Ch october 2005 by Newsline

October 2005 Vol II No.7

Rs 60

TYCOON, ADVENTURIST AND ACE PILOT, VIJAYPAT SINGHANIA 70K DREAM!

•CAPA CAPERS •SPICING AHEAD PLUS All our regular features

PUBLISHERâ&#x20AC;&#x2122;S NOTE

Changing with the Times! WILL THE NEW breed of kids be able to change things? Well one is talking of the likes of Air Deccan Spicejet and a whole host of LCCs that are waiting in the wings. Their work culture is different, their entire system is online and they are truly creatures of the digital age. Every ticket on any of these airlines is booked through their site and if agents are servicing their clients then they are charging them for the services. This has lead to the creation of interesting new byproducts like the agent's credit cards that's a great boon for travel agents who don't have to induct personal cash into the system. But what about the big timers in the business? Slowly but steadily they are waking upto the demands of online booking. But e-ticketing in the case of Jet and Sahara is sill an option and not the only way you can buy a ticket. Less than two years from now they will have to go hundred percent tickets and they will perhaps again have to thank the LCCs for bringing in a practice that is very much on its way to becoming an industry standard. Perhaps the one sector that has still not woken up at all to this coming revolution is the Travel Agents Association of India (TAAI). At their conference in 2004 in Kolkata, there was much heat and dust about the reduction in commission that airlines were subjecting them to and how they will have to face upto the reality in a phased manner. Almost the same thing was repeated this year at Colombo. If commissions have to go, they have to do so in a phased manner was the general refrain. Between Kolkata and Colombo hardly anything seems to have been done to prepare the industry for the huge changes on the way. Virtually 10 percent of tickets in this country are e-tickets.90 percent of our booking are still done the traditional way. The percentage is as high as 40 percent in the US and 35 percent in Europe. Why

CRUISING HEIGHTS October 2005

Asia Pacific sees a percentage as high as thirty. Then why are we-a country that prides itself for being at the cutting edge of the digital revolutionso abysmally backward when it comes to adopting this new technology that saves money and provides greater efficiency? Frankly, the prime reason is the travel agent who sells the ticket. Unless he can quickly get his act together (and in this case it is the myriad associations of these agents) work out a systematic calendar of change, it looks that e-ticketing will arrive in India by the IATA (International Air Transport Authority) deadline of 2007 and our guys will be caught napping. One reason for this sluggish response is the entire mindset of the community. Almost everyone of these associations is constantly telling the government what it should and can do. At times, they even tell them what they haven't done. But clearly bridging the digital divide and learning to work without commissions has nothing to do with the government. It is a question of attitude that sadly is lacking. Maybe it is time for the captains of this industry to take a look at how their brethren elsewhere are doing and try and bring some of their best practices to their systems in India. That can be a good starting point to the eventual goal of e-tickets and zero commissions.

OFF THE CUFF

It isn't my illaka The Purana Quila is one of the most fascinating monuments in Delhi. Thankfully it is being put to good use for cultural festivals and as a showcase for India when high profile foreign visitors come to this country. Humayun's Tomb is also fast acquiring a similar reputation although the Quila because of its vast acreage is better equipped to deal with events. But there is one complaint. Why can't the Archeological Survey of India that creates such a fuss about events being held there and ,sometimes, withholds permission till the nth hour do something about the grand entrance to the Quila.Can't they get together with the Municipal Corporation to reorganize the parking area, clean out the shops sat the entrance(and provide them a better and more aesthetic location in the area),create a cafĂŠ-considering no one can eat or drink inside the Quila-at the entrance, small shop for knick knacks and put up better lighting? But it is clearly too much to ask of the ASI.The other day, one high profile Delhi organizer mentioned how the Survey had declined to wave off the hefty fees to the Quila even though the performance was for a noble cause. The cheque had to come in before the permission was granted. When they have such a tough regime, why doesn't the ASI look at its surroundings in a more holistic fashion? After all the Quila begins at the entrance and it will do everyone-the visitors, the performers and the ASI plenty of good to have a welcoming area that is welcoming! It is a tragedy that civil servants who should know better behave as policemen. Cops all over India (or should one say South Asia) are well known for the illaka concept of looking at issues that pertain merely to their territory. In the process they have many a time turned a blind eye to events in the neighborhood when they should have known better. The illaka concept must go from culture and tourism

contents

GOD IS WITH ME

p20

It requires a special type of person to chase world records and cutting edge adventure at 67.Meet Vijaypat Singhania and his dreams of achieving 70K.

CAPA CAPERS

p26 OFF THE RECORD

There was plenty of debate and plenty of fireworks. The Capa LCC session in Mumbai. A special report. CRUISING HEIGHTS October 2005

Praful sends the crowd to Sharad Pawar.Good strategy: please the boss and please the hopefuls.

PERISCOPE

“

More routes “The Gulf-India market is important to us and we are pleased to be part of the expansion and development of this market. We are continuing in our strategy to open new routes and especially those that are under served internationally like Nagpur. ”

LETTERS TO EDITOR

The cover story on Airbus acquisition was brilliant. One thought that the deal was a win win situation for India, but the manner in which you have pointed out the fine print exposes the obligations of the manufacturers .One hopes that the Civil Aviation Minister will attend to the smaller details and safeguard the interests of the PSU carrier Sujata Noida September 2005 Vol II No.6

Rs 60

IA gets its planes but will Airbus fulfill the conditions?

ADEL ALI, CEO, Air Arabia

e-savvy “We are the first domestic airline to offer travel agents the facility of issuing e-tickets. This will prove more beneficial to the passenger than going on to the Internet to make booking, ” ALOK SHARMA Executive VP,Air Sahara

Plus: Airport privatization Nilotpal Basu interview

As a former Indian Airlines employee based in Hyderabad, I can unequivocally testify to the fact that the Central Training Establishment is a jewel in the crown of IA.It will make great sense for the government to convert this fine institution into a world class hub of multi disciplinary training facilities for not just IA for all regional airlines. It will help generate enormous revenue for IA; help bring in more jobs to the aviation sector in the region and offshoot the creating of such infrastructure elsewhere.Also, the fact that the Begumpet airport is likely to be free after the launch of the new airport gives ample scope to the CTE to ensure an even more holistic use of facilities including live sessions. Please do something before it is too late. Vishwas Secundrabad

The interview with Nilotpal Basu was excellent. But it does tell one that the Parliamentary Committees in this country are toothless wonders that can hardly do anything to improve the situation on the ground. After having given a stinging report against the modernization of Mumbai airport, the Committee found the Ministry completely overlooking their opinion and brazenly going ahead. If they have any sense of self respect they must quit en masse to redeem their honour.After all what is the point of elected MPs going on an inspection and doing a fact finding study if the facts are to be thrown out of the window. Mohan Baharin All the correspondence may kindly be addressed to Editor, D-11, Nizamuddin East (basement) New Delhi - 110014 OR mail at newslinepublications@rediffmail.com

Cargo blues “"I was shocked to learn that India does not have any cargo aircraft. As India integrates with the world economy cargo movement is assuming large proportion. We have to facilitate cargo movement,” PRAFUL PATEL Civil Aviation Minister

Mera Bharat mahan

“India has a rich cultural heritage. Why not use it to make more money and at the same time spread the greatness of our culture and propagate are traditions? Every aspect of Indian tradition has time-tested relevance. For example, the art of making rangoli can actually keep away Alzheimer's disease. The joining of dots is supposed to work very well on our nerves and this has been proved scientifically too. Similarly, our age-old methods of storing grains, drawing water from the well, setting of curds and making fresh butter and ghee are all very interesting and fascinating to tourists. Besides, it is our endeavour to help save the villages from abject poverty. We want to give a fresh lease of life to the dying folk arts and handicrafts.”

CRUISING HEIGHTS October 2005

RENUKA CHOWDHARY Tourism Minister

COLD STATS

Exhibition ‘badshah’

Growing numbers • Having Singapore lead in the effort to draw up a new international standard for exhibitions also enhances Singapore`s position as a leading Exhibitions Hub. In 2003, Singapore hosted 63 exhibitions generating about S$171 million in tourism receipts. This year they are expected ti generate S$ 400 million.

• China will receive 64 million tourists by 2010, ranking third in the world. China will rake in 42.6 billion US dollars of foreign currency income by 2010, up eight percent year on year, ranking third in the world. The number of domestic travelers will increase by a big margin, with domestic tourism income reaching 881 billion yuan. And 9.8 million people will be direct employees of the tourism industry

LOOKING GLASS

Blueprint revision “We are revisiting our business model in India based on our current aviation economic situation and the company will decide on our next move to new destinations at a later stage," ” CHRISTOPHER YEK RM, Malaysian Airlines

CRUISING HEIGHTS October 2005

OFF THE RECORD

Pushing Hard TOURISM MINISTER Renuka Chowdhary cannot be accused of not trying hard enough. She wants the Incredible India logo everywhere and if it's on Air India, then the credit must go largely to her. Next she wants the states to adopt Atithi Devo Bhava in a big way and promote it. So far so good. But is her love for Indian handicrafts that surpasses anything one may have seen. The other day one such family arrived at Transport Bhawan to meet Mantriji and was ushered in her presence. The good lady dropped everything to look at their wares advised them on who to meet to market their stuff and told officials of how they could find opportunities to use Indian handicrafts. Without a doubt Renuka scores ten on ten as far as pushing handicrafts are concerned.

You lose some, you win some THE DELHI Gymkhana elections perhaps needs no post mortem, but there can be little doubt that Civil Aviation Secretary Ajay Prasad would have won comfortably if only `spoilsport` Raj Bharagava had kept out of the race. This superannuated civil servant has nothing better to do than contest election after election by turns. Sometime back he took over the reigns of the Delhi Golf Club and there was a huge uproar over some of his decisions. This time he decided to take his charm to the Gym, but, thankfully, he got just 74 votes. But they were decisive enough to tilt the contest away from Ajay Prasad. But what must give heart to Prasad is the fact that his friends stood by him and they came out in droves to vote for him. For retired RAW chief Dullat, the contest should actually have been a walkover. After all he spends a huge amount of time at the club each day. That he still had to huff and puff his way to victory is testimony to the networking skills of Prasad and his loyal band of Stephanians.

Overheard • That Naseem Zaidi had to postpone his shift to Montreal as India's representative at ICAO because Sanat Kaul decided to take leave and stay there for an extra month. The good man is scheduled to return by Diwali and Zaidi, whose papers are still being processed, is all set to leave in November. • That Rajiv Talwar's portfolio at Tourism has become rather lean. Is it because Mantriji is unhappy with him or is it a precursor to Rajiv moving on to bigger things in the central government? There are some reports that he may move soon, very soon, to a well known PSU. • That Air India chairman V Thulasidas has sent a spanking letter to the Central Vigilance Commission on the AI cases pending before it. His letter is expected to pave the wave for a major ACC appointment at AI by end October. • That the Airport Authority of India (AAI) is looking at several vintage World War II strips for repair and upkeep. The Minister's rich friends hop there in their aircrafts to inspect their factories in the hinterland. So they want some madat.Mantriji is happy to oblige.

Kya aap Sharadji ko milae? It was a long list of hopeful's who made their way to meet Civil Aviation Minister Praful Patel last month. And they had just one thing on their mind: his blessings as they sought the vacant top job at Indian Airlines. At that point in time the Public Enterprise Selection Board hadn't announced its shortlist of 17 candidates for the interview and there were more than three dozen hopefuls in the capital who thought they stood a good chance.Patel, ever the diplomat, met each one of them, listened to them patiently and was willing to consider their candidature. But he had only one thing to ask of all of them: Kya aap Sharad Pawarji ko mile? Agar nahin to jaye unhe mileye. `` Smart move by mantriji: keeping the candidates at bay and pleasing mentor and leader, Sharadji as well!

Colombo blues THE TRAVEL Agents Association of India (TAAI) is grumbling at Renuka Chowdhary for not coming to their annual jamboree at Colombo.Apparantly the lady had promised them of attending the opening but cancelled at the last moment due to more pressing commitments.``Why did she say yes, if she couldn't make it. We were hoping till the last minute that she would come, `` said one senior office bearer of the association. But maybe its good that Renuka kept away. Considering the internecine warfare amongst the agents and their hitting each other with the zero percent commission issue, its no surprise that Renuka kept away. Blunt and outspoken, TAAI could have found the hard talk a little too much to digest.

