Cruisingheights

Pg 20

... and the air india story begins — again

Cruising heights www.cruisingheights.in

DECEMBER 2012 I `90

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speC aero iaL on

engi pg 38 nes

TKO!

It’s a technical knockout blow from the Gulf carriers — Qatar, Emirates and Etihad — that has won the first round in the bout with Star, SkyTeam and oneworld.

bright future for business jets

10,000 bizjets will be inducted internationally in the next 10 years and a sizeable number will be taken by india and China

Lufthansa Leans on ibs

indian it prowess scores above 399 solutions providers to win contract with Lufthansa Cargo

editor-in-chief's note

Losing the prize

Cruising Heights December 2012

forthcoming in pressing its case. In fact, when the Secretary General of ICAO came to India for the regional conference of the Directors General of Asia Pacific nations there wasn’t much enthusiasm in pursuing this objective. “They went back with the feeling that we are not too keen on this prize. After all if your body language is so casual why should they go out of the way?” said one official.

hc tiwari

T

he International Civil Aviation Organisation (ICAO)’s first branch office will commence operation in Beijing K Srinivasan during the first half of 2013.

This is a follow-up to an ICAO decision last year to establish a branch office in East Asia to meet the region’s huge demand for air travel and the sundry regulatory spin-offs that follow.

In early November 2012, ICAO announced that Beijing had been chosen over Singapore, Seoul and New Delhi for this honour. While four cities were in the fray, in real terms it was a two-horse race between India and China as the two most rapidly-growing aviation markets in the world?

The key role of the branch office will be airspace management in the Asia-Pacific region.

For a country that has thrown its hat into the ring for the top job at ICAO (former Civil Aviation Secretary Dr Nasim Zaidi has already been announced as the candidate although it is doubtful if anything will come of it now, considering that Dr Zaidi has moved to the country’s Election Commission and is slated to be the Chief Election Commissioner in over two years from now), the loss to Beijing should actually come as a shock. Believe it or not, no one’s bothered.

It’s as if it is no big deal!

If there is any sense of priority, it’s on who should get which GSA (General Sales Agent) in which city, who should head the Aircraft Acquisition Committee (AAC), how slots can be auctioned and how more airports can be privatised. In effect, these are issues that is one long moolah train. There is no concern about moving forth with the Civil Aviation Authority, getting the security apparatus streamlined, resolving issues between the regulator and the airports, getting the Airports Authority of India (AAI) more money to meet its objectives. These are all issues that are on the table and not getting the attention it deserves.

Those in the know state that China got the green light simply because they lobbied vigorously, focussed laser-like on the objective, feted the ICAO Chief like a head of state when he went to Beijing and in short did everything they could to grab the prize. India, according to one official, was lukewarm, casual and most non-

setting the agenda: Raymond Benjamin, Secretary General of ICAO delivering a speech at The 49th Conference of Directors General of Civil Aviation (DGCA), Asia- Pacific Regions in early November

At least on issues like this there has been no one like Praful Patel. He would have wooed ICAO and floored them with charm. He would have organised a meeting with the Prime Minister, wined and dined them till he got the prize. It only goes to show that you need Ministers who have the savvy of good bureaucrats and the spiff of seasoned spinmasters and publicists in a connected multi-lateral world.

We lost a prize, but it will be worth it only if we learn some lessons from this outcome.

srini@newsline.in

3

Imagine an airline catapulted into the sky by electric motors. Sounds interesting. Airbus is developing a technology known as eco-climb, which allows the aircraft to be launched. The plane would sit on a platform that ran along a track where the runway would otherwise be. The platform would accelerate to take-off speed, at which point the plane would lift into the air powered by its own engines.

Taking off in this way would both conserve fuel and make life more pleasant for those who live near airports. Aircraft engines are optimised for level flight at cruising speed. Using them to speed up a plane on the ground fritter away a lot of fuel. An induction-motor-powered platform, by contrast, would be optimised for the job at hand. It could launch the plane at higher speed, letting it climb faster. That would save fuel, too. It would also mean fewer people on the ground would suffer from aircraft noise. And it could do all this from a track that was a third shorter than a conventional runway.

According to Airbus’s back-ofthe-envelope calculations, ecoclimb would reduce fuel burning up by 3 per cent on a usual 900-km (560-mile) flight, even with existing aircraft designs. But it would also allow for the design of lighter aircraft, with smaller engines, which would cut fuel consumption, noise and emissions further. “A continuous eco-climb would further cut noise and CO2 emissions, particularly if renewable fuels were used, making the process even more eco-efficient.

This would be in sharp contrast to today. Aircraft currently climb in a series of incremental — and inefficient — stages, which require more fuel,” said Airbus.

4

contents dauntlessjaunter.com

Off the cuff

Simplifying take-offs

season of tie-ups

p30

The aviation industry worldwide has witnessed a change in its DNA in the last few months. Airlines all across have entered agreements that transcend the boundaries of alliances such as oneworld, etc . What does that mean for the aviation sector? Will it divide the aviation fraternity into profit-seeking groups?

news digest

p20

There is widespread optimism among Air Indians that the Maharaja is on the road to recovery. What are factors that is bringing about this feeling? Plus: SpiceJet and Jet move on.

Cruising Heights December 2012

Business Aviation

p47

Honeywell has forecast in its 21st annual Business Aviation Outlook that nearly 10,000 new business jet deliveries will happen from 2012 to 2022, with India and China playing leading roles.

contents articles news views edits interviews clippings profiles news digest

cargo

Cruising Heights

p58

Volume VII n No 7

India remains a key destination for FedEx feels Rakesh Shalia, Managing Director-Marketing, FedEx Express, Middle East, Indian Subcontinent and Africa, as he talks about the future plans of the express mover in India. Plus: IBS reaches out to Lufthansa Cargo.

Editor-in-Chief

K SRINIVASAN Managing Editor

TIRTHANKAR GHOSH Group Consulting Editor

R KRISHNAN Consulting Editor

Nandu manjeshwar Assistant Editors

net express

p51 snippets

Indian air travellers, around 63 per cent, have a far more tolerant attitude towards fellow passengers communicating over cellphones in the aircraft and find it important to stay connected with family and friends. That is what leading global flight search site Skyscanner found in a recent survey.

p68

Air India is likely to auction some of its precious artwork, comprising thousand-odd paintings and sculptures by leading Indian artists. Plus: the latest from international carriers operating from India.

justin c murik, nidhi sharma Copy Editor

Ashok kumar Senior Sub-Editor-cum-Reporter

punit mishra Chief Visualiser

ajay negi Designers

modassar nehal, Mohit kansal nagender dubey, chanderjeet Design Consultant

artworks Picture Editor

Pradeep chandra Photo Editor

HC Tiwari Staff Photographer

hemant rawat Director (Admin & Corporate Affairs)

Rajiv Singh Director (Marketing)

Rakesh gera Manager (PR)

Ashutosh Mishra Sr. Executive (Coordination)

Alka goswami

choppers

p43 BACK PAGE

With the ability to lift more than its own weight in under-slung cargo, the K-1200 K-MAX ‘aerial truck’ is the first helicopter in the world to be specifically created for repetitive external lift operations and vertical reference flights. A look at the chopper.

p74

Going sky-high in a unique way to fight against all odds, is something that Delta Airlines has done, with its pink plane for cancer awareness.

cover design:

artworks

The total number of pages in this issue: 72+4

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Cruising Heights December 2012

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Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013, Tel: +91-11-41033381-82 All information in Cruising heights is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code.

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“ periscope

Policy review “Security and safety is a major concern at low-cost terminals. We are looking for an efficient model to construct terminals.”

V P Agrawal, Chairman, Airports Authority of India (AAI), on developing low-cost airport terminals in India

A big no!

“The FDI policy is only a few months old. One of the challenges is if the foreign investment will be used to develop the industry.”

letters to editor

The story Last King of Kingfisher (November 2012) was interesting to read.

The rise and fall of Kingfisher Airlines is dramatic to say the least. In my opinion, the business model of Kingfisher Airlines was flawed right from the scratch. Vijay Mallya is largely to blame for the airline’s downfall. The MEET flamboyant liquor baron was busy in VIJAYNAGAR-2 his favourite pursuits rather than ably managing the airline. His style of management has failed. And as far as bailing out the airline is concerned, it would be idiotic for the government to even think of such a move as the beleaguered airline is on the verge of closing down.

Ram Gupta, Ahmedabad

Adel Abdullah Ali, Global Chief Executive Officer, Air Arabia, on the foreign direct investment policy in India

CH cover-Oct_ACI COVER.qxd 01-Nov-12 1:45 PM Page 1

MALÉ AIRPORT TERMINAL: THE MAKING OF A SHOWPIECE

Pg 40

CRUISING HEIGHTS www.cruisingheights.in

NOVEMBER 2012 I `90

Middle East gets into the alliance act

Qatar Airways’ entry into oneworld signals attitudinal change of airline managements

Rolls-Royce eager to start India ops Kishore Jayaraman on RR’s plans to drive technological innovation in India

ON FOCUS C DGCA APA

The ruins of the once strong and resilient Vijaynagar Empire tell a story of complacency and over-confidence. Vijay Mallya’s Kingfisher saga is a repeat of that story.

Male Airport is poised to play an important role in the economy of Maldives as illustrated in the story Maruhabaa to Male (November 2012). The GMR-operated Ibrahim Nasir International Airport in Male will surely pave the way for better connectivity of the region. Maldives, which has been going through political instability over the years, has been longing for a world-class airport and in my opinion the GMR-operated Ibrahim Nasir International Airport will fill this void. The new terminal, which is scheduled to open in summer 2014, will also give the airport a new identity and recognition.

Ruhi Khan, Mumbai

I liked reading Heli-anchors at the races (November 2012).

Aerial photography is the technique of capturing photographs from an elevated location. The story provides a wonderful insight in the use of choppers in aerial photography. Indeed, choppers provide a fresh approach to the traditional way of capturing images. By utilising remote-controlled helicopters, one is able to shoot from a much lower altitude than an aircraft thereby ensuring greater detail and clarity in the shots. Aerial photography definitely opens up brand new possibilities for the photographer who is looking for something new.

Ajay Jaiswal, Lucknow

Upping the ante “...We do not put a gun on their head but the more comes in the better because airlines are a very capital intensive business. I think about $1 billion would be a good starting point.”

Pratip Chaudhuri, Chairman, SBI, on the realisation of Kingfisher Airlines’ debt

A guiding light “Seat belts don't matter. If there ever was a crash on an aircraft, God forbid, a seat belt won’t save you.”

Michael O’Leary, CEO, Ryanair, on the irrelevancy of seat belts in flights

Gut feeling “Air India is a public sector undertaking and killing Air India and Air India Express (AIE) is not a solution. Our responsibility is to strengthen Air India and solve the problems.”

K C Venugopal, Minister of State for Civil Aviation, on the resurrection plans of Air India

CLARIFICATION A word was used on Page 66 of Cruising Heights (November 2012) that should not have been there. It was unintended.

— Editor All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin (East), New Delhi -13, OR mail to cruisingheights@newsline.in.

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Cruising Heights December 2012

Grey areas “EU is continuing to pursue its unilateral and extra-territorial scheme which is dividing the world and recklessly risking a trade war.”

Tony Tyler, IATA Director General, on following one-sided and extra-territorial scheme by EU

The Airports Council International (ACI) recently released a report on the world’s busiest airports by passenger traffic. Topping the chart was the Hartsfield–Jackson Atlanta International Airport in the US followed by China’s Beijing Capital International Airport. London’s Heathrow Airport garnered the third spot while next to it was O'Hare International Airport in Chicago, US. The fifth spot was bagged by Tokyo International Airport, Japan. Los Angeles International Airport came sixth and at the seventh position was France’s largest airport, Paris-Charles de Gaulle Airport. For the eighth position, it was back to the US’ Dallas/Fort Worth International Airport. Frankfurt Airport earned the ninth position while Soekarno-Hatta International Airport of Indonesia claimed the tenth spot. Here’s the top 10: » Hartsfield–Jackson Atlanta International Airport, US: 55,868,147 passengers

» Beijing Capital International Airport, China: 46,950,904 passengers » Heathrow Airport, UK: 40,194,949 passengers » O'Hare International Airport, US: 39,070,976 passengers » Tokyo International Airport, Japan: 37,142,196 passengers » Los Angeles International Airport, US: 37,129,716 passengers » Paris-Charles de Gaulle Airport, France: 35,746,812 passengers » Dallas/Fort Worth International Airport, US: 34,175,500 passengers » Frankfurt Airport, Germany: 33,187,170 passengers » Soekarno–Hatta Airport, Indonesia: 33,095,953 passengers.

cold stats

Tackling numbers

Looking glass

Forget the worries of 2012.... Let's look out for a better 2013!

With a vengeance “The entry level fares of all LCCs and Full Service Carriers do have only around `500 gap. There is a cartel to fix the price of the bottom. Break the cartel and then only the market will expand.”

Captain G R Gopinath, Pioneer of low-cost aviation on the cartelisation being pursued by domestic airlines

Ground reality is different “There is no cartel. If there was a cartel why would we all be losing money?

If we manage to fix prices at levels where most carriers lose money, it does not seem a good move.”

Neil Mills, Chief Executive Officer, Spicejet, brushing aside rumours surrounding the cartelisation issues

Cruising Heights December 2012

9

news digest

Malaysia flies in February '13 with oneworld

Korean Air shows its B737-800 with SkyTeam livery Korean Air introduced its third SkyTeam livery aircraft. Korean Air’s third SkyTeam livery aircraft is a Boeing 737-800. The newlywrapped aircraft with an arrangement of 149 seats will operate on shorthaul routes including China, Japan and South East Asia.

The subtle design includes features such as the dark blue SkyTeam logo on the tail fin and the SkyTeam name in large, dark blue letters along

the front side of the body. By running three SkyTeam livered aircraft, the airline will now exhibit the alliance’s exclu exclusive colours and identity to more customers around the world.

Earlier, the first aircraft wrapped in SkyTeam colours, a Boeing 777-200 with a configuration of 260 seats, began its business in 2009 and the second aircraft, a Boeing 737-800 in 2011.

SA sweeps Premier awards Star Alliance and its member airlines — Air New Zealand, TAM, Lufthansa, SWISS, Turkish Airlines and United Airlines — took 22 awards. Premier Traveler magazine voted to honour Star Alliance and many of its member carriers.

“These days, alliances are the way the world connects, providing

a smooth travel experience. Organising a smooth travel experience for our customers is not always simple but we are proud that the readers of Premier Traveler acknowledge the collective efforts of our member airlines,” observed Mark Schwab, CEO of Star Alliance.

Flybe Finland tags into oneworld Flybe Finland is to fly as an affiliate member of oneworld on routes it operates on behalf of alliance member Finnair. The arrangement took effect from October 28, when Finnair transferred its 12 Embraer and 190 regional jets to Flybe Finland to operate on behalf of Finnair on select routes at select times, to destinations in Europe including Budapest, Manchester, Munich and Warsaw. Pilots will be from Finnair and Flybe while Flight Attendants will be employed by Flybe only, and wear the Flybe uniform. Other than that, customers should not notice any difference from regular Finnair services. The

10

transfer of these operations has been made as part of Finnair’s overall restructuring plans to return the group to profitability.

Finnair, Vice-President-Alliances, Paavo Virkkunen said, “Extending oneworld affiliation to these contract flights operated by Flybe Finland on behalf of Finnair is in line with our strategy to ensure that customers flying on these routes enjoy a seamless Finnair brand experience. The good news is that they will continue to enjoy all oneworld services and benefits, including earning and redeeming frequent flyer rewards and earning tier status points.”

Malaysia Airlines will become a full member of oneworld with effect from February 1, 2013, adding one of commercial aviation’s most frequent award winners to the world’s leading quality airline alliance. The national airline of Malaysia received clearance to board oneworld after successfully completing a thorough review of its readiness conducted by Qantas, which is sponsoring its entry into the alliance, with the oneworld central team. While its alliance implementation programme is on track for completion in the coming weeks, its addition to oneworld is being held until the beginning of 2013 to avoid the end-of-year holiday seaAhmad Jauhari son and for other administrative reasons. Malaysia Airlines will start offering oneworld’s full range of services and benefits from February 1, 2013 – becoming the alliance’s second airline operating the Airbus A380.

Oneworld CEO Bruce Ashby said, “Malaysia Airlines is an ideal candidate for oneworld, with its world-class reputation for customer service mirroring oneworld’s own focus. Its Kuala Lumpur home will provide our customers with another of the world’s best airports, geographically well placed between our existing hubs.

This will greatly enhance oneworld’s offering throughout one of the world’s fastest-growing region for air travel demand.”

Malaysia Airlines Group Chief Executive Ahmad Jauhari Yahya said, “Oneworld membership represents one of the most significant achievements to date for Malaysia Airlines. We are very pleased and proud to join what is clearly the world’s top-quality airline grouping on February 1.”

Cruising HeigHts December 2012

news digest

Air France pressures Air Berlin

Air France wants Air Berlin to join its SkyTeam alliance of airlines around the world and forsake its membership of the competitor oneworld grouping.

“Together with it we can defend ourselves better against the low-cost airlines.

If we further work closer together along the way Air Berlin must decide if it would stick to the oneworld alliance or switch to the SkyTeam alliance of Air France-KLM,” he said. A Spokeswoman for Air Berlin told Agencies, “The membership in the airline alliance oneworld has developed positively both for Air Berlin and for oneworld. The Air Berlin membership in oneworld is independent of the potential code-sharing with other airlines.”

Gearing up for tam goodbye Star Alliance is bracing up for the likely exit of Brazilian carrier TAM, which would leave the marketing and frequent flyer partnership without a grip in the important Brazilian market.

TAM, which recently merged with Chile’s Lan Airlines to establish Latam Airlines Group, is expected to dump Star Alliance after Chilean regulators warned the merger could not take place if the new airline was part of the global marketing alliance.

“Eventually TAM will have to leave Star and from our standpoint, whenever

that date comes, we need to come back and rebuild a proposition for Brazil,” said Mark Schwab, Star Alliance’s Chief Executive, on the sidelines of an airlines conference in Panama.

“We are very happy with the rest of our network in Latin America, but Brazil represents 40 per cent of air travel in the region,” he added. “We have plenty of service into Brazil, but we’ll end up losing a strong home carrier,” Schwab said. “We need to look for a strong home carrier and a competitive network within Brazil.”

Meanwhile, The Chief of LATAM Airlines, has very firmly indicated that the LATAM Airlines will be a oneworld member. On June 22, Chilean airline group LAN and Brazil’s TAM closed on their merger creating one of the biggest carriers in the world with affiliates in various Latin American countries LATAM’s Chief Executive Enrique Cueto said, “The merged carrier would prefer both LAN and TAM to be in the same alliance.”

Mark Schwab

Codeshare Virgin, SIA in codeshare pact Virgin Australia and Singapore Airlines recently stretched out their codeshare agreement, which could serve travellers from Australia’s east coast who are connecting in Singapore. Under the agreement, Virgin Australia, from the first quarter of 2013, will improve its code to SIA flights from Brisbane, Sydney and Melbourne to Singapore and beyond Singapore to cities in Europe, the UK and additional cities in Asia. At the same time, SIA will put its code on all of Virgin Australia’s 32 domestic destinations. Currently, Virgin Australia codeshares on SIA flights to Europe and the UK from Adelaide, Perth and Darwin. The changes mean Virgin Australia passengers will also be able to travel to Europe and Asia from Sydney, Melbourne and Brisbane on the SIA and SilkAir networks.

Finnair-MAS in codeshare tie-up Malaysia Airlines (MAS) and Finnair have established new codeshare partnership, thereby increasing contact to the airlines’ hubs in Helsinki and Kuala Lumpur. Through this new agreement, selected MAS services between Kuala Lumpur and the cities of Singapore, Bangkok and Hong Kong will bear the Finnair flight code.

“Finnair is very pleased to offer our customers flying

12

to Southeast Asia an extended reach to Kuala Lumpur, the cultural and economic heart of Malaysia and a fast-growing and prosperous metropolis. Malaysia Airlines is a natural counterpart for us and we look forward to welcoming the company to the oneworld alliance,” said Finnair Vice-President, Commercial Partnerships, Hannu Sundberg.

MAS’ Senior Vice-President of Government and International Affairs, Germal Singh said, “The arrangement with Finnair is a part of a strategy to develop commercial cooperation with oneworld alliance members. Through this partnership we can expand our reach.”

Cruising Heights December 2012

news digest

Skytrax under scrutiny

Adel Ali on India Air Arabia board member and Group Chief Executive Adel Abdullah was recently in India and spoke to journalists in Mumbai. In India, it operates over 112 weekly flights from Sharjah connecting Jaipur, Kochi, Nagpur, Coimbatore, Delhi, Mumbai, Thiruvananthapuram, Goa, Kozhikode, Hyderabad, Bengaluru, Ahmedabad and Chennai.Here is a gist of his take.

On investing in India We don’t want to rush into buying or investing in a market that we are not expert of. Operating from the UAE to India and back is one thing and picking up stake here is another, as we don’t have the required expertise. One needs to look at the policy framework in detail and understand what it exactly offers.

On growth in the subcontinent For the past two years, we have not grown because we have used up all our allocated seat capacities under the bilateral. I am hopeful both the governments are sensible to recognise this fact and increase the seat allocation.The seat factor on the India-Sharjah route is quite high and there is enough room for expansion.

14

Today, most of the airports we operate enjoy an extremely high annual passenger load factor of 90 per cent.

We should be allowed to fly to more Indian airports. We had good year-onyear growth until about 2010. For the last two years, we have not grown in this market despite running at about 98 per cent seat factor simply because we were not being granted any more rights into India But for the last two years we have not grown at all because we have used all our allocated capacity.

On the allure of India I believe every airport in India can go international. Look at the sheer size of this country, it should have maybe 20, 30 international airports. If you look at the demography, every country in the world has Indian population. Similarly, you have people coming from everywhere into India. India itself has changed much for over the last few decades. Twenty years ago, one hardly saw Indian families in Euro Disney or the Swiss Alps skiing. Today, you see scores of Indians.

On profitability It is high. Fuel prices are high, airport charges are high. There are quite a lot of additional charges that airline has to pay. In comparison, you pay at least 40 per cent more in India.

An investigation by an advertising watchdog into a leading airline and airport review site found it was unable to back up several of its claims, including that reviews on its site were posted by genuine passengers.

The Skytrax Research airline review website www.airlinequality. com claimed to provide an airline rating system and customer reviews for airlines and airports worldwide based on what it said were ‘‘checked and trusted airline reviews’’ from more than five million passengers.

However, the Advertising Standards Authority in the UK said that there was no evidence that Skytrax had followed the robust procedures it claimed it had in place to check all reviews were genuine.

Although Skytrax argued that every review underwent a four-stage authentication process, it said it was unable to provide proof it had followed its own procedures as customer emails were deleted 24 hours after a review was submitted.

The ASA, which launched an investigation into Skytrax following concerns raised by online reputation management business KwikChex, said that because Skytrax did not have the ability to track a review back to its source after the first 24 hours, and therefore could not demonstrate the verification process to which any one particular review on the site had been subjected, it did not hold sufficient evidence to substantiate the claims ‘‘Checked and trusted airline review’’ and ‘‘REAL travellers with REAL opinions’’.

Skytrax was also found to have misled the public by claiming to provide an ‘‘Official Quality Star Ranking’’ system as it was unable to prove its claim that it had launched its programme with the backing of the airline and (later) airport industry, and the ASA also said that there was no evidence that several titles used by the site, including ‘‘5 Star Airlines’’ were trademarked, as claimed by Skytrax.

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12

news digest

Programme to expand Sri Lanka's Akbar Baker waxes eloquent national carrier

Qantas, Virgin in tug-of-war

Qatar Airways Chief Executive Officer Akbar Al Baker shared his insights on Qatar Airways and its unique position in global aviation during a keynote speech in Washington. Addressing policymakers, students, intelligence officials and governmental leaders, the airline boss spoke of how the carrier was increasingly playing a pivotal role in the State of Qatar’s economic growth.

Al Baker said that the GCC region stood apart as a powerful base in global aviation, spurring new alliances, international route expansion and uncompromising service standards. The GCC’s draw as a tourist destination and economic hub continued

Qantas has accused Virgin Australia of making a ‘‘thinly-veiled attempt’’ to convince the competition regulator to reject its proposed alliance with Middle Eastern airline Emirates. In a strongly-worded rebuttal of Virgin’s claims, Qantas said that its rival was trying to ‘‘minimise Qantas International’s competitive position’’ so that what it termed the ‘‘formidable Virgin/ Singapore Airlines/Etihad/ Air New Zealand alliance’’ would not have to respond as vigorously.

Virgin has claimed in submissions to the competition regulator —The Australian Competition and Consumer Commission — that a Qantas-Emirates

The Sri Lankan government is planning to implement a programme to expand the country’s national carrier, SriLankan Airlines in the next six years, Civil Aviation Minister Priyankara Jayaratne has said.

According to the Minister, the government plans to increase the airline’s fleet to 30 aircraft and will purchase five new aircraft within the next six months.The airline currently has 21 Airbus A320, A330 and A340 aircraft, and its network extends to 58 destinations in

33 countries in Europe, North America, Canada, Australia, Far East, Middle East and the Indian Subcontinent. The carrier operates 30 flights daily and directly serves 22 countries.

Responding to the expanding tourism industry, the government is also implementing a programme to develop 10 internal airports. Accordingly, domestic airports will be constructed in Kandy, Nuwara Eliya, Batticaloa, Trincomalee, Ampara and Puttalam.

Erdogan sets the cat amongst the pigeons

Akbar Al Baker

to fuel the region’s unprecedented growth on the world stage, he stressed.“At Qatar Airways and in Qatar we want to nurture a continuation of the region’s growth.

One of the best ways to accomplish this is to link Doha with as many global gateways as possible,” said Al Baker.

Earlier speaking at the Arab Air Carriers Organisation(AACO) annual meeting in Algiers he said that “(I had) considered joining Emirates to create a mega-carrier” before being invited to join the oneworld alliance. He believed that the two airlines would have benefited from “so many synergies” with airlines that had so many similarities.

16

Germany’s largest airline Luf Lufthansa and Turkish Airlines, which enjoys a long-term relationship via Star Alliance and its joint venture Sun Express airline, should deepen their existing ties, said Turkish Prime Minister Tayyip Erdogan.

Turkish Airlines and Lufthansa are already joint owners of the Sun Express airline and members of the Star Alliance, one of the global airline networks.Erdogan said that he had agreed to a proposal by German Chancellor Angela Merkel to establish ‘‘joint management’’ of the two carriers. “During my visit to Germany, Merkel made this proposal: ‘let’s put Lufthansa and Turkish Airlines

under joint management’. I said okay,’’ Erdogan said in a speech to his ruling AK Party. ‘‘This is currently among our projects and God willing we can, and will, take this joint step with Turkish Airlines and Lufthansa,’’ said the premier. ‘‘There is nothing concrete that we have been informed of.

If a big decision is to be taken here, a management board decision would be necessary. But there is no such thing at the moment,’’ a spokesman said.

Lufthansa spokesman Klaus Walther said that Germany’s largest airline had a long-term relationship with Turkish Airlines via Star Alliance and joint venture Sun Express.

Cruising HeigHts December 2012

Alan Joyce

alliance will make it harder for competitors to challenge the dominance of Australia’s largest airline on key routes. The ACCC is looking closely at the impact an alliance between Qantas and Emirates will have on fares. Virgin and Singapore Airlines want the proposed deal – should it be granted anti-trust approval. Under the proposal, Qantas and Emirates will co-operate on passenger and freight operations on routes to Europe, North Africa, the Middle East, Asia and New Zealand. The ACCC has said that it intends to make a draft ruling on the proposed Qantas-Emirates alliance by Christmas, and make a final decision in March.

IAG goes for IATA hats off to European Union Vueling takeover Commissioner

800 passengers on board!

