Cruising heights by Newsline

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PRIME MINISTER’S THRUST AREAS FOR REVIVAL OF CIVIL AVIATION

CRUISING HEIGHTS www.cruisingheights.in January 2012 n `90

STAKEHOLDERS LIST OUT THEIR IMMEDIATE PRIORITIES TO BOOST THE DIPPING AVIATION SECTOR AND THEIR FORTUNES.

201p1 er e of th year Was

chop

AGENDA FOR A

NEW STARTIN

2012

Down: The KF story

Time to move Airports for with caution… smarter fliers

Vijay Mallya has to get his act together if he wants his airline to survive

But infrastructure enhancement initiatives will help revive air cargo in 2012

The initiative to usher in hi-tech to make the whole experience of flying an enjoyable one is on

| AJIT SINGH TAKES CHARGE OF CIVIL AVIATION MINISTRY

EDITOR-IN-CHIEF’S NOTE

Here’s to the mother of all wishlists! or years, we have airports and airlines? On an average, there been asking airwill be about a 1000 queries each day on lines and airports transfer from T1-D to T3 in Delhi and a about their wishlist national number with ready info will make for the next 12 months. life that much easier. K Srinivasan 4 Could we ask Rahul Bhatia to take Even this issue has a cover the early morning flight from Delhi to feature on the subject. So, maybe it was time wherever and sip Nimbu pani or fruit juice to to ask people what was in their wishlist and start his day? Arre Bhai, India is a country that what is it that they wanted from airlines and lives on tea and coffee. And nothing more airports. Here is what a group of friends came delightful than a hot cuppa early in the day. up with. This is neither in order of precedence or importance. It’s simply a rambling list of requests from frequent fliers who spend a large part of their time in the air. 4 Could the DGCA be good enough to reconsider fees for preferred seats? Lopsided as it may seem, most airlines have removed the front-end seat from their inventory once the fee was dropped. It’s now simply offered to VIPs and associates. Seasoned travellers loved the option of blocking a good seat early on. 4 Could the CISF get it right at the gate? Some of their security CHEER UP! It’s only the fog at Delhi Airport. And, it affects everybody men and women — God bless them including the Aussies. — can take an eternity to read your ticket and connect you with your passport or I-card. For eternity, we have been hearing of the And, if you are one of those last minute yatris coffee coming on board Indigo. When? How at the airport, you can remember the Lord. long? 4 Finally, could we see a reduction in That’s how close it gets. Here’s hoping they the price of tea and coffee across airports? will speed things up in 2012. 4 Could Kingfisher Airlines be good Could the Biryani be cheaper in Hyderabad enough to tell its passengers in advance if and could the sandwiches and rolls be less flights have been cancelled or taken off the obscenely priced? time-table? In the past few months, too many If you are going to charge us for using the flights have been cancelled and too few airport, atleast let us eat and drink cheap! informed. One friend of mine had the horrid Season’s greetings and all the very best example of flying in from New York and for 2012! being told that the onward flight to Bhubaneshwar no more flew that schedule. He spent a harrowing day at the airport and finally was put on a flight in the evening. 4 Could we have a one India-one number that is a central clearing house for all srini@newsline.in sorts of issues that relates to flights and

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Bumbling security The events of September 11 are still fresh in our memories even after ten years. The US security system has undergone many changes but a recent news item has brought in visions planes being piloted by 'rogue' pilots. The US Transportation Security Administration (TSA), according to a report in watchdog.org, has failed to keep a strict watch on the foreign pilot screening process that was essentially designed to prevent attacks like those that took place on 9/11. The report mentioned:“For several months in 2010, TSA and Department of Defense contractor Mantech International Corp. failed to enforce the Alien Flight Student Programme (AFSP), which performs threat assessments and background checks on more than 38,000 non-citizens learning to fly every year.” Between 2004, when TSA acquired the programme from the US Department of Justice, and 2010, the programme employed between 15 and 35 contractors, who processed the background checks. In 2010, due to budget cuts, a number of people were thrown out and only around 10 persons were left to process thousands of applications by the time the contract for security screening expired. The AFSP was developed after the events of 9/11, when nine of the 19 hijackers — who crashed four planes into the World Trade Center, the Pentagon and the Capitol — including four pilots, attended flight schools in the United States. To prevent future attacks, the US Congress ordered the Department of Justice to begin screening of foreign-born flight school candidates for criminal backgrounds, using online applications and fingerprinting. The TSA took over the programme in 2004 and gave the contract for the approval process to Mantech.

contents

MUCH ADO ABOUT 2012 p32 CRUISING HEIGHTS TAKES A CLOSE LOOK AT THE INDIAN AVIATION INDUSTRY THAT IS PITTED AGAINST SOME FORMIDABLE CHALLENGES — MOST OF THEM CAN BE OVERCOME BY POLICY MANOEUVRES FROM THE GOVERNMENT. EVEN SO, IT WILL BE A LONG AND DIFFICULT YEAR AND ONE WRONG MOVE COULD HAVE RIPPLE EFFECTS THROUGHOUT THE INDUSTRY. PLUS: AVIATION STAKEHOLDERS GAUGE THE OUTLOOK FOR 2012 AND PREDICT HOW 2012 WILL PLAY OUT.

HEMANT RAWAT

Off the cuff

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At the end of 2011, Kingfisher Airlines stands at the crossroads: will it sink or swim? The airline has been craving for funds to keep its nose in the air. What are its options? Plus: two whole new sections on alliances and numbers. CRUISING HEIGHTS January 2012

NET EXPRESS

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Mumbai fliers are the most IT-savvy and IBM launches an Airport Solutions Lab. And IBM's Dan O'Connell speaks about new technologies that will be available for fliers around the world that would ultimately make travel easier.

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contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST

HEMANT RAWAT

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FOCUS ON CHOPPERS

CRUISING HEIGHTS Volume VI No 9

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Editor-in-Chief

The year of the chopper: that is what 2011 was. From the raid at Abbottabad to the crash that took the life of the Arunachal Pradesh CM, a look at the role played by the helicopter. In the snippets section, HATSOFF sets in motion simulated pilot training while NH 90 takes on Sikorsky S-70B for the Indian Navy's bid.

K SRINIVASAN Managing Editor

TIRTHANKAR GHOSH Group Consulting Editor

R KRISHNAN Consulting Editor

NANDU MANJESHWAR Assistant Editor

SNIPPETS

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SpiceJet introduces flights to Tuticorin while GoAir adds seven more daily flights. Also, Air India unveils Shagun Vouchers and BIAL completes a special coffee festival. In the international section, Flydubai bags the Low Cost Airline of the Year award.

JUSTIN C MURIK Copy Editor

ASHOK KUMAR Sub-editor-cum-reporter

PUNIT MISHRA Senior Designer

RUCHI SINHA Design

MOHIT KANSAL, NAGENDER DUBEY, MODASSAR NEHAL Picture Editor

FEDEX

PRADEEP CHANDRA Photo Editor

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Caution will be the watchword in 2012 for the air cargo sector as the industry looks up to future challenges. While the IATA has painted a bleak picture for the industry, there are some who believe that the year will throw up new opportunities.

Director (Admin & Corporate Affairs)

RAJIV SINGH

DAILYCALLER.COM

CARGO

HC TIWARI ——————————

Director (Marketing)

RAKESH GERA Sr. Executive (Subscription)

ALKA GOSWAMI

BACK PAGE

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Madonna, Jake Gyllenhall, Salma Hayek and Matthew Fox turned out to be the favourites in the British Airways poll that asked respondents which celeb they wanted to spend Christmas with. UK, US, South Africa and Canada emerged in the top five favourite spots. PRIME MINISTER’S THRUST AREAS FOR REVIVAL OF CIVIL AVIATION

GLOBETROTTING

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www.cruisingheights.in January 2012 `90

STAKEHOLDERS LIST OUT THEIR IMMEDIATE PRIORITIES TO BOOST THE DIPPING AVIATION SECTOR AND THEIR FORTUNES.

Amusing stories about a traveller who was forced to sit for seven hours on almost half a seat because of his obese co-passenger while a professional pilot gets frisked after misbehaving with a female passenger. In another story, a gay couple face problems from airport personnel.

1 201pe r Was

year

of the

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AGENDA FOR A

NEW STARTIN

2012

Down: The KF story

Time to move Airports for with caution… smarter fliers

Vijay Mallya has to get his act together if he wants his airline to survive

But infrastructure enhancement initiatives will help to revive air cargo in 2012

The initiative to usher in hi-tech to make the whole experience of flying an enjoyable one is on

AJIT SINGH TAKES CHARGE OF CIVIL AVIATION MINISTRY

Cover Design: Ruchi Sinha

CRUISING HEIGHTS January 2012

(Mob. 9650433066)

Executive Director

RENU MITTAL For advertising and sales enquiries, please contact: +91-9810030533, 9650433088 Editorial & Marketing office:

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. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase- I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase- I, New Delhi-110020.

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“Air India incurred a loss of `5548.26 crore during 2008-09, `5552.55 crore during 2009-10 and the estimated loss for 2010-11 is `6994 crore.” CIVIL AVIATION MINISTER VAYALAR RAVI on by Air India before the new minister was appointed .

Abated pride “We see the travel is very low, but potential is very high. Now it is a challenge for the Indian carriers to be profitable.” BRIAN PEARCE, IATA'S CHIEF ECONOMIST, on the present state of Indian carriers.

LETTERS TO EDITOR

Bleeding Red (December, 2011) made some startling revelations + about the present state of affairs of Indian aviation industry. The Indian aviation sector is facing tumultuous times, with airlines like Kingfisher and Air India adding up huge losses and struggling to turnaround their operations. Though, the India’s aviation ministry has proposed allowing foreign airlines to invest under 26 per cent in Indian carriers, the proposal has not seen the light of the day as yet. So, what is the way out? It’s high time, the government should take some steps to resurrect the ailing aviation sector otherwise the industry will go haywire. Kumar Vaibhav, Patna IATA CHIEF TONY TYLER ON AVIATION IN 2012

CRUISING HEIGHTS December 2011 `90

www.cruisingheights.in

Insider’s perspective on Air India Dubai sparks $63.3 bn of aircraft orders Simulator trains for chopper emergencies Travel bookings to rise in 2012

More passengers and more flights mean more red ink on the balance sheet. A look at what’s making the future for the Indian aviation industry bleaker than ever before.

The story Do buy in Dubai (December, 2011) gave an inside peek into the Dubai Air Show. Indeed, the air show ended on the optimistic note witnessing billions worth of orders for aircraft, maintenance services and flight training programmes. The world’s leading aircraft manufacturers like Boeing and Airbus enjoyed a highly successful air show tinted by landmark commercial airplane orders, high-level customer participation and an unheard-of display of technologically advanced aircraft. The air show raked the big moolah by playing the host to hundreds of exhibitors and visitors. Rupa Saha, Kannuaj Regarding the column Time to bite the bullet and go for FDI (December, 2011), I wish to make few points. FDI in aviation has long been put on the backburner citing various reasons. However, various ministries are thinking over the proposal to allow foreign direct investment (FDI) by foreign airlines in domestic carriers. Ministry of Civil Aviation has too been a laggard in this respect as permitting 26 per cent in India’s aviation companies might be able to solve the crisis. The writer rightly pointed out even after all that has happened to the Indian aviation sector, should the government go back on its bold move? Kamal Khan, Gwalior

Able strategy “We are short-staffed at the moment. But we are in the process of creating 550 new posts. We are also trying to make the whole process of licence- granting online so that it becomes easier to catch cheats.”

E K BHARAT BHUSHAN, HEAD, DGCA on the issuing of licences to the pilots in India.

“Unlike cars where there are millions of filling stations, there are only about 1,700 aviation stations in the world. So if you can get the right fuel, like mass-produced algae, then getting it to 1,700 outlets is not so difficult.”

SIR RICHARD BRANSON, FOUNDER, VIRGIN GROUP, on the feasibility of bio-fuel in the future.

Clear conscience “There is a comprehensive plan to install CCTV cameras on the operational area, city side and along the perimeter. The camera surveillance of terminal buildings has been upgraded and converted into live monitoring recently.” CHENNAI AIRPORT DIRECTOR E P HAREENDRANATHAN , on the beefing up of security plans of Chennai Airport.

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

Airy-fairy

CRUISING HEIGHTS January 2012

Point-in-case “We hope that the ministry considers our proposal. If Aviation Turbine Fuel (ATF) is included in the 'declared goods' category, as we want, it will attract a uniform tax across India.” A BAIJAL, CONVENER, FIA, on the inclusion of ATF in the 'declared goods' category.

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LETTERS TO EDITOR

CRUISING HEIGHTS December 2011 `90

www.cruisingheights.in

Insider’s perspective on Air India Dubai sparks $63.3 bn of aircraft orders Simulator trains for chopper emergencies Travel bookings to rise in 2012

More passengers and more flights mean more red ink on the balance sheet. A look at what’s making the future for the Indian aviation industry bleaker than ever before.

E K BHARAT BHUSHAN, HEAD, DGCA on the issuing of licences to the pilots in India.

SIR RICHARD BRANSON, FOUNDER, VIRGIN GROUP, on the feasibility of bio-fuel in the future.

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

Airy-fairy

CRUISING HEIGHTS January 2012

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World's top 10 touchdowns

widespread and passionate debate. That's why we decided to ask our website users, aviation fans and pilots for their opinions." The top ten airports for scenic landings are: Barra Airport (Scotland, UK). London City Airport (London, UK). Jackson Hole Airport (Wyoming, USA). Aruba Airport (Dutch Caribbean). Malé Airport (Maldives). St Barts Airport (French Caribbean). Queenstown Airport (New Zealand). Gibraltar (British overseas territory). Narvik Airport (Norway). St Maarten (French/Dutch Caribbean).

COLD STATS

Barra Airport's unique beach airstrip recently topped a list of the world's ten favourite scenic airport landings, according to a global poll conducted by the private jet hire booking network, privatefly.com. Barra Airport came first in a poll of 1000 pilots and travellers carried out by privatefly.com. Privatefly.com articulated that the airport has a unique beach runway the only one in the world for scheduled aircraft - with flight times varying according to the tide as the runway is literally washed away once a day. Barra Airport outdid well-known airports such as London City Airport (London, UK), Malé Airport (Maldives) and Queenstown Airport (New Zealand). Commenting on the poll, Adam Twidell, CEO of privatefly.com and an experienced pilot said, "When privatefly.com published its own top 10 airport landings list last year, it inspired

LOOKING GLASS

Waiting for a brighter tomorrow! Chaos and confusion “Supply of experienced pilots especially commanders remains tight. The short-term situation has suddenly improved due to the uncertainty at Kingfisher Airlines. We expect a serious skill shortage to surface by the end of 2012.” KAPIL KAUL, CEO-SOUTH ASIA, CAPA, on the shortage of pilots among domestic airlines especially Kingfisher Airlines.

Expressing solidarity “Kingfisher is one of our good customers. I have the highest regard for Vijay Mallya. He has had some issues with the airline. He's bringing in a new management team now which I think is very important. He needs to keep his airplanes flying.” JOHN LEAHY, AIRBUS COO-CUSTOMERS, on Kingfisher Airlines' revival strategies.

CRUISING HEIGHTS January 2012

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TRAFFIC DATA

No let-up in the CANCELLATION DATA OF SCHEDULED DOMESTIC AIRLINES

he downhill journey of the domestic carriers continued through the last quarter of 2011. The month of November 2011 witnessed an increase in seat factor as compared to the previous month. The number of passengers carried by domestic airlines during January-November 2011 was 550.32 lakh as against 468.09 lakh during the corresponding period of previous year, thereby registering a growth of +17.6 per cent. The top domestic carriers that held a market share of 19.8 per cent were IndiGo and Jet Airways. However, if Jet Airways (19.8 per cent) and JetLite (7.3 per cent) are taken together, the market share held by Jet was 27.1 per cent. Following the two carriers, were Air India (17.4 per cent), SpiceJet (15.5 per cent), Kingfisher (14.0 per cent) and GoAir (6.2 per cent). The month of November 2011 witnessed a significant increase in seat factor as compared to previous month primarily due to ongoing peak season, according to the figures released by the Director General of Civil Aviation. IndiGo's seat factor was 88.7 per cent (84.2 per cent in October 2011), JetLite was 79.7 per cent (74.1 per cent in October 2011), Kingfisher's was 79.6 per cent (79.3 in October 2011), GoAir was 79 per cent (76.1 per cent in October 2011), SpiceJet's was 76.9 per cent (78 per cent in

REASONS OF CANCELLATIONS

REASONS OF DELAY CAPACITY VS DEMAND

CRUISING HEIGHTS January 2012

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rising numbers

PASSENGERS CARRIED BY

SCHEDULED DOMESTIC AIRLINES

ON-TIME PERFORMANCE (OTP) Passengers carried by domestic airlines during Jan-Nov 2011 were 550.32 lakh as against 468.09 lakh during the corresponding period of previous year thereby registering a growth of + 17.6 per cent.

SEAT FACTORS OF SCHEDULED DOMESTIC AIRLINES

The month of Nov 2011 witnessed a significant increase in seat factor as compared to previous month primarily due to ongoing peak season.

October 2011) and Jet Airways and Air India were 76 per cent (70.8 per cent and 72 per cent, respectively in October 2011). The number of passenger complaints recorded by scheduled domestic airlines in November 2011 was 1017. The approximate number of passenger-related complaints was 1.9 per 10,000 passengers carried. GoAir had 4.1 complaints per 10,000 passengers while IndiGo had 2.2, Air India had 1.8, Kingfisher had 1.7, Jet Airways had 1.6, SpiceJet had 1.5 and JetLite had 1.4. The overall on-time performance of airlines in November 2011 was 85 per cent. Kingfisher led the carriers in on-time performance with 91.8 per cent. It was followed by Jet Airways with 91.4 per cent, SpiceJet with 90 per cent, JetLite with 89.6 per cent, IndiGo with 87.8 per cent, GoAir with 83.4 per cent and Air India with 65.5 per cent. According to the data received by the Director General of Civil Aviation, the overall cancellation rate of flights in November 2011 was 1.2 per cent. Leading the carriers was Air India (2.9 per cent), Kingfisher (2.6 per cent), JetLite (0.9 per cent), SpiceJet (0.4 per cent), GoAir (0.3 per cent) and IndiGo (0.1 per cent). The reasons for the cancellations: Miscellaneous 55.4 per cent, Weather 16.4 per cent, Technical 16.3 per cent, Operational 9.9 per cent and Commercial 2.0 per cent.

PASSENGER COMPLAINTS OF SCHEDULED DOMESTIC AIRLINES • Total number of complaints (Nov 2011) — 1017 • Number of passenger related complaints — 1.9 per 10,000 passengers carried

CRUISING HEIGHTS January 2012

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OFF THE RECORD

So the mischiefmongers have got into action. And if anyone has to blame, it has to be the decision-making process. Why on earth do they make the process of selecting and approving CEOs for the public sector units so excruciating and painful? Now, take for example, the selection of the next CEO of HAL (Hindustan Aeronautics Ltd). It took less than half a day on October 13, 2011 for the PESB (Public Enterprises Selection Board) to clear the name of R K Tyagi (presently the Chairman and Managing Director of Pawan Hans) as its choice

AI — DIRECTORS STORY

Vayalar Ravi

SO LONG VAYALAR RAVI

GETTING IT RIGHT

H.C. TIWARI

R K Tyagi

CRUISING HEIGHTS January 2012

H.C. TIWARI

for HAL. A choice that was made with the full support and backing of the Defence Secretary who was on the selection committee. Not just that. Tyagi underwent a bruising several monthslong process to head ONGC was cleared by the CBI, IB and every conceivable agency just months back for the top job there. So, why go through the process again? With experience of 35 years in PSU working and heading different positions, Tyagi looks like the perfect man for the job. But there are some who would have us think differently. Kya baat hai, bhai!

Now we are not trying have to go back to Akbar to be nasty, but the Bhawan. He had dumped hard fact is that Rajiv that office for Rajiv Gandhi Gandhi Bhawan has just Bhawan these past few had a huge sigh of relief. months and it must be And it’s all to mark the clotough to get back there. But sure of the Vayalar Ravi such is politics. era. Boy, was he a strokeSomehow, Ministers less wonder? His most these days seem to get the famous quote was describopportunity of cutting the ing pilots as 12th pass that ribbon at their home airenraged them no end durports. Praful Patel did so at ing their agitation earlier Nagpur, Ravi’s first act was this year. But that wasn’t to get the Prime Minister to all. Ravi — a decent soul inaugurate Thiruvananthawho didn’t have the foggipuram Airport and now est idea about what aviation Ajit Singh will get to do was — simply took no the honours at the Lucdecisions during his nearly know’s Chowdhary Charan 10-month tenure in the Singh Airport. Ministry. Things literally Good luck, Mantriji! came to a standstill and everything was on ‘auto pilot’ if one could use that phrase. But why blame Ravi for all this? After all, he was put there by the Prime Minister who talks ad nauseum about the second wave of reforms, but sends a dyed-in-the-wool Socialist and trade unionist to manage the controls. Now that he is back to his old perch at Overseas Indian Affairs, poor Ravi will Ajit Singh

So S Venkat, the behind-the-scenes badshah who so faithfully served several Chairmen and Managing Directors (he can actually write a book on how to be on the right side of successive masters) has finally made it to the Air India Board. He is now the new Director (Finance) on the AI Board and has one hell of a job to get it right.Venkat’s appointment went through cleanly, if one can be permitted to use that word. There were no hiccups on the way and the Vigilance Department and the other big brothers of the sarkar all said “no objections” to his being appointed. Unfortunately, his compatriot Deepak Brara, who has been selected for the position of Director (Commercial) has not been approved on the basis that the CBI has investigated and recommended penalty proceedings against him and several other erstwhile Indian Airlines employees. No one knows the actual status of the complaint and if indeed there is anything to go by. But why is it that all these orders surface only at the time of appointment? The latest reports are that the Air India top management has, in consultation with members of the board and the Ministry of Civil Aviation decided to issue a speaking order — while it is called a speaking order, it is not just verbal. That’s just the nomenclature. In real terms it’s a written comment that outlines what the CEO, in this case Rohit Nandan feels on the subject. The matter

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S Venkat

will then go to the airlines CVO, Urmilla Subba Rao, who will have to dole out the final clean chit for Deepak’s appointment to proceed. All that is likely to happen in the coming weeks and hopefully Deepak will occupy the CD’s chair in the New Year. Meanwhile, the agency has registered an FIR as part of the process to have an RC (Regular case) against Airbus, unknown officials of the Ministry of Civil Aviation and known officials. In this case the

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Sunil Arora

Vishwapati Trivedi

poor known officials are former employees of Indian Airlines who were part of the negotiating committee. The point is: How is it that civil servants — many of who served as CEOs of Indian Airlines during the period and many were on the board of the airline when the acquisition of the 43 narrow bodied aircraft was taking place — have been left out of the loop by the CBI? In any case, what is the CBI case? You have the case of Union Carbide where the

H.C. TIWARI

Deepak Brara

non-executive chairman of the company, Keshub Mahindra, was arrested by the agency although he had no role to play except preside over board meetings. In sharp contrast, those who had full executive authority vested in them to take decisions figure nowhere in the CBI’s FIR! Several senior former and present Indian Airlines employees are deeply anguished at the development and are thinking of petitioning the government or approaching someone like Prashant Bhushan to get them justice or at least a level playing field. It needs an AG and a CVC to make sure everything was above board, transparent and in keeping with the rules. The only one official — an IAS at that — who made sure that the entire acquisition process did not get into a tangle later was the far-sighted Sunil Arora during whose tenure the entire fleet purchase was crafted. He had an oversight committee that was chaired by the respected late Comptroller and Auditor General (CAG) of India C G Somaiah. He also made sure that he sent the entire acquisition process and procedure with all the relevant papers to

CRUISING HEIGHTS January 2012

Sushma Chawla

both the CAG and the CVC before a single aircraft had been ordered to make sure that everything was in order. They vetted and approved the process that followed. Finally, how on earth can a nine billion dollar deal and offset (if indeed they have to be considered as offset) conditions that were part of the Boeing deal be equated with a two billion dollar deal with Airbus for the same offset of $ 175 million? Even Airbus is pretty miffed at the whole thing and rightly so. But last reports suggest that in spite of their misgivings, they have agreed to go by. Clearly, that is what the Ministry wants. This is simply because of their long standing relationship with the domestic wing of Air India and their pole position in the Indian market. Something is terribly wrong in the kingdom of the Central Bureau of Investigation (CBI). First, they make selective cherry picking, book some and forget the rest and then fail to see that oranges and apples can’t be the same. No wonder Anna wants the CBI to be under the Lokpal to tweak them into some semblance of order.

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Record arrivals at Colombo

Etihad Airways has thrown a lifeline to the debt-ridden airberlin by subscribing to 31.57-million new shares for €72.9 million (Dh349.02 million), raising its stake in the second biggest German airline to 29.21 per cent. The deal that will take the total number of destinations served either directly or indirectly or with partner airlines puts Etihad right on top in the Gulf market sweepstakes. It now has 80 destinations more than that offered by any other Gulf carrier. The latest investment increases the Abu Dhabi-based airline’s stake in airberlin from 2.99 per cent to become the single-largest shareholder in Europe’s sixth-biggest airline. Etihad Airways will provide five-year financing of up to $255 million to support fleet development and future network growth.

Sukhoi superjet update

Aeroflot’s Sukhoi Superjet 100 fleet accumulated 1,000 commercial flights. The jubilee flight SU824 was on route St PetersburgMoscow in late November 2011. Aeroflot currently operates three SSJ100 aircraft which serve routes from Moscow to St. Petersburg, Nizhny Novgorod, Yekaterinburg, Ufa, Astrakhan, Chelyabinsk, Kazan and Minsk. These aircraft will also start to serve international routes early next year.

Vayudoot to be wound up

VAYUDOOT IS BEING WOUND UP. THE AIRLINE SET UP 31 YEARS AGO TO SERVICE THE NORTH-EAST HAS COME A CROPPER AND IN A COUPLE OF MONTHS IT WILL BE HISTORY. ACCORDING TO A CABINET NOTE BEING PREPARED, THE NON-VIABILITY OF KEEPING THE OUTFIT GOING HAS BEEN ELABORATED UPON BY THE CIVIL AVIATION MINISTRY: WE HAVE DECIDED TO CLOSE VAYUDOOT, BUT THE FINAL DECISION IS TO COME FROM THE CABINET.

