks about it’s role: “(to be) the ‘voice of India’s’ airline industry, working to identify and take up issues on behalf of the industry, with various regulatory authorities, government departments and other key stake-holders. The Federation provides a platform for consensus building amongst the member carriers.”

CRUISING HEIGHTS November 2008

One industry friend related a incident from a FIA meeting that is symptomatic of the functioning and general attitude at FIA. Apparently at one of their recent meetings the legacy carriers or full service carriers (FSCs) wanted the low cost carriers (LCCs) to make sure that the price difference between the two was never more than Rs 500. Almost everyone agreed (including, one was told, Siddanth Sharma who was then with Spicejet and represented them at the meeting) excepting IndiGo’s Rahul Bhatia. He declined to ‘fix’ the rates and is believed to have said that he had no issues with what price the others wanted to sell their tickets at, but he wasn’t upping his rates and was clear on the price at which he wanted to sell his product. In other words, I know my business model, leave it to me to handle it my way.

Now knowing Rahul Bhatia — infact from the little I know of this reclusive, low profile persona—one gets the feeling that he is straight, dogged and hugely stubborn. He simply won’t budge if he thinks he is in the right. And in this case he was damn right.

Simply put, fixing prices is akin to rigging. Is it fair on the passengers? Aren’t they entitled to a bouquet of fares to pick and choose from? So, the ‘differential fare farce’ flew out of the window and we now have a situation where Spicejet is reducing fares(some call it the Wilbur Ross effect, the American billionaire having invested a plenty of money in the airline and promising to invest more) and passengers have an alternative they can choose.

If FIA needs to help the industry then it needs to reenergise its platform. It needs to be a platform that looks at the industry holistically, addresses issues on a long term basis and changes the perception that it’s a club for rich men (and exalted babus) who want to use only to benefit the airlines they own. Or head!

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Off the cuff

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Bio-fuels for flying There has been a lot of talk about bio-fuels for aircraft. In February this year, Virgin Atlantic Airways flew a Boeing 747-400 from London to Amsterdam with one of its General Electric CF6-80C2 turbofans using a blend of 20 per cent biofuel and 80 per cent conventional jet fuel.

Air New Zealand, Continental Airlines and Japan Airlines all plan demonstration flights over the next few months using secondgeneration bio-jet fuels derived from feedstocks such as jatropha that do not compete with food for land or water.

Recently, in a history-making event, Green Flight International completed the first US crosscountry flight with a jet-powered aircraft fuelled predominantly with biofuel. The flight used a firstgeneration biodiesel, and the team is now planning flights using algaebased bio-jet fuel. The Aero L29 jet trainer was flown 2486 miles from

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THE MOTHER OF ALL ALLIANCES Will this alliance spell good for the paying passenger or it will finito for him with high costs and few options. It’s taken the industry by surprise and there are plenty of views on the subject. R Krishnan examines the Kingfisher-Jet alliance.

Carol Sugars and Doug Rodante prepare for the world's first 100 per cent bio-fuel jet flight.

Reno, Nevada, to Leesburg, Floria.

Of that distance, 1776 miles were flown on 100 per cent biofuel and 710 miles on a blend of 50 per cent biofuel and 50 per cent standard jet fuel.

“These flights prove that we have the capability of supplementing our energy requirements with safe, environmentally-friendly alternatives to petroleum,” said Green Flight President and CEO Douglas Rodante.

Orlando-based Green Flight was formed and funded by Rodante to promote use of biofuels, is now planning flights early in 2009 using a next-generation, sustainable algae-based bio-jet fuel.

p6 OFF THE RECORD The inside story of Deepak’s meteoric rise at Air India and his peers feel about it.

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p14 NEWS DIGEST The Gulf routes are hot and the Gulf carriers hotter still! Will the Indian carriers match up to the onslaught?

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

CRUISING HEIGHTS

GUEST COLUMN

Editor-in-Chief

K SRINIVASAN Managing Editor

TIRTHANKAR GHOSH Consulting Editor

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R KRISHNAN Copy Desk

AIR SHOW p13

India Aviation 2008 — report from Hyderabad.

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Rajji Rai on the zero commission conundrum.

BIRENDRA KUMAR Layout Artists

RUCHI SINHA PRADEEP JHA RAVINDER GUSAIN Art Director

BHART BHARDWAJ Co-ordinating Photo Editor

H C TIWARI Subscription

p52 SNIPPETS Emirates opens its new terminal at Dubai airport.

p41 CARGO

Ajay Bhambi on the aviation meltdown.

SAS returns to India and CEO Lars Sandahl Sorensen hopes it will be better this time.

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OUR COVER

Cover Illustrations by Ruchi Sinha

Gen Manager

RAJIV SINGH Executive Director

RENU MITTAL

INTERVIEW

There is huge potential for a regional cargo hub in India. Is anyone listening?

JAYA SINGH

With due apologies to Karan Johar, Abhishek Bachchan and John Abraham,messers Naresh Goyal and Vijay Mallaya fit perfectly as the ‘Dostana’ pair. We thought of a hundred different ideas for the cover illustration, but finally settled on a zany twist to one of the most enduring pictures from the hit film. It conveys camaraderie, warmth and, well, Dostana. As for the Kingfisher-Jet alliance we’ll have to wait and see!

CRUISING HEIGHTS November 2008

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

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

Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase-I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase-I, New Delhi 110020 Vol III No 7

RNI NO. DELENG/2006/16897

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Future plans

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It (expansion) will be partly carried out through internal accruals and through the typical aircraft funding options … but we are certainly not in the market for raising funds.

Paramount Chief M THIAGARAJAN on their future plans.

Acting tough

LETTERS TO EDITOR

October 2008 Rs 60

THE INTERVIEW of Civil Aviation Minister, Praful Patel, “Our Airlines have the resilience and the stamina to last the distance” (October ’08) was worth reading. In fact, Praful Patel was candid enough to Ready to fly into the future talk about with the issues facing the aviation sector. The minister has always been in the forefront to boost Indian aviation ever since he took charge of the ministry. In the last four years, he has done a remarkable job, taking important decisions to scale up the operations of Air India along with developing world-class airports.

Ram Shahi, New Delhi

We have issued a show cause notice to an airline as it cancelled large number of flights without informing us. These slots could have been used by others. Moreover, the air operators’ permit mandates that airlines inform the government about non-adherence of schedules.

DGCA Chief KANU GOHAIN on airline’s playing truant with slots.

Great future Self-service is here to stay with potential for truly explosive growth in emerging markets.

Plus

Airports Unlimited

AAI’s thrust on enhancing airport infrastructure around the country

A detailed look at the present state of affairs of the country’s civil aviation sector and all its stakeholders.

Illustrations: Rajeev Kumar

Phenomenal all-round progress! (October ’08) was interesting. The growth in the civil aviation sector has been phenomenal, barring a few exceptions. That is because the Indian aviation sector has been liberalised keeping in view the global aviation scenario. The steps and key decisions, which were taken on the part of Ministry of Civil Aviation has brought in rich dividends for Indian aviation. And the results can be seen from the present aviation scenario. The formation of NACIL, development of new airports along with the liberalisation of air services and modernisation of 35 non-metro airports would bring about a qualitative change in Indian aviation.

Prem Shanker, Surat

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The cargo story, Now, dedicated cargo airports (October ’08) illustrated the fact that India desperately needs all-cargo airports to boost the air cargo operations in India.

Air cargo is going through a rough patch, simply because it’s potential has long been disregarded by the Ministry of Civil Aviation. Now, that Indian air cargo has started showing that it is capable of earning money, the Ministry has woken up to give the much-needed fillip to the industry. Indeed, with the coming of all-cargo airports, the Indian aviation scenario would definitely grow.

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

SITA Director for India and South Asia MANEESH JAIKRISHNA on the huge potential.

Welcome Inde !

There is a great potential for more passenger traffic and we want to tap this. For this, flight crew are being given an orientation on what food Indians prefer, the regional films they like to watch and even the gestures that should be used while guiding them. So far, 250 flight attendants have volunteered to learn Indian culture through our programme.

Air France Senior Vice-President JEAN-LOUIS PINSON on India plans.

Menonspeak

If the fuel prices stabilise below $80 a barrel, the company will have a double-digit growth. Then we will look at some more new routes.

We are engaged in several global companies to set up these SBUs. We expect that these units would be ready by June-July 2009.

If banks are unable to lend us money that would also be a problem.

We have strong fundamentals and I don’t see any question of grounding any of our aircraft.

Air India Chairman RAGHU MENON on the Maharaja.

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For those of you who missed out the big aviation stories, here’s what’s coming.

Aviall Inc, a wholly owned Boeing subsidiary, plans to open a business office in the country. One of the largest providers of new aviation parts and related aftermarket services in the aerospace industry, Aviall’s India, will be headquartered at the Noida Special Economic Zone in Uttar Pradesh.

US-based business jet maker Hawker Beechcraft Corporation (HBC) has opened its first authorised service centre in Delhi in partnership with Interglobe General Aviation, with a total investment of US $8 million. Two more centres — one in Mumbai and another

ETA Star, one of Dubai’s household names, will invest over US $1 bn to cash in on booming sectors such as ports and aviation.

The US pioneer in fractional aircraft ownership, NetJets is planning to expand in India.

GMR Infrastructure is looking to tap the growing corporate jet market in India, which is expected to rise from the existing 150-190 to over 500 in the next four years with investment plans to the tune of US $151 million.

COLD STATS

in southern India — are likely to come up by 2009. Hawker Beechcraft has the maximum number of business jets flying in India.

Aviation moves up, despite downturn blues

LOOKING GLASS “Ladies and Gentlemen, this is your captain on Flt A380. We can’t take off till all the seats are filled up... and that could take a few days...weeks...”

Blow hot, blow cold It is an unfortunate decision, which all of us regret but it is an attempt to save the company and the jobs of the remaining employees.

Jet Airways Executive Director SAROJ DUTTA on the sack notice to employees.

My apology to you for whatever happened... you are like my children and I will not let you down.

We will together make it (Jet) a big company.

Jet Airways Chairman NARESH GOYAL to retrenched employees.

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OFF THE RECORD

Jadugar Deepak!

Y

ou have got to give it to him: 10 out of 10. There is something about Deepak Brara that makes CEOs twirl around his little fingers. Now we don’t want to say that Mantriji also is part of his growing fan club, but it is evident that he has a deep and faithful following at RGB (Rajiv Gandhi Bhawan). Bhai, Kya jadoo hai Deepakji? Kuuch samjhao yaar!

Just some weeks back, Narayan Vaghul, the non-executive board member at Air India (for the uniniatied Vaghul is the man who put ICICI in the collective Indian consciousness) remarked during the course of one board meeting that it would make no sense to have an Air India

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Board without representation from the commercial side. So, pronto Deepak, now working as Executive Director (Sales) in Mumbai was called into the board room to join the distinguished company of messers Raghu Menon, Narayan Vaghul, R K Singh, Anita Khurana, Anup Shrivastava, Chandrasekhar, Unny, Vipin Sharma and Amod Sharma to join the confabulations.

One board member (was it Chairman Raghu Menon?) went to the extent of suggesting that Brara would now attend all board meetings to represent ‘Commercial’ and that he would participate in their deliberations, but have a ‘voting right’. Now wait a minute, who has a voting right at AI, none of the exalted mem-

CRUISING HEIGHTS November 2008

bers is a shareholder, and so what do they vote for? Most issues are sorted out anyway in the backroom or through instructions from RGB — the sole shareholder in the Maharaja. So, why this fuss about voting rights? “Voting, we have never been asked to vote. What a joke,” snorted one whole-time director.

With all due respects to Vaghul, he has become the Vic Dunca of Air India.

Like Naresh Goyal’s alter ego at Jet Airways, Vaghul is like an obedient navigator who can be gently guided to change the altitude or correct the course and no one will say a thing. After all isn’t he supposed to the independent outside director? Unlike Dunca though, Vaghul isn’t a dyed-in-the-wool professional

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from the aviation business. And an increasingly skeptical bunch of Executive Directors and General Managers wonder why he chooses to act as his master’s voice. Why can’t he be independent and why can’t he be like the Narayana Vaghul of old?

Anyway, to cut a long story short, our bridesmaid Deepak has finally made it to the boardroom. According to the minutes of the board meeting, Vaghul had demanded that all issues at AI have a commercial angle and they needed to be examined from that angle. So, Deepak, Executive Director (Sales and Marketing) now redesignated as ED (Commer-

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cial) is a permanent special invitee (PSI) to the board.

What the PESB (Public Enterprise Selection Board) failed to give RGB has given him on a platter. It speaks volumes about what the Ministry of Civil Aviation thinks about the PESB. It is also an indication of how well they practice the adage: ‘Show me the man and I’ll show you the rule’. By their own yardstick, when the two entities AI and IA (Indian Airlines) were merged to create NACIL, it was categorically stated that the wholetime directors on the two boards would continue to be on the boards of the merged entity and new directors would

CRUISING HEIGHTS November 2008

come through the process.

One senior ED said: “How are we any different from Deepak? There are several of us handling independent charges like ground handling, etc. These are subjects that come up routinely in the board, So, why aren’t we permanent special invitees to the board?” It’s a good point and one, perhaps, Mr Vaghul will consider addressing in the coming weeks (with some help from his friends on the Boards). Perhaps, what has most cut up senior staffers is the fact that virtually all agenda papers go to Deepak. He has a viewpoint on issues outside of commercial and in real terms he is now acting

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OFF THE RECORD like a board member with an opinion on ‘life outside commercial’.

But the straws in the wind were visible for some time and Deepak must be given credit for his remarkable dexterity in pleasing people.

Earlier this year, just weeks before V Thulasidas demitted office after an extended run at Air India, Deepak was posted to the US as the Maharaja’s head honcho in North America. It was a posting that he sought and got. And his logic for the exit was simple. There was no way he would report to Anita Khurana — a batchmate from Indian Airlines. And as he went off to New York, he continued to hold charge of Alliance Air (now renamed AI Regional) for quite a while and there were instances of papers being couriered to the Big Apple for his approval and signature.

And prior to that when Anita Khurana took over as Commercial Director after the PESB interviews (she was number o n e and

Raghu Menon

Anup Shrivastava

Brara number two in the pekking order), Brara was given added charge of Alliance Air after a series of meetings at RGB. In any case, the then CMD Vishwapati Trivedi had a great working relationship with him and would have gladly made him CD if it were in his hands. But when the firmaan came from RGB, GOOD NIGHT: Getting your bed ready on the AI firstclass. he happily gave him Alliance Air. That was no surprise. er invited to any board meetings and the Mantriji had a soft spot for him considering argument was that the PESB mandate the close interaction the two had during the must be respected. Sushma retired Sushma Chawla (another CEO he was unsung last August. extremely close to) era.

So, you now have a situation where a Just to jog your memory as the Direccandidate, selected by the Chairman tor (PR) at Indian, it was Deepak who (PESB), Secretary (Civil Aviation) and a piloted the project to rechristen IA into distinguished panel of experts chosen for Indian, worked out the logo in tandem a particular job has been moved out of with Praful Patel, flew to Hamburg to that job (although she continues to be on inspect the first aircraft’s paint job and the board) and someone who lost out in made sure his instructions were followed that race has been brought through the to the T. backdoor. “Why blame the Maharaja for Ironically, it was Sushma Chawla, the being in misery… we are responsible for former Deputy Managing Director at IA, our own sorrow. There are no HR rules who had given Deepak the wings to fly. and there is no respect for convention,” He was her key aide and he virtually said one former director. ruled the roost under her tutelage.

There is no denying the fact that Under Sunil Arora she was a permaDeepak Brara is a sharp cookie. His colnent invitee to all board meetings leagues respect his knowledge of the (though she wasn’t on the business and his ability to think percepboard) although the PESBtively on issues. What they don’t like is appointed directors came on the innate ability of the man to squeeze board only during the the lemon and leave you in the dry. But interregnum between more of that next time as also about the Arora’s exit and brief stint at New York and the change of Trivedi’s arrival. guard that finally saw Chitra Sarkar fulBut once Trivedi fill her ambition of being the RD (Amercame on board, icas). Watch this space for the action. she was nev-

S. Chandrasekhar

Deepak Brara

Narayanan Vaghul

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Change of name

Amod Sharma

Vipin Kumar Sharma

Anita Khurana

K.M.Unni

CRUISING HEIGHTS November 2008

Interestingly, one of the items listed for discussion in the last board meeting was a change of name from National Aviation Company of India Ltd (NACIL) to Air India Ltd. Equally mysteriously it was withdrawn at the last moment. Now, why on earth would Raghu Menon and Co want a name change? “Maybe it will help improve our load factors,” said one insider caustically. Or, maybe it will bring in some good luck and much needed moolah from the sarkar.

What’s the reason, Menon? Please tell us.

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Mantriji Launches

CH Outlook 2009!

C

ivil Aviation Minister Praful Patel released Cruising Heights Aviation Outlook 2009 on Day Two (October 16) of India Aviation 2008 at Hyderabad. The October issue was a special collector’s issue that focused on the prospects for the industry in the next 12 months and how airlines, airports and the key support institutions are gearing up to the challenges in the face

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of the unprecedented crisis in the business. “Like every business, aviation has its cycles, its ups and downs. Publications like the CH Outlook offer a perspective that is always invaluable,” said the minister while releasing the 172page issue.

A large number of exhibitors and fellow professionals were on hand when the issue was launched. In fact, many exhibitors made use of the Minister’s

CRUISING HEIGHTS November 2008

exclusive visit to the CH Pavilion to have him ‘whistlestop’ at their stalls.

Cruising Heights Outlook 2009 is the second in our series of mapping the next 12 months for the industry. The first issue was launched in October 2007. This comprehensive issue looks exhaustively at the aviation sector, cargo, airports, infrastructure, including ground handling, MRO, ATC, DGCA and the performance of the Ministry.

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July 2008

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COLUMN

Zero is no good You can’t equate the model overseas with the model in India.

The two are entirely different.

Rajji Rai

Travel agents in our country are like the marketing arm of the airlines and bring in close to 85 per cent of their business

A

part from general economic meltdown travel agents, are facing a peculiar situation that only worsens their functioning. I will give you an example: Lufthansa, Air France and KLM said they will not give any commission to the travel agents. They announced it and that was it. No discussion, no interaction, just take it or leave it.

Basically travel agents help airlines to fetch customers. A few years ago all airlines were giving nine per cent as incentive or commission to the travel agent, a standard commission as per IATA norms, to agents in India. Thereafter they decided to reduce commission from nine per cent to seven per cent and then again four years ago they went down to five per cent. At that time Air India — that is before the merger of Air India and Indian Airline — made a commitment to give five per cent commission till May 2009. Suddenly in June-July this year they felt they did not require travel agents and announced their move to zero commission.

After their announcements all travel association, including TAAI, which is the nodal association of travel agents and tour operators, met up and decided that was not acceptable since India was not ready for zero commission. This may be in tune with the global trends but in the Indian scenario it is not feasible. The travel associations had debated and formulated a course of action with a plea that airlines should desist from going into zero commission since the timing was all wrong.

We met up with airlines’ chiefs, about fifteen of them including foreign and major domestic carriers; but they were clear and did not change their intention, only changing the deadline from October 1 to November 1. When the airlines announced their intention in June-July the market was upbeat with upto 90-100 per cent load factors since there was no hint of economic downturn. When the airlines started implementing it the meltdown had started!

The airlines failed to read the writing on the wall on the economic catastrophe. Diwali is a perfect example. Aircraft go full and airlines do roaring business. This year the load factors must have been just about 70 per cent. To say the least it was a pathetic show.

And post-Diwali load factors are hovering at the 50 per cent mark! Travel agents in our country

are like the marketing arm of the airlines and bring in close to 85 per cent of their business. In the present circumstances enforcing zero commission would be wrong and unwise move and only help in alienating travel agents. I personally felt that agents taking up a retaliatory and confrontationist mode would not help either party and instead we need to work on a framework that is workable.

The solution I believe lies in the highly workable transaction fee module. But I must add that the other associations are skeptical about the workability of the transaction fee module.

Three major domestic carriers — Air India, Jet and Kingfisher — which initiated zero commission are now agreeable to support the system by handholding agents till end-December 2009. During this handholding period they would allow inclusion of transaction fee module that we have worked on across the counters and charge the same transaction fee across all their distribution channels (including net). That pre-decided transaction fee would also be available for travel agents to charge when they decide it is workable. This system we have worked on is an optional means of remuneration for travel agents and tour operators.

Of course, some of the travel agents were quite upset and wanted to retaliate by boycotting those airlines still insisting on zero commission. The aim is not be confrontational instead to press home the point that travel agents are indeed their marketing arm. Air France, KLM and Northwest are being boycotted since the last fortnight.

There is a difference between five per cent commission and transaction fee. Earlier the commission was already included or inbuilt in the fare but the transaction fee would be in a separate box in the ticket that would be charged extra to the customer. In e-ticketing travel agents do not come into play at all.

Zero commission was introduced in the advanced economies, like North America and Europe, long time ago and now it is just e-ticketing. But do not compare developed economies with developing economies like India. We are yet to reach that level of sophistication and travel

agents in India still play a vital role.

(The writer is the President of (TAAI) The Travel Agent’s Association of India.)

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NEWS DIGEST

ON DISPLAY : The Airbus pavilion at the airshow!

N INFRASTRUCTURE NEWS

ational Aviation Company of India Limited (NACIL) riding on brand Air India and European Aeronautic Defence and Space (EADS) Company have signed a joint venture agreement for creating an Aircraft Maintenance, Repair and Overhaul (MRO) centre at Indira Gandhi International Airport, Delhi. Once the MRO receives the approval from the Central Government, it will begin operations from early 2009. It will become part of the Airbus MRO network.

To start with, the agreement signed in Hyderabad on October 16, 2008 on the occasion of the four-day Indian Aviation

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MRO !

TWO WAY….NO THREE WAY?

Show, the JV will undertake airframe maintenance and repair of aircraft of NACIL. Later it will extend the facility to other types of aircraft such as ATR etc of

Greenfield Airport at Pakyong, Sikkim The Cabinet Committee on Economic Affairs has approved construction of a Greenfield Airport at Pakyong, about 35 kms from the State capital (Gangtok). The new Greenfield airport at Pakyong with 1700 mtrs. long runway and with two parking bays will be operational for ATR 72 type of Aircraft operation in fair weather condition. The terminal building would be able to handle 100 passengers (50 inbound and 50 outbound) at a time.