China Eastern Airlines, one of the major airlines in China, recently unveiled its plans to purchase 60 Airbus A320 aircraft in a deal valuing $5.39 billion to meet thriving domestic travel demand. “The Airbus aircraft will primarily be used to satisfy the increasing demand for domestic medium and short-haul passenger air transportation routes,” the airline said. “The purchase of the Airbus aircraft will further strengthen the company's competitiveness in the domestic civil aviation market and increase its operational capacity in domestic routes of the company.”

Fraport boosts earnings

Air Berlin takes legal action Air Berlin (AB) has taken legal action against Berlin Brandenburg Airport operator Flughafen Berlin Brandenburg GmbH (BER) for compensation leading from the airports delayed opening.

AB said it was sustaining considerable damage that could not be fully quantified at this stage and estimated additional costs and other losses had already run into the tens of millions of euros.

“We have decided to bring our claim for damages through the courts,” AB CEO

was-audio.de

Emirates Airline would be interested in buying even bigger aircraft capable of carrying up to 800 passengers, Adel Al Redha, Executive Vice-President of Engineering and Operations divulged, but conceded manufacturers were a decade away from developing such technology.

“I think there is no doubt about it, there will be more demand for higher-capacity aircraft, purely driven by the capacity and congestion you have at airports and airspace,” Redha was quoted as saying.

Organization (ICAO),” said Tony Tyler, IATA’s Director General and CEO. The details of how the pause in the application of the EU ETS will be administered at a technical level remain to be clarified, and the proposal still needs to go through the co-decision process with the EU States and Parliament.

Nonetheless, Commissioner Hedegaard has made it clear that the EU wishes to create the space for the ICAO process to succeed.

“The flexibility shown by the European Commission demonstrates that the ICAO process is working, and we look forward to seeing all parties working together to present positive proposals to the ICAO Assembly in September 2013,” said Tyler.

Hartmut Mehdorn said in a statement. “Over the course of the last several months, we held many intensive discussions with the airport operator in which we strove to find a mutually acceptable solution. Unfortunately, no such agreement could be reached despite extensive efforts on the part of AB. Legal action is now the only feasible route opens to AB to safeguard its interests. It is our duty both to the company and to its shareholders to prevent losses.”

Hartmut Mehdorn Air Berlin, CEO

Cruising Heights December 2012

Fraport AG

International Airlines Group (IAG) is mulling to acquire Spanish low-cost carrier Vueling (VY). In a brief statement IAG said that its board was considering an offer for 100 per cent of VY’s shares. “No decision to make an offer has yet been reached nor, accordingly, on any of its potential terms, including in particular the price.

Further announcements will be made in due course when a decision is made,” it said.

VY is Spain’s second-largest airline and has been expanding rapidly in recent years.

The International Air Transport Association (IATA) welcomed the announcement by the European Commissioner for Climate Action suspending the inclusion of international aviation in the European Union Emissions Trading Scheme (EU ETS).

“Commissioner Connie Hedegaard’s announcement that she has stopped the clock on the imposition of the EU ETS on flights to and from non-EU countries represents a significant step in the right direction and creates an opportunity for the international community. The Commission’s pragmatic decision clearly recognises the progress that has been made towards a global solution for managing aviation’s carbon emissions by the International Civil Aviation

60 A320s for China Eastern

Frankfurt airport operator Fraport improved third-quarter earnings by a third from a year ago to $406 million as increased passenger traffic make up for lower freight volumes at Europe’s second largest cargo hub. This boosted earnings before interest, tax, depreciation and amortization by 3.5 percent in the first nine months of the year by 5.7 percent to $874 million, outperforming a 3.5 percent gain in revenue to $2.4 billion. Fraport Chief Executive Stefan Schulte said, “The company faces a difficult winter and will have to manage our business very closely.’’

17

news digest

4,500 3,600

Apple iPad Mini stolen

lose IAG jobs

JFK Airport in New York recently witnessed arrived from assembly partners in China. the stealing of 3,600 new Apple iPad IAG has announced plans to do away mini tablet computers worth $1.5 with 25 aircraft and 4,500 jobs million. Two people managed from Iberia as the Directors to get into the airport territory g n i said it was waging a fight for driving a truck and used one d Ad survival. International Airlines of the airport's own forklifts Group's Chief Executive Willie to load two pallets of the Walsh said cutting more than one in tablet computers into their s five jobs at the airline was vital for vehicle. They had to leave r e b Iberia and the future of Spain. He said three more pallets behind num when their actions were called Iberia needed to be strong and productive in order to create jobs and boost into question by an airport worker, who tourism. Walsh has set a deadline of had returned from dinner. The iPads had just January 31, by when he wants IAG to have reached agreement with the unions. Without that, he said deeper cuts and a more radical reduction in the size of Iberia operations would Dubai Airports (DA), result. which owns and manEchoing Walsh's determination to ages the operations drive reform at Iberia, the Divisional and development of Chief Executive, Rafael Sánchez-Lothe two airports in zano, Iberia said, “Iberia is in a fight Dubai, regards India as its topmost market as it accountfor survival. We have to take tough ed for 6.84 million air travellers last year. Lorne Riley, decisions now to save the company Head of Corporate Communications, Dubai Airports, and return it to profitability. Unless said, “India is the largest market for Dubai as there are we take radical action to introduce 350 flights plying every week from India. There were permanent structural change the future 6.84 million passengers travelling to Dubai in 2011.” for the airline is bleak. However, this He said the maximum number of people travelled on the plan gives us a platform to turn the Mumbai-Dubai route, followed by those from Delhi, Chennai, Hyderabad and Bengaluru. business around and grow. The Spanish and European economic crisis has impacted on Iberia, but its problems are systemic.”

uthep

6.84

40

million flyers from India

Airbus planes on order

PradeeP chandra

Mexican airline Interjet recently placed an order for 40 A320 Airbus aircraft in its latest move to boost operations in a market led by carrier Aeromexico. “We inked a contract to purchase 40 Airbus A320s, its new model,” Interjet Chairman Miguel Aleman Velasco

Willie Walsh Chief Executive, IAG

18

December 2012

said during a business summit in the central industrial state of Queretaro.

Interjet, which established operations in 2005, operates 34 A320s in its fleet. The new order comes on the heels of Aeromexico's firm order for 60 new Boeing 737 MAX aircraft announced as part of a plan to overhaul its fleet and use more fuel-efficient planes. Aeromexico has an option for 30 more of the planes. Aeromexico and Interjet got a big boost following the 2010 demise of debt-laden rival Mexicana.

4,273

A Chinese airplane manufacturer said that Chinese airlines would require 4,273 large passenger aircraft in the next 20 years. The Commercial Aircraft Corporation of China Ltd (COMAC) said in its latest forecast report on China's aviation market in the next two decades that China was expected to order 4,960 aircraft, including both small and large passenger planes,

planes needed by Chinese airlines worth more than $563 billion from 2012 to 2031. In the same period, the global market will demand 31,739 aircraft with a total value of around $3.89 trillion, according to the COMAC report, which was released at the China International Aviation & Aerospace Exhibition, held in Zhuhai of China's southern Guangdong Province. COMAC expects global air passenger turnover to grow at an annual rate of 4.9 per cent in the next two decades, and that of China will expand by 7.2 per cent annually.

7.8 10% bn for Dubai airports

Dubai Airports, the company that owns and operates Dubai International Airport (DXB) and Dubai World Central (DWC), will invest United Arab Emirates Dirham (AED) 7.8 billion for the expansion of Terminal 2, construction of Concourse D to provide access to airplanes and baggage backbone, and expansion of the passenger terminal, all at DXB in a bid to increase its capacity for handling passengers and flights.

The airport's Terminal 2 is expected to be operational by the first quarter of 2013, while the work for Concourse D is to be completed by 2015. Besides, DWC passenger terminal will be ready by 2018.

45

655% net profit for THY

Turkish Airlines (THY) saw its net profits increase in the first three quarters of this year: a whopping 655 per cent increase over the same period a year ago. The carrier released the results in a note to the Istanbul Stock Exchange (İMKB). The number of THY passengers jumped by 20 per cent to reach 29.1 million while the occupancy rate for its flights was 77.9 per cent in the January-September period, 5.3 points higher over the same months of 2011.

growth in Changi Singapore Changi Airport registered its highest number of passengers for the month of October with 4.27 million, 10 per cent more than that in the same period last year.

At the same time, Changi handled 27,600 flight movements, an increase of 5.2 per cent over October 2011. Passenger traffic to and from the Middle East continued its upward trend with the region contributing double-digit growth every month this year.

THY sales also increased by 30 per cent to Turkish Lira (TL) 11.2 billion in the same period. Turkish Airlines destination countries increased to 87, making the carrier's destination network from one hub the world's largest.

Turkish Airlines serves customers with 2,445 pilots and 5,344 cabin crew. The data arrived amid talks of a possible co-management agreement between Turkish Airlines and German airline Lufthansa.

new routes in 2013

SAS will launch 45 new routes in 2013. The Scandinavian carrier will offer direct flights to new destinations from all of the main airports and a number of regional airports in the Nordic countries. SAS will also increase the frequency of current flights on a number of domestic and European routes. The introduction of these 45 new routes is completely in line with the SAS goal

to meet customers' complete travel needs.

“Many of our customers choose SAS when travelling on business and leisure. They appreciate our time-saving services, and our award-winning punctuality. Therefore, we are proud to offer our customers 45 new routes to choose from in 2013. This means that we will continue to be the airline that has the largest selection of flights in the Nordic region”, said Joakim Landholm, Executive Vice-President, Commercial, SAS. Cruising Heights December 2012

19

news digest

Air India on Revival Path?

20

and merger took place, by and large the operations remained divided as they now term it widebody and narrowbody.

It was a clear thing that there was no merger on the Human Resources front. It looks that the merger was carried out without sparing a thought to the vital element of Human Resources Management postmerger. It is pertinent to mention here that there are 13 unions and associations in the two behemoth carriers. Expecting a smooth merger in the given situation is highly imaginary.

Air India’s financials become precarious post-merger. In an answer to the members in the Rajya Sabha, the Civil Aviation Minister in November 2011 had mentioned that Air India was having over `43,000 crore of aircraft and working capital loans.

The carrier owed nearly `4,000 crore to airport operators and the oil companies. A highly competitive environment, advent of the low-cost carriers, the global economic scenario, high-fuel costs, dwindling market and yields, industrial unrest situations have all taken their toll on the carrier’s physical and financial parameters and, at some point of time, the airline was pushed to the last but one rank in terms of market share. Periodical strikes by the pilots and engineers and regular threats to strike work by the other employee groups had its impact on the reliability of Air India’s services. It was not by choice that passengers were flying the national carrier.

Air India had to get out of this situation to survive. It had to work out a viable turn-around plan and execute it. After much deliberation, the turnaround and the financial restructuring plans were prepared by the management of Air India in consultation with SBI Caps, which was vetted by independent consultant Deloitte.

“The Cabinet Committee on Economic Affairs (CCEA) approved the turnaround plan (TAP) and financial restructuring plan (FRP) of Air India, under which the government will infuse `30,000 crore into the airline by 2020-21, subject to certain milestones that AI will have to meet,” said the Civil Aviation Minister on April 12, 2012.

Earlier, these plans were also examined by a Group of Officers, constituted by the Group of Ministers (GOMs) on Civil Aviation.

The Cabinet also approved acquisition of all 27 Dreamliner aircraft by the airline. dreaming big: Civil Aviation Minister Ajit Singh waving to the crowd after fornally unveiling Air India Dreamliner

Cruising Heights December 2012

As per the TAP, which envisages the airline to be profitable in 10-15 years, Air India would hive off maintenance, repair and overhaul (MRO) and ground-handling services into two different companies with different profit centres. “This will divert 7,000 workers to the MRO business and 12,000 towards the ground-handling company, which will align the employee-aircraft ratio with global standards,” the Minister said.

As per the financial restructuring plan, which aims at converting `18,500 crore of the national carrier’s short-term debt into long-term borrowings, Air India will issue government guaranteed non-convertible debentures (NCD) worth `7,400 crore to financial institutions and banks to repay part of working capital loans. These NCDs will have a maturity period of 20 years.

India Ratings has assigned Air India’s NCD issue a final rating of ‘IND AAA(SO)’. The final rating is based on the receipt of the debenture trust deed, deed of guarantee and trusteeship agreement, conforming to information already received and confirmation from the issuer with respect to their execution. The rating reflects the absolute, unconditional and irrevocable guarantee extended by the government of India for the timely repayment of principal and interest on AI’s NCDs. The banks have also approved conversion of Air India's working capital loans of `11,000 crore into long-term debt.

“This will lower the interest cost on these short-term loans by three-four per cent to 11 per cent, resulting in an annual savings of `1,000 crore as interest outgo. The airline currently pays `2,400 crore as interest

h c tiwari

T

here is widespread optimism among Air Indians that the equity infusion by the central government has already begun to have an impact of reducing the debt burden with oil companies, airports as well as vendors being paid their longstanding dues. The issue of NCD (non-convertible debentures) of over `7,000 crore has eased the maharaja’s loans woes and the conversion of short-term loans is now expected to save the carrier about `1,000 crore in the first year itself. All these financial steps are expected to lead to better cash flow, which will infuse confidence in the commercial operations as is now being expected with renewed vigour.

In view of the global aviation environment wherein critical/mass size is a key to success, the merger of the two carriers — Air India and Indian — was conceived and completed. The merger was expected to provide an opportunity to leverage combined assets and capital. It was also expected to create considerable synergy, since the two airlines could feed traffic to each other.

The synergy benefits were in the areas of route rationalisation, fuel procurement, stores and inventory purchases — aircraft and non-aircraft — insurance, handling of flights and employee productivity. Also, it was to result in redeployment of aircraft since both the airlines were flying on some common routes.

The merged entity Air India registered progressive increase in revenues – `13,402.27 crore in 2009-10 to `14,255.11 crore in 2010-11. However, the net losses during these two years were also as high as `5,552.44 crore and `6,865.17 crore, respectively. The loss during 2011-12 is also not expected to be any better. According to one estimate the losses during fiscal 201112 has been estimated at `7,853 crore.

The airline has accumulated losses of over `20,000 crore, since the merger.

Many factors must have worked in favour of the merged entity — the size, fleet expansion of 111 aircraft from Airbus and Boeing, state-of-the-art Boeing 777 aircraft operating direct flights to the US, experienced workforce, networth, infrastructure, and many more — to give the competition a tough challenge. But, it was not to be.

All the advantages have become disadvantages in the whole operation. There was a vertical split amongst the employees owing allegiance to their parent organisations viz.

Air India or Indian. Though there were some areas of operation where the synergy

annually,” a senior Air India official said. In addition, the government was also to infuse additional equity into the airline in this fiscal to the tune of `5,500 crore. While these were external, Air India on its side was also to reduce its costs, bring down the employees strength to industry levels, and monetise assets, etc. to make the turnaround plan effective.

Financial Restructuring and Operational Restructuring were the two elements of Air India’s turnaround plan. Operational restructuring is aimed at improved productivity, improved performance, route rationalisation, improved output from the existing workforce, cut down on the economically unviable routes, etc. Hiving off strategic business units of engineering and ground handling was also another important aspect of the turnaround plan, which would bring down the aircraft-employee ratio of Air India to industry standards.

Given the critical situation and challenges ahead, the question that is being asked is: Is Air India on its revival path?

To begin with, the mood at Air India is clearly optimistic. Infusion of equity, sovereign guarantee for the Non-convertible Debentures, conversion of short-term loans to long-term loans, will help the carrier to reduce its interest burden substantially.

Air India’s performance in the recent

months has raised the hopes of the insiders who feel that it may be amongst the first few steps towards the turnaround. During September 2012, Air India edged past Jet Airways in terms of number of passengers carried in the full service category. This, despite the fact, that the airline had an industrial unrest just before that and its reliability took a beating, particularly in the long-haul international sectors. October is expected to be better than the previous month, as the airline has not only carried a record near 35,000 passengers on a single day (see Snippets) but also crossed the 30,000-passenger mark on 10 occasions.

The arrival of the Dreamliners and the subsequent curiosity among air travellers to experience the latest flying machine have helped the national carrier improve its passenger numbers. On the psychological side, the arrival of this state-of-the-art technology aircraft has provided a high morale booster to the employees. They believe that the aircraft would be a game changer for them. Concerted efforts and constant monitoring at the highest level have also shown their results in the improved on-time performance of Air India.

On the human resources front — considerably delayed after the merger — the Dharmadhikari Committee Report has been accepted by the government and an

Cruising Heights December 2012

implementation committee has been constituted for execution. Though some sections of employees feel let down by the report, the implementation itself is another way forward to address the industrial relations side of the merger. Air India has also cleared almost all the backlog of salary payments to its employees in November, thus reducing friction between the employees and the management. In fact, the working hours of the staff of the two carriers – other than the pilots and cabin crew – have been synchronised.

More importantly, on the issue of socalled vertical split in the rank and file, even Civil Aviation Minister Ajit Singh stated in Parliament that there were issues such as different working hours, working days, etc. between the two merged carriers as also different fleet, which had kept the pilots and engineers of each carrier separate from each other. In this context, on the contentious issue of new FDTL (Flight Duty and Time Limitations) regulations introduced by the DGCA (Directorate General of Civil Aviation), the Minister reportedly said the new rules were being resented by groups of pilots as unilateral. “I feel it will only improve the productivity of pilots rather just increase their rest period,” he said.

Steps are already underway to have a separate business unit of MRO, which has been given a authorised capital of `1,000 crore and engineering staff of 7,000. Similarly, there is another SBU for groundhandling for which 12,000 staff members have been earmarked from within the

23

news digest

ABOVE GROUND LEVEL  Mumbai airport unveils first designer store

hemant rawat

Mumbai’s Chhatrapati Shivaji International Airport recently unveiled its first designer outlet – Riyaz Gangi’s new store. Talking about the store Riyaz Gangi said, ” We are pleasantly amazed at the wonderful response we have already received. This is a cash-and-carry store, so the prices are between `3,000 and `20,000. We are keeping more

hue and cry: Air India employees during the strike in July, 2012

lifestyle products, which are mostly picked up by passengers for gifting and last-minute buys.”

Riyaz also said that designer stores were patronised by foreigners, who were always infatuated with Indian fashion. ”Foreigners passing through here usually pick up scarves and dupattas as they make great gifts,” he added.

Meanwhile, shoppers have something to cheer about as the airport is soon going to get a much-improved and bigger duty-free shopping area at Terminal 2, which is under construction.

Alternative place found for airport plan A new location in Pune, close to the one that the Maharashtra Airport Development Company (MADC) previously found unsuitable for the airstrip, has been selected by the district administration for the international airport project.

The MADC and the Airports Authority of India (AAI) had written to the district administration to identify an alternative site. The letter was forwarded to the administration in September and the district officials

22

merged entity and given authorised capital of `1,000 crore. The employees of both the MRO and GH will have the same terms and conditions of employment as they enjoyed in the parent Air India.

There are also reports of Air India’s efforts to revive its entry into the Star Alliance. The global alliance body, in July 2011, had suspended the integration of Air India into its group, citing the reason that the carrier had not met the minimum joining conditions that were contractually agreed.

Marketing initiatives, advertisement campaigns highlighting the strengths of the airline and short-term promotions — which are value for money to the price-sensitive traveler — have also contributed to the improved performance of the carrier. This has been reflected in their frequent flyer programme reaching a significant milestone of ‘One Million Members’. Air India has also asserted its brand value by consecutive top rankings in The Economic Times Top 50 Service Brands. It also has been the recipient of Reader’s Digest Most Trusted Brand seven years in a row. The arrival of the Dreamliners has helped Air India not only to consolidate itself in the domestic market with additional capacity, new links and additional frequencies on some sectors; it is expected to play a greater role in its international operations. Having started their international journeys to Dubai and Frankfurt, the new Dreamliners inducted into the fleet are expected to replace the present Boeing 777s. Air India is also expected to start its flights to Sydney and Melbourne with the Dreamliners in the near future. Perhaps, what does not augur well for Air India is the fact that the B777-200LRs (long range) have not yet been disposed off. Sometime ago, AI had decided to get rid of two B777200 LRs and three B777-300 ERs (extended range). Now, there is a move to reconfigure Cruising Heights December 2012

the planes and deploy the B777-200 LRs on the Saudi Arabia route and the B777-300 ER on the North America route. According to aviation experts, the problem with AI’s 777s is two-fold: their seat configuration and the fact that they are fuel guzzlers. Incidentally, Emirates has 89 B777-200 LRs and B777-300 ER in its fleet and they are recording profits with high load factors in the business and first-class sections.

What could be worrisome for AI is the fact that these B777s are being used for short range flights. AI's 777-200 LR, meant to fly for more than 15 hours without a stop, are being used for middle-haul destinations that take less than 10 hours to reach like Frankfurt, Paris, Hong Kong and Shanghai.

Even so, the air is clearing for Air India. Equity infusion, recasting of the working capital loans, issuance of NCDs with full sovereign guarantee, etc have eased their cash flow to some extent. On the other hand, Air India is also working on route rationalisation, expanded network, additional capacity induction, short and longterm marketing initiatives, etc. to improve its financial performance. Hiving off the two strategic business units of Engineering and Ground Handling will also go a long way to trim its financials, apart from giving a widely-accepted aircraft-employee ratio. Monetisation of assets and cost control initiatives are also other efforts from the national carrier to set its house in order.

Successful implementation of the Dharmadhikari Committee report will be challenging but once done, it will iron out the minor irritants and pave the way for better industrial relations.

Air Indians should thank their stars that they are working for a government-owned company and as such are still in their jobs.

Otherwise, they would have faced a situation similar to that of Kingfisher. n

sPicejet

weAthers AAthers on

S

piceJet has managed to sharply increase its average revenue realisation per passenger even in the usually lean season of July-September or the Second Quarter (Q2) for all airlines and still ended up posting higher net losses compared to a profitable Q1 in the current fiscal 201213. Obviously, SpiceJet’s performance has confirmed the serious structural distortions in the Indian civil aviation industry with irrational tax structure that has made the usage of air services unattractive not only for passengers but also for the airlines by way of hiking fuel costs to artificially very high levels. The Chennai-based SpiceJet recorded another quarter of robust growth with revenues rising by 57 per cent to `1,207 crore in Q2 2012 compared to `766 crore in the corresponding Q2 of 2011.

The average realisation per passenger in the quarter under review, rose by 37 per cent to `4,001 compared to `2,920 in Q2 of 2011. This is passenger yield or the heart of the airline business. Imagine a 37 per cent increase in yields over one year and the airline is still in loss! That confirms the serious structural instability in the Indian aviation industry. This is more or less true for other carriers as well. The increase in yield and revenue during Q2 of 2012 came when load factors in the usually lean season dropped to 66.3 per cent compared to 67.2 per cent in Q2 of 2011. High fuel prices along with a volatile rupee impacted the Indian civil aviation industry as a whole. International crude prices, which fell in Q1, again rose

sharply in Q2. Fuel as a proportion of revenue was 53 per cent as against a comparable ratio of 62 per cent last year.

The resultant improvement in efficiency was due to better pricing discipline adopted by the carrier and quicker redeployment of its aircraft fleet on more profitable routes. The fuel cost at 50 per cent to 60 per cent for most airlines is unsustainable. The comfort zone is when fuel accounts for 35 per cent — which is what it is in most parts of the world. Add to this the airport charges and exchange rate as all aircraft are leased in dollars.

Despite the yields rising by 37 per cent, the net loss of the airline in Q2 2012 was `163.52 crore compared to a loss of `240.07 crore in Q2 of 2011. The number of passengers carried by SpiceJet rose by 15.9 per cent, the ASKM increased by 20 per cent, the number of departures by 48 per cent and the overall revenue from operations by 57 per cent. In Q1 2011, the airline’s total operating expenses in Q1 2012 was `1397.48 1397.48 crore while revenues were higher at `1,459.92 1,459.92 crore yielding a profit of `62.44 crore.

According to SpiceJet CEO Neil Mills, improved yields coupled with effective cost controls helped the company perform better in what is always a weak quarter for the airline business. Increase in international operations and an improved fleet management helped the airline deliver better numbers for the quarter. Fuel costs and a weak rupee continued to be a cause for worry for

future ready: SpiceJet bombardier planes lined up at bombardier delivery Centre

Cruising HeigHts December 2012

ABOVE GROUND LEVEL  have reverted to MADC with the site in the Chakan-Rajgurunagar belt.

According to officials, the administration found the alternative site in the same area. ” This would again have to be assessed by the MADC for the go ahead for the airport,” they said.

Earlier, The MADC and the AAI had conducted the preliminary techno-feasibility study and declared the site not viable owing to undulating terrain at the site shown for developing the airstrips at Rajgurunagar, which had natural obstructions that cannot be removed.

AAi Mulls terMinAls for lccs Airports Authority of India (AAI) is now looking for feasible models to make dedicated low-cost terminals. The aim is to cut terminal charges so that no-frill carriers can minimise cost. AAI is however seeking a middle ground where facilities of the full-service terminals can be cut down to provide minimum but effective facilities to passengers.

AAI Chairman V P Agrawal said that they were looking for a terminal design, which could be appealing and effective V P agrawal for Indian LCCs as well as passengers. ”Security and safety is a major concern at low-cost terminals. We are looking for an efficient model to construct terminals,” he said. ”Singapore airport is shutting down the low-cost terminal. It isn’t doing too well in Malaysia as well.

This is why a good model is required,” Agrawal said. ”However, passengers do not like if there are no aero-bridges.

We need to provide conveyor belts as most people here won’t like that their luggage is just brought and left at the terminal,” said Agrawal.

Ajit singh: hAndover jhAnsi AirPort to AAi Minister of Civil Aviation Ajit Singh recently shot off a letter to the Uttar Pradesh government to facilitate the handing over of the Jhansi airport to the Airports Authority of India (AAI) for tourism development in Bundelkhand.

23

news digest

ABOVE GROUND LEVEL 

’200 airports exclusively for general aviation’ V P Agrawal, Chairman, Airports Authority of India (AAI), in India Aviation Summit 2012 exhorted that India needed exclusive airports for general aviation purpose. ”India would require 200 airports by 2020 for general aviation purpose.

The growth in general aviation would benefit the aviation industry in Tier-II and Tier-III cities as a significant part of general aviation travel is focused on infrequently connected airports.

By 2020, the Indian general aviation fleet is expected to reach 2000 from 680 today; growing at a Compound Annual Growth Rate (CAGR) of 13 per cent. The direct and indirect economic contribution of general aviation could be close to $4 billion per annum by 2020,” Agrawal said.

jagopunjabjagoindia.com

No flights for Bathinda Airport Bathinda Airport has hit the rough patch as no airline is willing to start flights from this place even after two-

and-a-half-months of its completion. ”Everything at the airport includ-

24

hemant rawat

”At the instance of the state government, the airport was handed over for maintenance to the UP government. I understand the state without the concurrence/coordìnation with AAI handed over the air field to the Army in 1990,” the letter written recently by Singh to Akhilesh Yadav reads.

Singh said, ”For developing the airport and ensuring connectivity, it was suggested that UP considered handing over Jhansi airport back to AAI to cater to ATR type of aircraft operations to fulfill the local aspirations and overall development of the region.”

Jhansí Airport was handed over to the erstwhile National Airports Authority (now AAI) in 1986 from the control of Director General of Civil Aviation (DGCA).

heavy responsibility: SpiceJet CEO Neil Mills has his task cut out to stem the losses by the airline

the aviation sector with SpiceJet being no exception. SpiceJet had 18.5 per cent market share in the domestic market with 300 daily flights to 38 Indian cities and four international destinations. Notwithstanding all this, the company auditor in his report noted that the accumulated losses had fully eroded the net worth of the company.