CRUISING HEIGHTS October 2005

Nagpur celebrations

FIRST THE training school at Gondia and now the renaming of Nagpur Airport and its status as an international airport. Like it or not, one has to grant Praful Patel the quality of being focused and getting what he wants. After much huffing and puffing the AAI board has cleared the Gondia study that will determine the shape of things to come at Praful's favourite airstrip. In the meanwhile he has helped Nagpur Airport get international status and renamed it after B R Ambedkar.And the honours were done by none other than Patel's mentor and NCP neta Sharad Pawar. But he must thank his friend Adel Ali of Air Arabia who decided that Nagpur had huge traffic potential with Sharjah and decided that daily flight was the best panacea to all their problems. No wonder Praful loves Air Arabia and wants them to get more rights. After all hasn't Adel proved a friend by coming to Nagpur.

Tight schedule POOR RAMALINGAM.The AAI Chairman had worked out an itinerary that gave him a day to catch his breath once he arrived in New York for a meeting at the FAA (Federal Aviation Authority). He then had to hop over to Montreal for a meeting at ICAO (International Civil Aviation Authority). But Mantriji ordered that he had to be there at Nagpur for the renaming ceremonies and the boss orders you obey. So he had his whole schedule reworked to attend the function at Nagpur before zipping back to Delhi and taking a flight to NY.Both Mantriji and he should cross reach other across the Atlantic-Praful going to the US of A for a week long official trip and the AAI Chairman on his way home.

Mother of all farewells What should one call it? Perhaps the right expression would be `mother of all farewells`.Over the past one year, several senior officials had superannuated at IA but a formal farewell for them was pending. In a good turn to all of them, CMD Sushma Chawla decided to organize a grand get together to reminisce with them and wish them good luck. So most of them came and had a ball and collected their mementos (picture shows former Director (personnel) getting his silver salver from Sushma Chawla).Meanwhile, the drama over the next CMD continues. No one is talking about the succession. But everyone has one thing to say: `what's wrong with an insider ?`` CRUISING HEIGHTS October 2005

AVIATION DIGEST

No technology in planes,no Currently, Federal Aviation Administration (FAA) regulations prohibit the use of personal electronic devices, including cell phones, while an aircraft is in flight. In general, six in ten American adults (62 percent) are not in favor of allowing in-flight use of cell phones. Yet the poll also shows that the generations are split on this issue. Half (51 percent) of young adults age 18-24 would like to be able to use cell phones while in the air. This compares to 44 percent among those

US cool to EU proposal

age 25-44 and only 32 percent among those over 45.The issue of using cell phones while on a commercial flight brings up two distinct schools of thought: Some people are looking for the convenience of being able to make calls while they are in flight, while others are not looking forward to the disturbance it will cause those that involuntarily will be listening to their conversations.

Planning to attend the World Cup Soccer matches in Germany next year? Lufthansa has introduced an air pass for the event which provides you with a flexible ticket, allowing you to follow your team of choice across Germany. The pass can be purchased anytime until July 16, 2006 for travel between June 1- July 16, 2006 and must be bought in conjunction with an intercontinental Lufthansa or Star Alliance member ticket. GloBall Airpasses offer a minimum of three and a maximum of 10 coupons and costs either 60 or 110 per sector depending on the class booked.

Delta's safety honour INTERNATIONAL AIRLINES and the United States are giving a cool reception to the European Union's plans to bring aviation into its greenhouse gas emissions trading scheme. The European Commission recommended that all carriers that take off from an EU airport, regardless of nationality, should be included in the scheme in an effort to curb increasing emissions of gases that cause global warming. But the International Air Transport Association (IATA) said the EU proposals would distract from forming a global answer to the problem of airline emissions through the International Civil Aviation Organization (ICAO). "A European solution is no solution at all. Unilateral regional efforts will only distract from this process," IATA Director General Giovanni Bisignani said The current system, launched in January, puts a limit on the amount of carbon dioxide (CO2), the main gas blamed for global warming, that big polluters like power plants can emit.Officials have said aviation would not enter the scheme until 2008 at the earliest because any formal proposal from the Commission must go through the EU legislative process.

WTTC position on taxing of air travel for international aid THE POSITION of WTTC regarding the recent announcement by the French President, Jacques Chirac , that from next year in France a tax will be levied on all airline tickets in order to raise development funds for Africa is as follows: There are several channels through which aid can be raised - at state level, EU level, individual level and through the private sector. All these sectors already contribute in a considerable way and in a variety of different forms to overseas aid and development. In particular, after the Tsunami, the response on the part of individuals all over the world was phenomenal. It seems inappropriate to us that one specific industry sector, aviation, should be the vehicle for such funds to be collected. Furthermore, to use an industry sector which is already facing considerable challenges - in particular those posed by the rising price of fuel - creates an extra burden.

CRUISING HEIGHTS October 2005

US$7.4 billion losses for global aviation THE INTERNATIONAL Air Transport Association (IATA) announced a revised industry loss forecast of US$7.4 billion for 2005 in light of skyrocketing oil prices . The revised forecast is based on an average oil price (over the 12 months of 2005) of US$57 per barrel (Brent). In May IATA issued a loss forecast of US$6.0 billion based on an average price of oil at US$47 per barrel. The regional profitability picture is mixed. While European airlines are expected to break even and Asia Pacific carriers will make in the

range of US$1 billion, losses by North American carriers could exceed US$8 billion. Cumulatively, airline industry losses for 2001-2004 were US$36 billion, US$32 billion of which was lost in North America. The industry fuel bill rose from US$44 billion in 2003 (at an average price of US$29/barrel Brent) to US$63 billion (US$38/barrel Brent) in 2004. At US$57 per barrel, the industry fuel bill for 2005 will top US$97 billion. "With a total industry turnover in the range of US$400 billion per year, a fuel bill of US$97 billion makes up 25% of our total costs. In less than two years the total bill has more than doubled," Bisignani .

Mid East MRO demand to soar says Dubai 2005 debutant

New negotiations

THE EUROPEAN Commission proposed today to open aviation negotiations with Australia, Chile and India . These negotiations will seek further opening of the respective air markets and enhanced regulatory cooperation. Chile and Australia, which have already signed "horizontal agreements" with the EU, are among the most advanced nations with regard to the regulatory framework for aviation and market liberalisation. These countries largely share the EU`s market-driven and consumer-oriented approach to aviation policy. The new proposal also targets

India, one of the most outstanding growing markets in international aviation. The Commission has already received a mandate for the creation of a transatlantic Open Aviation Area with the United States, and it has requested negotiation mandates with Russia and China. Vice-President Barrot attended recently the EU-China Aviation Summit in Beijing which was very successful in fostering closer co-operation between China and the EU in civil aviation.

Airlines to provide in-flight medical oxygen MANY U.S. air carriers and foreign air carriers operating to and from the United States would be required to provide medical oxygen without charge to passengers who need it during flight, under a new rule proposed today by the U.S. Department of Transportation. This proposed requirement would apply to all passenger carriers operating at least one aircraft with more than 60 seats. The Department is proposing this requirement because passengers needing supplemental oxygen on flights have long experienced significant difficulties in obtaining the services they need in order to fly. Currently, airlines are not required to provide medical oxygen to passengers, and many choose to not offer it. Those that do may require passengers to pay for the service.

MIDDLE EAST demand for Aviation Maintenance, Repair and Overhaul (MRO) will soar in the next few years due to the arrival of new regional airlines and massive fleet expansion among established carriers, according to an Asian specialised services provider set for its Dubai air show debut this November. Singapore-based Raycom Aerospace, a specialist manufacturer of aircraft engine components, says regional demand for its services is set to double by 2007 and future expansion includes the launch of a Dubai-based design and manufacturing support team to complement its existing sales operations in the emirate. Raycom is among a slew of MRO providers both from within the Middle East and beyond lined up for Dubai 2005, which will be held at the Airport Expo Dubai from November 20-24. Among them is Air New Zealand Engineering Services which is looking to the show to produce joint venture leads.

Online agencies not â&#x20AC;&#x2DC;lowestâ&#x20AC;&#x2122; SINGAPORE HAS been voted the Best Business City in the World for the fifth year running by readers of the Business Traveller Asia-Pacific magazine. Singapore piped Hong Kong and London to the top spot in the Best Business City category in the annual poll of the magazine's subscribers, comprising frequent travelers based mostly in the Asia-Pacific region. Singapore also swept the polls in the other major categories this year. Singapore's Changi Airport clinched the Best Airport in the World title, and its range of duty-free shopping also came up tops with the magazine's readers. ShangriLa , Singapore, was voted the Best Business Hotel in the world and in the Asia Pacific region, while The Ascot, Singapore, garnered the Best Serviced Residence in the Asia Pacific title. Singapore Airlines (SIA) also dominated the airline categories, clinching the Best Airline and the Best Asia Pacific Airline titles in the poll.

CRUISING HEIGHTS October 2005

NEWS SNIPPETS

Hedging their bills! AIR INDIA has been given permission by the government to hedge upto 10 per cent of its fuel requirement. The country's flag carrier will start hedging for fuel from January 1, 2006. The maharaja's fuel bill during 2004-05 was Rs 1650 crore of which it uplifted 35 per cent from the domestic market and 65 per cent from the international market or destinations it connected. As per the official decision Air India will be allowed to hedge up to 10 per cent of its fuel requirement for which it has appointed Ernst & Young as its advisor and Citi Bank as the counter party to do actual hedging. Incidentally, Air India had been asking successive governments for more than six years to allow the airline to hedge fuel. The Babus in the Ministry of Civil Aviation were keener to hedge for plumb postings! The permission finally arrived when Civil Aviation Minister Praful Patel used his persuasive powers on the mandarins of Finance Ministry as well as PMO to get them show the green flag. But the bigger issue: should you enter the hedging business when oil prices have risen to crazy heights -- $ 70 a barrel and still rising. In case an Air India official indeed manages to convince the babus in Rajiv Gandhi Bhawan and finally gets to hedge its fuel requirement and unfortunately should the international ATF prices fall below the hedging mark agreed to between Air India and Citi Bank the counter party, then it will be the Maharaja who will pay to Citi Bank instead of the latter to former if ATF prices were to fall below the agreed price. Should that happen it is pretty sure that besides the technical, commercial and other staff mem-

bers of Air India, the finance department may also come under all pervasive CVC, CAG, CBI etc. It will be interesting to see then the CAG sitting in judgment over the judgment of those who are in travel business. Close on the heels of Air India getting permission to hedge fuel, the private airlines have also sought the same facility from the government. On October 6, 2005, Civil Aviation Minister Praful Patel called CEOs of all airlines in the country for a free and frank discussion on important issues confronting the airline industry. Patel sought the views of CEOs about airport infrastructure, parking bays, connections to unconnected places, impressed upon airlines not to flock only to Delhi and Mumbai but disperse operations to other cities, ways and means of meeting Cat II obligations of airlines mainly private to connect far off places in North East, J&K etc.

Pant Nagar to open end 2005

UTTRANCHAL'S SECOND biggest airport at Pant Nagar is likely to be operational by this year end. Upgradation work at their two airports at Dehra Dun and Pant Nagar is in full swing. Dehra Dun, which at present is the only functional airport is being upgraded to match international standards and to make the runway fir for jet aircrafts like the Boeing and Airbus that fly on the country's other domestic routes. Uttaranchal's only airport, Jolly Grant is on the outskirts of Dehra Dun is at present equipped to receive smaller aircrafts like the ATR and Dornier with a seating capacity of 19 to 21 seats that can comfortably land on the 3,600 feet runway. Plans are on to extend the Dehra Dun runway to 8,000 feet to facilitate landing of larger aircrafts. The state government also intends to build at least one `designated` helipad in all the 13 district headquarters of the state. The state government of Uttaranchal is also planning to expand its three other airstripsNainisaini in the Pithoragarh district, Chinyalisaur in Uttarkashi, and Gauchar in the Chamoli district. Detailed technical studies have been completed in terms of the infrastructure to be put up at the three airstrips under the control of the state government. The three airports are likely to be developed under public private partnership framework. It is expected that the enhanced transportation links will give a huge fillip to tourism in the region.