Novotel Hyderabad Airport opens Novotel Hyderabad Airport was thrown open to public near Rajiv Gandhi International Airport (RGIA). The hotel, which is owned by GMR Hyderabad International Airport Limited, is Novatel Hotel the second Novotel in the city and also in India. For passengers making brief (eight hour) stopovers, the hotel is offering ‘FlexiStay’ package, said

other airlines besides also to aircraft other than Airbus family and component maintenance business. NACIL is a major operator of Airbus aircraft and is currently induct-

Novotel Hyderabad Airport General Manager, Simon Jinks, in a press release. The hotel is built over five acres with 305 rooms — 11 luxury suites, 53 premier rooms and 241 superior rooms. An all-day dining multicuisine restaurant, The Square and Haldi with Indian dishes are the restaurants, while Splashes, the sunken pool bar and the bar offer cocktails. The hotel has a premier lounge and a crew lounge for the aircrew members to unwind.

Mangalore: 2 years of global operations The second year of international operations saw increase in the number of international aircraft movement. During the period between October 2007 and September 2008, the airport witnessed 2200 international aircraft movements as against 720 in the corre-

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Mangalore Airport terminal

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ing 43 new A320 family aircraft hangars, equipment etc. into its fleet. The induction proIt may be recalled that when gramme which started from midAirbus Industrie signed agreement 2007 would continue till 2010. The with the then Indian to sell 43 AirAirbus family being operated by bus family aircraft, it had in writing NACIL includes A319, A320, A mentioned that it will not be direct321, A310 and A330s. ly a equity investor and, therefore, EADS noted on the occasion holder in the MRO that was prothat “This is a new milestone in the posed then (2005). In 2003, Indian long history of cooperation Airlines had already signed an between India and EADS. For the MoU with Singapore Airlines Engilast three years, we have continued neering Company (SIAEC) to set to expand our industrial relationup a nationwide network of MRO. ship by launching several initiaThe IA Board had approved of it tives between different EADS’s and it had even got the CVC divisions and the Indian industry. approval. Sadly this agreement was EADS is keen to support the fastput in cold storage by then NDA developing aeronautical sector in (BJP) Civil Aviation Minister R P India”. The upcoming facility in Rudy for inexplicable reasons who Delhi airport will also cater to the seems to be so critical of the sucmarkets in South East Region and cessor UPA Civil Aviation Minister neighbouring nations. By 2013 Praful Patel who strangely continover one hundred single aisle airued to keep it in cold storage. craft and around ten wide body airWhen Airbus signed agreement craft per year would be maintained with Indian in September 2005, the and the centre would employ up to THANK YOU : Praful Patel receiving a memaib on the stairs to the decision of EADS or Airbus Indus300 technical personnel. trie backing the MRO only techniA380 at Hydrabad.

NACIL said “This is the first cally and not financially was comof a kind of Joint Venture Airframe MRO for the Company”. municated to Indian and the Ministry of in the country and is of immense imporIn addition to the DGCA approvals, Civil Aviation was made in writing. Hence tance in the current growing aviation the MRO will also obtain approvals from Indian and Rajiv Gandhi Bhawan housing market. With the setting up of this facili- FAA/EASA which will help it undertake the Ministry of Civil Aviation both knew ty in Delhi, NACIL will see an increased outside or third part work. Both NACIL that EADS will not be a financial partner. availability of aircraft following reduc- and EADS will initially be 50-50 equity So much so that at the press conference of tion in major maintenance check times partners in the JV. A third Airbus network September 7, 2005 to announce this agreethrough enhanced productivity. Besides partner and local affiliate of EADS com- ment it was clarified that EADS or Airbus catering to NACIL’s own Airbus family pany would be inducted soon. The total Industrie would only facilitate the identifiaircraft, the new MRO facility will also project cost has been estimated at US 40 cation of a equity partner for the MRO be able to attract other airlines’ job lead- million dollars spread over five years (now to be set up in Delhi). ing to savings and generation of earnings which includes new wide body aircraft However, there was a mid-course corsponding period of the previous year. International operation began with six flights a week in October 2006, and there are around 25 flights a week now. International passengers contribute nearly one-third to the total traffic at the airport. The first international flight from Dubai landed at the Mangalore airport on October 3, 2006 with the Union Civil Aviation Minister, Praful Patel, receiving the first international flight on that day.

BAPL plans airport at Ludhiana Punjab has received a proposal for opening an international airport from Bengal Aerotropolis Projects Limited (BAPL).

The firm intends to invest around Rs 3000 crore and has asked for 2700 acres of land in Ludhiana.BAPL is a specialist company promoted by Pragati Social Infrastructure and Development Limited (PSIDL), a joint venture company of HUDCO. PSIDL is BAPL’s largest shareholder. The company has submitted a detailed project report to the state government in this regard. Punjab State Industrial Development Corporation Limited (PSIDC) has signed an memorandum of understanding (MoU) with BAPL assuring land acquisition

and help in getting necessary approvals from the concerned departments of the state. Besides building the airport, the company also plans to come up with modern township with housing on 500 acres, build commercial, institutional and recreational infrastructure on 320 acres. The company has chosen Ludhiana as it is an industrial hub and accommodates many national and international companies. Moreover, cumulative exports from Ludhiana alone have amounted to $82 billion as on March 2007.

Aircraft engineers, training institutes under scanner The country’s aviation regulator has launched a major crackdown on aircraft maintenance engineers (AME) and institutes training these professionals after surprise inspections found that many had severely compromised on aircraft safety.Since 2005 as many as 23 aircraft maintenance engineers — three this year — have been stripped off the privileges of Kanu Gohain

CRUISING HEIGHTS November 2008

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NEWS DIGEST rection and now find EADS actually entering into a financial 50-50 JV with NACIL. As per the terms of the new JV, EADS will in the near future off-load its equity in favour of a local affiliate which industry sources have identified as “IAV” owned

by Rajya Sabha member and FICCI President Rajiv Chandrasekhar. Besides there will also be a technical partner. This has been communicated to NACIL Board in a letter by EADS recently.

Perhaps NACIL has done well by first keeping the equity to 50 per cent and then possibly lower it when EADS cashes out financially (not technically). This way NACIL will be able to keep out the CAGs and CVCs. Incidentally much before merging into NACIL, Indian had got a virtual NoC from CVC for its MRO - JV with SIAEC. This was in the same nature as to what it sought to be done when Indian Airlines referred to both CVC and CAG the files pertaining to the sealing the acquisition of 43 Airbus aircraft once the processes was completed.

Even as this was being done, the then unmerged Air India whose representative was also on the Board of Indian Airlines sought to delay the MRO-JV by stating it should be three way JV between AI, IA and SIAEC. What we have today is a two-way JV between NACIL (that combines both AI and IA) and EADS. Based on EADS written intention that it will withdraw financially from the JV and off-load stakes in favour of a local affiliate and an Airbus network partner will make it once again a three-way JV! The local affiliate is IAV sources in the industry stated.

FINALLY A REGULATOR!

S

o we finally have an airport regulator with both Houses of Parliament passing the Airport Economic Regulatory Authority (AERA) Bill 2007 on October 24, 2008. The Bill was introduced in the Lok Sabha on September 5, 2007 and then referred to the Parliamentary Standing Committee. The committee submitted its report to the House in April 2008. But because of too much nuke and other political matters on plate this crucial piece of legislation that will shape the future of airports operations in India could not be passed. It was a sign of great relief that the Bill was passed into Act in October 2008.

Before the passage of the Bill, Civil Aviation Minister Praful Patel said with the growth in civil aviation sector there was need to improve the infrastructure.

The AAI Act 1994 and Aircraft Rules 1935 were amended in the year 2004 (that were awaiting from the earlier regime) to enable private sector participation in airports for improving quality, efficiency and increasing competition.

Following this, Greenfield airports came up in Bengaluru and Hyderabad in PPP mode similar to Kochi which was the

their licenses as checks found them negligent towards several critical safety parameters. There are 56 DGCA-approved schools that train AMEs with the basic skills. An AME graduating from such a school has to go through a three-stage test called basic aircraft maintenance course (BAMC) conducted by the regulator before they are eligible to certify aircraft for flying. It has been found that some schools are illequipped to offer aircraft maintenance training and students passing out from these schools are not employable as their knowledge or skill-set is not adequate.

Tirupati now “international airport”

Tirupati Airport

16

In a move that will allow foreign airlines to land in Tirupati, the Union Cabinet has given its approval for the existing domestic airport there to be declared as an international airport. At the moment foreign airlines cannot land in Tirupati and

first such private airport. Now Delhi and Mumbai airports were also coming up in PPP initiative.

Praful Patel said “Sir Airports are natural monopoly and, therefore, it is essential to ensure that tariffs are commensurate with the level of services rendered. There is also need to create a level playing field among different categories of airports. Besides, prospective investors are seeking certainty about regulatory regime over the concession period. There was, therefore, an urgent need for an independent regulatory authority to frame tariffs of aeronautical services and monitor performance standards to ensure that airport operations are economic, efficient and viable.

The Ministry of Civil Aviation agreed with the Parliamentary Standing Committee that fuel supply infrastructure at the airports also be brought under the regulatory ambit and AERA functions are extended to cover all airports irrespective of size. The government he said, felt that there is scope of monopolistic practice developing in respect of throughput charges paid by oil companies to the airport operator for use of airport infrastructure assets etc and hence

people from abroad have to travel there through various other cities from where several domestic carriers, including Kingfisher, Air India and Jet Airways offer connections.

International airlines can operate to an airport here only after it has been declared as an international airport. The Cabinet approval is expected to offer improved connectivity and wider choice of services at competitive prices, an official statement issued here on Wednesday states.

Airport aviation school to become functional next year The proposed aviation academy by the Cochin International Airport Limited (CIAL is slated to be functional from the next academic year.

The academy would be offering three tires of courses for students at affordable fees. The

CRUISING HEIGHTS November 2008

Cochin Airport

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CALLING THE SHOTS: Now MIAL, BIAL, HIAL and DIAL will are regulated!

agreed with the committee.

Besides Praful Patel said services such as Ground Handling, services relating to cargo facilities also tend to be a monopoly nature and, therefore, should specifically be brought under the ambit of AERA. But the government felt the Committee recommendations that nonaeronautical services be regulated by AERA was not correct. Usually there are concessionaires who are selected through competitive bidding where in market determines the value of concessions.

There are competitive outlets and therefore no monopoly.

Globally, non-aeronautical charges account for bulk of airport revenues and

this helps in the moderation of aeronautical charges. In India also there is a trend towards rising non-aeronautical revenue.

It was, therefore, felt that one of the factors relevant for determining the tariff for aeronautical services could be revenue generated by the airport operator through non-aeronautical services. While charges for non-aeronautical service need not be regulated per se, the revenue generated there from may be taken as a factor relevant for determination of charges for aeronautical services by AERA. With these remarks, Patel introduced amendments to the original Bill which were accepted and passed by the two Houses of Parliament.

AERA will determine the amount of PSF to be levied under the aircraft rules. It will monitor performance standards relating to quality, continuity and reliability of services as may be prescribed by the Government of India or any authority. It can also call for information as may be necessary to determine the tariff. AERA will also have penal powers where there is willful failure to comply with orders and directions of the AERA Act, noncompliance of orders of authority, Penalise for offences by companies, penalise for offences by government departments.

Overall the objective of AERA is to create a level playing field and promote healthy competition among all major airports (government owned, PPP and private), encourage investment in airport facilities, regulate tariffs of aeronautical services, protection of reasonable interest of users, operate efficiently economic and viable services at notified airports. AERA will have a chairperson and two persons to be appointed by the central government from among persons having adequate knowledge and professional expertise in aviation, economic law, commerce or consumer affairs. The members shall be whole time appointees. When AERA is to decide a matter involving civil enclave in a defense airfield, Defence Ministry will be represented by a an additional member on AERA to be nominated by the Ministry of Defence.

proposal is to offer short term certificate courses of six months, mid-term diploma courses and long-term graduate and post-graduate courses. The certificate courses are on subjects like ground handling, fire-fighting and retail management in airports. The diploma courses include aircraft maintenance engineering, airport infrastructure development and aviation management. The academy would also offer courses on airport administration and security.

Nap & shower facility at Rajiv Gandhi airport A special lounge with nap & shower facility at the Rajiv Gandhi International Airport has commenced operations from Monday. The facility, a new concept in Indian airports, will also have Wi-Fi facility. Passengers can have a short nap, shower and a quick bite and browse the Internet.

Transit passengers, too, can avail themselves of the facility.

The lounge is located opposite the car park and below the airport village area. It comprises 28 spa rooms with shower and a TV, a lounge with seating capacity for 44 passengers, two meeting rooms, business centre, four shower rooms, a massage room with four-seated massage chair, TV viewing

Rajiv Gandhi International Airport

area and a 24-hour bar. Plaza Premium Lounge, a lounge management company which operates 21 airport lounges in seven international airports across the world, will be managing this facility.

CRUISING HEIGHTS November 2008

17

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NEWS DIGEST

Qatar Airways Gulf Air

Like Air India, Gulf Air was once the Maharaja of the skies.

Not any more. It’s now a Bahraini enterprise straining to be successful. India is a key market.

Emirates

Etihad

Famous for its inflight service, Qatar has quietly muscled its way to the top through sheer class and service. But like Emirates, it's still hungry for more.

The last to take off, Abu Dhabi’s national airline has plenty of plans, a huge order book and unlimited ambition. It wants to double operations out of India.

The big daddy of the region. At 25 years of age, Emirates is way ahead of the pack. But it is still hungry and thirsty for more!

Air Arabia

The region’s first and most successful LCC. Adel Ali has set the benchmark for the entire region.

Launched first India flight from Nagpur!

KAZAKHSTAN

TURKEY

IRAQ

SAUDI

IRAN

BAHRAIN DOHA

ARABIA

PAKISTAN

DUBAI

SHARJAH

QATAR

CH Graphic: Ruchi Sinha

ABU DHABI

18

ETHIOPIA

SOMALIA

CRUISING HEIGHTS November 2008

IND

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Page 3

GLOBETROTTING VIA

THE GULF I

CHINA

NEPAL

BURMA

INDIA

THAILAND

SRI LANKA

CRUISING HEIGHTS November 2008

n sharp contrast to the fears the Ministry of Civil Aviation expressed over two years ago to PMO’s hint at the possibility of concluding an open / liberal sky with the ASEAN (carriers), Rajiv Gandhi Bhavan has run thousands of extra miles (perhaps wanting to increase its FFP entitlement) to conclude very liberal bilateral deals with the Gulf and Middle East based carriers. While a liberal ASEAN sky deal was summarily rejected notwithstanding far fewer flights to the South East, Far East and Pacific/Australia from India, the government in general and the Ministry of Civil Aviation in particular seem to be generous in doling out traffic rights for the India - Gulf sector.

The palpable reasons were the government had to accommodate the private carriers Jet Airways, JetLite and Kingfisher (via Deccan rights) as well which would not have been possible in the absence of additional rights. So, even when it hurt the national carrier (Air India, a reference brushed aside by the babus in the Ministry in the name of competition), the new rights granted to the Gulf and Middle East carriers was seen as an indirect way of allowing greater participation to upcoming Indian private carriers that were impatient to fly overseas route particularly the Gulf read the UAE. After hiking their entitlement, the government concluded yet another bilateral agreement following which Dubai based Emirates (emerging as the mother of all airlines) is to expand its operations in India to 163 weekly flights by February 2009. This is the second round of expansion in India stated Emirates Vice President (India and Nepal) Mr. Orhan Abbas who remarked “We are bullish on India it is a power house for us”. (We can hear Raghu Menon of Air India ruing as his cash cow is fast getting starved of cash, besides Naresh Goyal of Jet and perhaps Dr Vijay Mallya of Kingfisher Airlines who should be cursing their stars for seeking market (Gulf) access especially

19

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NEWS DIGEST

ASEAN Sheikh Ahmed bin Saeed Al-Maktoum Chairman and Chief Executive Emirates’

“Our growth plan will continue in India. The Indian market is a growing one. So, the growth will continue.

”

James Hogan CEO Etihad

“India is an enormously important market for Etihad and one we are very keen to expand further.

”

Bjorn Naf CEO Gulf Air

“We were actually looking for doubling the capacity that we have today.

”

Akbar Al Baker CEO Qatar Airways

“India today is the largest single market for Qatar Airways with a network of nine cities which represents more than 10 per cent of our global network of 83 international routes.

20

”

‘OPEN SKIES’

T

he Association of South East Asian Nations (ASEAN) transport ministers’ meeting held in Makati, Metro, Manila, Philippines on November 6, supported the proposed Open Skies Agreement and India’s keen interests to join the ASEAN member states in an open skies regime.

ASEAN and India had agreed to pursue cooperation in the fields of Open Skies

at the cost of Air India).

Emirates will add five more flights each to Bengaluru and Chennai apart from operating three more flights a week to Hyderabad. In all Emirates will operate 31 additional flights a week to India from the present level. This will also increase its cargo capacity which will increase to 10,588 tonnes from February 2009 compared to 8448 tonnes being carried in July 2008. The February 2009 expansion will see Emirates operating seven additional flights out of Mumbai taking the total weekly flights out of India’s financial capital Mumbai to Dubai to 35 or five flights daily. Passengers from Delhi will soon have the option of choosing from three daily flights to Dubai or 21 flights a week. Passengers from Kochi will soon be able to fly twice a day to Dubai as Emirates plans to operate 14 flights a week between Kochi and Dubai. Besides, Emirates operates flights to Chennai, Nagpur, Hyderabad, Bengaluru, Thiruvananthapuram and Kozhikode.

A day after this announcement came on October 20, 2008, Emirates announced fare cuts. As per its Senior Vice President Commercial Operations to Gulf, Middle East and Iran Adnan Kazim, the fares will be reduced by seven per cent and 35 per cent covering the range of its business and economy class fares tickets issued in UAE to over dozen

Agreement, Airports & Air Navigation, Aviation Safety, Aviation Security, Human Resources Development and Information Exchange. Broadly, it will include the following:

An agreement based on the ‘Open Skies’ principles, covering both airfreight and passenger services.

In line with the ASEAN multilateral air services agreements, the ASEANIndia Air Services Agreement may include multiple airline designation, open route schedule, full exercise of third, fourth and fifth freedom traffic rights, Any frequencies, capacities and aircraft

destination including, India, Europe, Middle East and the Far East. The fares were being reduced to reflect the softening of fuel prices and would apply to select Emirates flights including, Amman, Damascus, Bangkok, Paris, Colombo, Frankfurt, Munich, Zurich, and Indian cities of Mumbai, Kozhikode, Kochi, Delhi, Hyderabad, Chennai and Thiruvananthapuram.

He said that demand for Emirates flights have remained robust and was glad to be able to further reduce the fares in tandem with lowering of fuel prices. This is the second revision down in fares after the first round in August 2008 when it did not apply to India. Is it a mere coincidence that after Air India withdrew its flights to Los Angeles and Jet Airways withdrawing flights to San Francisco, Emirates has started with effect from the last week of October 2008 direct non-stop flights between Dubai and LA three times a week.

Not to be left behind, the gas rich Qatar has indeed decided to balloon its services into and out of India substantially. According to Qatar Airways India Region Chief Naveen Chawla, Qatar will launch flights to New York from nine Indian cities offering one stop services at Doha. What was always known has now been openly stated by the Gulf carrier. The daily Doha-New York nonstop flights to New York JFK will offer

E M I R AT E S ’ C A PA C I T Y E X PA N S I O N INDIA

1st Jul’08 1st Oct’08 26th Oct’08 1st Dec’08 1st Feb’09

MUMBAI (BOM)

28

28

28

28

DELHI (DEL)

18

18

25

25

35 25

HYDERABAD (HYD)

16

18

20

21

21

CHENNAI (MAA)

14

14

18

18

19

BANGALORE (BLR)

10

15

17

19

20

KOCHI (COK)

10

10

12

12

14

KOLKATA (CCU)

7

7

7

7

7

AHMEDABAD (AMD)

8

8

8

8

8

THIRUVANANTHAPURAM (TRV)

8

8

8

8

8

KOZHIKODE (CCJ)

6

6

6

6

6

125

132

149

152

163

TOTAL

CRUISING HEIGHTS November 2008

News Digest graph page:News Digest nov 23.qxd

types, change of gauge; and Inter-modal transport arrangement.

The ASEAN Air Transport Working Group (ATWG) shall be the negotiating platform with representatives from India on the ASEAN-India Aviation Cooperation Framework. The ASEAN ATWG and India shall focus on the finalisation of the ASEAN-India Air Services Arrangement.

The agreement would also include co-operative arrangements between or among airlines, including the utilisation of resources and business management, and airline cooperation in the form of interlining, block-space, code-sharing among

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1:18 PM

ASEAN and Indian airlines.

The ASEAN Air Transport Working Group (ATWG) shall be the negotiating platform with representatives from India on the ASEAN-India Aviation Cooperation Framework. The ASEAN ATWG and India shall focus on the finalisation of the ASEAN-India Air Services Arrangement as priority.

So, don’t be surprised if you soon have Singapore Airlines zooming into Delhi and flying off to Dubai or London or Thai taking off to Frankfurt from Mumbai. It’s all coming despite the best efforts of many to delay it.

Zooming into the Gulf !

CITIES

EMIRATES

DEC 08

FEB 09

Page 5

AIR ARABIA

GULF AIR

ETIHAD

“Gulf-India market is important ...we are pleased to be part of the expansion.

”

(WEEKLY)

QATAR

KOCHI MUMBAI THIRUVANANTHAPURAM AHMEDABAD BANGALORE KOZHIKODE CHENNAI DELHI HYDERABAD JAIPUR COIMBATORE NAGPUR KOLKATA

12 28 8 8 19 6 18 25 21 7

14 35 8 8 20 6 19 25 21 7

14 14 9 7 7 7 7 7 7 7 5 4 -

7 14 7 7 7 14 7 2

7 14 7 7 10 14 -

7 7 7 7 7 7 7 7 2 -

TOTAL

152

163

95

65

59

58

passengers one of the quickest and most convenient journeys to New York, US, he said. The launch of the new non-stop or direct flights to NY from Doha will replace the existing six flights a week to Newark Liberty international airport via Geneva.

Qatar will operate Boeing 777-300 ER on the new route featuring 335 seats in a two-class configuration of 42 business class seats and 293 economy class seats. Qatar will launch flights from Doha to Houston in Texas from March 2009 which it said will connect the energy capital of Middle East with energy capital of the US. But what Chawla did not say was that even this flight will be totally energised by Indians from India like the one to New York. This will be the third destination in the US for Qatar Airways which is already operating Doha- Washington non-stop flights.