But this was hardly a concern for the airline promoter and management who firmly believed that it had very good value. This automatically raises the question whether SpiceJet will divest in favour of any foreign carrier now that FDI by foreign carriers is an officially approved policy. On this sensitive issue, CEO Neil Mills stated earlier during the time of the company’s AGM in Chennai in September 2012 that the airline was not holding any talk with any foreign airline on offering its stake.

“We are not desperate to raise money. We will do a deal that makes economic sense to shareholders and the company. This was on September 26, 2012.

Again a month later in Mumbai on October 31, 2012, on the occasion of CAPA meet, Mills remarked: “We have been looking at funding opportunities but we don’t need it tomorrow. We are not that desperate”. As it is the company when at a time other airlines are finding it difficult to pay salaries and allowances of its employees on time, SpiceJet has hiked salaries of its employees by 5 to 10 per cent. “Cost of living has gone up and no hike in salaries would mean the employees are effectively earning less than last year.” The general optimism in Spice is also evident from the fact that it is going ahead with its aircraft acquisition plan.

As on date the airline has a fleet of 36 Boeing 737s (largely 800s and a few 900s) and 12 Bombardier Q400s. The airline is planning to add three more Bombardier Cruising Heights December 2012

turbo-props by December 2012 of which one will be deployed on the proposed Trivandrum-Male route. It is also planning to launch services to the Chinese city of Guanzhou and Riyadh. (Maybe one has to wait and see how it will do in this sector with its biggest plane, which is a Boeing 737-900). According to Neil Mills, the airline is planning to take delivery of six brand new leased aircraft in 2013 mostly Boeings and will use the leasing option to expand.

Despite these plans, Mills said that the airline was not in a hurry to mop up funds as it was paying salaries and bills on time.

There was also news that Hong Kong -based Bravia Capital is in exploratory talks with SpiceJet. To this speculation, Mills responded saying there were also others who were in talks. He said: “We have always said we will raise funds if we get a good deal.” As on September 30, 2012, Kalanithi Maran and his Kal Airways Pvt Ltd held 48.59 per cent stakes in the airline.

Earlier, SpiceJet had announced expansion of domestic network opening a new sector Bengaluru-Belgaum deploying Q400 a 78 seater turbo-prop aircraft. The issue now is whether the airline come back to black in the third and fourth quarter of the current fiscal ending March 31, 2013.

The answer can be a qualified yes provided the fuel prices are down and rupee is up vis a vis the US dollar. But as we go to print, this does not seem to be happening at least in the case of rupee-dollar exchange rate. If the second Obama administration decides to seriously cut back its expenditure, there is every possibility the rupee could weaken even beyond `55 to a dollar that will make the same fuel even more expensive and the same aircraft’s lease rentals dearer. For instance, the aircraft lease rentals in Q2 rose to `298 crore compared to `196 crore in Q1. n

whAt’s AAt’s uP

for jet?

S

oon after Jet Airways managed to significantly compress its losses in Q2 compared to market expectations, there was talk of the airline wanting to divest at least 5 per cent of its holdings so that promoter quota came down to 75 per cent. As per the latest SEBI guidelines, in publicly-quoted companies, the promoters would have to bring down their holdings to 75 per cent while public shareholding was to rise to 25 per cent. Based on this policy, in Jet Airways the promoter Naresh Goyal holds 80 per cent, which he is supposed to bring down to 75 per cent by the latest date of June 30, 2013. While there is a sevenmonth time to get there, the speculation saw mid-November Jet stocks rise to `408 when there was nothing that happened to boost the morale of Indian aviation. Incidentally, LIC and HDFC Mutual Fund are among the top institutional shareholders in Jet Airways.

It is still too early to say if Jet would negotiate with such institutional shareholders for unloading some of its shares to adhere to the SEBI guideline. But what seems to be clear is that no foreign airline would want to pick up a meagre 5 per cent stake of Jet airways. Jet Airways promoter Naresh Goyal went in for an IPO in FebruFebru ary 2005 when he divested 20 per cent of

his 100 per cent holding to Indian public and institutions at a price of `1,150 per share. Since then, Jet Airways share price has been quoted at more than 70 per cent discount as the intervening years saw a global meltdown in 2008 and 2009 and virtual stagnation in the Indian economy in the last two years along with the continued global economic slowdown. Against this background, the performance of Jet Airways in Q2 2012 has been more than impressive even as the leading Indian LCC IndiGo displaced Jet to occupy the top position among Indian domestic carriers in terms of domestic marketshare.

It is suggested that Jet Airways along with its subsidiary JetLite is yet to come to terms with the adjustment process it has set within the airline by doing away with the business class seats and making some flights all economy and then trying to add a few business class seats in some of the alleconomy seats plane. Then we heard that the airline would now focus more on its international route as its foreign forays were bringing it more money than its domestic yatras. During Q2 2012 (July-September) Jet Airways registered a total income of `4,137.63 crore compared to `4,587.27 crore in the previous quarter and `3,293.54 3,293.54 crore in Q2 of 2011.

ground reality: Jet airways aircraft at delhi airport

ABOVE GROUND LEVEL  ing gadgets, conveyer belt, security operates etc are in place, but, we are eagerly awaiting for the airlines to start operations from this airport,” an official of the Airports Authority of India was quoted as saying.

According to the sources, Badal family would leave no stone unturned to make this airport a success. There are also possibilities of Punjab government reducing the landing charges and providing more VAT percentage rebate as compared to Chandigarh and Amritsar airports to fulfill Badal family desire for success of Bathinda Airport project. diAl cleArs the Air on frAPort equity stAke

Delhi International Airport Pvt. Ltd (DIAL) recently negated media reports that Germany’s Fraport AG, which owns 10 per cent stake in the airport, is looking to walk out from the joint venture. ”DIAL has noted recent items in the media which quote senior officials of Fraport AG stating the company will be divesting its equity in DIAL. It is a matter of record that Fraport has been a shareholder holding 10 per cent equity in DIAL since inception and that the GMR Group has a right of first refusal on equity of Fraport. Under terms of OMDA (operation, management and development agreement), any request for transfer of equity by Fraport can be considered after seven years. Hence, at this stage, the GMR Group is not engaged in any discussion or negotiation with Fraport on this matter,” DIAL Spokesperson said.

DIAL is controlled by the GMR Group, which owns a controlling 54 per cent stake in the airport. Other shareholders include the Airports Authority of India (26 per cent), Fraport (10 per cent) and Eraman Malaysia (10 per cent).

AAi uPs the Ante for Pushing tourisM Airports Authority of India (AAI) is poised to provide international airport facilities at places with tourism potential. Recently, AAI sanctioned eight airports which will be made into international airports. Among these

Cruising HeigHts December 2012

25

news digest

ABOVE GROUND LEVEL 

Two new airports in Chhattisgarh soon The Airports Authority of India (AAI) is mulling to construct two new airports at Raigarh and Bilaspur in Chhattisgarh. ”The officials have been asked to take immediate action on the plan and work out the proposal for building airports in Raigarh and Bilaspur,” Minister for Civil Aviation Ajit Singh said. The Minister hinted that the Chhattisgarh was top in the list of states identified for the expansion of aviation services. ”I have also directed the ministry officials to take necessary steps for increasing the number of flights connecting the state,” Singh said.

Praising Chhattisgarh government’s attempt to cut back the Value Added Tax (VAT) on aviation fuel to four per cent, the Civil Aviation Minister said, ”I thank the Chhattisgarh government for curtailing the VAT that had helped to register about 58 per cent in traffic.”

While Chhattisgarh Chief Minister Raman Singh urged the Civil Aviation Minister to approve the road map designed for the expansion of aviation sector in the state. ”The state government has provided 430 acres of land to the AAI for expansion.”

Navi Mumbai airport gets boost The development of the airport got a much-needed boost after the state cabinet made up mind to give 250 hectares of land to create forest and

26

in.com

are airports such as Agra, Bhubaneshwar, Coimbatore, Mangalore, Lucknow and even Varanasi. The reason for providing international airport status to airports at these places is the tourism development potential there.

AAI Chairman, V P Agrawal said, ”That these places are big tourist spots and having international airports would further tourism. This is why AAI will be setting up facilities required for international travel. This means that we are enabling them to operate international flights. The facilities include setting up immigration and customs counters and personnel.

Security personnel for the international operations will also be provided.

After that, foreign airlines can operate if they like to.”

LEANING ON A FRIEND: (L-R) Jet Airways' Chairman Naresh Goyal with Etihad Boss James Hogan

This included both the income from operations and other than operations, which incidentally for these comparative quarters was `382.35 crore, `242.35 crore and `171.26 crore, respectively. The total expenses for Q2 2012 was `4,058.81 crore compared to `4,341.21 crore in Q1 of 2012 and `3,543.02 crore in Q2 2011. The fuel cost for these quarters was `1,681.36 crore, `1,967.41 crore and `1,491.18 crore. It is interesting to see here that between Q2 2011 and Q2 2012, fuel cost rose by `190 crore with no significant increase in passenger growth. This also explains the state of the Indian aviation industry, which is facing a severe obstacle in terms of falling traffic in terms of passenger flown. As for rupee depreciation, the impact was also seen in the aircraft lease rentals, which in Q2 2012 was up at `310.83 crore compared to `275.57 crore and `206.15 crore in Q2 2011.

All this was notwithstanding the unrealised foreign exchange gain of `69.60 crore in Q2 2012 compared to a loss of `68.94 crore in Q1 2012 and `275.68 crore in Q2 2011. Against a market expectation of at least seven times more, Jet Airways net loss in Q2 2012 was `99.67 crore only compared to a marginal profit of `24.70 crore (mainly driven by fall in fuel prices) and a whopping loss of `713.60 crore in Q2 2011. A continued positive impact on income from leasing of its B 777s shored up its bottomline. In the whole of fiscal 2011-12 leasing of its aircraft earned the airline revenue of `452.12 crore. In Q1 and Q2 2012 it was `241.09 crore. A healthy turnaround in Jet finances has emboldened the airline to declare that it will retire $600 million by the end of the current financial year 2012-13.

This will also include sale and lease Cruising Heights December 2012

back of some of its aircraft. The CFO of Jet Airways stated at the time of releasing the Q2 2012 figures: “We have been steadily repaying our debt which covered among others the working capital loans as well. By March 2013 we expect that our debt will come down to $1.96 billion from the current $2.34 billion. So by the end of the fiscal we would have repaid $600 million.” Jet’s total debt on its balance sheet is over $12,000 crore or $2.4 billion at the end of Q2 2012. CFO Ravi Shankar stated that the airline was looking for more sale and lease back options for its aircraft in addition to what was done in Q2. This would result in cash surplus and consequently reduce the need for working capital loan and would also bring down interest costs.

Jet Airways has reported a pick-up in business class load factor and, therefore, once again looking at reconfiguring some of its 162-seater Boeing aircraft to add some more business class seats. For the ensuing peak season, it is looking at more full service operations in lieu of Jet Konnect. The airline is also planning to lease out some of its grounded A 330s after it pulled out some of its international routes that were making losses. These A 330s could be leased in a few weeks for a period ranging from 12 to 18 months. According to Jet Airways Vice President for investor relations and commercial strategy, the airline can hope to register lease rentals of a million dollar annually per month.

Jet is also seriously considering to lease some of its Boeing 777-300 ERs, which are currently on lease to Thai and will come back next year after the expiry of the lease. In all, there are five such 777s that are on lease. In Q1 2012, Jet Airways raised $42 million by way of outright

jet-etihAd deAl in the offing

Sudheer raghavan CCo, Jet airways

hamad ali Coo, Jet airways

in 2003, when Etihad was born, it asked Naresh Goyal for help to set up its systems. Goyal and Jet had been more than forthcoming then leading many aviation experts and market specialists to believe that the present deal will come through.

One of the major reasons for Naresh Goyal to sell a part of his shareholding from the 80 per cent he owns in Jet Airways is the order from the Foreign Investment Promotion Board (FIPB) to dilute his stock and bring it down to the regulatory levels.

Talks about the deal were confirmed by the Civil Aviation Ministry. According to reports in Economic Times, a civil aviation official was quoted as saying: “We are aware that the deal is progressing but to close a deal might take some time, maybe a couple of months or so. Both the sides have appointed consultants as Etihad wants to make sure that they have a sound investment in the country as cost issues remain a concern about airline companies in India.”

Etihad must surely be worried about Jet’s loss of market share: over the last couple of months, IndiGo has overtaken Jet to emerge as the leader as far as domestic routes are concerned. Apparently, both the airlines consultants — PWC and E&Y (London) — to find out more about each other’s route networks. Even so, the deal is in line with Etihad policy of picking up stakes in carriers around the world: Virgin Australia (it raised its stake from 4.99 per cent to 10 per cent), air berlin (30 per cent stake), Air Seychelles (40 per cent stake) and even Aer Lingus.

sale and lease back of seven Boeing 737s, Dubai and Chennai-Dubai. Planes used on which helped reduce its debt and working these routes will be re-deployed in coming capital loans. As decided in Q1 2012, the weeks. These routes may be reintroduced ancillary revenues of the airline from April 2013 when Jet will rose 20 per cent year-on-year take delivery of some new after the introduction of preplanes.” seat booking charges, enhanced According to Jet Airways outbound offerings, sale of merCEO Nikos Kardassis, “Imchandise and other offerings provement in yields has helped on the website. Jet Airways is the group post and operating planning to discontinue some profit. We have focused on reof its money-losing routes and moving loss-making routes, also replace expensive expat network rationalisation and senikos Kardassis pilots with Indian pilots. lectively adding routes, which Ceo, Jet airways According to Jet Airways made an economic sense. The CCO Sudheer Raghavan: “We will disconresult of these initiatives were quite evitinue loss-making routes to increase the dent from the improvement in operating average revenue per flight departure. We profit year on year basis by `520 crore for will offer more business class seats to meet Jet Airways group. Domestic operation the peak demand. These steps will help accounted for 41 per cent of its total revgenerate cash and reduce working capital enues. Domestic traffic for Jet Airways fell pressure thereby cutting interest expense. by 6.6 per cent in Q2 2012 and the averAlready the airline has discontinued lossage domestic load factor in Q2 2012 was making routes such as Mumbai-Johannes65.6 per cent against 80 on international burg, Chennai-Kuala Lumpur, Hyderabadroutes. n Cruising HeigHts December 2012

mangrove belts to compensate for the acquisition of mangroves for the construction of the airport.

outlookindia.com

As we go to press, the aviation sector in India is abuzz with news about Middle East carrier Etihad taking up to a 29 per cent stake in Naresh Goyal’s Jet Airways (the percentage has not been confirmed yet). A story doing the rounds through four weeks of October and November even pointed out that Jet's top brass — that included Chief Commercial Officer Sudheer Raghavan, COO Hamid Ali and others — were in Abu Dhabi for a month to discuss the details of the deal. Relations between Etihad and Jet are believed to be an old and cordial one. Way back

ABOVE GROUND LEVEL 

Forest Minister Patangrao Kadam of Maharashtra said, ” This is a landmark decision. Land and NOC for the second airport has been granted by the state.”

Earlier in July, the Centre had assured CM Prithviraj Chavan that it would expedite the sanctions process for the airport. The Centre in 2007 had given in-principle approval for the Navi Mumbai airport. indiA rAtings rA PrAises Air indiA’s bonds India Ratings has assigned Air India Limited’s (AIL) `74 billion non-convertible debenture (NCD) issue a final rating of ’IND AAA(SO)’. The final rating is based on the receipt of the debenture trust deed, deed of guarantee and trusteeship agreement, conforming to information already received and confirmation from the issuer with respect to their execution.

The rating reflects the absolute, unconditional and irrevocable guarantee extended by the Government of India (GoI) for the timely repayment of principal and interest on AIL’s NCDs. It is a continuing guarantee and shall remain in force and effect until the complete discharge of NCD obligations. The guarantee will also remain in force if AIL cannot meet its NCD obligations due to any dissolution/ winding up or similar proceedings initiated by or against the company or for any other reasons including any reference of the company to the Board for Industrial and Financial Reconstruction or AIL being brought under the purview of any other authority notified under any law.

AIL will open a no-lien bank account with State Bank of India in which interest payments as well as principal repayments will be deposited by the issuer/guarantor.

27

news digest

ABOVE GROUND LEVEL  cceA APProves revised cost estiMAte for kolkAtA AirPort The Cabinet Committee on Economic Affairs recently approved the revised cost estimate of `2325 crore for the modernisation and expansion of Netaji Subhash Chandra Bose International Airport, Kolkata (NSCBI) including construction of an integrated terminal building. Earlier, the CCEA considered the proposal of the Ministry of Civil Aviation in July 2008 and approved it for an amount of `1942.51 crore. Thereafter, based on award of certain packages of work, by competitive bidding and review of scope of certain works, the project cost increased to `2325 crore.

The airport is likely to be inaugurated on January 23, 2012 on the birthday of Netaji Subhash Chandra Bose.

The revised estimated cost of the work is `2325 crore and the same will be met through internal resources and borrowings. Term loan assistance of `986 crore that is about 42 per cent of project cost has been considered at 10 per cent interest rate per annum with nine years repayment period including moratorium period of two years. The ratio between internal resources and borrowings has been revised at 58:42 to fund the project.

28

A

new terminal building was recently inaugurated at Raipur’s Swami Vivekananda Airport. Built at a cost of `135 crore and spread out over 18,500 sq m, the terminal can handle up to 700 passengers, including 200 international fliers.

President Pranab Mukherjee inaugurated the new Integrated Terminal Complex in the presence of Civil Aviation Minister Ajit Singh, Chhattisgarh Governor Shekhar Dutt and Chief Minister Raman Singh. “The aviation industry has grown world over and India is no exception. Air travel is no longer a luxury or the exclusive privilege of the rich. The rapid expansion of aviation in India has provided significant impetus to the economy,” said the President. “I am confident it will help bring a large number of tourists and business people to the beautiful and mineral resource-rich state which has a hard-working and talented population.”

Civil Aviation Minister Ajit Singh said that the growth of air travel

facilities in Chhattisgarh would contribute in the nation's development and growth. He said that there had been continuous growth in air traffic across the country. He also said that the Airports Authority of India (AAI) had plans to construct two new airports at Raigarh and Bilaspur in Chhattisgarh. “The officials have been asked to take immediate action on the plan and work out the proposal for building airports in Raigarh and Bilaspur,” Singh said. He also hinted that Chhattisgarh was top in the list of states identified for the expansion of aviation services. “I have also directed the ministry officials to take necessary steps for increasing the number of flights connecting the state,” Singh added.

AAI Chairman VP Agrawal echoing the same sentiments said that the “beautiful complex has the capacity to serve 700 passengers, equipped with centralised airconditioning system, five lifts, three escalators, sophisticated CCTV, public address system, fire-fighting equipment and two aero bridges”.

aai

AgrA AirPort gets ils boost Instrumental Landing System (ILS) to facilitate low visibility aircraft operations at Agra Airport became operational recently. Installed following the directions of Union Minister of Civil Aviation Ajit Singh, the new system with provisions of flight calibrator and appropriate landing procedures will make possible landing and take-off by aircrafts in cases of visibility as low as 800 metres. It will be helpful particularly during the foggy season.

The issue of Installation of ILS at Agra Airport had been pending for a long time. Singh asked the concerned authorities to take it up on a priority basis due to high importance that Agra has in the world tourism map.

Agra Airport is an Air Force Airport with a civilian enclave maintained by the Airports Authority of India (AAI) for providing facilities for scheduled passenger aircraft operations. AAI so far had VOR facility at the Airport for homing and landing of aircraft in visibility up to 2400 metres. n

rAiPur gets A new terMinAl

one more feather in the CaP: President Pranab mukherjee (third from left) unveiling the new integrated terminal at raipur. also seen to his left is Shekhar dutt, governor, Chhattisgarh, (extreme left) Civil aviation a minister a ajit Singh, (third from right) raman Singh, Chief minister, Chhattisgarh and minister of State for Civil a aviation KC Venugopal (in white).

Cruising HeigHts December 2012

traffiC Data

Passenger traffic rebounds in October

A

HC TIWARI

s per the passenger traffic data submitted by various domestic airlines, the total domestic passengers carried by scheduled domestic airlines in the month of October 2012 was 45.55 lakh. In September 2012, the total domestic passengers carried by the scheduled domestic airlines was 40.18 lakh.

This shows that 5.37 lakh more passengers travelled in the month of October. The number of passengers carried by the domestic airlines was 483.94 lakh between January and October 2012 as against 496.19 lakh during the corresponding period of the previous year — a growth of -2.47 per cent.

The break-up for the month of October 2012 is as follows: Air India – 9.49 lakh, Jet Airways – 8.24 lakh, JetKonnect – 3.00 lakh, IndiGo – 12.66 lakh, SpiceJet – 8.69 lakh, GoAir – 3.47 lakh, Kingfisher – Nil, Mantra – 0.001 lakh.

The marketshare of scheduled domestic airlines for the month of October 2012 is: Air India – 20.8 per cent, Jet Airways – 18.1 per cent, JetKonnect – 6.6 per cent, IndiGo – 27.8 per cent, Spice Jet – 19.1 per cent, GoAir – 7.6 per cent and Kingfisher – Nil. IndiGo, Jet Airways, Air India and SpiceJet improved yields and also gained market share ahead of Kingfisher Airlines' licence suspension. Jet Airways improved its market share to 24.7 per cent share from 23.8 per cent in September.

SpiceJet crept to 19.1 per cent up from 18.5 per cent in September while GoAir reported a marketshare of 7.6 per cent.

As compared to October 2011 also, the market share of Air India showed a considerable improvement rising from 16.6 per cent to 20.8 per cent. Further, during October 2012 the airline carried 9.49 lakh

BACK WITH A VENGEANCE: An inside view of Air India Boeing 787 Dreamliner. Air India has bounced back with improved passenger load factor in October, 2012.

The number of passengers carried by the domestic airlines was 483.94 lakh between January and October 2012 as against 496.19 lakh during the previous year.

Cruising HeigHts December 2012

passengers as compared to 8.98 lakh passengers carried in October 2011.

The passenger load factor of Air India was also improved reaching 74.7 per cent in October 2012 from 64.7 per cent in July 2012. The on-time performance of the airline has also improved during the last three months ranging between 84 per cent and 87 per cent.

The passenger load factors improved substantially for airlines in October judged against that of September.

IndiGo reported the highest load factor of 77.2 per cent followed by Air India with 74.7 per cent. SpiceJet and GoAir reported load factor of around 70 per cent.

Though JetKonnect had a passenger load factor of around 70 per cent, its full service carrier Jet Airways reported the lowest among its peers at 67.5 per cent each. n

29

cover story

UNITED ONLY IN NAME “There is consolidation in general. We have been on the benefit side in the past but now we are impacted as well�

Mark Schwab

CEO, Star Alliance

The three airline alliances – Star, SkyTeam and oneworld – are in disarray, largely due to the stick wielded by the three carriers from the Middle East: Qatar, Emirates and Etihad. What does this mean to the world aviation and the Indian aviation community. A close look at the present scenario.

A

viation alliances started in the late 1990’s after a decade of anarchy with the Gulf war, SARS and skyrocketing fuel prices buffeted the aviation business. For starters, it was just an equation that was made up of loose marketing agreements that was really a basis for code-sharing and expanding routes and frontiers — a way to expand their international networks. It was also a way to break the protectionist barriers that restricted airlines enjoying fifth freedom (flying beyond from other countries) or mounting flights from third countries to other countries. There were also restrictions on number of seats and flights through bilateral agreements. Alliances were the answer. Today, those linkages have been converted into formidable alliances that has a threeyear process for admitting members, voluminous thousand-page agreements, global backend million-dollar IT integration hubs, world class lounges and a huge number of incentives to the travelling public.

Strangely, everything is dominated by the number three. There are three global alliances — Star Alliance, SkyTeam and oneworld. There are three mega European carriers — British Airways, Air France/KLM and Lufthansa — there are three major Gulf carriers — Emiratas, Etihad and Qatar and there are three major full service carriers in India — Air India, Jet and Kingfisher (till it tanked!).Till the arrival of the Chinese, the big three in Asia were Singapore Airlines, Cathay Pacific and Korean Air! Barring the Gulf — where Qatar has now made the first move with its alliance with oneworld — in every other region, the competing carriers have joined competing alliances.

Dominating the world skies for years, the big three US carriers — American, Delta and United — were in a way responsible for the creation of the three global alliances, oneworld, SkyTeam and the Star Alliance, respectively. United’s long term arrangement with Lufthansa led to Star (1997) and there was really no looking back after that as the others scrambled to get their own alliance in place. It was also no accident that the three largest European airlines — British Airways, Air France/KLM and Lufthansa — have each joined a different alliance. Today, more than 40 of the world’s largest airlines are part of one or the other alliance and drive roughly 60 per cent of airline traffic globally. Nonetheless, there are plenty of gaps to be filled. leading the world: (l-r, facing page top) Star alliance’s Ceo, Mark Schwab, Skyteam’s Md, Michael wisbrun and oneworld’s Ceo, Bruce ashby

“Customers want seamless connectivity and we want to deliver a superior airport experience...”

Michael Wisbrun MD, SkyTeam

“For any airline, joining an alliance is one of the biggest projects they will ever undertake...”

Bruce Ashby

CEO, oneworld

cover story

Alliances, Gulf carriers’ style

T

he European airlines seem to be under some misconception that they still rule the world. Well, they did at one point of time or precisely when London, Paris and Frankfurt were the hubs where flyers changed carriers to move into Europe or move across the ocean to the Americas. Today, those European hubs are fast fading out and

member-elect Kingfisher Airlines is all but dead. Add to that is the fact that the members are as disparate as they can be unlike Star’s which has a frequent-flyer programme that is followed by all its members.

Let us see why. When Etihad took a stake in oneworld member Air Berlin, there were murnurs of protest but not vehement enough to end the membership. On its heels came Emirates’ 10-year tie-up with Qantas — again another oneworlder. This time around, the effect of the partnership is definitely going to affect BA and Cathay Pacific. Then came the shocker. After many ‘no Akbar Al Baker James Hogan Tim Clark comments’, Qatar Airways joined being taken over by the likes of Dubai, oneworld. The upshot of all this is that Abu Dhabi and Doha in the Middle East. all three carriers from the Middle East Their locations make them ideal bridges are connected to oneworld in some form from the east to the west. or the other.

Shaking them out of their cosy exIf that was not enough creation of istence — indeed some analysts put it confusion, Air Berlin has taken a step as “destroying” — are the three major that is being seen as the last nail in Gulf carriers, Etihad, Emirates and Qa- the alliance coffin. It has gone ahead tar. In fact, the three carriers have made and tied up with Air France-KLM, a it quite clear to the big European as well Skyteam member, for a long-standing as American carriers (read the three ma- strategic partnership. The question that jor alliances: the biggest Star led by Luf- arises immediately is: Can an oneworld thansa and United Airlines followed by member Air Berlin be allowed to get Skyteam comprising Air France-KLM into a strategic partnership with a carrier and Delta and lastly, oneworld centred from a rival alliance? But then, the truth around BA, now part of the IAG, and is that the oneworld members are someAmerican Airlines) that the world avia- how either tied-up with the Gulf carriers tion sector can run without paying obei- or in a relationship with other rival allisance to alliances. The attitude of the ance members.

Middle Eastern carriers are a result, first Over the next year or so, the situaof their being overlooked by the alli- tion is likely to change. CNN’s top busiances and second, they were progressing ness reporter Richard Quest tweeted that well without support from the alliances. Qatar’s Akbar Al Bakar will in most Indeed, the Gulf carriers expansion likelihood question the tie-ups Qantas spree remains unchecked. Not a day goes and Air Berlin have gone through once by without news from any of the three his carrier becomes a full-fledged oneopening new trade routes and touching worlder. Quest meanwhile, has predictnew destinations. (We, in India, can jus- ed that “Air Berlin will eventually leave tifiably claim a share in their prosperity: oneworld and join Skyteam to tidy up its after all India provides the fliers who relationship. I predict Qantas will slowly land in the Middle Eastern hubs at night but surely drift away from oneworld but for their onward journeys across the keep one foot in the camp because of its oceans). However, it is the rapid growth relationship with American Airlines and of the carriers that is seeing the grip of US routes. And I predict Star loses Brathe alliances loosening slowly and the zil’s TAM to oneworld next year.” He grouping that has been most affected is goes on to point out that the alliances oneworld. and their members would do well to sit On its part, however, oneworld has up and toe the line “offered” by the Gulf not had an easy time. While two of its carriers simply because “they have the major members, Malev-Hungarian planes, the hubs, the connections and are and Mexicana, went bankrupt, another opening up the new markets”.