HIKENOW.NET

Etihad lifeline for airberlin

Sri Lanka tourism is booming. The country’s Bandaranaike International Airport welcomed the arrival of 800,000th tourist in year 2011 on December 19, 2011. This is a record number of arrivals and a first for the Island nation. November 2011 also broke another record being the month which received the highest number of tourists — 90,889 — in the history of Sri Lanka Tourism’s calendar years. During 2010, Sri Lanka received over 6.5 million arrivals. That makes this year’s growth at a phenomenal 33.1 per cent of annual growth. This year has seen a massive contribution to this total from India, Japan, Germany, the UK, France, the Netherlands, Italy, and Middle Eastern countries.

Jet Airways cuts lounges across India One of the best blogs from Indian airports www.livefromalounge.com has the following top say about Jet: Somehow Jet Airways’ does not seem ever interested in informing this lowly Gold member of their JetPrivilege programme about their new initiatives, so I’ve had to depend on FlyerTalk for this update. Jet Airways has apparently been ‘reviewing’ its lounge contracts with all the airports it operates with in India, and is terminating about 10 of them. 9W, in an email sent out to select members of the Jet Privilege programme, believes that the product offering would become diluted or unviable at these airports, and hence is terminating them from January 1, 2012. Going forward, Jet Privilege will offer lounge access at the following airports domestically, and that too only for Platinum, Gold, Silver and Jet Airways Citibank Credit Card members: Mumbai, Delhi, Kolkata, Bengaluru, Chennai, Hyderabad, Goa, Ahmedabad, Vadodara, Pune and Kochi. Point to note here is that in India, no airline except Air India ever got the right of way to the airports, and hence they almost always depend on airport restaurants, contract lounges etc to offer their elite travellers the lounge facilities. At Bengaluru, in fact, Jet does not even have a lounge, and it has offered passengers a food coupon for years to eat at the food court for years. So, all you frequent travellers, take note. And yes, time to sign up for one of those lounge access offering credit cards!

CRUISING HEIGHTS January 2012

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Bengaluru Airport grows and grows

BA bags Lufthansa’s BMI You can’t keep Willie Walsh quiet! The Chairman and CEO of British Airways parent IAG has now acquired BMI from Lufthansa BMI with a 172.5 million-pound ($271 million) bid that puts Virgin Atlantic out of the race. It straightaway ramps up its position at London Heathrow airport. The deal brings as many as 56 daily slot pairs at one of the world’s busiest airports: Heathrow. These will be used to add routes to emerging markets. IAG, formed from a merger of BA and Iberia in January 2011, which issued a statement that the sale offered a “unique” opportunity that IAG could not let go even in this tough economic outlook. Lufthansa opted to sell after BMI had consolidated losses of €223 million ($291 million) but Walsh was sanguine in an interview to Bloomberg Television stating that there was an urgent need to restructure BMI, and “regrettably that means there will be some job losses”.

Odyssey mystery!

The cat is finally out of the bag. It is Odyssey Airlines that hopes to start non-stop all-business class flights from London City to New York and other locations using 10 newly-ordered Bombardier CSeries passenger jet. The disclosure came from Bombardier that hopes its C series will give it the lift to take on Airbus and Boeing. The start-up directly targets BA which offers twice-daily all-business flights using Airbus A318 aircraft from London City, a small business airport near the British capital's financial district which can handle only moderately-sized jetliners. But Odyssey will have to contend with an awful record of failures by previous entrepreneurs. Several all-business airlines have been killed off by high costs and the difficulty niche airlines face in matching benefits offered by big players. US-based Maxjets filed for bankruptcy in 2007 and UK-based Silverjet collapsed in 2008.

CRUISING HEIGHTS January 2012

Getting it back CBSNEWS.COM

Bengaluru International Airport has reported a +12 per cent growth in passenger traffic for 2011. This is, of course, based on forecast figures for December. For the record: the airport handled 12.54 million passengers in the year, comprising 10.24 domestic and 2.3 million international passengers. Annual air traffic movements grew by +7 per cent. The airport at present handles more than 350 aircraft movements, servicing around 35,000 passengers per day. Since it opened in 2008 it has grown by +54 per cent and continues to grow above the national average every year, according to Bengaluru International Airport Limited (BIAL). Adding to the increasing passenger traffic, the airport has seen the introduction of 15 new international airlines in the past three years. These include six new airlines in 2011: passenger carriers Etihad Airways, Bangkok Airways and Tiger Airways; and cargo carriers Cathay Pacific Cargo, Qatar Airways Cargo and Aerologic. Commenting on the growth, BIAL Managing Director Sanjay Reddy said: “Bengaluru has the third highest domestic traffic in the country after Mumbai and Delhi, which makes it the busiest in the South of India.” There was no separate confirmation from Chennai airport on this data. Its latest available total passenger traffic data, in 2010-11 was 12 million, of which 80 per cent is estimated to be domestic traffic.

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James Murdoch

WHEN YOU HACK, YOU GET HACKED! THE MURDOCH FAMILY'S CORPORATE JET RECORDS HAVE BEEN HACKED BY BUSINESS JET TRAVELER IN RETALIATION FOR A REPORT ON BIZ JET ABUSES IN THE WALL STREET JOURNAL. LAST JUNE, THE MURDOCH PRESS'S WALL STREET JOURNAL PUBLISHED A SCATHING REPORT ON THE APPARENT MISUSE OF CORPORATE JETS, CRACKING SECRET FAA FILES THAT SHOWED TAX DEDUCTIBLE LEASES, OPERATING COSTS AND ACTUAL FLIGHTS WERE BEING ABUSED FOR PRIVATE OR LEISURE PURPOSES AT COST TO THE COMPANY AND THE SHAREHOLDERS. IN AN AMERICA WHERE CORPORATE MALPRACTICE, ESPECIALLY IN THE BANKING AND FINANCE SECTORS, IS A CAUSE OF WIDESPREAD ANGER AND BEWILDERMENT, THE ARTICLE WAS DYNAMITE, THE MORE SO FOR APPEARING IN THE NEWSPAPER WITH THE LARGEST CIRCULATION IN THE USA. THE ARTICLE ACCUSED THE MURDOCHS, RUPERT AND JAMES, OF GROSS HYPOCRISY BASED ON WHAT APPEARS TO BE EXTENSIVE USE OF THE JETS FOR PRIVATE PURPOSES, AND IT CERTAINLY ISN'T AN ESSAY THAT IS GOING TO IMPROVE THEIR BATTERED CREDIBILITY.

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SkyTeam airlines co-locate at Beijing Airport

Mark Schwab is Star Alliance CEO

Horton to head oneworld

Tom Horton is the new Chairman of the oneworld alliance. The

FORUM.TAYYAR.ORG

governing board of oneworld elected Horton to succeed Gerard Arpey following Arpey’s decision to retire from American Airlines. The nomination was made by the oneworld governing board’s final meeting for 2011 held in New York where it has been based since June of last year. Arpey will lead a huge team of stalwart CEOs and will also oversee the biggest expansion of the alliance with the addition in 2012 of airberlin, Kingfisher Airlines and Malaysia Airlines. (see detailed story in the News Digest section)

Beijing airport

Ethiopian joins Star Ethopian Airlines has formally joined the Star Alliance. The airline was inducted on board at a colourful

ceremony held at Addis Ababa’s Bole International Airport on December 13, 2011. Ethopian is the alliance’s third carrier out of Africa; the other two being EgyptAir and South African Airways. “Today we have taken a large step forward in completing our Africa strategy,” said Jaan Albrecht, CEO of Star Alliance, on the occasion. “With Ethiopian Airlines now part of the Star Alliance network, we offer our customers the widest choice of flights connecting to, from and within Africa.” What the addition of Ethiopian Airlines does to the Alliance is to provide access to many of the continent’s major commercial and political cities.

Mark Schwab

The Chief Executive Board of Star Alliance, of which SAS is a member, has appointed Mark Schwab, a veteran Star Alliance the new head of the world oldest and biggest Alliance. The Executive Board of the Alliance recently finalised the appointment of Schwab — who comes from Star Alliance member United where he was responsible for the company’s alliances as Senior Vice President — to be the new CEO of the Alliance out of its headquarters in Frankfurt. He succeeds Jaan Albrecht, who was appointed as CEO of Austrian Airlines in November 2011. “With Mark Schwab we have secured an internationally renowned airline executive, who has all the qualifications required to lead our alliance into the next chapter of its success story,” said Rob Fyfe, Chairman of the Star Alliance Chief Executive Board.

LAN throws oneworld into doubt partner LAN of Chile could well exit from theal Oneworld liance following its merger with Brazilian carrier TAM to create Latin America’s largest airline. There is also the

MG.AVIATION-FRIENDS-HAMBURG.DE

Tom Horton

The new facility brings together Air France, Aeroflot, Alitalia, China Eastern, China Southern, Delta Air Lines, Korean Air, KLM and Vietnam Airlines. The idea is to collaborate in order to provide great synergy and customer experience as part of SkyTeam members’ efforts to collaborate in order to improve customer benefits and deliver a superior SkyTeam experience. This is the first time that the SkyTeam is operating as one united brand for its partners out of China. The facility at Beijing includes 50 check-in desks with 10 self-service kiosks. “The co-location of SkyTeam carriers worldwide is an integral part of our strategy as it offers tangible benefits to both our customers and our members,” said Gordon Humpherys, SkyTeam’s VP of Airport Services. “With so many SkyTeam members serving Beijing, the shared facility strengthens our brand in this region and makes travelling through the airport easier for passengers, while enabling airlines to realise a number of important synergies.”

STARALLIANCE.COM

AA.COM

SkyTeam has unveiled its brand new check-in co-located area at Terminal 2 Beijing Capital International Airport.

possibility, suggest inside reports, that TAM could switch from the Star Alliance to join oneworld. Brazil’s anti-trust authorities have approved the LAN/TAM merger, which was first mooted in 2010. The combined airline, LATAM, valued at more than £9 billion, will fly to 115 destinations in 23 countries and employ 40,000. Chile has already approved the merger, but Brazilian civil aviation authorities insist that the combined entity must join a single global alliance. The airlines have yet to announce which alliance they will join.

CRUISING HEIGHTS January 2012

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1,000

777 fuselage skin panels were loaded in a train bound for the Boeing’s Everett factory. The fuselage, made by Mitsubishi Heavy Industries from Japan, will be part of a landmark airplane that is expected to be completed in February 2012 and sent to Emirates Airline, the 102nd 777 it has ordered. The 1,000th 777 is a landmark because it only took 16 years to sell and produce that many. The 747 hit that mark in 23 years and the 767 did so in 29 years.

AIRLINERS.NET

code-sharing pact has been signed by Etihad. Hainan Airlines will place its “HU” code on Etihad Airways flights between Abu Dhabi and Etihad’s three gateway cities in China: Beijing, Chengdu and Shanghai. Etihad Airways signed its first code-sharing agreement with a Chinese airline and started flights to one of China’s biggest cities, strengthening its presence in the world’s second-biggest economy.

flights to London daily on A 380 are the Emirates staple. The service to the UK capital’s Heathrow’s airport will commence on March 25, following the start of a third daily superjumbo flight on January 24, Emirates said in an emailed statement. The move will make Emirates the largest superjumbo operator to service the UK’s largest airport, the company said. The fifth daily flight will be operated by a Boeing 777-300ER. Meanwhile, Qatar Airways (QR) has secured another slot pair at London Heathrow (LHR) and will add a fifth daily flight between Doha and LHR from March 25, lifting capacity on the route from 28 to 35 flights each week. The Doha-based carrier will deploy a Boeing 777 configured with 42 seats in business class and 217 seats in economy.

pilots have quit Air India over the past two months. Half of them are co-pilots who are believed to have joined a domestic LCC and a Singapore carrier. Apparently, many of these co-pilots have completed their command training but have been waiting endlessly to get promoted to the post of commander. Many senior AI pilots operating Boeing aircraft on international routes such as Mumbai-New York and Mumbai-London have landed jobs with a leading Gulf carrier.

per cent from last year’s 17 per cent is the fall in Arab airlines growth in 2011, due in part to political turmoil across the Middle East. Not all Arab airlines will see such growth (in 2011). Some airlines will, in fact, recede

CRUISING HEIGHTS January 2012

OUTLOOKINDIA.COM

ADDING UP THE

Air India pilots resigned during 2010-11. The government said that 49 pilots of Air India had submitted their resignations during 2010-11 citing reasons such as delay in payment of salaries and lack of progress in career. "Most of the pilots, who have tendered resignation, have cited nonpayment of allowances and delay in payment of salaries as well as lack of career progression as reasons," Civil Aviation Minister Vayalar Ravi said responding to a written question in the Rajya Sabha. under (the) pressure of political and economic turmoil in some of the biggest economies in the region, said Arab Air Carriers Organisation (AACO) Secretary-General Abdul Wahab Teffaha, who spoke at the organisation’s conference held recently in Abu Dhabi.

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2012, according to IATA

Kolkata Airport will be ready by March

he International Air Transport Association (IATA) announced revisions to its industry outlook. For 2011, profitability remains weak but unchanged at $6.9 billion for a net margin of 1.2 per cent. Looking ahead to 2012, IATA downgraded its central forecast for airline profits from $4.9 billion to $3.5 billion for a net margin of 0.6 per cent. The Eurozone crisis has put severe downside risk on the 2012 outlook. In the worst case scenario, should the Eurozone crisis evolve into a full-blown banking crises and European recession, IATA has estimated that the global aviation industry could suffer losses exceeding $8 billion in 2012. Even if government intervention averts a banking crisis, it is unlikely that Europe will avoid a brief recession. Business and consumer confidence has already fallen too far. Global GDP growth forecasts for 2012 have been revised downwards to 2.1 per cent. Historically, the airline industry has seen profit turn into loss whenever global GDP growth falls below 2 per cent. This is driving the downgrade in the 2012 outlook. “The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the Eurozone sovereign debt crisis. Such an outcome could lead to losses of over $8 billion — the largest since the 2008 financial crisis,” said Tony Tyler, IATA’s Director General and CEO. At the global level, passenger demand is expected to expand by 6.1 per cent which is stronger than the 5.9 per cent forecast in September. Air travel growth has persisted at a stronger pace than we had expected. This travel strength, along with tight capacity management, particularly in North

West Bengal Chief Minister Mamata Banerjee announced early December that the `2,300-crore modernisation project of Netaji Subhas Chandra Bose International Airport, Kolkata, will be completed by

Construction work in progress at Kolkata Airport.

March next year. “The new airport will be ready by March and we shall also start a flying club at Behala where an airstrip lies unused,” the CM said at a FICCI programme. Airports Authority of India (AAI) Chairman V P Agrawal confirmed the completion date during a visit to oversee the progress at the airport. He said: “The modernisation work of the N S C Bose International Airport is expected to be completed by March 2012. After that, the airport would be the best airport in the country, even better than airports in Delhi, Mumbai or Bengalurus.” The Chairman was speaking to reporters after inaugurating an operational building. For the record, it may be mentioned that AAI had taken up the `2300-crore modernisation project for the Kolkata Airport in 2008, which includes building a fourth terminal and revamping the existing ones. The project that is already eight months behind schedule could well be pushed back by a couple of months if the impending work-to-rule agitation by a section of employees is set in motion. According to reports, over `1,800 crore or a little over threefourths of the earmarked project funds have been utilised. The project originally scheduled to be completed in 30 months is already six months behind schedule and may finally get over in 42-48 months. “At this crucial juncture when the tempo of work is at its peak, any agitation will adversely affect the project. We are aware of the issues and are trying to resolve it,” the Chairman said. He hoped that his colleagues would realise the efforts

IATA.ORG

ABOVE GROUND LEVEL ¨¨

CRUISING HEIGHTS January 2012

America, has kept load factors high and is supporting a 4.0 per cent increase in yields. This has helped a modest increase in forecast revenues, which we expect to total $596 billion this year. This slightly stronger-than-expected passenger performance is offsetting: Worse-than-expected cargo performance.

Tony Tyler

A downward-trend in cargo since midyear means that cargo will likely finish the year with a 0.5 per cent contraction in volumes and flat yields. Somewhat higher-than-anticipated oil prices. At an average oil price of $112 per barrel, the industry’s 2011 fuel bill is expected to be $178 billion (up $2 billion from previous expectations).

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eyes $4b biz from Abu Dhabi airport ABOVE GROUND LEVEL ¨¨ L&Tarsen & Toubro (L&T) is looking Last November, the company along with

CIAL to install hi-tech radar to aid aircraft landing

at over $4 billion (over `21,500 crore) worth of contracts in Abu Dhabi when the bids for the construction of the new airport are opened. L&T along with its consortium partners bid for the $12-billion project in November in an internationally competitive bidding. L&T would be the leader of the consortium, as in the previous bidding for the Al-Salalah airport in Oman. “L&T along with its consortium partner expects to get up to $4 billion worth of contracts. The scope of work would involve construction of the airport terminal, runway, traffic control system, equipment handling and overall infrastructure building,” said R Shankar Raman, Chief Financial Officer of L&T. If L&T wins the project, this would be its second airport project in the Gulf region.

Fursatganj to get aviation university

With the installation of the Approach Surveillance Radar in the near future over Kochi to regulate aircraft movements, Cochin International Airport Limited (CIAL) has commenced work on a Navigational Aid Station to house the equipment. The project is a joint collaboration between CIAL and Airports Authority of India (AAI). The total cost of construction of the station is estimated to be `3 crore and it is expected to become operational by the end of next year. The AAI is responsible for the installation and operation of the equipment. What happens at present is a procedural control to regulate air traffic in CIAL and it takes about 10 minutes for an aircraft to land. With the installation of the Approach Surveillance Radar, the holding time will come down to about 3 minutes. The automated equipment will also help CIAL handle the growing air traffic while improving the precision

IMPORTANT MILESTONE: Congress MP Rahul Gandhi lighting the lamp to mark the 25th anniversary of Indira Gandhi National Aviation Academy (IGRUA).

ongress MP Rahul Gandhi has declared that a worldclass aviation university will come up in Fursatganj. His announcement means that Former Minister Vayalar Ravi’s desire to have the University in Kerala has been tossed aside for a six. The former Civil Aviation Minister has now officially decided that the National Aviation University would be built at Fursatganj. Rahul Gandhi also announced the expansion of Fursatganj airport. All

Kochi Airport.

Oman-based consortium partner Galfar Engineering and Construction bagged the Al-Salalah airport project in Oman. Apart from Larsen & Toubro-NPC, the other consortia that have submitted the bids include: Al Habtoor-Murray & Roberts, Bechtel-Al Jaber, Hyundai Engineering & Construction-Kumho and Samsung-ACC and TAV-CCC. L&T is designing and constructing the 6.6-lakh-sq-ft passenger terminal building and the air traffic control tower, besides other infrastructure at the airport. It also has the experience of completing major airport projects like Delhi International Airport terminal T3, Bengaluru International Airport, and Hyderabad International Airport. The company is now executing the brownfield expansion of the Mumbai International Airport.

IGRUA

being put it in and join forces to make sure the prestigious project was completed on time. At the foundation stone-laying ceremony in December 2008, former Civil Aviation Minister Praful Patel had remarked that unions in Bengal needed to improve work culture and display discipline to build and operate a world-class airport. Work is expected to begin soon on the exterior facade as well as interior fittings. The terminal is expected to be handed over to airlines by the end of March. A time frame of 90 days is the standard after the handing over for the terminal to be ready and operational. Several airlines have expressed interest to operate from Kolkata once the new terminal is in operation. These include FlyDubai, Cathay, British Airways and Japan Airlines. Austrian Airlines and Air Mauritius have also shown interest.

CRUISING HEIGHTS January 2012

these pronouncements took place at a function to mark the 25th anniversary of Indira Gandhi National Aviation Academy (IGRUA). It was one of the last functions attended by Vyalar Ravi where Rahul Gandhi was also present. Nasim Zaidi, Union Civil Aviation Secretary, told the media: “Yes, it has been decided that the university would be built at Fursatganj in UP and its campus will be close to IGRUA at Fursatganj airfield.”

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India’s no to carbon tax data

of aircraft movements during turbulent weather. Apart from a faster throughput, the tool will enhance the safety of passengers, which is critical.

aking a tough stance, the Ministry of Civil Aviation has told Indian carriers not to submit carbon emissions data to the European Union (EU) for a new tax that will become applicable from January 1, 2012 for all flights to Europe. If the tax is levied as scheduled the three Indian carriers flying to Europe at the moment — Air India, Jet Airways and Kingfisher — may end up paying an additional `300 crore each year. Of course, they are likely to pass it on to passengers who will end up paying more for their tickets. Under the planned Emission Trading Scheme (ETS) of the European Union (EU) the EU-ETS would mean that airlines using EU airspace will have to pay a fee for carbon emissions that exceed a set limit. Not just that, they will also pay for that part of the journey that is beyond the EU airspace. India has led the opposition to the move with support from more than two dozen countries including the US and China. "I am directed to say that the ministry has decided that there is no need for Indian carriers to submit any data to European Union under EU-ETS. Any correspondence received at your end from the EU in this regard may be forwarded to this ministry, for taking necessary action," the Civil Aviation Ministry said in a letter to all the domestic airlines that fly on international routes in late November 2011.

The completion of the Mumbai airport’s modernisation is likely to be delayed further by more than a year to the end of 2014, and passenger traffic at the facility is expected to reach the saturation point in the following year, according to a presentation made by Mumbai International Airport Pvt. Ltd (MIAL) in Barcelona. “International operations at the new terminal will commence from end of 2013 and domestic operations will commence from end of 2014,” R K Jain, Chief Executive Officer, MIAL, told an international airport conference last month, according to the financial daily Mint. The modernisation project at Chhatrapati Shivaji International Airport (CSIA), which started 10 years ago when airport operations were privatised, was scheduled to be completed by March 2013. The cost has more than doubled to `12,380 crore. “Due to constraints at CSIA, a land-locked airport ruling out any further expansion, it is imperative to develop a second airport for Mumbai,” Jain said in the presentation. Just recently, Mumbai airport moved to being the country’s India’s second busiest from its numero uno position. Till 2010, Mumbai airport was the busiest in the country in terms of passengers handled. The Indira Gandhi International Airport in Delhi is now the topper. Mumbai airport handled 29.07 million passengers, 20 per cent of India’s total traffic, in the year ended March, compared with 29.94 million at Delhi airport. According to the presentation, the new terminal “is expected to reach full capacity by 2015 under (an) unconstrained growth scenario”. The airport has achieved a growth rate of 10.8 per cent in passengers between 2004-05 and 2010-11. While MIAL had, earlier this year, said the project would be completed by 2013, according to an investor presentation, an MIAL spokesperson is believed to have confirmed the new completion deadlines.

WEREUROPE.EU

Mumbai modernisation likely to be delayed to 2014

Meanwhile, a high-level meeting of representatives from various ministries and airlines was held at the Rajiv Gandhi Bhawan headquarters of the Civil Aviation Ministry to firm up India's response to the EU plan to tax airlines on the basis of carbon emissions beginning on January 1, 2012. The data is critical for working out how much an airline needs to pay. Payments are calculated on the basis of this data and noncompliance would mean that they would be unable to calculate what an airline has to pay. The EU-ETS will follow an annual cycle with airlines having to monitor yearly emissions, from January 1 to December 31, on a per-flight basis. This data must then be aggregated in an annual emissions report and verified by an independent accredited verifier. By March 31 of the following year, the verified report must be submitted to a competent authority. The EU maintains it's not a tax. There has been condemnation by countries from around the globe including every major civil aviation power including the US, China, Brazil and India. No one has any idea of the implications of the Indian decision. Would our carriers be stopped from flying over Europe for not submitting the data? Ministry officials say that the next few steps will be in coordination with the other major players.

BIVA.BE

ABOVE GROUND LEVEL ¨¨

IN TROUBLE?: Jet Airways planes at Brussels airport

CRUISING HEIGHTS January 2012

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GMR starts Maldives terminal

ABOVE GROUND LEVEL ¨¨ GMR bids for Brazil airports modernisation

GMR Infrastructure has bid for modernising three airports in Brazil. The modernisation programme

he ground-breaking ceremony for the new terminal of Ibrahim Nasir International Airport (INIA) in Male was presided over by Maldives President Mohamed Nasheed, GMR Chairman G M Rao and Malaysia Airports Managing Director Sri Bashir Ahmad and assorted officials who dug the first hole for the new terminal in front of journalists, both local and Indian. Scores of airlines dropped flowers onto the newly-reclaimed land as part of the ceremony. Addressing the gathered dignitaries, Chairman Rao said: “Since we have come here the love and affection of Maldivians has been of great comfort to us.” “As an infrastructure developer, GMR is the custodian of the asset it builds, while the asset belongs to the nation and its people. For the last year, we have fulfilled every one of our commitments to the government of the Maldives, and we intend to respect and fulfill every remaining commitment.” GMR had begun sending batches of 29 local employees every two months to India for on-the-job training, he said, and had committed to sponsoring 10 students every year to study engineering disciplines in India. During the political crisis in Egypt earlier this year, “GMR safely transported 160 Maldivians from Mumbai to the Maldives in a special aircraft, after they were evacuated from Egypt,” Rao said. In his address, President Nasheed said he wished to assure GMR that the government was “200 per cent behind your contract, and every single other contract the government has signed with any other foreign party in this country.

Not just contracts signed by our government, but also contracts that any ruler of the Maldives has signed with any party. We will honour it.” The opposition Dhivehi Qaumee Party (DQP) recently filed a successful Civil Court case against the government claiming that GMR’s charging of a $25 airport development for departing passengers, as stipulated in the concession agreement, was illegal. Nasheed expressed surprise at the hostility to the airport development charge, noting that only a few Maldivians frequently travelled outside the country. “Why should anyone be worried about paying $25 to develop the airport from the money they spend on their weekend in Sri Lanka?” he asked. He noted that the Maldives had always welcomed foreign investors, and that there was no harm in them doing so. ”The government understands the need for foreign investment and we are aware of the role that foreign investors play in development of this country,” Nasheed said. “A fair amount of our assets are foreign-owned, even now, and today I am happy to say we are again increasing our list of assets by one with the groundbreaking ceremony we are having today.” The new terminal is due to be completed in June 2014, and will be run by GMR under a 25-year concession agreement extendable for a further 10 years. GMR holds a 77 per cent stake in the venture, with the remaining 23 per cent held by Malaysian Airports Holdings Berhad (MAHB). The $400-million project is the single largest foreign investment in the history of the Maldives. CRUISING HEIGHTS January 2012

Air India’s MRO unit opens

Air India’s Maintenance Repair Overhaul (MRO) facility near the Thiruvananthapuram International Airport has been commissioned. Set up on over six hectares given by the state free of cost to the national carrier at Chakka, the state-of-the-art facilities installed in the Rs 110-crore MRO is aimed at attracting other types of Boeing aircraft in addition to Boeing 737-800 aircraft used by low-cost carriers such as Air India Express. Air India, which will be initially running the full-fledged MRO, has chalked out plans to get third party business, according to the daily The Hindu. The MRO here, along with the one in Mumbai and the one in Hyderabad, would be brought under Air India Engineering Services Ltd later. There are two hangars to take care of the maintenance and repair of two aircraft at the same time. It’s electrically-operated, vertically

WWW.THEHINDU.COM

INTERNATIONAL MOVES: Dignitaries break ground at Maldives to signal the start of construction.

is an effort to get the country ready for the Soccer World Cup in 2014. GMR that had been looking at Spain and Croatia have since dropped those plans. If GMR gets the bid, it will get the opportunity to renovate airports at Brasilia (capital), the industrial hub of Rio De Janerio and the country's largest city, Sao Paulo. Other's bidding for the projects include the Turkey-based TAV Construction that is constructing the international airport at Abu Dhabi and the French ADP.The project bids are to be finalised by January 2012. To fasttrack private airport upgrade projects, Brazil has decided to grant licences to build new terminals and new airports. Brazilian air travel jumped 23 per cent in 2010, according to the country's Civil Aviation Authority (Anac).