CRUISING HEIGHTS October 2005

A view had reportedly emerged that government should take money from private airlines that were unable to meet the criteria and then auction those routes to smaller airlines which could make connectivity to North East for example as the life line of its business model. Spicejet Director Ajay Singh who was one of the invitees to the meeting felt it would be better to auction the far flung routes. As for hiring it to Indian Airlines, another CEO said the fee charged by IA would come to the same as what they would have incurred had they flown those destinations. What was ultimately suggested to Praful Patel was the earlier the Aviation Economic Regulatory Commission was set up better it would be for the sector. A CEO closely connected with computer software world articulated well his knowledge of telecom. He said we must learn from TRAI and the way it evolved to prevent repeating the same mistakes when setting up the Aviation Regulator. Well Taken. But who will ensure that the Aviation Regulator does not become a hand maiden of the government like DOT first and later of some favourite private airline as happened in telecom. After all some private airlines have been able to befriend all successive governments with extremely opposite ideologies to get what it wants and wanted!

Airbus or Boeing? IS JET Airways trying to redo its homework?. India's number one private carrier and acknowledged world-class airline wants to be equidistant from the Americans and Europeans like the UPA. The present government wants many to believe that after it gave the Indian Airlines and Indian Navy's order for airplanes and submarines to the French, the bigger wide-body jets required by Air India and perhaps the multi-role fighters IAF wants could go to the Americans. Boeing will be granted the order for purchase of 18 Boeing 737-800s and 50 wide body aircraft comprising, Boeing 777-300 ER, Boeing 777-200 LR and Boeing 787 the dreamliner. Readers guess could be as good as ours if GoI will place the 124 fighter orders for F-16 manufactured by Lockheed Martin instead of either F 18 made by Boeing or the Mirage 2000 by Dassault of France. The story that is doing the rounds is if IA got Airbus, then Air India got Boeing; if Indian Navy got Scorpien the IAF will get Lockheed. The moral of the story is "to each according to his need and to each according to his ability". The purpose of

stating this became necessary, as it was the CEO of Jet Airways, Herr Wolfgang who made everyone think that way. Answering a question at the recently concluded two-day CAPA meet on low cost airlines in Mumbai early October 2005, Wolfgang said "We have decided to induct both Boeing and Airbus. We feel Airbus A 340 and A 330 were optimal for flights up to 10 hours and Boeing 777 was ideal for flights up to say 14 hours. It is always good to have two manufacturers". Perhaps Wolfgang seemed to agree with the former German Chancellor Schroeder who recently lost the elections and was better known for his anti-American views on Iraq. By openly expressing it to a thousand audience at Mumbai's Grand Hyatt conference hall where the who's who of aviation industry had assembled to attend the CAPA meet, Wolfgang's policy statement implied that Jet Airways will perhaps henceforth not look at Boeing for medium to near long haul connections as it felt Airbus was better to fit that bill. However for very long haul routes it will prefer the American Boeing. This statement seemed strange as it came at a time when Bush government is looking for alleged Al Qaeda connections and till

CRUISING HEIGHTS October 2005

then banned the entry of Jet Airways flights into the US. Even stranger was the story that appeared in a leading economic daily the next day where Jet Airways was quoted as saying that they had postponed their US launch to 2006 because it had not been able to freeze the kind of aircraft it wanted. Is it a Gang-Up or Just a Wolf among the Gang? Speaking about Jet Airways, India's biggest and best airline has acquired three Boeing 737-800s with all economy class configuration seats. May be 189 seats. Does this mean Jet Airways is also going the Maharaja way to start a an LCC while retaining the legacy carrier. Asked about this, Wolfgang had a definitive answer for its deployment but said no to the possibility of starting an LCC. Jet needs these three all economy 737-800s to use in those sectors where it has no demand for business class seats. So typical of worker class state, Jet is possibly going to deploy them on Kolkata route to and fro. The Jet CEO said we may have 7 flights a day to a destination and an eighth one could be only a good addition. But this will be only an exception not a rule. So Jet starts its back-end operations with an LCC type aircraft to neutralize the high cost of its premier class travel.

NEWS DIGEST

Making Money IA PROFITS zoom: Indian Airlines has registered a net profit of Rs.1.60 crore during July 2005-06, making it the highest ever in the airline's history in the month of July, which is considered a lean month for passenger traffic. .Significantly, the profit hasbeen in the face of increasing price of Aviation Turbine Fuel and a highly competitive market where fare is the key denominator. Indian Airlines had recorded a net profit of Rs.28.45 crore in the first quarter of this year. July's performance shows an encouraging trend, which the airline hopes to continue throughout the year, and the total profit earned in the first four months of this financial year is Rs.30.05 crore. AI too makes profits: The national flag carrier Air-India has posted a marginal growth in net profit at Rs 96.39 crore (Rs 963.9 million) for the financial year ended March 31, 2005 against Rs 92.33 crore (Rs 923.3 million) in 2003-04.While it has posted a 22.2 per cent increase in total revenue at Rs 7,630 crore (Rs 76.3 billion) during the year compared with Rs 6,246 crore (Rs 62.46 billion) to last year, total expenses shot up to Rs 7,565 crore (Rs 75.65 billion) from Rs 6,238 crore (Rs 62.38 billion). The A-I board has also declared a dividend of 10 per cent to the government after a gap of 10 years. "Main factors that led to better profit include increase in the number of passengers, rise in capacity utilisation and curtailment of cost on other controllable expenses. The decrease in interest on financing arrangement has also helped the company to post better performance," company secretary S Venkat said." However, increase in fuel prices adversely affected the profitability of the airline to the extent of approximately Rs 643 crores (Rs 6.43 billion)," he said. Average fuel costs shot up from US Cents 114 per US Gallon in 2003-04 to US Cents 159 per US Gallon in 2004-05. He said the current prices are around 220 US Cents per US Gallon." But for this increase, the net profit for 2004-05 would have been in the region of Rs 450 crores (Rs 4.5 billion) after adjusting for fuel surcharge. The airline, in an effort to minimise the impact of rising fuel prices, is planning to hedge some of its international fuel uplifts shortly," he said. Jet's 30 percent dividend: In its first annual general meeting after its IPO, the Jet Airways board on Tuesday approved a 30 percent dividend-per-share on the paid-up equity share capital. Speaking on the occasion, the Jet Airways chief Naresh Goyal said the domestic Indian

aviation market will continue to grow at above 20% each year, over the coming 3-5 years. Commenting on the low-cost airline model that has recently made waves in India, he said the opportunity to offer significantly-lower fares on a sustained basis and still operate profitably, are limited. Despite the sensex being on a bull run, Jet Airways is among the few scrips that has underperformed the market. The scrip which was aggressively priced on listing has lost steam in the past two months. While the sensex has returned over 18 Per cent in the past six months, the Jet Airways scrip has fallen over 13% in the period. This is primarily on concerns about competition from low cost carriers (LCC) and the surge in oil prices.

Renuka's new initiative A SLEW of new initiatives on the occasion of World Tourism Day to give further momentum to the booming "Incredible India" campaign which targets five million foreign tourist arrival next year. Among the new projects of the Union Ministry of Tourism included co-branding of 'Incredible India' with national carrier Air India and software major Microsoft, a sightseeing package for underprivileged children from orphanages, exclusive website on rural destinations and tourism taxis with 'Incredible India' graphics. Air India will henceforth have the `Incredible India' brand displayed at the tail of its selected aircrafts. Indian tourism themes with music will be available at the Microsoft Window. Tourist taxis with 'Incredible India' graffiti will run on the roads of Metropolitan cities. These were formally launched at a glittering function held at Purana Quila on the occasion. The highlight was the ensem-

ble of India Musical Instruments by 'Saptakshara' by Vinayakram and performance by other well-known artists was also held in the CRUISING HEIGHTS October 2005

evening at Purana Quila. This year, the World Tourism Day is celebrated with the theme "Travel and Transport: From the Imagination of Jules Verne to the reality of the 21st century." Jules Verne was a pioneer in travel writings. While the countries the world over celebrate the Day with their own programmes, India began the day on a warm note midnight Monday when tourism officials received passengers coming from abroad at the airport with vermillion, flowers and sweets. "I really enjoyed the idea. It is really a heart warming experience," said a foreign tourist who came from Berlin to the news agency UNI.Peter Agathakis, senior journalist of Austrian Broadcasting Corporation, who arrived here, was quoted as saying, "I was surprised first. Then I realised it is the sign of warmest welcome. I was never received as warmly as this." A similar reception was accorded at various hotels in Delhi and other cities.

SPECIAL REPORT

Spicing ahead

Spicejet is gung ho about its debut and the market response in the first few months. They believe the next year will be even better.An analysis by K Srinivasan and R Krishnan

ometime recently Ajay Singh was flying onboard one of the Spicejet routes when the guy next to him took out his Puri and Aachar (brought from home, of course) with much relish. When the aircraft encountered air turbulence, Ajay by his own admission felt uneasy and asked this guy sitting next "Aren't you scared". Pat came the reply "I wanted to see a plane fly". He always traveled by train and this was his first flight. No wonder he excited at exploring space! And this is Spice's magic mantra, the business model that they are banking upon: "our whole emphasis is get people shift from rails to planes". Lamenting that only 17 million out of India's 1080 million had taken to wings, Singh said that ``with a middle class of 300 million, it is entirely conceivable to see 70 million Indians flying. ``Mark Winder, Spice's CEO echoes the same issue, but there is a silver lining in his lament: ``From 4 million cell phones say few years ago India has cell phone user base of 65 million. So things are changing now. `` Interestingly Winders is soon leaving Spicejet to head home to Canada and this is perhaps his last formal inter-

Spice quoted all the freedoms enshrined in the Indian Constitution and added its own "freedom to fly" CRUISING HEIGHTS October 2005

view. Ajay somehow could not let go off his passion for computers and telecom as he compared the aviation business to telecom and recalled how the latter sector saw an explosion after tariffs dropped. His recipe considering India being a price sensitive market is keep fares low to encourage Indians to fly. No wonder in its promotional ad, Spice quoted all the freedoms enshrined in the Indian Constitution and added its own "freedom to fly". In this context, he pointed out that while passenger growth between 19972001 (before 9/11) grew by only 4 per cent, the introduction of Apex Fare by legacy carriers stimulated the market and increased passenger growth by a hefty 30 per cent. Thus Spicejet genuinely believes that Low Cost Carriers will be growth leader in Indian aviation and the experience of world renowned LCCs like Ryan Air, South West and Easyjet is replicable in this country. Ajay is almost blunt in his assertion: "We don't want to reinvent the wheel. We just want to follow (history). When we opened bookings on May 16, 2005 we sold 37,400 tickets and received 5.4 million hits on our website. British Telecom thought that a virus had hit our system. Since we launched on May 23, 205 we have flown 400,000 passengers with a load of 85 per cent. We are a Low Cost Carrier but we are not a cheap airline. ``

t the time we took over the company, all debts to the government had already been paid. A settlement had been reached with private creditors and this settlement had already been filed in court. So we got a relatively clean company. On choosing Boeing A: We felt that the Boeing 737-800 was the ideal aircraft with which to launch a low cost operation. It had 9 extra seats than the Airbus A320. Boeing made us a very attractive commercial offer for the plane and we decided to buy this plane instead of the Airbus A320.

On buying Modiluft Modiluft provided us a good platform. The company had a license. It had airport infrastructure such as a hangar, office space, and counter space at Delhi and Mumbai airports. The company was listed on the Bombay Stock Exchange. All these factors enabled us to launch SpiceJet very quickly.

On the huge orders placed and the infrastructure bottleneck A: In the short term, I do not expect that many aircraft will come into the country. This is because there aren't very many aircraft available on lease or on sale in the international market. In the medium to long term we will certainly need more parking bays and a policy on how these will be allocated. It will be a pity if the growth in Indian aviation is stifled because there is no place to park planes! The Airport Authority requires that a parking bay given to an airline must be occupied within a certain time frame by the airline. We feel that this is appropriate. If the bay is not occupied it must be allotted to another airline on a first come-first serve basis. Government should evolve a policy that makes air travel more affordable - encouraging the growth of low cost airlines can do this. On rising fuel prices and low fares A: If fuel prices go on rising, it is inevitable that fares will need to be increased. At this time the Indian aviation market is very small, about 18 million air trips in a year. This can be increased significantly. The potential market is large enough to absorb a few more players. On breaking even at Rs two per km A: It is premature to comment on the financials at this stage. We are only in the first quarter of our operations. Spicejet's USP A: SpiceJet intends to provide safe, on-time travel at a reasonable cost. It intends to be low cost but not cheap. SpiceJet's cost model ensures that our cost is significantly lower than carriers such as Jet, Sahara and Kingfisher. Therefore, on a sustainable basis we expect that SpiceJet's average fares will be lower than the others. On consolidation in the Indian market (like Jet Star and Vlauair) A: It is too early to talk about consolidation in the Indian market. I foresee that airlines in India will co-operate more on operations and share resources to lower cost and increase efficiency. Future projections A: I expect that if the economy continues to grow, and if some infrastructure issues can be resolved, Indian aviation has the potential to grow to 40 to 50 million air trips.