32

Cruising Heights December 2012

South America, Africa and India are huge gaps in the alliance. The Gulf is still not really alliance territory in that Qatar has just joined oneworld and both Etihad and Emirates have chosen to go with bilateral deals that will give them greater flexibility and actually threaten many alliances (oneworld, for example, could well lose Qantas that has gone for a bilateral deal with Emirates).

It’s true that there are few airlines left to woo — maybe Jet and Air India, both of who have been courting Star Alliance for a long, long time (maybe AI would have opted for one or the other if only it hadn’t paid such a huge advance to Star) and Jet is well, to put it mildly, on-today, off-tomorrow in its attitude to these alliances. Naresh Goyal is actually more interested in ensuring no one else gets into them as he did by gently persuading Lufthansa to shelve the AI induction! The biggest cherry at the moment is LATAM — the giant airline that will happen in 2013 on the full merger of Brazil’s TAM and Chile’s LAN, the two dominant airlines of South America. TAM now belongs to Star (although it’s announced it will be exiting the alliance) and LAN to oneworld, but the merged airline will have to choose one as directed by regulators.

While Star has moved quickly to sign AviancaTaca and Copa, oneworld would suffer a body blow were LATAM not to stay with it (the decision is expected end 2013). It’s already in a bit of a hole for not having a presence in China (because it would simply not be in Cathay Pacific’s interest!) and losing the South American cherry would call into question its entire status as a comprehensive alliance.

So where are alliances really headed?

Many believe that in a decade from now, flying will really be what is euphemistically described in aviation circles as “metal neutral”. In other words, it simply won’t matter who you are travelling on as long as it’s an alliance partner and the benefits accrue to the alliance members. At the moment, at least that looks a bit far-fetched if one were to take into consideration the yawning gap in standards and services of many of the member airlines with an alliance. In Europe and Asia you have flat beds and the aircraft are five years old or less while the American carriers have legacy aircraft and as for flat beds — well, consider yourself lucky if you get decent service!

That apart even the benefits vary hugely between airline to airline within a single alliance. In a perceptive piece CNN said: “Someone with a basic level of elite status (Premier) on United, for example, will get priority boarding and security along with access to Economy Plus seats with more

STACKED UP AND READY

Star Alliance Airline

Adria Airways Aegean Airlines A look at the three alliances and their Air Canada member Air China Air New Zealand ANA Asiana Airlines Austrian Airlines Blue1 SkyTeam bmi Airline Brussels Airlines Aeroflot Russian Airlines 99 Continental Airlines Aeromexico 53 Croatia Airlines Air Europa 43 Egyptair Air France 250 LOT Polish Airlines Airlines Alitalia 134 Oneworld Lufthansa Airline China Eastern Airlines 330 SAS Scandinavian China Southern Airlines 344 American Airlines 981 Singapore Airlines CSA Czech Airlines 38 British Airways 238 South African Airways Delta Air Lines 798 Cathay Pacific 131 Spanair Kenya Airways 31 Finnair 66 Swiss International Airlines KLM 164 Iberia 118 TAM Linhas Aereas Korean Air 131 Japan Airlines 202 TAP Air TAROM 26 LAN 67 Thai Airways Vietnam Airlines 66 Malev Hungarian Airlines 26 Turkish Airlines Invited to join Qantas 140 United Aerolineas Argentinas 49 Royal Jordanian 30 US Airways China Airlines 67 S7 Airlines 49 Invited to join Garuda Indonesia 78 Invited to join Avianca/TACA Middle East Airlines 16 Air Berlin 121 Copa Saudi Arabian Airlines 166 *Kingfisher Airlines 67 Ethiopian Airlines Xiamen Airlines 68 Malaysia Airlines 94 Shenzen Airlines Fleet/Countries served 2,048/142 Fleet/Countries served 2,506/149 Fleet/Countries served Number of flights/day 9,190 Number of flights/day 14,615 Number of flights/day

15 28 215 272 51 182 71 43 15 59 52 346 13 61 36 376 155 109 58 33 66 147 55 93 142 413 340 88 49 48 99 3,446/155 16,000

* Kingfisher Airlines ran into financial trouble and hence delayed its plans to join oneworld. The above data and figures has been collected from various reports published in 2010 and 2011. This chart was published in the Emirates' Paper, Aviation at the Crossroads: Safeguarding Competition and Consumer Choice, that has been quoted elsewhere in this story.

Cruising Heights December 2012

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cover story

Star in one world

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midst the alliance and outside the alliance tie-ups stories, one could well ask about the interest of the Indian carriers in alliances. A lot has been said about Air India’s Star misadventure.

However, not many may be aware of the fact that Jet Airways sought the government’s permission to join the alliance exactly a year after the Maharaja’s effort was put on hold.

It is believed that both Jet Airways and Star Alliance have secretly harboured wishes to embrace each other. In fact, Jet’s efforts were doubled sometime after March this year after Air India’s failed and Kingfisher Airlines dropped out of the reach of oneworld. A letter from Star Alliance’s CEO Michael Schwab to Jet Airways spilt the beans. The letter was quoted extensively by the media: “I am writing following our (last week) meeting to confirm the interest of our members in naming Jet Airways in Star Alliance. Our

legroom when flying United. A basic elite member of any other Star Alliance airline, however, gets none of that when flying United. All that person gets is priority standby and waitlisting for flights that are full. The biggest benefit of being an elite member with an airline has always been the upgrade. And that’s an area where these alliances fall far short. You can use miles to upgrade on some airlines in Star Alliance and SkyTeam, but that’s permitted only with full fare tickets, which can run into thousands of dollars. A quick search at the airline’s website will often come up with cheaper business class tickets. If you’re a oneworld flier, then there are no reciprocal upgrades between airlines.”

That is the one big challenge for alliances: to get some uniformity in service standards and benefits that are common across an alliance. That’s easier said than done with each individual carrier having its own commitments and compulsions, but experts believe if they have to survive and prosper, they will have to move forth for some CMS (common minimum standards) in the years to come. But all that will happen only if the alliances survive and prosper. There is a belief that the entire equation is rapidly changing and the more recent developments have only made these elements even more acute. Take oneworld, for example. Here is what the Centre for Asia Pacific Aviation (CAPA) had to say on the developing scenario: “Some oneworld

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members feel that the membership of Jet Airways in Star would be of mutual interest to them and Jet Airways, evidenced by the continuing discussions over several years. We trust that you share the same view.”

The letter goes on: “To move this along, I would invite you to confirm the interest of Jet in joining Star Alliance, which we would take to the chief executive board for final approval and following which, we would establish project teams to manage and drive integration process.”

It is only after this letter that Jet Airways sent out a request to the government on July 16, 2012, to approve its application to join Star. “In order to build the right global partnership and to support our future expansion plans, Jet has been evaluating the potential of joining a global alliance. We are pleased to inform you that we have made the decision to

join Star Alliance,” said the letter. “We request ministry approval to join Star Alliance. This would allow us to complete the comprehensive integration process as soon as possible in order to be better prepared for our planned international expansion.”

One wonders what took Jet so long to push its application to join Star. In fact, Jet flies into quite a few Star Alliance hubs such as New York (JFK/EWR), Singapore (SIN), Bangkok (BKK) and Toronto (YYZ), and even uses one of them — Brussels (BRU) — as its scissor hub in Europe. In addition, it has launched flights to German destinations like Munich, one of Star founding member Lufthansa’s hubs.

To top it all, Jet is aligned to a number of Star Alliance members like ANA, Singapore Airlines, South African Airways, Swiss, Thai Airways, Turkish Airlines and United and will be able to help them

TOP IN SERVICE: Jet’s service is already in a class of its own and with the membership of Star when it comes will raise the bar further

carriers will not prize alliance membership, either of their own doing or a result of their benefits being lessened. The candidate list is tall: American Airlines is being courted by Emirates, which has a close relationship with Japan Airlines and in September 2012 signed an extensive partnership agreement with Qantas; Finnair’s future has been bet on connecting European-Asian traffic, a staple of Qatar Airways; Cathay Pacific already has a hands-off approach and Qatar’s addition will do little to reverse that stance; Cruising Heights December 2012

Royal Jordanian is in Qatar’s backyard; and airberlin has a deep partnership and equity stake with Qatar rival Etihad Airways.

“Qantas has made its move, aligning with Emirates and loosening ties with British Airways and Cathay Pacific. The next to break rank could be American Airlines or Japan Airlines. While those two are less likely to entirely leave oneworld, Qantas, for example, could have greater ability to secure partnerships — especially in muchneeded Asia — without the weight of its marketing alliance possibly clashing with

bring in traffic to India. With support from a number of Star Alliance airlines, it will be easy for Jet to step into the alliance. In fact, the process will be faster than Air India’s. As for the frequent flyer programme,

Jet recognizes most of the Star Alliance carriers’ programmes and once again it will be an easy step for alignment.

It remains to be seen whether the government gives its nod to Jet keeping the demand of Air India aside. And though Air India’s Chairman Rohit Nandan has gone on record to state that “Air India is still looking to join Star Alliance and we feel that they must take us because our performance is better than ever and better than others… we are ready with all formalities and

in happier times: Willie Walsh, CEO, British Airways and Vijay Mallya, Chairman, Kingfisher Airlines during the announcement of their codesharing partnership that vanished like a dream

ROYAL CLASS: Air India’s service has gone down and the membership of an alliance could see the Maharaja getting back to the old days

a prospective partner’s alliance. airberlin joined with Etihad before it formally entered oneworld (although airberlin’s decision to seek membership in oneworld was made before Etihad forged a tie-up with airberlin).”

Perhaps, the most exciting development is the creation of a hybrid partnership platform — to woo LCCs like IndiGo —

by Skyteam. What it means is that carriers would enjoy the benefit of association without some of the huge full membership costs that the LCCs may not want to spend on.

Also, it will not limit you to shake hands with carriers that may not be possible under the binding alliance rules. “We will not make them members of the alliance. They will be only partners but not members,” SkyTeam Chairman Leo van Wijk said at the 2012 IATA AGM in Beijing.

So, what will be the rules of the game in this new order. Straightforward and simple: • It would not require prospective hybrids or LCCs to work with all of its members.

• The hybrid or LCC would also be free Cruising Heights December 2012

could join tomorrow. We are not looking at joining any other global airline grouping since Star Alliance suits us best”, Star may take its time to accept Air India.

Meanwhile, Air India could look at another alliance and the one that is, perhaps, close to the Maharaja is oneworld.

The smallest of the alliances, oneworld is keen to get new members. In fact, it was on the verge of welcoming Kingfisher but Vijay Mallya and his finances upset the plan. And its CEO, Bruce Ashby is an old India hand, having steered IndiGo in its formative years.

As for routes, Air India flies to a number of oneworld hubs such as London (British Airways), Chicago and New York (American), Hong Kong (Cathay Pacific) and Tokyo (JAL). The Maharaja has plans to fly to Sydney, the hub of Qantas. Also most of the oneworld carriers fly into Delhi and Mumbai, both Air India’s hubs. So, joining oneworld could turn out to be a win-win situation for the Maharaja as well as the alliance and its members.

to partner with other alliances’ carriers.

• Frequent flyer recognition, through check-in service for connecting flights and baggage handling will be minimum requirements The two contenders that Skyteam is wooing at the moment is Gol in South America and IndiGo in India. It is believed there have been discussions between IndigGo and SkyTeam. A normally wary IndiGo may be more forthcoming, thanks to this new model that reduces the complexity of alliance memberships and simplifies the operations in an alliance system. Indeed, as CAPA rightly suggests, “IndiGo will be careful to ensure SkyTeam affiliation is not limiting. With an approximately seven percentage share of the Indian market, SkyTeam is the smallest of the alliances in India. Before any affiliation is reached, IndiGo will want to ensure the standing of SkyTeam’s willingness for it to partner with non-SkyTeam carriers in order to gain greater international access.”

In essence, its churn time for the global alliances as they face new challenges and an industry where low cost is king and the paying passenger increasingly goes online to do his own booking. He knows what he is getting and unless it’s worth his while he will ‘click’ to the next option. It also contradicts the first rule of an alliance: to provide seamless, uniform service across the alliance. It’s a tough task, but the airline business has in any case never been easy! n

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cover story

It’s time to go it alone...

As independent global airlines are getting fewer in number, carriers such as Emirates have set their own standards with a legendary service and value, and access to even more cities, and in the process are becoming a highly-competitive network alternative to the Star, SkyTeam and oneworld alliances. Here’s how Emirates justifies its action…

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s parts of the global economy emerge from financial crisis, international aviation is at a crossroads. Today as never before, three large and growing airline alliances dominate the competitive landscape, their market power multiplied through a succession of mega-mergers and enhanced by antitrust immunity. In Europe, the combination of Air France and KLM was followed by an unprecedented shopping spree that saw Lufthansa acquire Swiss, Austrian, bmi and Brussels Airlines, and was complemented by the British Airways-Iberia merger.

The United States has also witnessed huge airline mergers, including Delta/ Northwest, United/Continental and Southwest/AirTran. Grants of anti-trust immunity by the US, the EU, Australian, Japanese and other regulators allow members of the alliances jointly to set prices and coordinate capacity, protected from the civil and criminal sanctions for those activities.

Today, the three alliances (Star, oneworld and SkyTeam) have swollen across national and regional boundaries to encompass over 50 once-separate airlines accounting for almost 70 per cent of all International Scheduled Revenue Passenger Kilometres (RPKs) for 2010.

The alliance carriers suggest that this extraordinary and rapid consolidation of the airline industry is merely the work of market forces, long overdue in a sector that has consistently failed to earn the cost of capital. They further contend that anti-trust immunity benignly circumvents limits on cross-border mergers and produces commercial benefits otherwise denied by government restrictions on foreign ownership.

Others, however, warn that consolidation on this scale, coupled with anti-trust immunity, has the potential to forestall new market entry, to create a “join or perish” commercial imperative for unaffiliated carriers to enter alliances and, ultimately, to create a highly concentrated market that invites collusion, undermines incentives for innovation and harms consumers. What is clear, in

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Emirates’ view, is that the emergence of the three mega-alliances presents public policy concerns that merit careful attention.

The three alliances’ almost 70 per cent share of total international RPKs masks cases of significantly greater market control. Alliances account for 90 per cent of passenger traffic between Europe and North America, the world’s largest transcontinental market. Alliances have 73 per cent of the growing Europe-South America market. On the Asia-Americas markets, alliances control 71 per cent, with a focus on North America, where SkyTeam and Star together comprise 60 per cent. Indeed, notwithstanding the success of low-cost carriers in short-haul markets, the three alliances still control 85 per cent of passenger traffic within North America and 74 per cent within Europe. However, markets such as Africa-Asia, Middle East-Americas and Australasia-Europe have largely been ignored by alliances — markets where Emirates has catered to passenger demand. Of concern is the alliance domination of major city-pair markets, in many of which new entry is severely restricted by limited runway capacity at hub airports and the lack of commercially useable slots.

Alliances account for 90 per cent of passenger traffic between Europe and North America, the world’s largest transcontinental market Cruising Heights December 2012

The way forward: Putting competition and consumers first Governments should investigate and, if appropriate, intervene to stop alliance activities aimed at thwarting independent competitors. Anti-trust immunity is premised on an open and competitive market.

It was never intended as an instrument to eliminate airlines that choose to remain outside the alliances; and should never be cover for inter-alliance collusion aimed at denying non-aligned airlines a fair and equal opportunity to compete. While the number of independent global airlines is few and may become even smaller, carriers such as Emirates have consistently punched above their competitive weight by maintaining a focus on what consumers demand most — excellent service and value.

In today’s increasingly concentrated global

aviation sector, the need for independent competitors to maintain the global competitive balance is more important than ever.

First, while an independent carrier alone cannot match the scope of an alliance network, it offers consumers an alternative in innumerable markets, typically with industry-leading service and competitive fares.

Emirates is a case in point. With service to over 110 destinations on six continents and extensive interline relationships providing access to even more cities, Emirates has become a highly-competitive network alternative to the Star, SkyTeam and oneworld alliances. For instance, passengers travelling between the Asia-Pacific region and Africa can choose between travel on an alliance via a European hub or, in the alternative, on Emirates via Dubai. Similarly, passengers travelling from North America to the Indian Subcontinent can do so on an alliance via Europe or on Emirates via Dubai.

The key point: an independent carrier such as Emirates offers consumers a competitive alternative – a fourth network option – in a growing number of city-pair markets.

Second, for consumers, who do not begin or end their journeys at alliance hubs, independent carriers often offer a more convenient one-stop option than the multi-stop alternative inherent in the network business model of the alliances. That business model funnels passengers through a limited number of alliance hubs that has grown smaller with industry consolidation.

Passengers in non-hub markets are required to take short-haul flights to and from connecting hubs, resulting in multi-stop journeys. For instance, a passenger in Manchester (or Hamburg or Nice), who wishes to fly to Kozhikode in India, must first fly to an alliance hub such as London, Frankfurt or Paris and then connect again in India for the final leg of the journey to Kozhikode. In contrast, independent carriers such as Emirates have embraced what are secondary markets for the alliances. As a result, via Dubai, the same passenger can fly on Emirates one-stop from Manchester, Hamburg or Nice to Kozhikode. It makes a commercial sense for alliance carriers to operate a hub and spoke system. Indeed, independent carriers such as Emirates do the same thing via hubs such as Dubai. For passengers at the far end of alliance spokes, however, independent carriers offer a much-valued onestop alternative.

Last, independent carriers are the only airlines willing and commercially

able to offer head-to-head competition on the critical routes between their own hubs and the hubs dominated by alliance carriers. Alliances enjoy a powerful position at their respective hubs and are unlikely to undercut their existing traffic flows by starting service between a competitor alliance’s hub and non-hub destinations. For instance, SkyTeam and oneworld do not and almost certainly never will offer headto-head competition with Star’s non-stop flight between Washington Dulles and Kuwait. The same is true for Star’s non-stop flight between Washington Dulles and Dubai. Neither SkyTeam nor oneworld can be expected to offer non-stop head-to-head competition.

The most telling measure of whether an airline is successfully providing consumers with greater competitive choice is the amount of attention competitors pay to it and the decibel level of their complaints.

Applying this test, Emirates obviously is providing increasingly significant value to consumers.

WATERSHED EVENT: Qatar Airways became the first Gulf airline to join an alliance — oneworld

Conclusion: Two Visions at the Crossroads Air France CEO Pierre-Henri Gourgeon has commented: “Europe is at the crossroads of international air travel, and this is a role we need to value and defend.”

This airline-centric vision amounts to an unabashed call to arms for Europe to deny Emirates new market opportunities and force consumers to fly through European alliance hubs.

Emirates also believes that aviation is at a crossroads, but its vision is fundamentally different: competition and consumer choice should be paramount, not the protection of market share for any airline.

State aid to airlines is absolutely unacceptable, whether through financial subsidies of any type or through restrictive air services agreements that protect flag carriers at a steep cost to consumers.

In a global airline industry dominated as never before by three fully integrated alliances, non-aligned carriers like Emirates offer consumers a vitally important competitive choice.

Emirates urges political leaders and aviation policymakers to safeguard the ability of non-aligned carriers to compete and to reject the collusive efforts of alliance airlines to deny consumers a free and fair marketplace for air services.

— Excerpts from Emirates’ paper, Aviation at the Crossroads: Safeguarding Competition and Consumer Choice.

Cruising Heights December 2012

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aero engines

Honda’s engine tests to end by 2012

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FAST FORWARD MODE: (Top, right) A cutaway of Honda’s HF 120 engine that is expected to complete all tests by the end of this year and submit all certification documents to the US Federal Aviation Administration early next year

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High-flow, wide-chord design.  Rugged and FOD resistant  Lower noise

Advanced, compact, reverse-flow design.  Reduced emissions  Higher durability

Low pressure turbine Counter-rotating turbine design.  Fewer parts for lower operating costs  Reduced weight

High pressure turbine Low pressure compressor Lightweight, high pressure ratio, 3D aerodynamic design.  Improved operability  Lower fuel burn

Low shock, 3D aerodynamic design.

Single crystal blade materials.  Lower fuel burn  Commercially proven reliability Single, high pressure ratio titanium impeller.  Stall-free performance  Reduced weight and fuel burn

High pressure compressor

Honouring Arnold Palmer He is the king of golf and now Rolls-Royce has honoured Arnold Palmer, for his singular contribution to business aviation. The golf legend was presented with a trophy during the National Business Aviation Association (NBAA) in Orlando. One of the great advocates of business aviation for over half a century, Palmer has the singular distinction of having an airport — the Arnold Palmer Regional Airport in Pennsylvania — named in his honour.

The RR-Palmer relationship took off in 1996, when he became the first customer to take delivery of the Cessna Citation X business jet, powered by the Rolls-Royce AE 3007C engine. Four years later, he became the launch customer of the Rolls-Royce AE 3007C1 engine when he upgraded to a new Citation X in 1999 — an aircraft that he continues to fly. Through all these years, Palmer has used the Rolls-Royce CorporateCare service to make sure he has no engine issues. In recognition of Arnold Palmer’s role as an ambassador for business aviation, Rolls-Royce presented him with a mounted AE3007C Citation X fan blade at a ceremony held at the Rolls-Royce stand on the first morning of the NBAA show.

Cruising Heights December 2012

world.honda.com

E Honda Aero Engines said engine certification testing was proceeding well, with 13 HF120 test engines accumulating more than 5,500 hours and 7,300 cycles. The company said it expected to complete all testing by the year-end and to have submitted all certification documents to the Federal Aviation Administration (FAA) early next year. Tests that remain include medium bird ingestion, 150-hour block endurance test and crosswind. The results, especially the critical block test, would be available soon. “Based on those, we can tell our delivery timing,” said Honda Aircraft President Michimasa Fujino. “They’re making good progress.”

GE Honda Aero executives said that initial certified engines will be made at GE before production shifts to the GE Honda assembly plant in North Carolina which could develop the capacity to assemble 1,000 engines per year.

The company plans to offer three levels of engine service plans to customers, including basic warranty, an enhanced programme that would cover parts, and a comprehensive turnkey programme for parts and labour. Company officials said pricing for the programmes is being evaluated but will be competitive. They also said that they were pursuing other customers, both OEM and retrofit, for the engine, including direct competitors of the HondaJet, but that their primary focus remained on getting engines certified and delivered to Honda Aircraft.

Meanwhile, Fujino was happy to be close to certification of the HondaJet. The light jet’s flight testing had shown that it was performing even better than expected, with a higher top speed and lower specific fuel consumption. “We have to conduct final testing after we get the final [conforming] engine,” said Fujino. “Building an aircraft or certifying an aircraft is an extremely difficult job,” he concluded. “We are building an airplane but also building an airplane company at the same time.”

Combustor

Fan

Air France jostles with Rolls Royce

50 years of caring!

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olls-Royce is the world’s leading manufacturer of corporate aircraft engines and, through its CorporateCare programme, operates the most comprehensive corporate aircraft engine maintenance management programme available for new and in-service Rolls-Royce BR725, BR710, Tay and AE 3007 engines.

October 2012 marked the 50th anniversary of Rolls-Royce introducing its ground-breaking Power-by-theHour support package with a service developed for the Viper engines on the HS125 jet. ‘Power-by-the-Hour’ was invented in 1962 to support the Viper engine on the de Havilland/ Hawker Siddeley 125 business jet.

A complete engine and accessory replacement service was offered on a fixed-cost-per-flying-hour basis. This aligned the interests of the manufacturer and operator, who only paid for engines that performed well. Believe it or not, RR continues to support one aircraft from that generation on the programme.

“Power-by-the-Hour” is the basis for the market-leading CorporateCare service. Rolls-Royce CorporateCare that was launched in 2002 and added a range of additional features. These include engine health monitoring, which tracks on-wing performance using onboard sensors; lease engine access to replace an operator’s engine during off-wing maintenance, thereby minimising downtime; and a global network of authorised maintenance centres to ensure that the world-

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Cruising Heights December 2012

Continued on Page 40 zooming ahead: The de Havilland/Hawker Siddeley 125 business jet with the Viper engines

jeff d welker

t is a tug-of-war that may finally Trent 1000 for the 787 order too and the reach conclusion in early 2013. At airline is using this as a critical element in least that’s what Air France-KLM its negotiations with Rolls-Royce. has officially said. The airline said that So how does the maintenance deal it hoped to finalise its arrangements help AF-KLM? Simple. The airline would with engine giant Rolls-Royce (RR) on like to consolidate and be able to carry out an engine maintenance agreement in maintenance on several types of Rollsthe first half of 2013.

Royce engines as it prepares to expand The airline has 25 Airbus A350 its MRO business. On several occasions XWB wide-bodied jets on order and AF has indicated its desire to expand Air the deal that it is seeking with RR is France Industrie — the highly profitable the freedom to carry out maintenance, maintenance, repair and overhaul operarepair and overhaul operations on the tions of the company that has been a huge Rolls-Royce Trent XWB engines that buffer in managing the turbulence in the will power the planes. The problem is, rest of the company. At the moment, the that where the moolah company repairs under is, and Rolls-Royce licence engines made wants to keep that part

by General Electric of the deal for itself. Air (GE). The issue is that AF-KLM would like France Chief Executive the A350 is only ofto consolidate and Alexandre de Juniac has fered with Rolls-Royce indicated: “We’re not engines and Air France be able to carry out really in a hurry.” The does not want the A maintenance on sevAF-KLM A350 will 350 market, when it eral types of Rollsarrive in 2017 (if the emerges, lost out to it. present revised schedule For the record, it Royce engines as it for the aircraft stands) may be mentioned that prepares to expand and, therefore, the slow the Air France mainits MRO business. and steady round of tenance division is the talks with an early 2013 world’s second-largest target to strike a deal. provider of multiproduct The A350 is only offered maintenance, repair and with the Rolls-Royce Trent XWB overhaul services (MRO) and is expected engine. De Juniac’s comments were to generate revenues upwards of €3.1 bilmade while inaugurating a $55 million lion of revenue and €130 million in profits engine test-bed facility next to Charles this year. The division’s President, Franck de Gaulle airport. The company hopes Terner, speaking at the same function said this facility will break even in about 3.5 that the market was very competitive, but years. an annual 3.9 per cent growth over the next As far as its other big ticket order 10 years was expected. As usual, the bulk Air France-KLM has also ordered 50 of this was likely to come from Asia. He (25 firm and 25 options) of Boeing said that the Chinese demand was expected 787-9s wide-bodied jets but has still to grow at an annual rate of 10 per cent to choose between Rolls-Royce Trent compared to just 1 per cent for Europe.

1000 or General Electric GEnx engines.

“Air France planned to expand its operaThe general perception is that Rollstions in China and India to be closer to its Royce wants AF-KLM to order the customers,” Terner said.

Continued from page 39 Cover story class support is readily available to customers whenever required.

The service allows operators to remove risk related to unscheduled maintenance events and make maintenance costs planned and predictable.

Steve Friedrich, Vice President, Sales and Marketing, Civil Small and Medium Engines, Rolls-Royce, said: “We are proud to celebrate 50 years of service excellence for Rolls-Royce. The customer focus and pioneering approach of ‘Powerby-the-Hour’ remains at the heart of our CorporateCare programme today. We continuously seek to enhance our level of service, and this year have significantly expanded our authorised service network and introduced new technologies to improve our Aircraft on Ground responsiveness. We look forward to delivering another 50 years of excellence in engine services.”