Air India MRO centre at Thiruvananthapuram airport.

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moving hangar door system is the first of its kind in the country. Translucent door fabric will save electrical energy for hangar illumination. Rainwater usage and harvesting, solar water heater system, 5000 sq.ft. of workshop, warehouse and office space and a 10,000-sq.mt. aprons are the salient features of the MRO. The Indian MRO market is estimated at $800 million and is growing at about 8 per cent annually, against a 4 per cent world average. A recent Ernst &Young study found that the Indian MRO market could grow at an average annual rate of 15 per cent. Presently, only Air India and Jet Airways have in-house maintenance, repair, and overhaul facilities.

TAJGVK to set up five-star deluxe hotel near Mumbai airport

TAJGVK Hotels & Resorts Ltd has announced the setting-up of a five-star deluxe (luxury category)

That is exactly what Vijay Mallya’s Kingfisher Airlines has been doing this past year. R Krishnan believes that 2012 can be different for the airline — only if the ‘King of Good Times’ gets his act together and brings in money to fly his planes.

f Kingfisher Airlines was relieved at the beginning of 2011 following a successful recast of its debt, it must have been really distressed at the end of the year. Leave alone survival, its very existence as an airline is now under threat no matter how hard its promoter Vijay Mallya may try to present a brave face while trying to put Kingfisher Airlines on take-off mode again. Was it his mistake that the airline went under or was it a result of factors beyond control? Perhaps, it was a mix of both but more of the former than the latter as the common costs governing the Indian aviation industry

hotel with 275 rooms near terminal 1C of Mumbai International Airport, under the ‘Taj’ brand. The company, in tranches, would invest around `110.25 crore in the hotel project, which is likely to be commercially operational by mid-2014.TAJGVK is a joint venture, formed through a strategic alliance, between the Indian Hotels Co Ltd (IHCL) and the Hyderabad-based GVK Group in 1999.The proposed hotel is developed jointly with Greenridge Hotels & Resorts Pvt Ltd, a GVK company, through its special purpose vehicle, Green Woods Palaces & Resorts Pvt Ltd.

Up the

down flight

Fewer flights delayed in December: ATC

Fewer city-bound flights were forced to circle above the Mumbai airport in December owing to air traffic congestion compared to November. This led to fewer flight delays. According to air traffic control

path Vijay Mallya

CRUISING HEIGHTS January 2012

H.C. TIWARI

An ATC control room at one of the airports.

also impacted Kingfisher Airlines equally hard. To say that only his airline suffered from rising fuel costs was wrong as were arguments that fares charged by competing carriers was below cost and therefore hit him below the belt. It is precisely here that “his mistake” played a major role. While meeting the press in Mumbai on November 16, 2011, he said that it was wrong to write the epitaph of his airline and that he would be bouncing back soon. Obviously, these were brave words uttered at the time of crisis. What seems to be happening now is that the crisis is slowly devouring the airline itself. If Air India is suffering from huge legacy costs, Mallya in a short span also built a huge legacy cost but blamed the low-cost or low-fare arm Kingfisher Red (converted Air Deccan) for a large part of his misfortunes. He said while the full service carrier part of his airline

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(ATC) officials, movement in and out of the airport has become smoother because of a reduction in the daily take-offs and landings from 750 to 720. The ease in traffic load was witnessed soon after Kingfisher Airlines reduced 10 scheduled flights out of Mumbai in December. In November, the airline had curtailed 40 flights from its national network because it was making losses on these routes. “Owing to the reduction of 10 flights the numbers of daily movements have come down by 30. So, very few flights have to hover above the airport even in peak hours,” said a senior ATC official requesting anonymity. Normally, Mumbai-bound flights circle above the airport for about 10 to 15 minutes on an average during peak hours. As a result flights from 6 am to 9 am and 8 pm to 10 pm often get delayed. But now the circling time is not more than three minutes, said ATC officials. Sources said that they had saved enormous amounts of fuel, thanks to this reduction in time.

Navi Mumbai airport to be unviable

There seems to be fresh problems arising for the upcoming international airport in Navi Mumbai. Interested bidders and infrastructure companies are concerned about the escalating land cost which many developers believe may make the project unviable. “Navi Mumbai airport was moving reasonably well, till the land acquisition bill was brought in the Parliament. Now that has raised the expectation of the farmers five to six times...If the land itself is going to cost you Rs 5000 crore or more which is what it comes to. Then A M Naik how are you going to ever put a project because the airport project cost will go up by Rs 5000 crore," A M Naik, L&T Chairman told ET NOW. The proposed airport is facing hurdles in the acquisition of private land. It will need 2,042 hectares of land of which 1,405

showed higher yields, the low fare arm registered below cost yield due to irrational pricing as dictated by the market. If this was true, how is it that other competing carriers did not suffer financially as much as Mallya’s airline did? The fact was that his full service airline represented by Kingfisher First and Kingfisher Class offered a very high-quality product and where he personally appeared on the inflight entertainment channel (on the screens behind each seat of the full service) to inform passengers that they were like his guests at home. It was certainly a laudable objective to treat passengers to the best but it made little economic sense. Travelling by his business class, especially in the A 321s, one would have noticed that he had provided 28 business class seats with top-of-the-line facilities like inflatable backs, foot rest opening out at the press of a button, sea food for meals, sparkling apple juice to imitate champagne and much more. All this had to end and today we find that most airlines have gone bottoms up. Like the great fall of Humpty Dumpty it is becoming very difficult for all of Mallya Good Times men to put the airline together again. Obviously, in a country as open as India where even the most secret government documents finds its place on the front pages of newspapers, Mallya’s lifestyle was never a secret. Thus the failure of his airline was blamed on his lifestyle which we feel was totally wrong. The failure was due to a product offering which cost more than the fare he charged. The higher his load factor, the greater was his misery as is now borne out by details. Last heard in November 2011, the combined effect of flight withdrawals and the gaining public perception that Kingfisher flights could be cancelled at the last minute prompted the Kingfisher passenger to move to other airlines. It was

interesting to see that even Air India carried more passengers notwithstanding its not very reliable on-time performance. The Kingfisher story obviously provoked members of Parliament to raise the obvious question whether the government-owned banks lost heavily while lending to Kingfisher Airlines as part of its debt restructuring. The reply given by the Minister of State for Finance Namo Narain Meena makes an interesting reading. Before giving details, the minister said: “Banks have no plan to carry out a second round of debt-restructuring of Kingfisher Airlines” which had an outstanding loan of `6,419 crore. (SBI, the leader of the consortium of 11 lender banks also said the same thing: it had no plans for such a recast.) Meena said Kingfisher Airlines had a total outstanding loan liability of `6,419 crore which was included in the `9,703.37 crore provided to the airline for non-fund based activities. The break-up showed SBI exposure at `1,457.58 crore, IDBI Bank `727.63 crore, PNB `710.33 crore, Bank of India ` 575.27 crore and Bank of Baroda `537.51 crore. The other lender banks that funded the airline included ICICI Bank, Central Bank of India, United Bank of India, UCO Bank and Corporation Bank. Of the total outstanding of `6,419.60 crore, nearly `750 crore had been converted into cumulative redeemable preference shares and `553 crore as non-convertible cumulative redeemable preference shares to be redeemed in 12 years. Kingfisher Airlines is scheduled to start repaying the loans to SBI from September 2012. But servicing of interest is being done with some delay. To avail of the corporate debt restructuring, Vijay Mallya had given a personal guarantee of `248.97 crore and United Breweries Holdings which he heads gave a corporate guarantee of `160.43 crore. In addition, the airline provided collateral security of

H.C. TIWARI

ABOVE GROUND LEVEL ¨¨

FRIENDLY ADVICE: John Leahy (left) flanked by Vijay Mallya during the press conference announcing the arrival of A380 in India.

CRUISING HEIGHTS January 2012

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hectare is already with the nodal agency, City and Industrial Development Corporation (CIDCO), 151 hectares is owned by the state government and 485 hectare is privately-owned. For a long time now, CIDCO officials have been negotiating with the residents of seven villages for the 485-hectare that has to be acquired to complete the airport project. Land acquisition is stuck as the 5,000 families in the area are demanding a higher compensation package. The Navi Mumbai airport project, at an estimated cost of `9,800 crore, is the biggest infrastructure project on offer in Mumbai, and corporates like Reliance, the Tatas, GVK and GMR and HCC, among others, are keen to be associated with the project.

Flemingo Duty Free eyes PE funding

Flemingo Duty Free Shop Pvt. Ltd - one of the country's betterknown duty free consortiums is

MOODIE REPORT

planning to raise funds to expand its operations. Reports suggest that Flemingo may pursue the PE (Private Equity) option and has given the mandate to Mumbai-based investment bank Avendus Capital Pvt. Ltd for the deal. Flemingo Duty Free is a part of Flemingo International Inc — a Dubai-headquartered company that

FUND INFUSION: An inside view of Flemingo Duty Free shop.

operates predominantly in the duty free segment in Asia and Africa. In India, it has outlets at 12 airports, eight seaports as well as at the Wagah border between India and Pakistan. Flemingo International holds a 60 per cent stake in Flemingo Duty Free, with the balance held by directors Atul Ahuja and Viren Ahuja. The company is expecting to log net sales of $50 million (around `260 crore) from India for 2012.

` 5,239 crore which included Kingfisher banking arm of SBI to devise a plan to House in Mumbai, Kingfisher Villa in Goa rescue the airline. But the most and hypothecation of its helicopters. important comment on the state of affairs Besides, the airline also hypothecated the was made by Airbus Industrie COO John Kingfisher Brand which has been valued at Leahy who said, “Kingfisher is one of `4,111 crore by global consulting our good customers and Mallya has company Grant Thornton. Futher, the some issues. He is bringing a new pledged securities included ground management team which I think is very support and other equipment of `101.58 important. I think he now understands crore, computers `22.43 crore, office that he has to drop some money-losing equipment `13.39 crore, furniture and routes and focus on money-making fixtures `33.35 crore and an aircraft for ` routes.” This observation itself suggests 107.77 crore. Obviously after pledging that many of the mistakes were made by everything to run the airline, Vijay Mallya and the role Mallya is at loss to pledge played by common factors anything new. It is such a was much less on inflicting piquant situation that if serious injuries to his Mallya were to be shaken, the airline. At the time of airline would fall and so going to the press, would the bank money that Kingfisher Airlines was would go into the biggest supposed to pay at least ‘black hole’ of all times. And two instalments of its loan if more good money were to lest it was described as a be thrown after the bad, it Non-Performing Asset Minister of State for will turn out to be the biggest which would then close all Finance Namo Narain Meena gamble. That is why even other options for a new after Mallya’s airline failed to debt reacst. Kingfisher deposit service tax collected from Airlines sought `500 crores for passengers and TDS deducted on various immediate working capital needs from payments made to its employees with the banks which is yet to be accepted. tax authorities, they have accepted his Meanwhile, Mallya has reportedly assurance that “all will be well and paid by told his friends that his hunt for new the end of March 31, 2011”. Such an allfinanciers is now zeroing in on those who encompassing ‘All is well’ campaign had had benefitted from him in the past. There to be accepted by the officialdom for they are also reports that some really big-time may lose even more if Mallya loses at the Indian industrialists are thinking of taking end. stakes in his airline. According to S P Even as this drama was being enacted, Tulsian, a well-broker in Mumbai, Mallya the Kingfisher fleet shrunk, some planes will need big cash infusion in the region were grounded for lack of maintenance of `4500 crore to save his airline. Sources and repair, while others for failure to pay said if he carves out and sells 30 per cent lease charges. Notwithstanding all this, his of his brewery business, then he may be officials told the media that no flight had able to save his airline if all goes well. been cancelled for shortage of pilots. At Pending all such speculation acquiring one time he had over 700 pilots. But after some semblance of truth, Mallya has the crisis hit, planes grounded for technical stated that curtailed service of his airline and other reasons, nearly 140 pilots have will continue till March-end 2012. After left the carrier and another 50 are on the that he expects to come back with an allway out. The situation reached such a state new revamped Kingfisher as a first and that one of Kingfisher’s commanders, full service economy class carrier. To this soon after landing, announced over the end, his A 319s, 320s and 321s are being public address system in the aircraft that reconfigured. It is reported that he may “it is their sense of duty towards the guests have between eight and ten business class that is making them fly despite not being seats in his aircraft as against 28 business paid salaries for two months”. class seats in A 321s and 20 in A 320s. He With such hair-raising stories for the is looking for an ideal combination of PSU banks, its bosses have now sought business class and economy class offering control of part of the cash flows of the to maximise the yield as this model airline that is currently controlled by three should work even when the Indian of their private sector bank counterparts. economy grows at 7 per cent or the Indian A dispute is building up on the money domestic air traffic expands at less than received by the loss-making airline 15 per cent as against nearly 20 per cent through tickets sold on credit cards. The in the recent past. bank fights apart, Kingfisher Airlines has Perhaps, Mallya needs all the best now asked SBI Caps, the investment wishes for 2012! CRUISING HEIGHTS January 2012

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Waiting

Bharat Bhushan Ankur Bhatia

for

Kapil Kaul

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V P Agrawal CRUISING HEIGHTS January 2012

H.C. TIWARI

Nasim Zaidi

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he year that just went by — 2011 — can easily be described as the worst for the Indian civil aviation industry in recent memory. Should one extend its generalities to the year that has just come in, the emerging picture could be even more confusing. It is just that there are too many imponderables which need to be assumed and addressed and too many serious policy gaps which have to be filled up. Or else, it could be a rocky year again, notwithstanding every one’s wish that it should be a rocking year.

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IF 2011 WAS THE YEAR IN WHICH THE CIVIL AVIATION SECTOR BARELY MANAGED TO HOBBLE, 2012 COULD WELL TURN OUT TO BE THE RE AL ANNUS HORRIBILIS — IF THE GOVERN MENT DOES NOT INITIATE STEPS TO BREATH E LIFE INTO THE INDUSTRY, WRITES R KRISHNAN.

Srinivas Bommidala

Tom Wright

G V Sanjay Reddy

CRUISING HEIGHTS January 2012

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’PRIORITIES AND Dr Nasim Zaidi, Secretary, Ministry of Civil Aviation 2011 has been a difficult year of mixed performance for civil aviation sector. While the traffic has grown 18 per cent, it is also a fact that airlines have not been able to remain viable. It is rather contradictory that traffic has grown at a very high pace but the financial performance has not been good. It is on account of various factors such as high operating costs, intense competition, etc. So, airlines are expecting to do better in the next year. It is estimated that losses of airlines in current year will touch ` 10000 crores. And, it affects stakeholders such as airports where arrears are mounting and airlines are not clearing their arrears and they are also getting financially affected. Airlines have been seeking certain policy initiatives by the Ministry so that they can perform better in the coming times. With this backdrop of 2011, there is a range of factors that has affected their performance. One important factor is the price of ATF. The second factor is fares below operating costs. There is a need for an economic regulatory framework. Some airlines have asked for import of ATF, additional working capitals from commercial banks. There is an inter-ministerial working group looking at various policy initiatives needed for viability for these sectors.

If we are to describe India’s civil aviation industry based on domestic traffic figures, we can say “great” without batting an eyelid. However, if the proof of the pudding is in the eating, then the greatness of the Indian civil aviation industry should be reflected in the great health of the Indian carriers. But the Indian carriers, barring one, are really sick and the imponderables, therefore, need to be clearly isolated and addressed by way of fresh policy thrusts. These, we feel, will be the game changer in 2012. That obviously cannot happen when policy-makers feel that there should be a set of rules for state-owned airline and another for the privately owned when the skies they are cruising in and the people they are flying are common to all. Consider this: All the airlines in India together have debts in excess of `80,000 crore of which more than 50 per cent is on account of

The government is considering policy initiatives at various levels. Airlines should also look at rationalising fares, efficiency of fuel use, revenue enhancement, operating costs and ATF, etc. I think with these policy initiatives of the Government and internal work of airlines, the entire sector should be able to do better in 2012. One important thing is fare management. That would help in minimising the losses and I hope traffic would continue to increase in 2012. I wish all the airlines very best for the year 2012. FIVE IMPORTANT POINTS ON THE PLATE OF THE CIVIL AVIATION MINISTRY IN 2012 We want to have an appropriate economic regulatory framework that will oversee airline pricing without getting into tariff fixation. The ATF pricing mechanism and its fiscal issues will be examined and an overall competitive policy framework for civil aviation sector of the country will be developed. Second important thing is approval of the Air India turnaround plan and financial restructuring of the airline. We hope we would be able to do that by March 2012. The third important thing is utilisation of bilateral traffic rights by Indian private airlines including Air India. In that regard, we have

If we are to describe India’s civil aviation industry based on domestic traffic figures, we can say “great” without batting an eyelid. However, the truth is something else CRUISING HEIGHTS January 2012

THRUST AREAS HAVE BEEN APPROVED BY THE PM’ formed an inter-ministerial group. Also, on the agenda is identification of strategic geographical areas where we can extend bilateral rights in the interest of Indian carriers including Air India. In this regard, one important factor is development of the hub airports. Also in the pipeline is the Civil Aviation Authority Bill which would be ready by the Government by the mid-year. There are also plans to create a couple of new institutions. The first is the Independent Accident Investigation Bureau and the restructuring of the Bureau of Civil Aviation Security (BCAS) to boost aviation security. There are plans to set up the Air Navigation Services Corporation and a national aviation university. These are five or six institutions for which deadlines have been set and we hope that we would be able to achieve these targets in 2012. These are the priorities and thrust areas which have been approved by the Prime Minister. Deadlines have been set, action is underway and hopefully things will move forward. Finally, as Secretary in the Ministry of Civil Aviation, I wish, airlines, airports and various stakeholders of the industry all success.

state-owned Air India. Since it has government support both in terms of budgetary support and non-budgetary avenues and also because it is subject to as well as a product of geo-political pressures, Air India may even be able to fly without paying fuel bills for a very long time: an option that is not available to other competing carriers, however superior they may be either in terms of product offering, on-time performance, etc. The factors that may govern the course of Indian aviation in 2012 as they would in other parts of the world clearly are: (i) fuel price, (ii) fare, (iii) capacity, and (iv) grip of Air India over foreign routes. This is only an indicative list and many factors do rise at certain times that spoil the game and from which recovery takes an even longer time. In this context, we may mention the erratic behaviour of the rupee which has fallen steeply vis-a-

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vis the US dollar in the last six months sending the account books of the most efficient operator awry. The first three factors — fuel price, fares and capacity deployed — work together but the rupee factor has now given an entirely new dimension to the problem faced by airlines in India. Let us take fuel prices first. Just before the year 2011 ended, state-owned oil companies dropped as part of their 15day adjustments 1.38 per cent in the price of aviation turbine fuel (ATF). As per this revision, the ATF prices in Delhi on December 16, 2011 came down marginally from `64,622.34 per kilolitre to `63,739 per kilolitre. But this was actually not a cut as barely 15 days earlier the prices were hiked by 3.70 per cent. As is the practice in many countries, the oil marketing companies in India also revise ATF prices on the first and 15th of each month based on average international crude oil prices during the fortnight. But these periodic adjustments — either upwards or downwards — do not really serve any purpose as ATF prices in India, due to various taxes and mainly sales tax imposed by various state governments, is nearly 50-60 per cent higher than that in the competing markets of the Middle East and South East Asia. Even Vayalar Ravi who took over as Civil Aviation Minister on January 19,

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FALLING BOTTOMLINES: Ready to fly out but will they bring profits?

’AVIATION SECTOR HAS

TO BE PROTECTED’

V P Agrawal, Chairman, AAI At AAI, we have been on an extension spree to develop ‘Airport Infrastructure’ which entails all facets of aviation: Terminal (both passenger and cargo) and ATS (provisioning new state-of-the-art technology systems and defining procedures). My thrust would be to ensure completion of all tasks in hand so that I can put them into operation and derive maximum benefits. We have to look at ‘city side development’. We have identified the locations and the resources for that. I also have on the anvil to immediately make 85 airports operational and increase connectivity in the country and gradually increase the number in the next two years to 100-plus. Chennai and Kolkata are undoubtedly on top of the agenda. I am confident that Chennai would be completed in the first quarter and Kolkata in the second quarter of 2012. There is no denying the fact that the people of these regions would be delighted once the terminals are put

2011 was changed or should we say adjusted by the lead UPA partner to accommodate Rashtriya Lok Dal President Ajit Singh on December 18, 2011? Vayalar Ravi, therefore, had only 11 months at the helm and had to leave before he could come to grips with anything in the Ministry. Of course, he did one thing: complete the process of shifting the headquarters of Air India Express to Trivandrum. The move, incidentally, had been initiated by his predecessor Praful Patel who had been in the saddle of the Ministry of Civil Aviation for more

into the operation. I have also ensured that additional concessions are offered to the airline operators; especially to those who are not able to take a firm decision to start operations. With this we would be ensuring more connectivity, thus enhancing traffic: domestic and international. On the ATS scenario, most of the airports have been provided with secondary radars and we have also completed automation of ATCs at smaller airports, which adds to our capability of having optimum ATS integration. Our progress in this regard especially in the Western and Northern regions has been good. Automation equipment for the Eastern region airports has since been acquired and is in readiness as this region is the last one to be integrated. Passenger traffic has increased and it has been a thrilling journey so far. Despite the growth in traffic, airlines have been suffering losses. Airlines would have to evolve a strategy to cover up the losses may be by

CRUISING HEIGHTS January 2012

increasing rates, which would get manifested in improving bottomlines. In case that doesn’t happen, it would be disastrous for the concerned airlines, wherein the carriers would perforce have to take recourse to reducing capacity. Hence, the year 2012 would be critical. As far as the ground infrastructure is concerned, we have provided the best. It is on the part of the airlines to derive maximum benefit from it. In my opinion in 2012, the government should extend full support to this sector, as this sector plays a pivotal role in pushing the growth of the entire economy. The need to protect this sector needs no further emphasis. We want more concessions especially for the ailing airlines that are suffering from high fuel costs. We want more city airports to get activated, more repeated travel, more industrial support and more people to fly. We are now in the process to develop airports in Tier-3 cities.

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E K Bharat Bhushan, DG, Directorate General of Civil Aviation The Civil Aviation sector is growing at a very healthy pace. Domestic passenger sector is recording a growth of neary 20 per cent year over year. So far, as fares are concerned, we have to understand that it is a function of demand and supply. The DGCA is now ensuring that the fares are communicated to the public by respective airlines so that they can make an informed choice. On the infrastructure front, there are a lot of acheivements. The scheme of modernisation of 35 nonmetro airports is almost complete. We can be proud of the PPP projects at Delhi, Hyderabad and Bangalore and Mumbai is going to be another feather in the cap of Indian Civil Aviation. Kolkata and Chennai are expected to be commissioned in 2012. AAI is now working on the GPS Aided Geo Augmented Navigation (GAGAN) project which is a ` 800crore project for navigation through satellite, which is expected

than six and a half years. In one of his last answers to a question asked in Parliament, Ravi said that ATF was sold at Kuala Lumpur at `41009.33 per kilolitre, Singapore at `42,289 per kilolitre and in Dubai at `43,087 per kilolitre, respectively. Compare this with the price in India where it is as high as `64,000 per kilolitre. If Indian carriers are paying such high fuel prices for domestic travel, how can they be in business and how can the banks that have lent money expect to get their money back? ATF now accounts for nearly 50 per cent of the operation cost of Indian carriers for domestic operations. Interestingly, on ATF bought for foreign-going Indian commercial aircraft, there is no levy of sales tax but even then what Air India or Jet or for that matter other Indian carriers flying abroad pay for uplift of ATF, the price is much higher than that in all important global commercial centres and aviation hubs. In fact, Air India when it was a mainly foreign-flying airline before the merger, had made numerous complaints about the high cost of fuel. There is another problem. If an Indian carrier flies in from abroad with additional fuel in its tanks, Customs levies duties on it since it will be

to be certified by DGCA by the middle of 2013. Job opportunities for both commecial pilots and aricraft engineers are expected to grow in line with the growth in the industry. We have thoroughly verified all licences in the wake of the fake pilot cases. LACK OF ADEQUATE MANPOWER The greatest challenge before the DGCA is the lack of adequate manpower. We are regularly in touch with the UPSC to induct maximum number of people. The proposal for the Civil Aviation Authority is likely to invest the regulator with significant administrative and financial autonomy. Both CPL and ATPL examinations have been made on-line for the first time starting with the November 2011 examination. This was a long-felt need and we had to surmount many problems before it could be done. Our intention is to move to an exam-on demand model.

INCREASING NUMBERS: Passengers checking in but thatâ&#x20AC;&#x2122;s more headaches for airlines.

CRUISING HEIGHTS January 2012

'FIRST STEP IN E-GOV-

ERNANCE PROJECT TAKEN' E-GOVERNANCE PROJECT STARTED We have started implementation of an ambitious e-governance project. We have taken the first step in this regard and a national consultant has been appointed. DPR is also ready. I am targeting, provided government approvals come, that we can go for international bidding by the end of March. So far as safety is concerned, in the light of recent mishaps, we have tightened things significantly. Recommendations of enquiries are being followed up closely. Licencing of airports is nearly completed as also promulgation of minimum requirements for helipads. We have recently undertaken financial surveillance of all airlines in the light of extreme financial distress of many of them; the intention is to ensure that financial stringency does not bring about any compromise on safety.

used for domestic operations. One really does not know if the Indian government really wants the civil aviation industry to flourish and catalyse the Indian economy. What is the point in carrying 60 million domestic passengers, register a growth rate of 19 per cent and make huge losses. Is there any point in beating our chest to say India leads the world in domestic flying operations but remains mute when it comes to disastrous economic consequences of such a high growth rate?