So how does one sustain the numbers and get the passengers of Laloo's trains and into Spicejet's brand new 737-800s? Simple.Connect.middle India. ``Our strategy,`` said Winders and added,`` is to connect metros in India via intermediate points. Everything we do today is Category 3 and once we begin to increase our fleet we will also do Category 2 and 2A. We want to develop the secondary market especially where the train journey is more than 8 to 10 hours. It is very difficult to wean away train passengers who undertake journeys of less than 6 hours. The trip has to be cost advantageous and nothing under 6 to 8 hours will be attractive enough to those passengers. We want to be in the market for DelhiKokata via Patna. We are looking at Chennai from Delhi via Indore or Nagpur. `` At the moment the carrier has three Boeing 737-800s with firm purchase order for 10 Boeing 737-800s the first of which will come up for delivery in January 2006. They are leasing another five new aircraft starting March 2006. ``In all we are hoping to have 20 airplanes in the next 18 months. Besides acquiring one of the 10 firm airplanes in January 2006, we will lease three airplanes in March-April 2006,`` said Winders. These brand new planes will be leased from either CITI or Gecas. In September 2006 the second acquired aircraft arrives and thereafter

Simple.Connect. middle India. “Our strategy,” said Winders and added,” is to connect metros in India via intermediate points CRUISING HEIGHTS October 2005

it will be one aircraft each month. But Winders is worried about autumn next year (Aug-Sep 2006).They are looking at lease options, but few are available. Singh said that as per our scheduled acquisition plan apart from the aircrafts arriving in 2006, Spicejet will have another 8 such aircraft by end 2007. ``Our fleet size will expand to 40 aircraft all Boeing 737-800 by 2009. `` In the next six months Spice will cover Delhi, Ahemdabad, Pune, Mumbai, Bangalore, Goa. And Kolkata.They are also looking at Chennai possibly via Patna for Kolkata and via Indore or Nagpur to Chennai. We will thereafter look at Cat 2 and 2A although it isn't clear whether it will be North-West or North-East. `` The effort will be to minimize the number of airports we open up. We have infrastructure in Ahmedabad, Delhi, Banglaore and Mumbai and we have to revolve around that, `` said Winders. Ajay Singh has another perspective on the lesser routes; He believes its time to resolve the issues relating to route dispersal guidelines and look at the possibility of auctioning the Cat II routes. Aviation, he believes, should learn from the telecom experience in India. The way TRAI evolved over time in India leading to encouragement in investment climate perhaps needs to happen in aviation as well. In telecom, if a player did not want to provide rural connectivity he had to pay into the Universal Service

Caption: A reference framework would allow

Obligation (USO) fund which in turn is used for providing rural connectivity. Singh believes that's the right way forward for aviation. But he doesn't have the IA-Kingfisher Airlines model in mind where the public sector carrier flies the non-productive routes on behalf of Malaya.`` No. We don't want that model. We don't want to pay such hefty premium to IA. It will be better to use a USO kind of framework or even auctioning of the routes. There is no need to make it more expensive. `` But Winders admitted that Spicejet did speak to IA for ground handling and security. ``The cost quoted was prohibitive. LCC will be driven by cost, efficiency and quicker turn-arounds. `` While fuel accounts for nearly 40 per cent of Spicejet's operational costs, the carrier hopes to stimulate the market through innovative route planning and pulling in new passengers. But Winders complains that the cost of fuel, parking, landing and navigation charges are high for Low Cost Carriers to compete against the trains. ``I have a concern that Indian aviation cost is too high to attract mass market. That is why we need to stimulate the market. Like kids wanting to go home, or alternatively parents

With oil prices at $ 70 a barrel, it may not be the right time to enter hedging business. But in any case this does not mean LCCs should not be allowed CRUISING HEIGHTS October 2005

wanting to visit kids, someone wanting to attend a wedding etc. The opportunity is huge in India, `` said Winders Will hedging be one answer to the rising fuel bill and the move to greater connectivity? While Spicejet has along with other LCCs have sought permission of Ministry of Civil Aviation to hedge ATF prices, Singh felt that "with oil prices at $ 70 a barrel, it may not be the right time to enter hedging business. But in any case this does not mean LCCs should not be allowed. We have spoken to Ministry of Civil Aviation and to the Minister Praful Patel who has agreed in principle to support the hedging initiative". Nonetheless, the airline believes the business is profitable and there is scope for more players. `` The Indian market size today is such that it can take 2 to 3 more players. I feel there will be several LCCs. India also requires regional airlines using turbo-props (ATR types). As far as we are concerned after we get rid of the socio-economic route operation obligation we will look at smaller cities which are the answer for expansion of aviation in India. What they are planning is to stimulate further passenger growth by focusing on 30 towns

with population of more than a million each. Head-hunted by a US firm, Winders who has been looking after the day to day operations has a simple mantra: "they give me money and I spend it". The `they ` in this case happens to be Ajay Singh who is a major investor and looks after the fleet acquisition, finances etc. and other partners including Chairman Siddanth Sharma. Keeping in mind the rapid expansion plans of the carrier, Winder, Ajay and Co are working with Boeing for opening a training school in India. While the engineers are being trained locally, the airline has several expat pilots. But the Indian co-pilots are being further trained in Spain, England etc.`` No we are not sending them to Jet Airways for training. Jet has a simulator in Mumbai. All over the world there is no cooperation between LCC and Legacy carriers.` said Winders plainly. Worldwide there is no interline arrangements between Legacy carriers and LCC,It is no different in India. In this context, Winders had an interesting point to make:``Southwest Airline in the US was the first LCC but has no interline, but it still

Worldwide there is no interline arrangements between Legacy carriers and LCC,It is no different in India. CRUISING HEIGHTS October 2005

carried the interline traffic. For instance, in our night flights we do get passengers disembarking from international flights arriving in Mumbai for other domestic destinations we presently fly. We are carrying international traffic without interline traffic arrangement. ``At the moment the airline is flying a solitary aircraft on night duty. Since its launch on May 23, 2005 Spicejet has already acquired a market share of 4 per cent in the domestic skies. ``We have mostly pulled people from trains. The market is growing by 25 per cent but the share is not contracting as the absolute number of travelers has increased. For example, though we have a 4 per cent market share, our passenger growth has been as high 25 per cent since we launched. I am overwhelmed by my passenger volumes and our fare has to go up on average for us to be profitable with respect to travel cost. `` said Winders as a last word Ajay adds his bit: ``we want to focus on the young people. We are the only airline in India that is truly following the South West model. We have started night flights between Delhi-Mumbai-Delhi at really low fares - below Rs 3000 one way. We are saying as the moon rises, the fares fall. `` â&#x2013;

VIJAY’S INTERVIEW

BALLOON

VIJAYPAT SINGHANIA TALKS TO K SRINIVASAN ABOUT HIS EXTRAORDINARY NEW ADVENTURE

LET ME start by asking about an angel of cockpit? Your granddaughter's picture helped you through the microlight flight. But what about the flight in the balloon. Who will be the angle at 70,000 feet? A. This name is specially meant for the book because I think one of the inspirations for it was by granddaughter. I don't have any angel for my balloon flight; I think I will have God with me. Q. How is the preparation going? A.I did my initial training in January and I have done a lot of flying between then and now: I have done it in India, in Italy, in France and in England. Infact in India we did a flight a months back when we broke the Indian record. So the Indian record now stands in my name. We went to 29,000 feet. But the one in November is a big one. Q: Any special type of accalmatisation? A. Lots of things involved in this flight. Actually I cannot do any practice on this balloon, it will only fly once. The body cannot sustain that level at all under any circumstances when your body is subjected to pressure at 60,000 feet and above your blood will boil and your body will disintegrate, you cannot survive. So we have a specially designed capsule which has very special life support

But if it's a big leak and at a very high attitude-- that's a very small possibility, but anything is possible-- then it can become a little more dangerous. CRUISING HEIGHTS October 2005

systems, it has a lots of communication equipment, pressure indicator, altitude indicator, GPS for navigation purposes transponders for anti collision with other traffic in the area so it has a lot of equipment and there are control mechanisms in terms of controlling the balloon, types of fuel, firing in terms of parachute valve control (for parachute in an emergency). So there are lots of things in this parachute, it's a very sophisticated parachute. It is a closed capsule and will be sealed on departure and, hopefully, it won't leak on departure. Hopefully, if the leakage is small, in reasonably good atmosphere, we can safely bring the flight down. But if it's a big leak and at a very high attitude-- that's a very small possibility, but anything is possible-then it can become a little more dangerous. Q. You have to just to go by your experience A. no I do not have experience of flying at this level infact nobody in the world has experience of flying, but we have gone through a lot of exercise with the people who are designing my project and we have come up with a certain number of numbers that we call the cutoff numbers, the lakhaman rekha beyond which you cannot go. These are complicated numbers and so long as I remain within those parameters, my flight will continue. If it goes outside these numbers, I have to abort… … Q. Have you decided on any particular day when you fly A. On 19th of November. We did a very detailed study of the Indian weather, around

VIJAY’S INTERVIEW

BALLOON

VIJAYPAT SINGHANIA TALKS TO K SRINIVASAN ABOUT HIS EXTRAORDINARY NEW ADVENTURE

But if it's a big leak and at a very high attitude-- that's a very small possibility, but anything is possible-- then it can become a little more dangerous. CRUISING HEIGHTS October 2005

INTERVIEW

Mumbai in the last 10 years, day-by-day, hour-by-hour including wind speed, temperatures, and directions and for every thousand feet. We have done a very detailed study. Its a very complex study and took us almost 4 months to do the study to finalise the date. We found that this day we are likely to have the least wind speeds-wind is deadly for this project-- you can't have any wind. Also, it should be the right direction --from the sea to the land not from the land to sea. It could drive me be have hundred miles into the sea which is very dangerous. People had tried landing in the sea but none who landed in the sea have survived because if the balloon continuous to drag you then it would drag you to behind but it would push you under the water in very deep water where your capsule will be crushed by the water. So we decided-infact we originally were thinking of landing in the sea to avoid the high-tension wires, mountainous terrain, tall buildings and all that kind of thing-- that this was safer than landing in sea. The date was decided after looking at all these issues. Also, 19th is a Saturday, and if winds are too strong we delay it by a day and do it on the 20th, a Sunday, a holiday when it will be easier for people to come. Q. What is the site of the launch? A. We have zeroed in on the race course in Bombay? Q.how long will it take you to reach 70 K

On 19th of November. We did a very detailed study of the Indian weather, around Mumbai in the last 10 years, day-by-day, hour-by-hour including wind speed, temperatures, and directions and for every thousand feet. CRUISING HEIGHTS October 2005

TIGER MAN: This Cessna helped carry Singhania to his second world record. Starting from Canada and ending in Canada and flying over the North Pole. A. It will take roughly half hours to reach there and one and half hours to come down. Q. And how long do you stay there? A. Not even a few seconds, you can't stay there because the balloon is not designed to keep that lift levelâ&#x20AC;Ś infact at around 6065,000 feet you are going to put all the power you have in your burners. So it depend on how high it takes you, we don't know we are hoping it will go up to 70K so much depends on weather conditions are there. It will just hit its ceiling and starts dropping and when it drops, it will drop for a long time before you can stop it, at even by firing the gas. So it is not a fully controlled flight at that stage. So you are just pushing it as hard as you can and when it reaches its ceiling it will turn back and start dropping. So you are not even there for two seconds. Q. Is it a gentle drop to come down? A. No initially it will be a fast drop, we want a fast drop, we don't want a gentle drop. We want it very fast because at the higher altitude can have a high rate of descent, but as you come down you have to reduce and reduce because don't forget when the balloon is dropping a lot of air around it is going to

Can he do it?

ill I pull off a hat trick and notch up a third entry? I do not know. But before the year ends, I would have gone on a flight that would certainly give me the opportunity to try. I first flew for fun in a hot-air balloon in East Africa some years ago. The ride took me over the wildlife reserves at low altitudes. It was also the beginning of a fondness for a new type of adventure. In time to come, I dreamt of doing, once again, what no one had done before - a round-the-world, non-stop hot- air balloon flight. Then I discovered that two millionaires were already planning it. Richard Branson, owner of Virgin Atlantic Airways, had put in a lot of time, effort and money into it. He had some experience by now, having crossed the Atlantic with noted balloonist Per Lindstrand, in which they unfortunately had to ditch some fifty miles west off the Scottish coast. Steve Fosset, another adventurer from the United States had done a few shore runs in different places around the Middle Ease. I would have formidable competition, I thought. After a meeting with Per, I decided to call on Mr. Branson and see if we could collaborate in some way. The meeting was at Branson's Gatwick headquarters. He arrived in a chauffer-driven limousine - not unusual for a millionaire, except that the chauffer was a beautiful girl in a mini. I watched with envy as he strode into the building. Every nice-looking lady member of his staff not only allowed, but expected him to kiss her profusely as she greeted him! What a way co start the day, I thought, no wonder the guy is so successful. I must try it when I got back home, if only my girls would be so accommodating! Mr. Branson gave me a patient hearing as I explained why I thought I should accompany him on this historical voyage he had so meticulously planned. The cost I could share with him, his other requirement I definitely could not. He had invited Sharon Stone to go along on the trip. That put 'CLOSED' to my inclusion. I worked with Per for some time, but he was committed to Branson. 1 he risks and cost of the venture were mounting steeply, hence I decided to bid good-bye co it. But during my discussions with Per, another plan began taking root in my mind.After putting it on the shelf for several years, in late 2004 I decided I must go ahead with it before I needed a stick 10 walk with. I located and had a series of

HELLO FRIEND: With his friend Air Chief Marshall who released his book.