Qatar currently operates 58 flights a week from nine Indian cities with early morning arrivals in Doha to provide onward connections to the US. It operates daily services to Delhi, Mumbai, Chennai, Ahmedabad, Kochi, Thiruvananthapuram, Hyderabad, Kozhikode and twice a week flight to Nagpur. With 63 aircraft, Qatar operates to 83 destinations worldwide, of which nine are from within India in technical sense! Enjoying average loads exceeding 75 per cent

Adel Ali CEO Air Arabia

from Indian destinations, Qatar flights to New York and later to Houston (a city which has a large concentration of ethnic Indians and which Air India has been wanting to connect for decades but not managed till date) in Texas will certainly be success. So if we just add Emirates and Qatar they will beginning 2009 operate a combined 221 flights a week using mostly the wide body Boeing 777s and Airbus A330s. From their home base at Dubai and Doha they will fly desis bharatis and pravasi bharatis to all parts of the world.

So, what the mandarins in Ministry of Civil Aviation have done in the name of liberal skies to the west of India (not too far into the west but just very near India’s western doors) has been to create one hell of a competetion for Air India-Indian Airlines combine and now its favourite big boys Jet and perhaps Kingfisher should it fly to the Gulf. By the way the Indian carriers use mostly the narrow body Airbus A320 and A321 a few A310 besides Boeing 737-800s. Instead of Jet and Kingfisher forming an alliance, had these crybabies established alliance separately with Emirates and Qatar or Etihad they would have been better off. If you can’t beat them why don’t you join them.

CRUISING HEIGHTS November 2008

Naresh Goyal Chairman Jet Airways

“I am not able to tell you how many passengers we will be flying (to the Gulf).

This region will constitute a very good percentage of our overall revenues.

”

Raghu Menon CEO Air India

“There has to be an appropriate response for the Gulf routes as it is now heavily competitive.

”

Vijay Mallya Chairman Kingfisher

“There is tremendous demand for air travel to the Gulf and the opening up of the routes will ultimately benefit the customer.

”

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NEWS DIGEST

What meltdown?

Plane - makers fly high

U

DINESH KESKAR

22

naffected and unfazed by the economic meltdown worldwide and its huge impact on the aviation sector, Boeing is gung-ho about the long-term health of the industry. Dinesh Keskar, Senior VicePresident, Sales, Boeing Commercial Airplanes, believes that demand for new aircraft would continue in the longterm and has, in fact, scaled up overall sales projections.

He said he was more “bullish” on India than any other country as the forecast for the economic growth for the next 20 years for the country was expected to be 6.7 per cent as against the world average of 3.2 per cent.

Keskar was clear that markets such as China and India will be among major drivers for this growth as these economies are likely to grow at a much faster pace than the global GDP. He said air travel will increase in the south-west Asia and the current orders under execution for India — estimated at about $25 billion — bear testimony to this growth. In fact, there have been no requests for any delay from any airliner as of now, he said.

Dr Keskar said there could be some minor temporary hiccups but Boeing was confident of a huge

order book and a backlog of planes to deliver. He described the order book position for Boeing as being “quite robust”. In fact, if one airliner preferred to differ, another was ready to take that order, he quipped, although there had been no instances of deferment in India.

But Jet Airways is said to be in talks with Boeing Company. to defer deliveries of two widebody Boeing 777s to next year from October-November this year.

“Our earlier forecast for India stands firm. In fact, so far, no airline has formally asked us for either cancellation of previous orders or deferment of their deliveries. The current downturn in the sector is temporary and may not prolong for more than six to nine months,” said Keskar Airbus seemed equally upbeat.

Notwithstanding cancellation of three A340 aircraft by Kingfisher and turbulence in the aviation industry globally, Airbus said that the company’s latest forecast, which was due in the next two months, would peg the demand for aircraft at a higher level.

However, Airbus expected demand for aircraft to slacken all over the world owing to the credit crunch. The company planned to put on hold its production plans till 2009. “We arrived at this con-

Future delivery forecast estimated

at 911 planes between 2007 and 2026 worth about $86 billion Revised upwards to 1001 airplanes with overall estimated value of $105 billion About 29400 new aircraft will be required over the next 20 years, of which 12500 will be for replacement of current ones, and 16900 new ones inducted to meet growth. The overall value of these planes is estimated at about $3.2 trillion.

CRUISING HEIGHTS November 2008

clusion given the global financial turbulence and the present state of the aviation industry,” said Kiran Rao, Executive Vice President, Marketing and Sales, Airbus India.

As a precaution, Airbus has urged Indian operators of its aircraft to reschedule deliveries in the hope of forestalling a capacity glut that could hobble customers long-term and could eat into future jetliner demand. India, “has a great need for air travel,” said John Leahy, Airbus’s Chief Operating Officer for customers. Now, he said, “there’s too much capacity.”

would need only 24 dedicated freighters for the period 2008-2027. The forecast for cargo planes remains the same as last year (2007-2026).

In spite of a continuing downturn faced by the industry, some Indian companies are persisting with their plans for freighter operations. Pioneer LCC operator, Capt G R Gopinath, is going ahead with his plans to start a separate cargo airline company, Deccan Cargo.

He will be picking up cargo

Cargo

versions from European manufacturer, Airbus. So also Hyderabad-based Flyington Freighters, which is acquiring half a dozen A330200 freighters to start international cargo operations.

According to Dr Keskar, though India will grow over 6 per cent in its GDP it may not need a large number of freighters, or even larger freighter versions, such as B777 or B747. “The reason is simple that India is ordering more commercial passenger airplanes.These planes will be adding more cargo carrying capacity in its belly space. Typically a Boeing 777 version can carry up to 20 tonne of cargo,” he said. Keskar said though figures for the sale of freighters could be revised upwards in the future, it will not be by much.

But Boeing has indicated that the country

Airbus market share in India had

gone up to 57 per cent (of 250 aircraft) in 2007 from 20 per cent in 1981.

World would need 24000 new aircraft in the next 20 years.

India was expected to have a total fleet size of 1221 (the present capacity is 253) by 2006, requiring 992 new aircraft with a total value of $120 billion.

It would require 670 single-aisle aircraft and 227 twin-aisle aircraft.

CRUISING HEIGHTS November 2008

Boeing

JOHN LEAHY

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NEWS DIGEST

What meltdown?

Plane - makers fly high

U

DINESH KESKAR

22

naffected and unfazed by the economic meltdown worldwide and its huge impact on the aviation sector, Boeing is gung-ho about the long-term health of the industry. Dinesh Keskar, Senior VicePresident, Sales, Boeing Commercial Airplanes, believes that demand for new aircraft would continue in the longterm and has, in fact, scaled up overall sales projections.

He said he was more “bullish” on India than any other country as the forecast for the economic growth for the next 20 years for the country was expected to be 6.7 per cent as against the world average of 3.2 per cent.

Keskar was clear that markets such as China and India will be among major drivers for this growth as these economies are likely to grow at a much faster pace than the global GDP. He said air travel will increase in the south-west Asia and the current orders under execution for India — estimated at about $25 billion — bear testimony to this growth. In fact, there have been no requests for any delay from any airliner as of now, he said.

Dr Keskar said there could be some minor temporary hiccups but Boeing was confident of a huge

order book and a backlog of planes to deliver. He described the order book position for Boeing as being “quite robust”. In fact, if one airliner preferred to differ, another was ready to take that order, he quipped, although there had been no instances of deferment in India.

But Jet Airways is said to be in talks with Boeing Company. to defer deliveries of two widebody Boeing 777s to next year from October-November this year.

“Our earlier forecast for India stands firm. In fact, so far, no airline has formally asked us for either cancellation of previous orders or deferment of their deliveries. The current downturn in the sector is temporary and may not prolong for more than six to nine months,” said Keskar Airbus seemed equally upbeat.

Notwithstanding cancellation of three A340 aircraft by Kingfisher and turbulence in the aviation industry globally, Airbus said that the company’s latest forecast, which was due in the next two months, would peg the demand for aircraft at a higher level.

However, Airbus expected demand for aircraft to slacken all over the world owing to the credit crunch. The company planned to put on hold its production plans till 2009. “We arrived at this con-

Future delivery forecast estimated

at 911 planes between 2007 and 2026 worth about $86 billion Revised upwards to 1001 airplanes with overall estimated value of $105 billion About 29400 new aircraft will be required over the next 20 years, of which 12500 will be for replacement of current ones, and 16900 new ones inducted to meet growth. The overall value of these planes is estimated at about $3.2 trillion.

CRUISING HEIGHTS November 2008

clusion given the global financial turbulence and the present state of the aviation industry,” said Kiran Rao, Executive Vice President, Marketing and Sales, Airbus India.

As a precaution, Airbus has urged Indian operators of its aircraft to reschedule deliveries in the hope of forestalling a capacity glut that could hobble customers long-term and could eat into future jetliner demand. India, “has a great need for air travel,” said John Leahy, Airbus’s Chief Operating Officer for customers. Now, he said, “there’s too much capacity.”

would need only 24 dedicated freighters for the period 2008-2027. The forecast for cargo planes remains the same as last year (2007-2026).

In spite of a continuing downturn faced by the industry, some Indian companies are persisting with their plans for freighter operations. Pioneer LCC operator, Capt G R Gopinath, is going ahead with his plans to start a separate cargo airline company, Deccan Cargo.

He will be picking up cargo

Cargo

versions from European manufacturer, Airbus. So also Hyderabad-based Flyington Freighters, which is acquiring half a dozen A330200 freighters to start international cargo operations.

According to Dr Keskar, though India will grow over 6 per cent in its GDP it may not need a large number of freighters, or even larger freighter versions, such as B777 or B747. “The reason is simple that India is ordering more commercial passenger airplanes.These planes will be adding more cargo carrying capacity in its belly space. Typically a Boeing 777 version can carry up to 20 tonne of cargo,” he said. Keskar said though figures for the sale of freighters could be revised upwards in the future, it will not be by much.

But Boeing has indicated that the country

Airbus market share in India had

gone up to 57 per cent (of 250 aircraft) in 2007 from 20 per cent in 1981.

World would need 24000 new aircraft in the next 20 years.

India was expected to have a total fleet size of 1221 (the present capacity is 253) by 2006, requiring 992 new aircraft with a total value of $120 billion.

It would require 670 single-aisle aircraft and 227 twin-aisle aircraft.

CRUISING HEIGHTS November 2008

Boeing

JOHN LEAHY

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IATA: Alarming ‘dip’ in passenger

traffic globally

T

he International Air Transport Association (IATA) announced global international traffic results for September. Passenger traffic declined 2.9 per cent while cargo traffic dropped 7.7 per cent compared to the same month in 2007.

International load factors tumbled by 4.4 percentage points from August to 74 per cent in September.

“The deterioration in traffic is alarmingly fast-paced and widespread.

We have not seen such a decline in passenger traffic since SARS (Severe Acute Respiratory Syndrome) in 2003,” said Giovanni Bisignani, IATA’s Director General and CEO. “Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand. At this rate, losses may be even deeper than our forecast US$5.2 billion for this year,” said Bisignani.

able to keep pace with the fall in demand. September load factors in all regions fell compared to August.

For September, all major regions reported that passenger traffic shrank, with the exception of Latin American carriers which saw an increase of 1.7 per cent. Even this is shockingly down from the 11.9 per cent growth of the previous month.

Up to August, the drop in international passenger traffic was isolated to Asia Pacific carriers. The economies of the region’s two major growth markets

— China and India — slowed and Japan saw industrial production drop five per cent in August. The sharp downturn in world trade disproportionately impacted Asia-Pacific carriers with a 6.8 per cent drop in traffic in September.

The steady five per cent international growth of North American carriers turned into a 0.9 per cent contraction.

European carriers saw traffic drop from last year (-0.5 per cent) as the region’s economies head for recession.

After years of double-digit growth, passenger traffic by Middle Eastern carriers turned to a negative 2.8 per cent. While the region’s oil-based economy remains strong, the large portion of transit traffic exposes the region’s carriers to the global economic weakness.

African carriers posted the largest decline in traffic (-7.8 per cent), a continuation of the previous month’s trend.

Cargo This is the worst decline since the technology bubble burst in 2001.

Declines in air freight have slowed year-to-date growth to 0.1 per cent, with all regions except the Middle East and Africa reporting negative results.

Passenger

This is the first time since the SARS crisis in 2003 that global passenger traffic has shrunk.

Capacity cuts were not

THE BAD NEWS: IATA chief Giovanni Bisignani forecasts hard times ahead.

24

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Etcetra Runway 11-29 now 24X7: The third runway 11-29 at Delhi is now available for round the clock operations.

This had been inaugurated on September 25 for full commercial operations. The operational hours of the new runway were increased in a phased manner in accordance with global aviation best practices. Following the encouraging feedback from all stakeholders such as airlines and ATC on successful operations since its opening, the runway will now be available for operations round the clock. The maintenance of the main runways (11-29 and 10-28) will be carried out on alternate days on the weekdays whereas secondary runway (09-27) maintenance will be carried out on Sunday.

Gulf-bound: The meltdown, poor HR practices and the continuing ‘heat’ in the Middle East market can mean only one thing — India’s best and brightest aviation honchos are Gulf bound. Take the pilots first. Emirates, Qatar, Ethihad, Air Arabia, Gulf Air and Oman Airlines and the yet-to-start FlyDubai are all receiving applications from pilots serving in India. A majority of them are Indians, although insiders admit that for the expats shown the door in the sub continent, the Gulf is the next obvious stop.

Kingfisher halts GECAS: Kingfisher Airlines defaulted on rental payments for four A320s on lease from GECAS is seeking to repossess four A320s on which it claims Kingfisher Airlines had defaulted on lease rentals. It moved the DGCA on the matter. Kingfisher quickly responded and secured relief from the Karnataka state court preventing the repossession.

“Since the matter is sub-judice, the DGCA cannot take action on de-registering the aircraft. Kingfisher said, though, that the court “has heard our application and thought it fit to pass adinterim orders for our protection.” One Kingfisher official said: “We have a solid case. There is no question of a default. Had there been a default, the court would not have admitted our case.

The fact that the we have got relief is evidence that we have a point…”

26

Planes lined up at Delhi Airport

The most alarming drop was with Asia Pacific carriers — the largest players in the market. The region’s carriers reported a 10.6 per cent decline.

Europe and North American carriers, which had seen flat growth through August saw cargo traffic fall 6.8 per cent and 6.0 per cent respectively.

“The industry crisis is deepening—along with the Passengers waiting for flight at one of the Airport in India crisis in the global economy.

Airlines, like all other businesses, are fac- ernments examining solutions within the ing enormous challenges. But unlike other bilateral system that could be quickly companies, they are denied some basic implemented to expand opportunities for commercial freedoms—access to markets access to markets and to global capital. and to global capital—that could help them “I hope that the Agenda for Freedom manage their business in this difficult Summit will conclude as a successful distime,” said Giovanni Bisignani. cussion that sparks a process of change by The web of 3500 bilateral air service governments. We are not asking for anyagreements that govern international air thing other than the basic freedoms to do transport denies market access until specif- business that other industries take for ically agreed. And the ownership clauses granted,” said Bisignani. that are contained in these agreements preMeanwhile, IATA criticised budget clude mergers across borders. plans in Belgium and Ireland that mimic “Look at what the banking industry is British and Dutch departure taxes as “coldoing. They are taking government hand- lective madness.” The Belgian and Irish outs. They are accessing global capital. governments announced plans to impleAnd we have seen mergers without any- ment departure taxes in their new budgets. body asking to see the investors’ passports. Combined with the proposed UK Aviation Airlines are not asking for handouts. But Duty and the recently implemented Dutch today’s crisis highlights the need for air- departure tax, by 2010 air travellers could lines to be able to run their businesses like face a tax burden of up to EUR 3.8 billion normal global businesses,” said Bisignani annually in these four counties alone. “The from Istanbul on the eve of the Agenda for timing could not be worse for governments Freedom Summit. to make mobility more expensive. Look at IATA has taken the extraordinary step what has happened in fuel, the biggest cost of facilitating a discussion among 15 pro- item for airlines. Even with the recent gressive governments on the future regula- drop, today’s price is still over 300 per cent tory structure of international air transport. more expensive than it was only a few IATA circulated a paper among these gov- years ago,” said Bisignani.

CRUISING HEIGHTS November 2008

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GLOBETROTTING

AT A GLANCE

A Cheetah in the cargo A DELTA AIRLINE baggage worker got a bit of a fright when she opened a jetliner’s cargo door and found a cheetah running loose amid the luggage. Two cheetahs were being flown in the cargo area of a Boeing 757 passenger flight from Portland, Oregon to Atlanta, Georgia when one escaped from its cage.

“They told us a large animal had gotten out of a container in the cargo

hold and they were having to send someone to tranquilise it.” said one passenger. He said luggage was delayed, but baggage handlers promised to send his bags to him in Alabama.

The airline summoned help from Atlanta Zoo, and experts rushed to a closed airport hangar and tranquilised the escaped animal and took both big cats to the zoo.

Drunks force flight back

FIVE DRUNK passengers have been escorted off an international flight after a fight broke out on board and their plane returned to Darwin. A Jetstar flight was carrying 172 passengers from Darwin to Singapore when it returned 30 minutes into the flight. It appeared the men had been drinking duty-free alcohol before they boarded the plane.

Staff initially didn’t sense the men’s intoxication but they were later found

Michael O’Leary: A Class Act Never a man to be fazed by a situation or lost for words, he handled the appearance of a semi-naked man with ‘Exposing O’Leary’s Lies’ scrawled over his torso at the airline’s AGM with characteristic aplomb. After being confronted by the environmental protestor at the meeting and ushering him from the stage personally, O’Leary released a statement: “I hope next year instead of a semi-naked bloke, they’ll send a semi-naked girl to the AGM. She would probably make as little sense as this guy this morning, but at least

Obese?

Off you go

A

n obese flight steward for national flag carrier Philippine Airlines has been grounded for good by the Supreme Court after a 20-year legal battle.The 217-pound (98.43 kg) Yrasuegi was dismissed by Philippine Airlines (PAL) after he failed to lose weight as specified under his contract in 1989.Yrasuegi challenged the dismissal arguing that his weight had nothing to do with the airworthiness of PAL’s airplanes in a legal battle that would stretch for 19 years.He argued that his being fat was a “sickness and a physical

28

abnormality” that was beyond his control. But the Supreme Court noted that Yrasuegi repeatedly refused offers of medical assistance to lose weight and ignored weight checks.It said Yrasuegi ignored suggestions to “trim down”.

“Thus, his fluctuating weight indicates absence of willpower rather than an illness.Passenger safety goes to the core of the job of a cabin attendant. On board an aircraft, the body weight and size of a cabin attendant are important factors to consider in case of emergency.Aircraft have constricted cabin space, narrow aisles and exit doors,” it stressed.

CRUISING HEIGHTS November 2008

she’d be more attractive.”

Ryan Air’s ad campaign featuring unauthorised images of French President Sarkozy and his bride to be Carla Bruni some time ago created an uproar and a court case. After the dust settled, O’Leary reflected that it wasn’t such a bad thing for the airline to lose the court case.

“We paid 60,000 euros to their charity but we got more than 5 million euros in of free publicity, so we’re happy. I’m available to kiss and make up with Mrs Sarkozy any time she wants.”

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Girlfriend trouble

A MIDNIGHT VISIT to an airplane at Detroit Metropolitan Airport has landed a Michigan couple in trouble. A 22-year-old airplane cleaner from Dearborn Heights was arrested for bringing his girlfriend aboard a Northwest Airlines

On the Greens of the world, he is simply delightful: “Green protestors are our best passengers. They’re always flying off to their demonstrations.”

Facebook comments furore VIRGIN ATLANTIC has sacked 13 of its cabin staff after they criticised the airline and some of its passengers on social networking website Facebook.The airline, controlled by Richard Branson’s Virgin group, said the staff’s behaviour was “totally inappropriate” and “brought the company into disrepute”.The action follows an investigation into the remarks posted on Facebook, which concerned planes flying from London’s Gatwick airport and insulted passengers, as well as reportedly saying the planes were full of cockroaches.

The Independent reported that the airline’s passengers had been referred to as “chavs” — a British term similar in meaning to Australia’s “bogan”. “Virgin Atlantic can confirm that 13 members of its cabin crew will be leaving the company after breaking staff policies due to totally inappropriate behaviour,” the airline said in a statement.”

Following a thorough investigation, it was found that all 13 staff participated in a discussion on the networking site Facebook, which brought the company into disrepute and insulted some of our passengers.”

It said cabin staff who held such views could not uphold the expected standard of customer service. “There is a time and a place for Facebook. But there is no justification for it to be used as a sounding board for staff of any company to criticise the very passengers who ultimately pay their salaries,” a spokesman said.

plane just after midnight without authorisation. An airport spokesman says the man apparently was trying to impress the 18year-old woman. The Detroit News and Detroit Free Press report the couple was caught on camera and arrested for breaching security.

Illustrations by Rajeev Kumar

to be “quite inebriated”. The men became “exceptionally rowdy” during the flight. “Our cabin manager approached the captain of the aircraft and said we have some very disruptive passengers,” A Jetstar spokesman said. The captain initially intended getting security to meet the men in Singapore but when they wouldn’t settle, it was decided to turn back. Australian Federal Police officers were waiting at Darwin airport and escorted the men off the plane.

4:05 PM

A new zeppelin in the skies MORE THAN SEVEN decades after the giant Hindenburg burst into flames during a New Jersey landing, the zeppelin is returning to the USA - with an hour-long ride above the San Francisco Bay Area, costing $495 per person. Airship Ventures' newly-built zeppelin, a canvas-covered airship with a gondola that holds up to 12 passengers, is 15 feet longer than a Boeing 747. Unlike the Hindenburg, which was filled with hydrogen, the modern version is kept aloft by non-flammable helium. Typical cruising altitude is 1,000 feet.

Visions of the future WILL WE BE FLYING faster than sound in 2093? Will aircraft look like flying saucers? Will they need fuel and produce emissions? And what about space, will we have business and leisure flights there? Finnair, which this year celebrates the 85th anniversary of its founding, has decided, instead of recalling the past, to embrace the future and take a peek all the way to 2093. Precisely forecasting the future is impossible and perhaps that’s why it’s so tempting. Justified views and scenarios that open up possible realities are necessary, both in business and in social planning.” The future and the past are at least distinguished by the fact we can influence the future, but the past is history. That’s why visions are important,” explains Finnair’s SVP Corporate Communications Christer Haglund.In the book Departure 2093 — Five visions of future flying, published on November 4, Finnair enlists the aid of experts to highlight perspectives that are both

essential and fascinating when addressing the future of air travel.