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Coming back to Vayalar Ravi, he said states levied sales tax which ranged between 3 per cent and 35 per cent. Between December 2012 and December 2011, the ATF prices in India rose by 33.5 per cent. Air India owed more than `2300 crore in ATF dues to oil companies. What we have seen is the government paying money to Air India to shore up its equity that helps in improving its debt-equity so that it can borrow more. At the end, Air India tries to pay off the state-owned oil marketing companies before looking at the next creditor — yet another stateowned entity, Airports Authority of India. We have the strange spectacle of taxpayers’ money being frittered away to save a losing airline as part of the Government’s policy. But when it comes to genuine difficulties of private airlines, we are told they are private enterprises and deserve to close down should they suffer losses. The fact that fuel prices are determined by the government, the fact that the government decided on airport charges till the Airports Economic Regulatory Authority of India (AERA) came in, the fact that the Directorate General of Civil Aviation (DGCA) lords over air fares and, to top it all, the fact that the government will follow a dog-in-the-manger policy of neither flying its own airlines to foreign destinations nor allowing competing private Indian carriers to fly to these foreign destinations, sums up the disastrous scenario in India which we hope may change for the better partially if not fully in 2012. Why we are saying this is to impress upon our readers — or, rather caution them — about the need to appreciate the scenario that unfolded in 2011 and the one that may in 2012. This takes us to the second issue of fares. There are in all six carriers in the Indian domestic skies: Air India, Jet Airways, Kingfisher, JetLite, IndiGo, SpiceJet and GoAir. While the first three are full service carriers, the remaining four are LCC or Low Fare Carriers. Since the launch of Air Deccan as a LCC in 2003-04 and the subsequent launch of SpiceJet, GoAir and IndiGo and the conversion of Air Sahara into the low fare JetLite, the low cost carriers have garnered nearly 68 per cent of the domestic Indian air services market. The figure is all set to go higher. What the last five to six years has taught us is the price-sensitive nature of the Indian customer and the fare-sensitive nature of the Indian air traveler. If you don’t serve food on board, passengers are liable to pack rotis from home. When nearly 65 per cent of the domestic airline market is governed by low fares, how can the remaining 35 per cent remain immune to it?

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TARGET: REVIVAL OF CIVIL AVIATION The Prime Minister has approved certain thrust areas in the civil aviation sector that would serve as a priority agenda for the government. The identified thrust areas, milestones and target dates are:

Thrust Area/ Milestone: Target Examination of the pricing and tax regime governing air turbine fuel

.1.2012

Finalisation of framework of economic regulation relating to airline pricing

.5.2012

Finalisation of Turnaround Plan (TAP) and Financial Restructuring Plan (FRP) for Air India; constituting a team of experts and professional management for the turnaround period; finalisation of indicators that reflect the level of efficiency reached In the utilisation of fleet

.3.2012

Finalisation of policy to enhance the utilisation of traffic rights by Indian carriers

.2.2012

Finalisation of Civil Aviation Authority of India Bill, 2011

.5.2012

Finalisation of the rules delinking DGCA from air accident investigation

.2.2012

CRUISING HEIGHTS January 2012

Implementation of the recommendations of the Expert Group of ICAO on Civil Aviation Security

.8.2012

Examination and implementation of Route Dispersal Guidelines

.5.2012

Framing of an Economic Regulatory Policy to promote investments in airport infrastructure

.3.2012

Establishing a fullfledged Air Navigation Services Corporation

.11.2012

Examination of feasibility of issuing infrastructure bonds by AAI for generating additional resources

.2.2012

Setting up a National Aviation University

.11.2012

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A VERY, VERY TOUGH 2012 Centre for Asia Pacific Aviation (CAPA) has estimated that Indian carriers lose $25 or `1300 every time a passenger gets into a plane. According to CAPA’s Outlook 2012, airlines will lose a whopping $2.5 billion in 201112. This despite the fact that around 52 million passengers flew within the country in 201011 and the traffic grew in double digits. Commented Kapil Kaul, CAPA’s South Asia CEO to business daily, Mint, “This is the worst-performing year for the sector. These are record losses in the history of Indian aviation. Such losses have never been there even in FY08 when the fuel went up to $150 and operating environment was hard... The appetite for losing money is the highest in India. We expect a very, very tough 2012.” CAPA pointed out in its report that of all the airlines — Air India, Jet Airways, Kingfisher Airlines, SpiceJet, IndiGo, and GoAir — Air India and IndiGo’s revenues came from international operations while a major portion of the revenue for Kingfisher, SpiceJet and IndiGo was generated from local operations but which also fly abroad. “The paradox of India’s airline sector is that it serves one of the world’s fastest-growing economies and is posting doubledigit traffic growth,” CAPA mentioned. Of the $2.5 billion loss, IndiGo will take a hit of $600 million and the rest will have to be borne by Air India. Meanwhile, the Mumbaibased Citi Investment Research and Analysis released a report in December 2011, pointing out that “the key concern with the domestic (aviation) industry is the high degree of fragmentation, which renders it a challenge to raise fares (and yields) in the best of times — in a challenging environment, the impact of high fuel prices/depreciating currency is exacerbated by the carriers’ inability to raise fares sufficiently to offset cost pressures”.

All the airlines in India together have debts in excess of `80,000 crore of which more than 50 per cent is on account of state-owned Air India

When Vijay Mallya launched his Kingfisher First and Kingfisher Class which had excellent business and economy class offerings, the question often asked was: will he be able to sustain it? The fact that he could not and has not is now evident for everyone to see. Irrespective of the clear writing on the wall, Mallya feels it will be better to fly only Kingfisher First and Kingfisher Class and is all set to wind up Kingfisher Red, which was his version of LCC. He has blamed this low fare version for his problems. Perhaps, he has misread the story. Notwithstanding his interpretation, the series of cancellation and withdrawal of capacity ended up with his market share dropping sharply to just 14 per cent or the fifth place before GoAir (see Traffic Data on page 10). Obviously, this drop resulted in gains for Jet Airways including JetLite, IndiGo — which moved to the second place — Air India and SpiceJet. This has also seen fares rising sharply in the second half of November and December 2011. Perhaps, the second half of December 2011 appeared to be the first time in

’NEW ‘ATTRACTIVE’ Srinivas Bommidala, Chairman - Airports, GMR Group GMR AIRPORTS’ AGENDA FOR 2012 Foremost our efforts are oriented towards turning our airport portfolio profitable while ensuring that all GMR airports achieve and maintain a rank among the top three airports in the world with regard to operational excellence. Developing the new terminal for INIA, Male, will be a key focus area. We are committed to developing an airport that is worthy of the country of Male and complements the natural beauty of the island country. We hope that the efforts that we are making will be visible to all by 2012. GMR AIRPORTS’ ASSESSMENT OF AVIATION SECTOR The developed world will continue to struggle with traffic growth especially under recessionary worries. This will impact international traffic growth at airports in emerging economies favourably, since more airlines will be keen to

CRUISING HEIGHTS January 2012

OPPORTUNITIES WILL OPEN UP IN S-E ASIA AND AFRICA’ start routes to emerging economies. The Indian aviation sector may feel the pinch on account of the prevailing macro environment in the short term. However, the greater challenge for the domestic aviation sector emerges from the weak financial situation of some airlines which will pose a supply constraint. Of course, other airlines will likely benefit from this as their load factors will be higher. PREDICTIONS FOR 2012 Air India should witness stabilisation of its operation. Near 0 per cent traffic growth in key parts of US and EU. Possible consolidation among airlines in India. Middle East Carriers (Qatar, Emirates, Etihad) will extend their dominance to developed economies through higher fleet allocation and new routes. New ‘attractive’ opportunities will open up in S-E Asia and Africa for business development.

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’AIRPORT INFRASTRUCG V Sanjay Reddy, Managing Director, Mumbai International Airport Pvt. Ltd In the last five years since MIAL took over operations at CSIA, it has been our concerted effort to transform CSIA into one of the world’s best airports that consistently delights customers and becomes the pride of Mumbai. The new integrated passenger terminal which is currently underway, will significantly enhance the capacity of CSIA by catering to about 40 million passengers annually. Going forward, we look towards the completion of the integrated terminal that is expected to be unique in design and concept, passenger-friendly and raise the CSIA travel experience to a new high. In the meantime, in the coming year we at MIAL shall continue to significantly enhance passenger comfort and convenience. This includes upgrading our current facilities on an ongoing basis and further finetuning our offerings in areas such as duty free, food and beverage and brand retail. The Air Traffic Control Tower many months when the fares seemed to be slightly above the cost of operations. That was because Kingfisher shrunk capacity which in turn helped to restore some sort of balance in the market. Notwithstanding all this, the fear in the aviation industry is that even the third quarter of fiscal 2011-12 or the fourth quarter of 2011 (October-December 2011) may see all the carriers except IndiGo still making losses. In the earlier quarter, the carriers suffered because Air India dropped fares below cost forcing them all to follow suit. So, will this play out in 2012 as well? Will Kingfisher be able to use its 66 aircraft or scale it down to 45 — mainly A 320 family aircraft? We do not know. But if Kingfisher restores most of its trunk routes and satisfies other requirements, there is every possibility that fares could well go below cost again because the competition will force the carriers to resort to low fares again. After all, why should DGCA be surprised by the fact that in 2011 nearly 247 slots remained unused forcing it to reallot? However, what or what not should Kingfisher do will not determine the scenario in 2012. Yet another imponderable which will be a deciding factor in 2012 is:

which is currently in the process of being completed will sport a distinctive and eye-catching design from a visual perspective. It will be completed by the end of 2012. Significant airside developments will also be made to upgrade the runway system at CSIA. It will further enhance the efficiency of flight operations at CSIA and eventually support the movement of 40 million passengers per annum. Your assessment on how the aviation sector will fare in 2012 Industry sources estimate that the aviation sector in India is expected to cross the 450 million mark for domestic passengers by 2020. A report released by the International Air Transport Association (IATA) also reported that the expansion of India’s domestic aviation market has been the strongest in the world — tripling in the past five years. The Government’s open-sky policy, announced earlier this year, attracted many foreign players interested in entering the market, leading

IMPROVING INFRASTRUCTURE: Chennai Airport is in the process of getting a makeover

CRUISING HEIGHTS January 2012

TURE SHALL CONTINUE TO BE THE HIGHLIGHT OF 2012’ to a substantial increase in the number of aircraft. However, currently the aviation sector is facing a crisis due to escalating prices of aviation turbine fuel (ATF), and nearly all airlines with the exception of IndiGo and SpiceJet, have incurred heavy losses. The significant rise in passenger traffic at all major airports in India has necessitated an urgent need for liberal government policies that would be in the best interest of the travelling public. Airport infrastructure shall continue to be the highlight of 2012, considering many airports such as Kolkata, Chennai and others are also in the process of being modernised and redeveloped. A majority of $30 billion in the next 15 years will mainly be concentrated on airport infrastructure development and manpower training & development. Airport infrastructure development in particular, is a capitalintensive sector that requires proper planning with a vision for the next 20 years and the combined resources of the public and the private sectors. capacity induction and deployment. Perhaps, one may counter whether this is an imponderable at all when capacity is something decided in advance. But if the market tanks then even the best airline may delay taking delivery or go in for leasing those aircraft as Jet Airways did with its four Boeing 777-300 ERs to Turkish Airlines, Thai and a West Asian carrier. The question is: can the airline do the same with narrow bodies which dot the domestic skies? The answer to this question will depend on how bad the

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Kapil Kaul, CEO, South Asia, CAPA CAPA will continue to further strengthen its research and advisory services in this region. CAPA will launch the first phase of CAPA AeroPark at Bengaluru by Q1 of FY 12-13. We are also planning to launch a boutique PE fund for the air transport sector in India by end of FY 1213. Uncertainty to continue and structural issues to get stronger. I don’t have any positive expectations for the situation can get in the coming year and how quickly the government comes out with a policy prescription that does not differentiate between state-owned and privately-owned carriers. For instance, the year 2011 must have ended with a total carriage of 60 million domestic passengers. At the time of going to the press, the figures released by DGCA showed that during January-November 2011, Indian carriers carried a total of 55 million domestic passengers which was 17.6 per cent more than the same period of 2010. During November 2011 the domestic traffic was 5.1 million and usually December is a peak time and has never carried less than earlier months. If it is the same, 2011 could well see the carriage of 60 million domestic passengers. Assuming that state-owned Air India had a market share of 17 per cent (it should actually be less), then nearly 83 per cent of the domestic traffic was carried by private carriers. So, should the government apply one yardstick for its own carrier and a totally different one for private carriers when both ferried passengers without any distinction? It is well-known that Jet Airways may bring in at least seven more Boeing 737800s while IndiGo could induct at least 10 more A 320s. Seven planes have been leased by SpiceJet while an unspecified number — may be four — by GoAir. So, if we expect at least 28 more aircraft or at least two aircraft in each month of 2012, there will be mayhem in the skies with the fuel prices going up and fares falling. The market can survive only if the DGCA allows the minima in fares to rise above costs. But the problem is that each carrier has different costs. IndiGo’s cost is, perhaps, the lowest or else it would not be making profits when 85 per cent of the operating cost is common to all airlines — be they full service or low cost. The determining factor in 2012 will also be capacity deployment. What we

’AIR INDIA’S CRISIS WILL

mean is: even if Kingfisher shrinks its capacity from 66 to 49, the loss will be more than made up by others inducting more capacity. So, at the end of it all there will be more aircraft available for the domestic market and at the present fare structure, it will surely be a recipe for complete financial disaster. After all, it was not for nothing that other than IndiGo all domestic carriers made losses in the first three quarters of 2011-12 and may well do in the first quarter of calendar year 2012 as well. What can the way out be? Perhaps, allowing private carriers to deploy their narrow bodies — be they A 320 or B 737800 — to fly on foreign routes mainly South East Asia and the Gulf could be the answer. It may be mentioned that while Spice sought approval to fly to CIS countries, IndiGo wanted to fly more to Gulf and South East Asia destinations. Neither got the permission to fly. Jet Airways has been waiting to fly to some European destinations and even this has not been agreed to by an over-cautious Ministry of Civil Aviation as it thinks this would

TURN DECISIVE IN FY 12-13’ sector in FY 12-13. Government-run PSUs like Air India and AAI will continue to operate inefficiently. Air India’s crisis will turn decisive in FY 12-13. AAI’s financial distress will become another major issue for the government. Expect IndiGo to continue its exceptional performance although the negative operating environment will hurt its financials severely as well.

Ankur Bhatia, Executive Director, Bird Group Chairman, CII’s Core Committee on Growth Potential of Civil Aviation & Airports One of the fastest-growing aviation industries in the world, with a compound annual growth rate of 18 per cent, Indian aviation industry ranks ninth in the global civil aviation market. Looking at its growth over the past few years, the Indian aviation industry has emerged as a huge market with a massive passenger movement in both domestic and international sectors. However, looking at the scenario in 2011, the Indian aviation industry was faced by some of the prominent challenges that hindered its projected growth. In spite of the tremendous growth in the past and the huge potential, the rising operating cost has completely jeopardised the economies of some airlines today. Challenges like insufficient infrastructure, shortage of trained and skilled manpower, inadequate regional connectivity and restricted FDI of 49 per cent with no investment of foreign airlines in Indian carriers have limited the resources and lead to an investment gap.

CRUISING HEIGHTS January 2012

’RISING OPERATING

COST HAS JEOPARDISED ECONOMIES OF AIRLINES’

Further the rising ATF cost has been putting more pressure on the airlines, resulting in increase in airfares. All these factors combined, lead to the losses mounted by the airlines in India. We are hoping that in 2012, the government will look at addressing some of the key issues that cripple the industry today. The recommended approach to curb these existing challenges is firstly to include ATF as ‘declared goods’. Rationalisation of ATF prices for domestic operations will result in huge savings for the industry. A liberal view as far as FDI in aviation sector is concerned will help enhance the growth prospects by instilling more confidence by foreign investors in domestic carriers. Further, a new outlook for the route dispersal guidelines is also pivotal in order to augment the sector’s growth. Above all improving on the infrastructural constraints will further bring down the high aviation cost and help in the overall growth of the industry.

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Tom Wright, General Manager, South Asia, Middle East & Africa, Cathay Pacific Airways Ltd. The world is facing economic uncertainty and this is felt in the world aviation business. India is still growing economically but at a slower rate than before. Cargo is noticing this impact and its coming through on the passenger side as well. 2010 was an outstanding year and 2011 started off well but has steadily tailed off. We can see also see what the high cost of fuel is doing and we are concerned the price of jet fuel doesn’t seem to have a correlation to world economic activity. IATA has downgraded its central forecast for 2012, for airline profits from $4.9 billion to $3.5 billion for a net margin of 0.6 per cent. Global GDP growth forecasts for 2012 have been revised downwards to 2.1 per cent. Historically the airline industry has seen profit turn into loss whenever global GDP growth falls below 2 severely damage the prospects of Air India. Even as one tries to sort out these issues, the rupee has declined sharply against the US dollar. In the last one year, it has depreciated by more than 16 per cent considering that the airline business is largely dollar-denominated in terms of aircraft purchase or lease, consumables and in case it is foreign-going then it is even more painful. For every dollar, the airlines will have to earn more rupees in India where earnings are shrinking because of fares being below cost and over capacity and unbridled rising fuel prices and irrational airport charges. It was indeed useful when the Prime Minister personally met the leaders of Indian

’2012 WILL BE A VERY

CHALLENGING YEAR’

per cent. This is driving the downgrade in the 2012 outlook. Looking ahead, we are likely to face a very challenging year in 2012. We are not blind to the challenges ahead and would continue to take a cautious and careful approach to the business. Aviation is a very volatile business and it seems that 2012 is going to prove the accuracy of this sentiment once again. We will need to ride this business cycle as we have ridden the others. It just goes to show that you need to manage your business well in the good times so you can handle the downturns. We’re pleased that our current financial strength allows us to also continue our investment in our industry-leading products as well. I know that the Cathay team will be going all out in 2012 to show our customers how fantastic the new Cathay Pacific

What or what not should Kingfisher do will not determine the scenario in 2012. A deciding factor in 2012 is: capacity induction and deployment RISING COSTS: ATF prices push operating costs of airlines to precarious levels.

CRUISING HEIGHTS January 2012

is and to give them a great reason to choose to fly with us whenever they need to travel. We will continue to roll out our new business class, new lounges in Hong Kong and around the network and Premium Economy will make its appearance from early 2012. We will also continue in investing in new systems and processes that enhance our offerings and make us more efficient such as our new passenger reservations system known as PSS. We’ll also be adding more fuelefficient aircraft and continue to grow our network. Above all else, the Cathay team continues to be second to none and I know that we will all work together with dedication and a winning spirit to overcome the many hurdles 2012 is sure to place in our path. While remaining flexible and mentally tough we will also keep smiling. carriers and heard them out sometime at the end of November 2011. That meeting resulted in the formation of a committee of secretaries to look into the problems of the Indian aviation industry, mainly relating to fuel prices, bank loans, irrational way of Air India holding on to foreign routes without using them and cost of operations including airport charges. The committee has time till March 2012 to make its recommendations though it could suggest certain interim measures. Meanwhile, Civil Aviation Secretary Dr Nasim Zaidi announced that the government was working on a new civil aviation policy that would be applicable for the next 10 years. It will focus on attracting higher private investment in this ailing sector and improve the cost viability for stakeholders. He said the Ministry was also working on an economic regulatory framework to monitor air fares that would look at the legality of changes in fares by airlines and not work to fix exact fares. The third most important we think the government should do is allow at least 26 per cent Foreign Direct Investment (FDI) from foreign carriers without being subject to pressure from airlines. What is not explicable is that UPA-II government was all ready to stake its survival for FDI in retail but was always shy about allowing FDI by foreign carriers in domestic airlines. If the government allows FDI by foreign carriers, it can change the very way the aviation business is conducted in India.

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Mumbai fliers: IT-savvy

HEMANT RAWAT

umbai airport has taken the first place for passenger self-service check-ins, according to the 2011 SITA/Air Transport World Passenger Self-Service Survey (see following pages for detailed story). Self-service check-ins by passengers travelling through Mumbai airport have gone up from 36 per cent to 65 per cent over the past year. A total of 98 per cent of Mumbai survey respondents had either a mobile phone (56 per cent) or a smart-phone (42 per cent). The survey was carried out at the world’s leading airport hubs, which included Abu Dhabi International Airport, Beijing International Airport, Frankfurt International Airport, São Paulo Guarulhos International Airport and Mumbai International Airport. It is estimated that 283.5 million passengers pass through these six airports. Said Vikram Sethi, Vice-President and Head (Terminal Operations), Mumbai airport: “There will be a further increase in offsite checkin/self check-in.”

GENIUS AT ITS BEST: Models depicting smart airport solutions by the IBM Airport Solutions lab.

Building the base for smarter airports

Continued on Page 46

The establishment of this lab demonstrates IBM’s continued commitment to offer world-class technologies to airports and airlines in the entire region. These solutions, along with IBM’s proven industry knowledge and implementation capabilities, will help airports get unmatched value in their efforts to enhance operational efficiency and customer services. P. Indira Rani, Vice President, Distribution Sector, IBM India/South Asia

CRUISING HEIGHTS January 2012

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SMART MOVES IBM's Dan O' Connell on future airports.

AIRREVIEW.COM

business growth. The Airport Solutions Lab hosts technical and subject matter experts who will help customers witness and understand the various airport solutions that are offered by IBM. The lab will enable customers to have access to solutions on a wide range of areas such as energy management, asset management, space management, airport operations management and security management, among others. The international IT giant is a leading provider of airport systems and services and has been working closely with airports in India and across the world. In fact, IBM has helped a number of the country’s airports build sophisticated IT environments, improve public services

BUSINESS LINE

BM recently launched its Airport Solutions Lab in New Delhi. The first-of-its-kind centre in the Asia Pacific region and co-located with IBM’s Research and India Industry Solutions labs, the Airport Solutions Lab will showcase novel technology innovations and solutions for airports and airlines. The launching of the lab is significant: the demand for air travel continues to expand globally, with an estimated 7 billion passenger trips by 2020, from 2.2 billion trips in 2009. Along with the rising capacity demands, airports are also facing challenges in providing enhanced customer services, reducing costs, and increasing revenue. This is where IBM has stepped in to provide airports with smarter solutions to revitalise their processes and ensure better

48 ¨¨

WRONG TWEETS A look at how social media can go awry.

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MOBILE MANTRA Nikhil Ganju on the coming mobile revolution.

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“The airport experience Spearheading the sales and marketing for IBM’s Distribution Sector serving the Travel and Transportation, Consumer Products and retail industries for eight GMU geographies (Latin America, Middle East and Africa, Central and Eastern Europe, South Korea and Greater China Group, India, South Asia, ASEAN, Australia and New Zealand), Dan O’Connell, Vice President - Distribution Sector, Growth Marketing Unit, IBM, believes that since airports are not only turning into transportation hubs but also centres of commerce, they must go for new technologies that will ultimately make travel easier and a pleasurable experience. He spoke to Tirthankar Ghosh on the sidelines of the launch of IBM’s Airport Solutions Lab.

HEMANT RAWAT

You spoke of IBM doing analytics and Does all this data help airports become we anticipate bad weather, so travelers databases of people using airports in smarter? may want to catch an earlier flight. growing markets. What is the data used Sure, yes. The airport itself will start to Usually, we get that later. So the airport’s for? pattern its volume of people movement. staffing of security personnel, the An airline, for instance, is looking for that There are certain times, depending on the baggage handling — all that is functional one extra seat that it can sell or the place and the arrangements (that the — will fall into place with all the data. upgrade it can sell from Economy to airport will change its pattern of staffing). So the more I can understand what the Business. So, it would like to know how On a normal travel day, weather is airlines are doing, what their intentions frequent the travellers are: when was the normal, everything else is normal and the are, what their patterns are, what are the last time they went, were they flying on conditions are such that people will fly. disruptive elements… It’s all about the business, how many bags they took, were So I have to staff differently. I may need consumer. they flying with family members? Any to make adjustments to the way I manage information I can gather and store and my systems in the airport and my support How do you see the growing markets in then retrieve later on to compare. The systems. I can also bring in weather terms of airport and passenger solutions? more information I know — that will be information to anticipate the ways and Australia is a more mature market and something I can offer that another airline maybe send out in advance to people that it’s a travelling nation specially business may not offer — (will help me) — travelers find themselves get that person to either ‘fly with me’ travelling out of Australia a lot. So or ‘fly sooner’ or ‘fly more there is more of a tourist season in frequently’. the country as far as travelling If it is an airport we are talking goes. about, it might be information that is In the developing countries effectively used to allow a smoother where growth is a process — India check-in process. So, I know this and China are examples — we person travels every week or I know have a lot of people who have not this is a business traveler who is not a travelled before, certainly not on security threat. So the more an airplane. So, we would information I can gather on a person consider this a growth market and the more intelligence I can because of the sheer volume of handle about treating them, perhaps, people coming online. So, the differently or in a positive way. more information you can gather We try to capture as much data as and serve that growing market… we can. I mean this is not unique to Generally, it’s about the price and the airline industry. Retail is doing not so much about the features. it…The more information we can They are not worried so much gather on the customer, the more we about the features or the meals can customise analytics. (We) Take served on board. They just want to one idea, compare it historically…and get from Point A to Point B as fast compare it to the industry averages as they can. So again, knowing and all other aspects of the business who they are and tracking them — and then turn it back to the consumer. our solutions are built around The consumer needs to agree that it that... has a level of access — some people This is all very dynamic. We want it, some people don’t. But if I (as gather that data and then make a consumer) agree to get information recommendations to the airlines or about offerings on my PDA or to my the airport on how to treat that email account that might be interesting person uniquely, in a different information which we need to look way. You can (we advise the into as we go into the future. We need airport/airline) do it more often to AGILE MIND: A model of mobile check-in for passengers and their baggage at IBM Airport Solutions Lab. to see more and more of that. upgrade the regular experience.

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should be a lasting one” Would these solutions be totally different from one emerging market to another? No. I think it’s a different equation and how you apply it. On the surface they would look different because you are dealing with totally different type of travellers but behind it all is the same technology. It’s just how you configure it and how you interact with it. You have been working on smarter airports. What would be your definition of a smarter airport? Typically, that is what we call small consumer devices: kiosks in place of people. So, when you go (to an airport), you are going to have a travel card with an airline or with some identification device or some type of card on your bag which has the intelligence to — when you drag it up to a kiosk, it knows what it is — sense what it is, the packages you are carrying or the luggage you are carrying. That’s the most obvious example of what smart will look like. When you talk about the physical airport itself there are some sensing devices. It is simple things like when you go to the airport that keeps turning the lights off in spaces which are not being used. These are simple sensing devices of motion — these sense that there is nobody there and it has the ability to automatically shut the fans and lights off to save electricity. That’s smarter technology.