The programme continues to evolve based on input from customers. One good example would be the RR’s decision this year to introduce free on-wing labour coverage for line replaceable units and CorporateCare also now covers regularly scheduled borescope inspections.

In another unique first, for the BR725 engine that is about to enter service on Gulfstream’s new G650, Rolls-Royce will provide a replacement aircraft to cover the time the aircraft goes into maintenance or while a spare is being sourced as replacement. Also for owners and operators of the G650 another advantage will be having labour for A and C checks as part of the engine contract plus a bonus of 12 hours of free maintenance inspection. RollsRoyce also plans to the number of maintenance facilities from 9 to 34 by the end of 2012.

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Passport in progress The first passport engine for the Bombardier Global 7000 and 8000 programme is well on its way. AcAc cording to GE officials, the hardware for the assembly is under progress and it is expected that the assembly for the engine will begin in the next few weeks, according to reports. In April this year, GE froze the design for the Passport Engine. Tests completed since then include fan blisk validation tests, Fadec (Full Authority Digital Engine Controls for Turbine Engines) testing and ice ingestion testing.

It is expected that the first ground testing will happen in 2013 and flight testing in 2014.

A clean sheet design for the hugely popular Bombardier Global series, the passport will go on series 7000 and 8000.

The highlights of this engine include:

In one more example of the role that mobiles and tablets play in our lives, there is an application for Apple and Android devices called MyAeroEngine Support. With the use of GPS it advises operators locate the nearest authorised service centre. This is something that one can already do on the laptop or the desktop. It’s just that RR has now added the rest of the digital world to make life a little more easy.

Meanwhile, GE Aviation has introduced an app for the iPad and iPhone called BeaCruising HeigHts December 2012

•16,500 pounds of thrust • 8 per cent fuel consumption.

• The engine can best CAEP/8 emissions and Stage 4 noise regulations • The eCore suite, 52-inch front fan blisk and composite fan, combined with the engine’s integrated propulsion system from Nexcelle is unique.

The Passport will be encased in a slim-line nacelle that opens externally into a lower cowl to lessen weight and drag.

Digital connect

con. What the Beacon does is to ensure a return call from the appropriate customer service or technical representative in the region for Aircraft on Ground (AOG) problems within 30 minutes of a request being made via the app.

Saying thank you to the engineers The A380 is powered by four Trent 900 engines — two on each wing. Or, four from the engine alliance — a JV between GE and Snecma. But the aircraft that landed in middle October at an East Midlands Airport had three Trents and a Trent XWB. Larger than its Trent 900 neighbour and painted blue to make it stand out from the others, the XWB is a vital cog in the future of Rolls-Royce wheel.

Designed and developed by RR’s civil aerospace division in Sinfin, the engine has been made specifically for the Airbus A350 XWB (extra wide-body) aircraft.

In fact, that’s the only option on the aircraft.

The actual aircraft is still a work in progress and won’t be ready for the engines till the middle of next year. And while the fuselage and the wings get ready, the Trent XWB is being put through its paces on an A380, better known as a “flying test bed”.

The A380’s at East Midlands Airport was specially organised by Rolls-Royce and Airbus to thank the 2,000 RollsRoyce staff in Derby who have worked on the XWB engine programme. About 650 of those workers were taken to the airport to see the engine on the wing and have a tour of the A380 test plane — a bare interior full of test equipment and free of passenger seats.

Test pilots reported that the XWB had been performing well. It has been flown in different weather conditions to try it out. The XWB is being put through its paces in different environments. It flew near Dubai carrying out hot-weather testing. It will soon be going to Siberia to do some cold-weather testing.

By the time of the Paris Air show in June 2013, both engine and aircraft are expected to be tested as one unit. First deliveries will be made to launch-customer Qatar Airways in 2014 and then Singapore Airlines.

GE, Pratt & Whitney probe cause of Emirates’ engine failure severe damage that affected the Qantas flight out of Singapore some years back. That was on a Rolls-Royce engine — the second Emirates A380 that had an issue on the flight over Europe (Slovakia) on its way to JFK, New York from Dubai. It landed at Paris.

Latest reports suggest that experts from the Engine Alliance working with Australian investigators are focusing on a failed nozzle guide vane as the suspected cause of an engine shutdown on a GP7200-powered Emirates Airline Airbus A380. Inspectors are believed to have discovered damage caused by the failure of a second stage, high-pressure (HP) turbine nozzle guide vane. Engine Alliance declines to comment specifically on the cause of the incident but says “it is investigating the root cause of the engine event and will initiate prompt corrective action”. It adds that, to date, the engine “has demonstrated excellent reliability and performance on the Airbus A380, and the Engine Alliance is committed to maintaining those standards.”

But as a matter of abundant caution, Emirates President Tim Clark in an interview with the Financial Times said that several “rogue engines” would also need to be tweaked with upgrades replacing the nozzle guide vanes with better advanced models.

Cruising Heights December 2012

DUAL POWER: The A380 with three Trents and a Trent XWB engine

airbus

General Electric and Pratt & Whitney are investigating an engine failure on an A380. What caused one of their jointly-made engines to fail on an Emirates A380 is under progress. “The Engine Alliance is investigating root cause of the engine event and will initiate prompt corrective action,” both companies said in a statement. The companies through a joint venture known as the Engine Alliance produced the GP7200 engines. The A380 left Sydney for Dubai but was forced to return to Sydney after one of its four engines failed soon after takeoff.

The aircraft, with 380 passengers on board, was just 20 minutes into its flight from Sydney to Dubai and climbing at an altitude of 10,000 feet when it experienced a problem with one of its four engines. “I saw a flash. I thought it could have been lightning, but then we saw flames come out of the engine. The whole interior of the A380 lit up,” passenger John Fothergill, 49, from New Zealand told Australia’s Daily Telegraph newspaper. There are reports of some passengers experiencing a “judder” and that they saw flames shooting several metres out of one of the engines.

Emirates later said that there was no fire although passengers might have seen a flash. Fortunately for Emirates, the incident did not involve the type of

aero engines

The neo engine is Snecma puts Silvercrest engine to test assembled Pratt & Whitney (P&W) has finished assembling the first PurePower PW1100GJM turbofan for the Airbus A320neo. The “last bolt” ceremony was held at Pratt & Whitney’s West Palm Beach facility, where further testing is expected to start soon.

The engine — with 33,000 pounds of thrust — is now the third member of the PurePower PW1000G series to begin testing. Engines from this series already under test include models for the Bombardier CSeries and Mitsubishi MRJ. They have completed 3,700 hours and 11,000 cycles of full testing, respectively.

The neo programme will see a total of eight test engines run through the full programme lasting 24 months. Schedules call for the PW1100G-JM programme to run a total of eight test engines over the next 24 months. Pratt & Whitney has collected firm orders for 1,136 engines to power the A320neo series, scheduled to enter service in October 2015. The other engine on the neo — CFM Leap-1A — is expected to enter service in 2016.

CFM is on track to complete by endDecember the final design drawings for the first Leap-1A engine for the Airbus A320NEO, maintaining a plan that will culminate with entry-into-service in mid2016. The General Electric (GE) and Snecma joint venture is developing three versions of the Leap engine in parallel. In conjunction with the new Airbus engine, CFM is developing an almost identical 1C variant that is set to enter service on the Chinese-made Comac C919 in 2016.

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Snecma has started running the first Silvercrest turbofan at its Villaroche test facility, near Paris. With 11,000 pounds of thrust, the Silvercrest will power the Cessna Longitude super-midsize business jet. EASA engine certification is slated for 2015 and FAA validation is expected shortly thereafter.

“The start of tests on the first complete

engine culminates several years of intensive work by the programme team,” said Laurence Finet, Silvercrest General Manager at Snecma. “Since the start of development in 2010, nearly 1,000 engineers and technicians have worked on engine design, manufacture and assembly.” Eight engines will be involved in the development programme.

It’s Honeywell for the Jaguars Hindustan Aeronautics Ltd is likely to finally go with the F125 IN. These were the engines on offer as a replacement for the IAF’s Jaguar deep penetration strike aircraft fleet. This Honeywell turbofan engine is likely to make it as a foreign military sales (FMS) contract. In middle October, the Air Force issued an RFP (request for proposal) to Honeywell Aerospace to “completely reengine” 125 Jaguars and specified that it

Cruising Heights December 2012

would provide F-125IN turbofan engines.

The number is around 270 engines.

The Air Force is presently preparing for the first test-flight of an upgraded Jaguar to “Darin-III” standards. The up gradation has been undertaken by HAL by and includes next generation avionics that features a glass cockpit and autopilot. The test flight is expected any time now.

Focus on ‘copters P44

P46

HEavy liftEr

long wait aHEad

We meet K-Air's Robin Cherian who is all set to introduce Kaman K-Max in India

Negotiations for Boeing's deal for the Chinook and the Apache could take upto six months

Kaman’s India sortie T

he Kaman K-MAX aerial truck is something of a legend in aviation circles. With the ability to lift more than its own empty weight in under-slung cargo, the K-1200 K-MAX ‘aerial truck’ is the first helicopter in the world to be specifically created for repetitive external lift operations and vertical reference flights.

In contrast to this bespoke approach, other helicopters that are currently engaged in lifting heavy cargo are adapted from general-purpose helicopters, or those intended to primarily carry passengers or internal cargo. The narrow, wedge-shaped profile of the K-MAX and its bulging side

windows gives the operator a good view of the load looking out on either side of the aircraft. The innovative machine’s unmanned version — the K-MAX Unmanned Aerial Truck (UAT) — has been named by TIME magazine as one of “50 Best Inventions of 2011. Robin Cherian, Director of K-Air, extolled the K-MAX’s capabilities: “The K-MAX performs medium, lift operations better than any other helicopter in the world, in terms of reliability, repetitive lifting and operating cost.” (see accompanying interview). The helicopter has been used for a wide variety of applications including disaster relief firefighting, with precise wa-

Cruising HeigHts December 2012

ter drops, mobilization and logistics, search and rescue construction, such as oil rig and pipeline power line construction and repair and could very well adapt itself to Indian conditions and demands. The unmanned version of K-MAX is supporting the requirements of the US Marine Corps Cargo Resupply Program.

This one-of-a-kind machine is being brought to the Indian skies by K-Air an aviation company, headquartered in Cochin, Kerala. Established in 2005, K-Air is a general aviation that has grown rapidly with a global footprint and offices in USA, France, UAE, Malaysia and Philippines. n

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Focus on ‘Copters

“There is a huge potential for K-MAX in India” The superlative Kaman K-MAX has been making waves around the world with its exceptional performance and superlative qualities. Robin Cherian, Director of K-Air, the firm that has brought these choppers to India, talked to Justin C Murik about this remarkable rotorcraft. Ü On bringing the Kaman helicopter to India K-Air is proud to introduce the K-MAX helicopter to India. The K-MAX helicopter is a 5000-lbs, single-engine medium-lift, helicopter that can lift more than it weighs —6000 lbs. Designed by the legendary Charlie Kaman and manufactured by Kaman Helicopters, USA, the K-MAX performs medium, lift operations better than any other helicopter in the world, in terms of reliability, repetitive lifting and operating cost. It has an endurance of 2 hr 40 min and range of 214 nautical miles with an external load.

The K-MAX effectively marries newgeneration technology with an extraordinarily rugged airframe. Its exceptionally strong aluminium fuselage ranges in thickness from 0.065 inches to 0.125 inches for enhanced durability and safety, especially in critical areas such as the cockpit, fuel tank and lower fuselage.

To aid vertical reference flight, the narrow profile and landing gear placement provide pilots with an unobstructed view of the load from either side of the aircraft for enhanced control and more precise load placement. An external instrument panel is strategically located outside of the cockpit, enabling pilots to actively monitor performance during load operations.

Ü On the advantages of the K-MAX with regard to other choppers in the same category The ability to carry load more than its own weight with power to spare, consistent performance in hot and high conditions, most efficient lift to fuel ratio, less maintenance and thereby lower cost to the company are the distinct advantages vis-à-vis other choppers.

Ü On the cost-effectiveness of the K-Max compared to other choppers in its class Profitability is the bottom line in any helicopter operation. High serviceability, low maintenance, fuel efficiency and less manpower intensive are the key factors for every operator.

With one pilot one mechanic only required to operate, simple design eliminating high-maintenance systems, most efficient lift-to-fuel ratio and high reliability rates (numerous operators have clocked 1500 hours in a year), K-MAX scores way above others in its class.

Ü On the design factors that lead to KMAX’s unique profile The simple design of K-MAX has resulted in fewer aircraft systems and has shortened the load path between the engine and the rotor system. This airframe’s ability to handle the stress loads generated between the rotor system and the cargo hook assembly during repeated lifting is increased. This enhances the safety and reliability of the K-MAX. K-MAX has a unique cargo hook-trolley system. The trolley system allows the hook to move back and forth across the belly of the aircraft, enhancing aircraft and load stability.

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Ü On the hot and high-altitude performance of the K-Max K-MAX can reliably lift 6,000 pounds at 46 deg C at sea level and can repeatedly lift 5,000 pounds at 10,000 ft. It maintains its performance, with less degradation than other helicopters, when flying at high altitudes or hot temperatures. K-MAX has done extensive operations from the hot temperatures of Afghanistan to mountainous Cruising Heights December 2012

Focus on ‘Copters

terrains of Canada and New Zealand. Ü On after sales support by K-Air in India A comprehensive after sales support shall be provided to the K-MAX operator. A customer support cell is available 24x7 for all kinds of support. Ü On the maintenance requirements of the K-Max The K-MAX is a very low maintenance helicopter. The systems are very simple in construction and have been designed to be maintained by one mechanic. The absence of a tail rotor eliminates two gearboxes, drives shafting and thereby eliminates the associated maintenance. In addition to its wwreduced maintenance requirements, the K-MAX maintenance frequency is less and needs no special facilities for maintenance work. Ü On the infrastructure requirements compared to other choppers K-MAX has been specially designed for operating in remote areas. It requires less infrastructure and support than other heli-

copters. It is highly reliable and just needs one-pilot- one-mechanic team to operate. Ü On the possible markets for K-MAX in India We are looking at helicopter operators, PSUs and corporates engaged in construction, operation, and maintenance of roads, bridges, hydroelectric power projects, power transmission projects and telecommunication systems. We could look at options of outright sale or the lease of a K-MAX helicopter.

There is a huge untapped potential for the use of K-MAX helicopter in Himachal Pradesh, Uttarakhand, north-eastern states, Jammu and Kashmir region, which are mostly hilly and not easily accessible by other means of transport, thus saving time and money.

K-MAX would definitely come in handy lifting essential power equipment and repairing power lines in the eventuality of a power grid breakdown, reducing 6-10 hrs load carrying/repair time to 2-3 hrs.

Areas where K -MAX can be utilised:  Lifting of loads for the power, infrastructure, wtelecommunication and Cruising Heights December 2012

energy industry  Disaster relief such as floods and earthquakes, i.e. delivering supplies and lifting debris  Firefighting with precise water drops  Mobilisation and logistics  Search and Rescue Ü On the training of pilots for the KMAX As is the norm, Kaman Helicopters Inc shall provide ground and flight training at our facility in the USA. Ü On the flying characteristics of KMAX because of the intermeshing rotors K-MAX is a very satisfying helicopter to fly and is designed for pilots. Since it has intermeshing rotors and no tail rotor, there are no feet movements required for the pilot, very responsive engine and no tail rotor emergencies to bother about. In addition, the K-MAX woperates with a minimum number of systems that require pilot action or monitoring. The pilot can perform all normal and emergency procedures without removing hands or feet from the controls.n

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Focus on ‘copters Choppers to survey for aquifers

China on top of Bell’s radar The Chinese chopper market will grow at the rate of 20 to 25 per cent per year, according to Bell Helicopter, and the company has plans to grow its facilities and services in the country. Speaking at the Zhuhai Air Show in China, Bell Helicopter’s CEO and President, John Garrison said: “We are mapping out the service network together with Chinese partners, trying to make a solid foundation to ensure our market can go forward. We think China will be one of the strongest potential growth markets in the world. Clearly, the government will continue to open up low-altitude airspace, and regulations will be important for the entire industry.” According to Bell, China will require up to 2000

From March 2013, aquifers in six strategically selected areas of the country will be mapped by the CSIR-National Geophysical Research Institute of India in collaboration with Aarhus University in Denmark. SkyTEM Surveys has been subcontracted to do the actual mapping of the aquifers. The Aquifer India Mapping Project aims at acquiring 13,800 line kilometres of airborne geophysical data and apply sophisticated data processing techniques in order to evaluate a Danish helicopter-borne technology for aquifer mapping in India. The project will result in the assessment of aquifers status and their vulnerability to human activities with the use of airborne data. Designed in Denmark in the late 1990s to map water resources SkyTEM is a specialised helicopter-borne geophysical system.

choppers in the coming years. At present, the country has about 600 commercial helicopters according to Bell. A memorandum of understanding (MoU) was also signed by Bell to assist with the establishment of a maintenance training facility for Bell 206L and 407 helicopters in Guangdong Province.

Six months for Boeing deals?

According to a report in The Times of India, negotiations between the Boeing company and Indian officials related to the purchase of helicopters worth $2.4 billion could take up to six months to wrap up. India has selected Chinook CH-47F over the Russian Mi-26 choppers in the heavy-lift category. The Chinook is a tandem rotor design while the Mi-26 is a more conventional design.

In the heavy-attack chopper category, the Longbow variant of Boeing’s AH-64 Apache gunship triumphed over the Russian Mi-28

Havoc chopper. While the Chinook deal for 15 helicopters was estimated at $1 billion, the deal for the 12 Apache gunships is worth $1.4 billion.

Sweden orders seven AW139s

New heli-taxi services

AgustaWestland, a Finmeccanica company, has signed a contract with the Swedish Maritime Administration for seven AW139 intermediate twin helicopters. The aircraft will be equipped for Search-and-Rescue (SAR) operations with the first helicopter scheduled to be delivered in the spring of

In a sign of the burgeoning chopper taxi market in the country, two new heli-taxi services have been introduced. The first was introduced in Kerala in the town of Kollam by the Tourism Promotion Council, Kollam, and New Delhi-based Chipsan Aviation Ltd. The service will use the Eurocopter AS-350 B3, which has the capability to transport six people.

The second chopper service is being launched on the Kolkata-Purnia-Patna route by the Bengaluru-based Spirit Air Private Ltd in partnership with travel company DTDS. The air service will operate on a twice weekly basis on Tuesdays and Saturdays on the Kolkata-Purnia-Patna and Patna-Purnia-Kolkata routes.

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2013 and the final one in 2014. The Swedish Maritime Administration is the authority responsible for Maritime and Aeronautical Search-and-Rescue Services in Sweden and will operate the AW139 helicopters from five bases across the country.

Cruising HeigHts December 2012

business aviation

There's promise of growth in the next decade Honeywell has forecast nearly 10,000 new business jet deliveries from 2012 to 2022 with India and China playing leading roles. A peek at its 21st annual Business Aviation Outlook.

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he next decade will witness three to four per cent average annual industry growth, forecasts the 21st annual Business Aviation Outlook of Honeywell Global Business Aviation, with nearly 10,000 new business jet deliveries worth about $250 billion from 2012 to 2022. Of these, a major share will be delivered to the developing countries with growing economies. The emerging economies have made up the shortfall in the developed markets, which have been strained by the double burden of economic sluggishness and business lifecycle transitions.

In such a scenario, India, with its massive expansion of businesses and high-net worth individuals, is slated to be a key player in this development process. Take the case of TS Kalayanaraman of Kalyan Jewellers. The Kerala-based jeweller bought a seven-seater Embraer Phenom 100 to enable him to supervise his 30-odd jewellery stores that span across Kerala, Tamil Nadu, Karnataka, Andhra Pradesh and Puducherry. Kalayanaraman’s case is not a flash in the pan: India is brimming with entrepreneurs like him who have understood the potential of business aviation as a mechanism for growth.

It was only last year that Honeywell first focused on the growth of business aviation in the BRIC countries (Brazil,

Russia, India and China).

In 2011, these results led the survey with 50 per cent of respondents reporting acquisition plans. The figure has since come down to 46 per cent but with a firming profile. While last year less than one-third of BRIC purchases were planned to happen within two years, this year more than 40 per cent of those surveyed said they intended to begin purchasing activity in the next two-year timeframe. Some signs of uncertainty regarding business conditions do show up in this group’s timing profile, with a marked increase of purchases not allocated to a specific year or placed by default in 2017. Together, the emerging market results from BRIC countries reflect a slight tempering of enthusiasm compared to a year ago but are still quite strong when compared with other regions.

Said Rob Wilson, President, Honeywell Business and General Aviation: “Next year’s totals are anticipated to be of similar magnitude, reflecting the protracted nature of the global economic recovery. Over the medium term, a return to historical growth conditions supported by globalisation, wealth creation in developing nations and new aircraft development should boost orders and support accelerated growth beginning mid-decade. Despite the economic Cruising Heights December 2012

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challenges our industry has been dealing with for the past 40 months, we believe some progress is being made.”

A look at the international situation — as far as the demand for business jets worldwide is concerned — points out that emerging markets normally show higher but historically more volatile levels of demand, as well as a more pronounced preference for larger aircraft.  The report states: “The Asia Pacific region, where many of the industry’s major players have high expectations for long-term future growth, reports 34 per cent of its operators as interested in new purchases. This is lower than the 45 per cent reported last year but remains above the world average and results in an aggregate share of world five-year projected demand of about 7 per cent, off two points from 2011 levels”.  Latin America’s survey results indicate 39 per cent of operators have new jet purchasing plans, which is an improvement over last year’s 32 per cent. In

47

business aviation the Middle East and Africa, 32 per cent of respondents plan to buy a jet, down from 38 per cent last year.  North America, the industry’s mainstay market, has had new jet purchase plan levels remain stable, totalling about one-fourth of all operators, for the past five years. However, modest interest levels might be when compared with emerging markets, North America represents more than half of the projected global demand for the next five years based on the region’s historicallydominant installed business jet base, affirming the region’s place in the industry’s future.  According to the report, “Europe’s

GAMA: Industry state presents ‘mixed picure’ Speaking during the recently-held NBAA 2012’s Media Kickoff Breakfast, Caroline Daniels, Chairman of the General Aviation Manufacturers Association (GAMA), said that the state of the industry remained a “mixed picture.”

“This year we have seen continued growth in corporate profits and in global gross domestic product figures, which are both good signs for future shipments,” Daniels explained. “Flight Caroline Daniels hours have gradually been on the rise. And the international marketplace – particularly Asia and Latin America – continues to present opportunities for business aviation.

“That said, it’s clear the industry’s optimism is tempered, in part by marketplace trends,” Daniels continued. “After all, not all business aircraft types saw an increase in shipments and billings this year. And we think that trend points to an additional concern: the continuing lack of financing. We believe that there’s some pent-up demand, and if credit conditions were eased, we might see an impact on orders, shipments and billings.” GAMA’s first half figures, the most recent numbers available, were promising. Airplane shipments increased 5.9 per cent in the first six months of 2012 compared to 2011, while the accompanying value of the airplane deliveries rose 13.2 per cent.

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purchase expectations were up slightly this year, at 33 per cent and are roughly in line with levels in the previous two surveys. The European share of estimated global five-year demand rose by one point to 18 per cent in the 2012 survey.”

In its latest survey, Honeywell found: “About 30 per cent of operators interviewed have plans to purchase a new business jet over the next five years either as a replacement or in addition to the respondent’s fleet. This year, about 20 per cent of those with plans to purchase a new business jet intend to make it by 2013, with a similar proportion planning 2014 and 2015 purchases. The results lead to a relatively

stable level of projected demand” Moreover, there is going to be a growing number of choices for private jet buyers. Bombardier plans to begin deliveries of the ultra long-range Global 7000 and 8000 jets as early as 2016 and the supermidsize Learjet in 2013. Most recently, Bombardier’s Learjet 70 and the Learjet 75, that will replace the 10-year-old Learjet 40 and 45, will start getting delivered as early as the first half of 2013. The Citation Ten is on track to enter service by 2014.

Embraer expects the first of its two new jets, the Legacy 500, to reach customers by early 2014. The light-midsize Legacy 450 is most likely to enter service towards the end of 2014. 

“Obama re-election means bad news for bizjet market”

a class of its own: The luxurious interiors of a business aircraft

For aircraft at the smaller end, where demand is more concentrated in the US, “President Obama’s re-election should not help bizjet sentiment, and tax policy could weaken demand at the margin.

Moreover, decelerating corporate earnings growth does not bode well.”

Echoing this sentiment, JPMorgan Investment Research noted in its latest business jet monthly report that business jet demand “remains weak, but is not getting much worse”.

The company has forecast a growth of two per cent in business jet deliveries for 2013.

Indicative of a positive scenario, while Original Equipment Manufacturer (OEM) backlogs decreased somewhat in the third quarter, JPMorgan analysts expect further fleet orders to be Cruising Heights December 2012

announced by Bombardier and Gulfstream for aircrafts at the higher end.

JPMorgan noted that Hawker Beechcraft’s plans to exit the business jet market “would be a positive for the remaining players, particularly Cessna and Embraer.”

It expects Hawker to deliver 27 jets this year, and a decline to zero would represent a 0.4 percentage point headwind to market growth next year.

Meanwhile, pre-owned business jet inventories of in-production models recently crept up by 0.1 per cent to 10.6 per cent “and have not moved from the 10.4 to 10.6 per cent range in the past six months.” Nevertheless, average asking prices surged 2.6 per cent month-overmonth, the strongest price movement in percentage terms since 2008.

China is India’s toughest competition I

ndia might be one of the most market, which is expected promising business jet markets to generate great opportuniacross the globe (it is the 15th largties for all industry players. est business jet market in the world We commit ourselves to the by fleet size), but it has a strong market and each of our cusrival in China. Business aviation in tomers, with our full line of India has been in place for much state-of-the-art executive jets more number of years, with around and continuously improved 138 business jets, while China’s customer support.” numbers are less, around 120, but In-depth analysis by the Jean Michel Jacob, General Manager the numbers are growing really company has indicated that of Dassault falcon fast, and business jet makers are the overall environment in Business services doing everything in their capacity China is highly conducive to (Beijing) co. ltd. to get a foothold in China as they the development of busisee the country as an emerging market ness aviation. The rapid development for their products that holds enormous of its national economy generates more potential.

Chinese companies listed on Fortune 500 According to media reports, there are and more High-Net-Worth Individuals now at least 63,500 individuals in China (HNWI) as well. Data show the annual who fit into the target category of business growth rate of the country’s HNWI (with aircraft buyers. And of those, 13 per cent investable assets over 10 million RMB) intend to buy a business jet. This amounts stayed at 25 per cent over the past five to more than 8,000 Chinese intending to years. In addition, the latest Hurun Report, buy business aircraft. the authority in monitoring the wealthy Said Ernest Edwards, President, in China, indicates billionaires (in RMB) Embraer Executive Jets: “China is a in China increased by 87 per cent in 2012 rapidly growing global executive aviation over 2011. market with its economic development, the Dassault Falcon has established a gradual opening of low-altitude airspace ‘wholly-owned foreign entity’ to represent and the continuous improvement of its the Falcon brand in the growing Chinese aviation infrastructure. Embraer Execumarket. The subsidiary, known as ‘Dastive Jets pays close attention to the China sault Falcon Business Services (Beijing)

iFlyPrivate makes bizjets affordable static.amefiles.com

Industry experts claim that less than 0.5 per cent of the world’s population have access Roula Rabbat to private jets, as they are perceived to be a hi-end luxury rather than a necessity. However, the launch of a new website, iFlyPrivate, may bring about a change in the scenario for many as it offers economical deals for flying in a business jet.

The founder of the company, Roula Rabbat, said: “Usually private jet flights cost a lot. From the UAE to the UK and back it normally costs approximately $100,000 to $120,000. But if you go on

iFly and you find this destination, it will cost anywhere between $3,500 and $4,500 each way.”