The future and growth of air travel from the perspective of human movement.

Environmental impact of flying.

Development of aviation technology Images of the future aircraft See the debate at www.departure2093.com.

CRUISING HEIGHTS November 2008

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THE GRAND NEW ALLIANCE!

J

ust about two years ago, Jet Airways and Kingfisher Airlines told the whole world that they were the true Indian carriers who would take on the likes of mighty Singapore Airlines, Cathay Pacific, BA and Lufthansa.

Naresh Goyal’s Jet Airways (then 13 years old) made a huge song and dance of its illogical acquisition of Air Sahara by paying nearly Rs 2,200 crore inclusive of liabilities.

Some months later, Dr Vijay Mallya’s Kingfisher Airlines, which was only two years old then, bought 49 per cent of the publicly-quoted Air Deccan for a disclosed sum of Rs 1,000 crore by paying Rs 150 per share. Later, Mallya even bought 20 per cent from the shareholders as per SEBI requirement. Today, he owns most of India’s first LCC, Air Deccan. Mallya’s total expenditure on acquiring Air Deccan, rebranding it first as Simplifly Deccan with a UB emblem on the nose of its A320 aircraft and now again rebranding it as Kingfisher Red punched Rs 2,200 crore holes in his pockets.

Thus, between the two airlines, they sunk more than Rs 4500 crore to become bigger overnight and in the process acquire what they thought would have taken years to acquire. The scenario before their respective acquisition was a very competitive Indian airline industry. It was the time when LCCs were calling the shots and full-service carriers Jet Airways, Kingfisher Airlines and even Indian were complaining of irresponsible pricing by LCCs. But they also began to offer lower fares on

WHEN FOR YEARS, NARESH GOYAL AND VIJAY MALLYA HAVEN’T SEEN EYE-TO-EYE ON MOST AVIATION-RELATED ISSUES, IT CAME AS A COMPLETE SHOCKER TO SEE THEIR BONHOMIE AND CAMARADERIE. R KRISHNAN REPORTS ON THE KINGFISHER-JET ALLIANCE AND WHAT IT MEANS TO THE INDUSTRY AND THE TRAVELLING PUBLIC.

30

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THE GRAND NEW ALLIANCE!

J

ust about two years ago, Jet Airways and Kingfisher Airlines told the whole world that they were the true Indian carriers who would take on the likes of mighty Singapore Airlines, Cathay Pacific, BA and Lufthansa.

Naresh Goyal’s Jet Airways (then 13 years old) made a huge song and dance of its illogical acquisition of Air Sahara by paying nearly Rs 2,200 crore inclusive of liabilities.

Some months later, Dr Vijay Mallya’s Kingfisher Airlines, which was only two years old then, bought 49 per cent of the publicly-quoted Air Deccan for a disclosed sum of Rs 1,000 crore by paying Rs 150 per share. Later, Mallya even bought 20 per cent from the shareholders as per SEBI requirement. Today, he owns most of India’s first LCC, Air Deccan. Mallya’s total expenditure on acquiring Air Deccan, rebranding it first as Simplifly Deccan with a UB emblem on the nose of its A320 aircraft and now again rebranding it as Kingfisher Red punched Rs 2,200 crore holes in his pockets.

Thus, between the two airlines, they sunk more than Rs 4500 crore to become bigger overnight and in the process acquire what they thought would have taken years to acquire. The scenario before their respective acquisition was a very competitive Indian airline industry. It was the time when LCCs were calling the shots and full-service carriers Jet Airways, Kingfisher Airlines and even Indian were complaining of irresponsible pricing by LCCs. But they also began to offer lower fares on

WHEN FOR YEARS, NARESH GOYAL AND VIJAY MALLYA HAVEN’T SEEN EYE-TO-EYE ON MOST AVIATION-RELATED ISSUES, IT CAME AS A COMPLETE SHOCKER TO SEE THEIR BONHOMIE AND CAMARADERIE. R KRISHNAN REPORTS ON THE KINGFISHER-JET ALLIANCE AND WHAT IT MEANS TO THE INDUSTRY AND THE TRAVELLING PUBLIC.

30

CRUISING HEIGHTS November 2008

CRUISING HEIGHTS November 2008

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COVER STORY select buckets in their own flights. Yes, the crude-related ATF prices were high but not as high as it reached recently post-June 2008. Today, crude-related ATF prices are only somewhat higher than what it was about a year ago.

The purpose of recalling some slices of history is to establish the fact that Jet and Kingfisher by taking over Air Sahara and Air Deccan, respectively painted themselves in a corner and now want to join hands to overcome the competition that injured them seriously in the first place.

While the Civil Aviation Ministry isn’t looking at the dangers that monoliths like the Kingfisher-Jet alliance offer in terms of competition and choices, it is actually encouraging it in the name of saving the Indian carriers. But not a tear is being shed for air-travelling Indians who could end up as the big losers.

Surprisingly, Captain Gopinath told one interviewer that he supported the alliance: “If occupancy levels have fallen to 50 percent in the recent past, it implies the other 50 per cent of the people (read customers) cannot afford to fly anymore.

Overpricing and increasing fuel surcharge have made all airlines fly with half the passenger load factor. No airline can sustain or survive at this rate.”

While he was against a merger, he saw the alliance as being different: “Merger is an altogether different issue. In the prevailing situation, such an alliance makes sense and is in line with what has been happening with other/international airlines world over. Indian carriers can no longer remain immune to the impact of global crisis in the aviation industry. I hope it is only a passing phase and the industry will bounce back in a year or two.”

When Jet Airways took over Air Sahara,

Huge costs

More airlines in India have started flying less to small town.

Kingfisher Red has reduced frequencies to cities, including Gwalior, Trichi, Bhopal and Indore. Jetlite will not to fly to destinations where Jet Airways is already operating. Air India has also reduced frequencies on routes, including Bangalore-Goa, Goa-Pune and Bangalore-Pune.

According to Mumbai International Airport limited (MIAL),while number of domestic slots at the airport has

32

“

Kingfisher Chairman Vijay Mallya

I believe aviation should be treated as per international norms and other industry sectors where strategic investors can invest. I have received several expressions of interest from foreign airlines.

However, I cannot give details...

”

remained at 502 this winter schedule, slots for international airlines have seen a rise from 198 slots in the previous summer schedule to 214 slots in the winter schedule.

Domestic passenger movements fell down by 22 per cent in September this year as compared to that in last year in the same period. Even though international passenger movements fell to 5.6 per cent from 16 per cent this September, the frequency of international flights has shown an 8 per cent rise this year compared to that in 2007

Airlines cut capacity by about 17 per cent in the first half. They are expected to return at least 20 more aircraft, including Boeing 777s, to the

CRUISING HEIGHTS November 2008

the latter was indeed in dire straits. Why did Naresh Goyal take over Sahara? Naresh Goyal-owned Jet Airways did not want any competition on the international sector as it would have taken at least three years more for the nearest competing domestic carrier to fly overseas routes and by which time Naresh Goyal could consolidate and edge out all new entrants except Air India that always had the first right. Air Sahara was the only other private carrier meeting all the civil aviation requirements to fly foreign routes. Besides, it also had the same fleet type: Boeing NGs. What did Naresh Goyal do? He first took over the carrier and downsized hundreds of staff including cabin crew. There was no public protest, no opposition by anyone in the UPA and the TV channels and the print media evoked deathly silence. (Compare this to the protest that ran across the board when only 700 cabin crew of Jet were handed pink slips).

Sahara was renamed JetLite as Jet Airways’ LCC and made its subsidiary. Later, Naresh Goyal applied separately to the Ministry and DGCA for permission to fly foreign routes under JetLite particularly to the Gulf and South-East Asia (Air Sahara was in any case going to S-E Asia).

Strangely, when Air India and Indian were merged, they got a single bilateral. But Naresh Goyal by keeping JetLite separate got two bilaterals. So, Jet Airways by taking over Air Sahara not only became a bigger player with higher market share but also cornered all the overseas rights that were available to private carriers fulfilling the CAR (Civil Aviation Regulation). Unfortunately for him the plan did not work the way he expected. The books of Air Sahara had hidden many losses which hit Naresh Goyal so hard that even his auditors refused to cer-

tify Air Sahara or JetLite accounts.

Meanwhile, Jet Airways continued to expand overseas and ended fiscal 2007-08 with revenues that showed 48 per cent from overseas flights and 52 per cent from domestic. The up and then down of crude prices led to a steep fall in overseas fares, which made his operations extremely tight as compared to the product he offered and the money he expected for it. His COO Sudheer Raghavan announced that Jet Airways has put on hold all foreign expansions and would actually withdraw its MumbaiShanghai-San Francisco flight and may soon also withdraw Amritsar-London flight.

The way Jet expanded was unheard off.

Beginning April 2008, Jet started several routes including West Asia, Hong Kong, SFO, Toronto, Bangkok and New York. His choice of Brussels as his European hub has proved to be his biggest undoing. The number of Jet employees rose from 11088 in March 2007 to 13163 in March 2008. As a result, the employee remunerations, increments and benefits for the same period rose 28.5 per cent from Rs 938 crore to Rs 1,205 crore.

So, Naresh Goyal and his Jet Airways wanted to pre-empt anyone from taking over Air Sahara and he truly paid a very heavy price for it -- at least on hindsight.

Imagine Rs 2,200 crore for Sahara, chopping and churning the airline unsuccessfully, getting aircraft slots that have become a liability today, getting overseas rights under JetLite that has made no difference as Jet Airways is finding it difficult to use even its own entitlements. Is it not a wonder that Jet Airways unable to fight a battle in the overseas markets against the likes of Emirates, SIA, Cathay, Lufthansa, etc., has now chosen to fight out the small LCCs back home with much support of the government.

lessors in the remainder of this calendar year.

Last month, Mumbai-based lowcost carrier GoAir, the only airline still offering fares of Rs 0-99 fares made a surprise announcement. It announced a full service option, Christened Go Comfort, the new section offers food and other services - the so-called “frills” - and costs more than economy class. The launch of Go Comfort is seen as GoAir’s flight into the category of value carriers - a hybrid between a low-cost carrier, or an LCC, and a fullservice carrier In a recent presentation made to the investors, Kingfisher Airlines had said that it is leading the industry in trying to get the Airports Authority of

“

Jet Airways Chairman Naresh Goyal

Such alliances are taking place all over the globe such as the one with United and British Airways.

This is the first such alliance in India.It is not a cartel but essentially meant to save costs as airlines are losing money

”

India to reduce landing charges by as much as 50 per cent. . In the case of landing and take-off charges, the rate per flight for an A340 levied by AAI was $2,582, while Changi charges about $1,678 and Heathrow charges $2,471. The landing charges levied

by Singapore for an A330 was $1,134, in Hong Kong it was $1,025 and in Mumbai it was $1,511, the presentation said.

The fourth quarter of the current fiscal will be the worst negative in terms of demand. Air traffic may dip 8-10 per cent during the October-December period.

The Hyderabad airport has seen a 9.8 per cent fall in domestic passenger traffic in the eight months since it was inaugurated on March 14, though international passenger numbers increased by 10% over last year.

CRUISING HEIGHTS November 2008

The story of Vijay Mallya and his Kingfisher Airlines is much shorter. He took over Air Deccan, the first Indian LCC and which literally empowered ordinary Indians to fly. Though its promoter Capt Gopinath might have made a mistake in charging too little, his model was not bad as he did not believe in any frills. This was in sharp contrast to Mallya and his Kingfisher, which only believed in frills. Is it not interesting that no-frill carrier Air Deccan collapsed, but the full frills carriers are also comatose.

Mallya paid Rs 2,200 crore for taking over Air Deccan, rechristened it Simplyfly Deccan and now Kingfisher Red. There is now no Kingfisher Red — a near LCC but not fully LCC — between say DelhiMumbai or Delhi-Chennai. In a way the LCC planes have been withdrawn from most trunk routes and replaced by the more expensive Kingfisher Airlines flights. So, if Naresh Goyal-owned Jet Airways shrunk Sahara turned into JetLite on most trunk routes, Mallya did the same with Deccanturned-Kingfisher Red. Since they are private entrepreneurs they can do what they want with their carriers so long as they don’t violate any of the CAR or DGCA requirements.

“If GoAir, which is the recent champion of low-cost carriers, is changing its model, it only proves what I have been saying for so long, that the budget carrier model cannot survive in India,,” said Dr Mallya when Go recently announced Gocomfort—a cross between Economy and full service.

But what has foxed many is with an expanded fleet, their obligation under the route dispersal guidelines (RDG) ought to have gone up and, therefore, serving the Category III routes in the North-east, etc. too have gone up. No one has the faintest idea about that. Earlier, Kingfisher bought

A

lthough there has been a steady downturn (close to 35-37 per cent) in the price of Aviation Turbine Fuel since July, Indian ATF proves are still steep. And not just with the taxes-infact close to 10 per cent than available in Singapore and Kuala Lumpur. It pays for the oil industries losses elsewhere. Add the taxes and duties and it could up to well over 60 per cent in major metros like Delhi and Mumbai. If you look at the base price (around Rs 30.25 per litre in India) and around Rs 27.70(in Abu Dhabi), there isn’t a huge diference.But when you add the taxes and the levies, it’s a different ball game: Its over Rs 46 in Mumbai as compared to Rs 31 in Islamabad, Rs 30 in Abu Dhabi and Rs 29 in Kuala Lumpur

33

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COVER STORY select buckets in their own flights. Yes, the crude-related ATF prices were high but not as high as it reached recently post-June 2008. Today, crude-related ATF prices are only somewhat higher than what it was about a year ago.

The purpose of recalling some slices of history is to establish the fact that Jet and Kingfisher by taking over Air Sahara and Air Deccan, respectively painted themselves in a corner and now want to join hands to overcome the competition that injured them seriously in the first place.

While the Civil Aviation Ministry isn’t looking at the dangers that monoliths like the Kingfisher-Jet alliance offer in terms of competition and choices, it is actually encouraging it in the name of saving the Indian carriers. But not a tear is being shed for air-travelling Indians who could end up as the big losers.

Surprisingly, Captain Gopinath told one interviewer that he supported the alliance: “If occupancy levels have fallen to 50 percent in the recent past, it implies the other 50 per cent of the people (read customers) cannot afford to fly anymore.

Overpricing and increasing fuel surcharge have made all airlines fly with half the passenger load factor. No airline can sustain or survive at this rate.”

While he was against a merger, he saw the alliance as being different: “Merger is an altogether different issue. In the prevailing situation, such an alliance makes sense and is in line with what has been happening with other/international airlines world over. Indian carriers can no longer remain immune to the impact of global crisis in the aviation industry. I hope it is only a passing phase and the industry will bounce back in a year or two.”

When Jet Airways took over Air Sahara,

Huge costs

More airlines in India have started flying less to small town.

Kingfisher Red has reduced frequencies to cities, including Gwalior, Trichi, Bhopal and Indore. Jetlite will not to fly to destinations where Jet Airways is already operating. Air India has also reduced frequencies on routes, including Bangalore-Goa, Goa-Pune and Bangalore-Pune.

According to Mumbai International Airport limited (MIAL),while number of domestic slots at the airport has

32

“

Kingfisher Chairman Vijay Mallya

I believe aviation should be treated as per international norms and other industry sectors where strategic investors can invest. I have received several expressions of interest from foreign airlines.

However, I cannot give details...

”

remained at 502 this winter schedule, slots for international airlines have seen a rise from 198 slots in the previous summer schedule to 214 slots in the winter schedule.

Domestic passenger movements fell down by 22 per cent in September this year as compared to that in last year in the same period. Even though international passenger movements fell to 5.6 per cent from 16 per cent this September, the frequency of international flights has shown an 8 per cent rise this year compared to that in 2007

Airlines cut capacity by about 17 per cent in the first half. They are expected to return at least 20 more aircraft, including Boeing 777s, to the

CRUISING HEIGHTS November 2008

the latter was indeed in dire straits. Why did Naresh Goyal take over Sahara? Naresh Goyal-owned Jet Airways did not want any competition on the international sector as it would have taken at least three years more for the nearest competing domestic carrier to fly overseas routes and by which time Naresh Goyal could consolidate and edge out all new entrants except Air India that always had the first right. Air Sahara was the only other private carrier meeting all the civil aviation requirements to fly foreign routes. Besides, it also had the same fleet type: Boeing NGs. What did Naresh Goyal do? He first took over the carrier and downsized hundreds of staff including cabin crew. There was no public protest, no opposition by anyone in the UPA and the TV channels and the print media evoked deathly silence. (Compare this to the protest that ran across the board when only 700 cabin crew of Jet were handed pink slips).

Sahara was renamed JetLite as Jet Airways’ LCC and made its subsidiary. Later, Naresh Goyal applied separately to the Ministry and DGCA for permission to fly foreign routes under JetLite particularly to the Gulf and South-East Asia (Air Sahara was in any case going to S-E Asia).

Strangely, when Air India and Indian were merged, they got a single bilateral. But Naresh Goyal by keeping JetLite separate got two bilaterals. So, Jet Airways by taking over Air Sahara not only became a bigger player with higher market share but also cornered all the overseas rights that were available to private carriers fulfilling the CAR (Civil Aviation Regulation). Unfortunately for him the plan did not work the way he expected. The books of Air Sahara had hidden many losses which hit Naresh Goyal so hard that even his auditors refused to cer-

tify Air Sahara or JetLite accounts.

Meanwhile, Jet Airways continued to expand overseas and ended fiscal 2007-08 with revenues that showed 48 per cent from overseas flights and 52 per cent from domestic. The up and then down of crude prices led to a steep fall in overseas fares, which made his operations extremely tight as compared to the product he offered and the money he expected for it. His COO Sudheer Raghavan announced that Jet Airways has put on hold all foreign expansions and would actually withdraw its MumbaiShanghai-San Francisco flight and may soon also withdraw Amritsar-London flight.

The way Jet expanded was unheard off.

Beginning April 2008, Jet started several routes including West Asia, Hong Kong, SFO, Toronto, Bangkok and New York. His choice of Brussels as his European hub has proved to be his biggest undoing. The number of Jet employees rose from 11088 in March 2007 to 13163 in March 2008. As a result, the employee remunerations, increments and benefits for the same period rose 28.5 per cent from Rs 938 crore to Rs 1,205 crore.

So, Naresh Goyal and his Jet Airways wanted to pre-empt anyone from taking over Air Sahara and he truly paid a very heavy price for it -- at least on hindsight.

Imagine Rs 2,200 crore for Sahara, chopping and churning the airline unsuccessfully, getting aircraft slots that have become a liability today, getting overseas rights under JetLite that has made no difference as Jet Airways is finding it difficult to use even its own entitlements. Is it not a wonder that Jet Airways unable to fight a battle in the overseas markets against the likes of Emirates, SIA, Cathay, Lufthansa, etc., has now chosen to fight out the small LCCs back home with much support of the government.

lessors in the remainder of this calendar year.

Last month, Mumbai-based lowcost carrier GoAir, the only airline still offering fares of Rs 0-99 fares made a surprise announcement. It announced a full service option, Christened Go Comfort, the new section offers food and other services - the so-called “frills” - and costs more than economy class. The launch of Go Comfort is seen as GoAir’s flight into the category of value carriers - a hybrid between a low-cost carrier, or an LCC, and a fullservice carrier In a recent presentation made to the investors, Kingfisher Airlines had said that it is leading the industry in trying to get the Airports Authority of

“

Jet Airways Chairman Naresh Goyal

Such alliances are taking place all over the globe such as the one with United and British Airways.

This is the first such alliance in India.It is not a cartel but essentially meant to save costs as airlines are losing money

”

India to reduce landing charges by as much as 50 per cent. . In the case of landing and take-off charges, the rate per flight for an A340 levied by AAI was $2,582, while Changi charges about $1,678 and Heathrow charges $2,471. The landing charges levied

by Singapore for an A330 was $1,134, in Hong Kong it was $1,025 and in Mumbai it was $1,511, the presentation said.

The fourth quarter of the current fiscal will be the worst negative in terms of demand. Air traffic may dip 8-10 per cent during the October-December period.

The Hyderabad airport has seen a 9.8 per cent fall in domestic passenger traffic in the eight months since it was inaugurated on March 14, though international passenger numbers increased by 10% over last year.

CRUISING HEIGHTS November 2008

The story of Vijay Mallya and his Kingfisher Airlines is much shorter. He took over Air Deccan, the first Indian LCC and which literally empowered ordinary Indians to fly. Though its promoter Capt Gopinath might have made a mistake in charging too little, his model was not bad as he did not believe in any frills. This was in sharp contrast to Mallya and his Kingfisher, which only believed in frills. Is it not interesting that no-frill carrier Air Deccan collapsed, but the full frills carriers are also comatose.

Mallya paid Rs 2,200 crore for taking over Air Deccan, rechristened it Simplyfly Deccan and now Kingfisher Red. There is now no Kingfisher Red — a near LCC but not fully LCC — between say DelhiMumbai or Delhi-Chennai. In a way the LCC planes have been withdrawn from most trunk routes and replaced by the more expensive Kingfisher Airlines flights. So, if Naresh Goyal-owned Jet Airways shrunk Sahara turned into JetLite on most trunk routes, Mallya did the same with Deccanturned-Kingfisher Red. Since they are private entrepreneurs they can do what they want with their carriers so long as they don’t violate any of the CAR or DGCA requirements.

“If GoAir, which is the recent champion of low-cost carriers, is changing its model, it only proves what I have been saying for so long, that the budget carrier model cannot survive in India,,” said Dr Mallya when Go recently announced Gocomfort—a cross between Economy and full service.

But what has foxed many is with an expanded fleet, their obligation under the route dispersal guidelines (RDG) ought to have gone up and, therefore, serving the Category III routes in the North-east, etc. too have gone up. No one has the faintest idea about that. Earlier, Kingfisher bought

A

lthough there has been a steady downturn (close to 35-37 per cent) in the price of Aviation Turbine Fuel since July, Indian ATF proves are still steep. And not just with the taxes-infact close to 10 per cent than available in Singapore and Kuala Lumpur. It pays for the oil industries losses elsewhere. Add the taxes and duties and it could up to well over 60 per cent in major metros like Delhi and Mumbai. If you look at the base price (around Rs 30.25 per litre in India) and around Rs 27.70(in Abu Dhabi), there isn’t a huge diference.But when you add the taxes and the levies, it’s a different ball game: Its over Rs 46 in Mumbai as compared to Rs 31 in Islamabad, Rs 30 in Abu Dhabi and Rs 29 in Kuala Lumpur

33

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COVER STORY the mileage from Indian to meet its RDG obligations. However, insiders in Indian say that DGCA rules when giving NoC (No Objection Certificate) and AoC (Air operation Certificate) is not very clear about it.