Do you think that is because these airports are newer? I think it is. I think there is a progressive attitude in most of the ASEAN nations, Korea, Australia and China. You see it now in India with the new airports designs. These are magnificent edifices. They are beautiful to see, they are beautiful to experience and with it the systems, the handling systems for people, baggage and so forth are much more sophisticated and well thought out. So in Asia, partly because it’s newer and also there is the idea, ‘We want to grow’ and ‘We want to attract people’ and the experience of the airport is a lasting experience that people have and it should be a positive thing and should not be a deterrent. When I look at it from a commerce perspective, we are looking at airports as a means to attract commerce. Your idea of a smart passenger… Ultimately, the smart passenger will. I must mention that in Qantas domestic terminal you can buy Qantas tags but that is all very Qantas-specific. As soon as you go international you can’t do that and anywhere outside of Qantas you can’t do that obviously. Ultimately over time, I think you’ll see a standardisation of bag tags across all the systems around the world. Now some will come online quicker, you know the more developing countries will come on quicker than others. The smart traveller will have a PDA or a handheld device of some kind with no paper involved and they’ll have bag tags and devices for users. So you walk into the airport and you walk by with the devices. You can wave your PDA or some form of a handheld device, you can drag your carry-on luggage… and ultimately you will not have any delay in pace. I think the organisation of the tags to put on your bags could happen in a couple of years. There is going to be a lot of fast-forwards in technology. CRUISING HEIGHTS January 2012

HEMANT RAWAT

When do you think we will be able to have such technology in India? All these technologies are available. In some form they are implemented in airports around the world. As you can see that some airports are more efficient like Changi Airport in Singapore is very advanced in technology. It’s really more about upgrading and, of course, there is the cost factor. I travel around the growth markets — and that is not North America or Western Europe — and I find the airport experience all through Asia is generally much better than that in the best airports they have in the United States. The architecture (of the airports) — it’s very open, airy, lots of sunlight coming in. The way they (the airports) handle bags, the way they handle people, the way they handle queues…I check that all the time — all the time I’m going

through Asia and I have never lost a bag. The whole travel experience in Asia…the system that gets you down there may be slow but once you are in the airport and most airports like Kuala Lumpur, all through China…(the experience is good).

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Now, a journal to record your trips

rip Journal from iQapps, Google award-winning travel app that lets users track, record, document, and share their travels with friends and family, is now available as a free download and features an updated version (7.1) to take advantage of iOS 5’s new capabilities. Designed for iPhone, Android, Symbian, Bada and Facebook, Trip Journal supports optional live tracking that lets users track routes and mark map locations, even when the app is closed. According to Valentin Vesa of iQapps, the makers of Trip Journal, “The update further solidifies Trip Journal’s status as the ultimate travel app.” It is functional and feature-filled and allows users to easily create a rich media travelogue of their travel experiences, record their trip with GPS tracking, add their favourite places and destinations, and do so much more. According to the San Francisco Chronicle, in 2009, Google named Trip Journal the top application for innovative concept and design, and awarded it the grand prize of $100,000. Since then, the app has been downloaded thousands of times across the world, and has earned praise and accolades from users, travel experts, and digital media enthusiasts alike.

1.BP.BLOGSPOT.COM

HEMANT RAWAT

Continued from Page 43 common view of the situation and through greater customer insights, are assisted in taking informed deciand enhance operational efficiency. sions. IOC ensures collaboration Among the solutions on offer at across various centres, provides an the lab are: integrated view of the entire operaAirport Operations Management tion, and helps take preventive action Solution: Resource management systo any potential issues. IBM Intelligent Building tem, which helps manage the realManagement System (IIBMS): time flight and airport capacity manConsidering airports are sharply agement function, is at the heart of focussed on reducing operational airport operations. IBM has piocosts and enhancing their efficienneered to set up the state-of-the-art cy, energy and space management multi-airport operations management areas, which can provide substansolution, which helps clients who tial leverage. IIBMS uses sophistiown or manage multiple airports to cated analytics on data derived monitor and manage multiple airports from building management systems from a single location. Smart Airport Enabler: Airports and helps make airport operations have substantial complexity from a SMART AND SHARP: A display at the Intelligent Operation smarter. Centre (IOC) in the IBM Airport Solutions Lab. process and integration perspective. “The establishment of this lab Intelligent Operations Centre (IOC): The absence of integration would make it demonstrates IBM’s continued commitThe need for a coordinated action in airchallenging for airports to handle air trafment to offer world-class technologies to ports is of utmost importance for safety fic effectively during peak hours. IBM’s airports and airlines in the entire region. and operational efficiency. Airports tend to solution leverages Service-Oriented These solutions, along with IBM’s have multiple operation control centres Architecture, along with WebSphere inteproven-industry knowledge and impleand it is a challenging task to ensure that gration stacks and provides airport-specifmentation capabilities, will help airports all the users in these centres have a ic content for greater efficiency. get unmatched value in their efforts.”

Wrong tweet, mate!

recent exercise by the PR team of Australian airline Qantas has demonstrated how powerful social media can be. It all began when Qantas decided to have a competition on Twitter. The aim was to promote the luxury of the carrier’s first class. The prize was just a pair of pyjamas and an amenity kit given to first-class passengers and not a first-class ticket or tickets for two. Soon after the competition was announced, the tweets started. Entrants had to tweet their “dream luxury in-flight experience” under

CRUISING HEIGHTS January 2012

the hashtag qantas luxury. In around 20 hours, and at an astounding pace of 25 tweets per second, the Qantas PR team was flooded with negative tweets, posts and worse still, dirty insults. Qantas’ passengers — and according to reports, even some employees — let loose a barrage of complaints ranging from lost bags, bad meals, missed connections, bad service and even the CEO’s pay hike. When the tweets went viral, stories started appearing in newspapers like The Age and The Australian. The timing of the competition was wrong and Qantas realised how powerful the social media could be.

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Airlines in fast forward IT mode

Moveo, IBS tie-up to power airport solution biz

oveo Systems, a Bangalore based start-up developing highly innovative next generation human interaction solutions for airports and enterprises, recently announced that it has completed the merger of its business with IBS Software Services. IBS is a leading global provider of next generation IT solutions to the Travel, Transportation and Logistics industries and operates from ten global locations across the Americas, Europe, Asia-Pacific and Middle East and Africa. “Moveo Systems brings to the table considerable proficiency in enterprise mobility. Ability to deliver information anywhere, any time through mobile application is of critical importance for a complete travel experience. With this integration, we have significantly augmented our capabilities to offer cutting edge solutions.” said VK Mathews, Executive Chairman, The IBS Group.

selling.” “Airlines continue to increase the proportion of tickets sold via their directly controlled distribution channels and I predict that 2011 will see them overtake indirect distribution for the first time. If you extrapolate the trend, by 2014 58 percent of tickets will be sold directly. This channel shift will reduce the share sold through GDSs and online travel agents.” Passenger mobile service offerings from airlines are set to explode in the next three years with 91 per cent of responding airlines planning to invest in mobile device-based services for passengers over the next three years. The priority is on mobile services which support check-in, flight status notifications, electronic boarding passes and travel distribution. Airlines anticipate that by 2014, 15 per cent of all passengers will use mobile phones to check-in. 85 per cent of airlines either already sell (33 per cent) or plan to sell (52 per cent) tickets through mobile phones by 2014, and most plan to extend mobile functionality to include ticket modification/upgrades and sales of onboard services.

Love a destination! Write about it

ntelaplay has set in motion www.intelaplay.com, an immersive and intuitive online travel website, providing a differentiated experience for travellers and advertisers alike. The online platform offers an educational, easy to use, yet richly contextual experience. Developed by Junction Creative Solutions, the website is designed and aligned with the mission of Intelaplay, presenting comprehensive resources in an easy-to-digest experience for its users. According to the website www.sys-con.com, the Intelaplay concept is based around galleries of high definition, up-to-date photos and descriptions of hotels and attractions written by local and knowledgeable sources. This differentiated and immersive experience generates a highly realistic image of the destination to aid the user in choosing an itinerary. Listings are categorised as “Places to Stay” and “Places to Play”, simplifying and organising the planning process to drive maximum

CRUISING HEIGHTS January 2012

INTELAPLAY.COM

irlines carrying 57 per cent of the world’s passenger traffic have reported an increase in IT and Telecommunications (IT&T) expenditure and are ready to spend big on passenger mobile services and other transformative technology, according to results published in the 13th annual SITA/Airline Business Airline IT Trends Survey. Overall, operational IT&T spending has remained stable at 1.8 per cent but this represents a significant increase in actual expenditure following a return to profitability in the last 12 months after two years of recession. Compared with

2010, 50 per cent of airlines have reported an increase in total IT&T spend while 32 per cent have reported no change and 18 per cent have stated that there has been a decrease. Despite concerns about market conditions and fuel prices, the outlook for 2012 is also positive with 54 per cent of survey respondents expecting budgets to increase, and 29 per cent expecting them to remain the same. 91 per cent of airlines plan to invest in passenger mobile services and 93 per cent are prioritising virtualization technology. Launching the 2011 Airline IT Trends Survey, Paul Coby, Chair of the Board, SITA, said: “Airline IT departments are delivering major transformational initiatives using advanced applications for areas like revenue management and optimising load factors. Virtualisation and cloud computing are going to be critical for both IT efficiency and managing cost. 93 per cent of this year’s survey respondents plan to implement virtualisation technologies. Survey respondents are also telling us of their success in pushing more traffic and sales through their websites with corresponding improvements in ancillary sales and up-

value for users on the site. Detailed information on dining, culture, events, and more based on location offer local residents an incentive to utilise the site. The website also launched Intelaplay’s campaign, A New Way to Stay and Play that allows users and advertisers to get an in-depth overview of the benefits of Intelaplay. For travellers, the site offers an enhanced user-experience making for a more streamlined travel planning experience. For advertisers, the site offers an opportunity to reach target consumers based on user preferences resulting in a higher return on investment.

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Inside an airport, according to Google Maps

GANJU MANTRA

ndia is on the cusp of a mobile t e l e p h o n y revolution. That is what Nikhil Ganju, Country Manager, TripAdvisor India, believes in. In a recent interview with financial daily Mint, Ganju predicted that Indians would follow the global trend: “Mobile telephony is going to be the next wave for us. Globally, TripAdvisor receives more than 10 million unique monthly visitors on mobile and tablet devices. We expect to see the trend mirrored in India in the near future, with an estimated 30 million smartphone users in India in 2012,” he said. TripAdvisor’s India head also talked about the power of social media in moulding opinions — especially about hotels. “We recognize the increased use and importance of social media and, hence, we have integrated Facebook users with TripAdvisor, using Facebook instant personalisation that instantly personalises the site for each person who visits when logged in to Facebook, surfacing trusted reviews from friends, most popular destinations among friends, and an interactive social map.” The integration would be the “the next step in making travel planning even more fun, relevant and social for travellers. First, on the homepage, travellers will see their friends’ travel maps, highlighting all the places they’ve been to, their friends’ most-recent travel activities, and their friends’ most-popular travel destinations. Earlier, you used to rely on the wisdom of the crowds, but now by integrating Facebook, this is supplemented by the wisdom of your friends,” said Ganju. TripAdvisor’s hotel reviews are widely read by would-be customers and the India country manager pointed out that all of them were genuine. “We have three primary methods to manage the legitimacy of reviews. Reviews are systematically screened by our proprietary site tools. Additionally, our large and passionate community of more than 50 million monthly visitors helps report suspicious content. An international team of quality assurance specialists investigate suspicious reviews that are flagged by our proprietary tools.”

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emember Microsoft’s Bing search engine that we informed you about sometime ago. Bing’s maps launched with support for 42 national airports included locations for restaurants, ATMs, ticket counters, restrooms, and so on. That spurred Google Maps to start its maps of airports. Now, Google’s new maps actually include both airports and shopping malls, and will probably be expanded to other shopping centres. Stores in the US like Macy’s and IKEA are already online and Google is asking

stores to do the work for them by submitting floor plans. The service is meant to become a platform for Google Wallet and Google Places, with the floorplans tying together the “here’s where it is” aspect of Places with the “here’s how you pay for it” aspect of Wallet. Google’s map expansions are only available on Android-powered tablets and phones right now. The company wants to deepen people’s attachment to their Android phones by allowing Google to pitch location-based ads.

Wenzani for all reasons and seasons

et another travel app - but this one is from Lonely Planet. Wenzani, the free app for the iPhone and iPod touch - is now available in public beta from the App store. Named after a Zulu greeting that means “what are you doing?” Wenzani brings recommendations from Lonely Planet and other top travel publishers along with local experts, and users’ social networks. According to the San Francisco Chronicle, Wenzani is designed for those looking for trustworthy, high-quality recommendations in categories which includes restaurants, nightlife, shopping, hotels, cultural activities, kid friendly and live events. It contains three key features like top expert recommendations, customised algorithm and social recommendations. In the first feature, Wenzani brings content from Lonely Planet, Frommer’s Travel and DK Eyewitness, the top three guidebook publishers in the US, and traditional competitors, along with BBC Travel, Time Out, and Hearst. In addition, Wenzani highlights local taste makers, for example Lonely Planet’s CRUISING HEIGHTS January 2012

NYC-based Travel Editor Robert Reid and other lifestyle bloggers. Wenzani’s technology presents the content according to context and relevancy, taking into consideration the user’s location and their social network, so that the information is constantly updated while on the go. Soon, Wenzani will filter by other factors such as weather, time of day, and whether the user is a local or visitor, so it becomes even more tailored and relevant to the users’ needs in real time. Integrated with the curated expert recommendations is the social media function, which allows users to connect with their friends and other travellers in order to share their own personal experiences and recommendations. Users can browse their friends’ entries and recommendations, create their own listing to add into the guide, or ask a question to the community to get immediate answers pushed onto their mobile device. Wenzani also has a Facebook web app to allow users to integrate recommendations from Facebook into the guide.

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P51

CLASH OF THE TITANS

SPECIAL SECURITY

In the backdrop of Indian Navy tender, NH 90 takes on Sikorsky S-70B.

011 was undoubtedly the year of the chopper. Operation Neptune’s Spear or the Abbottabad raid to eliminate Osama bin Laden seared the images of the tail rotor of the American stealth chopper on the minds of people around the globe. It firmly established the status of the chopper as the go-to tool for the execution of surgical special force operations. The world was in awe of this silent and deadly new machine that could deliver highly-trained operatives, and possibly ordnance, to strike with impunity at America’s enemies anywhere on globe. That the technology that powered the chopper had not matured enough was evident by the stealth chopper’s crash, but that did not take away the role of the chopper in the success of the operation. For weeks after the attack, speculation was rife in the media, on the internet, TV and in print, about the origins of the chopper and the technology involved in making it super silent.

The speed demons On the technology front, Eurocopter and Sikorsky engaged in the battle of the X’s with the X2 and the X3, respectively. The gloves were off to win the title of the world’s fastest helicopter. Eurocopter unveiled its fast chopper called the X3 which flew at a speed of 266 miles per

RAF.MOD.UK

P50

From the US SEAL team’s stealth chopper to the empowering set of rules for pilots by the DGCA in India, we take you through the important milestones of 2011.

2012 THE YEAR OF

THE CHOPPER CRUISING HEIGHTS January 2012

London Olympics gears up for chopperborne sharpshooters .

hour in a test flight. Eurocopter calls the X3 a hybrid helicopter as it combines a pair of propellers mounted on a wing with a conventional rotor. The X3 uses the fuselage from its popular Dauphin model. The twin-engine Eurocopter design lacks a tail and is heavily modified with a small wing and two extra propellers mounted at the ends. The main rotor and the small propellers are powered by twin-turbine engines. The demonstrator chopper delivered on the promise of pushing the frontiers in rotary-wing aviation by surpassing its original speed target of 250 miles per hour. The speed to beat, however, was 288 miles per hour set by the American Sikorsky X2. Sikorsky Aircraft was awarded the Collier Trophy for the development of the X2, which achieved a speed of 288 mph in level flight. This means that the Sikorsky X2 is the fastest helicopter in the world without external thrust. Unlike Eurocopter’s X3, the Sikorsky X2 uses a different coaxial rotor design with a pusher prop. Using counter-rotating main rotors, some of the drawbacks of high-speed helicopter flight are minimised. The troubles associated with retreating blade stalls are also reduced by slowing down the main rotor speed and using the pusher propeller behind the chopper for thrust as speeds increase. The Sikorsky’s X2 is touted as the starting point for a fresh light attack Continued on Page 52

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CAE

FOCUS ON ‘COPTERS

HATSOFF to kickstart pilot training

Helicopter Academy to Train by Simulation of Flying (HATSOFF) in Bengaluru is all set to open a Dauphin 365 N3 simulator for pilots, after it is

NH INDUSTRIES

assessed and found eligible by the Civil Aviation Authorities (CAA) of the UK on behalf of European Aviation Safety Authority (EASA) and the Directorate General of Civil Aviation (DGCA) of India. The facility is a joint venture (JV) project between Hindustan Aeronautics Limited (HAL) and CAE-Canada. HATSOFF will join a select group of elite simulator training institutions around the globe that can boast of six synthetic training devices for choppers once it achieves this criterion. After passing muster at this crucial qualification phase, HATSOFF will have the Bell 412 EP, HAL civil/conventional Dhruv and the Eurocopter’s Dauphin 365 N3 units — all certified as Level D, FFS/FFMS, which is the utmost qualification for flight simulators in the world.

NH 90 takes on Sikorsky S-70B in Indian Navy tender

The European NH-90 and the American Sikorsky S-70B choppers will go head-to head for the US$1-billion tender for 16 multi-role helicopters (MRHs). The eventual victor for this tender is to be made known some time in 2012. Also known as the Seahawk, the Sikorsky S-70B has been in service for nearly 20 years. The NH 90 is the product of NH Industries, a consortium of France, Germany, Italy and the Netherlands. The Indian Navy requires the MRHs for anti-submarine warfare and anti-surface warfare roles, while in its auxiliary role it would perform search-and-rescue, cargo and casualty evacuation operations. The Navy is looking to replace its Sea King fleet inducted in the 70s and 80s with the MRH. A follow-on order is expected after the induction of the 16 MRH choppers. With contracts from 14 European nations including France, Germany and Italy, the NH90 is said to be the most successful European helicopter programme. On the other hand, the Sikorsky S-70B is proclaimed to be the one of the ‘world’s most capable helicopters’ due to its combination of battle-tested technology and state-of-the-art airframe, avionics and mission equipment.

rough cutout

Royal rescue by Prince William The United Kingdom’s Prince William co-piloted a chopper that saved two people, after a ship was hit by

CRUISING HEIGHTS January 2012

CELEBUZZ.COM

an “enormous wave” in the Irish Sea, according to the UK’s Press Association. William was called in for the rescue operation from his base at RAF Valley after the ship

issued a Mayday call when its hull cracked. Two members of the Russian crew were pulled from the water safely by William’s Sea King helicopter and taken to hospital. The Royal Air Force has released vivid footage of the operation, taken from the chopper Prince William was co-piloting.

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FOCUS ON ‘COPTERS

Chopper-borne sharpshooters for London Olympics

Snipers on military helicopters will help protect the 2012 Olympic Games. The marksmen will keep an eye on the British capital from the skies above the city to quickly respond to any untoward incident. According to reports, they will be based on the Royal Navy ship HMS Ocean, which will be anchored in the River Thames near Greenwich. Special Forces soldiers will be among the 13,500 troops who will help strengthen security at locations around England, which will host the games.

Heli-Telis over Metro Skies The Indian Air Force has deployed special choppers at Delhi and Mumbai to keep track of action on the ground in case of terror strikes. Two Mi-17s have been outfitted with FLIR (forward-looking infrared) imaging systems and CCD (charge-coupled device) sensors for “live streaming video footage” from the scene of an incident to “command and control centres” on the ground. These choppers will be used for reconnaissance and surveillance duties during a crisis. Images from these choppers will help initiate swift and well-directed counter-measures to perils emerging on the ground.

Bell delivers 429 with multi-mission configuration

fax County, Virginia, USA. This multi-role Bell 429 is capable of completing missions for airborne law enforcement, helicopter emergency medical services and search and rescue. This one-of-a-kind, multi-mission configuration was completed at Paradigm Aerospace Corporation, a Bell Helicopter Customer Service Facility, located in Pennsylvania, USA. According to Larry Roberts, Senior Vice President for Bell Helicopter’s Commercial Business: “The Bell 429 was designed for multi-role capability. Our customers like the speed, power and the advanced flight deck technology found in the Bell 429.” The Bell 429 is one of the world’s newest and most advanced light twin-engine helicopters.

Copter deal: Eurocopter, Kamov in final round the Cheetah helicopters for the Indian Air Force and Army. The commercial bid will be opened very soon for the final negotiation with the last two contenders. The twin-engine Kamov 226 (Russian) and the single-engine Eurocopter AS 550 Fennec are the two last contenders in the bid. Both are going to be invited for price negotiations. India is replacing the Cheetahs, which were bought in 1970s from France. They are the lifeline for Army deployments at high altitudes in Kashmir and Siachen. The procurement process began in 2005 with tender for 197 helicopters. The contract is expected to be worth around $1billion. Initially, the order is expected to be as per tender requirement but the final figure might be double the initial requirement. There is, however, no clear indication yet as to which helicopter will turn out to be cheaper.

BELL HELICOPTER

Two contenders have emerged from last year’s field trials for the light utility helicopter (LUH) deal to replace

CRUISING HEIGHTS January 2012

SIKORSKY

EUROCOPTER

Bell Helicopter announced it has delivered the first Bell 429 with a multi-mission configuration to Fair-

Brunei opts for S-70i Black Hawks Sikorsky Aircraft has signed a con tract with the Brunei Ministry of Defence to provide 12 S-70i Black Hawk helicopters with associated spare parts, training and ground support equipment. The contract contains an option for 10 additional aircraft. As part of the contract, Sikorsky will place an S-70i aircraft simulator in the South-East Asia region. The first of the S70i will arrive in Brunei from 2013. 30 countries operate more than 3,000 Black Hawk helicopters and the S-70i helicopter is the latest variant.

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2011 IN CHOPPERS: (1)Mahalaxmi Race Course (2) Pawan Hans celebrates its twenty-fifth year (3) Eurocopter’s hybrid chopper (4) Rotor section of the SEAL team’s stealth chopper at Abbottabad (5) Sikorsky’s X2 (6) Eurocopter’s X3 Continued from Page 49

Hybrid technology

helicopter being created for the US Army’s Armed Aerial Scout programme. The military rotorcraft, known as the X2 Raider, will retain an identical basic layout. It will also be quieter and is expected to carry a greater payload than present choppers with a similar size. Both Sikorsky and Eurocopter hope to market the fast-flying helicopters for a wide variety of uses like search-andrescue, border patrol and the military.

In what was described as a major innovation towards making helicopters safer, Eurocopter tested a hybrid chopper that combines a turbo shaft internal combustion engine with an electric motor. The success of this technology opened the way for further enhancements in rotary-wing aircraft safety. For the initial breakthrough in exploring the hybrid concept, Eurocopter used the supplemental electric system to increase manoeuvrability of a single-engine helicopter during an autorotation landing — which is performed by helicopters in the event of a main engine failure. Eurocopter used a version of its highly successful light single-engine AS350 to demonstrate the viability of this technology. In the event of an engine failure, the electric motor would provide power to the rotor, allowing a pilot to control the helicopter very easily during the descent to a safe touchdown. The next step of course is to bring this concept to maturity and evaluate its implementation on Eurocopter’s series production helicopters.

Reprieve for pilots On the home front, 2011 saw a spate of chopper accidents with the most sensational being that of Dorjee Khandu, the then Chief Minister of the Arunachal Pradesh. Consequently, the Directorate General of Civil Aviation (DGCA) issued a directive that pilots would not be prosecuted if they refused to fly or undertake unscheduled landings in case of bad weather or an emergency. The DGCA instructed that “no punitive action would be taken” against the pilot if there was an unscheduled landing in case of an emergency, like bad weather. In such a situation, the pilot should immediately land the chopper at a “suitable place”, according to the DGCA directive. The DGCA move followed a recommendation by the Parliamentary Standing Committee on Transport, Tourism and Culture that pointed out that pilots should be provided “adequate legal protection to decline to fly in absence of mandatory technical or weather clearances”.

Turbulence over Mahalaxmi The year saw the DGCA suspending helicopter flights from Mumbai’s Mahalaxmi Race Course citing security concerns and non-availability of emergency measures. The decision bewildered many including captains of CRUISING HEIGHTS January 2012

industry. The race course used to witness around 15-20 operations per day and each of these flights took off only after clearance from Mumbai airport. The ostensible reason was that the helipad did not have adequate security and emergency procedures in place. The DGCA verdict came after an audit of the race course facilities showed that no heliport permissions were taken from the controlling body. According to the audit, there were no standard operating procedures in place and no visual aids or markings for navigation were available with choppers landing on the race course. Another contention was that no emergency procedures are in place and most importantly, there are no proper security arrangements at the heliport facility. One of the main deficiencies pointed out in the audit report was about the dimensions of the helipad.

A quarter century of quality The year also saw the 25th anniversary of Pawan Hans Helicopters Limited that has grown in strength over the years. No longer does the company operate only in hilly and inaccessible areas or promote travel and tourism; it has to its credit a number of achievements: establishment of a specialised institute for Safety Audit and Excellence, heliports and becoming an authorised maintenance unit for an international chopper manufacturer. Pawan Hans has turned into India’s premier multi-disciplined helicopter services provider.

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C A R G O

L O G I S T I C S

CRUISING HEIGHTS January 2012

Boom or

bust?

Pharma boost with Opticoolers

As economic turmoil grips Europe and the USA, air cargo stakeholders are gearing up to move ahead with caution.