AN ANGEL IN THE COCKPIT By Vijaypat Singhania Published by Roli Books

meetings with two very experienced 'balloonists, Andy Elson and Colin Prescot flying Pictures Ltd. In Glastonbury in the UK. In January 2005, i went to Cuneo in Italy for training with a retired British army colonel, Patricia Watkins, in sub-freezing temperatures. Having obtained a British licence,I started detailed discussions with Andy and Colin who would ultimately be the suppliers of all rhe equipment.the present high altitude record for hot-air balloons is heldBy Per Lindstrand, who went to 65,000 feet in May 1988 in Maine, USA? I bought a 160,000 cftsized envelope/balloon and in June 2005 climbed to 28,200 feet, establishing a new Indian record, flying from a location near Ahmedabad. In November 2005, my goal is to beat Per's record and climb to 70,000 feet, in a big balloon Don Cameron is making for me under Andy's design and supervision. It will take off from Bombay and will be the largest balloon ever build, having, an envelop size of 1.6 million size cft. Most sporting / fun balloons have a size of no more than 70 to 80,000 cft. It is a risky venture. But, with Gods grace, I shall do it.

INTERVIEW

I think flying is still part of my blood when I lose all of my blood I might lose my flying till than I don't think I will lose it. push it because of outside pressure, so the balloon starts collapsing, if it collapses I lose control, I can't fire, because if I fire with a collapsed balloon it will burn to cinders in a fraction of a second .So I can't allow it to totally collapse, that control I have to maintain all the time. Q.You hold several records. Is it this quest for records that fires you? A. I suppose it is the same thirst that inspires a lot of sports people be it mountain climbing, Channel swimming, a tennis or cricket match for that matter, anything really. Everyone wants to excel himself, this is human nature, to excel yourselfâ&#x20AC;ŚI did X not I want to do 2X or do 4X If you are quite satisfied with X then all development in this world will come to a halt. Q. You have been a commander on jet planes. Does flying still tickle you as it did years ago? A. I think flying is still part of my blood when I lose all of my blood I might lose my flying till than I don't think I will lose it. At this moment I don't have endorsement on any aircraft. At sixty you lose your commercial pilot's license and I still haven't taken my private licence Its mainly technical problems I am very angry about it, but I can't do much about our regulations. Q.you did fly with several airlines; you enjoyed your stint with them? A. Four of them: I flew with East West, Damania, Alliance and Sahara. I enjoyed it, it was very nice of them to let me do it. They wouldn't allow an honorary captain; I was the only honorary captain. Inititially I was P2 (co-pilot), then I became PI (commander). In East West and Damania I was P2, Alliance initially I flew as P2 then P1 and Sahara as Commander. I got my command in Alliance. Captain D S Virk cleared my command. Q.Why did you to four one after another? A: I would have remained with one, but was getting a little cheesed by the safety procedures. I told them, but they were not listening. This was with both East West and Damania; they were going beyond limits in breaking the rules, which was wrong. I have never supported that, because you are playing with passenger's lives Q: But your book talks about your breaking the rules.

WITH JRD: Vijaypat having a word with J R D Tata after his record breaking microlight flight.Tata was the original having done a KarachiMumbai flight in the 20s when flying was still find its feet !

I suppose it is the same thirst that inspires a lot of sports people be it mountain climbing, Channel swimming, a tennis or cricket match for that matter, anything really. CRUISING HEIGHTS October 2005

A: That's a separate issue, that's different. I am risking my own lives, not somebody else's life. My life is in my hands, what I do with it is my business. But somebody else's life, I have no business to play with that. They put trust in me, that he is a competent guy, our life is safe. You can't break that trust. And I think it is very careless and irresponsible for someone to do that. Q. What was the issue with Alliance? A: Alliance was okay unfortunately I had a problem with Shakti lumba he was chief of operations. He was very nice to me I have cleared for my command but he kept on insisting with me that because of union problems that I should only fly with a commander. I said: no, I am a commander; I will fly with a co-pilot. He said, our unions would not allow it. I said to hell with your unions, I don't want to fly because you making me feel inadequate, you are saying I am not good enough in a commander then say so, take away my command. But he didn't do that. I proved myself in all my tests, so I got so disgusted that I left Alliance. But that was so close to my retirement age that I flew for a very short time for Sahara. Q: must have been wonderful flying the new age 737s. A: No I flew the 200s, I wasn't rated on the others.400 would seem like a glass cockpit. I have unofficially flown lots of glass cockpits including Boeings and Jumbos.

MICROLIGHT HERO: In front of the 150 kg machine that carried him across oceans over 5000 kms to a world record victory.

Q: Are you excited by the evolution that's taking place in Indian aviation. A. In the Indian scene, I am appalled. Let us leave it at that, I wouldn't like to elaborate at this stage. Let me say, I have very strong views on this…. Q.But the new planes that are coming in are bigger, faster and better… A: Well, there are two sides to the picture. Passenger fares have become lower, flying time is shorter. But the risks are higher; each time you have an accident more number of people are going to get killed. In aviation accidents, you don't have surviors. This is not a motorcycle accident. It's a deadly business that requires a very high degree of skill. Though, there is a lot of automation from a pilot's point of view, it is good fun, but at the same time, these machines are very complex and if don't know your machine you are in very serious trouble. Flying is very safe if you go by the book .In the old days it was said that you fly by the seat of your pants, those days are gone. You have to be very very familiar with the rules as traffic gets congested and they reduce the distances and clearances between aircrafts. The skies are getting crowded; you have to know your business. You can get terribly confused if you allow your concentration to break in the cockpit, it

This was with both East West and Damania; they were going beyond limits in breaking the rules, which was wrong. I have never supported that, because you are playing with passenger's lives CRUISING HEIGHTS October 2005

can be suicidal. Q: Are you a temperamental person by nature: your scrape in Pakistan and with the DGCA is testimony to a sharp personality… A: I didn't know I was a tempramental.but I have always been a fighter. When I am wrong, I quietly put my head down and say: I am sorry, I have no shame in doing that. But when I am right, I will fight. What Shivraman was doing was pure bureaucrat: one crook means everybody's a crook. Why penalize those who have worked hard to train and contain their licences. By all means penalize and lock up the crook, but don't tar everybody with the same brush. One crook means everybody is a crook and you prove your honesty. That wrong and that's unfortunately a part of our system. Q; your book describes the crazy things you did on the Italian leg of your trip… A: Don't we all do foolhardy things in life? Well when I was on my night flight in the bad weather over the Italian Alps, I should never have gone there. All my flying told me don't go, don't go, and don't go. All my experience said the same. Sometimes you do irrational things. I went, my aircraft could have broken up into pieces. Why it didn't…maybe I wasn't destined to die. ■

CAPA

CAPER The two-day symposium on Low Cost Airlines organized by the Centre for Asia Pacific Aviation (CAPA) in Mumbai on October 6 and 7, 2005 provided much food for thought. But somewhere along the line it lost the punch as speeches either became repetitive or simply tried to hid more than what it revealed. Nonetheless, some 9interesting points were made. R Krishnan's exclusive report 26

CRUISING HEIGHTS October 2005

NE UNDERLYING theme running across was the emphasis speakers laid on cutting costs to make low cost carriers indeed low cost. However, it was left to Boeing's Dinesh Keskar to look at the crystal ball and a few bold predictions: India's tryst with LCCs may not last long. Sooner, rather than later, some players will bite the dust and there will be a distinct phase of mergers and consolidation. One remembered what the late Madhvarao Scindia had said in in 1992 when Jet Airways had not even started. At that point in time there were more than 27 air taxi operators who were waiting to take become scheduled operators after having received the crucial no objection from the Ministry of Civil Aviation. Scindia then said that next few years perhaps two private carriers would survive. They were indeed prophetic words as by the end of 2000, besides Indian Airlines only Jet Airways and Air Sahara survived. Others like East-West, Damania, Modiluft, Citylink, NEPC closed shop. Cut to 2004. We are again witnessing the mass entry of new airlines this time in the avatar of Low Cost Carrier (LCC). Apart from legacy or fullfledged carriers like Indian Airlines, Jet Airways and Air Sahara the traveling public has been given a choice to fly any of the LCCs that dot the Indian skies. And there are several others who are readying to take-off shortly. Those operational include Air Deccan that pioneered the LCC revolution in India, Spicejet (Modiluft's in a new avatar), Kingfisher which claims it is not an LCC (because its

The key question is if there is enough space and economy of scale for a dozen operators? Or will there be a consolidation as the years roll by CRUISING HEIGHTS October 2005

promoters feel it is perched somewhere between being a Legacy carrier and a true LCC) and Paramount (the business class carrier out of Coimbatore). Those waiting to get off the blocks soon are Go Air (from the Bombay Dyeing group), Star Air (promoted by Dubai based NRIs attached to ETA --Emirates Trading Agency belonging to the Dubai Headquartered Al Gorair group), Magic Air and some smaller regional players like Indus Air supported by Mohan Meakins etc. The key question is if there is enough space and economy of scale for a dozen operators? Or will there be a consolidation as the years roll by. According to Dr Dinesh Keskar there will be consolidation. It will be pertinent to recall Kapil Kaul's (CEO of CAPA's Indian Subcontinent and Middle East office) opening remarks: In July 2004 nobody took our views on LCCs seriously. Now 14 months later we have got 300 delegates and 40 sponsors for the Mumbai symposium. Captain Gopinath launched Air Deccan and revolutionized air travel by taking it within the reach of even the lower middle class. Today LCCs have already captured 15 per cent of the air travel market in India and by the end of March 2006 it is expected to touch 22 per cent. So much has changed in the last one year. Between 2003 and 2005, India has seen the induction of 60 aircraft, many of them brand new. In the next five years the number of aircraft will rise from the present about 200 to between 450 and 500. But CAPA feels induction of additional 250 to 300 aircraft over the next five years in India can is only a conservative estimate. The main issue is adequacy of airport infrastructure particularly parking bays, apron area, aeronautical side services, terminal areas etc. Most important, the absence of regulatory framework could further impede the fast growth of Indian civil aviation. This may lead to a new question of whether all the LCCs including ones which are planning to enter the air space would survive. The answer could be: yes, maybe or a plain No. CAPA's Executive Chairman Peter Harbison moving a little away from LCCs made a few stinging remarks on the state of the country's international carrier Air India.Harbison remarked the government's role and how it permeates down to everything that happens in industry, often - and has been notably the case with Indian flag carrier Air India -- to negative effect. CAPA Executive Chairman said the long-standing government protection of the national airline may have been well intentioned but did not achieve the intended effects of promoting a healthy air service sector. The restrictive environment that prevailed till last year had resulted in the benefits of the Indian market's enormous potential going to foreign carriers who were able to operate freely under less binding air transport regulatory regimes. Consequently, Air India which 40 years ago was one of the world's leading carriers - has