When two airlines become one, then it impacts the RDG. Similarly, when fleet size is downsized it again impacts the RDG. That this happened is not surprising and that this will happen even more seriously once the alliance of Jet and Kingfisher takes off.

Coming back to Mallya he spent Rs 2,200 crore on Air Deccan, rebranded the airline and used its five years status to fly overseas — the first of such flights being launched on September 3, 2008 from Bengaluru to London. That flight today is drawing poor loads. So much so that Kingfisher has announced that anyone taking more than four return flights within India and or eight one-way travel within India can get a free ticket to go to London and back from Bengaluru. Though there is nothing wrong in this, it at the same time shows the state of the market.

Both Jet Airways and Kingfisher owe to the public sector oil companies over Rs 1,200 crore of which Jet owes Rs 850 crore and Kingfisher Rs 350 crore. State-owned Air India owes Rs 600 crore. All these carriers have not paid the oil companies even after the credit period of 60 days expired.

Now, Petroleum Minister Murli Deora is holding a meeting with Praful Patel along with the oil companies and airlines to sort out the issues. Additionally, Kingfisher along with others also owe Rs 210 crore to Airports Authority of India. This too, is being sorted out.

Mallya also has incurred huge debts in his rapid expansion and acquisition of Deccan. He wanted to do private placements but could not do so earlier as he expected a better price. Today, the scenario is even worse.

Similarly, Naresh Goyal wanted to raise $ 400 mn dollars by part-selling his holdings

34

Prime Minister Manmohan Singh

“

There is an employment angle to be looked at. If airlines close down, there will be a considerable amount of unemployment. It is not a question of helping the rich, it is helping those who will loose

”

CRUISING HEIGHTS November 2008

in his airline. The stock prices of Jet Airways are today about Rs 250 compared to an unheard off Rs 1150 he got per share at the time of the IPO. What this means is: He will have to sell five times more his share to get the same money.

So, what do they do? Usually when the going gets tough, the tough get going. But in India, especially its civil aviation industry, when the going gets tough the tough go to the government.

There are certain issues — high ATF prices, taxes, airport charges like landing and navigation and also parking, etc.— where there is no difference of opinion between Jet, Kingfisher, Air India, LCCs, etc. All have been hit. But a solution to many of the issues could raise the spectre of being anti-competitive. Mallya and Goyal and the Ministry of Civil Aviation will have to guard against that or at least find solutions to them. As for the proposed Jet Airways-Kingfisher Airlines alliance, the published details are as follows:

It is not just an alliance of Jet Airways and Kingfisher Airlines but also includes JetLite and Kingfisher Red. So, it is actually an alliance of four against which only three will be in competition namely Air India, Spice and IndiGo. Paramount and GoAir are no players at all in a competitive sense.

It is true that the number of Indians traveling in the domestic skies has fallen sharply. The number of Indians flying domestic has fallen by over 20 per cent in September 2008 which is the fourth straight month of falling traffic compared to the same period of previous year as well. Apart from so called excess capacity, the slowdown in demand even in the peak season was result of recent fare hike by full service carriers Jet Airways and Kingfisher Airlines and perhaps AI.

At the end of September 2008, the market share of various airlines was as follows: Air India (domestic) 18.1 per cent, Jet Airways 23.6 per cent, JetLite 8.9 per cent, Deccan 12.3 per cent, Kingfisher 15.3 per cent, SpiceJet 8 per cent, IndiGo 10.1 per cent, Paramount 1.7 per cent and GoAir 1.8 per cent.

So, Jet Airways, JetLite, Kingfisher and Deccan have a total market share of 60 per cent. Soon after the massive ATF price hike in June 2008, all airlines put together cut their daily flights by nearly 20 per cent.

Under the newly-forged alliance between Jet and Kingfisher, it is proposed to cut the capacity. The two have announced that they will send back 15 narrow-bodied A 320s and B737s to leasing companies when the lease expires at the end of 2008 and in 2009. This will result in withdrawal of 75 flights per day or nearly 10 per cent of their

THE SHRINKING OF LCCS IN 2008

Cumulative market share (%)

combined daily domestic flights. In addition, Jet Airways is leasing four of its B777300 ER to save its losses on the international sector, which has become even more competitive with the announcement by Emirates that it will take its total number of weekly flights into and out of India to 169

by January-February 2009 as it feels India is a very bullish market.

Naresh Goyal in a statement on October 13, 2008, the day the alliance news was jointly announced by him and Mallya in Mumbai, said: “In this environment the Jet Airways-Kingfisher Alliance represents a completely new industrial model for aviation in India, which would be based on an unprecedented depth of cooperation between the two companies.”

Mallya said: “Both Jet and Kingfisher fully realise that better understanding of supply and demand in this capital and labour intensive industry is key to profitability and enhancement of shareholder value”.

Is this not stretching the argument too far? How many are the shareholders of Jet and Kingfisher? Jet is still 80 per cent owned by Naresh Goyal and no one knows how many shareholders Kingfisher has, though there are a few Deccan shareholders still on board after the merger. Promoters and those who got in via the IPO have been nearly bought over by Mallya who as on date is the sole owner of Kingfisher. So, when he says shareholder value he means himself and Naresh Goyal.

Fair enough, the shareholder has a right to enhance his value. But where are the customers or passengers in the alliance scheme of things? Will they benefit or not? No. When the whole accent is on contracting the supply (read aircraft) and raising fares, how will the customers benefit from this alliance?

The alliance will seek code-sharing.

The two airlines have a network that use 189 aircraft, which is more than perhaps the fleet strength of all other airlines put together.

THE GROWTH OF FSCS IN 2008

Cumulative market share (%)

Praful Patel

“

I didn't get into this. I just cautioned the entire industry and did not ask any one in particular to shake hands. This (Jet-Kingfisher alliance) is born out of necessity and adversity. Airlines have to first be able to survive for a later-day fight

”

CRUISING HEIGHTS November 2008

These 189 aircraft connect across 927 domestic and 82 international flights everyday.

Both are betting on Delhi and Mumbai, which is reportedly the sixth busiest air corridor in the world. When Kingfisher acquired Air Deccan, it removed its flights on this sector and got only its own full service flights. Even flights to Chennai from Delhi were replaced by its full service flights.

Under the alliance, Jet and Kingfisher will try and ensure only one of them fly for part of the day and then the other for the rest of the time. This means the scheduled flight frequency of one airline after another that is Jet after Kingfisher and vice versa will be abolished. If the two carriers are having a load of only say 60 per cent each, attempts would be made to increase the load to over 80 per cent by taking each others passengers under the code-share. This will also be done under the name of route rationalisation and in the process lead to withdrawal of capacity and thereby lead to hike in fares.

As per DGCA, only six cities — Delhi, Mumbai, Chennai, Hyderabad, Bengaluru and Kolkata -- account for 85 per cent of domestic traffic. These are also the stations where one can hope to get business class passengers who help meet the yield target.

But this way of code-sharing can mean reduced availability as per the route dispersal guideline and meeting the CAT III routes and the North-east. How will the DGCA react to it. Also, is it in keeping with CAR guidelines?

To ensure that passengers and Jet and Kingfisher go to each other, the alliance also proposes to allow redemption of FFP of each other. Jet already has 10 lakh FFP members and Kingfisher is slowly making its base. So, these travellers will never travel by any third airline. Nothing will prevent the two carriers from re-writing FFP rules and award points higher than hitherto for even the lowest tickets under the dynamic booking facility. So, you hold back your

35

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COVER STORY the mileage from Indian to meet its RDG obligations. However, insiders in Indian say that DGCA rules when giving NoC (No Objection Certificate) and AoC (Air operation Certificate) is not very clear about it.

When two airlines become one, then it impacts the RDG. Similarly, when fleet size is downsized it again impacts the RDG. That this happened is not surprising and that this will happen even more seriously once the alliance of Jet and Kingfisher takes off.

Coming back to Mallya he spent Rs 2,200 crore on Air Deccan, rebranded the airline and used its five years status to fly overseas — the first of such flights being launched on September 3, 2008 from Bengaluru to London. That flight today is drawing poor loads. So much so that Kingfisher has announced that anyone taking more than four return flights within India and or eight one-way travel within India can get a free ticket to go to London and back from Bengaluru. Though there is nothing wrong in this, it at the same time shows the state of the market.

Both Jet Airways and Kingfisher owe to the public sector oil companies over Rs 1,200 crore of which Jet owes Rs 850 crore and Kingfisher Rs 350 crore. State-owned Air India owes Rs 600 crore. All these carriers have not paid the oil companies even after the credit period of 60 days expired.

Now, Petroleum Minister Murli Deora is holding a meeting with Praful Patel along with the oil companies and airlines to sort out the issues. Additionally, Kingfisher along with others also owe Rs 210 crore to Airports Authority of India. This too, is being sorted out.

Mallya also has incurred huge debts in his rapid expansion and acquisition of Deccan. He wanted to do private placements but could not do so earlier as he expected a better price. Today, the scenario is even worse.

Similarly, Naresh Goyal wanted to raise $ 400 mn dollars by part-selling his holdings

34

Prime Minister Manmohan Singh

“

There is an employment angle to be looked at. If airlines close down, there will be a considerable amount of unemployment. It is not a question of helping the rich, it is helping those who will loose

”

CRUISING HEIGHTS November 2008

in his airline. The stock prices of Jet Airways are today about Rs 250 compared to an unheard off Rs 1150 he got per share at the time of the IPO. What this means is: He will have to sell five times more his share to get the same money.

So, what do they do? Usually when the going gets tough, the tough get going. But in India, especially its civil aviation industry, when the going gets tough the tough go to the government.

There are certain issues — high ATF prices, taxes, airport charges like landing and navigation and also parking, etc.— where there is no difference of opinion between Jet, Kingfisher, Air India, LCCs, etc. All have been hit. But a solution to many of the issues could raise the spectre of being anti-competitive. Mallya and Goyal and the Ministry of Civil Aviation will have to guard against that or at least find solutions to them. As for the proposed Jet Airways-Kingfisher Airlines alliance, the published details are as follows:

It is not just an alliance of Jet Airways and Kingfisher Airlines but also includes JetLite and Kingfisher Red. So, it is actually an alliance of four against which only three will be in competition namely Air India, Spice and IndiGo. Paramount and GoAir are no players at all in a competitive sense.

It is true that the number of Indians traveling in the domestic skies has fallen sharply. The number of Indians flying domestic has fallen by over 20 per cent in September 2008 which is the fourth straight month of falling traffic compared to the same period of previous year as well. Apart from so called excess capacity, the slowdown in demand even in the peak season was result of recent fare hike by full service carriers Jet Airways and Kingfisher Airlines and perhaps AI.

At the end of September 2008, the market share of various airlines was as follows: Air India (domestic) 18.1 per cent, Jet Airways 23.6 per cent, JetLite 8.9 per cent, Deccan 12.3 per cent, Kingfisher 15.3 per cent, SpiceJet 8 per cent, IndiGo 10.1 per cent, Paramount 1.7 per cent and GoAir 1.8 per cent.

So, Jet Airways, JetLite, Kingfisher and Deccan have a total market share of 60 per cent. Soon after the massive ATF price hike in June 2008, all airlines put together cut their daily flights by nearly 20 per cent.

Under the newly-forged alliance between Jet and Kingfisher, it is proposed to cut the capacity. The two have announced that they will send back 15 narrow-bodied A 320s and B737s to leasing companies when the lease expires at the end of 2008 and in 2009. This will result in withdrawal of 75 flights per day or nearly 10 per cent of their

THE SHRINKING OF LCCS IN 2008

Cumulative market share (%)

combined daily domestic flights. In addition, Jet Airways is leasing four of its B777300 ER to save its losses on the international sector, which has become even more competitive with the announcement by Emirates that it will take its total number of weekly flights into and out of India to 169

by January-February 2009 as it feels India is a very bullish market.

Naresh Goyal in a statement on October 13, 2008, the day the alliance news was jointly announced by him and Mallya in Mumbai, said: “In this environment the Jet Airways-Kingfisher Alliance represents a completely new industrial model for aviation in India, which would be based on an unprecedented depth of cooperation between the two companies.”

Mallya said: “Both Jet and Kingfisher fully realise that better understanding of supply and demand in this capital and labour intensive industry is key to profitability and enhancement of shareholder value”.

Is this not stretching the argument too far? How many are the shareholders of Jet and Kingfisher? Jet is still 80 per cent owned by Naresh Goyal and no one knows how many shareholders Kingfisher has, though there are a few Deccan shareholders still on board after the merger. Promoters and those who got in via the IPO have been nearly bought over by Mallya who as on date is the sole owner of Kingfisher. So, when he says shareholder value he means himself and Naresh Goyal.

Fair enough, the shareholder has a right to enhance his value. But where are the customers or passengers in the alliance scheme of things? Will they benefit or not? No. When the whole accent is on contracting the supply (read aircraft) and raising fares, how will the customers benefit from this alliance?

The alliance will seek code-sharing.

The two airlines have a network that use 189 aircraft, which is more than perhaps the fleet strength of all other airlines put together.

THE GROWTH OF FSCS IN 2008

Cumulative market share (%)

Praful Patel

“

I didn't get into this. I just cautioned the entire industry and did not ask any one in particular to shake hands. This (Jet-Kingfisher alliance) is born out of necessity and adversity. Airlines have to first be able to survive for a later-day fight

”

CRUISING HEIGHTS November 2008

These 189 aircraft connect across 927 domestic and 82 international flights everyday.

Both are betting on Delhi and Mumbai, which is reportedly the sixth busiest air corridor in the world. When Kingfisher acquired Air Deccan, it removed its flights on this sector and got only its own full service flights. Even flights to Chennai from Delhi were replaced by its full service flights.

Under the alliance, Jet and Kingfisher will try and ensure only one of them fly for part of the day and then the other for the rest of the time. This means the scheduled flight frequency of one airline after another that is Jet after Kingfisher and vice versa will be abolished. If the two carriers are having a load of only say 60 per cent each, attempts would be made to increase the load to over 80 per cent by taking each others passengers under the code-share. This will also be done under the name of route rationalisation and in the process lead to withdrawal of capacity and thereby lead to hike in fares.

As per DGCA, only six cities — Delhi, Mumbai, Chennai, Hyderabad, Bengaluru and Kolkata -- account for 85 per cent of domestic traffic. These are also the stations where one can hope to get business class passengers who help meet the yield target.

But this way of code-sharing can mean reduced availability as per the route dispersal guideline and meeting the CAT III routes and the North-east. How will the DGCA react to it. Also, is it in keeping with CAR guidelines?

To ensure that passengers and Jet and Kingfisher go to each other, the alliance also proposes to allow redemption of FFP of each other. Jet already has 10 lakh FFP members and Kingfisher is slowly making its base. So, these travellers will never travel by any third airline. Nothing will prevent the two carriers from re-writing FFP rules and award points higher than hitherto for even the lowest tickets under the dynamic booking facility. So, you hold back your

35

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COVER STORY customer.

The two are also looking at common ground handling facility and cross-selling of tickets using common ticket distribution system. Incidentally, both use the Sabre system. To begin wit,h they will reduce the labour on the ramp side at airports and they will even co-brand the buses used for transporting passengers to the aircraft.

Another area is the joint fuel management to reduce ATF costs. The two are jointly exploring the possibilities of renegotiating with oil marketing companies for a better rate. They will also jointly hedge their fuel requirements.

To cut short their international misery, Jet has already decided to lease four of its B777-300 ERs. Kingfisher has already sold five of its earlier acquired A340-500s. It has staggered the purchase of A330-200. It may not expand its overseas operations beyond Bengaluru-London and may even withdraw it completely to become a totally domestic driven airline. It needs to be pointed out here that while Jet Airways business class has been getting much heavier loads, Kingfisher Airlines, despite a far better product, has not got even 35 per cent load causing huge losses to it.

Mr Praful Patel, Civil Aviation Minister has tried to balance the entire exercise by saying that he was seriously pursuing his efforts to get Air India an equity support of Rs 1,500 crore and soft loan of Rs 2,000 crore to meet its working capital needs. The fact is when he decided to merge Air India and Indian, they were already in serious trouble. Despite knowing that, he forced reluctant state-owned carriers to merge.

And when oxygen was needed they were denied it and now that they are comatose, the Ministry says it will give oxygen.

Air India CMD Raghu Menon has already said this alliance would reduce competition. There are a number of routes and a number of airlines. Reduction in capacity will constrain competition and may possibly lead to hike in fares as well.

Vijay Mallya has already gone on record to state that the purpose of the alliance with Jet Airways was to save costs and maximise efficiency and profits.

Aviation industry sources said the new FFP would attract customers from other LCCs as well. The alliance is known to account for more than 80 per cent of the commissions earned by travel agents from domestic carriers. The so-called route rationalisation will ensure withdrawal of capacity, making seat availability scarcer and, therefore, lead to hike in fares. Even CAPA says that with route rationalisation the passengers will have to pay at least 10 per cent to 15 per more fares.

Andrew Harrison, CEO of DIAL, said

36

“

Hyderabad Airport CEO P S Nair

Passenger traffic has come down.

Airlines have the option to stop flying and ground aircraft.

An airport does not have a choice. We can’t switch off even a light despite the downturn

”

CRUISING HEIGHTS November 2008

they are meeting the airlines soon to discuss the contours of the alliance and what it means for airport slots. There is a fear that the two airlines in the alliance may dictate terms of having control of majority of slots in metro airports such as Delhi and Mumbai. After all they have Jet Airways, JetLite, Kingfisher and Kingfisher Red or Deccan.

Instead of Jet then Kingfisher, then Jet then Kingfisher followed by JetLite and Deccan or Kingfisher Red, from metros in the morning, they could well combine flights of the full service carrier and even their respective so-called two LCCs. However, the bigger question is what will happen to their ground handling? As per a union cabinet decision, no domestic carrier — that includes all private carriers — will be allowed to do self handling in the six metro airports — Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bengaluru — with effect from January 2009.

Ground handling will be provided by a combine of AI and its JV partner, another private JV and the airport promoter if it desires or through revenue sharing with yet another JV company. Private airlines can do it provided they float a separate company and bid for the GH job.

Incidentally, the GH tenders for Delhi, Mumbai, Hyderabad and Bengaluru have been floated, decided and sealed. Only Chennai and Kolkata remain where AAI and AI will provide it as their right conferred by the Cabinet decision. Last time when this was sought to be done, Jet Airways made a hue and cry and said its 4000 ground staff will have to be sacked. Now the same proposal has got Cabinet backing.

Will Jet and Kingfisher go against the decision and will it be changed for the alliance?

Or will this also be made a cost-cutting issue to extract greater concessions from a tired UPA government?

Finally a quote from the net on the alliance: “Thank God, some of the media people have woken up and are calling the Kingfisher-Jet alliance a cartel. ET has stated in its editorial that the alliance “may be” anti-consumer. Why may be? Prima Facie, it is…whenever, two major competitors sit down on a table to work together to save money, that is, make more profits, you don’t have to be a rocket scientist to figure out that it is going to be against the law and the consumer is going to get screwed (to put it mildly).

I am surprised that Naresh and Vijay think that we are all stupid. What does route rationalisation mean when the combined entity is concerned? It means reduction in joint supply. Reduction in joint supply means less competition. Reduced competition means higher prices and poor

service for the consumer”.

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INTERVIEW Nov.qxd

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INTERVIEW

Photo: H.C. Tiwari

For SAS Scandinavian Airlines, touching base once again with Delhi, is like coming home. An excited Lars Sandahl Sorensen, CEO, SAS International, told Tirthankar Ghosh that though the aviation sector was going through turbulent times, the new DelhiCopenhagen flights only underlined SAS’ commitment and eagerness to serve travellers from the two countries.

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“ WE FLY WHERE OUR CUSTOMERS

WANT US TO

”

A

What differentiates SAS from other carriers flying to European destinations? Why would passengers opt for SAS and not for other carriers?

One major factor is of course where you are going in Europe.

In terms of USP, we believe that we can offer you a very attractive product. We believe that we have an inflight product that is unique. One of our products is the ‘Premium Economy’, a product that none of the European airlines flying from India have. We have a great service on ground. In addition, we have the Copenhagen hub — the Copenhagen airport is one of the best airports in the world and has been voted as the best in the world a number of times — is incredibly big. It provides short connection times and has a very nice environment. A lot of people want to go through the airport…

We believe we have competitive pricing. We can even offer our customers the flexibility of flying one way in Business Class and return in Economy.

Have you got any Indian cabin crew?

We do not have plans to induct Indian cabin crew — yet. Not with the three flights that we presently have. However, we have a lot of Indians in Denmark working for us who advise us on what is important.

And we know food is extremely important for Indians. We are aware that the food has to be right and that is how we aim it to be. We work with Oberois here.

What is the current load factor as far as passengers are concerned?

It is around 80-82 per cent. At the moment, it is very high. In fact, now with the downturn in the economy around the world, we are all anxious to see what will happen.

Have you got plans to fly to more destinations in India?

At the moment, it would not be right for me to say that we are

CRUISING HEIGHTS November 2008

“

The bottomline for us in SAS is quite simple: we fly where our customers want us to

Photo: H.C. Tiwari

: What makes SAS come back to India? The carrier was here a few years ago… : It is interesting…

In fact, your Commerce Minister Kamal Nath asked me this question: Why did you leave India when so many (airlines) were coming in? Now, you ask me this question: Why are we coming in when other people are going out? Either we have totally misunderstood the dynamics of the Indian market or may be we have missed something. The bottomline for us in SAS is quite simple: We fly where our customers want us to. Coming in now is because we see that there is a lot of demand for direct flights between India and Scandinavia. Ever since we stopped flying in 2001, our loyal customers — corporates in Scandinavia as well as Scandinavians in India — have always wanted us to restart our services. And we are like many other carriers limited by the number of aircraft we have… hence the limited number of flights for the moment.

We see India as a place which is very much like home for us. From our customers’ point of view, we wish to have a steady business with India; one, because of the great development that is taking place in

We have shorter travelling times to most destinations in northern Europe. That is very important for any business traveller. So, the combination of a good product, attractive pricing, flexibility in the product and quick travelling times: That’s our USP. However, we cannot be successful without the combination of tourists and corporate travellers. We need both: We cannot focus just on tourism or corporate travellers. That is why India, for us, is an attractive destination.

“

Q

the trade between Scandinavia and India and second, because a large number of our people wish to come and explore the mystique of this country. We have seen strong growth year on year.