Rabbat claims that till now, very few people have even tried to find out the price of flying privately. “Because it is such an exclusive industry, people don’t even try to learn about it,” she explained. “They know it’s very expensive but they don’t have an idea how much.” Besides the price factor, now, when most people fly on a private jet, they will be accompanied by unknown peopeo ple just like in a commercial flight. Of course, there will be fewer people and the service will be significantly better. To accommodate this change, iFly offers a fully automated bookbook ing service.

Co. Ltd’, is based in Beijing. Jean Michel Jacob has been named General Manager of the subsidiary and Jean Rosanvallon, the Chairman.

“Firmly establishing Dassault’s presence in China today positions us to serve the needs of its growing business aviation sector with the highest level of support in the years to come,” said John Rosanvallon, President and CEO of Dassault Falcon. “Establishing this subsidiary is key to doing business in China and making sure Falcon customers have the best possible resources.”

Francois Chazelle, VP, Airbus Corporate Jets claims that the company is now focussing its attention towards India, but has been distracted for a while by the market of China.

What India needs to realise is that it faces strong competition from the Asian superpower that is very supportive of business aviation and looks at it as a tool for progress. It has relaxed air traffic control from the military and given authorisation for more airports. India, in a similar fashion, needs to create a conducive environment for business aviation by easing regulatory framework, developing infrastructure, working out a solution for controlling exorbitant jet fuel prices if it wants to emerge as a leader in the race. 

500th Falcon initial assembly Dassault Falcon’s 500th Falcon 900, a Falcon 900LX, that will initially serve as a demonstration aircraft, is scheduled to be handed over in early summer 2013. This Falcon 900LX, is presently in final assembly in Bordeaux-Merignac (France).

Twenty Falcon 900LX’s have been delivered since the latest version of the storied large cabin tri-jet line was certified in July 2010. The Falcon 900, the only airplane in its class with a threeengine design, features a comfortable cabin width of seven feet eight inches and a cabin height of six feet two inches.

“The Falcon 900 family has thrived for so many years because of its versatility, comfort, performance and fuel efficiency,” said John Rosanvallon, President and CEO of Dassault Falcon. “The interior has always been highly regarded as one the most spacious and comfortable in its class.”

Cruising HeigHts Heig December 2012

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business aviation

Falcon 2000LXS launched

Wings for Learjet 85 The first wing shipment of Bombardier Aerospace’s Learjet 85 jet arrived at the Wichita assembly line and is presently in the process of being readied for mating to the fuselage of Flight Test Vehicle one (FTV1).

Alongside the arrival of the first complete Learjet 85 aircraft wing, the fuselage for FTV2 has successfully completed its integrity inspection.

Installation of the nose, bulkheads, floor, windshield and door surrounds are scheduled to begin soon. Once complete,

the main fuselage will be shipped with the aft fuselage to the final assembly line.

“Seeing the wings arrive for our first Learjet 85 test aircraft is a wonderful moment.

A moment that could not have happened without the hard work and dedication of every single person involved in this project,” said Ralph Acs, Vice President and General Manager, Learjet. “This development programme is gaining ever more momentum as we tirelessly work towards first flight and the first customer delivery.”

The Falcon 2000LXS, which is set to replace the Falcon 2000LX in 2014, was recently launched by Dassault Falcon.

The Falcon 2000LXS offers improved airport performance, payload and cabin comfort compared to the Falcon 2000LX. The 4,000 nm Falcon 2000LXS will allow operators to access more airports because of new full-length inboard slats, which give the aircraft category-leading airport performance and balanced field length.

“Customers are demanding more of their business jet and that's what Dassault is delivering in the Falcon 2000LXS. Like all Falcons, the 2000LXS will offer the best fuel economy and the lowest operating costs in its category,” said John Rosanvallon, President and CEO of Dassault Falcon. “But, what also needs to be recognised is the continuous evolution and robustness of the Falcon 2000 platform, which has set the highest of standards for comfort, reliability and efficiency in business aviation.”

7,000th Beechcraft King Air soars After Hawker Beechcraft Corporation (HBC) began the production of the twin-engine turboprops in 1964, the company reached a milestone when it recently delivered the 7,000th Beechcraft King Air, a Beechcraft King Air 350i to Herman & Kittle Properties (HKP), Inc., based in Indianapolis at a special delivery ceremony at the National Business Aviation Association annual convention in Orlando. Jeff L. Kittle, HKP’s President and CEO, was a guest of HBC for the delivery ceremony.

The Indian market consists of a total 71 King Airs. All three current production King Air models – King Air 350i, King Air 250 and King Air C90GTx – were at HBC’s static display at the Orlando Executive Airport, along with the Multi-Mission Beechcraft King Air 350ER demonstrator aircraft and other HBC aircraft.

“The King Air is still king. We delivered the 5,000th King Air in 1996, the 6,000th in 2005 and now we’ve reached 7,000 – clearly, interest in the all-time best-selling business aircraft family is as strong as ever,” said Shawn Vick, HBC Executive Vice President, Customers. “Through relentless product enhancements, the King Air’s performance and value have continuously increased and set the standards in our industry.”

“Our company was already excited about moving up from the King Air 200 that we’ve loved to a new King Air 350i, so realising we were getting the 7,000th King Air produced just made it that much more special,” Kittle said.

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Kittle added: “Probably the biggest selling point for us with the King Air 350i was the flexibility to load the plane up with full passengers and full fuel. We fly less than 700 miles for most of our trips, and we get there as fast as a business jet while burning less fuel and with our team being very comfortable and productive in the cabin. The addition of broadband internet and phone access has made it a true workspace.”

Cruising HeigHts December 2012

Net Express Cruising heights

d i g i ta l t r e n d s f o r t r av e l l e r e x p e r i e n c e

EMD in India by Finnair, Amadeus

images.wisegeek.com

In the air and on a mobile Skyscanner recently found that 63 per cent Indian air travellers have a tolerant attitude towards fellow passengers communicating over mobiles in the aircraft

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early two-thirds of Indian air travellers favour the use of mobile phones on board flights. This was found by leading global flight search site Skyscanner after the recent move by airlines such as Emirates to provide passengers with the facility to make calls on their phones via OnAir, their in-flight WiFi provider.

Over 10,000 travellers across Asia Pacific were surveyed by Skyscanner. The survey revealed that there was much less enthusiasm for allowing passengers across Asia Pacific to make calls on their mobiles in-flight, with 51 per cent against their introduction. This percentage dropped down further among travellers from Europe. In a similar survey conducted earlier this year, an overwhelming 86 per cent of travellers told Skyscanner that they were against the

introduction of mobile phones on planes.

What was perhaps, interesting was the fact that Indian travellers were more tolerant of fellow passengers talking to friends and family back home. Only 18 per cent said they would be annoyed by other passengers making calls. The figure rose to 32 per cent across Asia Pacific.

Commenting on the findings, Kavitha Gnanamurthy, Skyscanner’s Market Development Manager for India, said: “The move

by Emirates is a bold one and is something that travellers will no doubt find a talking point over the coming months. The survey results help highlight the fact that Indian travellers are very much in favour of using mobile phones in-flight, as compared to other Asian travellers who aren’t excited by this trend. n Cruising HeigHts December 2012

Travel technology partner Amadeus has become the first Global Distribution System (GDS) provider to launch Electronic Miscellaneous Document (EMD) functionality with Finnair in India. EMD will enable Finnair to offer travel agencies much more choice with the selling of innumerable ancillary services.

EMD is an electronic record used to capture data about a sale and track its usage. The functionality is issued as an accountable document for a payment received (such as reservation change fee, date change penalty, excess baggage etc.) and as a credit note or voucher (such as residual value/compensation) and settled just like standard e-tickets using existing settlement plans from BSP India.

The functionality will offer a single view in the PNR with automatic reporting in the BSP sales report as well as back office systems via the Amadeus Interface Record.

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interview Michael Thorburn, Director of Sales and Marketing, Serko

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Milestone for schiphol airport The e-gates at Schipol Airport to hit 1 million passenger milestone

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"Music in the sky", courtesy af Music lovers are now being offered a new iPhone application

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"Domestic India travel sector is growing fast" Michael Thorburn, Director of Sales and Marketing, says that Serko’s India target market to-date has been to focus on MNCs, looking to invest in technology to drive savings across all areas of the business travel category  You are into a niche market that has tremendous potential for growth. How do you plan to exploit this market?

Currently Serko’s key strategy to deploy its Corporate Booking Platform throughout India is based on a B2B reseller model. This is a proven approach in Asia Pacific which supports low-cost, rapid market growth.

In addition to this Serko also markets and sells its solutions directly to corporate end-customers since many Travel Management Companies (TMCs) lag behind in providing technology to support their corporate clients fast evolving travel programs.

This has been more apparent in the emerging Asia market and as a consequence Serko’s India target market to-date has been to focus on MNCs, looking to invest in technology to drive savings across all areas of the business travel category.  Which is the most robust market as far as business travel is concerned?

The domestic India travel sector is growing fast with airline suppliers offering lower cost air travel, as a viable alternative to other forms of transport such as rail. In this regard business travel requirements are being fulfilled more by air travel, which in

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turn drives demand for those suppliers in that sector and opportunities for products such as Serko, to provide managed travel solutions for businesses.

Serko will provide sales and product support to businesses and resellers from offices located in India, resourced by local Indian employees Cruising HeigHts December 2012

 With the economy growing, what is your take on the Indian market in the field of business travel and what are its unique features?

As business travel grows, travel and expenses (T&E) remains one of the most largely unmanaged spends of a company’s budget. Whilst travel management companies are able to assist in this area, there is little control over travel costs at point-ofsale.

There are some processes already available to try and control this, however many still result in a duplication of workflow and are somewhat cumbersome to administer for an organisation.

Similarities exist in India with other markets such as new airlines emerging, leveraging a ‘low cost carrier’ (LCC) model, one-way and return sector faring, product bundling and a fragmenting distribution of travel content.

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an travel market is ownership and payment processes at various points in the travel supply chain such as Global Distribution Systems (GDSs) and the car transfer requirements in relation to business travel.  What are your expansion plans and how do you plan to grow your services?

Serko plans to grow its reseller base to support both a corporate reseller model and corporate-direct model. There are number of travel-related businesses that are able to become appointed as a Serko reseller, in order to offer their customer base a technology solution that will improve savings on T&E. Serko will in turn provide sales and product support to businesses and resellers from offices located in India, resourced by local Indian employees.  Any lacunaes that hinder the growth process?

Aside from the on-going challenges the fast evolving travel industry presents, which Serko is well used to managing by adopting an agile approach to software development, the time required to set up local offices and staff.  Do you think that travel agents will remain to be a strong component of the market or they will completely recede to the background Travel Agents remain key players in the supply chain and important partners with technology suppliers such as Serko. They are able to manage their customers more effectively, while providing a streamlined service to travel procurement and therefore operating a more efficient business themselves.  In what ways has the economic recession affected business travel and the work of portals such as yours?

The economic recession has no doubt had an impact on business travel in terms of actual bookings and the type of travel purchased. i.e. economy class over business class and lower cost hotel rooms etc.

However business has to continue and travel is still an important part of doing business.

Companies need to find a lower cost way, of achieving the same outcome.

Corporate online booking platforms do well in a recession as they are tool that is used to drive changes in buying behaviour and so drive savings of up to 30 per cent on ticket costs and improve workflow gaining savings, efficiencies and improved productivity.

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Million milestone for Schiphol e-gates Within nine months improved the of its installatraveller experition in March, the ence at Schiphol, automated border but also gained control system new efficiencies," at Amsterdam's said Kier coSchiphol Airport Gerritsen of the comprising 36 eDutch Ministry of gates is expected to the Interior. hit the one-million Accenture's innovation at its best: Passengers at the e-gates passenger mileMark Crego, stone by the end of at Schipol Airport who leads the this year. The e-gates were developed by Border and Identity Management business, Accenture and Vision-Box. added: "With continuing growth in interOn average, passengers are processed national travel volumes and increasingly in just eight seconds thanks to the use of complex documentation and visa requirefacial recognition technology to validate ments, there is a greater need than ever passenger identity. "By introducing autoto verify passengers' identities using new mated border control so that we can opertechnologies that are supported by efficient ate a self-service passport system, we have human processes." futuretravelexperience.com

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Coming: Semantic search technology for OTAs “One of the things that really struck me as an exhibitor at this year’s World Travel Market exhibition is how big an impact technology is having on the travel sector. According to Google’s own statistics, 60 per cent of all travel this summer was booked online, and let's face it, this figure is only going to grow,” said Carsten Kraus, Chief Executive of FACT-Finder Travel, who talked about semantic travel search at The World Travel Market 2012.

“We recently brought 80 people to our usability studio to get deeper insight into how people search for travel and venues where one participant made a very telling observation: “Why can’t Online Travel Agencies (OTAs) be more like Google?”

This should be interpreted as, “Why can’t there just be one search box that you type your request into?” The idea of one-field search was very appealing across the group.”

“If you look at the search function on any OTA’s website, it is often incredibly complex with multiple fields to complete.

Furthermore, it’s very difficult to search by what are increasingly becoming key venue selection criteria such as free wi-fi, business centres, and other added value benefits, which means you’re often forced to wade through large numbers of irrelCruising Heights December 2012

GURU evant results MANTRA to get what you want. If you put all

these options into a standard search box it would be huge. A one-field search box would eliminate all of these problems.”

“Until now, this hasn’t been possible in a search function as search has not been semantic— i.e., it has been unable to take inferences from the way in which we, as humans, think (and therefore type into a search box or engine) and produce intelligent answers from that; it simply matches the keywords that we enter. But this is starting to change.

We have already implemented this kind of search technology in the travel sector for German travel site weg.de, which resulted in a 12 per cent uplift in sales and a 66 per cent reduction in search times.”

“Although semantic search is presently in its infancy, a lot of investment is going into developing the technology at search companies like ourselves and Google, and we predict it will be broadly available in the search technology space by 2016, and by 2020 will be standard.” “Of course, the invention and adoption of semantic search technology is the first step towards more intelligent computers."

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Roving check-in desks at Indonesian airports process passengers from multiple airlines, making it ideal for shared-use airport terminals. Ilya Gutlin, SITA President, Asia Pacific, said: “Essentially it is a check-in desk on wheels, which means it can be set up anywhere there is a queue and then stored away in a back office when it is not required. This provides much greater flexibility than fixed counters, as well as providing a back-up system for business continuity in the event of a disruption.”

In an attempt to systematise traffic during peak hours, mobile check-in desks have been adopted at two of Indonesia’s busiest airports, Soekarno-Hatta International Airport in Jakarta and Bali’s Ngurah Rai International Airport.

The wireless solution has been developed by ground handler JAS alongside SITA. The roving check-in counter, which is called Mobicheck, is based on industry standard CUTE technology and it can

BB Airways, Abacus ink agreement Nepalese BB Airways recently inked the first-ever distribution agreement with Abacus International, Asia Pacific’s leading revenue partner for airlines. The agreement will provide all Abacus-connected travel agents with complete and exclusive access to the full fares and content available for the airline beginning January 2013.

The agreement will also see BB Airways utilise key technology solutions from Abacus to help increase the efficiency of its current booking and ticketing processes as well as reach high yield customer segments.

Shisheer Bhatta, Managing Director, BB Airways said: “We are very excited to be working with Abacus International."

KIS for Emirates

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Emirates Airlines recently announced the development of a line-of-business application for Windows 8-Knowledge Driven Inflight Service (KIS).

The KIS application, an in-flight communication and customer relationship management device that was first introduced by Emirates for its pursers in 2004, will run on the soon-to-be-launched HP ElitePad 900 business tablets, that are light, attractive and has a long battery life, ideal for nonstop flights. The device was announced by HP in October and will be available to customers in January 2013.

“At Emirates, we strive to deliver the world’s best in-flight experience,” said Kevin Griffiths, Senior Vice President, Cabin Crew at Emirates. “To support our crew, we have created an application on Windows 8 that delivers a unique,

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personalised experience with the necessary information for our cabin crew to better serve the needs of customers. The Windows 8 platform running on HP ElitePad 900 devices gave us this option, allowing us to create the KIS app that enables our crew to offer an experience not available on other airlines.”

Pursers on the flight use the KIS application to brief the cabin crew before every flight and understand how to best meet the personal preferences and needs of passengers.

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adsadvance.co.uk

Music lovers are now being offered a new iPhone app, “Music in the Sky”,

by Air France Music that will enable them to be able to listen to “on air” tracks previously only available on board. The application has been created by the agency BETC. The principle is as poetic as it is fun, with pieces of music hidden in the clouds. Users just have to catch them by raising their iPhone and adding them to their playlist. Travellers will also have the opportunity of discovering new music depending on where they are going, from Paris to Tokyo to Buenos Aires; each different sky will have its own tracks.

To celebrate the launch, previously unreleased tracks by Francois and The Atlas Mountains, Eugene McGuinness, Villagers, Melody's Echo Chamber and Tomorrow’s World will be revealed.

Moreover, Air France Music will enable users to win other unreleased tracks, concert tickets or even air tickets by discovering hidden games in the sky several times in a year.

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SITA, NEC provide ABC gates Air transport IT specialist SITA and NEC Europe (NEC), recently reached an agreement to jointly provide an automated border control (ABC) gate solution.

It incorporates sophisticated biometrics technology for use at immigration control points at airports in the European Union (EU). The agreement comes as EU member states implement recommendations to move to self-service border control using ABC gates.

The speed and accuracy of this SITA/ NEC automated border control gate helps speed up passenger flows at border control checkpoints while improving security and resource management. It incorporates face recognition, and optionally fingerprint verification, against e-passport data.

Passengers can be processed through the SITA/NEC ABC gate in just 10 seconds or less. It is less resource intensive as it only requires manual intervention by an immigration officer in rare cases when a match is unsuccessful. This leaves the border security staff free for other activities. Moreover, reduced waiting times can attract more airlines and increased revenue for the airport authority.

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Fedex on a high in india

Kenneth Koval, FedEx Vice President Operations, India, and Rakesh Shalia, MD-Marketing, Middle East, Indian subcontinent & Africa, pose in front of the B777F aircraft that was introduced by FedEx at Delhi.

A positive outlook and a confidence in india ndia along with its acquisitions are bringing in results for FedEx, says an upbeat rakesh shalia.

Lufthansa Cargo reaches out to IBS

Collaborative IT to boost air cargo

Kabul cargo comforts SpiceJet

Trivandrum's IBS will provide its iCargo solution to manage Lufthansa Cargo

Future-oriented IT systems can create new benchmark

Low-cost carrier has gained popularity among freight forwarders with flights to Kabul

Last in/first out

Now, airfreight from the hinterland

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n what is being seen as a significant boost to air cargo in the country, air carriers recently started accepting cargo — for the first time — from one of the inland container depots (ICDs).

The Container Corporation of India (Concor is a state organisation) has a network of more than 61 terminals and offers scheduled and on-demand rapid rail and road services between the hinderland and ports, and between major metros. The ICD from which the carriers have started lifting cargo was at the industrial city of Kanpur — well known for leather products — around 500 km from Delhi and well over a 12-hour truck journey.

The city exports around 500 tonnes a month and imports about 115 tonnes. The launch of the facility has come as a boon to freight forwarders and exporters and is a well-timed move to meet the growing

demand of the cargo industry from the Tier-II cities of the country.

Perhaps, what is important is the fact that Customs and other functionaries involved with the air cargo sector have started adapting to a changed environment and trying their utmost to accommodate the demands of the stakeholders.

The Kanpur ICD facilitated all Customs clearances for the air cargo. The cargo was brought to Delhi by GMR, the operator of the airport.

The bonded trucking service between Delhi and Kanpur operates thrice a week.

According to Yash Vardhan, Director — International, Concor:“This is the first time in India that the airport, airline, inland container depots, customs and customers have joined hands to offer such a unique service at a location.”

His enthusiasm was echoed

by Pradeep Panicker, Chief

“There is some thought that some of the change we see in air cargo may be structural, maybe a permanent movement to sea freight and all that. At the same time, when we talk about high value goods that need to move fast, air is always a good solution to minimise your inventory holdings and maximise the supply holdings.”

Commercial Officer - Aero, Delhi International Airport Limited, who pointed out that the bonded trucking service would not only ensure better protection for the cargo but there would be minimal transit risk.

Aware of the fact that delays at airports were growing longer, Concor has chalked out plans to enhance infrastructure that would be able to attract air cargo, so that it can be sent out in bonded trucks.

In fact, Concor is going ahead with plans to invest $ 295 million in 2012-13 to set up Air Freight Stations (AFSs) and ICDs. Some time ago, an AFS was inaugurated in Mulund, Mumbai and another has been planned at Ahmedabad in Gujarat.

The Mulund facility, the second of its kind in the country, for example, has not only helped exporters in the Mumbai area but also expand the reach of air cargo to the interiors. Forwarders from around Mumbai would not have to brave the congestion at Mumbai airport to clear their cargo or even send it out.

The ramping up of the infrastructure comes at the right time: according to projections, the country would be generating 15 million tonnes of air cargo by 2015, while the planned and proposed capacity development at airports was only for around six million tonnes.

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John Slosar

Cathay Pacific CEO

Cruising Heights December 2012

TRENDS Freight forwarders and the rest of the air cargo community can look forward to better times. The plans of a cargo only airport at Rohtak, near Delhi, have gathered momentum. Haryana Chief Minister Bhupinder Singh Hooda has requested the central government to go ahead with the construction of a Greenfield Cargo Airport for international operations at Rohtak. The Chief Minister said that an area of about 2,770 acres had already been identified for the project. In addition, he said there was also a need to have passenger airports in Karnal and Hisar.

Meanwhile, in Madhya Pradesh, there are plans to turn Indore’s Devi Ahilyabai Holkar Airport into an international cargo hub. According to Civil Aviation Minister Ajit Singh, a cargo hub at Indore, in the centre of the country, would transform business — particularly perishable commodities — around the commercial capital of Madhya Pradesh.

The minister asked the state government to help the Airports Authority of India (AAI) in acquiring land to ensure the establishment of the cargo hub.

In the south, Chennai airport’s perishable cargo facilities have been upgraded. The airport has been handling pharmaceuticals that constitute around 1.5 per cent of the total cargo handled. The present infrastructure includes three chambers of cold storage with different temperature specifications. It also has a further 500 sq. mt storage area in the Perishable Cargo Centre. A new facility with six cold storage chambers measuring an area of 26000 sqm has also been created. More enhancements of the facilities are in the process.

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Lufthansa leans on IBS A big boost for the Indian IT industry, IBS’ iCargo was selected from 400 solution providers

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eading IT solutions provider to the global aviation industry, IBS Software, has entered into a contract with Lufthansa Cargo AG (LCAG), the airline cargo service provider in the Lufthansa Group, for the implementation of iCargo solution. The solution will manage the airlines’ entire air cargo movement worldwide.

IBS was selected from among 400 solution providers after an intense selection process that commenced 18 months ago. The contract is one of the largest IT system deals by Lufthansa Group.

Lufthansa Cargo ranks among the world’s leading cargo carriers. In business year 2011, the airline transported around 1.9 million tonnes of freight and mail and sold 9.5 billion revenue tonne-kilometres.

Lufthansa Cargo focuses on the airportto-airport business, serving more than 300 destinations in some 100 countries with its own fleet of freighters, the belly capacities of passenger aircraft operated by Lufthansa and Austrian Airlines, and an extensive road feeder service network. While the bulk of the cargo business is routed through Frankfurt airport, the company’s other hubs are in Munich, Leipzig-Halle and Vienna.

IBS’ new generation iCargo system will replace the legacy Unisys based MOSAIK application which Lufthansa used for the

past 30 years. Once implemented, iCargo will have a user base of over 4,000 staff members and will interface seamlessly with a host of other system applications within the IT landscape of the airline. Lufthansa Systems will provide comprehensive consulting services during and after the implementation phase. The provider will also host the solution at its own data centre in Kelsterbach near Frankfurt and will ensure compatibility with the remaining IT landscape of Lufthansa Cargo. IBM is in charge of the system integration. iCargo will manage the key business functions of the airline -- from sales processes up to the cargo terminal operations functions. The real time availability of operational information through iCargo will help generate actionable intelligence which will vastly improve the overall utilization of assets and improve revenue generation and operational efficiencies. iCargo is an integrated solution that supports the requirements of airlines’ freight business providing enhanced web-enabled features that optimise operations, enhance profitability and provide scalability. The solution helps manage the increasing volumes of cargo movement requirements of freighters, ground handling agents as well as airports.

UPBEAT: At the press conference to announce the tie-up with Lufthansa Cargo (L-R) IBS’ Mathew M Baby, Vice President and Head of Airline Cargo Services; Sankalp Saxena-President & Head of Aviation Operations Services and V K Mathews - Founder & Executive Chairman with Hans-Guenther Loeffler, Acting Consul General, German Consulate, Bangalore; Lufthansa Cargo’s Dr Roland Schütz,Vice President, Information Management (CIO) and Thomas Sonntag, Vice President, Procurement and Infrastructure (CPO)

Cruising Heights December 2012

More than 20 global airlines depend on iCargo to manage their mission critical cargo logistics including leaders like All Nippon Airways, British Airways, Qantas, South African Airways and Nippon Cargo Airlines. Since its launch in 2006, iCargo has emerged as the most definitive cargo management IT solutions in the global aviation industry. Today, over 70 per cent of the cargo movement in and out of Australia is managed by iCargo. The solution is the industry leader in Japan as well and is the only non-Japanese system that has full NACCS (Japanese Customs) capability and know-how. Fully compliant with IATA initiatives such as Cargo 2000 and e-Freight, the solution fetched IBS the ‘IT Provider of the Year 2012’ award.

“The thorough selection process testifies IBS has a great product, the utmost comprehensive solution, a benchmark setting ROI and has been assessed as the best choice for our initiative. The clear differentiator is the state of the art architecture / technology as well as the skilled employees. Furthermore, iCargo is unique in offering consistent process support with its single platform ranging from sales processes to handling as well as ULD management and up to revenue accounting. This mix of strengths has clearly convinced us. The decision is perceived as a major milestone towards materializing and enabling our joint visions,” said Dr Roland Schütz, CIO of Lufthansa Cargo AG, who was present at the press briefing to announce the tie-up.

“To be chosen by an iconic airline like Lufthansa is a significant step in our endeavour to make iCargo the No.1 air cargo management solution in the world. We expect to add substantial business value to LCAG and be a transformational partner in their quest to achieve increased operational efficiencies and growth. This alliance is a testimony to our capability, professionalism and commitment to support the requirements of global organisations such as LCAG renowned for its disciplined business practices. It is indeed a defining moment for IBS and heralds the beginning of a long and productive business relationship,” said VK Mathews, Executive Chairman, IBS Group. n

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‘FedEx India operations will continue to grow’ India remains a key destination for FedEx, feels Rakesh Shalia, Managing DirectorMarketing, FedEx Express Middle East, Indian Subcontinent and Africa. In an exclusive interview to Tirthankar Ghosh, Shalia talks about the future plans of FedEx concerning India and how the carrier is poised to make a big difference in express cargo industry in India?  How do you find business now? It looks like a second recession has come?

On the economic front, we continue to see modest growth in the global economy.

The Indian economy is growing and India is becoming one of the major markets for companies across the globe. The Indian economy is amongst the top four largest economies globally and is going to be amongst the top three economies by 2020.

The Indian domestic and international express cargo industry is one of the fastest growing in the world and worth close to $3.5 billion.

FedEx Express in India is growing steady with a positive outlook. We have confidence in India; our acquisitions are aimed at enabling us to invest more effectively and directly in India’s long-term growth and prosperity. Our acquisitions of PAFEX and the recent AFL and UFL businesses have enhanced our business flexibility and speed to market.  In such a situation, what innovative measures or long-term strategies has FedEx undertaken for the domestic market as well as the international market?