SPECIAL REPORT

G O P I ' S

H O M E

Should the fare be less than cost or cost more than fare, then it is a sure recipe for bankruptcy. In the US, airlines cannot publish a fare that is lower than the cost incurred. In India sab kuch chalta hai. Referring to this, India's LCC Pioneer Capt Gopinath asked how could a legacy carrier like Jet Airways charge fares in some sectors that is lower than the cost. Is it to send me out of business? The Captain looked at Nilotpal and said: "I hope Nilotpal Basu will helps us out". Then turning to a co panelist on the dais he asked Wolfgang "is it not a fact that despite all efforts to prevent other carriers from entering the aviation business, after the entry of Air Deccan, Jet Airways' profits have soared". Rubbing it further, Captain Gopinath said we have not asked for a Taj Mahal. All we asked is parking bays and that too at such a place (in Mumbai) from where

become an inefficient airline with a small, elderly fleet and one which now carries less than 20 per cent of the passengers traveling to or from India. "The potential for growth has been remarkable but has not been allowed to materialise. For Air India and for India's economy protectionism has been destructionism." Harbison complimented the Indian government at the same time for taking forward looking steps by relaxing controls and diluting protectionism as evident from the rise of many LCCs. The lack of connection had also inhibited flow of investment in hotels. Delhi and Mumbai should have become the largest hubs in this part of the world. He said the government must allow 49 per cent FDI that includes the national airlines and explore the possibility of privatising these as well as the major airports. Harbison remarked the sooner Air India and Indian Airlines were merged and restructured the better would it be for them. Even in the case of Indian Airlines its market share dropped from 70 per cent in 1995 to 30 percent in 2005. IA and AI had to be synergised. There was pin drop silence from the large gathering as Harbison waded into Air India. Excepting that he had reckoned with the redoubtable V.K.Suri, General Manager (Finance) with the Maharaja. Suri said since 1953 when Air India was formed, it made profits for more number of years than losses. And in the last four years, Air India was making profits consecutively when other known airlines were not. Referring to fiscal 2004-05, he said Air India was able to make profits and even declare a dividend despite paying an enhanced Rs 650 crore more than the budgeted fuel bill. ``Air India,`` roared Suri and added,`` has given back to the Indian govern-

T R U T H S

our passengers can walk into or walk out of the plane instead of being forced to use AAI's bus services and pay a hefty amount for an unwanted service. In contrast, Wolfgang just listened to Captain Gopinath who certainly rewrote airline business rules in India.

After three years the government guaranteed protection on the `milch cow sector`--the Gulf route-- will simply vanish ushering in even greater competition. CRUISING HEIGHTS October 2005

ment far more than what it received.`` He also recounted the increased connections by Air India in the last few months especially to the US and Canada from 10 flights a week to 30 flights with the induction of Boeing 777s. Taken aback by this well constructed response from AI, Peter Harbison lamented " I wish I had used my slides last year". But quickly regaining lost ground, Harbison then harped on "see the contrast with Chinese aviation even in the last three years. Protectionism does not help". Perhaps one could not agree with Harbison more on the issue of protectionism. But how does one explain the protectionism in Australia (CAPA is headquartered in Sydney). Despite repeated requests by Singapore Airlines, a very healthy and top class flag carrier Qantas has refused permission to the small island state's SIA to fly from one of the destinations in that country( say Sydney) to key West Coast destinations in the US like Los Angeles and San Francisco. One doesn't know whether the Australian government has given the fifth and sixth freedom rights to SIA. It is easy to protect the "outback" than a major gateway like India that has been generous enough to allow numerous overflights to very large number of carriers. I don't know how many airlines overfly the outback. All this does not take away the importance of what Harbison said. Air India needs to be bolstered and spruced up. The issue of merging Air India and Indian Airlines has to be considered seriously or at least route rationalisation becomes the guiding mantra in a harmonious co-existence of the two. After three years the government guaranteed protection on the `milch cow sector`--the Gulf route-- will simply vanish ushering in even greater competition. In this context, it will be pertinent to question the government's wisdom in barring Indian carriers from flying to the Gulf unless they have been in airline business for at least five years and had attained the acceptable Average Seat Kilometers (ASKM). In other words it leaves the sector free for Jet and Sahara. In cricketing parlance it can only be described as a vicious bit of reverse swing! But protectionism wasn't just limited to discussing Air India. It was a recurring theme time and again through the conference. And even the private sector players had plenty to say on the subject. Leading the pack was Jet Airways CEO Wolfgang Prock-Schauer. Wolfgang listed a few negatives in Indian aviation scene but ended up very positive on Jet Airways future. The only one to question him was the ever bubbly Captain Gopinath of Air Deccan.. Prock-Schauer in his perspective on full service carrier said the Indian economy was showing a tremendous growth and India should ideally be the hub between Australia and Europe and between Africa and Japan. India had a strong domestic base as evident from the growing domestic traffic of nearly 20 per cent now. The domestic passenger base

P R A F U L PRAFUL PATEL'S MANTRA was simple: Indian Aviation can only grow if it looks new destinations, a new segment of passengers and adapts to service a variety of customer bases. The Civil Aviation Minister's intervention was at the high profile, `Powering Aviation Growth organised by CII in Mumbai on September 26. Patel was blunt: competition had resulted in carriers looking beyond the Mumbai - Delhi sector. Infact; they were forced to do so. But he did want airlines to look seriously at the huge potential that cargo offered. He spoke of creating a multi-modal cargo and passenger hub at Nagpur, to provide a boost to cargo flights. For good measure he mentioned that the Naresh Chandra Committee's recommendations would not be 'carved in stone'. Patel believes that industry players need to be better capitalized as added that both IA and IA were under utilized as far as equity went. Air India CMD V. Thulasidas (Chairman CII National Committee on Civil Aviation) in his introductory address termed the meet as a common platform for the industry to come together and open up discussion on issues, which was 'long overdue'. The high cost aspect of ATF and airport charges, continuing exemption from withholding tax on leased aircraft, bring the industry in the process of evolving the national civil aviation policy as also the need to evolve measures to build capacity and infrastructure were the four areas he stressed. Vijay Mallya (Kingfisher Airlines) spoke of the Naresh

touched 18.6 million and growing. But the international base was even greater as evident from Compounded Average Growth Rate (CAGR) of 50 per cent. The top metros - Delhi, Mumbai, Kolkata, Chennai and Bangalore accounted for 70 per cent of airline business. However, if the infrastructure was better the growth would be unprecedented. Wolfgang said Jet Airways' market share had reached 41 per cent with 288 flights a day, same as that of Indian Airlines whose market share had dropped to 33 per cent with higher seat availability. He said Air Deccan had shown a rapid growth and soon it could be seen with Kingfisher and Spicejet. But notwithstanding all this, Air India, Indian Airlines, Jet Airways and Sahara together accounted for a market share of 85 per cent. Jet Airways according to him was an established carrier with good infrastructure, distinct presence, network, prime parking space in major airports, economies of scale etc. "We have 40 737s and can operate aircraft at low cost. While we can tap the market for its huge potential, there were still some things that had to be set right. The key challenge was that 80 per cent of the operating expenses of the airline were not dependent on the business model like fuel, parking, landing and navigation charges, and payroll costs. Some of the startup carriers had even higher payroll costs and therefore unsustainable low fares coupled with high costs would lead to even higher break-evens. The operating environment in India was tough as fuel cost in India for example was 80 per cent more than in Singapore

P A T E L ' S

M A N T R A

Chandra committee having made its recommendations at a time when things were not as hectic or constantly changing as at the present. He echoed Mr. Thulasidas views on the need to involve the industry in the new policy, as also the urgent need for improving infrastructure. ATF should be regarded as a national resource, he said, terming its wastage as a national waste. "Most of the ATF wastage takes place due to delays during taxing for take off and holding before landing," he added. He also made a plea for Indian carriers to fly overseas. The Plenary on India's emerging aviation landscape saw Air Marshal S S Ramdas (Retd.) speak of issues that needed urgent attention of the authorities. While not sounding pessimistic, he pointed out that 2005 seemed to be a repeat of 1990, with an almost similar situation existing. There was an urgent need to plan for and create

B L U N T

T U L A S I

AI'S CMD V.THULASIDAS had some home truths for all. His opening remark suggested that it is too early to judge Air India Express AI's low cost arm. He had the big heart to admit, " I am aware of Air India's costs which are killing. Yes ATF price is a very important component. But everything we do is very expensive and very difficult to make money in airline business these days. Having said that I must also say that in the last four years Air India has made small profits that could have been higher had we not carried the high burden of high oil prices. Therefore, the concept of low cost is not just for LCCs but the entire airline industry. Otherwise the famous US carriers would not have come to the present sorry plight. Perhaps Air India Express will teach the mother Air India some lessons in cost management.

CRUISING HEIGHTS October 2005

infrastructure if the industry was to grow, he stressed. Peter Luethi (Jet Airways) said that while growth forecasts were good, it was necessary that the gaps in infrastructure were filled up at the soonest. Jeh Wadia (Go Air) spoke of the Indian market having a distinct place for low cost carriers. He spoke of low cost carriers providing reliable, quality service, and was confident that full service and low cost carriers would co-exist in the Indian skies. Specifying GO Air's aim as commoditizing air travel, he mentioned the airline would commence operations from 30 October. Warner Rootliep GM, KLM Airlines spoke of the changes in the Indian civil aviation sector, and how the international carriers needed to be very careful while deciding on domestic partners, as the Indian domestic players were looking at operating overseas, which could turn today's partner to tomorrow's competitor. Mr. Zubin Karkaria (Kuoni India) and South Asia spoke of the need for public - private partnerships to ensure India's open skies developed in the right direction. Arjun Sharma(Le Passage to India) spoke of how cash rich and poor in time customers had increased in India, and that the civil aviation sector as also the travel industry needed to coordinate to meet this growing segment. He also spoke of the need for carriers to focus on routes where tourism related demand was high, such as Agra Goa, Varanasi - Kathmandu or Udaipur - Mumbai, which he termed as 'bottlenecks' or required routes which carriers did not fly at present.

and airport charges were about 55 per cent higher. ``There were ATC constraints and also other bottlenecks in key airports. The aircraft movement in these airports was very low at 25 an hour while it was 85 per cent higher in Europe. India today had only 1800 pilots and therefore to say that the country will be able to induct 400 aircraft in the next five years seemed not possible. Even for 200 aircraft we will need 2400 additional pilots. When there is very inadequate parking bay space at most airports, how can we accommodate more new aircraft? `` Asked the Jet CEO Then came the gem from Wolfgang: "The growth therefore has to be stepwise. India had restricted policy for years. It can't be open sky suddenly. It has to be a step by step approach". As far as Jet Airways is concerned since its launch in May 1993, the airline has acquired 51 aircraft comprising 43 Boeing 737s and remaining ATRs. Its turnover had risen to Rs 4400 crore with a market share of 43 per cent repeat 43 per cent. It carried 8 million passengers in 2004-05 and 20 per cent of its shares after the February 2005 IPO was held by nonpromoters. Wolfgang seemed immensely happy when he disclosed that Jet Airways's EBITAR had grown to $ 332 million in 200405 from $ 227 million in 2003-04 and $ 146 million in the previous year. This was a very high growth. By March 2009, Jet Airways will have a fleet of 90 aircraft that will include 56 Boeing 737s, 8 regional aircraft and 22 widebody jets both Boeing and Airbus. We have a solid balance sheet and financial strength to execute the expansion, Wolfgang

SPECIAL REPORT asserted. His closing remark was an eye opener. Jet CEO said emphatically "There will be consolidation of new carriers". I don't know if he had plans to acquire another Indian carrier in his mind as there is wide speculation in the aviation industry that Jet may after all swallow Air Sahara given the latter's perceived political and financial problems. Should Jet Airways acquire Air Sahara, it will get in one stroke a huge bonanza in parking bays, pilots (as Sahara is also a Boeing buff) and more international routes besides of course key early morning and evening time slots in critical stations like Delhi, Mumbai, Bangalore, Chennai and of course Hyderabad where Air Sahara recently set up its Hub. You can have it one way or the other, but can you have it both ways? In the case of Jet Airways it can perhaps be any which way considering the excellent product it has developed and offered internationally. Its hallmark is excellent financial engineering and of course the mania for sticking to on time performance as well as the schedules. Even ten years after it launched, many of its schedules on major trunk routes have not changed. Rather more flights have been added without disturbing the existing ones. Jet has certainly taught a lesson to others in aviation business that adherence to schedules is the way to keep on flying and making more and more moollah. But it took the passion of Captain Gopinath to bring Messers Wolfgang and Company back to terra firma. The Captain said when he was starting his airline, the first low cost model in India, he was told by Vijay Mallya (who had not yet launched Kingfisher) , "Captain you take all the carpenters and masons and leave the rest to me". A year later (in 2004), he had flown more than one million passengers who are not just carpenters and masons but also wide eyed middle class travelers who loved the experience he was providing. If anyone has truly expanded the air travelers market in India it is undoubtedly Captain Gopinath. But how long will he survive in a market where most costs incurred are beyond the operator's control? Also, will he find the funds to back his purchase plan for 75 new aircraft (all A 320s and ATRs). At the same time I could not agree more with him on the issue of entry barrier. When the LCCs were queuing up outside Rajiv Gandhi Bhawan, established players like Jet and Sahara went to the extent of suggesting to the powers that be that the entry norms should be tightened as it would spoil the party for those who had managed to get in. We even heard of authorised capital being increased Rs 250 crore from the present Rs 30 crore.. There was also frantic efforts to pre-empt the parking bays in Delhi and Mumbai airport without which it would be extremely difficult for new players to get even part of the business model right.