ASEAN LINKS TO AID AIR CARGO CONNECTIVITY WITH ASEAN NATIONS WILL ENHANCE CARGO FORTUNES

GACAG GETS DOWN TO SERIOUS BUSINESS CARGO BODY IS COMMITTED TO BETTER CONDITIONS FOR AIR CARGO

NEEDED: OUT-OFTHE-BOX THINKING MAXIMUS CEO ADVISES AIR CARGO STAKEHOLDERS TO CREATE FORUM

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need for a greater physical connectivity between India and the Asian nations; indeed, it was the country’s “strategic objective”. According to Pushpanathan Sundram, Deputy Secretary-General of ASEAN, initial talks between India and the ASEAN had taken place and there was a “commitment at the highest level” to sign the agreement in 2012. Once that is done, Indian carriers will be able to fly to more destinations than the present Thailand, Singapore and Malaysia ABLE STRATEGIST: The Prime Minister, Dr. Manmohan Singh with the East Asia Summit Head of States/Governments at the 9th routes. India’s pharamaceutical and ASEAN-India Summit, in Bali, Indonesia. auto industries looking for markets in AS AIR CARGO tonnages dwindle — buffeted the developing nations would be able to utilise by high -turbine fuel prices and the faltering the carriers to their advantage. economy in USA and Europe — it is time the The ASEAN nations have a combined Indian air cargo industry look at the ASEAN market of over 1.8 billion people and India’s countries to boost fortunes. trade with the ASEAN countries has increased Prime Minister Dr Manmohan Singh from $30.7 billion in 2006-07 to $ 39.08 recently advocated increased connectivity billion in 2007-08 and to $ 45.34 billion in between India and the 10 ASEAN nations. An 2008-09. During April-September 2009-10, air services agreement between India and the country’s trade with ASEAN was $ 20.19 ASEAN is scheduled to be signed in the first billion, according to data released by India’s quarter of next year. While the move meshes Ministry of Commerce and Industry. In 2008with Dr Singh’s ‘Look-East’ Policy, it promises 09, India’s exports to ASEAN totalled $19.14 to open new markets for air cargo billion and during April-December 2009-10, stakeholders from India. the country exported goods worth $12.8 The Prime Minister pointed out that while billion to ASEAN. As for imports, during India’s partnership with ASEAN was the April-December 2009-10, India’s imports foundation of the ‘Look-East Policy’, there was from ASEAN was $18.09 billion.

SOME TIME AGO, this column mentioned how Lufthansa Cargo was going ahead with its Opticooler programme. Reports from Lufthansa point out that a number of pharmaceutical companies have been finalising the complex validation process of the Opticooler and the lane on which the Opticooler would be used. Customers value the high level of temperature stability, the reduced complexity of the shipment procedures (as there is no need for dry ice replenishment) and longer standing times of the unit. The first companies started their validation procedures in April 2011, after Lufthansa Cargo introduced the container to the market at the end of 2010. According to Christopher Dehio, Senior Manager, Global Key Accounts Competence Center Temperature Control of Lufthansa Cargo,”We expect a sharp increase of demand once the QADepartments of our customers have finalised the validation and introduced the container into their internal processes.” It has only been a year since Lufthansa Cargo introduced Opticooler. The box, a joint collaboration between Lufthansa Cargo, a number of clients and Dokasch GmbH, is able to maintain a permanent temperature of between +2 and +30 degrees Celsius. Unlike the earlier version of the Unicooler that function with dry ice, the Opticooler only needs electricity to charge and re-charge the accumulators embedded in the device. The charging process takes between five and eight hours and once fully charged, the batteries run for 100 hours.

PIB

ASEAN to the rescue

The fall of the mighty IT’S INDEED sad that Ulrich Ogiermann, once the Chairman of The International Air Cargo Association (TIACA) and former CEO of Luxembourg-based Cargolux Airlines International, has had to go to jail in the US anti-trust cases that is going into the price-fixing scandal that took place from October 2001 to February 2006. Cargolux was charged with supposedly manipulating surcharges on air cargo shipments to and from the United States in order to eliminate and impede competition. On December 9, 2011, two years after Cargolux pleaded guilty and agreed to a fine of US $119 million, Ulrich Ogiermann, who had resigned from his post but stayed on as Special Advisor to the company, and Robert Van de Weg, Senior Vice President, Sales and Marketing, entered a plea agreement with the US Department of Justice that included guilty pleas and a sentence of 13 months. A total of 18 airlines and14 airline executives have fallen under the DoJ’s investigation, with more than US$1.6 billion in fines imposed.

“The year 2012 will be a terrible time for those forwarders, who have put all their eggs in the Chinese import basket as China, suffers from slow growth combined with higher inflation.” Julian Keeling

CEO, Consolidators International

CRUISING HEIGHTS January 2012

CARGO

The gains the air cargo sector in the country made in 2011 are slowly disappearing and with the economy around the world in dire straits, caution will be the watchword in 2012, reports Tirthankar Ghosh.

Tread with caution in

2012

he International Air Transport Association (IATA) has made it amply clear that the short-term outlook for the air cargo industry is bleak. In fact, in 2012, IATA has downgraded its forecast for airline profits from $4.9 billion to $3.5 billion for a net margin of 0.6 per cent. This was almost contrary to Boeing’s forecast that pointed out that world air cargo traffic would triple over the next 20 years and cargo rates should mirror that demand, according to Jim Edgar, Boeing’s Regional Director of Cargo Marketing. Edgar was quoted as saying that till 2029, Boeing expected world air cargo traffic to grow at an annual rate of 5.9 per cent with Asia continuing to be at the forefront of the air cargo industry. The routes associated with Asia would continue to experience the world’s highest growth rates over the next 20 years, at 6.8 per cent. IATA, however, said that nothing of that sort would happen. The Eurozone crisis, for example, has stunted growth. Tony Tyler, IATA’s Director General and CEO,

CARGO

“2012 would be more difficult than 2011…keeping three factors in mind: fuel costs, the Eurozone crisis and manufacturing around the world”

JAY SHELAT Jet Airways

“Through 2011, our customers have had to encounter increases in the price of ATF, adding to the forwarder's burden to make ends meet” BHARAT J THAKKAR ACAAI

“ FedEx continues to be extremely confident in India...India's freight sector is set to expand by 8.5% per year for the next five years”

RIPPLE EFFECT ON CARGO

“The future looks exciting and the time is ripe for change and we are ready and keen to be the catalyst for change”

KENNETH F KOVAL FedEx Express

SANKALP SAXENA IBS Software Services

“There is no sign of cargo uptake for the first few months… the later part of the year may see better times and a gradual upturn” ASHISH KAPUR Cathay Pacific Airways “2012 is the year to keep costs in check, revenue will only look meaningful to those who can keep costs in check”

CRUISING HEIGHTS January 2012

SHESH KULKARNI UFM

maintained, “The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the Eurozone sovereign debt crisis. Such an outcome could lead to losses of over $8 billion-the largest since the 2008 financial crisis.” In India, the dim prospects were echoed by air cargo carriers. Bharat J Thakkar, President, Air Cargo Agents Association of India, pointed out that 2011 had been an eventful year. “The freight forwarding community weathered the storm of recession in 2009 and 2010 and recovered — to an extent — in the first quarter of 2011,” he said. However, the good times did not last. Thakkar said, “Before we could breathe easy, the industry was pushed to the back foot. All through the year, our customers have had to encounter increases in transaction costs over the rise in the price of air turbine fuel, resulting in increase of fuel surcharge adding to the forwarder’s burden to make ends meet. There is very little being done about it.” Thakkar squarely blamed the infrastructure for the air cargo industry not doing as well as it should. He said, “ATF prices apart, the industry has had to bear up with the infrastructure — or rather the lack of it — available at almost all international airports around the country.” He went on to point out that the airport operators had done little to salvage the situation. “Whatever airport operators might say and promise, improvements through 2011 of the infrastructure have been slow. In Mumbai, for example, ACAAI in tandem with the Bombay Custom House Agents’ Association (BCHAA), the Federation of Freight Forwarders’

Today, with the fading economic situation in EU and US, the fresh downturn is once again staring us in the face Associations in India (FFFAI), the Association of Multimodal Transport Operators of India (AMTOI), the Western India Shippers Association (WISA), the Federation of Indian Export Organisations (FEIO), the Confederation of Indian Industry (CII), the Associated Chambers of Commerce and Industry of India (ASSOCHAM) amongst others, has been very vocal with MIAL (Mumbai International Airport Limited), to place improvements before the peak season of 2012 for exports which is currently on the decline.” Imports too would need the top most priority, said Thakkar, as its rapid annual growth of 20 per cent-plus would increase further. The ACAAI President also said that the association was eager to discuss the proposed Master Plan that had been put forward by MIAL at a recent air cargo seminar in New Delhi. ACAAI would like to see exports and imports on a fast track and dwell time going down. As for the air cargo industry, other than the first quarter of 2011, “it has been an uphill task despite the fact that the country’s achievements have propelled it to the front rows of global power,” said Thakkar. This, despite the fact that “some of us did well — what with

India being one of the few countries that overcame the slowdown with 12 per cent increase in business traffic in 2010-11. Today, with the deteriorating economic situation in Europe and the USA, the spectre of a fresh downturn is once again staring us in the face. In fact, we have started feeling the impact. Added to the high price of aviation fuel, there is the falling value of the rupee and export uncertainties. Exports, in fact, declined by four per cent in November 2011 in comparison to November 2010, while imports have risen by 29 per cent in the same period. This,” said Thakkar, “requires more attention and fast-track improvement at all airports to meet the growing demand for imports.” Thakkar’s views were echoed by Jay Shelat, Vice President, Cargo, Jet Airways. He said, “2012 would be more difficult than 2011.” He had his reasons: “I say this keeping three factors in mind — fuel costs, the Eurozone crisis and the employment/manufacturing situation around the world.” Pointing out that fuel prices would play an important role in the rise or fall of the air cargo industry, Shelat said, “No one knows which way or how far up the fuel prices will rise through the year. If it does, air cargo will be the most affected. “Fuel prices,” he emphasised, “are unlikely to settle. The events in the Middle East continue to have their effect on oil markets resulting in supply/demand imbalance which in turn will continue to unsettle the industry.” Coming to the Eurozone crisis, Shelat said that the air cargo industry had “been feeling the effects for quite some time now. Exports to Europe have been difficult through 2011 and 2012 will be even tougher.” He pointed out IATA data, according to which the Eurozone crisis had

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caused severe risk on the 2012 outlook. “If the Eurozone crisis turns into a global recession,” said Shelat, “the aviation industry around the world could suffer losses exceeding $8-10 billion in 2012. The ripple effect is being felt - and will be felt throughout the manufacturing industries…2012 is election year in the USA and that may have an impact on improvements in the manufacturing and employment figures in the second half of 2012,” he said. As for the intra Asia-Pacific region and the Indian domestic market, suffice it to say that it is these two regions that have helped keep some positive trends, according to the Jet cargo chief. “While 2011 was a difficult year — in comparison to 2010 — the figures were steady for the first three quarters of 2011. In the last quarter of the 2011, we felt the impact of the high fuel prices, etc. and the ripple effects will continue in 2012 making the year even more difficult than 2011.” Asian carrier Cathay Pacific is, however, bullish about 2012 and freight from India. Keen to develop its Hong Kong hub, Cathay launched services to Bengalaru in India a few months ago. In addition, the carrier also launched a new market in Europe with its new scheduled freighter service to Zaragoza, Spain on November 15. The new freighter destination will be operated as an extension of one of the airline’s existing freighter services flying from Hong Kong to Delhi, then onward to Amsterdam and Zaragoza, returning to Hong Kong via Dubai. With this new service, Cathay Pacific became the first and only airline operating a freighter service linking India and Spain, bringing to five the number of European destinations that shippers in India can choose from, including Amsterdam,

CARGO Frankfurt, London and Paris. As the biggest freighter operator in India, Cathay is optimistic that conditions will improve. Said Ashish Kapur, Regional Manager Cargo-South Asia, Middle East and Africa, Cathay Pacific Airways, “From the Indian perspective, 2011 has been a very exciting year as we launched bi-weekly freighters from Chennai to Frankfurt, Bengaluru to Hong Kong and a new destination, Zaragoza in Spain. We will continue to look at potential new markets in the coming year.” “Sitting on the Mainland’s doorstep, we feel bullish about the future of cargo in this region and the role our airline will play. We are investing to be able to take on this market and it’s exciting to see these investments now becoming a reality,” said Kapur. With cargo accounting for one third of the airline’s total revenue, Kapur said that “projections for the next two decades say that world air cargo traffic will expand at around 6 per cent annually, and much of this growth will be focused in Asia — and China in particular.” However, he agreed that while an “extremely strong 2010 for cargo was always going to be difficult to beat, a downturn in the two key markets of Hong Kong and Mainland China had turned 2011 into a challenging year.” As for 2012, Kapur mentioned that the outlook was marginal towards the beginning of the year. “There is no sign of cargo uptake for the first few months. However as cargo is volatile, the later part of the year may see better times and a gradual upturn. If the market runs down its inventory and the demand comes back it has to be built up again. So while we may be in for a bumpy ride in the coming months, we should keep a positive mindset and keep a clear

focus on the many good things that are happening.” FedEx too is optimistic about India. Said Kenneth F Koval, Vice President, Operations, India of FedEx Express Europe, Middle East, Indian Subcontinent and Africa (EMEA), “We expect overall economic growth to continue at a moderate pace. India,” he emphasized, “has been enjoying sustained economic growth in the recent past. However, now on account of the global economic situation and domestic factors like impact of tight monetary policy, the revised growth projection for the Indian economy has come down to 7.5 per cent for this fiscal year.” According to Koval, FedEx continues to be extremely confident in India for many reasons. To begin with the country’s freight industry is expected to grow at 10 per cent per annum by 2014 with the air freight sector set to expand by 8.5 per cent per year for the next five years.” FedEx anticipates a lot of opportunities in several key industry sectors to propel the growth of the express logistics industry in India. Ecommerce, pharmaceuticals and healthcare as well as gems and jewellery are some of the sectors that we believe will offer several growth opportunities for the express

The intra Asia-Pacific zone and the Indian domestic market have helped keep positive trends in the air cargo industry alive

industry,” said Koval. Koval elaborated that phama was growing at pretty healthy pace in the country and contributed to about 8 per cent of the total output of pharma products in the world. With Indian pharmaceutical exports poised to grow at 30-35 per cent in 2011-2012, the industry was 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 sector’s need for specialised services such as packaging solutions and temperature-controlled ground and air transport facilities will offer the express industry tremendous opportunities in the coming year,” he said. Along with pharma, the e-commerce industry has also resulted in a steady growth in contribution of the sector to FedEx’s business. “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,” he said. With all these opportunities coming up, would the air cargo industry get back to the boom of 2010? Shesh Kulkarni, President and CEO of Bengaluru-based freight forwarding start-up, UFM, who has been hoping for good times does not think so, “I have for last few months prayed that the world economy hits its bottom fast for once it get there, the only way for it to move is up… but my fear always is when it hangs mid-air. The early part of 2012 will continue to experience the mid air scenario… it does not look good and does not look bad either.” It will be this experience that trade and business will have to get used to for a long time to come, as this does seem to be the

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trend for many quarters to come. “One will have to be incredibly aligned to stay on top: 2012 is the year to keep costs in check, revenue will only look meaningful to those who can keep costs in check,” advised Kulkarni. Jet’s Shelat put it simply when he said that 2012 would be a year when “we will have to move with caution”. Taking lessons from the past, he pointed out that “global figures show a 4.6 per cent fall in October 2011. I believe that the contraction of air freight volumes this year — and the story may be repeated around the world — is a sign of turbulence ahead for both local and global economies.” Amidst the cautionary approach, the IT majors that have been providing solutions will move ahead in 2012. Sankalp Saxena, President and Head - Aviation Operations & Cargo Lines of Business, IBS Software Services, agreed that the air cargo Industry has not had many ‘pathbreaking’ innovations in the recent past. “However,” he said, “there are several initiatives such as e-Freight and Cargo 2000, which does bring in some aspects of innovation into the air freight industry, but these are logical extensions of existing business processes. Several initiatives that are fairly well established in SCM practice such as lean logistics, 3PL, pick and pack, multi-modal transportation are still waiting to be adopted into the core air cargo industry processes.” Saxena went on to say that the captains of the industry including major airlines were already thinking of such concepts along with enablers such as piece-level tracking, RFID/GPS-based tracking and monitoring and electronic processing. “The future,” he said optimistically, “looks exciting and the time is ripe for change and we are ready and keen to be the catalyst for change.”

for meetings to get a complete picture from all stakeholders and under the chairmanship of M Kannan, Economic Advisor to the Ministry of Civil Aviation, a policy on Air Cargo/ Express Industry — a first in India is expected,” he said. The group, incidentally, is readying the final report — which is expected to be submitted to the government in a few weeks — and is going to not only make recommendations but also incorporate the best international practices in the Air Cargo/Express Service Industry and their suitability in the Indian context. Aware of the bottlenecks at Indian airports, Dr Zaidi said that there was “a need to decongest cargo terminals with simplification of Customs procedures, greater use of mechanised handling and speedy clearances of shipments” and the Civil Aviation Ministry has geared up to infuse new life in the sector. As Secretary Zaidi pointed out that the government was working on a new civil aviation policy that would specifically seek to promote private investments in the ailing sector. “We have decided to frame a new civil aviation policy that will help meet the challenges of the next decade. The challenges are wide-ranging from viability

There was a need to decongest cargo terminals with simplification of customs procedures and mechanised handling

FRAPORT.COM

On its part the government has made some moves to ensure that the air cargo industry in the country is not hampered by the lack of infrastructure. In fact, the Indian aviation sector has started dreaming big. “India,” according to Dr Nasim Zaidi, Civil Aviation Secretary, “has the potential to emerge as a global trans-shipment hub.” He was speaking at a recent air cargo seminar. Dr Zaidi has been taking a special interest in air cargo and has initiated moves over the last year or so to ensure that the sector is comparable to those in developed nations. In fact, his initiatives have earned him the title of “the guardian of the airfreight industry”, from the Air Cargo Agents Association of India (ACAAI). Dr Zaidi was instrumental in the setting up the Working Group on Air Cargo/Express Service Industry. The Working Group had been entrusted to address the issues related to the air cargo industry and prepare the current situation of the industry and assess its future growth potential. The Group, comprising representatives from the airline industries, airports, cargo associations, the Customs department and the Ministry, has completed a detailed study of the existing system of services available and identified areas that require further improvements to seize the emerging opportunities in international trade and in the context of the faster pace of economic growth in India. The work done by the Civil Aviation Ministry was emphasised by Bharat J Thakkar, President of ACAAI, “The government and the civil aviation ministry in particular have made commendable progress in just seven months since the announcement of the setting up of the Working Group on Air Cargo /Express Industry. All stakeholders were invited

SIMPLE LOGISTICS: Cargo being loaded into a freighter.

of the sector to human resources. The policy will encompass all that,” Dr Zaidi said. The policy will be applicable for 10 years and will be the foundation for a promotion board for air cargo. “We have about five months to complete the process,” said Dr Zaidi. Meanwhile, he emphasized, the air freight stations at Mumbai and Chennai — the two were set up some time ago but have yet to start functioning — would start operations soon. The Secretary also hoped that to keep up with the booming traffic in cargo, customs procedures would have to be reviewed for speedy clearance of cargo. The Secretary’s assurance about the new policy comes at a crucial time. There was an urgent need to help the air cargo industry — not only stand steady on its feet but also march ahead. Dr Zaidi underlined the fact that GDP had been growing annually at nearly eight per cent and that the air cargo industry had recorded an average annual growth of 12 per cent. Indian airports, in fact, had handled a total of 2.33 million tonnes of cargo in 2010-11. While domestic cargo was expected to increase from 0.8 million tonnes to 1.7 million tonnes by 2016-17, international cargo will move from 1.5 million tonnes to 2.7 million tonnes during the same period.

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In the short term, the situation does not look too encouraging although there are indications, according to air cargo pundits, that point to a brighter future. A major indicator is the Foreign Direct Investment (FDI) limit in cargo airlines that was raised by the government from 49 per cent to 74 per cent. The move has attracted players from abroad — especially those from the Middle East — to expand their Indian network. The other indicators are technological advances. IT has evolved over the last two or three decades from an information processing tool to one that is helping corporations decide current and long term strategies. Said IBS’ Sankalp Saxena, “IT strategy these days is seen to be tightly in sync with business strategy and is not a separate entity or a derivative. Air cargo business is no exception to this. In recent times, we saw the revolution which was led by a handful of companies, which has completely shifted the air cargo industry’s dependence on cumbersome legacybased platforms to smart and lean ‘new generation’ systems that enable business as well as IT-users to derive a host of benefits.” What remains to be seen is whether the future would see the start of a smarter new breed of Indian cargo operators and, of course, better air cargo facilities.

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Kingfisher fiasco needs a closer look There is a lesson for the air cargo and logistics sectors from the troubles that Kingfisher is going through. Shesh Kulkarni believes that there was a mismatch in the timing of the opening-up of the aviation sector and the building-up of infrastructure.

The aviation sector is linked to the air-freight industry and logistics as a sector is yet to be recognised as an industry. Cargo infrastructure is still wanting in most airports or port locations. One is afraid that once the cargo infrastructure is ready at key airports, what will the cost be for forwarders, shippers or importers? 60

n the list few months we have had a few steady headlines: Jan Lokpal, Retail FDI, 2G and Vijay Mallya’s Kingfisher! In the last 20 years, the aviation industry has seen some exciting events and a shift from the virtual monopoly of Indian Airlines and Air India over the Indian skies. The country welcomed the opening-up of the aviation sector. Then came the low-cost ones. Even as Deccan, IndiGo, SpiceJet, etc made their presence felt, the common man fulfilled his dream when air travel became affordable and a reality for many. For the business traveller, however, there was only one option: Jet Airways. In came Vijay Mallya and true to his style and flamboyance, he changed the travel experience. Guests were received by young, well groomed staff, and ushered in by smart hostess. Seats had video, there was gourmet food, fancy cutlery, etc. Needless to say the experience of flying KF was hedonistic as compared to the plain and efficient service of Jet. Overnight, KF became the toast of the business world. Politicians and ministers preferred flying Kingfisher…clearly the carrier had raised the bar in the aviation sector. All of a sudden, India became a point of discussion among frequent flyers globally. Today, however, it is disturbing to note how KF and Vijay Mallya have become untouchable for banks, financial institutions, etc. KF cannot be singled out since I believe the carrier was one of the key differentiators in air travel. The question that arises is: Does Kingfisher deserve a bailout either in the form of subsidy or FDI? This is a critical question since the aviation sector, unlike the logistics sector, has more clout at various levels. If the aviation sector experiences indifference, the logistics industry has to be very cautious in its approach while making plans that will lead to its recognition as an industry, building-up of infrastructure at ports and airports, and much more. In my opinion, KF became a victim of the poor vision and piecemeal handling of policies by those in the aviation sector and CRUISING HEIGHTS January 2012

infrastructure-builders of the country. It’s ironical that the aviation sector (private carriers) and the creation of airport infrastructure (private promoters) were taken up independently with huge time gaps in their deployment. While both should have worked in tandem, the spaced out timings impacted costs and deliverables. While it is true that the new infrastructure did drive efficiency up, the costs far outweighed the gains from the improved set-up. The government will only get credit if FDI is allowed in aviation. While one or two carriers could cry foul, in the long-term, FDI will be required since cost and time involved in raising funds or capital in India are high. If time does not kill you, then interest surely will. As a growing economy, we must take advantage. The country needs both segments to be operational: one cannot just have “economy class only” by delaying or avoiding FDI in aviation. This delay is a matter of worry. The aviation sector is linked to the air freight industry and logistics as a sector is yet to be recognised as an industry. Cargo infrastructure is still wanting in most airports or port locations. One is afraid that once the cargo infrastructure is ready at key airports, what will the cost will be for forwarders, shippers or importers? Will we have to pay more? How many of them will be forced to close shop because of their inability to sustain? The increased logistics cost will have to be factored in the cost of the products. A CII survey mentions that logistics cost in the country was 21 per cent of the product cost. This, when our infrastructure is still unavailable. Just imagine what will happen when we get it right? Hopefully, it will not take our costs to a higher level as it happened in the aviation sector. It’s time we stopped living the life of an ostrich. It’s time the air freight and logistics sectors reacted. What has happened to KF needs a closer look! (The writer is President and CEO of a leading logistics company which provides complete logistics solutions and can be reached at cruisingheights@newsline.in)

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CARGO

DEBATE OR DISCUSSION: Members of the Global Air Cargo Advisory Group (from left) Peter Gatti, Oliver Evans were among the many trade leaders who met with Commissioner Bersin.

GACAG moves ahead on

pilot programmes With dedicated persons from the air cargo industry taking a leading role, GACAG has shown that it means business. The Group’s recent meeting with the US Customs and Border Protection promises better conditions for the air cargo industry. A report. he air cargo industry and national regulatory authorities need to continue working together on pilots to test the feasibility and processes for advance electronic data for air cargo shipments, the Global Air Cargo Advisory Group (GACAG) told Alan D. Bersin, Commissioner of the US Customs and Border Protection (CBP), at a meeting in Washington DC. Industry and regulatory authorities should also assess

whether advance data can help support a risk-based approach to air cargo screening. GACAG representatives also met with senior officials from the Transportation Security Administration (TSA) and communicated a similar message. GACAG further said that pragmatism, flexibility, and joint evaluation of pilot results would be ‘critically important’ to realising the goals of the Air Cargo Advanced Screening (ACAS)

programme. Further, GACAG hopes to support CBP and TSA outreach efforts to international institutions, to help communicate about ACAS, and about lessons learned from the approach taken in the United States. The CBP and TSA meetings were attended by representatives of the four founding members of GACAG: The International Federation of Freight Forwarders Associations, The Global Shippers’ Forum,

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The International Air transport Association and The International Air Cargo Association, and also addressed broader issues related to automation, harmonisation and security. During discussions with Commissioner Bersin and other CBP officials, for example, GACAG members said that automation systems should require only those data elements that were legitimately needed to ensure compliance with pertinent regulations, and should be in

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Air cargo needs to do some fresh thinking t’s staggering to look at the changes made by passenger airlines in the past 20 years. From inflight innovations and paperless tickets to the continued rise of low-cost carriers, flying has never been more efficient, more accessible, or more enjoyable than it is now. In comparison, take a look at the past 40 years in air cargo. Then, an air waybill was printed on a typewriter and sent out. Now, an air waybill is printed from a computer and sent out. In effect, very little has changed; the operational processes, the systems, the contracts are all much the same —as is the delivery. Unlike the passenger business, in which companies such as flydubai aim to open the market and bring aviation to a wider audience, air cargo is still too expensive, too elite and too inefficient to increase its market share — still it has just a tiny two per cent of the overall freight transport market. And I am certain that needn’t be the case. In recent times, the lack of progress has been shameful and one of the first steps must be to recognise that there is much room for

Fathi Buhazza

WWW.ARABIANAEROSPACE.AERO

Air cargo has been around for many decades but things have not improved. In fact, comments Fathi Buhazza, the industry has to put in place a system where stakeholders create a forum that encourages people to think.