We are continuing with our strategic investments and innovative services in the Europe Middle East, Indian Subcontinent and Africa (EMEA) region to support our long-term vision of growth. This will also enable the company to grow stronger when the economy will rebound. We have taken some innovative measures for handling the situation: • We have taken actions to streamline operations and reduce cost structures where possible.

• We are focussing on delivering the best possible service to our customers during this time.

• We are offering a full range of services (air, ground and supplychain services) to meet all requirements of various customer segments to help them stay competitive in the evolving global economy.

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 You now have a frequency of more than 30 weekly flights from India. What is the kind of tonnage capacity FedEx is transporting weekly?

We have 31 dedicated cargo flights connecting key Indian cities with global trade centres – the most by any express service provider in the country. Our airlift capacity is approximately 1000 tonnes per week.  The Working Group set up by the Ministry of Civil Aviation of which you were a part, has set some strict deadlines for infrastructure work to be completed.

Do you believe that the situation – at least, for express – is improving?

The situation in express cargo industry has improved and it’s growing steadily. The Government of India is working towards building up the required infrastructure. For example, the construction of the Bengaluru International Airport provided infrastructure enabling our dedicated freight operations in South India. Modernisation of airports and air facilities in New Delhi, Mumbai instills a definite sense of confidence that the Government of India is serious towards building the infrastructure needed for logistics and air cargo industry.

However, there is room for improvement in several areas of infrastructural issues. Airports are hampered by factors like inadequate warehouses with airside and city side access, parking bays and single runway at certain airports, cargo handling/customs clearance capabilities, which lead to congestions and undue delays. In tier 2 cities, the infrastructure development is required for smooth transportation as they are the new emerging markets.  In the Indian context, FedEx added Bengaluru as a gateway hub for operations in India; then came the AFL acquisition and then the connecting flight to China. Where does that put FedEx today in comparison to the global competitors who are all here?

We continue to maintain our position through the introduction of new products Cruising Heights December 2012

and services that offer Indian customers unparalleled access to global and domestic markets helping them compete effectively at a global level.

In India, FedEx offers customers a comprehensive portfolio of services that include the following:  International shipping  Domestic shipping • Air and ground express • Ground distribution  Logistics/warehousing  FedEx Supplychain Services  Freight forwarding FedEx has always believed in being ahead of the market cycle and will continue to maintain our position. Today, FedEx is one of the largest express transportation companies operating in India, with the largest number of flights, connecting India to the world.  You have been a key player in the express services in country. What are the problems – infrastructure or otherwise – that you have had to overcome or counter every day?

Amongst key emerging markets, India is a very important market for FedEx Express; however there are challenges and issues such as inadequate Infrastructure, layered taxations etc which are major issues faced by express service providers.

Infrastructure is a very important aspect for trade and commerce. Logistics expenditure stands very high in India, approximately close to 13 per cent due to lack of infrastructure. Ports, airports and air facilities, roads all are facing infrastructural issues.

Airports too are hampered by factors such as inadequate warehouses with airside and city side access, parking bays and single runway at certain airports, cargo handling and customs clearance capabilities, which have led to congestions and undue delay in clearance of goods, thus impacting Indian consumer, producers, importers and exporters. Poor cargo warehousing facilities and multi-modal links for local distribution are also factors that constrain air cargo opera-

tions in the country.

Layered tax structure in India is another challenge – which adds to the cost and delivery time in domestic distribution. In addition, costs such as inflation, Aviation Turbine Fuel (ATF) and airport handling continue to rise, which is also hampering seamless operations of the industry.  FedEx has expanded into the domestic segment. First, how is that doing and what are the expansion plans? Second, in a cost-conscious nation like India, has FedEx found the going difficult?

Our expansion plans and acquisitions into the domestic segment have been aimed to cater the Indian businesses, which is growing and expanding. The acquisition of AFL/UFL businesses has boosted our vision of being a ‘one stop shop’ for all customer segments in India. The acquisitions support our long-term strategy to grow our business in India and better serve our customers seeking to expand or enter the Indian market.

India is a cost-sensitive market but that is definitely changing as consumers are now increasingly valuing the quality of service versus price. This is definitely an important consideration for companies like FedEx which believes in providing the best quality service at competitive prices.

To overcome the challenges related to costconsciousness in India, FedEx Express is becoming ‘one stop shop’ for its customers. Customers can now streamline their supplychain operations and integrate multiple vendors into one single vendor. It becomes easier for them to deal with just one provider and also to negotiate competitive rates and demand discounts by combining the requirements with one provider.  Where does India figure in FedEx’s list of priorities, especially among Asian markets? In which sectors have you seen growth?

Among Asian markets, India is one of the key players and we consider it one of the high potential markets for FedEx. The total market is expected to rise to a value of approximately $50 billion; the industry is developing and growing rapidly. We see it growing to being in the top 10 in terms of foreign sales in the next couple of years.

The demand for air transportation is ever increasing, particularly from the financial, trading, pharmaceuticals and manufacturing sectors in India. All our customers are equally important and we are committed to providing the best possible service to everyone.

While we do have a strong presence in all sectors, the major growth sectors for Fe-

dEx in India have been as follows:  For exports – healthcare, electronics and manufacturing.  For domestic – e-commerce, organised retail and IT hardware and consumer electronics.

FedEx anticipates a lot of opportunities in several key industry sectors to propel the growth of the express logistics industry in India. The growth of the e-commerce industry in India has also resulted in a steady growth in contribution of the sector to our business. The rapid evolution in India’s e-commerce habits has resulted in a sustained growth of our business from the industry and the projected industry growth will offer opportunities for growth that FedEx is well-positioned to leverage.

We believe that we will also see additional growth for this specific sector coming from tier 2 and tier 3 cities in India, which will over a period of time come to an equal balance of growth between metros and tier 2 and 3 cities.

FedEx continues to focus on the key sectors like textile including fashion, IT hardware, automobile, leather, pharmaceuticals, engineering, handicrafts, high-value items and electronics industries, in addition, the SME sector is also a vital part of our focus.  It is believed that pharma will be the next IT. What initiatives has FedEx taken to further the perishables sector?

India’s pharmaceutical manufacturing sector is poised for major growth. India has a strong base for manufacturing Active Pharmaceutical Ingredients (APIs) and R&D facilities. The exports are poised to grow at 30-35 per cent in 2011-2012, twice the present rate of close to 17 per cent, according to the Indian Drug Manufacturers’ Association and are projected to touch $15.8 billion in 2013-14, contributing to about 8 per cent of the total

Rakesh Shalia, Managing Director-Marketing, FedEx Express Middle East

cruising HeigHts December 2012

output of pharma products in the world.

The express shipping in pharma is dependent on good packaging, quick and efficient delivery services and alert tracking. FedEx Global Supply Chain Services offers a portfolio of services to meet the critical demands of time-sensitive delivery, real-time visibility, accurate documentation, and product integrity from shipment origin to final destination. They can be applied with the flexibility and scalability needed to move with changing market conditions. Services include:  Diagnostics and clinical trial services  Healthcare and life sciences international transportation services  Healthcare and life sciences international support services  Healthcare and life sciences international supplychain services We continue to address the requirements in healthcare and pharma and develop solutions that our customers need. n

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Collaborative IT will boost air cargo

Sumeet Nadkar

Future-oriented IT systems can create new benchmarks for booking, handling and accounting and can go a long way in ensuring economic success in air cargo business, writes Sumeet Nadkar.

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lobal trade will be largely defined by the fast paced economies. We are now a part of a globalised world where economic instability in one part of the world affects most other regions.

As stakeholders in a global supply chain, companies need to follow a collaborative business approach. Also, this collaboration, in this increasingly fast paced world, needs to be seamlessly digitised. The recipient of any information, in this value chain needs to be able to use this information directly in his internal system without having to re-key in the data. At Kale Logistics, we bridge this communication gap existing in global supply chains through pathbreaking and industry-focussed IT platforms.

Kale Logistics has been working with local Indian and global industry bodies to drive greater collaboration between cargo supply chain entities.

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The air cargo industry Globally, the air cargo industry understands the implications of carbon emission and is advancing towards paper-free movement through various means. Kale Logistics has been working with local Indian and global industry bodies to drive greater collaboration between cargo supply chain entities. Cargo community platform UPLIFT has already helped many leading forwarders, Customs house agents, airport custodians and airlines to automate their manual processes and exchange information electronically with their global trade partners. This has not only resulted in significant savings for those who have adopted this technology but also reduced the paper from the supply chain. However, the adoption level of the latest that technology has to offer is very low. As per a study by the University of Texas, only 11 per cent of 1000 manufacturing companies have transactional/information sharing capabilities with their suppliers. If this is the state of affairs in developed nations, it's no surprise that in India IT spend is low on the list of priority expense for most businesses.

Current state of automation The supply chains world over are becoming more complex due to globalisation. Between Cruising Heights December 2012

local and international players there are too many levels of trade entities, too much regulatory compliance and disconnected and different systems in use at all levels. Dependency on paper-based processes has led to non-availability of real-time information exchange and lack of shipment visibility resulting in customer dissatisfaction. One needs to bear in mind that today all our logistics business decisions have to factor in the needs and expectations of a global customer, who has more information and access at his hand to get the best service and best deal.

The current situation has brought us at a point where we all are paying for rising logistics costs and delays in cargo delivery. Increasing environmental concerns have made e-freight compliance mandatory for all players (small, medium or large). Most businesses are using some form of IT system/software, but different systems are making data reusability limited.

Today, industry players know the necessity of using not just ordinary IT systems that automate your operations but applications that enable both internal automation and external communication. Industry requires systems that are scalable and can collaborate with other disconnected systems.

Innovations in IT Any revolutionary or innovative idea — be it in technology or in business — takes time to break-even. So, has been the case with IT adoption amongst logistics industry players. The challenge lies in educating and creating awareness about the right technology. We have been working at the grassroots' level along with major industry associations here in India and also globally to spread IT education and awareness.

The industry is so diverse with many small, medium and large players all having a stake in the cargo that's being shipped. Therefore, it becomes critical that the systems that are being used by these businesses are able to interface and exchange real-time information with each other.

Since Kale Logistics is an industry/domain focussed IT provider with a wide portfolio of IT

Scalable solutions Our IT solutions incorporate industry best-practices while remaining cost-efficient and userfriendly. Recently, its CFS/ICD Management System-CAPELLA was successfully deployed on Windows Azure platform to offer its customers greater operational efficiency and scalability. According to Amruthesh Reddy Chedimala, IT Manager, Continental Warehousing Corporation (Nhava Seva) Limited, the operations were semi-automated relying on legacy system which proved to be very expensive including the year-on-year maintenance costs. “We required a feature rich, integrated and scalable solution for both our local and international needs. CAPELLA offers expansive features for CFS operations right from terminal operation, container inventory, yard management, back to town processes and other features with a comprehensive reporting tool. Moreover with an MS Windows Azure platform the deployment time was fast and we no more have to bear costs on infrastructure, maintenance or administration.

We have successfully implemented CAPELLA at two of our CFS locations at Chennai - Madhavaram and Redhills. Also, the implementation of the system is in progress at the ICD of our group company in Hyderabad.�

CAPELLA is world-class solution for global CFS/ICDs and it provides automation, quality of data exchange and decision support in compliance with all local and international trade regulations. In recent years we have seen a greater adoption of a system like CAPELLA in global CFS operations as it effectively addresses the challenge of revenue leakages and container tracking while offering deployment flexibility.

Collaboration: The way forward After globalisation, we are now entering an era of 'technology convergence'. With large-scale

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solutions that cater to the entire supply chain, it was able to develop a platform like UPLIFTwhich is India's first cargo community system.

Today, UPLIFT is recognised as the industry's platform of choice for collaboration between various trade entities. Currently, it connects 150-plus forwarders/Customs house agents to leading cargo carriers serving Indian markets, Indian Customs and airport custodians. Being compliant with US (AMS), EU (ENS) and the rest of local and international regulations, has helped UPLIFT users to transact and exchange half-million EDI messages till date.

UPLIFT interfaces with airport ground handling solution Galaxy to provide seamless cargo/shipment visibility to the entire cargo valuechain including the airport trade partners.

Kale's airport system is in use at leading airports in Asia like - Mumbai International Airport Ltd, AI-SATS (Air India- Singapore Airport Terminals ltd) amongst others.

adoption, community systems act as a common communication platform and can successfully unify the entire logistics supplychain with multimodal transport entities. The trade entities can exchange EDI-based information and transact seamlessly from anywhere and anytime. This, in turn, will reduce the logistics costs, delay in cargo delivery and humongous amount of duplicate data-entry effort involved.

Working closely with industry, we have rapidly bridged the gap between plain vanilla IT systems to providing web-based and cloudbased solutions to collaborative IT systems.

Currently, the industry is utilising technology in bits and pieces. For example, forwarders, airlines, airports, Customs are using systems which are disparate in nature, warehouses are using some operational systems combined with technologies like bar-code scanner, RFID/GPS solutions. However, more-advanced stakeholders from the cargo community are now relying on EDI-based community systems like UPLIFT. UPLIFT is a collaborative platform, which is a scalable and user-friendly web portal. There is an increasing demand for better collaborative business processes with greater execution capabilities which is beyond the disparate IT systems currently in use. We are specialising in cloud computing solutions. Our next step is to bridge the gap between software and mobile apps for the logistics community. We plan to take our logistics and supply chain clients to the next level of machine-2-machine communications/wireless communications. This has the possibility to get efficiency, security, tracking, monitoring, information, connectivity and collaboration for the transportation industry players. It can also help monitor logistics and minimise economic losses. n (The writer is CEO and Managing Director of Kale Logistics, the Mumbai-based global IT solutions provider focussed on the logistics and airports industry) Cruising Heights December 2012

A GREAT LEVELLER: Ushering innovative applications of IT can give a major boost to the air cargo sector.

We have successfully implemented CAPELLA at two of our CFS locations at Chennai Madhavaram and Redhills.

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cargo

Kabul helps air cargo biz

SpiceJet cashes in on the demand from Afghanistan with its flights to Kabul. A report.

I

“Kabul is an important destination for us.

India and Afghanistan have ancient cultural connections and the launch of new services would bridge the distance between the two countries and help enhance this old relationship.”

Neil Mills

CEO, SpiceJet

anna.aero

t was slowdown in September. All the Indian carriers saw lesser number of passengers: as per traffic data issued

by Indian aviation regulator Directorate General of Civil Aviation, the number of passengers carried by domestic airlines for the month of September 2012 was around 350,000 lesser than August 2012.

With rising fuel costs and fewer passengers, Indian carriers are looking at ways to keep their heads in the air and the low-cost ones are no exception. Perhaps, the most innovative has been SpiceJet. In August this year, it launched flight to Kabul in Afghanistan. In fact, other than the state-owned Air India, the Delhi-based SpiceJet is the only carrier that has taken what is generally being referred to in aviation circles as a “calculated risk” in touching Kabul.

For the boyish-looking Neil Mills, the Kabul flights — thrice a week — are money-earners. Not only has he been able to attract the medical tourism traffic — and there is, in fact, a huge number — but also on cargo. A low-cost carrier veteran — Mills was with EasyJet and flydubai – the twoyear-old Chief Executive of SpiceJet has started rewriting all the rules and air cargo plays an important part in his success story.

BOOSTING RELATIONS: Shaida Mohammad Abdali, Afghan Ambassador to India cutting the ribbon unveiling SpiceJet’s Delhi to Kabul Service. Also seen to his right CEO SpiceJet, Neil Mills.

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Cruising Heights December 2012

As he pointed out, “Kabul is an important destination for us. India and Afghanistan have ancient cultural connections and the launch of new services would bridge the distance between the two countries and help enhance this old relationship.”

To begin with, the paucity of seats on the Delhi-Kabul route forced carriers before SpiceJet joined the bandwagon — Air India and two small Afghan carriers — to charge anything between $190 and $560 per ticket for a one-way two hour flight. Incidentally, the Delhi-Kabul route is perhaps, the most profitable with yield per passenger kilometre or per tonne (for cargo) double of that charged on the DelhiDubai or the Delhi-Singapore routes.

Coming up next on SpiceJet’s radar are Guangzhou in China, Riyadh in Saudi Arabia, and Hong Kong. While there is only one Indian carrier going to Riyadh, Mills will be tapping into the huge Indian population working there. The movement of perishables to Riyadh in addition to the regular cargo would be what SpiceJet will look out for. More than the Riyadh route, it is the Delhi-Guangzhou service that is being hailed as a Mills’ triumph. Strangely, no Indian carriers fly to Guangzhou today. The trade connection with the city is strong: a number of manufacturers from India have tie-ups with the Chinese. To top it all, small and medium businesses from Delhi and the northern part of the country regularly fly out to Guangzhou to source goods.

It is no wonder then that the low-cost carrier made a $10.2 million profit for the first quarter that ended on June 30 after five consecutive quarters of losses.

Mills is perhaps one of the few in the industry to foresee that finding new routes from India will do well to keep the upper decks as well as the bellies full. And what better way than connect the two Asian powerhouses: China and India. Witness the latest figures from Singapore’s Changi Airport for the six months until June this year.

While Indian cargo to Changi touched 53,148 tonnes going above Japan – in fact, it is now the airport’s sixth biggest nation in tonnage, China became number one beating the US with 111,772 tonnes. n

cargo jottings Jet refuses to carry live animals

Jettainer unveils JettApp for smartphones

Jet Airways has told People for the Ethical Treatment of Animals (PETA) India that it will not transport animals bound for laboratory experiments. In a reply to PETA's letter questioning the airline's policy about shipments of animals to laboratories, Mohammad Ali El Ariss, Vice-President, Cargo, Jet Airways, stated, “We decline to transport live animals for laboratory experiments.”

"The airline is now among those airlines that deny to carry dogs, cats, primates and other animals to laboratories, where they would suffer and die," said PETA India Science Policy Adviser Chaitanya Koduri. "It has set an example for the declining number of airlines that still carry animals," he said.

Jettainer and Lufthansa Cargo recently started testing an application for smartphones. The socalled JettApp enables airlines to record ULD data promptly and accurately. All parties involved in the process chain – Jettainer, ground-handling companies, repair shops as well as the airline itself – therefore benefit from excellent data quality.

The new application is supposed to function as the mobile arm of Jettainer’s system JettWare, which is used in order to professionally steer fleets of loading devices. At this point of time the application is being tested at Lufthansa Cargo’s stations INNOVATIVE APP: Jettainer ULD in Frankfurt, Duesseldorf, Munich being scanned using the Jetapp application. and Singapore. In total, forty employees using ten smartphones are involved in the test run. They are checking all the functions JettAPP features – from determining the location of a loading device by maintaining the ULD history up to monitoring ULD stocks.

As for the test run, mobile devices based on the Android system are used – later on, users can also decide for other products. JettApp allows an exact scan of all kinds of barcodes including QR and RFID/NFC. Moreover, Jettainer equipped the application with an electronic signature function: the handover of loading devices to third parties may be acknowledged right on the display. The test run of JettApp is an important part of the diversified innovation programme of Lufthansa Cargo.

“The improvement of business processes due to the introduction of mobile devices will allow us to further improve the valuechain between the ULD management, airlines and other players. We at Jettainer are glad about the high interest the innovation

Lufthansa Cargo flies Beaujolais Nouveau Lufthansa Cargo flew 550 tonnes of red wine to the delight of the world’s wine lovers.

But the rules were strict; the new wine might not be gulped till after the stroke of midnight on the third Thursday in November. Only then SUPPLY CHAIN MADE EASY: Cargo being can the eagerly awaitloaded into Lufthansa Cargo freighter. ing aficionados around the globe uncork and sample this year’s vintage. The rule dates back more than 60 years to 1951 when the Beaujolais winegrowers were first allowed selling the new vintage in the year of its harvest.

Making sure the new vintage arrives on time on November 15 to proclaim Le Beaujolais Nouveau est arrivé! at numerous celebrations required sophisticated logistics, since the young wine is now coveted by wine lovers all over the world. In Asia especially, the fanbase of the fresh and fruity red wine is particularly huge.

Demand is notably high in Japan and China. The biggest single shipment, all of 39 tonnes, was, therefore, flown to Tokyo on November 6.

DHL, Blue Dart celebrate Indo-German trade DHL and Blue Dart recently celebrated 60 years of successful IndoGerman trade relations, by hosting a collaborative festivity called “Germany and India 2011-2012: Infinite Opportunities”. The main focus of the celebration was the ‘Indo-German Urban Mela’ that looked at the implications of rapid urbanisation in today’s megacities, where a group set of modern multi-purpose pavilions was put up for ten days in five different cities in India, including Delhi, which was the final destination.

As one of the city partners of the Indo-German Urban Mela, Deutsche Post DHL presented itself in a pavilion as an innovative and reliable partner to solve challenges posed by the pace of change in urban living. In the pavilion, interactive pillars and exhibits gave visitors an impression of DHL’s network in India and around the world: With a digital exhibit following a shipment in India, an informative short film about an Urban Freight Center and an interactive game with the DHL Smart Truck, the company presented how it can minimise its most significant impact on the environment emissions of carbon dioxide.

Another pillar in the DHL pavilion covered the topic GoTeach.

This Deutsche Post DHL initiative deals with one of the most important issues for personal and economic development,

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NOBLE ACT: Vikas Anand, COO, DHL Supply Chain, with the certificate of participation along with Michael Steiner, Ambassador of the Federal Republic of Germany, Heiko Sievers, Director Goethe-Institute/MMB-South Asia and Head of Project Management “Germany and India 2011-2012” and Markus Heinsdorff, Artist at the DHL pavilion.

employment and prosperity: education. “Deutsche Post DHL, one of the world’s largest private employers, is living up to its responsibility by promoting a high-quality education for every child,” said Anil Khanna, Managing Director, Blue Dart Express.

cruising HeigHts December 2012

developed by us is receiving,” mentioned Alexander Plümacher, Managing Director, Jettainer. “It took us just one year to implement the application and we’re now pleased to be testing its suitability for daily use with Lufthansa Cargo. As soon as next year, we plan to comprehensively introduce the product to our customers.”

FedEx: World’s best multinational workplace

ACS transports life-saving medication Air Charter Service (ACS) recently transported urgently-needed medication from Cologne/Bonn Airport to the Syrian capital of Damascus. The ongoing desperate humanitarian situation in Syria means that relief shipments to SERVICE DELIVERY AT ITS BEST: Air Charter the people living there Service aircraft at one of the airports. continue to be absolutely essential. ACS, working closely with the logistics services provider Agility, organised the temperature-controlled shipment of urgentlyrequired relief supplies to the crisis region on November 10, 2012.

ACS ensured that all the processes – ranging from the proper loading of the sensitive freight at Cologne/Bonn to the final delivery of the goods to Syrian hospitals – went smoothly. An Airbus A300 cargo plane was used to transport the goods.

“We have to process transport enquiries especially quickly and with a great deal of flexibility, particularly in crisis situations.

Thanks to our many years of experience and expertise in the freight charter business, we managed to handle the temperature-controlled transport of the sensitive medication to Damascus in a professional manner. We were able to ship the relief supplies from Germany directly to the crisis region within a very short time,” says Stephan Blank, Director-Cargo, Air Charter Service, Germany.

CWC embraces Kale CAPELLA system Continental Warehousing Corporation (Nhava Seva) has gone live on CAPELLA at three of its locations. It is also the first client to go live on CAPELLA with MS Azure Platform. CWC chose Kale CAPELLA – a proven enterprise wide web-based CFS/ICD management system used by many global CFS and ICD successfully for streamlining their container operations.

Amruthesh Reddy Chedimala, IT Manager, Continental Warehousing Corporation (Nhava Seva) Limited, said, “Our operations were semi-automated relying on legacy system, which proved to be very expensive including the y-o-y maintenance costs. We required a feature rich, integrated and scalable solution for both our local and international needs. CAPELLA offers expansive features for CFS operations right from terminal operation, container inventory, yard management, back to town processes and other features with a comprehensive reporting tool.”

Speaking on the occasion, Vineet Malhotra, SVP, Kale Logistics Solutions, said, “CAPELLA incorporates industry best-practices for global CFS/ICD operations. It provides automation, quality of data exchange and decision support in compliance with all local and international trade regulations. In recent years we have seen a greater adoption of a system like CAPELLA in global CFS operations as it effectively addresses the challenge of revenue leakages and container tracking while offering deployment flexibility.”

BUSY AT WORK: FedEx employees at work in one of the airline’s cargo service centre.

FedEx recently announced that it had been recognised as one of the top 10 World’s Best Multinational Workplaces by Great Place to Work Institute for the second year in a row. The ranking is the world’s largest annual study of workplace excellence and identifies the top 25 best multinationals in terms of workplace culture.

"I am delighted that FedEx Express has once again been named among the world's best multi-national workplaces," said David J Bronczek, President and Chief Executive Officer of FedEx Express. "This is the second consecutive year we achieved this prestigious global ranking. This award serves as another testament to our unique service culture and to our people and operating teams around the world who go above and beyond for our customers every day."

“The companies listed on the second-annual World’s Best Multinational Workplaces List are creating workplaces dedicated to fostering trust, pride and camaraderie amongst their employees,” said Susan Lucas-Conwell, Global CEO, Great Place to Work. “Their inclusion on this prestigious list demonstrates their commitment to continually improving the lives of their employees and setting innovative new standards for workplaces of the future.”

APPoINtmENtS Cathay’s new Cargo manager Siddhant Iyer has been appointed Cathay Pacific Airways’ Cargo Manager-Western India.

Iyer will oversee cargo sales and revenue for Cathay Pacific and will be responsible for the development and execution of cargo sales strategy for the region.

Siddhant Iyer With total experience of 11 years, Siddhant Iyer began his career in the aviation industry in February 2001 as a Customer Service Agent with Jet Airways. Between 2004 and 2006, he worked with Thai Airways and GoAir. He joined Kingfisher Airlines as Guest Services Manager in 2006 and later moved to Cathay Pacific Airways in July 2008 as Airport Services Manager (Bengaluru). Earlier this year in April, he was appointed as Cargo Manager for Andhra Pradesh. From November 1, 2012 he had been appointed Cargo Manager for Western India.

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globetrotting

n  Pilotless cockpit

n  Teacher or Innovator

In a shocking incident, two pilots were found sleeping in cockpit. It all happened when the captain left to use the toilet. He at that moment tried to call his first officer on a radio link but got no response. The captain used a code to get back in the cockpit and found the pilot drooping over the controls. Another pilot also found himself incapable to get back in the cockpit and used the entry code. His first officer had to be shaken awake. Meanwhile a third pilot also fell asleep while his plane was on the ground.

Rob Hunter, Head of Safety, British Airlines Pilots Association, said, “We commonly receive letters that deal with cases where

A headteacher in Rustavi, Georgia has transformed an aeroplane into a kindergarten. The purpose: to educate the children. Gari Chapidze bought the outdated but fully functional Yakovlev Yak-42 from Georgian Airways and renovated its interior with educational equipment, games and toys but left the cockpit gadgets in one piece so they could be exploited as play tools.

“The idea was to produce a kindergarten where children go with joy. Sometimes kids have difficulties in adapting to kindergarten, to a new environment. We decided to help them by making it fun,”

n  No holds barred Believe it or not, a Ukrainian man tried to open an emergency exit and to top it all, the maniac also tried to bribe the FBI agents who later arrested him on the account. It all happened when Anatoliy N Baranovich woke up during the plane’s descent from Boston, started shouting in Russian while trying to open the back door thus damaging the plane’s fuselage, before other passengers controlled him.

Passenger who was on the same flight, Mike Riegelman said, “He scared a lot of people though. Flight Attendants announced that there was a medical emergency on board. The Flight Attendant was a big guy, and he went screaming to the back of the plane. I've never seen a big guy that big move that fast. Delta handled it well and, obviously, the passengers held onto the guy. The good news is people are alert and willing to help.”