A R A B I A N AIR ARABIA STARTED in October 2003 is completing two years this month end. Its CEO Mr Adel Ali is gung ho on his airline and the launch of a new route to another Indian city Nagpur from Sharjah non-stop. Can you imagine older airlines in India cannot fly international routes, but startups from Gulf or even South East Asia can fly into India to hurt mainly Air India? If this is what the prerelease version the new civil aviation policy one wonders what havoc it will cause when actually formulated and implemented. Air Arabia has already carried 1.5 million passengers in the first year of its operations and hopes to carry more this calendar year. Good Luck. But what Ali said actually took the cake. Air Arabia, he said, is driven by the logic " What we don't have

Some of the startup carriers had even higher payroll costs and therefore unsustainable low fares coupled with high costs would lead to even higher break-evens. CRUISING HEIGHTS October 2005

S T A L L I O N you don't need". We use our aircraft for 15 hours a day and with quick turnaround are able to offer 40 per cent cheaper fares. May be it is possible in the Gulf where you turn taps for oil and not water! When one asked both Thulasidas and Adel Ali the actual component of fuel cost of ATF carried by their respective fleets ex-India and ex-Sharjah (to Sharjah and back for Air India and various Indian points of call and back to Sharjah for Air Arabia), only Thulasidas responded. He said it cost Air India US $ 1.58 per gallon. But Adel Ali observed Maun Vrath. Ali only said jet fuel prices are internationally priced and could be marginally up or down.

Gopinath was dead right in asking aloud on where Jet and Sahara been had Indian Airlines applied the same logic "After we came in, Jet is making even more profits. Yes they are the best in the world. But competition is as good for me as to them". "In the current year 2005 we hope to carry 5 million passengers. We are not taking away passengers from Indian Airlines and Jet Airways nor did we take away any from them last year. We have created a new market. The story of Air Deccan is the story of new India" as his short, sweet and crisp documentary shown that day in Mumbai illustrated. Captain Gopinath was again right in saying that Air Deccan was not just going to Delhi, Bangalore or Kolkata but to cities and towns that were longing for air connection. "If Indian Airlines and Jet Airways are the Oberoi hotels of India, we are the Udipi hotels. We will shortly be connecting an important tourist destination - world heritage site of Hampi - near Hospet-Bellary. The airport there was built in 1934 and never used after that. We are now working on it and would soon land there as well. It is vested interest that kept airline business as a close club in India. We have a vested interest in opening and connecting such towns and cities. We need policy changes and airports like these needs to become functional". On the issue of rising costs and how an LCC like Air Deccan is trying to manage, Gopinath was perceptive: "We have our own model. We have recruited 220 pilots and we may need another 700 pilots in the next five years as we receive 75 new aircraft over that time frame. Referring to SIAEC, he said he saw 19 Indian aircraft engineers in Changi to suggest the point that not all were from Singapore. Even Ryan Air does not have all Irisih pilots. As for inflight services, he said we have sold mineral water worth Rs 10 crore on

board our flights. It is all economy class and all our crews stay in our own guesthouses. We save 60 per cent of ticket distribution cost by using Internet ticket delivery system (print out of tickets). At the end of the day the cost has to be lower than the fare. In the US the bankruptcy laws are such that you cannot charge fares that are lower than costs. But in India we have Jet Airways which sometimes charge fares on particular sector that are lower than its costs. It is to send me out of business. Looking at Nilotpal Basu, Rajya Sabha Member and the Chairman of Parliamentary Standing Committee on Transport, Tourism, the Captain asked "All we are asking is only parking bays and not Taj Mahal". It was left to Dr Dinesh Keskar, Senior VP Commercial Airplanes, and Boeing to make the big bold speech. While stating that 16 out of the world's top 20 LCC used only Boeing aircraft (737s), Dr Keskar said there has to be a fanatical side to cost control and quick turnaround of aircraft between the two points sought to be connected. There has to be a disciplined management as the whole culture of LCC is totally different from that of legacy carriers. LCCs need shared culture where every employee should feel any loss that the airline incurs is seen as a personal loss just as it goes with success. South West of US was the pioneer in LCC business worldwide and in its nearly three decades existence it has made profits and used only Boeing fleet. LCCs require a simple standard product with asset flexibility. The thumb rule is that the number of passengers has to be very large for LCCs to be successful. If it is between Delhi and Mumbai where the flight is only short haul, in the US LCCs make it from coast to coast with a travel time of nearly seven hours. Air India's LCC Air India Express is now doing 1400 nautical miles, Jet Blue 1200 miles. Traditionally LCCs were doing one to one and a half hour flights or 400 to 600 miles. They turn those aircraft very fast resulting in a very high utilization. Incidentally, the CEO of Air Arabia Adel Ali said he was using his A 320s for 14 to 15 hours a day. Since these were new aircraft it was possible to do and this was also the main reason for LCCs to opt for new aircraft as the crucial C and D checks become necessary some years down the line. Aircraft are also so configured that there is no galley space as there is no catering. There are no FFPs and ticket sales are through direct sales to avoid the need to pay commission. Dr Keskar said Spicejet that incidentally is also all Boeing fleet has started night flights, which would add nearly 40 per cent to its seat capacity on, offer and reduce cost substantially. The cycle was such that Low Cost leads to Low Fare that in turn boosts demand that in turn leads to seat capacity increase. The cycle goes on. But the model can be turned topsyturvy even if one element in the package goes

J E H

I S

G U N G

H O

JEH WADIA, the young and smart promoter of Go Air is all set to launch his LCC on October 30, 2005. His opening remarks were indeed of great historical interest. Jeh said, "Wadia group is 250 years old. It was in the business of ship building in 1735 and had built 400 ships. He told the audience that the American National Anthem was composed in one of Wadia built ships. Wadia's flagship company "Bombay Dyeing" had been paying dividends for the last 125 years and it was the second listed company in India. The Wadia group also owned Britannia (of biscuit, bread and cake fame) had 750,000 repeat 750,000 retail outlets in India. (He did not say if he would use Britannia outlets as ticket sale outlets for Go Air). Jeh Wadia

was clear in his mind that air travel had to be commoditised and his whole business model was on that premise. Go Air would serve point to point and the emphasis would be on high asset utilization. There will be no interlining and no on board meals as all LCCs do. Go air hopes to have a 36 aircraft fleet in three years with an average one aircraft joining the fleet every 46 days. The utilization of aircraft would be between 11 and 12 hours a day. The brand message is "Experience the Difference". But why did Jeh Wadia choose French made Airbus A 320 is not clear after he proudly told delegates that the American National Anthem was composed on one of Wadia built ships.

"more consolidation in the near future and use of bigger aircraft with higher seating capacity to achieve larger economies of scale".

haywire. The impact is being felt in India just as it is in the rest of the world. For example, the price of Aviation Turbine Fuel (ATF) has gone out of control at $ 70 a barrel. In India besides the unprecedented rise in ATF prices, there is also the additional problem of crew shortage particularly pilots and engineers, rising salaries, sharp increase in lease rentals -nearly twice of what it was two years ago-and the withdrawal of withholding tax exemption on leased aircraft with effect from October 2005 that one has to contend with. All these will put enormous pressure on growth. In South East Asia, in 2002, the growth rate of LCC was 184 per cent while it was Zero for legacy carriers or even negative after 9/11. In fiscal 2003-04 the growth for legacy carriers remained stagnant while LCCs flourished leading to huge upsurge in demand for aircraft. According to Boeing's estimate, in the next 20 years LCCs will have 4000 aircraft world wide and capture nearly 20 per cent of the market while scheduled airline will be left with 60 per cent of the market after accounting for other types of airlines. On India, Dr Keskar said with GDP expanding at 8 per cent, Indian air travel market could see a growth of 20 per cent next year. But the predominant issue is the number of airlines the Indian market support? Boeing has just changed the seat configuration of Boeing 737-900 ER with a seating capacity of 215 all economy class that Ryan Air is acquiring. Against the usual 189 seats being flown by LCCs in India today, there is a potential to increase passenger seating capacity to 215 as stated which means 25 more or 12 to 15 per cent more seat factor. The underlying message in Dr Keskar's presentation was clear: "more consolidation in the near future and use of bigger aircraft with higher seating capacity to achieve larger economies of scale". â&#x2013;

CRUISING HEIGHTS October 2005

TOURISM DIGEST

AT A GLANCE

Tourism for Tomorrow Awards The World Travel & Tourism Council (WTTC) issued a call for entries for the 2006 Tourism for Tomorrow Awards . The Awards, previously run by British Airways, promote and encourage best practice in Travel & Tourism all over the world. There are four categories for entry, allowing for applications from tourism destinations, businesses and organizations. The categories are: Destination Award: for destinations of any size which show a commitment to responsible tourism development Conservation Award: for any tourism organization committed to the protection of natural and cultural heritage Investor in People Award: for any tourism organization which shows a commitment to human resource development and local community involvement.

Expensive France CURRENT RUMOUR in tourism circles suggests that France has become an expensive destination, particularly because of the sustained growth of hotel rates. Global chains are the main villans, it seems. Since 1999, the average daily rates across all categories rose faster than inflation (2.7% versus 2.0% on an annual average).

WTO Project

Just a drop!

elegates to World Travel Market can arrive at the global business event in style - by hopping on the Fietscafe, a fun new 17- passenger bike and mobile cafe, operating between nearby hotels and the venue. The latest craze to come out of Holland will not only help passengers get some exercise and fresh air on their way to the exhibition, but will give them the feel-good factor too. The fietscafe will collect desperately needed funds in aid of Just a Drop, the industry water-aid charity that has already saved the lives of thousands of children worldwide. Passengers on the jumbo bike will be offered refreshments on their trip as well as asked to pay a minimum of a ÂŁ1 towards Just a Drop. The international appeal of Just a Drop, started by World Travel Market, helps children throughout the world who do not have clean water and sanitation close to their homes. The most recent water-related projects by Just a Drop include three in Ethiopia as well as Grenada and India.

THE WORLD Tourism Organization (WTO) and the United Nations Environment Programme (UNEP) combined their efforts to condense all aspects of the sustainability of tourism into a single publication: Making Tourism More Sustainable: a Guide for Policy Makers. The purpose of the new WTO-UNEP publication is to provide tourism decision makers with guidance and a framework for the development of policies for more sustainable tourism, a toolbox of instruments that they can use to implement these policies, and some selected case studies. According to how it will be planned, developed and managed, the massive growth predicted for tourism in the forthcoming years could provide excellent opportunities for spreading prosperity but could also represent considerable challenges and potential threats to the environment and local communities.

CRUISING HEIGHTS October 2005

HK Disneyland FIRST BATCH of tourists who went to the Hong Kong Disneyland on the day of its opening not only had a wonderful experience in playing but also had a shopping spree. Income from ticket selling and souvenirs reached more than 100 million Hong Kong dollars on the first day and tourist boom is expected to continue on Tuesday.The service hour started at one o`clock in the afternoon. Yet before that, many tourists had already made up a good plan as what to buy. As soon as the door opened, hundreds tourists rushed to the shops in the American small town for all those lovable gifts.