We wish to connect and live up to the demands of this market. It is a turbulent time in the industry and starting off a new destination at this time shows our commitment and our eagerness.

39

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INTERVIEW

Photo: H.C. Tiwari

exported to Scandinavia while pharmaceutical products and telecommunication equipment are coming here. So there is a good balance. Our full belly capacity is booked. On an average we are carrying around 15-16 tons.

There is a positive development in cargo which is quite interesting. While we see some weakness in the passenger growth, cargo seems to be moving up.

CELEBRATING A REBIRTH: (L-R) Swedish Ambassador to India Lars-Olof Lindgren, Lars Sandahl Sorensen and Lennart Paulsson, SAS Director and GM India officially inaugurate the first SAS flight from India.

“

In terms of USP, we believe that we can offer you a very attractive product.

One of our products is the ‘Premium Economy’...

“

40

planning to expand in India.

However, one of the cities that we would like to fly to is Mumbai. But we are also looking at other places. That is because a lot of Scandinavians are going to other places in India. But, Mumbai would be the first.

We are working closely with the Scandinavian tourist boards …Sweden, Denmark and Norway actually work together. So, we work with them to promote the Scandinavian market not only in summer but also in winter.

One can have so many great experiences there (during winters). We have not been very good at explaining to the market here. We have to be good in giving reasons to go to Scandinavia.

How much does Asia figure in SAS International’s expansion plans?

We have expanded a lot in Asia.

There has been expansion in the number of flights to Bangkok, Beijing. We are flying daily to Tokyo. So, Asia is very important for us. But we have a strategy in our company where it is not only Asia…you have Finnair for instance focusing very much on Asia while our concentration is on the United States and on Asia.

That’s where our customers want to go. They want to go the US, Dubai and India. The US is a very big and important market for us.

We are aware of the challenges (of infrastructure) here. The airport authorities here have been

very cooperative. By using the time slot that we use… we do not fly when everybody else flies… I think that is a convenience for our customers. We have a good partner here in Interglobe and they are advising us on how to do this in the best possible way.

One question about SAS cargo.

We understand that you will be ferrying cargo from here to Scandinavia. Will it be bellyhold cargo or will you do so through a separate SAS Cargo unit?

The cargo we are carrying is bellyhold although SAS Cargo operates as a separate business entity.

The cargo business is doing very

In the event of cargo tonnage rising in the future, would you introduce dedicated freighters in the sector?

At the moment we have no plans to introduce dedicated freighters.

Yes, we do have a dedicated freighter service but that is operates in the Far East: China, Hong Kong to Scandinavia.

Is India on your radar as far as cargo is concerned?

While I am not directly responsible for our cargo operations, we would like to mention that our prime objective is to ensure that our bellies are full. Once we achieve that, we can start looking at other opportunities.

How many aircraft do you have?

Do you have any plans to enlarge your fleet?

In the group we have 150. We are

CLASSY SERVICE: Wines and personalised service aboard a SAS flight.

well. Usually, we have a problem when the cargo business is only good in one direction and not good in the other. But here in India what we are seeing now is that the business is strong in both directions. A lot of garments are

CRUISING HEIGHTS November 2008

in the process of changing some of our planes to new CRJs. However, we have no plans at the moment for the expansion of our intercontinental fleet comprising 11 aircraft — all Airbus 340s and 330s

(seven 340s and four 330s).

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AIRCARGO

Opportunity knocks for a REGIONAL CARGO HUB As the developing world looks to India for a return to the days of growth, our planners can seize the opportunity to make the country a regional cargo hub, writes Tirthankar Ghosh. Such a hub will not only serve SAARC but also be a transshipment point between for goods between China and Europe or Africa and the Americas.

O

n the eve of the 36th Air Cargo Agents Association of India’s (ACAAI) annual convention which takes place in Bahrain in the beginning of December this year, it is time that aircargo stakeholders take a long and hard look at the future. The country has the opportunity to play a global role — more so now that it is an accepted fact that the economic meltdown has not affected us in the same manner as it has the developing world. As the world looks to India and China for support, it is time we took the step for the Indian economy to grow by boosting our potential in airfreight to keep pace with growth.

As more of the nation gets connected by air and transportation gets better, India, according to Boeing’s World Air Cargo Forecast 2008-09, will continue to be the largest submarket in Southwest Asia, comprising about 63 per cent of international flows in the region. Since 1997, the forecast states, the total India air cargo market (domestic and international) has averaged 9.5 per cent annual growth. The nation has the potential to develop a large domestic air freight market. In 2007, for example,

COMING SOON TO AN AIRPORT NEAR YOU: A Cargolux freighter being loaded

CRUISING HEIGHTS November 2008

India’s domestic market was estimated at 342000 tonnes, and it has expanded at an average annual growth rate of 10.8 per cent for the past decade. “The vast geographic expanse and fractured nature of transport within the country — especially truck transport — should foster growth of India’s domestic air cargo. The domestic India air cargo market will continue to grow quite rapidly, expanding 9.9 per cent on average per year through 2027, reaching 2.3 million

41

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AIRCARGO

Recipe for success Any cargo hub — regional or otherwise — must fulfill certain conditions to attract more shippers. Among the foremost is that it should be established in a place which is within four hours’ flying time from other major stations/countries.

The other important conditions are: The hub should be attractive as far as costs go. Customers must find the rates competitive enough for transporting goods directly from the place of manufacture to the final destination.

Hub must have facilities for speedy clearance.

Forwarders/shippers must have sufficient cargo space.

The hub should be well connected by road, rail, etc; and, The services provided at the hub must be of a high quality, accurate, convenient and reliable.

We should move ahead to project the country as a regional cargo hub. For a long time, the idea has been considered more a paper dream than reality.

Time and again, the issue has been raised at different forums

tonnes flown per year.

As for the international market for India, it now exceeds 1.11 million tonnes per year, and the leading trading partner regions are Europe and Asia, followed by the Middle East and North America.

Although Europe is India’s biggest air trade partner, Asia is by far the fastest growing market, having expanded on average 13 per cent per year since 1997.

With such an optimistic future, we should move ahead to project the country as a regional aircargo hub. For a long time, the idea has been considered more a paper dream than reality. Way back in 2005, Vipin Vohra, the then President of the Air Cargo Agents Association of India (ACAAI) had told this correspondent in a curtain-raiser before the 33rd annual convention in Bangkok that his association was interested in seeing the development of India as a regional cargo hub.

Similar views have been echoed by a host of other stakeholders. Ankur Bhatia, Immediate Past President, CII Delhi State Council and Executive Director, Bird Group, proposed the development of India as a regional hub for air cargo not only because we have the advantage of geographic location but also the availability of skilled, inexpensive manpower. And, in 2006, at the India Cargo Summit organised by the Confederation of Indian Industry (CII), Singapore Airlines Cargo’s Hwang Teng Aun speaking about India’s geographical location, had said that “Delhi has the

42

CRUISING HEIGHTS November 2008

potential to become a global hub for air cargo”. Well aware of Delhi’s location and the international trade carried out in the metropolis along with the concentration of manufacturing industries, Aun had mentioned that these factors could prop up Delhi as an internationally successful cargo destination. He had, however, hastened to point out that the major stumbling block was infrastructure — or rather the lack of it.

The move, therefore, for a regional hub is certainly not new and with the kind of progress that the nation has made in terms of infrastructure — new Greenfield airports, etc — the aircargo hub idea received a dose of adrenaline at the recent India Aviation show in Hyderabad in October this year. On the sidelines of the first-ever international civilian airshow, in one of the seminars on aircargo, the regional hub concept came through loud and clear.

Projecting the idea was Blue Dart’s Managing Director Tulsi Mirchandaney. At the outset, she built her case, stating that

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aircargo had always remained a distant cousin of passenger loads. “(Air) Cargo has been and is perceived by both passenger airlines and most airports from the singular, narrow viewpoint of short-term revenues.

Perhaps, its role in facilitating trade and business, and, therefore, having a major impact on the economic development of the region is not immediately apparent.” She stated that there were, however, a few exceptions of governments and airports that have shown foresight and long-term vision by setting up what she termed as “bustling centres of commerce”. These were now reaping the benefits, she said.

Similar points were echoed by Anita Khurana, Director Cargo, Air India, on the sidelines of the seminar. She was forthright when she said, “The whole world is looking at us and waiting to exploit this market, whereas we are yet to take advantage of this situation. When airports in our neighbouring countries are fast developing into major hubs, why should India too not have

A tale of two seaport cities

its own cargo hub? Airports at Dubai and Singapore are quickly developing into major cargo hubs and they have captured a sizeable portion of the Indian market.” She said that the country had no dedicated cargo hub of world standards to boast off.

Right now the airport infrastructure available at the existing airports is still found wanting when it comes to cargo hub needs.

India, therefore, according to Mirchandaney, was in dire need for such “centres of commerce” and it was time that the country hitched itself to a new growth phase which could be “achieved by transforming ourselves into a major regional hub”. She then detailed her reasons: India’s geographical location is ideal: We are strategically positioned between Asia and Europe.

Unlike other hubs around the world, the country has a large number of domestic consumers. So, the hub will act as a domestic as well as international transshipper.

Over the last few years, the Tier II and Tier III cities have grown.

The country has a well-recognised CRUISING HEIGHTS November 2008

43

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AIRCARGO

India’s air cargo outlook (FTKs bn)

manufacturing base.

The Free Trade Agreeement, which will be signed as we go to press, with the Association of South East Asian Nations (ASEAN) will reduce tariffs related to the import and export of goods. It is aimed at boosting trade between India and 10 members of the ASEAN (Brunei, Vietnam, Indonesia, Thailand, Laos, Malaysia, Philippines, Singapore, Myanmar and Cambodia), and will, in time, evolve to allow tariff exemptions on some services as well. It will also boost bilateral trade from the current estimated US $38 bn to around US $50 bn by 2010.

Aircargo watchers believe that India could become a regional hub like Dubai, Singapore or Hongkong. The country could take lessons from the success of these hubs and adapt them to the Indian situation. Successful hubs like Singapore and Frankfurt airport, for example have registered steady growth despite the various crises like the Gulf War, 9/11 and SARS. In fact, the only point of contention could be the placing of the hub. Two cities, Navi Mumbai and Chennai, were ideal. Both have an airport and a seaport along with good rail and road connectivity. Incidentally, both have catchment areas that have industries that produce time-sensitive goods. Hence, the need for air connectivity.

Despite the sluggish outlook, world air cargo traffic, point out Boeing as well as others, will expand at an average annual rate of 5.8 per cent for the next two decades, tripling current traffic levels with

44

CRUISING HEIGHTS November 2008

Asia’s air cargo markets continuing to lead the world air cargo industry in average annual growth rates, with the intra-Asia market expanding at 8.1 per cent per year.

In general, markets connecting developing economies to established economies will either approximate or exceed the average world growth rate.

Over the next 20 years then, the forecasts are that air freight, including express traffic, will grow more rapidly than air mail, averaging annual growth of 5.9 per cent through 2027. Air mail RTKs will grow much more slowly, averaging 2.1 per cent during the same period. Overall, world air cargo traffic will increase from 193.6 billion Revenue Tonne Kilometers (RTKs) in 2007 to more than 595.9 billion RTKs in 2027.

In such circumstances, with Asia’s air cargo markets continuing to lead the world air cargo industry, economies like China and India will be more buoyant than others. Perhaps, more important is the fact

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that Asia would become an increasingly important market for logistics and airfreight companies.

The country would do well to look to the future but with an eye on China, which incidentally has a lead over us. With international manufacturing companies moving their operations to China, our regional hub ambitions could be affected. To begin with, then, we need to find ways to increase our competitiveness in the market. Further, airports like Suvarnabhumi, Hong Kong and Singapore as well as those in the Gulf are expanding at a furious pace and will be able to cater to direct air cargo services. When that starts happening on a large scale, our role as a transshipment hub will diminish.

To face these challenges, there has to be a collective will, a shared vision between the government, regulators, operators, service providers and users, with a focus on stringent timelines that will help us move to our destination “as partners in progress”, as Mirchandaney put it.

To begin with, in the short-term, our ambitious plan of a regional hub can see fruition if our international airports go the way that many others around the world have: Most have enhanced cargo facilities

Cargo handling to take Dubai to the top

T

he success of the Dubai Logistics City (DLC) is often cited when India’s potential as a regional cargo hub is mentioned. Perhaps, the best integrated logistics and multi-modal transport hub in the world, the DLC could well have an impact on air cargo growth in the region. The facility will start functioning from the end of this year.

DLC is a major block in the Dubai World Central (DWC) complex. The $33 bn aviation centre in Jebel Ali, Dubai, comprises multi-modal logistics facilities. According to Abdulla Al Qurashi, CEO of DLC, “Each continent has its own transportation needs and while Dubai caters to the growing

India’s Opportunity: Regional Hub USD Bn

India

Singapore

UAE

Thailand

Malaysia

GDP Industry Service Agriculture

912 252 493 167

133 46 87 0

163 102 58 3

205 73 112 20

168 79 74 15

Exports

127

273

143

128

160

Imports

173

240

86

127

124

Airports

BOM

DEL

SIN

DXB

BKK

KUL

(Mn Tonnes) 0.431

0.38

1.91

1.50

1.18

0.67

Source: Press Information Bureau, CIA-World Fact Book, Ministry of Finance and Department of Statistics, Malaysia, Central bank of Thailand, DB research, Airport Council International, Authority of India Courtesy: Blue Dart

by accommodating large cargo sections.

Out metro airports could do a makeover as Schipol in Amsterdam has. Today, Schiphol, has become one of Europe’s “mainports” with intercontinental air, road and rail traffic connections. All it did was expand the airport’s cargo area by putting in five extra gates for wide bodies. Also a 110000 sq m cargo terminal was completed in 2003 while another 170000 sq m cargo terminal will be completed by 2015.

On his part, Civil Aviation Minister Praful Patel has pushed through the first step in a long-term project: The Nagpur multi-modal hub. In addition, he has also

Civil Aviation Minister Praful Patel has pushed through the first step in a longterm project: the Nagpur multimodal hub CRUISING HEIGHTS November 2008

Middle East, African and Asian markets, it merely acts as a trading gateway to a consumer population of around two billion, all within three to four hours flying time,” he said in a recent interview with Air Cargo Middle East & India.

Cargo growth in the Middle East has been the highest in the world: It was 9.5 per cent in 2007 and is expected to go to double digit growth in the future.

With the Dubai World Central-Al Maktoum International Airport up and functioning to its full capacity by 2015, DLC will become the centre of attraction for global and regional businesses looking for centralised supply chain initiatives. put into effect a plan for airport upgrades by 2010.

When the cargo centre at Nagpur is completed, the country will be one step ahead in the regional cargo hub game. The only disadvantage with Nagpur is that it is nowhere near a seaport. Even so, it will be a good beginning. As Patel said, “We hope to see that Nagpur becomes...something like Memphis, a major hub for cargo in India,” Patel has said.

Meanwhile, some air cargo operators have already got a whiff of the emerging opportunities that could rise from a dedicated cargo hub. Capt G R Gopinath, for example, recently signed a memorandum of understanding(MoU) with the GMR Group for the development of cargo hubs at Hyderabad and Delhi airports. Both hubs would help his Deccan Cargo and Express Logistics, which would start operations from January 1, 2009. GMR Hyderabad International Airport and Delhi International Airport (DIAL) signed the agreement for the development of a total of 2300 sq mts of cargo hub space in the two cities. Speaking about the agreement, Capt G R Gopinath said: “The setting up of infrastructure at Delhi and Hyderabad will enable Deccan Cargo and Express Logistics to establish an extensive multimodal storage, transportation and delivery network reaching out to every corner

of the country”.

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CARGO JOTTING Optimistic Menen

THE DUBAI-BASED Emirates that saw profits for the first six months of its reporting year dip by 80 per cent. It believes that the current economic slump will end and the sun will come out tomorrow. “Global air freight traffic — often seen as a barometer of world trade — contracted in the April-Septem- Ram Menen ber period and is likely to slow for the rest of the year before the market stabilises,” said Ram Menen, Emirates’ SkyCargo’s Divisional Senior Vice-president for cargo. “Lower fuel prices, a stronger US dollar, unprecedented government efforts to battle the global economic crisis as well as decreased freight capacity by airlines in recent months will help boost the air cargo industry next year,” he said.

Dubai launches IATA e-freight

DUBAI IS USHERING in a new era for air cargo, as it becomes the first city in Middle East to launch the IATA e-freight initiative, and only the 14th e-freight location worldwide to deliver paper-free cargo.

The ground breaking IATA e-freight initiative went “live” recently, and is now operational on the trade lanes between Dubai and Singapore, Hong Kong and London.

Led by Dubai Customs and Emirates, the Dubai IATA efreight implementation team started work in June 2008 and delivered IATA e-freight on schedule, in a co-ordinated exercise which also involved Dnata, Singapore Airlines, Cathay Pacific, British Airways, Schenker, DHL Global Forwarding, Kuehne

DHL Express launches TransPacific ON OCTOBER 27, DHL Express launched its TransPacific partnership with Polar Air Cargo, a subsidiary of Atlas Air Worldwide Holdings, Inc. The inaugural flight took off from Hong Kong International Airport to Wilmington, Ohio, DHL’s central hub facility. The partnership guarantees DHL Express access to six Polar Air Cargo Boeing 747-400F aircraft in addition to two Boeing 747400F aircraft operating since March 31 2008, providing significant additional capacity to eight key destinations in Asia and the US. DHL will utilise Polar Air Cargo’s scheduled weekday flights from Los Angeles, Wilmington and New York via Anchorage to the Asian destinations of Hong Kong, Shanghai, Seoul and Tokyo. In addition, the partnership also covers an extended weekend schedule, with flights to Honolulu, Sydney, Sharjah and Leipzig.

The volume on DHL’s TransPacific routes has been steadily increasing in recent years and despite a slowdown in 2008, overall TransPacific air cargo volume is expected to show double digit growth in the mid-term.

Dubai cargo airport

and Nagel, Modern Freight Company, Freightworks, and the International Air Transport Association (IATA).

IATA e-freight is one of five “Simplifying the Business” projects led by IATA to improve service and cut costs. It puts in place business, technical and legal frameworks to enable airlines, freight forwarders, customs administrations, ground handling agents and governments to seamlessly exchange electronic information and e-documents instead of paper. IATA e-freight eliminates the need to send 13 paper documents with air cargo shipments, effectively streamlining processes, improving speed and reliability, and reducing costs.

Safexpress tie-up with CII for Auto SCM 2008 SAFEXPRESS SPONSORED the third ‘Auto SCM India 2008’ Conference in collaboration with CII. Held in the beginning of November at Chennai, the two-day conference was organised to deliberate on the current state of auto logistics and the existing divide in the supply chain structure and to develop counter-strategies for the same. Implementation of the latest IT solutions to strengthen the supply chain processes also formed a crucial part of the conference.

Vineet Kanaujia, General Manager — Marketing, Safexpress, speaking about the conference said: “The automotive industry in India is growing at a swift pace. Today, the automotive industry is worth US $36 bn and accounts for five per cent of India’s GDP. The industry is expected to further witness a boom with more players entering the arena. Therefore, automotive companies would require logistics partners who would completely take care of their 3PL needs and in turn provide them with a competitive edge. This would require faster, more secure and superior quality service with knowledge of Indian geography.”

The Conference was inaugurated by Arcot N Veerasamy, Minister in the Tamil Nadu government and was attended by companies like Ashok Leyland, Motorola, Tata Construction

46

Mr Vineet Kanaujia, GM — Marketing, Safexpress along with CII official at Auto SCM India 2008.

Equipment Co Ltd, Satyam Computer Services Ltd, Deloitte, Miebach Consulting and many international players.

CRUISING HEIGHTS November 2008

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UPS India records more than 15 per cent growth

UPS RECENTLY reported diluted earnings per share for its third quarter even as UPS India reported a year-to-date growth of more than 15 per cent. This represents an 8.6 per cent decline from the comparable 2007 quarter. The company’s international and supply chain businesses demonstrated strength despite a challenging global economic environment.

“UPS in the Asia Pacific region performed to expectations given the current challenging economic environment. Growth in the region for the quarter was driven mainly by China and India, with more than 10 per cent and 15 per cent growth respectively, compared with the same period last year.

Our export volume from Asia to Europe also grew by more than 15 per cent,” said Derek Woodward, President of UPS Asia Pacific Region.

Pirojshaw Sarkari, Managing Director, UPS Jetair Express Pvt Ltd pointed out, “India’s healthy year-to-date growth of more than 15 per cent is representative of its immense market potential. This growth can be attributed to UPS’s initiatives in the area of our service expansion that includes its alliance with AFL leading to an extensive network presence, to support its customers in India.”

Sical makes profits SICAL LOGISTICS LTD, one of the leading providers of integrated multi-modal logistics solutions for bulk and containerised cargo and offshore logistics, recently announced that its operating profit grew by 43 per cent to Rs 14.61 vs Rs 10.18 crore, a year ago.

Sical’s container logistics business grew at more than 60 per cent over the second quarter of previous year, adding new customers and enhancing services to existing customers. Its halfyearly container volumes till September’08 grew at 11 per cent to 70,503 TEUs from 63772 TEUs a year ago. The offshore logistics business also saw strong growth in dollar earnings, which were not exposed to currency fluctuations, from its platform supply vessel in the North Sea. The rail business continued its positive growth with the addition of a third rake in its fleet.

Top score for Indian IT THE INDIAN IT industry is going strong and the latest to pitch in is Austrian Cargo, the cargo division of Austrian Airlines. The carrier has chosen the India-based IBS’ iCargo to replace its legacy cargo management system as well as its cargo revenue accounting system. As a result of this long term deal, iCargo will enable Austrian Cargo’s V K Mathews business growth in the next decade by providing a single efficient end-to-end IT solution for its current and future business needs. With this deal IBS’s next generation cargo management system, iCargo, has made a significant stride in the European market.

Austrian Cargo has opted for iCargo’s hosted version iCargoNet that is based on the latest ‘Software as a Service’ (SaaS)

FedEx move to help Indian businesses US EXPRESs major FedEx has brought in a US trade mission to India. In a first-ever kind of collaboration with the US Commerce Department's Commercial Service, the trade mission comprises visits by American business houses to Delhi, Hyderabad and Mumbai.

The move by the private sector giant will enable US businesses to better understand trade opportunities across key economic hubs in the country. In addition, it will help Indian companies looking to pursue new buying opportunities with American businesses.

The companies participating in the trade mission represent small and medium-sized businesses and sectors in manufacturing, transportation equipment, engineering, business services, consulting, architecture, information technologies, pharmaceutical, consumer goods, and more.