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pilots feel that the process that they get embroiled in is more fatiguing than the duty itself. It becomes a better option to put up with a bit of fatigue rather than report it.”

n  Thorough rejection Strange things happen on flight. And this time a female passenger was booted out of a flight before take-off as she had the wrong type of hand luggage. This incident happened at Valencian airport of Manises, Spain. The lady had broken the budget airline’s golden rule of only boarding with a small package — as she was carrying a book and a scroll which would not fit in her suitcase.

Soraya Pla, who posted the video on Facebook said, “Look at what we have just witnessed on a Ryanair flight! I am crying with frustration. They took her forcefully, because a simple book and scroll did not fit in her bag.” However, Ryanair claimed the woman had become unruly and had pushed past staff at the gate without showing her ID or boarding card. A spokesman of Ryanair said, “This passenger was in breach of airport security regulations, and having become disruptive was properly removed from the aircraft at the request of Ryanair agents.”

Cruising HeigHts December 2012

n  A poisonous intruder

Chapidze, the Director of the Institute of Georgian-Ukrainian Social Relations that runs the kindergarten, told AFP.

In one of the most unusual events that happened in-flight, an 18-inch-long reptile was discovered under a seat on a flight which had arrived from Cancun in Mexico. This juvenile smooth-scaled racer snake was found on the plane at Glasgow Airport.

Staff from the Scottish Society for the Prevention of Cruelty to Animals were called to contain the snake. The snake was taken to an animal rescue centre in Cardonald, Glasgow, where

n 

What a treat!?

Wedding plans this time were taken to a different level and that too in-flight.

Emily and Allan Wood were married at 13,000 feet in the air while jumping off back to earth with the entire wedding party falling behind them. After a couple of traditional wedding pictures, it was soon time for take-off. During the 13,000-foot climb the groom’s brother did the honours before the bride, groom and three family members all jumped.

staff named it Furtivo which means sneak in Spanish.

SPCA Senior Inspector Billy Linton said, “We have had the snake examined by a vet and, although we can’t be 100 per cent certain, we believe he is of the Dryadophis family, which are commonly referred to as American smoothscaled racers.”

“We've made it a point to do other fun things like paragliding, snorkeling and scuba diving and things like that and so I think it symbolises that we like to play. I'm just glad to be married to my best friend and to do it in just a fun way,” said bride Emily. Earlier, the couple's relationship started sweetly while working at a Leatherbys Family Creamery five years ago, but their love took on an adventurous side. Meanwhile, the adventurous plans didn’t surprise the couple’s family. “My sister is not much into cliché things,” said Holly Lozano, the brother of the bride.

n  The show stealer n  A curious case

A man created a ruckus mid-flight. This happened on a MumbaiDelhi IndiGo flight when 40-year-old Mursalin Sheikh suddenly turned violent, allegedly threatened to bring the plane down while slapping an air-hostess. Crew members who witnessed the incident said that he tried to make a dash for the cockpit and the aisle was blocked with a food trolley and he was restrained with the help of other passengers.

Confirming the incident, IndiGo said, “The rowdy passenger started shouting and also physically attacked a crew member. The passenger also got wild with co-passengers, and tried to get into the forward of the aircraft. IndiGo crew made suitable declarations and deployed security measures to block access to the front of the aircraft and the front galley.”

An airline pilot was accused of stealing a man’s rental car during a freakish encounter. The 43-year-old pilot from charter airline Omni Air was arrested for investigation of vehicle theft.

The story unfolded when the pilot allegedly overpowered a man who got into his rental car at a hotel near Seattle-Tacoma International Airport and the pilot climbed into the backseat. The victim pointed a handgun at the intruder and told him to get out. After a scuffle in which the man struck the intruder several times with the handgun, the man got out and the intruder chased him around the car. The intruder then jumped into the driver’s seat and drove off.

“We want to emphasise that the crewmember was off duty at the time of the incident and was not scheduled to report for duty for 12 hours,” Airline Communications Director Jeff Staton told the Associated Press.

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snippets

domestic Airlines Air India likely to auction artwork

India’s national carrier, which after years of financial turmoil has received financial support from the government, is likely to auction some of its precious artwork, comprising thousand-odd paintings and sculptures by leading Indian artists – some dated as old as the 12th century – to bolster its corporate image.

the ultimate journey: Passengers seated in the comfort of an Air India Dreamliner aircraft

“We see enormous corporate value in our art collection and we plan to exhibit it not only in government-owned but private museums as well. We plan to do the same overseas too, as Indian modern art is in huge demand there,” a senior AI executive was quoted as saying.

“Paintings have enormous corporate value. We could bring out limited edition of litho prints of an MF Hussain painting and gift it to corporates. It would bring grandeur to our brand name. Many corporates adopt such practices,” the official said.

Air India, meanwhile, is also planning events like a wine evening in a London museum around a certain set of artworks as a PR effort and promoting the brand abroad. The airline has set up a committee comprising members from the National Gallery of Modern Art, the Archaeological Survey of India and many renowned schools of art, who have been requested by the airline management to evaluate each work of art over a period of three months so that their monetary value and importance can be ascertained.

AI carries 34,911 passengers in a day: When Air India recently carried a record 34,911 passengers on a single day on its domestic network, it created history.

It was seven times in the month of October that the airline carried over 30,000 passengers in a single day. It may be mentioned

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here that Air India had crossed the mark of 30,000 passengers in a single day on 10 occasions during 2011.

October 29, 2012 saw Air India achieving 95 per cent seat factor on domestic flights and 69 per cent on international flights from Delhi. The Northern Region also had 90 per cent seat occupancy on the domestic sectors and 68 per cent on the international sectors.

Moreover, the membership for Air India's frequent flyer programme — Flying Returns – has crossed the one million mark and is witnessing the addition of around 400 new members everyday.

Fly Delhi-Mumbai every hour: Air India will be providing flights between Mumbai and Delhi (both ways) every hour and passengers wishing to travel on this sector by the national carrier can now fly every hour between 6 am and 11 pm, a press release of the airline stated.

The hourly service meant 18 flights daily on the Mumbai-Delhi-Mumbai and was effective November 12, Air India said, adding: “Passengers can avail of mostly direct flights and a few one-stopover flights on this sector.”

The Delhi and Mumbai airports account for almost 60 per cent of the overall air passenger traffic in the country. The airline services the sector with Airbus A-320s and A321s.

Air India toppled private airline Jet Airways to take the second place in terms of domestic market share in September.

Air India Express to improve services: Air India Express, the budget airline of India’s national carrier, plans to improve passenger handling with new courses for cabin crew and ground staff at airports. Hailing from Kerala, India’s new Minister of State for Civil Aviation, KC Venugopal, said that special training would be given to Air India Express crew on passenger interactions.

The airline has already started the exercise of identifying areas where it needs to supplement people with more supervisory control so that passenger handling at the airports is better.

Attributing the recent delays and cancellations of flights to a lack of pilots and a strike, the Minister said that he would take measures to tackle dearth of pilots, avoid cancellations and fly on time. Staff strength for ground services will also be increased soon.

Information about flight cancellation and delays will be announced through the media apart from personally informing the passengers about it. To boost the financial strength of AIE, the Minister said that it would cut half of the revenue shared with Air India.

New Bengaluru-Mangalore service by AIE: Air India Express recently introduced a new four-day-a-week flight between Bengaluru and Mangalore. “For Bengaluru passengers this flight will provide a convenient connection to Dubai by flight IX 813 leaving Mangalore at 10pm,” it said.

Cruising Heights December 2012

snippets

International Airlines BA makes Sydney travel better

Making travel much more convenient for its customers flying to or from Sydney, from March 31, 2013, British Airways flights to the Australian country will depart from Heathrow’s Terminal 5 on the airline’s new Boeing 777-300ER. Depictive of British Airways’ commitment to Australia, this move into Terminal 5 will make it easier for the passengers to connect with the airline’s short-haul and domestic network of flights, who would also benefit from the state-of-the-art building, which is quick and easy to navigate and is home to the airline’s flagship lounges.

In the process, customers flying to and from Singapore will also benefit from the terminal move and new aircraft as British Airways flights to Sydney go via the country. Speaking on the occasion, Jamie Cassidy, British Airways’ Area General Manager for Asia Pacific, said, “This move confirms British Airways’ commitment to Australia. It’s an important part of our network and we’re underlining that by putting our newest aircraft and cabins on the Sydney route and moving the flight to Terminal 5, to sit alongside the majority of our other services.”

Rostov: Air Arabia’s 5th Russia destination

Marking its 81st destination worldwide, Air Arabia recently started services to the Russian city of Rostov, its fifth destination in the country. The carrier has also started two weekly services between Sharjah and Rostov.

the maiden journey: Qatar Airways CEO Akbar Al Baker shows US Ambassador to the State of Qatar Susan Ziadeh and officials the airline's Business Class seats onboard Qatar Airways' new 787 Dreamliner in Doha

Dubai flights from November 20, and then deployed long-haul on one of the five daily London Heathrow services.

Unveils Boeing 787 Dreamliner video: A three-minute video showing the making of Qatar Airways first Boeing 787 Dreamliner has been released by the airline. The footage shows the aircraft being assembled and painted at Boeing’s 787 production line in Seattle before being rolled out for test flights. The video can be viewed on the airline’s Facebook site and is also posted on YouTube.

Qatar Airways is the Middle-East launch customer of the 787 with 60 aircraft on order.

Qatar launches flights to Mozambique

Speaking in this connection, Adel Ali, Group Chief Executive Officer, Air Arabia, said, “The introduction of direct services to Rostov underscores Air Arabia’s commitment to make air travel more convenient for our passengers. We will continue to focus on our route expansion strategy in the Russian Federation and Eastern European sectors where we have launched a number of new destinations since the beginning of this year.”

Dreamliner Arrives in Qatar

appointments

Qatar Airways’ first Boeing 787 Dreamliner landed in Doha and was greeted by hundreds of onlookers. Qatar Airways is the region’s 787 launch customer with 60 aircraft on order for delivery in phases over the next few years.

Chief Executive Officer Akbar Al Baker, who was onboard the delivery flight, was joined by almost 100 passengers on the maiden 13-hour journey direct from Seattle, the US West Coast home of American aircraft manufacturer Boeing. Those onboard included international media, senior management from Qatar Airways and Boeing, as well as third-party suppliers from companies involved in the 787 project.

The 787 had spent a few days positioned at Doha International Airport, giving staff an opportunity to tour the aircraft before it entered commercial service for a few weeks on selected Doha —

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With the arrival of flight QR584 in Maputo, Qatar Airways launched its thrice-weekly services to the capital of Mozambique, its 19th destination in the African continent, linking it with its Doha hub. This is the airline’s tenth new route of the year.

Qatar Airways is the first and only airline from the Middle-East flying to Mozambique, a move that shows the airline’s strategy to operate to underserved markets that have huge potential for scheduled international flights.

Guests on the inaugural flight to the former Portuguese colony included Cristiano dos Santos, Consul General of the Republic of Mozambique to the UAE, responsible for Qatar; and Salem Abdullah Sultan Al-Jaber, Ambassador Extraordinary and Plenipotentiary of the State of Qatar’s Embassy in South Africa with responsibility for Mozambique. The arrival ceremony at Maputo International

Naveed joins Cathay

Naveed A Khan has been appointed Cathay Pacific Airways’ Area Sales Manager — Western India. He will oversee passenger sales and revenue for Cathay Pacific and will be responsible for the development and execution of sales strategy for the region.

He moved to Mumbai with Cathay Pacific Naveed A Khan Airways in July 2008 as an Account Manager and later became the Marketing Communications Manager for a span of three years. He then moved to the cargo department as Cargo Manager for Western India in November 2011.

Cruising Heights December 2012

Airport was attended by a number of guests, including Mozambique’s Minister of Transportation and Communication Paulo Zucula, CEO of Mozambique Airports Authority Manuel Veterano, and CEO of Mozambique Civil Aviation Afonso Sande Cuinhane.

Emirates and easyJet tie up

Emirates award-winning frequent flyer programme, Skywards, and Europe’s fourth-largest airline, easyJet, have started a redemption agreement of Skywards Miles for flights on easyJet, connecting Emirates 31-destination-strong European network with all of easyJet destinations.

Since November 6, members have been able to use their Skywards Miles to fly with easyJet to over 30 countries across Europe and North Africa. Used in conjunction with an Emirates flight or for separate travel itineraries, Skywards members will have the choice to expand their travel options across Europe. The functionality will be available to Skywards members in every tier and the flights are bookable online.

“With over 130 destinations within Europe and North Africa partnering with easyJet was an obvious choice for Emirates. Like Emirates, easyJet is committed to expanding its operation by connecting an increasing number of cities, offering passengers limitless travel opportunities. This exciting new and strategic partnership will provide our robust Skywards members base, 31 per cent of whom reside in Europe, with a novel way of redeeming their Miles and expanding their travel possibilities,” said Essa Sulaiman Ahmad, Vice President — India and Nepal, Emirates Airline.

AirAsia restarts Kuala Lumpur-Solo flights

After a momentary breather in operations early this year as part of the airline’s realignment of business plans in Indonesia, low-cost carrier AirAsia will once again make the Kuala Lumpur-Solo route available from December 21, 2012. There will be three weekly flights.

AirAsia is offering promotional all-in-fares from as low as $33 one-way from Kuala Lumpur-Solo, for the travel period between December 21, 2012 and September 30, 2013. Indonesia is a very important market and presents many opportunities for the airline to expand and prosper. With Indonesia enjoying sustained economic growth, demand for flight services has increased and AirAsia is set to tap into this enhanced demand.

Besides re-commencement of Kuala Lumpur-Solo, AirAsia has also increased flight frequencies from Penang to Medan.

Improves service between Kuala Lumpur and Hanoi: Starting from January 22, 2013, AirAsia will increase its flight frequency from Kuala Lumpur to the Vietnamese capital Hanoi. The carrier is offering a special promotion fare from as low as `2,263 one way from Kuala Lumpur to Hanoi.

Etihad starts flying to Ahmedabad

Eithad Airways recently started flying to Ahmedabad with the new daily, two-class A320 service to the capital of Gujarat, that will offer nearly 1,000 seats a week into the Gujarati city.

This makes Ahmedabad, the airline’s ninth service to India and another step in expanding its presence in the Indian subcontinent and connecting key strategic cities with its home base of Abu Dhabi. In the lead up to the flight, Etihad Airways invited a number of trade partners and agents on a splendid ride on the Ahmedabad Eye Balloon Safari, before going to the airport to witness the arrival of the inaugural flight at Sardar Vallabhbhai Patel International Airport.

Etihad Airways’ President and celebrating progress: Neerja Bhatia, General Chief Executive Manager — India, Etihad Airways and agents from Officer, James HoGujarat cutting the inaugural cake gan, said, “We are delighted to launch this new service to the fifth largest Indian city and to serve our customers in Gujarat. We are confident that the addition of the Ahmedabad service will further strengthen commercial and cultural ties between India and the UAE.” Etihad increases baggage allowance: Etihad Airways recently increased the complimentary baggage allowance for Coral Economy Class guests to 30 kg. Members of the Etihad Guest programme will enjoy additional allowances. For example, an Etihad Guest Elite member travelling in Economy will now be able to check as much as 50 kg of baggage on a complimentary basis.

Peter Baumgartner, Etihad Airways Chief Commercial Officer, said, “We believe our generous baggage allowances will prove very popular with our guests across all cabins.” n

AirAsia Berhad Commercial Director Jasmine Lee said, “The increase of flight frequency for the Kuala Lumpur-Hanoi route is to provide our guests with further convenience and more choices of flights times to suit their schedule and travel preferences. The increased flight frequency also presents enhanced access for business and leisure travellers from Kuala Lumpur to Hanoi and vice versa especially as it is the second largest city of the country and serves as the main gateway to northern Vietnam. It has the potential to contribute to more growth in economic gains for both cities through healthier commerce and tourism activities.”

AirAsia X, the long-haul, low-fare airline affiliate of AirAsia recently celebrated its fifth anniversary at the LowCost Carrier Terminal (LCCT) in Kuala Lumpur; with a carnival for the public. The airline kicked off “Fantastic 5” with various offerings for its customers to mark the occasion. There were dance performances, clowns with balloons and tricks, tattoo sticker painting, and much more.

AirAsia X CEO, Azran Osman-Rani said, “It has been an amazing but challenging journey, and with strong perseverance, belief and passion, we have proven the skeptics wrong through the success of the long-haul, low-fare model with many trailblazing firsts in the industry.”

He also pointed out that AirAsia X was set to grow with an addition of 24 A330-300 aircraft between 2013 and 2017. n

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snippets

travel & tourism Kumarakom Lake Resort is winner again

For the fourth time in a row, the Kumarakom Lake Resort has been declared India’s Leading Resort at the recently-held World Travel Awards ceremony.

The event took place at InterContinental Singapore, which was held in partnership with the Singapore Tourism Board and TravelRave 2012, Asia’s most influential travel trade festival.

A heritage luxury resort, Kumarakom Lake Resort is in the tiny island hamlet of Kumarakom, an area famous for its unique ecosystem. Set by the banks of the immense Lake Vembanad, Kumarakom Lake Resort has carefully recreated a bygone era by its timeless shores. Fifty-nine heritage

HHI forays into Karnataka

With the launch of its property in Bengaluru under the brand The HHI Select, Hotel Hindusthan International (HHI) has forayed into the state of Karnataka. Originally known as The Emilion, the property located in J P Nagar was taken over by the HHI group and re-modelled to be a business hotel with modern amenities and affordable pricing. This is the first hotel under the HHI Select brand and has been conceptualised by the MD of the group, DK Jaiswal.

The 59-room HHI Select Bengaluru has a gym, rest-o-bar, two

future ready: A view of the HHI Select at Bengaluru.

banquets and the hotel offers a dedicated business centre for the business traveller. Guests can look forward to HHI’s unique offerings in Bengaluru with the expansion in brand presence.

“We have extensively renovated the property and trained the staff of the hotel so that they now are at par with the other HHI properties,” said Sanjiv Banerjee, VP, Sales and Marketing, HHI Group of Hotels.

Mahindra Holidays opens new resort

Mahindra Holidays & Resorts India Limited (MHRIL) recently opened ‘Mac Boutique Suites’, a 77-room resort located centrally in the Bangkok business district.

Speaking about the addition, Rajiv Sawhney, Managing Director and CEO, MHRIL, said, “This is the first step towards what we believe will be the next big movement in family holidays. Building where Indians love to go – outside of India. We have been considering locations such as Dubai, Sri Lanka, Malaysia including Bangkok. With this addition, our strategy has begun to take shape.”

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villas and luxury rooms echo the grandeur of the past, being constructed using bits and parts of traditional Kerala homesteads, some dating back to over two centuries. Its Ayurveda spa, Ayurmana, is a green leaf certified spa housed in a 200-yearold nalukettu and its multicuisine restaurant is actually a palatial Ettukettu commissioned by the King Marthanda Varma.

Two of the resort’s new offerings are the Heritage villas, which offer a personal pool and Jacuzzi attached to each villa, enclosed in its own private courtyard for maximum seclusion; and the Luxury Pavilion Rooms, surrounded by lush greenery.

Mac Boutique Suites is a full service resort on Sukhumvit road, in Bangkok’s important business district. The resort is just a few steps away from BTS Nana Station, a few minutes distance from the MRT (Subway) Asoke Station and five minutes from the expressway.

First travel cashback-cum-reward card

Standard Chartered, in collaboration with Yatra.com, launched the Standard Chartered Yatra Platinum Credit Card that offers a suite of benefits to credit-card customers when they make travel reservations on Yatra.com besides their regular shopping and other spends.

Some of the attractive benefits that the cardholder will get are a 10 per cent cashback on all travel spends at Yatra.com, waivers on Yatra.com domestic air cancellation fees for all tickets booked on Yatra.com, discount vouchers ranging from `4,000 to `8,500 for travel reservations across air, hotels and holiday packages, four reward points for every `100 spend on Yatra spends, fuel surcharge waiver on all fuel spends and many other benefits.

Commenting on the launch, Sanjeeb Chaudhuri, Regional Head, South Asia and Group CMO, Standard Chartered Bank, said, “The Standard Chartered Yatra Card offers attractive travel benefits and rewards, and is tailor-made to keep pace with the rapidly growing demands of frequent business and leisure travellers in India.

Standard Chartered has always been at the forefront in launching products that offer value and provide convenience to customers. We are confident that The Standard Chartered Yatra Card will provide a differentiated offering in the market.”

Rajasthan is ultimate heritage destination

With 18 of the winning 25 properties featuring in TripAdvisor’s 2012 Travellers’ Choice Awards for Heritage Hotels in India being from Rajasthan, the state has emerged as the undisputed destination for heritage properties.

Commenting on the significance of these awards, Nikhil Ganju, Country Manager, TripAdvisor India, said, “The TripAdvisor Travellers’ Choice awards for heritage hotels are special as they honour hotels which represent India’s rich past and heritage. These properties preserve a part of our history and recreate the magic to be shared with all.” He further added, “Not just from across the country, but travellers from halfway across the world come to enjoy

Cruising Heights December 2012

Indian hospitality in these hotels where they can also experience the charm and grandeur of our rich history.”

Unique hotels from Madhya Pradesh to Maharashtra, Gujarat to Kerala have made their way to the winners list as well.

Six hotels from the Taj Group bagged an award while two Samode Hotels properties also made it to the list.

Commenting on this win, Deepa Harris-Senior Vice President, Sales and Marketing, Taj Hotels Resorts and Palaces, said, “We are honoured that six of our properties have found pride of place amongst the top 25 TripAdvisor Traveller’s Choice Heritage Hotels in the country. Our iconic properties are special and unique and these awards are a wonderful reaffirmation from travellers of our commitment to maintaining the best in world hospitality always.”

meru completes 25 million trips

at IHM Pusa. The Gourmet Workshop was divided over two weekends, where chefs showcasd demos for the masses, proving their culinary talent.

Chef Devender Kumar, President, Indian Culinary Forum, said, “International Chefs Day-Chef Awards has been marked as a special occasion to accredit a chef as an artist. The idea is to create awareness for the profession of chefs who have renowned name in hospitality sector and have set remarkable standards in the art of cooking.”

new tourism offerings from singapore

THE SECOND phase of the customised and differentiated marketing campaign for the Indian leisure travellers, ‘Singapore — The Holiday y you Take Home With y you’, has been announced by the Singapore Tourism Board (STB). In order to lure the travellers to keep visiting the country, the campaign throws the spotlight on the latest tourism offerings and familiar favourites.

With the recent launch of Gardens by The Bay, Marina Bay Cruise Centre Singapore and the soon-to-be-opened Marine Life Park at the Resorts World Sentosa and River Safari, Singapore continues to offer a plethora of exciting and enriching experiences. Added to these, the Indian visitors enjoy visiting their familiar favourites such as the Universal Studios Singapore, Sentosa and Night Safari. “The country’s tourism appeal received a major boost after the opening of the two Integrated Resorts. Recently and within the next six months, new attractions and various experiential offerings will help push this tourism transformation even further. Increasingly, the discerning global Indian travellers seek fresh and varied travel experiences catering to their passions and interests,” said Chang Chee Pey, Executive Director, South Asia, Middle East and Africa-Singapore Tourism Board.

Kolkata gets chinese visa Application centre

Celebrating the completion of five successful years in the industry and the completion of 25 million trips across the country, Radio cab service provider Meru Cabs has announced the launch of the company’s loyalty programme – “Meru Select” – for its customers. Through Meru Select, the company will provide its customers with a 100 per cent assured cab service, a dedicated relationship manager to look into their queries and added benefits through discounts and select offers at various shopping and food outlets. The loyalty programme will be launched across the four cities that Meru is currently present in – Mumbai, Delhi, Hyderabad and Bengaluru.

If a Meru Select member does not get a cab after the booking has been accepted, he/she will be recompensed with a Meru Privilege Voucher, worth 500.

WITH THE appointment of VFS Global, the outsourcing and technology services specialist for diplomatic missions and governments worldwide, the Consulate General of the People's Republic of China in Kolkata has introduced a new facility for collection of visa applications and delivery service. VFS Global will operate the new Chinese Visa Application Service Center at Salt Lake in Kolkata.

VFS Global will be responsible only for accepting applications for Chinese visas from applicants residing in Kolkata and neighbouring areas. All applications will continue to be assessed and processed by the Consulate General of the People's Republic of China in Kolkata. The key features of these centres will be longer operating hours, a dedicated website for easy access, visa information including visa types, applicable fees and professional and responsive staff dedicated to handle visa queries, dedicated call centre unit and email support.

ddFs launches John Walker & sons odyssey

9th Annual international chef Awards

The 9th annual “International Chef Day” — Chef Awards 2012 recently took place at Hotel Ashok in New Delhi. Over the course of two weeks, the chefs competed in a bracketed elimination competition to determine the top chef who would go on to the Grand Finale. The competition was categorised majorly in three formats‘Trade Test’, ‘Gourmet Workshop’, and the grand finale called the ‘Chef Awards 2012’. The culinary competitions (Trade Test) among the nominated chefs for various award categories were held Cruising HeigHts December 2012

INDIA’ NDIA S LARGEST duty-free retail space in NDIA’ India at the T3, IGI Airport, Delhi Duty Free, has launched John Walker & Sons Odyssey, an award-winning luxury whisky from the House of Johnnie Walker.

John Walker & Sons Odyssey is unique triple malt inspired by the golden era of sea travel.

Developed by master blender Jim Beveridge using Sir Alexander’s handwritten notes, John Walker & Sons Odyssey has been carefully blended and married in European oak casks. n

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Mission: ‘Pink of Health’

W

hen the going gets tough, the tough gets going…but literally going sky-high in a unique way to fight against all odds, is something that Delta Airlines has done. Delta’s Boeing 767-400 signature 'pink plane’ has been dedicated to The Breast Cancer Research Foundation (BCRF) for awareness and fundraising to combat breast cancer. Throughout the month of October, it operated to a host of European destinations, including Moscow, London, Frankfurt, Nice and Madrid as part of its annual awareness campaign and fundraising effort for the BCRF. The aircraft featured BCRF’s trademarked pink ribbon logo on the tail and adjacent to the boarding door and was dedicated to the BCRF founder Evelyn Lauder.

Delta's first pink plane was a BoeBoe ing 757 that between 2005 and 2010 flew throughout the United States, Latin America and the Caribbean to generate awareness for the cause. According to menafn.com, since the day the aircraft was first given its glossy coat of paint, Delta’s “pink plane” has carried nearly 266,753 customers on about 1,300 trips around the world.

“At Delta we are proud to support such a noteworthy cause and combined efforts from customers, employees and families in raising $5million since we began working with the BCRF, has directly contributed to 18 fully funded research grants worldwide,” said Perry Cantarutti, Delta’s Senior Vice President for Europe, Middle East and Africa.

Delta’s flight attendants wore pink uniuni forms to support the cause and the proceeds from onboard sales of pink lemonade and pink headsets went to BCRF. Delta also do-

The fighTers: Delta Breast cancer survivors

nated $1 to BCRF for the first 50,000 new “Likes” on the Delta Facebook page during October. New and current fans could download a customised Delta Facebook cover and profile image, highlighting their contricontri bution to the cause (facebook.com/delta).

Delta and Northwest Airlines had also teamed up to kick off breast cancer awareness month with a special event on October 1. Breast cancer survivors and company executives from both airlines flew on DelDel ta’s pink plane from LaGuardia to Minneapolis/St. Paul where a ceremony was held.

Donations were also accepted and Delta’s Pink Mini-Cooper made an appearance at the ceremony. In addition to the pink plane,

throughout October, Delta’s administrative building were illuminated in pink lighting in support of BCRF. “The Breast Cancer Research Foundation has found it so rewarding to work with Delta because they set the bar high and share our commitment to stopping this terrible disease,” said Myra Biblowit, President, BCRF. “Together, Evelyn and I led the Foundation from a small US-based organisation to a dominant global funder of research that has raised over $380 million since its inception in 1993. Our progress to date is only possible thanks to the support of special partners like Delta Air Lines, its customers and its employees.” n