Net: yes, mobiles: no! A RECENT study finds that many Americans prefer to use technology when booking air travel and accommodations, but when it

Project Postcard FOR THE month of August, residents and tourists in Singapore wrote and sent out a staggering 272,635 "Uniquely Singaporeâ&#x20AC;? Postcards to their friends and relatives all over the world. This is an increase of more than 30,000 postcards compared to the same period last year, and bears testimony to the continued success of Project Postcard . All postcards were entered into two lucky draws where attractive prizes awaited both postcard senders and recipients. The Grand Prize winners all had interesting stories behind their postcards.

New York is the Best DATA FROM a survey released this week by global advertising agency Leo Burnett Worldwide finds New York City as the best city "brand" in the world. With Sydney coming in just behind New York , and just above London. Experts in branding with client experience that includes tourism accounts for Switzerland, Thailand, Singapore and Norway, Leo Burnett partnered with leading pollster YouGov to conduct the Leo Burnett World Cities Brand Index.

comes to using technology in transit, the general public is not seeking to use their cell phones while flying the friendly skies. Over the past several years, airlines have used a number of methods to direct prospective travelers to their Websites to book air tickets. Many airlines charge an extra fee for booking travel over the phone or at a reservations desk. It appears this strategy is working. Nearly half (47 percent) of Americans who travel prefer to use an airline`s Website to all other booking methods according to the study. Online travel agencies, such as Expedia and Travelocity, are preferred by 29 percent of travelers. Only 13 percent of travelers prefer to book air travel with traditional, offline travel agencies. About one in ten travelers (11 percent) prefer to use an airline`s reservations call center.

Use Tourism in war on poverty" - world leaders urged REPRESENTATIVES FROM governments and industry strongly backed the World Tourism Organization`s call to increase tourism to help realize the United Nations` Millennium Development Goals. Meeting at the invitation of WTO Secretary-General Francesco Frangialli in New York on the eve of the Special United Nations General Assembly, they agreed a declaration that calls on the United Nations and public, private and civil society decision makers worldwide to encourage tourism as one of the most effective tools for sustainable growth in the world`s poorest countries. CRUISING HEIGHTS October 2005

Food tourism is on the boil IT COULD be the colourful sight of a giant rustic paella in a Spanish seaside town or the smell of a warm bagel on a New York street . But whatever the dish, it seems food is something an increasing number of us remember from our travels. Like never before, holidaymakers are choosing where they go by what they can put in their stomachs - and catering for them is now top of the menu for tour operators and destinations. For the first time, the true extent of food tourism has been measured in the UK by World Travel Market, the premier business event for the international travel and tourism industry, with research revealing more than half (53%) ranked eating traditional dishes as a 'very important' or 'important' part of their holiday. Supermarkets have played a major part in the shift in attitudes, making foreign foods more available.Chicago led the way eight years ago when it appointed former chef Judith Hines as director of culinary arts and events.She oversees 275 annual food-related events, including its summer-long Stirring Things Up festival (May 1-Oct 31), which features culinary tours, food festivals, farmers' markets and concerts. Special hotel rates are available to visitors during the period.

CLIPPINGS

Idris Jala is the man! MALAYSIA AIRLINES has appointed Idris Jala, as its new Managing Director and CEO. He will take charge of his duties and responsibilities from 1 December 2005. Commenting on his new appointment as the Managing Director and CEO of Malaysia Airlines Idris Jala said, "As I am not from the airline industry, I will have to learn fast. I will do my best to work with everyone in Malaysia Airlines. I believe the key to business turnaround lies in unleashing the talents of everyone in Malaysia Airlines." Presently the Vice President of Shell Malaysia Gas and Power and Managing Director of Shell Middle Distillates Synthesis (SMDS) Malaysia, Mr. Jala has successfully led the business turnaround of SMDS since taking on this role in 2003. He now oversees Shell Malaysia's business interests in the LNG and Gas-to-Liquids sectors. He also has an extensive experience at helping Shell operations globally with significant business challenges in the downstream sector At 47, Idris Jala will be one of the youngest chief executives in the airline business. He holds Bachelor's Degree in Development Studies from University Sains Malaysia, Penang in 1982. Mr.Idris has won the Bishen Kaur Award as one of the top student in Development Studies. Later on, he was given a Shell scholarship that enabled him to obtain a Master's Degree in Industrial Relations at the University of Warwick in England.

John and Peter join spicejet family SPICEJET HAS APPOINTED Capt. John "Jack" EKL as their new Chief Pilot and Peter A. Hill as their new Vice President - Customer Services As the Chief Pilot, Capt. John "Jack" EKL will help SpiceJet in setting the professional standards for their Flight Crew and incorporate the successful procedures of Southwest Airline to make SpiceJet a truly low cost, efficient and safe airline. Previously, Jack was a Captain on the Boeing 737 aircraft and held management positions of Director of Operations, Chief Pilot, Manager of Flight, and Check Airman for Southwest Airlines. As the Vice President - Customer Services, Peter will provide SpiceJet with expertise in airline strategic planning & development and will help them raise the bar of customer service to deliver the best value to its customers. Peter Hill is gradu-

ate honors in Aviation and Flight Technology where he also obtained his commercial pilots license. He has vast experience in Executive Management, Operations, Customer Service and Administration.. He was with Air Ontario in Canada for 17 years where he reached the level of vice president. After consulting with Diamond Aircraft Manufacturing Peter returned to the airline business where he did two years with BWIA International as Vice President Customer service (including a period as acting President & CEO), a year at Air Jamaica as Vice President Customer Service and Operations Control and six years at BWIA West Indies Airways as Vice President Operations and Customer Service. After nine years in the Caribbean Peter returned to Canada for two years before joining the SpiceJet team

Jetstar comes to India JETSTAR ASIA IS commencing a five time weekly service to Bangalore, making it the first value-for-money carrier from Singapore to establish links with the world's leading IT centre. The airline also announced that it was adding an additional service to Kolkata, making it a four-time weekly destination. While exact commencement dates for the routes are to be determined, Jetstar Asia are targeting for the new services to be up and running by the end of October. The BangaCRUISING HEIGHTS October 2005

lore service will run with departures from Singapore's Changi airport to Bangalore's International Airport The airline provides top quality service onboard, though, for a price. This includes the digEplayer service, which combines music, movies and sitcoms in each seat on routes to Bangalore, Kolkata, Hong Kong, Manila and Taipei at a nominal cost of S$12 per flight. Hot food, snacks and beverages along with duty free items may be purchased on board.

CLIPPINGS

Le Passage opens office in Kochi IN ITS drive towards growth, Le Passage to India Tours & Travels has opened its 7th branch office in Kochi.The company plans to open two more offices in Bangalore and Chennai this month. Le Passage to India has closed its annual accounts for the year 2004-2005with a turnover of Rs 91crore as compared to Rs. 46 crore for 2003-2004 thus, achieving remarkable growth of 100 percent. Set up two years ago Le Passage is ranked among the top three tour operators by the Department of Tourism. During the course of the year they have opened overseas representations in Paris, London and one for Australia & NewZealand to add to the existing marketing offices in Germany, Spain & theU.S.A. Besides these, the company has offices in major Indian cities.

Joint promotion

Kachru promoted CARLSON HOTELS Worldwide has promoted Mr. K.B. Kachru to Executive Vice President for South Asia. He has been largely responsible for promoting and developing Carlson Hotels Worldwide position in Asia Pacific. K.B. continues to be based in Delhi and will focus his efforts on the development of Carlson brands in South Asia. Through this leadership and direction Carlson now has 47 hotels, 5TGIF Restaurants open and under constructing in South Asia. South Asia remains a key priority within Carlson's Asia Pacific strategy and with new responsibilities.

TOURISM MALAYSIA and Singapore Tourism Board together with Indian national carrier Air-India today announced the launch of a value for money package for the discerning Indian traveler. Competitively priced at Rs 18,999 the package will offer 5 Day and 4 Night stay, which will include 2 nights in Kuala Lumpur and 2 nights in Singapore. The package is valid from October one to November 30, 2005. Launched in association with 20 leading travel agents and based on a 'Two Fabulous destinations, One Great holiday' packaging, this offer will include economy airfare, accommodation with breakfast, transfers, along with half-day sightseeing tours on a seat-in-coach basis in both Kuala Lumpur and Singapore. Commenting on the launch of this

CRUISING HEIGHTS October 2005

package Mr. Manoharan, Director, Tourism Malaysia, India said, "This unique package is designed keeping in mind the upcoming Indian festivities and winter holiday season that will offer the traveler an opportunity to visit and explore the tourist sites of not just one but two countries. This initiative is yet another step by Tourism Malaysia to help augment the Indian arrivals beyond 200,000" Speaking further on the launch of this package, Mr. Dayne Lim, Regional Director, Singapore Tourism Board said, "We are extremely excited with this latest partnership with our Malaysian counterparts and Air India, and look forward to welcoming more Indian travelers to have a great year-end holiday in 2 fabulous destinations - Malaysia and Singapore".

A trip to remember FOR THE YOUNG kids who took the trip to Chandigarh and back on Gandhi Jayanti Day it was simply unforgettable. Organised by Indian Airlines in collaboration with the Cancer Patients Aid Association, the idea was to give cancer affected kids some joy and a few moments in the sky. `` These kids loved it. For most of them it was simply the thrill of being on air for the first time. They thoroughly enjoyed themselves. For us at IA it was a matter of immense satisfaction that we brought so much joy to these children, ` said Ashok Sharma GM (PR) at IA.The Airline has been organsing these trips on and off for children and in the words of Sonia Malhotra of the CPAA the children felt ``on top of the world``

Pata Mart at KL TOURISM MALAYSIA the nodal agency to promote Malaysia as a preferred tourist destination organized the PATA (Pacific Asia Travel Association) Travel Mart 2005 from September end (27-30) at Kuala Lumpurconvention centre, the city's latest state-of-the-art convention centre. This is the second time that Tourism Malaysia is hosting the prestigious PATA Travel Mart. The PATA Travel Mart in year 2004 was held in Bangkok and attracted a total of 345 global

buyers representing 309 organizations from 45 countries and 720 seller delegates representing 342 organizations from 37 countries. This was 70% larger than PATA Travel Mart held in Singapore in the year 2003 and this time the number was bigger.Pata focused on four fronts this time around: to implement more stringent buyer, attract new buyers for emerging and niche markets, attract a wider range of travel products from across Asia, organize educational workshops, seminars and press briefings on the latest travel trends, products and challenges.

Recoura in command CONTINENTAL AIRLINES recently appointed Laurent Recoura its Senior Director, India. Continental will launch daily, non -stop service between Daily and New York /Newark effective November 2, 2005 (westbound) - the first-ever scheduled non-stop flight between India and the United States.Recoura, 41, has overall management responsibili-

CRUISING HEIGHTS October 2005

ty for continental's sales and marketing in India. Previously, he was the airline's Sales Director, France, a position he held since 2001, having joined Continental in 1990 and held several position in sales and airport services. Prior to that, he worked for a travel agency in Toulouse which was the General Sales Agent for continental, along other airlines.

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Paint my aircraft

hat better way to advertise your wares than put it on the plane?

Well it's a dictum that airlines around the world are following with a great deal of passion. Its free publicity looks good on the plane and brings in the mollah through larger tourism numbers. A heady mix indeed. No wonder Renuka Chowdhary has gone for the Incredible India logo on all Air India aircrafts. To be fair AI has already done its bit for Incredible India with the extremely well painted tails of its LCC carrier AI Express. If one may add its looks better than the Incredible India logo on AI. The biggest hoopla in recent times was the China launch of the 2008 Beijing Olympics logo on the country's Air China aircrafts. In typical style, there was plenty of razzmatazz and colour as the painted aircraft were unveiled in front of cheering invitees. Qatar Airways, one of the fastest growing airlines in the Gulf has started flying with the Asian Games paint on its fuselage. The Games will be held in Doha next year. The government has pulled out all stops to make the event a huge success and Qatar Airways is doing its bit for the cause. Perhaps the best of the lot is the beloved Asterix strip that now features in the SN Brussels Airline. The Belgium based carrier decided that there was o better way to inform the world about its wares than with Asterix and Obelix.Chief Vitalstatistix may not have approved but the druid Getafix would sure have approved.

CRUISING HEIGHTS October 2005