As part of the trade mission, participants have been meeting Indian business partners, agents, distributors and buyers to discuss opportunities through business appointments arranged by the US embassy's Commercial Service. According to Jacques Creeten, Vice President of India Operations, FedEx Express, “FedEx is well-positioned to lead this trade mission because we facilitate global trade in more than 220 countries FedEx Express courier delivering to a and territories world- customer in an Oriental rug shop in Mumbai. wide.”

One of the main reasons for facilitating the trade mission, said Creeten, “We also have a significant presence in India.

Now in our eleventh year of direct operations in India, FedEx offers the largest number of international flights to and from India, as well as a dedicated ground network connecting more than 4,000 cities and towns across the country.” model that is increasingly become popular in the industry due to its simplicity and cost effectiveness. iCargoNet for Austrian Cargo will be hosted at IBS’s state of the art data centre in Thiruvananthapuram, India, that will also provide Austrian Cargo’s business users a 24x7 global help desk.

Welcoming Austrian Cargo to the IBS family Chairman & CEO, IBS Group, V K Mathews said, “While we set out inventing future with our next generation solutions, we were keen to provide airlines a viable and attractive option for moving away from expensive and inflexible legacy systems. The decision of a reputed quality airline like Austrian to choose our offering is a true endorsement of our vision and what our solutions offer to the industry”.

IBS is a leading global provider of new generation IT solutions to the travel, transportation and logistics industry. It has over a hundred customers for its range of products and services that manage mission-critical operations of many major airlines, airports, oil and gas companies, seaports, cruise lines and tour operators world-wide. Customers for its cargo solutions include Air New Zealand, All Nippon Airways, Avient Cargo, CargoJet, Kingfisher Airlines, Nippon Cargo Airlines, Northern Air Cargo, and Tokyo International Air Cargo Terminal (TIACT).

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WHAT A SHOW! The first civilian airshow of the country, India Aviation 2008, may have left much to be desired. Despite the hype, there were a handful of aircraft on show, the show attracted all the big ticket in infrastructure giants and manufacturers! It was a beginning, nevertheless. A look at events through the four days of October 2008.‌

T

he India Aviation 2008 show did not create the kind of waves that similar shows at Farnborough, Paris or Dubai does. No surprise. It was put together in a tearing rush and in all of six months. For a 180 day operation, it was pretty muscular. All the biggies were there with their pavilions and chalets, although one can complain that the aircraft on display were a wee bit less than what one would expect even for an inaugural edition.

However, visitors to the show had a field day. There was the Boeing 777 and

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GREAT BEGINNING: A spectacular fly-past by the Indian Air Force’s Surya Kirans at the inauguration of India Aviation 2008.

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the Airbus 380, along with small aircraft like IL-114 from Uzbekistan, the 10-feet long and four-feet wide Sport Star Plus from Czech Republic company EvektorAerotechnik and eight and six-seater Hawkers. While Bombardier had brought in the CRJ900 NextGen, Learjet 60 XR, Challenger 605 and Global Express XRS, there were Gulfstream and Beechcraft planes too along with a whole range of helicopters.

It was, however, not totally devoid of deals. Some deals by plane manufacturers that came to the notice of mediapersons. There was Engine Alliance -- a

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50:50 joint venture of Pratt & Whitney and General Electric Aviation - strengthening its presence in India.

The major attractions at the show were the exhibits put up by Air India, Kingfisher and Jet Airways among others. At one end of the huge airport were the hospitality chalets of the major aircraft manufacturers.

Pink slips from Jet stole the thunder The airshow was the first of its kind but all that the media zeroed in upon was the supposed tie-up between rivals Jet’s Naresh Goyal and Vijay Mallya of Kingfisher. The two were seen arriving together for the inauguration and for almost all the days of the show, the media concentrated on the Jet-Kingfisher handshake.

Soon after the inauguration, however, the media tried to find out from the two players what the tie-up meant. They were joining hands, they said, to cut costs and counter the economic meltdown.

The fallout of the bonhomie saw the handing out of pink slips to Jet staffers in Mumbai. The rest, as they say, is history.

Naresh Goyal suddenly took on the role of a father-figure and took back all those who had been laid off pointing out that he had not slept through the night thinking about the plight of the youngsters who had been shunted out. On his part, Civil Aviation Praful Patel spoke of the lay-offs as a minor turbulence.

AI’s seventh A319 arrives Among the beautiful birds that landed at Hyderabad for the airshow was one of

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Among the highprofile visitors was Robert Vadra, who flew in to Hyderabad to test fly the Falcon 900 EC, a business class aircraft. His flight had to be delayed to make way for the A380.

In fact, the A380 had to be towed away to make place for the Falcon to take off…

GLIMPSES FROM THE SHOW: (Clockwise from bottom left) Aviation Minister Praful Patel at the inauguration; Bell Helicopter presents mementoes to its Indian users; aerial acrobatics from the IAF; Air India's newly-inducted A319 receives a watery welcome at Begumpet; and, aviation top honchos along with Praful Patel pose for a photo-op on the arrival of the A380..

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Air India's spanking new A319s. The aircraft — the seventh A319 to be inducted in the Air India fleet — flew in from Hamburg to Begumpet and the show grounds. The plane was received by Praful Patel, Dr Y S Rajasekhar Reddy, Chief Minister of Andhra Pradesh among others.

At hand for the official handing-over was Dr Kiran Roam, Executive VicePresident, Airbus Industries, who transferred the title of the aircraft to Raghu Menon, Chairman and Managing Director, Air India.

We’re friends Almost all airshows till the one in Hyderabad, have seen rivals Boeing and Airbus fighting for the limelight — especially as far as orders are concerned. At Begumpet, it was bonhomie between the two giants.

After all, there were no orders from any of the air carriers. The last show at Paris saw orders of around 700 aircraft with Kingfisher Airlines ordering 50-odd planes. In November last year, the Dubai Airshow saw 350 planes worth US $69.7 bn being ordered and at Farnborough this year, US $64 bn worth of orders were completed.

Considering that this was the first show of its kind (there were only around two dozen aircraft on display), we still have to go a long way. Remember, when Dubai started its airshow in 1989, there were around 200 exhibits and 25 aircraft. Since then, the figures have gone up: At the last show there were more than 500 exhibits and 85 aircraft.

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Copters in the limelight True there were no big sales of aircraft but those who went back with smiles were helicopter manufacturers. Leading copter maker Bell handed over its hundredth chopper. Bell’s President and Chief Executive Officer Richard J Millman said his company had plans to sell 17 more this year and between 25-30 next year. Of course, added Millman, India Aviation 2008 was very important for the company.

The chopper maker is keen to set up a heliport design and operations centre along with a helicopter pilots’ training academy. “We are looking at several prospective partners for this,” Millman said. “While we are looking at one, the government wants us to set up one in the north and the other in the south. But we are yet to decide on that and also the location,” he commented.

Incidentally, Bell was wooing its customers at Hyderabad with a free training slot for pilot training: “You buy a chopper from us, we will give you a training slot free at Fort Worth Texas,” said Millman.

First defence aerospace hub from Tatas Kicking off Hyderabad’s claim to be ahead of every city in the aviation sector, an upbeat Chief Minister Y S Rajasekhara Reddy announced that the Tata Group was setting up the country’s

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first defence and civil aerospace hub at Aadibhatla, near Hyderabad, which would manufacture radar and satellite systems. A Tata group company, Tata Advance Systems, had decided to invest Rs 500 crore to set up the aerospace hub in a proposed special economic zone.

Touchdown by the Big Bird

Pink slips from Jet overshadowed the happenings at India Aviation. In addition, there was the tie-up between Jet and Kingfisher. The two bosses — Naresh Goyal and Vijay Mallya — were seen arriving together for the inauguration CRUISING HEIGHTS November 2008

“I had the chance and the honour to be the first to land the A380 in India last year when we came to visit Delhi and Mumbai. I am very proud to bring this iconic aircraft to Hyderabad this time and support the India Aviation 2008 air show. We will also be making a visit to the new Hyderabad International airport.

This major project is a clear sign of Indian aviation development and will see, I am sure, many A380s landing in India in the future.” That was Jean-Michel Roy, Test Pilot, who brought the A380 from Toulouse to Hyderabad. Indeed it was a pretty sight. Powered by four RollsRoyce Trent 900 engines, the mammoth A380 landed as daintily as a petite bird.

And at the press conference later on in the day, John Leahy, Airbus Chief Operating Officer, Customers, and Airbus’ India chief, Dr Kiran Rao were both optimistic about the plane’s future.

Falcon scares A380

Among the high-profile visitors to the show was Robert Vadra, Congress chief Sonia Gandhi’s son-in-law. He was there

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MORE FROM THE SHOW: (Clockwise from top left) One of the helicopters on display; Robert Vadra snapped minutes before taking off in the Falcon; visitors to the show; shivamam regales the delegates at Praful Patel’s dinner; a dapper Praful Patel welcomes his guests to the party organised for delegates to India Aviation; delegates find time to catch up with all the aviation news at one of the evening get-togethers; the A 380 which made a spectacular appearance at the show; and Aero Club of India members pose for a photo in front of the A380.

in the company of Satish Sharma, friend of his father in law Rajiv Gandhi and a former Boeing Commander at Indian Airlines. He flew in to Hyderabad to test fly the Falcon 900EX, a business class aircraft.

However, by the time he could take to the air, it was time for the A380 to land. The big one did land making it difficult for the little Falcon to take off.

Ultimately, the authorities were forced to tow away the A380 and clear the runway for Robert Vadra to take off. The maneuvering took place much to the discomfiture of the Airbus top brass who were waiting to complete the formalities of a ceremonial arrival and it was left to Aviation Minister Praful Patel to soothe ruffled feathers.

The little one Along with the A380, the plane which won the hearts of aviaition enthusiasts around was the ultra light two-seater Sport Star Plus. Bundled up in cardboard cartons, the little one was assembled by representatives of the Czech Republic company Evektor-Aerotechnik at the exhibition. The aircraft can be used for fun-flying and also small-package delivery by firms.

Corporate bigwigs did not seem to have been deterred by the financial meltdown around the world. Many were seen heading towards the helicopter stalls.

Reliance Industries, Essar and DLF

placed orders for an AU 139 from the Italian company Augusta Westland. In addition, Delhi and Mumbai-based charter companies also bought small helicopters like AU 109 and Bell 407, which will be used for the elections.

Bell reported that of the 40 orders for helicopters that the company has in India for the next three years, a large number of them were from corporate houses.

No show

Hyderabad was waiting for the last day of the show but those who came went back disappointed. The star attraction, the A 380 flew away before the 50,000odd visitors could make their way to the show braving long queues and high ticket rates CRUISING HEIGHTS November 2008

Hyderabad was waiting for the last day of the show to have a look at the beautiful birds at India Aviation 2008, but those who came out for the show had to return home disappointed. The 50000 visitors who made their way to Begumpet on the last day of the four-day show, braving the long queues, the high ticket rates and the heat, did not get a chance to see the A 380. Among the handful of planes on the tarmac were the AI Boeing 777 and a few small business jets. But it was one hell of a security nighmare.The organisers ran out of tickets and had to resort to stamped pieces of paper in lieu of tickets.

No where in the world are entries open ended. It’s like telling the public in Delhi that a Test match is on please come and watch it at the Ferozshah Kotla or for that matter at Wankhede in Mumbai. What if two lakh people turn up? Surely there is a lesson in it for the organisers.After all it isn’t ticket sales that makes up an air

show!

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Ajay Bhambi

ivil Aviation Minister Praful Patel has transformed the Indian aviation sector in the last five years. Airports are the window of any country and our airports were shabbily managed for many years but now the scenario is different. Patel took charge at the time of an aviation boom which is why he could push through all his projects. Now, however, times have changed. The world economy is in a steep meltdown. People are willing to discard their personal conveyance in favour of public transport. We will try to explore how the world aviation industry will fare in the coming year and where does the Indian aviation industry stand. Before we delve into this sector, let’s understand where the global economy stands astrologically. Here are a few important pointers:

“The basic job of Venus is of a consumer. It is a great consumer and its lust for consumption never ends. Venus is full of style and enigma to create different and several modes for total enjoyment. It does not deal with the basics; it influences one and all with glamour, pomp and show. If we want to see the real Venus then we have to look at the US and then we can understand when we talk of Venus in astrology. This is why the US has such a large aviation industry where air travel abounds; and one does not see the same sort of public transport on the roads.

Air travel signifies affluence and luxury which is why — besides being a need-based means of transport — it provides a ‘high’. Perhaps this is why many airlines attract travellers by playing on the luxuries provided by them.

With the downtrend in consumption in the US,

Patience in 2009 will bring growth later The economic meltdown has started and we could see more economic troubles ahead. The liquidity crunch would affect the global aviation industry and India would be no exception.

However, according to astrological forecasts, better times for the Indian aviation industry come after 2009.

Jupiter represents the airlines and commuters represent Venus.

Commuters are not coming forward specially with the luxury aspect; air travel is now need-based 52

“Jupiter rules over prosperity, growth, development, money, production and anything that deals with creating for an individual as well as a country.

Jupiter remains in a sign for approximately a year and completes its cycle around the Sun in about 12 years approximately.

“According to the Indian almanac, Jupiter was in Sagittarius almost throughout 2008. However, if we want to understand the real stability and financial pattern in totality, then we have to locate Saturn because it completes the cycle in 30 years and remains in a sign for two-and-a-half years. For the long-term pattern of the world economy, we need to take Saturn into account and for a short term we have to take guidance from benevolent Jupiter.

“Vedic Astrology is ruled by two groups or Gurus: the benevolent or positive planets led by Jupiter and the malefic and negative planets led by Venus. That is why the concept of Brahspatacharya (Jupiter) and Shukracharya (Venus) is very common in Indian classical astrology. During its sojourn when Jupiter crosses over to Sagittarius — as it did in 2008 — then it has a very definite role to play.

But when it crosses over Sagittarius, Jupiter realises that real prosperity and happiness of man has been checkered by Venus’s forces all over the world.

THE WAITING GAME COULD BE A LONG ONE: Passengers wait for their flight in the Delhi airport.

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Europe and other countries, almost all are in the same boat. In astrology, Guru (Jupiter) rides on the Elephant or in other words, Jupiter represents Elephant too. Elephantine countries like India and China have suddenly started feeling the heat being generated by the US and Europe. Since consumerism has taken a severe beating, the Elephant of produc-

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tion has fallen on its trunk.

The global economy and disparity in demand and supply is at the crossroads; that is what Jupiter’s journey over Sagittarius did — opened one’s eyes to reality. In astrological terminology, Jupiter represents the airlines and commuters represent Venus.

Commuters are not coming forward specially with the luxury aspect out of their thinking; air travel is now need based. With the Venus influence wearing off, airlines are thinking of putting aircraft back in the hangars.

Jupiter stays in a sign for a year approximately.

According to the Indian ephemeris, Jupiter will be transiting over Capricorn but it will be speeding in Capricorn and in Sanskrit that is known as “atichari”. Jupiter will transit into Capricorn on December 9, 2008 at 2341 hrs, and Jupiter will become debilitated. Capricorn is Jupiter debilitated sign hence Jupiter is considered extremely weak when transiting over Capricorn. The speeding Jupiter will leave Capricorn on May 1, 2009 and enter into its next sign i.e. Aquarius. Jupiter will again in its retrograde motion re-enter into Capricorn on July 30, 2009 and then eventually leave Capricorn for Aquarius on December 19, 2009. This whole calculation shows that Jupiter will neither be comfortable in its debilitated state in Capricorn nor will it have respite in its next sign i.e. Aquarius.

The world economy is already feeling the heat of the flames of the meltdown and Jupiter’s movement throughout 2009 indicates that the seriousness of this recession will be felt by one and all in 2009.

Sensex of the world had been tumbling in 2008 and giving the impression that it would bounce back and gain positive stability, which never happened. In 2009, it will touch the bottom — which the world has not seen of late and this scenario will be quite visible around May 2009. The heat of recession will engulf the world economy and the world leaders will feel the urgent need to sit down and find some solution to boost the constantly sagging world economy.

There will not be any easy solution and these sorts of meetings will keep on happening in different parts of the world. In India we expect the Sensex to touch

READY TO FLY BUT WHERE ARE THE PASSENGERS? Planes wait to fly out from Delhi airport.

about 5000 points.

Jupiter will leave Capricorn on May 1, 2009 and get into the next sign, Aquarius. It will remain there till the end of July 2009. This will be the period when world leaders will sit down again and try to come at a consensus on a point: ‘Lets forget and forgive our economic blunders and let’s begin afresh from the lowest step’. It may look plausible to many but will not be accepted in the beginning because nobody will be able to take the responsibility of the financial burden of others. A situation will come when without this there will not be any permanent solution. But who will swallow this bitter pill?

Jupiter will re-enter Capricorn on July 30, 2009 and continue there till December 19, 2009. This will be the period when India, Japan and China will start playing a major role in rescuing the world economy.

Ultimately, Europe will join this group and then a promise to save and undo the damage done by the US which has led the world up to this stage, will emerge. Many more countries — UAE, Iran and other smaller countries —will also join and there will be hope of halting the global economic meltdown.

Financial burdens will have to be written off before the world can get back on track. Jupiter provides a picture of the year but to know the long-term picture of the world economy, we have to take guidance from Saturn and that says it will take another three to four years for complete recovery.

India will emerge as a big player with a role as big as its size but that stage will come only after India realises its limitations and does not stretch beyond its means. The Indian aviation industry has grown out of proportion of late and most of its expansion was desire-based not needbased. Since the Indian economy has to survive and play a big role in the global arena, therefore, the Indian aviation industry will not face the same crisis as the world aviation industry is facing. It will, however, limit itself in 2009 to grow hugely

in the future.

(The writer is a practicing astrologer and writes regularly for various publications. He predicted eight months back that Obama would win the US Presidential election.)

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India will emerge as a big player but that stage will come only after India realises its limitations… the Indian aviation industry will not face the same crisis as the world aviation industry...

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DOMESTIC AIRLINES Jet honoured as “best Indian airline” JET HAS BEEN HONOURED with the “Best Indian Airline” award at the prestigious Business Traveller Awards 2008. The awards were presented by former England cricket captain David Gower, at a star-studded ceremony at the London Hilton.

The airline received the award on the basis of votes cast by the UK readers of Business Traveller Magazine, to reward those companies whose products and services they value as discerning business travellers. Jet Airways currently operates four daily services to London Heathrow from three gateway points in India: Two daily services from Mumbai and one each from Delhi and Amritsar respectively.

Announces optimisation of long-haul network: In light of the downturn in major economies worldwide, more specifically in the USA and UK, Jet Airways plans to optimise its network, focusing more on its established international gateways and routes. As part of the same, the airline’s MumbaiShanghai-San Francisco route will be discontinued effective from January 13, 2009. Jet Airways has already announced a code share partnership with United Airlines with convenient connections between Mumbai and several US points via London in both directions. This will enable Jet Airways to continue to serve its San Francisco customers, under a 9W flight number, in a more economically viable manner.

Jet-Jetlite codeshare agreement: Jet has entered into a codeshare arrangement with JetLite.As part of the agreement, Jet Airways will place its marketing code (9W) on key domestic routes operated by JetLite, enabling both carriers to offer passengers better connections and a wider network. Jet Airways’ JetPrivilege members travelling on these codeshare

Sanjay Aggarwal appointed CEO SPICEJET HAS ANNOUNCED that Sanjay Aggarwal, (40) is joining as Chief Executive Officer with immediate effect. His last assignment was with Flight Options as their Chief Operating Officer and Chief Strategy Officer. Flight Options operates 120 aircraft and is based in Cleveland, Ohio, USA. Prior to joining Flight Options in 2004, Aggarwal had been Senior Director of Marriott International and before that had been Manager of Financial Planning for the maintenance, reservations and internal consulting areas Sanjay Aggarwal of US Airways.Wilbur Ross, who led the recent $100 million cash infusion program into SpiceJet, said, “Of the many candidates, Sanjay was by far the most impressive. He is precisely the right person to lead the existing highly capable management team in turning SpiceJet around.”

Drops fare across the network: SpiceJet announced, a significant drop in its fares across the network on advance purchase of tickets. This will help all those who plan their holidays and business trips in advance. Fares will be now significantly lower on advance purchase. The congestion charge has been completely removed. With improved infrastructure available, congestion is not a problem anymore and on time performance across the network is also on an all time high at 88

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flights can avail of a range of JP benefits, including the accrual of JPMiles based on class of travel. Moreover, the JPMiles thus earned will be Status JPMiles, and these JPMiles as well as each codeshare flight will also count toward JetPrivilege tier upgrade/ retention. JPMembers will also earn Tier Bonus JPMiles and Online booking bonus for the codeshare flights booked on the Jet Airways website.

Jet Airways wins the TTG travel award: Jet Airways honoured with the much-coveted ‘Best Domestic Airline Award’ for the Year 2008, at the 19th TTG Travel Awards 2008.

TTG Travel Award winners are selected, based on votes cast by readers of the TTG magazine across the Asia Pacific region.

The TTG Awards recognise and salute luminaries and stalwarts in the travel trade industry for their stellar performance and for being established the ‘Best’ in their respective categories. Jet Airways becomes the recipient of the TTG Travel Award for the sixth year, having previously won the same in the years 2002, 2004, 2005, 2006, and 2007. per cent.

“In addition to this we also launch our Special Spicy fares which will ensure our consumers have upto 15 per cent saving on advanced purchase. This makes flying more attractive and affordable for all and will certainly help people to fly to all the 17 destinations that we fly to”, said Samyukth Sridharan, Chief Commercial Officer .

SpiceJet resumes flights to Jaipur: SpiceJet resumed operations to Jaipur from the October 26, 2008 with convenient daily direct flights to Mumbai and Bangalore. Samyukth Sridharan, Chief Commercial Officer — SpiceJet Ltd., said, “We are pleased to announce our daily direct service on the Jaipur-Mumbai and Jaipur-Bangalore routes starting from October 26 of this month. Jaipur is an important tourist destination for both domestic and overseas travellers who come into India during the winter season and we hope that our flights will offer them convenient direct connectivity. We are also confident that business travellers will find our daily flights to Jaipur a perfect aid to their business needs.”