HEAVY-DUTY: A Maximus air cargo freighter in operation.

improvement, from the aircraft themselves, to the packaging, loading, booking — the list is endless. Yet everyone seems to be satisfied, and no one sees a need — or space - for improvement. But contentment is the enemy of innovation. Look at low-cost airline leaders such as Tony Fernandes at Air Asia, Michael O’Leary at Ryanair, or Adel Ali at Air Arabia. For them, there’s no such thing as “impossible”. They are creative, open to ideas, and surround themselves with original thinkers — and they are very successful. Mistakes are viewed as opportunities to learn, and the industry continues to progress and improve. Most people in air cargo have worked in the industry for a long time. They are experienced. But sometimes, you get fresh thinking from a fresh pair of eyes. It might just be the case that sometimes, the voice of inexperience is worth listening to. Someone who has learned from other industries, and can clearly see the inadequacies of this one. Someone who, when faced with the statement: ‘But it’s always been done like this’, asks why. Part of the success of new entrants, be it Emirates, or flydubai, is their open-mindedness, their lack of legacy thinking, a clean sheet of paper unadulterated by the problems of the past. One example I have recently noticed at Maximus is ACMI, the leasing of aircraft. Traditionally, contracts last for five years. That’s the way it is. But I have to question it. Why should the customer take on the long-term cost burden of an aircraft that might need to be parked in times of low

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demand? Why not instead make it a partnership — the customer doesn’t pay unless the aircraft is flown and makes money. Why not make every contract a winwin? Airfreight, as always, is just the poor relation of the aviation business. Yet it costs customers a lot of money. I certainly don’t have all the answers as to how to make the industry cheaper, more efficient and more accessible. But it’s important that the industry acts, that it puts in place a system so people can brainstorm, create a forum that encourages people to think. Airlines could talk to the aircraft manufacturers, suggesting ways of eliminating waste, or adding something new. There are opportunities for talking across the supply chain about improving the processes of air cargo — look at the efficiencies of the integrators — they are light years ahead. And corporate social responsibility is one key area where air cargo’s emergency relief sector can easily take the lead, to make it an industry that contributes to the world. As you can see, there are so many untapped opportunities in this business and not enough people considering how to exploit them. Our industry only needs to look at its closest relation, the passenger business, to really understand what opportunities are available, and embrace progress. Otherwise, we will continue to be relegated to the lowest priority in aviation. (The writer is CEO of Abu Dhabi-based Maximus Air. The article can be found at: www.maximus.aero)

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standardised, harmonised formats. According to GACAG, any newlyrequested data elements should be checked against the content of the World Customs Organisation (WCO) Data Model and incorporated if they do not exist. Thereafter, new data elements should be added to those already within the WCO Safe Framework of Standards to ensure global coverage. Addressing the ACAS pilot programme in the United States, which has been expanded from express operators to include some passenger airlines and forwarders, GACAG said it was ready to work with CBP and the TSA on the initiative and urged continued open dialogue between government and industry to jointly evaluate ACAS at every stage of the process. The Group also called for shippers to be invited to the ACAS discussions. In a statement, GACAG said: “We understand and support the need for comprehensive risk assessment. A verified secure supply chain is one of the ways this can be accomplished with traders, forwarders, ground handlers and airlines all fulfilling their important roles. The interface and interaction between forwarders and airlines in this regard is paramount. This can only be efficiently accomplished through cooperative coordination of their respective submissions, particularly when it comes to the provision of advance information under the dual filing procedure.” The Group added: “Many issues must still be resolved through the ACAS pilots. In extending the pilot to passenger airlines, we need to take a pragmatic approach, given the many different ways of doing

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MAJOR PUSH: US CBP Commissioner Alan Bersin hosted meetings with trade groups from the air cargo industries.

business in the air cargo sector, and the number of parties involved.” The discussion with CBP also covered GACAG’s support of a paperless environment for air cargo imports and exports. Ultimately, GACAG said that it would like to see the processing and authorisation of secured data to be shared between air cargo operators and relevant participating government agencies where the responsible parties transmitted a standard set of data once enabling a “one-stop shop” practice. Moving towards a paperless environment will require collaboration and cooperation from customs and other border authorities, GACAG said. It will pursue this objective at the WCO. GACAG wants the WCO to review the need for all existing supporting documents and to replace those deemed necessary with equivalent electronic messages using an internationally standard format. GACAG believes that, at a minimum, the following should be accomplished through electronic means:

Export and import goods declarations to customs from exporters, importers and/or their forwarders or customs brokers; Export, import and transit cargo declarations to customs from airlines; Release into free circulation following completion of the Customs formalities; Supporting documents should be provided by exception only (e.g. in case of an examination) and printout of electronic records should be accepted; Air waybill, house waybill and manifest transport documents exchanged between forwarders and airlines and only provided to customs exceptionally — not regularly; All key commercial documents (e.g. commercial invoice, packing list, hazardous materials documentation, certificates of origin) when needed; Record keeping and archiving for all participating parties (shippers, forwarders, airlines, etc.). There should be no requirement for participating parties to

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print documents (for example, complete airline manifest and supporting printout for all US-departed flights) unless by exceptions (e.g. in case of an audit), and printout of electronic records should be accepted. For the air cargo industry, which has been following GACAG ever since it was set up, the move on pilot programmes has brought home the fact that the body means business. It has not only got its act together in its first year, planned out what it has to do and actually gone ahead. Perhaps, what is important is that it is talking and meeting people. Though what the ultimate results will be no one knows yet, but the fact that committed people such as Michael Steen, Oliver Evans and others are willing to work together and reach out to others, is a step in the right direction. It will not be out of place to mention that GACAG took a step recently on e-commerce. It said: “E-commerce is a critical component of the future security, efficiency, sustainability and overall commercial success of the air cargo supply chain.”

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Cathay unveils cargo terminal Cathay Pacific recently staged a special ceremony to mark the completion of the civil construction of the new Cathay Pacific Cargo Terminal at Hong Kong International Airport. The event was hosted by the airline’s Chief Executive, John Slosar, with Donald Tsang, Chief Executive of the Hong Kong Special Administrative Region, as guest of honour. The airline used the event to unveil its latest aircraft, a new Boeing 747-8 Freighter in a unique livery and carrying a special name, Hong Kong Trader, in recognition to the city’s position as one of the world’s most important trading hubs. In addition to the HKSAR Chief Executive, the terminal topping-out ceremony was attended by special guests from a number of government departments, representatives from the liaison office of the Central People’s Government in Hong Kong, the Airport Authority and Civil Aviation Department, key contractors involved in the projects and friends from Hong Kong’s airfreight industry. Speaking at the ceremony, John Slosar said, “When it begins operations in early 2013, the Cathay Pacific Cargo Terminal will mark a major advancement in Hong Kong’s position as the world’s busiest-international air cargo hub. Cathay Pacific has worked tirelessly to develop Hong Kong’s hub role and we are continuing to make huge investments — in the terminal and in new aircraft — to help boost our city’s competitive edge.” Awards cargo industry: The cargo division of Cathay recently honoured stalwarts of the cargo industry in Mumbai for their support to the carrier in 2010. Speaking at the function, Tom Wright, GM - South Asia, Middle East and Africa said: “Cargo plays a very important role for Cathay Pacific.India continues to grow year on year, and in 2010 India saw a growth of 28 per cent in tonnages with the revenue increase of 68 per cent. These exemplary business results that it would not have

PROUD MOMENT: Tom Wright and Ashish Kapur, Regional Manager Cargo - South Asia, Middle East & Africa along with the Naveed Ahmed Khan, Cargo Manager- Western India and Tarun Sethi, Cargo ManagerKarnataka and Andhra Pradesh, with the top 10 cargo achievers.

been possible without the fantastic support received from our trade partners. We owe much to them and thank them for their excellent support and contribution to our revenue growth.”

Lufthansa Cargo moves ahead in cool freight Lufthansa Cargo, which began operations at its first international pharma hub at Hyderabad in India, recently launched operations at its new facility for temperature-sensitive freight in Frankfurt. The Lufthansa Cargo Cool Centre was built in just six months is equipped with four cool storage rooms for four different temperature ranges as well as a deep-freezer cell on an area of 4,500 square metres. From now on, all temperature-controlled shipments carried by the airline in Frankfurt will pass through the new facility. At the inauguration of the Cool Centre, Board Member Product and Sales, Andreas Otto, underlined the status of temperature-sensitive freight. He told around 200 invited guests at the opening ceremony, “Our Cool/td product is assuming ever-

Blue Dart readies for growth

fuel), the surcharge will be accordingly applied,” he said. Blue Dart Express, air express leader, has earmarked about Rs GOGREEN Carbon Neutral Service launched: DHL 1.5 billion of capex in 2012 to expand air and ground services. and Blue Dart Express Ltd recently announced India’s first The company has decided not to go slow on investments in 2012, end-to-end GOGREEN Carbon Neutral Service across despite the slowing down of the economy. Finance Director international and domestic markets. This new service, a Yogesh Dhingra was quoted as GoGreen initiative, is an saying that the company’s “long extension of Deutsche Post term plans will not be impacted DHL’s (DPDHL) global by a six-to-eight month dip”. environment protection Blue Dart Express has a 44.5 programme launched in 2008 per cent market share of the and will provide customers in country’s air cargo service and India with an environmentallyhas chalked out plans to expand responsible shipping option. air capacity by 20 per cent Powered by DHL and Blue annually. It will be entering Tier Dart in India, the GOGREEN 2 towns in the North-East and Carbon Neutral Service will the south, according to Managing allow customers to neutralise Director Anil Khanna. their carbon footprint by paying APPEALING PICTURE: (L-R) Malcolm Monteiro, SVP & Area With its seven Boeings, five Director-DHL Express, South Asia, Anil Khanna, Managing an offset charge over and above of which are on operating lease, Director, Blue Dart Express Ltd., Dr. Keith Ulrich, Vice Presidentthe shipping rates. The offset Blue Dart has mentioned that it DHL Solutions & Innovations and Head of Research & Innovation charge will be calculated on Management and R S Subramanian, Country Manager, DHL will not be impacted by the rise Express India. shipment/weight and distance. in fuel prices since it has a “fuel Carbon emissions from surcharge mechanishm”,that enables it to pass on increases in customer shipments will be offset by reinvesting in costs to customers. Dhingra said that the company had environmental protection projects verified by SGS (Societe launched the fuel surcharge mechanism because “we can’t go Generale de Surveillance). A certificate, verified by SGS, will to our customers and change the rates every month. Whatever be issued to the customer annually that will mention the total fluctuations happen in crude oil or ATF (aviation turbine amount of CO2 offset per customer.

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increasing importance for Lufthansa Cargo thanks to growth rates of 15 per cent. The Lufthansa Cargo Cool Centre will enable us to ship temperature-controlled freight faster, more reliably and more efficiently at our Frankfurt hub, and further expand our position as a leading provider of cool transports.”

Pandas take a ride to Scotland

Kale’s IT solutions for warehousing Kale Logistics Solutions has expanded its IT portfolio to meet the requirements of warehousing, 3PL/ manufacturers, transport and fleet operators. At the recent CTL Expo 2011, Kale Logistics introduced Pyxis — a web-based warehousing and distribution management system and Helios — an end-toend web-based transportation and fleet management system. Pyxis Warehouse Management solution optimises every stage of the warehouse process starting from the point an inbound shipment enters the warehouse until after an outbound shipment leaves. A readily configurable system in which the user can define the location rules, package types, picking rules, shipment procedures, TROUBLE SHOOTING: D T Joseph, packaging techniques, Former Secretary, Ministry of Shipping and all other significant along with Vineet Malhotra, Global Headdetails regarding Sales & Marketing, Kale Logistics during the launch of PYXIS and HELIOS at CTL warehouse operations, Expo 2011. Pyxis functions help to improve the distribution centre’s operations by minimizing costs and increasing productivity. Helios is a web-based transportation and fleet management system comprising of two modules — Helios Trans and Helios Fleet. Helios Trans helps transportation service providers to manage entire business lifecycle including vehicle request, placement, delivery and billing. Helios Trans provides an endto-end business visibility to transportation service providers/ manufacturers and within the ambit of available costs and resources. At the same time, Helios Fleet allows companies, which rely on transportation in their business to control the risks associated with vehicle investment, improve efficiency and reduce their overall transportation and staff costs while remaining compliant with the statutory requirements.

TNT gets out of domestic road operations To focus on its international business, TNT Express recently sold its domestic road operations in India to a logistics subsidiary of India Equity Partners (IEP). “The decision comes after an extensive review of the prospects for the domestic road business in India within TNT Express’ business portfolio,” TNT said in a statement. “TNT Express will continue to offer inbound and outbound India services, via its globally interconnected networks. It will also continue to provide customer-specific special services, in particular, to the healthcare and service logistics segments.” According to reports, the domestic road senior management and most employees will move to the new employer. The move by the company follows the reports of TNT’s lower profits for its third quarter. Profit attributable to equity-holders dropped to 5 million euros from 14 million euros last year.

NOBLE GESTURE: A close-up of Panda which was exported to Scotland by Fedex Express.

FedEx Express sent two giant Pandas, Tian Tian, an eight year-old female Panda, and Yang Guang, an eight year-old male Panda from Chengdu’s Bifengxia Panda Base to Edinburgh Airport in Scotland. Working in conjunction with the Royal Zoological Society of Scotland (RZSS) and the China Wildlife Conservation Association (CWCA) in China, the specially chartered Boeing 777F flight known as the “FedEx Panda Express” landed in Scotland on December 4, 2011. The non-stop flight was chartered especially for the VIPs - very important Pandas - and the pair travelled in custombuilt enclosures provided by FedEx Express. The in-flight meals of bamboo, apples, carrots, a special Panda cake and mineral water were served to the Pandas who spent the journey eating snacks and snoozing. Tian Tian and Yang Guang were accompanied by a veterinarian and two animal handlers from Edinburgh Zoo and the Bifengxia Panda Base to look after their needs throughout the journey. FedEx Express donated its logistical services for the transportation providing an expert team to ensure the rare animals’ safety. During the flight, the Pandas were in the safe hands of seasoned pilots: Captain Paul Cassel, Captain Bob Gasko, Captain James Gorman and Captain Bill McDonald, who have extensive experience in transporting some of the world’s most precious cargo, ranging from White Rhinos to Penguins. Said Captain Paul Cassell after landing at Edinburgh International Airport: “It was an absolute privilege and honour to fly Tian Tian and Yang Guang, and to be part of this significant moment to bring the Pandas to their new home in the UK. Although every flight is unique, this flight has been particularly special — carrying such rare animals made the journey very exciting for all of us.” FedEx Express has a long history of transporting rare and delicate cargo. In February 2010, FedEx Express transported Tai Shan, a male Panda born at the National Zoo in Washington DC, US and Mei Lan, a male Panda born at Zoo Atlanta in Atlanta, Georgia, US, back to China. In 2003, FedEx Express transported two giant Pandas from China to the Memphis Zoo in Memphis, Tennessee, US and in 2000, FedEx took Tai Shan’s parents from China to Washington DC’s national zoo. Exotic cargo transported by FedEx Express has included Polar Bears, White Tigers, Elephants, Penguins, Mountain Lions, Gorillas, Eagles and even a 13-foot Tiger Shark used in filming the movie Jaws.

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GLOBETROTTING

ABBREVIATED VISIT

Please! Don't charge us

Angry passengers accused Comtel Air, an Austria-registered airline, of holding them to ransom after leaving the plane grounded on the runway and asking them to cover flight costs. Passengers said that they were asked to pay a total of £23,000 in order to pay fuel and airport costs so that they could then complete their journey. The flight was grounded in Vienna by its Spanish carrier Mint Lineas Aereas due to financial issues. Bhupinder Kandra, Comtel’s majority shareholder said that money

paid to travel agents had not been passed on to the airline. On arrival in Birmingham many of the passengers went to the travel agents where they had booked the plane tickets and demanded the “ransom” money be refunded.

New Zealand Prime Minister John Key said he was preparing to spend the night in New Plymouth when Air New Zealand called to say they had diverted a plane. Key’s transport arrangements had created a minor political storm on the last day of campaigning with Labour and Mana accusing him of seeking special treatment. He was on a two-day trip through the North Island but took a plane home to Auckland last night while the campaign bus continued to Taupo. His original flight was cancelled and another diverted

Worst nightmare

Spare us for God's sake This is rather amusing. Recently a gay couple claimed that they were called ‘faggots’ by a United Airlines manager as they were waiting for a flight home after thanksgiving. The gay slur allegedly took place as Billy Canu and his partner waited for a flight from Denver International Airport. The pair, who were travelling to San Diego, inquired about using a United passenger lounge. After the agents at the airline desk gave them a very condescending, sort of rude answer, the couple began complaining and were approached by a manager they identified as Rodney Hill. “We challenged him to act better,” Canu said as he described the incident on a Facebook post. “He then followed us, threatening again to remove us, at which point we walked away. Rodney Hill then shouted “idiots” at us. Angered at this, my partner attempted to walk back to challenge him. My partner shouted “what was that?” and Rodney replied, “What faggots?” before walking back to the customer service desk.” Reeling from the shocking slur, the couple wanted to return — but feared any further arguments could mean they were kicked out of the airport.

n Believe it or not, an annoyed United States Airways passenger was forced to stand throughout during a seven-hour non-stop flight because a morbidly obese co-passenger took up half his seat. Arthur Berkowitz, a businessman, said that his neighbour, weighing over 181 kg, on US Airways Flight 901 from Anchorage to Philadelphia made it impossible to get into his seat. “He was the last one to board, and as he walked down to me, he said, I really want to apologise. I’m your worst nightmare,” Arthur Berkowitz, 57, said of the obese man who squeezed next to him on the flight as reported by The Times of India. “He was a cordial person. But the

CRUISING HEIGHTS January 2012

facts are, he took half my seat, and half the seat of an exchange student who was pinned up against the window,” Berkowitz was quoted as saying by New York Post. Berkowitz said his ordeal presented a safety risk because he could not use his seatbelt for take-off and landing. Berkowitz said that he tried for months to get a response from US Airways for the grueling $800 trip — and all he got was a lousy $200 voucher. Later, Berkowitz claimed that the flight attendants admitted their gate agent had made an error in allowing the passenger to board without having bought two seats. US Airways has since apologised for the ‘regrettable’ incident.

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Dangerous in the air

to New Plymouth. Key said that he got great treatment, but it was the airline’s policy to divert a plane if it could pick passengers up within 20-odd minutes rather than leaving them stranded overnight. He said that his delegation was four or five out of the seven who boarded the plane in New Plymouth.

In a rather bizarre incident happened on a flight, Regional Express stated that a “self-combusting” iPhone 4 became red hot after a flight from northern New South Wales, Australia landed in the city and had to be extinguished by a flight attendant. That has prompted a probe by aviation authorities into why the iPhone turned rabble-rousing. The incident took place aboard flight ZL319 operating from Lismore to Sydney according to the airline, which said no one suffered harm. The airline

Destiny’s child

Consider this: 80-year-old Cezary Muchnik is extremely shortsighted flies plane into tree and remarkably survives. The story goes like this: Muchnik was trying to make an emergency landing after his plane developed engine trouble during the journey from the Czech Republic to Krakow in Poland. Police Spokesman Dariusz Nowak from Wielmoza kolo Skaly village, Poland said, “He planned to land in a field but didn’t see the trees in the way. He was unhurt and quite cheerful given his circumstances.” Earlier, aviation authorities had ordered Muchnik to take an eye test before he could take to the air again. The pilot told rescuers he intended to land in a field but apparently didn’t see the trees in the way. Authorities have said he will need to take an eye test before he takes to the skies again.

Pilot on a sky-high

Flying at times gives a real high. And this time it happened to high-flying pilot who faces the prospect of losing his job at airline Qantas after getting frisky with a female passenger on a long-haul flight between London and Sydney. Daily Mail reported His behaviour in the luxury premium seats, which have privacy walls and recline into beds, included sitting on the woman’s lap.

said that an iPhone owned by an unnamed passenger “started emitting a significant amount of dense smoke, accompanied by a red glow”. The airline conveyed that the flight attendant on board carried out recovery actions immediately and the red glow was extinguished successfully. While no one on the flight was harmed. Apple was keen to get to the bottom of what caused the hot iPhone.

In the end, passengers became so annoyed by the display that flight crews twice had to reprimand the unidentified pilot during the flight and he subsequently moved to economy, according to The Herald Sun. However, when the woman got off the plane in Singapore, the pilot went back into the first-class cabin until the plane finished its journey in Sydney. It is unclear whether the pilot had been drinking or whether he even knew the woman prior to boarding the flight. A Qantas spokeswoman told The Herald Sun, “Qantas is aware of an incident involving a travelling crew member on board QF32.The matter is being investigated internally in line with Qantas policy. Interaction of that nature is something that wouldn’t be sanctioned.”

‘I am stuck in toilet’

In a strange incident, the captain of Delta Flight 6132 sparked a terror alert after becoming stuck in the lavatory during the flight from Asheville, North Carolina to La Guardia Airport in New York. A passenger, with what was described as a “thick foreign accent”, tried to alert the cockpit of the problem, but the co-pilot became alarmed and notified air-traffic control. The conversation between the co-pilot and the control tower was recorded and posted on air traffic control website LiveATC.net. “He (the pilot) was stuck in the lavatory and someone with a thick foreign accent is giving me a password to access the cockpit — and I’m not about to let him in,” the co-pilot said. Indianapolis-based Chautauqua Airlines said the pilot had decided to answer the call of nature about 30 minutes from landing but had become trapped.

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DOMESTIC AIRLINES SpiceJet to Tuticorin SPICEJET recently unveiled commercial flights connecting Tuticorin to Chennai with its brand new fleet of Q-400 NextGen turboprop aircraft, offering a whole new flying experience to travellers of the city. SpiceJet Limited has been fast expanding its domestic footprint with the brand new fleet of the latest Q400 NextGen turboprop aircraft from Bombardier. SpiceJet’s fleet expansion, with addition of the Q400 aircraft, aims at enhancing air connectivity to Tier-II and Tier-III cities and towns. The Q400 NextGen turboprop aircraft can

GoAir adds seven daily flights GOAIR announced the addition of seven new daily flights from Mumbai to four crucial cities from December 21, 2011. The new flights will service Ahmedabad, Ranchi, Patna and Bengaluru and have been introduced to cater to the additional traffic expected in these sectors. With the new flights, the total number of daily flights will touch 82, and weekly flights will touch approximately 580 flights. GoAir currently flies to Delhi, Mumbai, Bengaluru, Cochin, Ahmedabad, Jammu, Srinagar, Guwahati, Bagdogra, Chandigarh, Goa, Jaipur, Nagpur, Nanded, Patna, Pune, Leh,

accommodate 78 passengers and is widely accepted as the best short-haul plane globally. SpiceJet had placed an order for 30 such aircraft and have already taken delivery of the first seven aircraft so far and is expected to take delivery of the eighth aircraft in the next few days. SpiceJet recently announced the addition of Tuticorin as its 31st destination its domestic network. Chennai was announced the second base for SpiceJet’s Q400 aircraft and they will be positioning atleast three aircraft with the aim of enhancing connectivity from Chennai in the 2nd phase of their Q-400 operations.

Lucknow, Ranchi, Kolkata and Port Blair. GoAir currently operates 11 aircraft and will induct two new Airbus A320 aircraft in January and April 2012. On the launch of the new flights, GoAir’s spokesperson said, “These new frequencies will provide even more flexibility of choice to our customers, and enhance our connectivity across India. The value-added features have been added based on customer research which showed that customers would appreciate avoiding long queues and they look forward to a simple, smooth and smart flying experience. We strongly believe that these features will add more comfort and convenience to our customers and make their travel with us more enjoyable.”

JET declared best in Asia region

service. Jet Airways is committed to delivering truly JET AIRWAYS was recently adjudged the “Best Airline in world-class service and has worked to continuously enhance Central/South Asia and India” at the 8th Annual Global the excellent in-flight services on all our flights.” Traveller Reader Survey Travel Awards in Beverly Hills, Holiday packages to Dubai Shopping Fest: Jet Airways’ California. Siva Ramachandran, Regional Vice-President- JetEscapes recently introduced exciting holiday packages for Americas, received the award on guests travelling to Dubai for the famed behalf of Jet Airways at a function at Dubai Shopping Festival, for travel the Peninsula Beverly Hills, effective January 5 to February 5, 2012. California. Guests to Dubai may choose The prestigious US-based Global between two attractive holiday packages, Traveller magazine conducted its both spread over four days and three survey over a eight-month period nights. The ‘Free and Easy’ package between January and August 2011 starts from `26,380, and the asking frequent business and luxury ‘Extravaganza’ holiday package starts travellers to name the best in a variety from `30,120, respectively. of travel-related categories and more While both packages include return than 36,000 people responded. The Jet Airways Economy air fare (inclusive readers were frequent-premium CRITICAL ACCLAIM: (Third from left) Siva of all taxes), visa, airport transfers, 3travellers averaging 16 international Ramachandran, Regional Vice-President (Americas), Star Hotel accommodation with Airways, with the award for 'Best Airline in and 16 domestic round trip flights a Jet breakfast, city tour, travel insurance and Central/South Asia and India'. year. Said Sudheer Raghavan, Chief the chance to earn 5 JPMiles for every Commercial Officer, Jet Airways, “We are honoured to `100 spent on JetEscapes, the ‘Extravaganza’ package also receive this ‘Best Airline in Central/South Asia and India’ includes, in addition, a Jet Boat ride, a Dhow Cruise with award from Global Traveller in recognition of our renowned dinner and a Desert Safari with a barbeque dinner for guests.

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BIAL showcases 10-day coffee festival

TOWARDS NEXT LEVEL: Air India cabin crew pampering passengers.

Air India proffers Shagun Vouchers AIR INDIA recently launched an innovative offer that doubles up as a gift voucher during the wedding season in the country. These Air India Gift Vouchers aptly named the ‘Shagun Vouchers’ will be issued in five different price denominations with an inbuilt discount. Each ‘Shagun Voucher’ will have a ‘face value’ (amount that will be mentioned on the voucher) and a discounted ‘sale value’ (amount that will be collected from a person buying the voucher). Valid from December 7, 2011 to March 31, 2012, the ‘Shagun Vouchers’ will be valid for a period of one year from the date of issue. A person buying a Shagun Voucher would need to present a copy of the invitation card and the wedding date should be within a month from the date of purchase of the Voucher. These vouchers will be issued and redeemed against ticket(s) or Holiday Package(s) on any domestic or international sector at Air India Reservation Offices only. Offers pilots one lakh ‘hardship allowance’: AI Express recently offered a hardship allowance of `one lakh per month for commanders who opt for postings in cities like Kochi, Mangalore, Kozikhode and Trivandrum. “We need commanders and co-pilots for our flights. So this hardship allowance of `one lakh should be able to attract talent from even the private Indian carriers. After all, a jump is not very common in today’s environment but we are doing it out of necessity, said a senior official. According to the company website, currently Air India Express flies to 13 international destinations — Dubai, Sharjah, Abu Dhabi, Al Ain, Muscat, Salalah, Singapore, KualaLumpur, Bahrain, Doha, Kuwait, Columbo and Dhaka from 12 Indian cities — Kozhikode, Kochi, Thiruvananthpuram, Mumbai, Pune, Jaipur, Amritsar, Lucknow, Kolkata, Chennai, Mangalore and Tiruchirapally.