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Bird Group expands its presence BIRD CONSULTANCY SERVICES signed an exclusive marketing agreement with ALSIM Simulateurs Company. Under the agreement, Bird Consultancy Services will offer Alsim’s simulator equipment and facility set-up to its customers in India and SAARC region. The agreement was signed by Ankur Bhatia, Executive Director, Bird Ankur Bhatia Group and Christine Douguet, Export Sales Manager, ALSIM Simulateurs Company.As per the terms of the agreement, Bird Consultancy Services will market Alsim in the Indian subcontinent (India, Sri Lanka, Bangladesh, Nepal, Maldives and Bhutan). Alsim’s state-of-the-art technology allows instructors to reconfigure FTD’s (Flight Training Devices) for different aircraft types and gives flying schools more training options and higher profit margins. Alsim is the first manufacturer to obtain a ‘dual’ FNPT II/FNPT II MCC certification on their flight trainer equipment. The company’s reconfigurable FTD serve the needs of flight schools, airlines, military organisations and corporate flight departments in over 22 countries. The equipment being offered to customers in the Indian Subcontinent includes Flight and Navigation Procedures trainers complying with JAR STD 3A, FAA AATD, CASA, TC rules. A large range of products from

ab-initio to entering an airline Company is offered as AL50, AL172, AL200-DA42, AL200MCC and the new brand ALX (jet orientated).

Jitender Bhargava gets 'Best Communicator of the decade award’

JITENDER BHARGAVA, Executive Director-Corporate Communications, Air India, bagged the ‘Communicator of the Decade Award’ presented to him by the Association of Business Communicators of India on Friday, November 7, 2008. He received the award from S.C. Jamir, Governor of Maharashtra, and Rajshree Birla, Director, Aditya Birla group.

Earlier, Bhargava, a recipient of the Mr Jitender Bhargava, Executive President's Award for Director-Corporate Communications, Air India, with HE S C Jamir, Governor meritorious conduct of of Maharashtra, and Rajshree Birla, the IX Asian Games in Director, Aditya Birla group, after New Delhi, was earlier receiving the ‘Communicator of the this year also presented Decade Award’ presented to him. the ‘Hall of Fame’ award by the Public Relations Council of India.

INTERNATIONAL Emirates Terminal 3 opens EMIRATES THREW OPEN the doors of its swanky new home — Emirates Terminal 3 at Dubai International Airport — to its passengers, in a phased operation.The new terminal opened with staff from Emirates Airport Services and Dnata manning every operation and service, including concierge and porter services, check-in and information counters, and all the lounges — Unaccompanied Minors, Special Services, Customer Services, Marhaba, First and Business Class — in the terminal and concourse.

Emirates welcomes first flight to Los Angeles: Emirates commenced its Los Angeles service, October. The Los Angeles route marks the first non-stop operation connecting Dubai to Los Angeles. Emirates is flying its Boeing 777-200LR on the route, offering 266 seats in a three class configuration and providing up to 10 tonnes of cargo capacity. Initially, service will be offered three times per week — Wednesdays, Fridays Emirates cabin crew send off pasand Sundays — before offering sengers in style as they prepare to daily service upon the arrival of board flight 216, the first non-stop flight from Los Angeles to Dubai. additional aircraft.

Egypt Air to increase its flight frequency in India

FIRST ECONOMY CLASS PASSENGER: Khalida Mirza, Vice Manager of A1 Properties, a Skywards Gold member and the first passenger at Business Class check-in was presented with a certificate by Mohammed H Mattar, Emirates' Senior Vice President Airport Services (Dubai) and flowers by Emirates cabin crew member Cintia Michaelsen.

Passengers effortlessly used both the traditional check-in counters and the Self Service Kiosks dotting the terminal. The baggage system at check-in, including the kiosks that handle luggage, functioned equally smoothly.

AUGMENTING ITS PRESENCE in the Indian skies, Egypt Air, is all set to scale its flight operations from Mumbai. The airline will now operate four weekly services between India and Egypt. The enhanced service MS 969 will operate on every Wednesday between Mumbai and Cairo at 0215 hrs arriving in Cairo at 0530 hrs local time. While the return flight from Cairo MS 968 will operate every Tuesday arriving at Mumbai at 1215 hrs. The airline will be operating Airbus 330 on this sector with a seat capacity of 268 out of which business class will constitute of 24 seats and economy class will have 244 seats.

With the recent addition, Egypt Air will now fly every Sunday, Tuesday, Wednesday and Thursday from Mumbai offering an overall total seat capacity of 1072, which will include a total of 96 business seats and 976 economy seats per week.

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SNIPPETS Business friendly Bahrain set to become key aviation hub THE KINGDOM of Bahrain is now also setting its eyes on becoming a key aircraft maintenance hub in the region. In support of this aim, Bahrain’s national carrier Gulf Air signed an agreement with Bahrain Real Estate Company (Edamah) to build a multi million dollar world-class hangar at the Bahrain International Airport as part of the airline’s growth and expansion strategy. The agreement was signed on behalf of Gulf Air by Chief Executive Officer Björn Näf and Edamah CEO Ma’amoon Al Moayyed.

(L-R) are Bahrain Real Estate Company CEO Ma’amoon Al Moayyed, Gulf Air CEO Björn Näf and Bahrain Airport Company CEO Dr Osama Al Ali at the signing ceremony for setting up a world class hangar for Bahrain’s national carrier Gulf Air in the Kingdom of Bahrain.

Edamah has already identified an international firm specialised in building hangars to design and construct the complex, which is slated for completion in 2011. Construction will begin next year and once completed, the facility will be able to accommodate three modern wide-body aircrafts at any time.

BA and ICICI launch co-branded credit card BRITISH AIRWAYS joined together with ICICI Bank to launch the “ICICI Bank British Airways American Express Credit Card”. The ICICI Bank-British Airways American Express Credit Card

provides one of the fastest ways to earn complimentary flights using a credit card in India. With complimentary membership to the British Airways Executive Club and attractive BA Miles earned on everyday spend; the card will give new and existing members an opportunity to accelerate their BA Miles earnings. While, the ICICI Bank British Airways American Express Credit card comes in two variants —ICICI Bank British Airways Premium American Express Credit Card comes at an annual membership fee of Rs 7,000. ICICI Bank British Airways Classic American Express Credit Card comes at an annual membership fee of Rs 3,500.

Vistajet intensifies international expansion VISTAJET ANNOUNCED that, as part of its global expansion strategy, it is stepping up its penetration into the Indian private jet market. VistaJet is deploying a full roll-out of its revolutionary Flight Solutions, including Jet Membership, Partnership, and Ownership programs. This launch brings customer service representation within Vista Jet’s portfolio to nine — including London, Salzburg, Munich, Zurich, Hong Kong, Dubai, Moscow and Kuala Lumpur. The move enables VistaJet to expand its revolutionary Flight Solutions further into the emerging Indian market and underlines the escalating worldwide demand of business aviation solutions. VistaJet is in advanced talks with several clients in India for the Flight Solutions Program.

Lufthansa lowers fuel surcharge for its flights AS CRUDE OIL and kerosene prices have decreased, Lufthansa will reduce its fuel surcharge on its flights. The fuel surcharge on domestic German and intra-European routes will lower by three euros to 24 euros per flight segment. On long-haul routes, the corresponding fuel surcharge will be decreased by five euros to 92 euros per flight segment. The reduction will apply to all Lufthansa tickets issued on or after 20 October 2008. Lufthansa continually monitors oil prices and will make any future adjustments to the fuel surcharge dependent on further trends in the price of jet fuel.

Malaysia Airlines announces ‘Festive Season Bonanza’ PASSENGERS TRAVELLING by Malaysia Airlines have more reasons to celebrate this festive season. Offering a festival bonanza to air travellers from New Delhi, Malaysia Airlines, the national carrier of Malaysia announced its special fares for passengers travelling to Kuala Lumpur and beyond to Penang, Langkawi and Singapore. Commenting on the announcement, Devinder Singh Bindra, Acting Regional Manager, South Asia said, “These fares will provide an opportunity for travellers to take short breaks to Kuala Lumpur, Langkawi, Penang and Singapore. This is an ideal dual destination approach offering the best of two at a competitive price. Also this offer coincides with Indian festivities inviting travellers to take extended weekend break. The offer is a reflection of our focused customer centric approach and highlights our commitment towards valued customers in India”. Malaysia Airlines operates 31 weekly flights from five gateways in India that includes Mumbai, Delhi, Chennai, Bangalore and Hyderabad. Globally, Malaysia Airlines cover more than 100 destinations across the six continents of the world.

Malaysia Airlines celebrates the ‘change of guard’ : With change being the only constant in life, Malaysia Airlines bid farewell to Christopher Yek, Regional Manager, South Asia, who successfully completed his three-year-tenure that saw the carrier charter its success story in the Indian skies. Yek now takes charge of China market operations for Malaysia Airlines. The carrier now

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Christopher Yek with Hon’ble H E Dato’ Tan Seng Sung, Malaysian High Commissioner, his wife and Alice Yek.

welcomes Azahar Bin Hamid as his successor.

Marking the ceremonial occasion for transferring of the bastion of South-Asia region, Malaysia Airlines hosted a special reception honouring the two stalwarts of the carrier. The reception witnessed the presence of Dato’ Teng Seng Sung, High Commissioner of Malaysia, the staff of Malaysia Airlines’ SouthAsia region and members of the travel trade fraternity who came together to honour and bid farewell to Yek. The evening culminated on a high-note address with speeches from the High Commissioner and Azahar bin Hamid who lauded Yek’s achievements.

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SITA’s global survey released SITA, THE SPECIALIST PROVIDER of IT solutions to airlines and airports released the first ever global survey to look at use of Passenger Self-Service on the second day of Indian Aviation 2008 at Hyderabad. The SITA/Air Transport World Passenger Self-Service Survey takes an indepth look at the attitudes and habits of a representative sample of the 232 million passengers who use six of the world’s busiest airports across five continents: HartsfieldJackson, Atlanta; Mumbai International; Charles de Gaulle, Paris; Moscow Domodedovo; Sao Paulo Guarulhos, Brazil; and Johannesburg O R Tambo International Airport.

The survey found that Indian travellers(thruough Mumbai Airport that was on the survey) use the web more than most for flight booking and check-in. SITA said there is an overwhelming evidence from passengers surveyed at six of the world’s busiest airports across five continents, that self-service is fast becoming the norm for passengers from Mumbai to Atlanta.

Here are a few details: The data is extracted from interviews with 2143

passengers from over 60 countries travelling on over 100 airlines conducted at the departure gates earlier this year.

The use of self-service check-in at Mumbai (28.7 per

cent) rivals that of one of mainland Europe’s main gateways, Paris Charles De Gaulle (29.9 per cent) but most significantly Mumbai leads all six airports when it comes to web check-in with a score of 19.3 per cent just ahead of Atlanta, 18 per cent.

The survey found that 61.7 per cent of Mumbai

passengers booked online which was ahead of all other surveyed airports except the world’s busiest, Atlanta, where 73.4 per cent booked online.

Only 19.7 per cent of respondents interviewed at

Mumbai Airport had never used online booking. Among those who did use online booking when it was

Praful Patel and Bruno Frentzel (Sr Vice President, SITA) exchanging the survey results.

available, 30 per cent found it cheaper to book offline, 28 per cent did not have a credit card; and 20 per cent had no internet access. Ease of use and time saved were the main reasons cited for online booking.

However, the major obstacles to self-service check-in

adoption according to Mumbai passengers in the survey were lack of availability of self-service for the particular flight, 27.5 per cent,

24.7 per cent of Mumbai passengers could not tell if

self-service check-in was available.

For passengers in Mumbai, price, flight schedule,

airline reputation and ability to book online were the four main considerations when making their travel arrangements.

Maneesh Jaikrishna, SITA Director for India and South Asia, said: “This survey confirms that selfservice is here to stay with potential for truly explosive growth in emerging markets. It is remarkable that despite low internet penetration in India, already almost 20 per cent of passengers at the country’s largest airport, Mumbai International, are using the web to check-in. The survey demonstrates that Indian travellers are among the most technologically savvy. Globally 93 per cent of the passengers surveyed were carrying a mobile device”.

The survey, now in its third year but expanded to include airports across the globe, confirmed the travelling public’s desire for greater autonomy when it comes to making their own travel arrangements.

Another picture from the release function.

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TRAVEL & TOURISM Amadeus and FCm Travel Solutions tie-up AMADEUS and FCm Travel Solutions have signed an agreement certifying FCm as a Global Reseller of Amadeus eTravel Management, the most widely deployed online booking solution for managed travel.Reflecting the longstanding relationship between the two companies worldwide, this Global Reseller Agreement demonstrates FCm’s commitment to enhance the value it already provides corporate clients by integrating Amadeus eTravel Management, Amadeus’s award-winning globally distributed self-booking solution, into the FCm portfolio of solutions.Amadeus e-Travel Management can help increase business travel programme compliance, reduce total travel spend and drive online adoption. Available in 12 languages, the global platform is easily adapted to local needs and connects to multiple Global Distribution Systems for air and rail reservations. Its low-fare search capabilities ensure corporate travellers have a wide choice of travel options.

Bird BIS for Paramount FFP BIRD INFORMATION SYSTEMS (BIS) announced its strategic partnership with Paramount Airways to launch the airline’s Frequent Flyer Program. The program is known as Paramount Royale and brings special rewards for its loyal customers. From the day Paramount Airways started operations, Bird Information Systems, a wholly owned subsidiary of Bird Group, has been a key technology partner for Paramount Airways, which uses its Airline Inventory and Reservations System (AIRS). BIS has been instrumental in providing various software and technology enhancements for airlines and travel trade, and is also in the process of implementing Frequent Flyer Program for various other airlines. Bird Information Systems has developed its frequent flyer program for the airline on open architecture thus enabling easy compatibility and scalability. The program offers several innovative web-based applications for customers such as cabin upgrade through vouchers that can be redeemed online. Paramount Airways, is giving a new dimension to its frequent flyer program, Paramount Royale by offering Pay By Miles, Member Tier Bonus, Web Checkin, Additional Baggage allowance, Priority tagging of luggage, Lounge Access and Upgrade Vouchers.

Gautam Kaul is COO of Yatra.com YATRA.COM announced the appointment of Gautam Kaul as the Chief Operating Officer (COO) for the newly formed Inbound Division of the company. As a COO, Gautam Kaul will oversee the overall functioning of the Division, including structuring policies and developing new strategies.

Gautam brings with him, 27 years of rich experience of the inbound travel sector. Prior to this role, Gautam was the Senior Vice President at SITA/ Kuoni Destination

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Management and headed Sales, Operations, Product Development, Quality Control and Vendor Management. Dhruv Shringi, Co founder and CEO, Yatra.com, said: “We are delighted to have Gautam on board. His appointment comes at an opportune time when we are expanding our operations in Gautam Kaul inbound travel. Gautam will be responsible in driving the inbound travel business of the company. Yatra.com will definitely benefit immensely from Gautam’s experience and his proven record of success”.

iXiGO.com goes mobile IXIGO.COM, ONLINE travel search engine is now mobileready! iXiGO announced the launch of its travel search engine for mobile phones on http://m.ixigo.com, bringing its consumer-friendly search technology from web browsers to mobile phones. iXiGO aims to expand its reach beyond the internet-savvy early-adopters to mobile-savvy travellers by tapping India’s 60 million GPRS enabled phones out of the 300 million Indian mobile subscribers. “The potential for iXiGO Mobile is immense”, said Aloke Bajpai, FounderCEO of iXiGO, “Our mobile users wanted the ability to search across airline sites without having to call up a travel portal, since portals charge additional booking fees.

Specially for hotel bookings, this is a great feature-rich product for last-minute booking decisions while you are on the way to your destination — easy to use while you are in a train or an airport lounge”. iXiGO Mobile searches across flights and hotels in India and features a click-to-call booking mechanism enabling people to speak directly with the call centres of respective airlines and hotel booking providers, saving them time, effort and money.

Novotel Mumbai to open early 2009 NOVOTEL MUMBAI JUHU BEACH (formerly Holiday Inn on Juhu Beach) will reopen in early 2009. The hotel will be the city’s newest upscale hotel after being closed for 15 months for a total renovation under the guidance of renowned Singapore interior designer IMA Interiors. A one-time icon of the Mumbai social scene and one of India’s most prominent hotels, it was first developed in 1976 and soon after became the centre of what is known today as the heart of Bollywood. Located on vibrant Juhu Beach in western district of Mumbai, the hotel is being redeveloped at a cost of approximately Rs 100 crore or US$ 22 million. Positioned on a 2.5 acre beach front site of Arabian Sea, and just 8 km from Mumbai’s airports and the key Western Express artery, the Novotel Mumbai Juhu Beach will feature 203 guest rooms and suites and boasts Novotel’s signature Premier Floor and Lounge for guests wishing for an upgraded experience.

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Listen up diners!

IT WILL BE a showdown of world-class chefs as they showcase the best of their culinary delights at the Malaysia International Gourmet Festival (MIGF) 2008. The Festival, held from November 1 to November 30, 2008 is the country’s premier fine dining event, where 28 of the country’s very best Master Chefs and restaurants combine throughout November to present a smorgasbord of special festival menus at unbeatable prices. In its 8th appearance, MIGF witnesses top Malaysian chefs dishing out their skills in preparing a wide range of cuisine, from Chinese and Pan-Asians to Japanese, French, Mediterranean, Thai and Italian. For almost a month, Malaysia’s finest restaurants will offer exclusive menus, promotions and events that will tempt even the most discerning connoisseur.

The festival is not only about great restaurants, renowned chefs and delicious food. It’s about camaraderie. In a notoriously competitive industry, the festival has proved time and again that we can all work together for the common good — fine dining for all!

Tourism Malaysia festive season indulgences OFFERING THE GLITZY cosmopolitan attractions of Kuala Lumpur, Tourism Malaysia reaches out to the Indian travellers with its ‘live-it-up @ KL’ package coinciding with the upcoming festival season. The package offers a sojourn through the bustling KL city streets full of life, culture and energy.The ‘live-it-up @ KL’ package for three nights / four days is attractively priced at INR 7,990 and includes airport transfers on SIC basis, three nights accommodation in Kuala Lumpur in star category hotel with breakfast and a half-day KL sightseeing on SIC basis. The package does not include airfare, taxes and visa charges.

Six Senses Spa: A paradise for spa lovers

Madrid strengthens ties with India

A DELEGATION FROM the Madrid City Council participated in a seminar in New Delhi on Efficient and Sustainable Development in Cities. The event was organised by the council itself in cooperation with the Asian Development Bank (ADB), the Indian Ministry of Urban Development and the Spanish Institute for Foreign Trade (ICEX). The Spanish capital will take this opportunity to offer governance and infrastructure examples as well as case studies on urban services.Tourism statistics show a clear affinity between India and Madrid. Madrid is already the second-most (From L-R) Mr. Pablo Bautista, General Manager, Promocio'n Madrid, Madrid City important gateway to Spain Tourism Office, Honorable His Excellency, for travellers coming from the Ambassador of Spain to India, Mr Ion India. Last year the number de la Riva, Mr Bonifacio Vega, CEO Madrid Office of International strategy and of passengers arriving at Global, action, at the conference.

Madrid-Barajas airport (32,357) represented more than 37 per cent of the total number of travellers who flew from India to Spain (87,003).

Las Vegas Convention and Visitors Authority (LVCVA) opens Indian Office LVCVA OPENS INDIA OFFICE, which is part of a suite of 12 representative offices serving a total of 75 countries spanning the globe. The organisation will enhance its longstanding commitment to its existing international markets while establishing a first-ever presence in India.

The Las Vegas Convention and Visitors Authority have chosen Connect Worldwide to market and promote the destination to encourage Indian travellers to visit Las Vegas. Connect Worldwide — India office will handle the project. Connect Worldwide is a global representation company with over 42 offices in 36 countries”. The Indian Market is very important to Las Vegas and the cornerstone of our new international strategy for the future. We will work with our representative office partner in India to prepare our short and long term budgets — in proportion to the opportunities throughout India,” John Bischoff, Vice President of International Brand Strategy for the Las Vegas Convention and Visitors Authority said.

A NEW AND INNOVATIVE corporate detox programme, developed by Six Senses Spas — a pioneer of spa trends — has been launched at Kempinski Hotel Barbaros Bay Bodrum in Turkey. The programme allows key decision-makers the opportunity to regenerate themselves by adopting a more wellness-orientated approach to meetings and hectic business lifestyles. The programme is designed for small executive groups between 10 and 15 people. It combines the modern and luxurious business meeting and accommo— dation services at the hotel with a uniquely designed detox programme incorporating holistic activities, nutritional and lifestyle consultations, balanced cuisine, spa treatments, plus effective take-home advice.

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Viva Las Vegas

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Bye Bye Tempelhof A

ccording to one news report, Tempelhof Airport has been many things to Berlin: A lifeline to German areas cut off after World War I, a centre of the city’s defence in World War II, and the hub of the airlift that ensured West Berlin’s survival during the Cold War. But for 85 years, it has always been an airport. Not anymore. Tempelhof is now officially closed. The future of the 900-acre (365 hectare) site is uncertain. Proposals have included turning the airfield and building — one of the biggest in the world, protected as a historical landmark — into a luxury spa, some condos, a museum, a park, a trade centre or even the centerpiece of a new Olympic bid (maybe Andhra Chief Minister Y S Rajshekar Reddy will salivate at the thought of what he can do to Begumpet that is much bigger).

“Tempelhof is nothing more and nothing less than the cradle of aviation,” said Ralf Kunkel, a spokesman for Berlin’s airports. “A very big and important chapter of European aviation is going to end.” Berlin Mayor Klaus Wowereit, who heads a left-wing coalition that includes ex-Communists, has been trying to close Tempelhof for years despite fierce opposition from the conservative opposition and citizens’ groups. The city also plans to close its biggest airport, Tegel, and route all flights to a new hub just outside the city, which is being created by expanding the former East Berlin’s Schoenefeld airport. But many still question the wisdom of closing down centrally-located Tempelhof, even as other cities like London have built new city airports in recent years. In an April referendum, 60.2 per cent voted in favour of keeping the historic airport open, but only 21.7 per cent of Berlin’s 2.4 million voters turned out — below the minimum required to make the ballot valid.

END OF AN ERA: (Top to bottom) US President Ronald Reagan and his wife land at Tempelhof in 1982; Tempelhof was designed as a semi-oval with 14 towers and the roof was originally intended to be used as a viewing platform for the audience at big Nazi events, such as Hitler’s birthday; West Berliners wave at the US transport planes that brought supplies to the enclave within Soviet-controlled East Germany; (extreme left) Berlin Airlift Monument in Berlin-Tempelhof, displaying the names of the 39 British and 31 American pilots who lost their lives during the operation, and symbolising the three air corridors; (Bottom, L-R) a plane at the airport; an almost deserted interior of the airport; and, an airlift pilot and his plane which is now part of an exhibit.

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