Delhi Duty Free announces perfume festival DELHI DUTY Free recently introduced a twomonth-long ‘perfume festival’. The festival will be on at all Delhi Duty Free shops during the upcoming Christmas and New Year festival season in the arrivals and departures shops till January 15, 2012. The perfume festival involves giving each traveller, who buys more than two perfumes from the perfumes and cosmetics section, an assured free gift in the form of a travel bag/hand bag/miniature perfume/toiletry set/pouch/air freshener/compact mirror and many more such gifts. Delhi Duty Free boasts of one of the largest collection of brands and widest varieties in perfumes in the region at irresistible prices. Over 150 different perfumes of leading international brands have been selected exclusively for this festival.

BENGALURU INTERNATIONAL Airport Ltd (BIAL) in collaboration with The Coffee Board of India and Karnataka Tourism recently launched the Kaapi Trail, inaugurating the 10-day coffee festival at the airport. This was the first time that an Indian airport had hosted a coffee festival of this magnitude. The 10-day long extravaganza exhibited different facets of South Indian Coffee giving passengers an opportunity to explore coffee in a unique way. The event was inaugurated by Jawaid Akhtar, Chairman, Coffee Board, Viswanatha Reddy, Director of Tourism, Government of Karnataka and Sunalini Menon, CEO, Coffee Lab. Also present were officials of BIAL and Anil Bhandari, President, India Coffee Trust. The opening

FRESH START: (L-R) Anil Bhandari President, India Coffee Trust; Viswanatha Reddy, Director of Tourism, Government of Karnataka; Jawaid Akhtar, Chairman Coffee Board; Hari Marar, President (Operations), BIAL; Bhaskar Bodapati, Director-Finance, (BIAL), Tom Shimmins, Sr. Vice President, (BIAL) at the Kaapi Trail launch.

of the event took place at the airport amidst passengers, airport partners, media and employees. It was a gala event with the cultural representation from different states in South India and unveiling of the Kaapi Trail. Sanjay Reddy, Managing Director, BIAL, had a message for the festival: “We have worked closely with the Karnataka Tourism to promote the region and its rich culture and heritage. This year’s mega event will be in the form of a coffee festival showcasing the coffee growing destinations of not only Karnataka but the entire southern region. We have so much to showcase to the world and make them aware of an entire new side of the region. We believe that efforts such as these will go a long way in establishing Bengaluru as a gateway to the South of India and bring economic prosperity to this region. By the end of the festival we hope to engage with over two lakh passengers and make them coffee experts.” Wins award for water management: BIAL recently announced that it had won the 8th Confederation of Indian Industry (CII) National Award for Excellence in Water Management. The award was conferred on Bengaluru International Airport for its water efficient unit. This award was received by Hari Kumar, Vice President, Engineering and Maintenance of BIAL during the “National Award for Excellence in Water Management” function held recently in Jaipur. “The objective of the award at CII is to recognise “Excellence” in Water Management in Industries and to facilitate sharing of information by excellent Water efficient companies. We are happy that BIAL is one of the few companies that has bagged this award in the airport sector. The practices showcased by BIAL are admirable and is appreciated by the panel of judges. We wish BIAL success,” said S Raghupathy, Executive Director, CII.

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INTERNATIONAL AIRLINES Flydubai named ‘Low-Cost Airline of the Year’ FLYDUBAI was named Low Cost Airline of the Year at the 2011 Aviation Business Awards, held in Dubai. The airline triumphed in all three nominated categories — Low SMILES ALL THE WAY: Flydubai CEO Ghaith Al Cost Airline of the Ghaith at Aviation Awards. Year, Technology Implementation of the Year and Personal Achievement of the Year for Flydubai CEO, Ghaith Al Ghaith. Judged by a prestigious panel of industry experts, the annual Aviation Business Awards (ABA) celebrate the achievements of the Middle East aerospace industry and recognise some of the sector’s key regional players. Flydubai was praised for championing the high standards of quality in service and amenities that the region is reputed for, while maintaining its commitment to offer convenient and affordable travel. Flydubai CEO, Ghaith Al Ghaith commented, “This is a landmark win for Flydubai and we cherish and value the support shown by the industry and our peers. We started out two years ago with a vision to make travel a little less complex, a little less stressful and a little less expensive. From the very beginning, due to sheer hard-work, determination and a tenacious commitment to quality and reliability, we have transformed into the world’s fastest-growing start-up airline ever. We are also the second largest carrier operating out of Dubai International Airport, with an operational network of 46 destinations spanning the GCC, Middle East, Subcontinent, Africa and Central and Eastern Europe. I would like to thank the judges for this honour and the confidence they have shown in Flydubai.”

JetBlue selects Pratt & Whitney engine JETBLUE Airways recently announced that it had selected Pratt & Whitney PurePower(R) PW1100G-JM engines for its recently ordered fleet of Airbus A320neo aircraft. The memorandum of understanding (MOU) includes 86 PurePower engines with a longterm PureSolution (SM) maintenance service agreement. Deliveries for the carrier’s firm aircraft order are scheduled to start in 2018. “Pratt & Whitney has done an outstanding job developing an engine for the Airbus A320neo; we are confident we’ve made an excellent choice for our aircraft,” said Dave Barger, President, CEO, JetBlue Airways. “The PurePower Engines are an investment in our fleet, our environment and our people that will maximise performance and efficiency, while minimising our carbon footprint.” “We are thrilled that JetBlue is the first US airline to select the environmentally-friendly PurePower engine for its A320neo aircraft family,” said Todd Kallman, Pratt & Whitney commercial engines & global services president. “Already a long-time IAE customer, we look forward to continuing our strong relationship with the JetBlue team.”

Cathay opens new lounge CATHAY PACIFIC Airways announced the opening of its first branded lounge in the United States, offering passengers travelling between San Francisco and Hong Kong, a comfortable place to relax and unwind before their flight. The new Cathay Pacific First and Business Class lounge,

modelled on the airline’s award-winning lounges at Hong Kong International Airport, is conveniently located on Level four of the international terminal building at San Francisco International Airport. Cathay Pacific’s General Manager-Product Alex McGowan said, “Cathay Pacific passengers, who are familiar with our lounges in Hong Kong will be delighted to get a ‘taste of home’ at San Francisco International Airport. The first Cathay Pacific lounge in the US will feature familiar favourites and we believe it will continue to enhance the quality of our passengers’ travel experience.” The 520-square-metre facility features an exquisite contemporary design similar to the airline’s flagship Hong Kong lounges. It features the finest quality materials including Carrara white marble and “China Black” granite, with warm bamboo wood finishes and panoramic windows offering an abundance of natural light. The reception wall is made of Venetian glass tiles by Fabbian of Italy, backlit to create a sparkling abstract impression of bamboo.

First-class Chefs take flight QUALIFIED First-class Chefs are now officially onboard Etihad Airways flights to London, Sydney, Melbourne and Paris, and will be progressively introduced across all other first-class destinations by early 2012. AT YOUR SERVICE: A First-class Chef The airline has hired offering food and beverages to a paasennearly 110 Chefs since ger on an the Etihad Airways’ flight. announcing in May it would introduce fully-qualified and classically-trained international Chefs dedicated to food service excellence in its Diamond First Class cabins. First-Class Chefs will also contribute to menu development for both lounges and flights. Etihad Airways’ First Class Chefs are provided with a pantry stocked with prime cuts of meat, sauces, par-cooked items, spices and freshly chopped vegetables. The pantry allows them to prepare for service and personalise dishes in the same way as Chefs in a restaurant kitchen. Tools not typically seen on an aircraft, such as a whisk and foamer are also at their disposal. The launch is marked by a complete redesign of the first class menu, now called The Mezoon Grille. Lee Shave, Etihad Airways’ Vice-President-Guest Experience said, “By introducing First Class Chefs and refocusing our unique Food and Beverage Managers in business class, Etihad Airways has created the most robust inflight culinary team in the skies.”

Lufthansa wins IATA award LUFTHANSA received the Fast Travel Award from the International Air Transport Association (IATA) for its innovative, flexible solutions to simplify and speed up travel. The main aim of the Fast Travel initiative is to make passenger transition through the airport as smooth as possible and to reduce waiting times, for example during check-in, baggage drop-off or boarding. Lufthansa Group Chairman and CEO Christoph Franz accepted the coveted Gold Award from IATA Director General Tony Tyler during this year’s annual Board of Governors’

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meeting in Montreal. Lufthansa fulfilled all six Fast Travel requirements at its two hubs, Frankfurt and Munich is the first airline worldwide to meet the conditions for the award at two airports simultaneously. FIRM STAND: Lufthansa planes at one of the airports. At check-in, Lufthansa offers passengers all three electronic options proposed in IATA’s Fast Travel programme — check-in-kiosks at the airport, online check-in or via a mobile telephone. More than 60 per cent of Lufthansa passengers now use one of these electronic check-in services. Self-service baggage drop-off is also becoming increasingly popular. This system enables passengers to print their baggage tag at a drop-off kiosk at the airport and attach it to their suitcase themselves. At the press of a button, the baggage is automatically transferred to the baggage handling system. 25 such baggage drop-off kiosks have been in use at Munich Airport for several years now. The latest, user-friendly generation has been undergoing tests since November at Frankfurt and Munich and, if successful, will be put into routine operation.

Celebrate Dubai Shopping Festival with Emirates EMIRATES recently introduced exciting packages beginning at `28025 per person to Dubai for its Indian travellers. The 16th Dubai Shopping Festival; an annual event being hosted between January 5 and February 5, 2012 has been specifically timed to coincide with the advent of the New Year which is also the best time to visit Dubai. Emirates is offering a variety of land packages on twin-sharing basis for four nights including return Economy Class airfare;

breakfast; personalised meet-and-assist upon arrival and return airport transfers by private car. Customers have a choice of accommodation from 32 selected properties to suit all budgets. The offer does not include visa fees, fuel surcharge and airport departure taxes. Orhan Abbas, Vice President, India and Nepal, Emirates, said, “It is indeed our honour and privilege to be associated with the funfilled extravaganza of the Dubai Shopping Festival again this year. Emirates has been supportive of the Dubai Shopping Festival an opportunity encouraging people to visit Dubai. DSF highlights the excellent amenities available in Dubai, putting the emirate on the world stage and attracting huge volumes of visitors each year. It is an excellent opportunity for shoppers and we are confident of receiving an encouraging large number of families visit the city this year.”

Air Arabia takes off to Yanbu AIR ARABIA recently started its flights to the City of Yanbu in Saudi Arabia, from the carrier’s primary hub in Sharjah, UAE. With great connectivity to Indian sub-continent and, Russia, Ukraine and Almaty, Air Arabia offers three-weekly flights to Yanbu, making it easier and more convenient for passengers to travel between the two countries. “In July this year, Air Arabia started its flights to the City of Gassim in KSA and today, we are extremely pleased to introduce our new service between Sharjah and Yanbu, which marks the sixth destination in Saudi Arabia reachable via Air Arabia,” said A K Nizar, Head of Commercial Department at Air Arabia. “Air Arabia customers now enjoy an ideal choice for air travel between the UAE and Saudi benefiting from value for money fares and wide spread of destinations with-in the Kingdom and beyond”. In addition to providing non-stop service to six cities in Saudi Arabia, Air Arabia also offers a range of value-for-money land arrangements, including hotel accommodation and car assistance.

The LCCT was also transformed into a carnival with full fanfare, with various activities organised for the public to AIRASIA recently celebrated its 10th anniversary at the Low participate. They were served with spectacular ‘fire-eating’ and Cost Carrier Terminal (LCCT) with various activities organised dance performances, plus interactive games where cool prizes by the airline for the public to commemorate the special presented to the winners. occasion. Unveils green home at ‘ecoThe journey of connectivity for friendly’ Terminal 3: AirAsia the airline started in 2001, with its Indonesia recently unveiled its first route from Kuala Lumpur to sophisticated green home at Terminal Kota Kinabalu. As a commemoration 3, Soekarno Hatta International of this first low-cost connectivity Airport in Jakarta. The state-of-the-art between Peninsular and East terminal, which formerly housed only Malaysia, AirAsia took a walk down Indonesian domestic flights, officially memory lane today in a receiving opened for international flights ceremony for guests onboard flight “Terminal 3 is without question AK5101 from Kota Kinabalu to a public facility the nation can be Kuala Lumpur. truly proud of. The sophisticated AirAsia Chairman Aziz Bakar LOYALTY ATTESTED: (From L- R) AirAsia Director Fam terminal is a reflection of Angkasa was present to greet and thank all Lee Ee, Deputy Group CEO Kamarudin Meranun, Group Pura II’s commitment to creating a Tony Fernandes, AirAsia X CEO Azran Osman-Rani guests on the flight, who have made CEO world-class airport, and will set a new during the 10-year celebrations of AirAsia. it possible for AirAsia to be where it environmental benchmark for airport is today. Special goodies commemorating the special moment buildings. We are particularly honored to be the first airline were also distributed. to fly internationally from Terminal 3. Not only will the AirAsia Group CEO, Tony Fernandes said, “Today is a very move boost operational efficiency, but more importantly, it special day, where we celebrate our 10th Anniversary. We would will also elevate our guests’ travel experience to the highest like to dedicate this special day to our guests, and everyone who level of comfort,” said Dharmadi, President Director of have been supporting us since day one. It has been a really AirAsia Indonesia. eventful journey. We’ve been through various challenges-bird Terminal 3 offers the best in modern design, provides flu, SARS, tsunamis, earthquakes, 9/11, floods, oil price credit complimentary wi-fi and filtered drinking water fountains, as crisis, civil unrest-and prevailed.” well as adopts an environmentally-friendly concept.

AirAsia celebrates 10 years

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TRAVEL & TOURISM SMALL LUXURY Hotels of the World are now offering discerning travellers more choice in South West India with the addition of The Serai-Chikmagalur to its portfolio (www.slh.com/seraichikmagalur). Located in the heart of ‘coffee country’ in Karnataka which produces over half of the coffee grown in India, The Serai-Chikmagalur combines classic and contemporary design and beautiful natural scenery. Indigenous materials from the plantation such as Chapdi, the local stone, and natural rosewood are incorporated into the stylish design. Coffee addicts can enjoy a guided plantation tour on the local estate to get a new perspective on their favourite caffeine boost — Arabica, Robusta and many spices grow in abundance in this part of the region. Guests can see first-hand how oranges, pepper, cardamom and vanilla are grown within the coffee plantation to balance and support the ecosystem. For those who prefer a bird’s eye view, guests can take a heli tour to see the lush-rolling hills, fertile plantations, estates and coffee works while learning about the history and culture of the land. Coffee fans can even luxuriate in their favourite brew at the Oma Spa where it is one of the key ingredients in their signature treatments, including scrubs and massages. Coffee is said to have numerous anti-ageing and protective properties and is a natural antioxidant. For those looking for adventure and culture, there are many experiences available in the local area including trekking, a visit to the Chennakeshava temple in Belur and the Shiva temple of Hoysaleshwara in Halebidu, both renowned for their intricate carvings, and Gomateshwara at Shravanabelagola — the largest monolithic statue in the world.

Best financial month for The Claridges THE CLARIDGES, New Delhi recently announced excellent financial results for the month of November, 2011. The figures for the hotel showed a positive upward trend and November, 2011 has been recorded as the best financial month ever in its history.

The hotel witnessed occupancy exceeding 93 per cent and Average Room Rate (ARR) above `12,000. The total revenue increase was over 15 per cent as compared to the same month last year. The contribution of SPLENDOUR: Outside view of The Claridges. World Hotels, our international business affiliate increased by almost 50 per cent over last year, same period. Markus O Schneider, General Manager, The Claridges, New Delhi commented, “We are extremely delighted on our financial performance. I would like to thank all staff associated with the hotel and our esteemed guests, without their support this would not have been possible.” He further added,” We are taking aggressive sales measures to the coming months and outlook for Jan - March 2012 looks equally promising.” The Claridges Hotels & Resorts owns and operates The Claridges, New Delhi; The Claridges, Surajkund, Delhi NCR; The Claridges Nabha Residence, Mussoorie; The Atrium, Delhi NCR and The Claridges Bharatpur Palace, Rajasthan (opening 2013/2014).

CLARIDGES.COM

The Serai-Chikmagalur gets SLH push

Live life king size at Suryagarh FOR A ROYAL and traditional hospitality, come and experience Suryagarh, Jaisalmer’s newest and most luxurious hotel located near the famous Sam sand dunes. Suryagarh a luxury boutique hotel, spread over 20 acres, is designed as a sun fortress (every part of the sprawling building faces the sun). It combines the contemporary with the medieval, its king-sized rooms and suites with new-age amenities, rambling courtyards and traditional Rajasthani artefacts are sure to charm and entice you. The Suryagarh team will treat you to majestic sunsets, replete with Rajasthani folk music and a camel safari. Feeling more

privacy, complemented by a rooftop terrace. The 139-squaremetre Angsana Suite or the 226-square-metre Presidential ANGSANA LAGUNA Phuket, the newest resort within Suite offer expansive views over the lagoon and picturesque Laguna Phuket’s idyllic beachside complex, is open for gardens, and the three-bedroom 357-square-metre Angsana visitors from December 01, 2011. The flagship Angsana Pool Residences feature private pools and gardens with views resort reflects the relaxed seaside of the championship Laguna ambience of southern Thailand, offering Phuket golf course. Finally, the a range of amenities and activities for the 490 square metre Angsana Grand active and contemporary traveller. Pool Residence offer four Angsana Laguna Phuket occupies the bedrooms, a private kitchen, sun site of the former Sheraton Grande deck and an outdoor sala. Laguna Phuket. This refreshed and Opens in Hangzhou: stylish resort is the largest Angsana Following the successful debut of property in Southeast Asia with 409 its sister brand Banyan Tree keys. Ten different room categories offer Hangzhou last year, Angsana a plethora of accommodation options. EXCEPTIONAL: An inside view of a room of Angsana Hotels and Resorts has just The 40-square-metre Laguna Room is Laguna Phuket. opened its second property in ideal for couples while the 45-square-metre Laguna Premier China. Located in the western part of Hangzhou only six Room is aimed at families. Honeymooners can enjoy the 88 kilometres from the city’s bustling downtown area and sited square metre two-story Angsana one bedroom Lofts which within the Westbrook Resort complex in the renowned Xixi are sited directly on the lagoon. The 112-square-metre National Wetland Park, Angsana Hangzhou is an idyllic Angsana two bedroom Lofts provide generous living spaces retreat from which to explore what Marco Polo once called for families and friends with sufficient room for individual one of the most splendid cities in the world. ANGSANA.COM

Angsana opens flagship resort in Phuket

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adventurous try Dirt Biking or watch Talwar Baazi in the shifting sands of the Thar Desert. Back at the hotel; indulge in local flavours straight from the kitchens of the Maharajas at the Indian speciality restaurant or international fare served round the clock at the coffee shop. True to its name “Rait”, the spa will help you unwind and relax after a full day’s activity. So, come with your friends and family to spend unforgettable moments at Suryagarh.

Sarovar Hotels boosts its Africa footprint SAROVAR HOTELS further spreads its wings in the African region with the recent signing of a 100 room hotel in Nairobi. Sarovar’s present strength in Africa includes New Africa Hotel and Casino, a 126-room business hotel in Dar-es-Salaam and Ole Sereni, the 134-room premium hotel in Nairobi. The New Portico hotel in Nairobi will be developed by M & H Corporation Limited. The hotel is expected to be operational by 2014 and will offer all modern facilities of an international quality three star hotel including dining outlets, conference venues, swimming pool, fitness centre etc. Located in Valley Arcade, the hotel is adjacent to a shopping mall, close to central business district and only eight kms from the city centre and 15 kms from the airport. Commenting on the signing Anil Madhok, Managing Director, Sarovar Hotels said, “Nairobi has emerged as a political, financial, cultural and sporting hub in Africa thus offering tremendous scope for the hospitality sector to grow. With this signing Sarovar continues with its expansion spree outside India, especially in Africa which we consider a second home for the company.”

Accor acquires Mirvac Hotels ACCOR HOTELS will bring international distribution to Mirvac’s 48 Australian and New Zealand properties after acquiring the business for 195 million Euros. The purchase adds more than 6000 rooms to Accor’s portfolio with the deal in line with its plans to open 40,000 rooms annually in 2012 and 2013. Mirvac had 44 Australian hotels, mainly in key cities, and four in New Zealand. The majority of the 48 will be “aligned with Accor’s upscale and midscale brands. Some may be rebranded. Accor Asia Pacific Chairman and Chief Executive Michael Issenberg said it was important for the Mirvac hotels to “underpin their futures with a robust international platform”. “Accor’s investment in the Mirvac hotels will provide the resources to deal with the next phase of evolution in the hotel industry,” he said. “This includes getting greater access to the most important emerging markets such as China and India where Accor is already an industry leader, as well as maximising the potential of distribution, branding, loyalty, purchasing and employee development.”

A P P O I N T M E N TS

Three Indian restaurants in Miele Guide DUM PUKHT in Mumbai, Dakshin in Chennai and Bukhara in New Delhi took 15th, 16th and 20th place respectively in The Miele Guide 2011/2012 Asia’s Top 20 restaurants. With 56 of this year’s top 500 restaurants found in India, the emerging dining destination has the largest section and its top 5 features a wide selection of cuisines covering three cities. Dum Pukht is the top restaurant in India which highlights food prepared in the refined ancient method of slow cooking. Dakshin, with a remarkable debut in 16th place in Asia’s Top 20, places second in India’s top five, with a menu promoting the diverse culinary traditions of Southern India. Bukhara, having been featured three times in Asia’s Top 20, comes in third with its specialisation in India’s North West frontier cuisine. International cuisine with a focus on grilled items makes a strong showing in India’s Top 5 with On The Rocks in fourth place and West View — Bar and Grill in fifth place.

TAAI presents travel awards, 2011 TRAVEL AGENTS Association of India (TAAI) celebrated its 60th diamond jubilee celebration in a grand way at Hotel Taj Land’s End in Mumbai. The celebration was graced by Subodh Kant Sahay, Union Minister for PUTTING A POINT: Subodh Kant Sahay, Tourism; Vipul Mitra, Union Minister for Tourism, addressing the audience at TAAI Travel Awards 2011. Principal Secretary, Tourism, Government of Gujarat; Ashish Kumar Singh, Secretary to Chief Minister of Maharashtra; Dr Burak Akcapar, Ambassador, Turkish Embassy, Delhi; Tomwit Jarnson, Consul General, Royal Thai Consulate; Mustafa Ozdemir, Vice-Consul from the Turkish Consulate office, Mumbai; Kapesh Jha , M D, Chhattisgarh Tourism Board; Mohan Yadav, M D, Madhya Pradesh Tourism Board; Dilip Shinde, Joint M D, MTDC and Vidya B Kumar, Executive Director, Punjab Heritage & Tourism Promotion Board, Dept of Tourism, Govt of Punjab along with all the past presidents of TAAI. The diamond jubilee finale concluded with The TAAI Travel Awards 2011, which was presented by Subodh Kant Sahay, Union Minister for Tourism, Government of India. New awards categories were introduced to broaden the scope of the awards and felicitate the best in the industry. M Iqbal Mulla, presented the presidential award to the Union Minister. for his unstinted contribution and innovation for the entire tourism industry. The event was spectacular with music and entertainment and was praised by the entire travel fraternity.

HARISH CHANDRA IS GM-IT AT SAROVAR

NEW GM FOR VIRGIN ATLANTIC

Sarovar Hotels recently announced the appointment of Harish Chandra as General Manager-IT. Harish brings with him a varied experience, of more than 17 years, in the hospitality, aviation, IT and telecom industry. He has worked in customer service, operations, IT Harish Chandra infrastructure, business development and system administration for several brands like Intercontinental Hotels Group, Essar (AGC) Group, Park Hyatt Goa, Air Sahara and The Park hotel.

Virgin Atlantic recently appointed Stephen King the new General Manager, India. Prior to this, he was working in the Virgin Atlantic Sales Leadership team in the UK leading Sales and Business Support teams. Stephen has over 10 years of experience in the transport industry. He joined Stephen King Virgin Atlantic in 2005 and managed the Business Consultancy team focussing on multi-functional projects across the airline.

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TRAVELLERS’ DELIGHT: (Clockwise from top left) Salma Hayek, Madonna, Jake Gyllenhal and Matthew Fox.

ho would you like to spend your holidays with and where? Tricky question, that! But that is what British Airways wanted to know from its customers and well-wishers through a poll on its site in Facebook. And the results were not surprising: Shopping and weather were the main reasons for people to go on a holiday in the winter months. First on the list, respondents wanted to spend time on holidays were with family and friends. Next on the list was Madonna, closely followed by that gorgeous hunk who goes by the name of Brad OO HO Pitt. Well, three cheers to .CO the singer… was it her songs that attracted the votes or was it something else? Among the other celebrities that people would like to find in their Christmas stockings after Madonna and Brad Pitt were Jake Gyllenhall, Salma Hayek and Matthew Fox. Family took the top spot — 70 per cent — in travellers’ favourite holiday companions when it came to vacationing this Christmas. Next came friends, with 15 per cent of the people choosing them as their number one choice for Christmas company. Strangely, pets also

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featured among the top five, with some people opting for animals over humans. A surprising two per cent of people said that they would most want to spend Christmas with their pet. Said Richard Bowden, British Airways’ Digital Marketing Innovation Manager: “It’s not altogether surprising that family topped the poll but we were surprised to see pets making the top five.” As for holiday destinations, the winter cold did not deter people from choosing winter wonderlands in the UK, US and Canada as the top five. Among the warmer destinations in the top five were Australia and Brazil. Said Bowden, “We suspect the trend for cold weather will reverse, come the new year, with warmer climes beckoning as a ‘pick me up’ after the excesses of the Christmas period.” Like a good marketing man, Bowden added that the time had come to start thinking about that perfect holiday destination for 2012 from now. Among the cities that figured prominently as holiday destinations was Cape Town. The city came fifth on the most desirable places in the world to visit this summer. London topped the list, with respondents citing the UK capital’s great shopping as a key attraction. The Caribbean’s warmth and beauty secured the second place. Brazil and New York were named in third and fourth places. Sydney and Florida followed Cape Town as sixth and seventh favourites.